Exhibit 10.4





EXHIBIT 10.4




SAFEGUARD SCIENTIFICS, INC.

EXECUTIVE DEFERRED COMPENSATION PLAN




Amended and Restated Effective January 1, 2009





 


 









 







SAFEGUARD SCIENTIFICS, INC.

EXECUTIVE DEFERRED COMPENSATION PLAN




TABLE OF CONTENTS




	 	 	 	 	 
	ARTICLE I ESTABLISHMENT OF THE PLAN
	 	 	1	 
	ARTICLE II DEFINITIONS
	 	 	1	 
	ARTICLE III ADMINISTRATION OF THE PLAN
	 	 	3	 
	ARTICLE IV PARTICIPATION
	 	 	4	 
	ARTICLE V PARTICIPANT ACCOUNTS
	 	 	5	 
	ARTICLE VI BENEFITS TO PARTICIPANTS
	 	 	5	 
	ARTICLE VII CLAIMS PROCEDURES
	 	 	7	 
	ARTICLE VIII MISCELLANEOUS
	 	 	9	 







 


 









 







SAFEGUARD SCIENTIFICS, INC.

EXECUTIVE DEFERRED COMPENSATION PLAN




ARTICLE I




Establishment of the Plan




Safeguard Scientifics, Inc. (the “Company”) established the Safeguard Scientifics, Inc.
Executive Deferred Compensation Plan (the “Plan”) to provide key management or other highly
compensated employees of the Company with supplemental retirement benefits. The Company amended and
restated the Plan, effective October 25, 2005 (“2005 Plan”), to incorporate the requirements of
Section 409A of the Internal Revenue Code of 1986, as amended and the regulations promulgated
thereunder (“Code”). The Company now desires to amend and restate the 2005 Plan, effective January
1, 2009, to comply with the applicable requirements of Section 409A of the Code and the final
regulations thereunder issued on April 17, 2007 and to make other appropriate changes.



The Company intends that the Plan shall at all times be maintained on an unfunded basis for
federal income tax purposes under the Code, and administered as a non-qualified, “top hat” plan
exempt from the substantive requirements of the Employee Retirement Income Security of 1974, as
amended (“ERISA”).



Amounts that were, pursuant to the terms of the Plan, earned and vested as of December 31,
2004 are intended to be “grandfathered” for purposes of Section 409A of the Code (“Grandfathered
Amounts”). Distribution of the Grandfathered Amounts shall be governed by the Plan as in effect on
October 3, 2004, consistent with the “grandfather” provisions of Section 409A of the Code, as set
forth in Exhibit A hereto.



ARTICLE II




Definitions





For ease of reference, the following definitions will be used in the Plan:



2.1. Account. “Account” means the account maintained on the books of the Company used
solely to calculate the amounts payable to each Participant under this Plan and shall not
constitute a separate fund of assets.



2.2. Base Salary. “Base Salary” means the annual rate of base salary paid to each
Participant as of any date of reference before any reduction for amounts deferred by the
Participant pursuant to a Code Section 401(k) plan or Code Section 125 plan, or pursuant to this
Plan or any other non-qualified plan that permits voluntary deferrals of compensation.


 


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2.3. Beneficiary(ies). “Beneficiary” or “Beneficiaries” means the person or persons
designated by the Participant to receive distributions under this Plan in the event of the
Participant’s death, as provided in Section 8.3.



2.4. Board or Board of Directors. “Board” or “Board of Directors” means the Board of
Directors of Safeguard Scientifics, Inc. (or any successor entity).




2.5. [intentionally omitted]



2.6. Committee. “Committee” means at least three individuals appointed by the Board to
administer the Plan pursuant to Article III and which also may act for the Company or the Board in
making decisions and performing specified duties under the Plan.




