UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington, D.C. 20549



Form 10-K/A



Amendment No. 1



(Mark One)

þ ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017

or

 ̈ TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ___________



Commission File Number 1-5620

Safeguard
Scientifics, Inc.

(Exact name of registrant as specified
in its charter)



|Pennsylvania                                                                               |  |                                                                                                                      
|------------------------------------------------------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------------------
|(State
        or other jurisdiction of
        incorporation
        or organization)     |  | 23-1609753
                                   (I.R.S.
                                   Employer Identification No.)
|                                                                                           |  |                                                                                                                      
|170
        North Radnor-Chester Road
        Suite
        200
        Radnor,
        PA |  | 19087                                                                                                                
|(Address
    of principal executive offices)                                               |  | (Zip
    Code)                                                                                                       



(610) 293-0600

(Registrant’s telephone number,
including area code)

Securities registered pursuant to Section 12(b)
of the Act:

|Title of each class           |  | Name of each exchange on which registered
|----------------------------- |  | -----------------------------------------
|Common Stock ($.10 par value) |  | New York Stock Exchange                  



Securities registered pursuant to Section 12(g)
of the Act:

None



Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes ̈Nox



Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.     Yes ̈Nox



Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days.    YesxNo ̈



Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YesxNo ̈



Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter)
is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.x



Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer,  a smaller reporting company or an emerging growth company. See
the definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):



|Large accelerated filer ̈ | Accelerated filerþ                            | Smaller reporting company ̈
|------------------------ | --------------------------------------------- | --------------------------
|Non-accelerated filer ̈   | (Do not check if a smaller reporting company) | Emerging growth company ̈  



If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ̈



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes ̈Nox



As of June 30, 2017, the aggregate market value of
the registrant’s common stock held by non-affiliates of the registrant was $237,111,560 based on the closing sale price as
reported on the New York Stock Exchange.



The number of shares outstanding of the registrant’s
common stock as of April 25, 2018 was 20,560,746.



DOCUMENTS INCORPORATED BY REFERENCE



None.



















SAFEGUARD SCIENTIFICS, INC.

FORM 10-K/A

December 31, 2017



TABLE OF CONTENTS



|Explanatory Note                                                                                        | 3 
|------------------------------------------------------------------------------------------------------- | --
|                                                                                                        |   
|PART I                                                                                                  | 4 
|                                                                                                        |   
|Item 1A. Risk Factors                                                                                   | 4 
|                                                                                                        |   
|PART III                                                                                                | 14
|                                                                                                        |   
|Item 10. Directors, Executive Officers and Corporate Governance                                         | 14
|                                                                                                        |   
|Item 11. Executive Compensation                                                                         | 21
|                                                                                                        |   
|Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 50
|                                                                                                        |   
|Item 13. Certain Relationships and Related Transactions, and Director Independence                      | 52
|                                                                                                        |   
|Item 14. Principal Accountant Fees and Services                                                         | 53
|                                                                                                        |   
|PART IV                                                                                                 | 54
|                                                                                                        |   
|Item 15. Exhibits and Financial Statement Schedules                                                     | 54
|                                                                                                        |   
|Signatures                                                                                              | 58



2







Explanatory
Note



Safeguard Scientifics, Inc. (“Safeguard,” the “Company,”
“we,” “us,” and “our”) is filing this Amendment No. 1 on Form 10-K/A for the year ended December
31, 2017 (“Amendment”) to amend our Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange
Commission (the “SEC”) on March 7, 2018 (the “Original Form 10-K”). We are filing this Amendment to (i) revise one risk factor as described in Item 503(c) of Regulation S-K
that is applicable to the Company; and (ii) present the information required by Part III of Form 10-K that was previously omitted
from the Original Form 10-K in reliance on General Instruction G(3) to Form 10-K. The Company is hereby amending the Original Form
10-K as follows:



| | · | On the cover page, to (i) delete the reference in the Original Form 10-K to the incorporation by reference of the Company’s
proxy statement for its 2018 annual shareholders’ meeting and (ii) update the date as of which the number of outstanding
shares of the Company’s common stock is being provided;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | To present in Part I, Item 1A, the risk factor captioned “Our success is dependent on our senior management,” which
has been revised;
| | - | -------------------------------------------------------------------------------------------------------------------------------------



| | · | To present the information required by Part III of Form 10-K, which information was originally expected to be incorporated
by reference to our definitive proxy statement to be delivered to our shareholders in connection with our 2018 annual meeting of
shareholders; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | To amend and restate Exhibits 31.3 and 31.4, in Part IV, Item 15(b), in their entirety to contain the currently dated certifications
from the Company’s principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002. The certifications of the Company’s principal executive officer and principal financial officer are attached
to this Amendment as Exhibits 31.3 and 31.4. Because no financial statements have been included in this Amendment and this Amendment
does not contain or amend any disclosure with respect to Items 307 and 308 of Regulation S-K, paragraphs 3, 4 and 5 of the certifications
have been omitted. The Exhibit Index has also been amended and restated in its entirety to include the certifications as exhibits.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Except as described above, no other changes have been made to
the Original Form 10-K. This Amendment does not otherwise update information in the Original Form 10-K to reflect facts or events
occurring subsequent to the filing date of the Original Form 10-K. This Amendment should be read in conjunction with the Original
Form 10-K and with any of our filings made with the SEC subsequent to the filing of the Original Form 10-K.