2.7. Company. “Company” means Safeguard Scientifics, Inc. or any successor entity.



2.8. Compensation. “Compensation” means an Eligible Employee’s earned income, wages,
salaries and fees for professional services and other amounts received, without regard to whether
or not an amount is paid in cash, for personal services actually rendered in the course of
employment with the Company as defined in Section 415 of the Code.



2.9. Effective Date. “Effective Date” means the effective date of the Plan. The
original Effective Date was January 1, 2003. The Effective Date of the plan as amended and
restated herein is January 1, 2009.



2.10. Eligible Employee. “Eligible Employee” means, as designated by the Company, in
its sole discretion, (i) a managing director, a vice president, director or higher level employee
of the Company, or (ii) any employee who is a member of a group of key management or other highly
compensated employees of the Company within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1)
of ERISA. The Company may determine the eligibility of similarly situated employees.



2.11. Employment Commencement Date. “Employment Commencement Date” means the first day
on which an individual became an employee of the Company.



2.12. Key Employee. “Key Employee” means a “key employee” as determined by the Committee or
its delegate as of the specified identification date for purposes of Section 409A of the Code. The
determination of Key Employees, including the number and identity of persons considered Key
Employees and the identification date, shall be made by the Committee or its delegate each year in
accordance with Section 416(i) of the Code, the “specified employee” requirements Section 409A of
the Code, and applicable regulations.



2.13. Participant. “Participant” means any Eligible Employee. An individual shall
remain a Participant until that individual has received full distribution of any amounts credited
to the Participant’s Account.



2.14. Plan. “Plan” means this Safeguard Scientifics, Inc. Executive Deferred
Compensation Plan as described herein and as it may be amended from time to time.


 


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2.15. Plan Year. “Plan Year” means the 12-month period beginning on each January 1 and
ending on the following December 31.



2.16. Separation Date. “Separation Date” means the date on which a Participant incurs
a Separation from Service.



2.17. Separation from Service. “Separation from Service” means a Participant’s “separation
from service” with the Company within the meaning of such term under Section 409A of the Code and
the regulations issued thereunder.



2.18. Year of Service. A “Year of Service” means a Plan Year in which a Participant
has attained 1,000 hours of service; provided, however, that (a) the Committee shall determine in
its sole discretion whether a Year of Service has been attained; and (b) no more than oneYear of
Service shall be credited for any Plan Year; and (c) each Year of Service shall be credited as of
the last day of the calendar quarter during the relevant Plan Year in which the Participant first
attains 1,000 hours of service for that Plan Year.



2.19. Valuation Funds. “Valuation Funds” means one or more of the independently
established funds or indices that are identified by the Committee. These Valuation Funds are used
solely to calculate the earnings (losses) that are credited to each Participant’s Account in
accordance with Article V below and do not represent any beneficial interest on the part of the
Participant in any asset or other property of the Company. The determination of the increase or
decrease in the performance of each Valuation Fund shall be made by the Committee in its reasonable
discretion. Valuation Funds may be replaced, new funds may be added, or both, from time to time at
the discretion of the Committee.



ARTICLE III




Administration of the Plan




3.1. Committee. The Plan shall be administered by the Committee appointed by the Board
of Directors. The Board shall designate one of the members of the Committee to serve as
Chairperson thereof. The Board shall also designate a person to serve as Secretary of the
Committee, which person may be, but need not be, a member of the Committee. A member of the
Committee may resign by delivering a written notice of resignation to the Board. The Board, in its
sole discretion, may remove any member of the Committee. Vacancies in the membership of the
Committee shall be filled promptly by the Board. In the absence of any appointment to the
contrary, the Compensation Committee of the Company’s Board of Directors shall be deemed to be the
Committee for purposes hereof.



3.2. Action by the Committee. A majority of the members of the Committee shall
constitute a quorum for the transaction of business at a meeting of the Committee and the Committee
may delegate any of its functions hereunder. Any action of the Committee may be taken upon the
affirmative vote of a majority of the members of the Committee at a meeting, or at the direction of
the Chairperson, without a meeting by unanimous consent of the Committee or
by mail, telegraph, telephone or electronic communication device; provided that all of the
members of the Committee are informed of their right to vote on the matter before the Committee and
of the outcome of the vote thereon.


 


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3.3. Committee Authority and Duties. The Committee shall have the full power,
authority and discretion to construe, interpret and administer the Plan, to correct deficiencies
therein, to supply omissions, and to make factual determinations. All decisions, actions and
interpretations of the Committee shall be final, binding and conclusive upon all persons having any
interest in the Plan.



ARTICLE IV




Participation




4.1. Eligible Employees. Subject to Section 4.3, each Eligible Employee who was a
Participant in the Plan as of the last day of the immediately preceding Plan Year shall continue as
a Participant in the next Plan Year. Subject to the requirements of Section 409A of the Code, the
Committee may, in its discretion, permit an employee who first becomes an Eligible Employee after
the beginning of a Plan Year, to participate in the Plan for that Plan Year. Participation under
the Plan shall be conditioned upon the Participant’s acknowledgement in writing or by receipt of
benefits under the Plan that all decisions and determinations of the Committee shall be final and
binding on the Participant and his or her Beneficiaries.



4.2 Company Contribution. The Company, in its sole discretion, may determine to
credit a Participant’s Account with positive amounts for any Plan Year on such terms as the Company
shall determine. Absent action by the Company to the contrary, the Account shall consist of:



(a) a fully vested amount equal to a stated percentage (which may vary from year to year) of
the Participant’s annual Compensation for the Plan Year not in excess of the limit imposed by
Section 401(a)(17) of the Code; and



(b) an amount equal to a stated percentage (which may vary from year to year) of the
Participant’s Base Salary for the Plan Year not in excess of the limit imposed by Section
401(a)(17) of the Code, subject to a vesting schedule pursuant to which such amount shall vest 20%
in each Plan Year in which the Participant attains a Year of Service.



4.3 Change of Status. The Committee, in its sole discretion, may determine that a
Participant no longer qualifies as a member of the group of key management or other highly
compensated employees under ERISA, and to take such further action in light of such determination
as the Committee determines appropriate in its sole discretion.


 


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ARTICLE V




Participant Accounts




5.1. Establishment of Account. The Company shall establish and maintain a separate
Account with respect to each Participant. The Participant’s Account shall be reduced by the amount
of payments made by the Company to the Participant or the Participant’s Beneficiary pursuant to
this Plan.



5.2. Earnings (or Losses) on Accounts. At such time as the Committee designates
Valuation Funds for the deemed investment of each Participant’s Account balance, each Participant’s
Account shall be credited semi-annually with all deemed earnings (or losses) generated by the
Valuation Funds, as if the designated balance of the Account had been invested in the applicable
Valuation Fund.



5.3. Valuation of Accounts. The value of a Participant’s Account as of any date shall
equal the amounts theretofore credited to such Account, including any earnings or losses deemed to
be earned on such Account in accordance with Section 5.2, less the amounts theretofore deducted
from such Account.



5.4. Statement of Accounts. The Committee shall provide to each Participant, not less
frequently than semi-annually, a statement in such form as the Committee deems desirable setting
forth the balance standing to the credit of each Participant’s Account.



5.5. Distributions from Accounts. Any distribution made to or on behalf of a
Participant from his or her Account in an amount which is less than the entire balance of any such
Account shall be made pro rata from each of the Valuation Funds to which such Account is then
allocated on the day before distribution under the Plan.



5.6. Vesting. A Participant’s Account balances shall be vested in accordance with
Section 4.2.



ARTICLE VI




Benefits to Participants




6.1. Benefits from an Account. Benefits from a Participant’s Account shall be paid to
the Participant as follows:



(a) Subject to Section 6.7, upon a Participant’s Separation from Service, the Participant’s
vested Account shall be distributed in a lump sum within 30 business days following the
Participant’s Separation Date. Any lump-sum benefit payable in accordance with this Section shall
be in an amount equal to the value of such vested Account as of the business day the Valuation
Funds are deemed to be liquidated to make the payment. Any unvested portion of the Participant’s
Account shall be forfeited.