3







PART I



| | Item 1A. | RISK FACTORS
| | -------- | ------------



You should carefully consider the information
set forth below. The following risk factors describe situations in which our business, financial condition and/or results of operations
could be materially harmed, and the value of our securities may be adversely affected. You should also refer to other information
included or incorporated by reference in the Original Form 10-K and this Form 10-K/A.



The intended monetization of our partner company interests
and distribution of net proceeds to shareholders are subject to factors beyond our control.



In January 2018, we announced that we will
not deploy any capital into new partner companies.  We will instead focus on supporting, and maximizing monetization opportunities
for our existing partner company interests to enable distributions of net proceeds to shareholders.  However, this strategic
plan may require providing significant additional capital and operational support to such existing partner companies and we may
not be able to sell our partner company interests during any specific time frame or otherwise on desirable terms, if at all, and
there can be no assurance as to how long this process will take or the results that this process will yield.  There can be
no assurance as to whether we will realize the value of escrowed proceeds, holdbacks or other contingent consideration, if any,
associated with the sale of partner company interests.  Additionally, there can be no assurance that we will be able to satisfy
our liabilities during this process.  Further, the method, timing and amount of any distributions resulting from the monetization
of existing partner companies will be at the discretion of our Board of Directors and will depend on market and business conditions
and our overall liabilities, capital structure and liquidity position.



The continuing costs and burdens
associated with being a public company will constitute a much larger percentage of our expenses and we may in the future delist
our Common Stock with the New York Stock Exchange and seek to deregister our Common Stock with the SEC.



We will remain a public company and will
continue to be subject to the listing standards of the New York Stock Exchange and SEC rules and regulations, including the Dodd-Frank
Wall Street Reform and Consumer Protection Act and the Sarbanes-Oxley Act of 2002.  The costs and burdens of being a public
company will be a significant and continually increasing portion of our expenses under our new strategy.  As part of such
monetization efforts, we will likely in the future, once the majority of our partner company interests have been monetized and
proceeds therefrom distributed, delist our Common Stock from the New York Stock Exchange and seek to deregister our Common Stock
with the SEC.  However, there can be no assurance as to the timing of such transactions, or whether such transactions will
be completed at all, and we will continue to face the costs and burdens of being a public company until such time as our Common
Stock is delisted with the New York Stock Exchange and deregistered with the SEC.



Our principal business strategy depends upon our ability
to make good decisions regarding the deployment of capital into, and subsequent disposition of, existing partner company interests
and, ultimately, the performance of our partner companies, which is uncertain.



If we make poor decisions regarding the deployment
of capital into, and subsequent disposition of, existing partner companies, our business strategy will not succeed. If our partner
companies do not succeed, the value of our assets could be significantly reduced and require substantial impairments or write-offs
and our results of operations and the price of our common stock would be adversely affected. The risks relating to our partner
companies include:



| | · | most of our partner companies have a history of operating losses and/or limited operating history;
| | - | --------------------------------------------------------------------------------------------------



| | · | the intense competition affecting the products and services our partner companies offer could adversely affect their businesses,
financial condition, results of operations and prospects for growth;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



4







| | · | the inability to adapt to changing marketplaces;
| | - | ------------------------------------------------



| | · | the inability to manage growth;
| | - | -------------------------------



| | · | the need for additional capital to fund their operations, which we may not be able to fund or which may not be available from
third parties on acceptable terms, if at all;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | the inability to protect their proprietary rights and/or infringing on the proprietary rights of others;
| | - | --------------------------------------------------------------------------------------------------------



| | · | that our partner companies could face legal liabilities from claims made against them based upon their operations, products
or work;
| | - | ------------------------------------------------------------------------------------------------------------------------------------



| | · | the impact of economic downturns on their operations, results and growth prospects;
| | - | -----------------------------------------------------------------------------------



| | · | the inability to attract and retain qualified personnel;
| | - | --------------------------------------------------------



| | · | the existence of government regulations and legal uncertainties may place financial burdens on the businesses of our partner
companies; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------



| | · | the inability to plan for and manage catastrophic events.
| | - | ---------------------------------------------------------



These and other risks are discussed in
detail under the caption “Risks Related to Our Partner Companies” below.



Our Credit Facility subjects us to interest rate risk.



In May 2017, we entered into a $75.0 million
secured, revolving credit facility (“Credit Facility”) with HPS Investment Partners, LLC (“Lender”). Debt
service costs under the Credit Facility are subject to interest rate changes. Interest rates could rise from time to time and significantly
increase our cost of borrowing. If that were to occur, replacing the Credit Facility with alternative credit arrangements having
a lower cost of borrowing would likely not be possible and no assurance can be given that we would be able to refinance the Credit
Facility on attractive terms or at all.



Servicing the indebtedness under the Credit Facility will
require a significant amount of cash and our ability to generate cash depends on many factors beyond our control.



Our ability to make payments on the indebtedness
under the Credit Facility will depend on our ability to generate cash in the future. We generate cash from proceeds we receive
in connection with the sales of our interests in our partner companies. Due to the nature of the mergers and acquisitions market,
and the developmental cycle of companies like our partner companies, our ability to generate specific amounts of liquidity from
sales of our partner company interests in any given period of time cannot be assured. Our ability to generate cash is also, to
a certain extent, subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond
our control. The risk exists that our business will be unable to generate sufficient cash flow to service our indebtedness under
the Credit Facility.



Covenants in the agreements governing the Credit Facility
could adversely affect our business and/or result in the operation of our business in a way other than as desired by management;
our ability to comply with such covenants may be affected by events beyond our control; and a breach of any of these covenants
could result in a default under the agreements governing the Credit Facility, which, if not cured or waived, could result
in the acceleration of the indebtedness under the Credit Facility.