 


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(b) Upon the death of a Participant prior to the commencement of benefits under this Plan from
any particular Account, the Participant’s designated Beneficiary shall be treated as a Participant
under Section 6.1(a) with the distribution to be made to such Beneficiary.




6.2. [intentionally omitted]



6.3. Unforeseeable Financial Emergency. In the event that the Committee, upon written
request of a Participant, determines that the Participant has suffered an unforeseeable emergency,
the Company shall pay to the Participant from the Participant’s vested Account, as soon as
practicable following such determination, an amount necessary to meet the emergency (the “Emergency
Benefit”), after deduction of any and all taxes as may be required pursuant to Section 6.5. For
purposes of this Plan, an unforeseeable emergency is an unexpected need for cash arising from a
severe financial hardship which has resulted from an illness or accident of the Participant, the
Participant’s spouse, the Participant’s Beneficiary, or a dependent (as defined in Section 152(a)
of the Code without regard to Section 152(b)(1), (b)(2), or (d)(1)(B)) of the Participant, loss of
the Participant’s property due to casualty (including the need to rebuild a home following damage
to the home not otherwise covered by insurance), or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the Participant’s control. Cash needs arising
from foreseeable events such as the purchase of a house or education expenses for children shall
not be considered to be the result of an unforeseeable financial emergency. For purposes of an
Emergency Benefit, only that portion of any vested Account that is necessary to eliminate the
financial hardship plus amounts necessary to pay taxes reasonably anticipated as a result of the
distribution, after taking into account the extent to which such financial hardship is or may be
relieved through reimbursement or compensation by insurance or by liquidation of the Participant’s
assets (to the extent the liquidation of such assets would not itself cause severe financial
hardship) may be distributed to the Participant. With respect to that portion of any vested
Account which is distributed to a Participant as an Emergency Benefit, in accordance with this
Article VI, no further benefit shall be payable to the Participant under this Plan. It is intended
that the Committee’s determination as to whether a Participant has suffered an “unforeseeable
emergency” shall be made consistent with the requirements under Section 409A of the Code.



6.4. Withholding Taxes. The Company may make such provisions and take such action as
it may deem necessary or appropriate for the withholding of any taxes which the Company is required
by any law or regulation of any governmental authority, whether federal, state or local, to
withhold in connection with any benefits under the Plan, including, but not limited to, the
withholding of appropriate sums from any amount otherwise payable to the Participant (or his or her
Beneficiary). Each Participant, however, shall be responsible for the payment of all individual
tax liabilities relating to any such benefits.



6.5. Effect of Payment. The full payment of the applicable benefit under this Article
VI shall completely discharge all obligations on the part of the Company to the Participant (and
the Participant’s Beneficiary) with respect to the operation of this Plan, and the Participant’s
(and Participant’s Beneficiary’s) rights under this Plan shall terminate.


 


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6.6. Key Employees. Notwithstanding any provision of the Plan to the contrary, any
amount payable under the Plan with respect to the portion of the Participant’s Account attributable
to non-Grandfathered Amounts, to a Participant who is determined to be a Key Employee shall be
postponed to a date that is not less than six months following the Participant’s Separation from
Service with the Company. If distributions are delayed pursuant to this Section 6.6, the
accumulated amounts withheld on account of Section 409A of the Code shall be paid within 30 days
after the end of the six-month period. If the Participant dies during such six-month period, the
amounts withheld on account of Section 409A of the Code shall be paid to the Participant’s
Beneficiary within 90 days of the Participant’s death.



6.7. Permissible Distribution Event. Notwithstanding any provision of the Plan to the
contrary, distributions from the Plan shall only be made upon an event and in a manner permitted by
Section 409A of the Code and the regulations thereunder.



6.8. Grandfathered Amounts. Notwithstanding anything in the Plan to the contrary, the payment
of benefits with respect to all Grandfathered Amounts shall be determined pursuant to Exhibit A.



ARTICLE VII




Claims Procedures




7.1. Claim. A Participant who believes that he or she is being denied a benefit to
which he or she is entitled under the Plan may file a written request for such benefit with the
Committee, setting forth the claim.



7.2. Claim Decision. Upon receipt of a claim, the Committee shall advise the
Participant that a reply will be forthcoming within 90 days and shall, in fact, deliver such reply
within such period. The Committee may, however, extend the reply period for an additional 90 days
for reasonable cause. If the claim is denied in whole or in part, the Participant shall be
provided a written summary of the Committee’s decision, using language calculated to be understood
by the Participant, setting forth:




(a) the specific reason or reasons for such denial;




(b) the specific reference to relevant provisions of this Plan on which such denial is based;



(c) a description of any additional material or information necessary for the Participant to
perfect his or her claim and an explanation why such material or such information is necessary;



(d) appropriate information as to the steps to be taken if the Participant wishes to submit
the claim for review;


 


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(e) the time limits for requesting a review under Section 7.3 and for review under Section 7.4
hereof; and



(f) the Participant’s right to bring an action for benefits under Section 502 of ERISA upon an
adverse determination on review.



7.3. Request for Review. Within 60 days after the receipt by the Participant of the
written summary described above, the Participant may request in writing that the Committee
re-review the determination of the Committee. The Participant or his or her duly authorized
representative may, but need not, review the relevant documents and submit issues and comment in
writing for consideration by the Committee. If the Participant does not request a review of the
initial determination within such 60-day period, the Participant shall be barred and stopped from
challenging the determination.



7.4. Review of Decision. Within 30 days of the Committee’s receipt of the
Participant’s request for re-review, the Committee shall schedule a meeting to review the
Participant’s request. Within 60 days of the Committee’s receipt of such request, the Committee
shall, after considering all materials presented by the Participant, render a decision in writing.
The Committee may, however, extend the reply period for an additional 60 days for reasonable cause.
If the claim is again denied in whole or in part, the Participant shall be provided a written
summary of the Committee’s decisino, using language calculated to be understood by the Participant,
setting forth:




(a) the specific reason or reasons for such denial;




(b) the specific reference to relevant provisions of this Plan on which such denial is based;



(c) that the claimant is entitled to receive, upon request and free of charge, and have
reasonable access to and copies of, all documents, records and other information relevant to the
claim for benefits; and



(d) the Participant’s right to bring an action for benefits under Section 502 of ERISA upon an
adverse determination or review.


 


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ARTICLE VIII




Miscellaneous




8.1. Protective Provisions. Each Participant and Beneficiary shall cooperate with the
Committee by furnishing any and all information requested by the Committee in order to facilitate
the payment of benefits hereunder. If a Participant or Beneficiary refuses to cooperate with the
Committee, the Company shall have no further obligation to the Participant or Beneficiary under the
Plan, other than payment of the then-current balance of the Participant’s Account in accordance
with prior elections.



8.2. Inability to Locate Participant or Beneficiary. In the event that the Committee
is unable to locate a Participant or Beneficiary within two years following the date the
Participant was to commence receiving payment, the entire amounts allocated to the Participant’s
Account shall be forfeited. If, after such forfeiture, the Participant or Beneficiary later claims
such benefit, such benefit shall be reinstated without interest or earnings from the date payment
was to commence pursuant to Article VI.