The Credit Facility contains various covenants
that prohibit or limit, subject to certain exceptions, our ability to, among other things:



5







| | · | Sell, transfer, lease, convey or otherwise dispose of all or any part of our business or property;
| | - | --------------------------------------------------------------------------------------------------



| | · | Exceed concentration limits with respect to the amount of capital deployed to any single partner company;
| | - | ---------------------------------------------------------------------------------------------------------



| | · | Exceed concentration limits with respect to the amount of capital deployed to one or more partner companies operating in the
same or similar industries;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Deploy capital to partner companies operating outside of certain specified industries;
| | - | --------------------------------------------------------------------------------------



| | · | Incur or assume liens or additional debt or provide guarantees in respect of obligations of other persons;
| | - | ----------------------------------------------------------------------------------------------------------



| | · | Pay any dividends or make any distribution (in cash or in kind) or payment in respect of, or redeem, retire or purchase any
capital stock;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------



| | · | Enter into, or permit any of our subsidiaries to enter into, any sale and leaseback transaction;
| | - | ------------------------------------------------------------------------------------------------



| | · | Wind-up, liquidate or dissolve, or merge, consolidate or amalgamate with any person, or permit any of our subsidiaries to do
(or agree to do) so;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Enter into certain transactions with affiliates; and
| | - | ----------------------------------------------------



| | · | Amend, modify or otherwise change any of our governing documents.
| | - | -----------------------------------------------------------------



In addition, the Credit Facility requires
us to among other things, maintain (i) a liquidity threshold of at least $20 million of unrestricted cash; (ii) a tangible net
worth, plus unrestricted cash, of at least 1.75x the amount then outstanding under the Credit Facility; and (iii) a minimum aggregate
appraised value of the Company’s ownership interests in its partner companies, plus unrestricted cash in excess of the liquidity
threshold, of at least $350 million.



The foregoing covenants could adversely
affect our ability to finance our operations, engage in business activities that may be in our interest and plan for or react to
market conditions or otherwise execute our business strategies.



Our ability to comply with these covenants
may be affected by events beyond our control, including prevailing economic, financial and industry conditions.



Our failure to comply with any of these
covenants could result in a default under the Credit Facility. If that were to occur, the Lender could choose to accelerate the
maturity of the indebtedness. If the Lender were to accelerate the maturity of the indebtedness, we may not have sufficient liquidity
to repay the entire balance of the outstanding borrowings and other obligations under the Credit Facility.



A significant amount of our deployed capital may be concentrated
in partner companies operating in the same or similar industries, limiting the diversification of our capital deployments.



Except as may be agreed to with our debt
providers, we do not have fixed guidelines for diversification of capital deployments, and our capital deployments could be concentrated
in several partner companies that operate in the same or similar industries. This may cause us to be more susceptible to any single
economic, regulatory or other occurrence affecting those particular industries than we would otherwise be if our partner companies
operated in more diversified industries.



Our business model does not rely upon, or plan for, the
receipt of operating cash flows from our partner companies. Our partner companies generally provide us with no cash flow from their
operations. We rely on cash on hand, liquidity events and our ability to generate cash from capital raising activities to finance
our operations.



6







We need capital to fund the capital needs
of our existing partner companies. We also need cash to service and repay our outstanding debt, finance our corporate overhead
and meet our existing funding commitments. As a result, we have substantial cash requirements. Our partner companies generally
provide us with no cash flow from their operations. To the extent our partner companies generate any cash from operations, they
generally retain the funds to develop their own businesses. As a result, we must rely on cash on hand, partner company liquidity
events and new capital raising activities to meet our cash needs. If we are unable to find ways of monetizing our holdings or raising
additional capital on attractive terms, we may face liquidity issues that will require us to constrain our ability to execute our
business strategy and limit our ability to provide financial support to our existing partner companies.



Fluctuations in the price of the common stock of our publicly
traded holdings may affect the price of our common stock.



From time to time, we may hold equity interests
in companies that are publicly traded. Fluctuations in the market prices of the common stock of publicly traded holdings may affect
the price of our common stock. Historically, the market prices of our publicly traded holdings have been highly volatile and subject
to fluctuations unrelated or disproportionate to operating performance.



We may be unable to obtain maximum value for our holdings
or to sell our holdings on a timely basis.



We hold significant positions in our partner
companies. Consequently, if we were to divest all or part of our holdings in a partner company, we may have to sell our interests
at a relative discount to a price which may be received by a seller of a smaller portion. For partner companies with publicly traded
stock, we may be unable to sell our holdings at then-quoted market prices. The trading volume and public float in the common stock
of a publicly traded partner company may be small relative to our holdings. As a result, any significant open-market divestiture
by us of our holdings in such a partner company, if possible at all, would likely have a material adverse effect on the market
price of its common stock and on our proceeds from such a divestiture. Additionally, we may not be able to take our partner companies
public as a means of monetizing our position or creating shareholder value.



Registration and other requirements under
applicable securities laws and contractual restrictions also may adversely affect our ability to dispose of our partner company
holdings on a timely basis.



Our success is dependent on our senior management.



Our success is dependent on our senior management
team’s ability to execute our strategy. On April 6, 2018, we publicly announced a series of management changes intended to
streamline our organizational structure and reduce our operating costs. These aggressive cost-reduction initiatives are intended
to better align our cost structure with the strategy we announced in January 2018. These management changes included the departure
of three members of our management team, including our current President and Chief Executive Officer, our current Senior Vice President
and Chief Financial Officer, and our current Senior Vice President of Investor Relations and Corporate Communications. A loss of
one or more of the remaining members of our senior management team without adequate replacement could have a material adverse effect
on us.



Our business strategy may not be successful if valuations
in the market sectors in which our partner companies participate decline.



Our strategy involves creating value for
our shareholders by helping our partner companies build value and, if appropriate, accessing the public and private capital markets.
Therefore, our success is dependent on the value of our partner companies as determined by the public and private capital markets.
Many factors, including reduced market interest, may cause the market value of our partner companies to decline. If valuations
in the market sectors in which our partner companies participate decline, their access to the public and private capital markets
on terms acceptable to them may be limited.



7







Our partner companies could make business decisions that
are not in our best interests or with which we do not agree, which could impair the value of our holdings.



Although we currently own a significant,
influential interest in some of our partner companies, we do not maintain a controlling interest in any of our partner companies.
Acquisitions of interests in partner companies in which we share or have no control, and the dilution of our interests in or loss
of control of partner companies, will involve additional risks that could cause the performance of our interests and our operating
results to suffer, including:



| | · | the management of a partner company having economic or business interests or objectives that are different from ours; and
| | - | -------------------------------------------------------------------------------------------------------------------------



| | · | the partner companies not taking our advice with respect to the financial or operating issues they may encounter.
| | - | -----------------------------------------------------------------------------------------------------------------



Our inability to control our partner companies
also could prevent us from assisting them, financially or otherwise, or could prevent us from liquidating our interests in them
at a time or at a price that is favorable to us. Additionally, our partner companies may not act in ways that are consistent with
our business strategy. These factors could hamper our ability to maximize returns on our interests and cause us to incur losses
on our interests in these partner companies.



We may have to buy, sell or retain assets when we would
otherwise not wish to do so in order to avoid registration under the Investment Company Act.



The Investment Company Act of 1940 regulates
companies which are engaged primarily in the business of investing, reinvesting, owning, holding or trading in securities. Under
the Investment Company Act, a company may be deemed to be an investment company if it owns investment securities with a value exceeding
40% of the value of its total assets (excluding government securities and cash items) on an unconsolidated basis, unless an exemption
or safe harbor applies. We refer to this test as the “40% Test.” Securities issued by companies other than consolidated
partner companies are generally considered “investment securities” for purposes of the Investment Company Act, unless
other circumstances exist which actively involve the company holding such interests in the management of the underlying company.
We are a company that partners with growth-stage companies to build value; we are not engaged primarily in the business of investing,
reinvesting or trading in securities. We are in compliance with the 40% Test. Consequently, we do not believe that we are an investment
company under the Investment Company Act.



We monitor our compliance with the 40% Test
and seek to conduct our business activities to comply with this test. It is not feasible for us to be regulated as an investment
company because the Investment Company Act rules are inconsistent with our strategy of actively helping our partner companies in
their efforts to build value. In order to continue to comply with the 40% Test, we may need to take various actions which we would
otherwise not pursue. For example, we may need to retain a controlling interest in a partner company that we no longer consider
strategic, we may not be able to acquire an interest in a company unless we are able to obtain a controlling ownership interest
in the company, or we may be limited in the manner or timing in which we sell our interests in a partner company. Our ownership
levels also may be affected if our partner companies are acquired by third parties or if our partner companies issue stock which
dilutes our ownership interest. The actions we may need to take to address these issues while maintaining compliance with the 40%
Test could adversely affect our ability to create and realize value at our partner companies.



Economic disruptions and downturns may have negative repercussions
for us.



Events in the United States and international
capital markets, debt markets and economies may negatively impact our stock price and our ability to pursue certain tactical and
strategic initiatives, such as accessing additional public or private equity or debt financing for us or for our partner companies
and selling our interests in partner companies on terms acceptable to us and in time frames consistent with our expectations.



8







We cannot provide assurance that material weaknesses in
our internal control over financial reporting will not be identified in the future.



We cannot assure you that material weaknesses
in our internal control over financial reporting will not be identified in the future. Any failure to maintain or implement required
new or improved controls, or any difficulties we encounter in their implementation, could result in a material weakness, or could
result in material misstatements in our Consolidated Financial Statements. These misstatements could result in a restatement of
our Consolidated Financial Statements, cause us to fail to meet our reporting obligations and/or cause investors to lose confidence
in our reported financial information, leading to a decline in our stock price.



Risks Related to Our Partner Companies



Most of our partner companies have a history of operating
losses and/or limited operating history and may never be profitable.



Most of our partner companies have a history
of operating losses and/or limited operating history, have significant historical losses and may never be profitable. Many have
incurred substantial costs to develop and market their products, have incurred net losses and cannot fund their cash needs from
operations. We expect that the operating expenses of certain of our partner companies will increase substantially in the foreseeable
future as they continue to develop products and services, increase sales and marketing efforts, and expand operations.



Our partner companies face intense competition, which
could adversely affect their business, financial condition, results of operations and prospects for growth.



There is intense competition in the technology
marketplaces, and we expect competition to intensify in the future. Our business, financial condition, and results of operations
will be materially adversely affected if our partner companies are not able to compete successfully. Many of the present and potential
competitors may have greater financial, technical, marketing and other resources than those of our partner companies. This may
place our partner companies at a disadvantage in responding to the offerings of their competitors, technological changes or changes
in client requirements. Also, our partner companies may be at a competitive disadvantage because many of their competitors have
greater name recognition, more extensive client bases and a broader range of product offerings. In addition, our partner companies
may compete against one another.