8.3. Designation of Beneficiary. Each Participant may designate in writing a
Beneficiary or Beneficiaries (which Beneficiary may be an entity other than a natural person) to
receive any payments which may be made following the Participant’s death. No Beneficiary
designation shall become effective until it is in writing and it is filed with the Committee. Such
designation may be changed or canceled by the Participant at any time without the consent of any
such Beneficiary. Any such designation, change or cancellation must be made in a form approved by
the Committee and shall not be effective until received by the Committee, or its designee. A
Beneficiary designation under the Plan may be separate from all other retirement-type plans
sponsored by the Company. If a Participant designates more than one Beneficiary, the interests of
such Beneficiaries shall be paid in equal shares, unless the Participant has specifically
designated otherwise. If there is no Beneficiary designation in effect, or if there is no
surviving designated Beneficiary, then the Participant’s surviving spouse shall be the Beneficiary.
If there is no surviving spouse to receive any benefits payable in accordance with the preceding
sentence, the duly appointed and currently acting personal representative of the participant’s
estate (which shall include either the Participant’s probate estate or living trust) shall be the
Beneficiary. In any case where there is no such personal representative of the Participant’s
estate duly appointed and acting in that capacity within 90 days after the Participant’s death (or
such extended period as the Committee determines is reasonably necessary to allow such personal
representative to be appointed, but not to exceed 180 days after the Participant’s death), then
Beneficiary shall mean the person or persons who can verify by affidavit or court order to the
satisfaction of the Committee that they are legally entitled to receive the benefits specified
hereunder. In the event any amount is payable under the Plan to a minor, payment shall not be made
to the minor, but instead be paid (i) to that person’s living parent(s) to act as custodian, (ii)
if that person’s parents are then divorced, and one parent is the sole custodial parent, to such
custodial parent, or (iii) if no parent of that person is then living, to a custodian selected by
the Committee to hold the funds for the minor under the Uniform Transfers or Gifts to Minors Act in
effect in the jurisdiction in which the minor resides. If no parent is living and the Committee
decides not to select another custodian to hold the funds for the minor, then payment shall be made
to the duly appointed and currently acting guardian of the estate for the minor or, if no guardian
of the estate for the minor is duly appointed and currently acting within 60 days after the date
the amount becomes payable, payment shall be deposited with the court having jurisdiction over the
estate of the minor.


 


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8.4. No Contract of Employment. Neither the establishment of the Plan, nor any
modification thereof, nor the creation of any fund, trust or account, nor the payment of any
benefits shall be construed as giving any Participant or any person whosoever, the right to be
retained in the service of the Company, and all Participants and other employees shall remain
subject to discharge to the same extent as if the Plan had never been adopted.



8.5. No Limitation on Company Actions. Nothing contained in the Plan shall be
construed to prevent the Company from taking any action which is deemed by it to be appropriate or
in its best interest. No Participant, Beneficiary, or other person shall have any claim against
the Company as a result of such action.



8.6. Obligations to Company. If a Participant becomes entitled to a distribution of
benefits under the Plan, and if at such time the Participant has outstanding any debt, obligation,
or other liability representing an amount owing to the Company, then the Company may offset such
amount owed to it against the amount of benefits otherwise distributable. Such determination shall
be made by the Committee.



8.7. Nonalienation of Benefits. The Company shall pay all amounts payable hereunder
only to the person or persons designated by the Plan and not to any other person or corporation.
No part of a Participant’s Account shall be liable for the debts, contracts, or engagements of any
Participant, his or her Beneficiary, or successors in interest, nor shall a Participant’s Account
be subject to execution by levy, attachment, or garnishment or by any other legal or equitable
proceeding, nor shall any such person have any right to alienate, anticipate, commute, pledge,
encumber, or assign any benefits or payments hereunder in any manner whatsoever. If any
Participant, Beneficiary or successor in interest is adjudicated bankrupt or purports to
anticipate, alienate, sell, transfer, assign, pledge, encumber or charge any distribution or
payment from the Plan, voluntarily or involuntarily, the Committee, in its discretion, may cancel
such distribution or payment (or any part thereof) to or for the benefit of such Participant,
Beneficiary or successor in interest in such mariner as the Committee shall direct. The Company’s
obligations under this Plan are not assignable or transferable except to (a) any corporation or
partnership which acquires all or substantially all of the Company’s assets or (b) any corporation
or partnership into which the Company may be merged or consolidated. The provisions of the Plan
shall inure to the benefit of each Participant and the Participant’s Beneficiaries, heirs,
executors, administrators or successors in interest.



8.8. Unfunded Status of Plan. The Plan is intended to constitute an “unfunded”
deferred compensation plan for Participants. Nothing contained in the Plan, and no action taken
pursuant to the Plan, shall create or be construed to create a trust of any kind. The Company
shall reflect in Accounts on its books the Participants’ interests hereunder, but no Participant or
any other person shall under any circumstances acquire any property interest in any specific assets
of the Company. Nothing contained in this Plan and no action taken pursuant hereto shall create or
be construed to create a fiduciary relationship between the Company and any Participant or other
person. A Participant’s right to receive payments under the Plan shall be no greater than the
right of an unsecured general creditor of the Company. Except to the extent that the Board
determines that a “rabbi” trust may be established in connection with the Plan, all payments shall
be made from the general funds of the Company, and no special or separate fund shall be established
and no segregation of assets shall be made to assure payment.



8.9. Severability of Provisions. If any provision of this Plan shall be held invalid
or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof,
and this Plan shall be construed and enforced as if such provisions had not been included.


 


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8.10. Governing Law. This Plan shall be construed in accordance with and governed by
the laws of the Commonwealth of Pennsylvania to the extent not superseded by federal law, without
reference to the principles of conflict of laws.



8.11. Headings and Captions. The headings and captions herein are provided for
reference and convenience only, shall not be considered part of the Plan, and shall not be employed
in the construction of the Plan.



8.12. Gender, Singular and Plural. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons may
require. As the context may require, the singular may read as the plural and the plural as the
singular.



8.13. Notice. Any notice or filing required or permitted to be given to the Committee
under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or
certified mail, to the Company’s Chief Financial Officer, or to such other person or entity as the
Committee may designate from time to time. Such notice shall be deemed given as to the date of
delivery, or, if delivery is made by mail, as of the date shown on the postmark on the receipt for
registration or certification.



8.14. Amendment and Termination. The Plan may be amended, suspended, or terminated at
any time by the Board as may be necessary to avoid current taxation of amounts deferred under the
Plan or to comply with applicable law; provided, however, that no such amendment, suspension or
termination shall reduce or in any manner adversely effect the rights of any Participant with
respect to benefits that are payable or may become payable under the Plan. In addition, the Board
may, in its sole discretion, amend the Plan to comply with applicable law without the consent of
any Participant and without regard to any effect such amendments may have on any participant.



8.15. Section 409A. The Plan is intended to comply with the requirements of Section
409A of the Code, and shall in all respects be administered in accordance with Section 409A.
Notwithstanding anything in the Plan to the contrary, distributions may only be made under the Plan
upon an event and in a manner permitted by Section 409A of the Code, and all payments to be made
upon a termination of employment under this Plan may only be made upon a “separation from service”
as defined under Section 409A of the Code. In accordance with Section 1.409A-3(d) of the Treasury
Regulations, a distribution under this Plan will be treated as made on the designated payment date
if the payment is made (i) at such date or a later date within the same calendar year, or if later,
by the 15th day of the third month following the date designated in the Plan, or (ii) at a date no
earlier than 30 days before the designated payment date. Except as permitted by Section 409A of
the Code, in no event shall a Participant, directly or indirectly, designate the calendar year of
payment.




 


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Exhibit A




Grandfathered Provisions




The terms of the Plan applicable to re-deferrals and distributions of Grandfathered Amounts are set
forth on this Exhibit A. With respect to the Grandfathered Amounts, the Plan shall be operated in
accordance with the terms of the Plan in existence on October 3, 2004, as set forth in this Exhibit
A, in accordance with the “grandfather” provisions of Section 409A of the Code.