The success or failure of many of our partner companies
is dependent upon the ultimate effectiveness of newly-created technologies, medical devices, financial services, healthcare diagnostics,
etc.



Our partner companies’ business strategies
are often highly dependent upon the successful launch and commercialization of an innovative technology or device, including, without
limitation, technologies or devices used in healthcare, financial services or digital media.  Despite all of our efforts to
understand the research and development underlying the innovation or creation of such technologies and devices before we deploy
capital into a partner company, sometimes the performance of the technology or device does not match our expectations or those
of our partner company. In those situations, it is likely that we will incur a partial or total loss of the capital which we deployed
in such partner company.



Our partner companies may fail if they do not adapt to
changing marketplaces.



If our partner companies fail to adapt to
changes in technology and customer and supplier demands, they may not become or remain profitable. There is no assurance that the
products and services of our partner companies will achieve or maintain market penetration or commercial success, or that the businesses
of our partner companies will be successful.



9







The technology marketplaces are characterized
by:



| | · | rapidly changing technology;
| | - | ----------------------------



| | · | evolving industry standards;
| | - | ----------------------------



| | · | frequent introduction of new products and services;
| | - | ---------------------------------------------------



| | · | shifting distribution channels;
| | - | -------------------------------



| | · | evolving government regulation;
| | - | -------------------------------



| | · | frequently changing intellectual property landscapes; and
| | - | ---------------------------------------------------------



| | · | changing customer demands.
| | - | --------------------------



Our future success will depend on our partner
companies’ ability to adapt to these evolving marketplaces. They may not be able to adequately or economically adapt their
products and services, develop new products and services or establish and maintain effective distribution channels for their products
and services. If our partner companies are unable to offer competitive products and services or maintain effective distribution
channels, they will sell fewer products and services and forego potential revenue, possibly causing them to lose money. In addition,
we and our partner companies may not be able to respond to the marketplace changes in an economically efficient manner, and our
partner companies may become or remain unprofitable.



Our partner companies may grow rapidly and may be unable
to manage their growth.



We expect some of our partner companies to
grow rapidly. Rapid growth often places considerable operational, managerial and financial strain on a business. To successfully
manage rapid growth, our partner companies must, among other things:



| | · | improve, upgrade and expand their business infrastructures;
| | - | -----------------------------------------------------------



| | · | scale up production operations;
| | - | -------------------------------



| | · | develop appropriate financial reporting controls;
| | - | -------------------------------------------------



| | · | attract and retain qualified personnel; and
| | - | -------------------------------------------



| | · | maintain appropriate levels of liquidity.
| | - | -----------------------------------------



If our partner companies are unable to manage
their growth successfully, their ability to respond effectively to competition and to achieve or maintain profitability will be
adversely affected.



Based on our business model, some or all of our partner
companies will need to raise additional capital to fund their operations at any given time. We may not be able to fund some or
all of such amounts and such amounts may not be available from third parties on acceptable terms, if at all. Further, if our partner
companies do raise additional capital, either debt or equity, such capital may rank senior to our interests in such companies.



We cannot be certain that our partner companies
will be able to obtain additional financing on favorable terms when needed, if at all. Because our resources and our ability to
raise capital are not unlimited, we may not be able to provide partner companies with sufficient capital resources to enable them
to reach a cash-flow positive position or a sale of the company, even if we wish to do so. General economic disruptions and downturns
may also negatively affect the ability of some of our partner companies to fund their operations from other stockholders and capital
sources. We also may fail to accurately project the capital needs of partner companies. If partner companies need capital but are
not able to raise capital from us or other outside sources, then they may need to cease or scale back operations. In such event,
our interest in any such partner company will become less valuable. If our partner companies raise additional capital, either debt
or equity, that ranks senior to the capital we have deployed, such capital may entitle its holders to receive returns of capital
before the dates on which we are entitled to receive any return of our deployed capital. Also, in the event of any insolvency,
liquidation, dissolution, reorganization or bankruptcy of a partner company, holders of such partner company’s instruments
that rank senior to our deployed capital will typically be entitled to receive payment in full before we receive any return of
our deployed capital. After returning such senior capital, such partner company may not have any remaining assets to use for returning
capital to us, causing us to lose some or all of our deployed capital in such partner company.



10







Economic disruptions and downturns may negatively affect
our partner companies’ plans and their results of operations.



Many of our partner companies are largely
dependent upon outside sources of capital to fund their operations. Disruptions in the availability of capital from such sources
will negatively affect the ability of such partner companies to pursue their business models and will force such companies to revise
their growth and development plans accordingly. Any such changes will, in turn, negatively affect our ability to realize the value
of our capital deployments in such partner companies.



In addition, downturns in the economy as
well as possible governmental responses to such downturns and/or to specific situations in the economy could affect the business
prospects of certain of our partner companies, including, but not limited to, in the following ways: weaknesses in the financial
services industries; reduced business and/or consumer spending; and/or systemic changes in the ways the healthcare system operates
in the United States.



Some of our partner companies may be unable to protect
their proprietary rights and may infringe on the proprietary rights of others.