ARTICLE I




Definitions




1.1. Termination Date. “Termination Date” means the date of termination of a Participant’s
active employment with the Company without regard to any compensation continuation arrangement.



1.2. Change of Control. “Change of Control” means (a) the stockholders of the Company approve
(or, if stockholder approval is not required, the Board approves) an agreement providing for (i)
the merger or consolidation of the Company with another corporation where the stockholders of the
Company, immediately prior to the merger or consolidation, will not beneficially own, immediately
after the merger or consolidation, shares of the Company entitling such stockholders to more than
50% of all votes to which all stockholders of the surviving corporation would be entitled in the
election of directors (without consideration of the rights of any class of stock to elect directors
by a separate class vote), (b) the sale or other disposition of all or substantially all of the
assets of the Company, (c) a liquidation or dissolution of the Company, (d) the acquisition by any
“person” (as such term is used in Sections 13(d) and 14(d) of the Securities and Exchange Act of
1934) other than Safeguard Scientifics, Inc. or any of its subsidiaries or affiliates, of the
“beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing a majority of the voting power of the then outstanding
securities of the Company except where the acquisition is approved by the Board, or (e) any person
has commenced a tender offer or exchange offer for a majority of the voting power of the then
outstanding shares of the Company.



ARTICLE II


Benefits to Participants




2.1. Benefits from an Account. For Grandfathered Amounts, benefits from a Participant’s
Account shall be paid to the Participant as follows:



(a) The Participant’s Account shall be distributed in a lump sum within 30 business days
following the Participant’s Termination Date. Any lump-sum benefit payable in accordance with this
Section shall be in an amount equal to the value of such Account as of the business day the
Valuation Funds are deemed to be liquidated to make the payment.


 


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(b) Upon the death of a Participant prior to the commencement of benefits under this Plan from
his or her Account, the Participant’s designated Beneficiary shall be treated as a Participant
under Section 6.1(a), with the distribution to be made to such Beneficiary.



2.2. Change of Control. For Grandfathered Amounts, in the event of a Change of Control,
within 60 days thereafter, a Participant may elect to receive the full value then credited to the
Participant’s Account. If a Participant elects to be paid a benefit under this Section 2.2, the
lump sum payment due to the Participant (or Beneficiary, in the event of the Participant’s death)
under this Section shall be made no later than the end of the calendar year in which the Change of
Control occurred.



2.3. Withdrawal of Participation. The Participant may elect to cause all or a portion of the
Participant’s Account balances attributable to Grandfathered Amounts to be distributed in
accordance with Article II of Exhibit A as if the Participant had terminated service with the
Company as of the time of such election, except that the amount distributed to the Participant
shall be reduced by a penalty of 10%, but not in excess of $50,000.



2.4. Unforeseeable Financial Emergency. In the event that the Committee, upon written request
of a Participant, determines that the Participant has suffered an unforeseeable financial
emergency, the Company shall pay to the Participant from the Participant’s Account, as soon as
practicable following such determination, an amount necessary to meet the emergency (the “Emergency
Benefit”), after deduction of any and all taxes as may be required pursuant to Section 6.4 of the
Plan. For purposes of this Plan, an unforeseeable financial emergency is an unexpected need for
cash arising from an illness, casualty loss, sudden financial reversal, or other such unforeseeable
occurrence. Cash needs arising from foreseeable events such as the purchase of a house or
education expenses for children shall not be considered to be the result of an unforeseeable
financial emergency. With respect to that portion of any Account which is distributed to a
Participant as an Emergency Benefit, in accordance with this Article, no further benefit shall be
payable to the Participant under this Plan. It is intended that the Committee’s determination as
to whether a Participant has suffered an “unforeseeable financial emergency” shall be made
consistent with the requirements under Section 457(d) of the Code.


 


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