Our partner companies assert various forms
of intellectual property protection. Intellectual property may constitute an important part of partner company assets and competitive
strengths. Federal law, most typically copyright, patent, trademark and trade secret laws, generally protects intellectual property
rights. Although we expect that our partner companies will take reasonable efforts to protect the rights to their intellectual
property, third parties may develop similar intellectual property independently. Moreover, the complexity of international trade
secret, copyright, trademark and patent law, coupled with the limited resources of our partner companies and the demands of quick
delivery of products and services to market, create a risk that partner company efforts to prevent misappropriation of their technology
will prove inadequate.



Some of our partner companies also license
intellectual property from third parties and it is possible that they could become subject to infringement actions based upon their
use of the intellectual property licensed from those third parties. Our partner companies generally obtain representations as to
the origin and ownership of such licensed intellectual property. However, this may not adequately protect them. Any claims against
our partner companies’ proprietary rights, with or without merit, could subject the companies to costly litigation and divert
their technical and management personnel from other business concerns. If our partner companies incur costly litigation and their
personnel are not effectively deployed, the expenses and losses incurred by our partner companies will increase and their profits,
if any, will decrease.



Third parties have and may assert infringement
or other intellectual property claims against our partner companies based on their patents or other intellectual property claims.
Even though we believe our partner companies’ products do not infringe any third party’s patents, they may have to
pay substantial damages, possibly including treble damages, if it is ultimately determined that they do. They may have to obtain
a license to sell their products if it is determined that their products infringe on another person’s intellectual property.
Our partner companies might be prohibited from selling their products before they obtain a license, which, if available at all,
may require them to pay substantial royalties. Even if infringement claims against our partner companies are without merit, defending
these types of lawsuits takes significant time, is expensive and may divert management attention from other business concerns.



11







Certain of our partner companies could face legal liabilities
from claims made against their operations, products or work.



Because manufacture and sale of certain partner
company products entail an inherent risk of product liability, certain partner companies maintain product liability insurance.
Although none of our current partner companies have experienced any material losses in this regard, there can be no assurance that
they will be able to maintain or acquire adequate product liability insurance in the future and any product liability claim could
have a material adverse effect on a partner company’s financial stability, revenues and results of operations. In addition,
many of the engagements of our partner companies involve projects that are critical to the operation of their clients’ businesses.
If our partner companies fail to meet their contractual obligations, they could be subject to legal liability, which could adversely
affect their business, operating results and financial condition. Partner company contracts typically include provisions designed
to limit their exposure to legal claims relating to their services and products. However, these provisions may not protect our
partner companies or may not be enforceable. Also, some of our partner companies depend on their relationships with their clients
and their reputation for high-quality services and integrity to retain and attract clients. As a result, claims made against our
partner companies’ work may damage their reputation, which in turn could impact their ability to compete for new work and
negatively impact their revenue and profitability.



Our partner companies’ success depends on their
ability to attract and retain qualified personnel.



Our partner companies depend upon their ability
to attract and retain senior management and key personnel, including trained technical and marketing personnel. Our partner companies
also will need to continue to hire additional personnel as they expand. Although our current partner companies have not been the
subject of a work stoppage, any future work stoppage could have a material adverse effect on their respective operations. A shortage
in the availability of the requisite qualified personnel or work stoppage would limit the ability of our partner companies to grow,
to increase sales of their existing products and services, and to launch new products and services.



Government regulations and legal uncertainties may place
financial burdens on the businesses of our partner companies.



Failure to comply with applicable requirements
of the FDA or comparable regulation in foreign countries can result in fines, recall or seizure of products, total or partial suspension
of production, withdrawal of existing product approvals or clearances, refusal to approve or clear new applications or notices
and criminal prosecution. Manufacturers of pharmaceuticals and medical diagnostic devices and operators of laboratory facilities
are subject to strict federal and state regulation regarding validation and the quality of manufacturing and laboratory facilities.
Failure to comply with these quality regulation systems requirements could result in civil or criminal penalties or enforcement
proceedings, including the recall of a product or a “cease distribution” order. The enactment of any additional laws
or regulations that affect healthcare insurance policy and reimbursement (including Medicare reimbursement) could negatively affect
some of our partner companies. If Medicare or private payers change the rates at which our partner companies or their customers
are reimbursed by insurance providers for their products, such changes could adversely impact our partner companies.



Some of our partner companies may be subject to significant
environmental, health and safety regulation.



Some of our partner companies may be subject
to licensing and regulation under federal, state and local laws and regulations relating to the protection of the environment and
human health and safety, including laws and regulations relating to the handling, transportation and disposal of medical specimens,
infectious and hazardous waste and radioactive materials, as well as to the safety and health of manufacturing and laboratory employees.
In addition, the federal Occupational Safety and Health Administration has established extensive requirements relating to workplace
safety. Compliance with such regulations could increase operating costs at certain of our partner companies, and the failure to
comply could negatively affect the operations and results of some of our partner companies.



12







Catastrophic events may disrupt our partner companies’
businesses.



Some of our partner companies are highly
automated businesses and rely on their network infrastructure, various software applications and many internal technology systems
and data networks for their customer support, development, sales and marketing and accounting and finance functions. Further, some
of our partner companies provide services to their customers from data center facilities in multiple locations. Some of these data
centers are operated by third parties, and the partner companies have limited control over those facilities. A disruption or failure
of these systems or data centers in the event of a natural disaster, telecommunications failure, power outage, cyber-attack,
war, terrorist attack or other catastrophic event could cause system interruptions, reputational harm, delays in product development,
breaches of data security and loss of critical data. Such an event could also prevent the partner companies from fulfilling customer
orders or maintaining certain service level requirements, particularly in respect of their SaaS offerings. While certain of our
partner companies have developed certain disaster recovery plans and maintain backup systems to reduce the potentially adverse
effect of such events, a catastrophic event that resulted in the destruction or disruption of any of their data centers or their
critical business or information technology systems could severely affect their ability to conduct normal business operations and,
as a result, their business, operating results and financial condition could be adversely affected.



We cannot provide assurance that our partner
companies’ disaster recovery plans will address all of the issues they may encounter in the event of a disaster or other
unanticipated issue, and their business interruption insurance may not adequately compensate them for losses that may occur from
any of the foregoing. In the event that a natural disaster, terrorist attack or other catastrophic event were to destroy any part
of their facilities or interrupt their operations for any extended period of time, or if harsh weather or health conditions prevent
them from delivering products in a timely manner, their business, financial condition and operating results could be adversely
affected.



13







PART III



| | ITEM 10. | DIRECTORS, EXECUTIVE
OFFICERS AND CORPORATE GOVERNANCE
| | -------- | ------------------------------------------------------



|Names of Directors and other Information:
|-----------------------------------------



|Stephen T. Zarrilli, age 56           |  | Other public directorships:Virtus Investment       
|------------------------------------- |  | ---------------------------------------------------
|President and Chief Executive Officer |  | Partners, Inc.                                     
|Director since: 2012                  |  | Former public directorships within past five years:
|Safeguard Board Committees:None       |  | Nutrisystem, Inc.                                  



Career Highlights:

| | — | President and Chief Executive Officer (November 2012 – present); Senior Vice President and Chief Financial Officer (June
2008 – November 2012); and Acting Chief Administrative Officer and Acting Chief Financial Officer (December 2006 –
June 2007), Safeguard Scientifics, Inc.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | — | Co-founder and Managing Director, Penn Valley Group, a middle-market management advisory and private equity firm (2004 –
June 2008)
| | - | -----------------------------------------------------------------------------------------------------------------------------------

| | — | Chief Financial Officer, Fiberlink Communications Corporation (2001 – 2004)
| | - | ---------------------------------------------------------------------------

| | — | Chief Executive Officer, Concellera Software, Inc. (2000 – 2001)
| | - | ----------------------------------------------------------------

| | — | Chief Executive Officer (1999 – 2000) and Chief Financial Officer (1994 – 1998), US Interactive, Inc.
| | - | -----------------------------------------------------------------------------------------------------

| | — | Deloitte & Touche (1983 – 1994)
| | - | -------------------------------



Experience and Qualifications:Mr. Zarrilli has
more than 30 years of experience in corporate finance and accounting, general operations and executive management; capital markets
transactions; debt and equity financings; merger and acquisition transactions; and emerging ventures.



|Julie A. Dobson, age 61
        Director since: 2003
        Safeguard Board Committees:Compensation
        (Chair), Nominating & Corporate Governance |  | Other public directorships:None.
        Former public directorships within past five years:American Water Works Company Inc., PNM Resources, Inc. and RadioShack Corporation
|------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Career Highlights:

| | — | Chief Operating Officer, Telecorp PCS, Inc., a wireless/mobile phone company that was acquired by AT&T Wireless, Inc. (1998
– 2002)
| | - | -----------------------------------------------------------------------------------------------------------------------------------

| | — | Various executive positions during her 18-year career with Bell Atlantic Corporation, including President, Bell Atlantic Corporation’s
New York/New Jersey Metro Region mobile phone operations, Vice President of Bell Atlantic Enterprises Corporation, and President
and Chief Executive Officer of Bell Atlantic Business Systems International
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Experience and Qualifications:Ms. Dobson
has 22 years of corporate and entrepreneurial experience, including experience relevant to corporate finance and accounting matters;
strategic planning, corporate development and operations management; capital markets transactions; and debt and equity financings.
Ms. Dobson also has relevant experience growing businesses organically and through merger and acquisition transactions and experience
serving on public company boards and the principal committees thereof.



14







|Russell D. Glass, age 55
        Director since: 2018
        Safeguard Board Committees:Compensation |  | Other public directorships:None
        Former public directorships within past five years:None
|----------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------



Career Highlights:

| | — | Founder and Managing Member of RDG Capital LLC (2005 – present)
| | - | ---------------------------------------------------------------

| | — | Managing Partner of RDG Capital Fund Management, an investment advisory firm (2014 – present)
| | - | ---------------------------------------------------------------------------------------------

| | — | Senior Adviser at Knights Genesis Group, a private equity firm (2017 – present)
| | - | -------------------------------------------------------------------------------

| | — | Director of Blue Bite LLC, a digital marketing technology company (2009 – present)
| | - | ----------------------------------------------------------------------------------

| | — | Director of A.G. Spanos Corporation, a national real estate developer and owner of the NFL Los Angeles Chargers (1993 –
present)
| | - | --------------------------------------------------------------------------------------------------------------------------------

| | — | Managing Member of Princeford Capital Management, an investment advisory firm (2009 – 2014)
| | - | -------------------------------------------------------------------------------------------

| | — | Chief Executive Officer of Cadus Pharmaceutical Corporation (n/k/a Cadus Corporation), a biotechnology holding company (2000
– 2003), and director (1998 – 2011)
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

| | — | Co-Chairman and Chief Investment Officer of Ranger Partners, an investment fund management company (2002 – 2003)
| | - | ----------------------------------------------------------------------------------------------------------------

| | — | President and Chief Investment Officer of Icahn Associates Corporation, a diversified investment firm and principal investment
vehicle for Carl Icahn (1998 – 2002)
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | — | Partner at Relational Investors LLC, an investment fund management company (1996 – 1998)
| | - | ----------------------------------------------------------------------------------------

| | — | Partner at Premier Partners Inc., an investment banking and research firm (1988 – 1996)
| | - | ---------------------------------------------------------------------------------------

| | — | Analyst with Kidder, Peabody & Co., an investment banking firm (1984 – 1986)
| | - | ----------------------------------------------------------------------------

| | — | Holds directorship at the Council for Economic Education and held other previous directorships at Automated Travel Systems,
Inc., Axiom Biotechnologies, Global Discount Travel Services/Lowestfare.com, National Energy Group and Next Generation Technology
Holdings, Inc.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | — | Received A.B. in Economics from Princeton University
| | - | ----------------------------------------------------

| | — | Received M.B.A. from Stanford Graduate School of Business
| | - | ---------------------------------------------------------



Experience and Qualifications:Mr. Glass
has experience relating to private equity, investment banking, and serving as chief executive officer of a public company. Mr.
Glass has experience serving on the boards of public and private companies in a wide range of industries, including biotech, healthcare
information technology, pharmacology, enterprise systems software, real estate, energy, and digital marketing.



|Stephen Fisher, age 53
        Director since: 2015
        Safeguard Board Committees:Audit , Compensation |  | Other public directorships:Vonage Holdings
        Corp., Inc.
        Former public directorships within past five years:None
|----------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------



Career Highlights:

| | — | Senior Vice President and Chief Technology Officer, eBay Inc., a leading ecommerce company (September 2014 – present)
| | - | ---------------------------------------------------------------------------------------------------------------------

| | — | Executive Vice President, Technology (December 2008 – September 2014) and several other executive positions (October
2004 – December 2008) during his tenure with salesforce.com, a provider of leading, worldwide customer relationship management
applications and products
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | — | Various positions with AT&T Labs (1996 – 1999 and 2001 – 2004)
| | - | --------------------------------------------------------------

| | — | Founder, President and Chief Executive Officer, NotifyMe Networks (1999 – 2000)
| | - | -------------------------------------------------------------------------------



Experience and Qualifications:Mr. Fisher’s
corporate experience includes experience relevant to strategic planning; business and product development; operations management;
and growing businesses organically. In addition, he possesses deep domain expertise in the technology and communications services
sectors.



15







|Ira M. Lubert, age 67
        Director since: 2018
        Safeguard Board Committees:Nominating
        & Corporate Governance |  | Other public directorships:None
        Former public directorships within past five years:Pennsylvania Real Estate Investment Trust
|------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------



Career Highlights:

| | — | Co-Founder of and a Partner of Quaker Partners Management, L.P., which advises a series of life sciences funds (2002 –
present)
| | - | -------------------------------------------------------------------------------------------------------------------------------

| | — | Co-Founder of and a Partner of LEM Capital, L.P., which advises a series of real estate funds invested primarily in multifamily
properties (2002 – present)
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------

| | — | Co-Founder of and a Partner of LBC Credit Management, LP, which advises a series of structured finance funds (2005 –
present)
| | - | -----------------------------------------------------------------------------------------------------------------------------

| | — | Co-Founder of and a Partner of Patriot Financial Management, L.P., which advises a series of community banking funds (2007
– 2017)
| | - | ----------------------------------------------------------------------------------------------------------------------------------

| | — | Co-Founder of Versa Capital Management, LLC, specializing in distressed and special situations (2004)
| | - | -----------------------------------------------------------------------------------------------------

| | — | Co-Founder of and a Partner of LLR Management, L.P., which focuses on lower middle market growth companies (1999 – present)
| | - | ---------------------------------------------------------------------------------------------------------------------------

| | — | Co-Founder and Chairman of Lubert-Adler Management Company, L.P., which advises a series of real estate funds (1997
– present)
| | - | ------------------------------------------------------------------------------------------------------------------------------

| | — | Co-Founder and Chairman of Independence Capital Partners, LLC, which provides services to certain investment advisers
(1997 – present)
| | - | --------------------------------------------------------------------------------------------------------------------------------------

| | — | Managing Director and Co-Founder of TL Ventures, the subsequent Safeguard-affiliated family of early stage venture funds with
over $1 billion of capital under management (1986 – 1997)
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Experience and Qualifications:Mr. Lubert
has 30 years of experience relating to private equity and investment management, including life sciences funds. Mr. Lubert began
his private equity career with Safeguard. Mr. Lubert was honored as Drexel University’s LeBow College of Business 60th Business
Leader of the Year and was honored by Temple University for his excellence in leadership with the Musser Award.



|George MacKenzie, age 69
        Director since: 2003
        Safeguard Board Committees:Audit (Chair),
        Compensation, Nominating & Corporate Governance |  | Other public directorships:American Water
        Works Company Inc. (Chair) and Tractor Supply Company
        Former public directorships within past five years:None
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



Career Highlights:

| | — | Interim Chief Executive Officer, American Water Works Company Inc., a provider of water services in North America (January
– April 2006)
| | - | ----------------------------------------------------------------------------------------------------------------------------------------

| | — | Interim Chief Executive Officer, C&D Technologies, Inc., a technology company that markets systems for the conversion and
storage of electrical power (March – July 2005)
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | — | Executive Vice President and Chief Financial Officer, P.H. Glatfelter Company, a manufacturer of specialty papers and engineered
products (September 2001 – June 2002)
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | — | Vice Chairman (2000 – 2001) and Chief Financial Officer (1995 – 2001) of, and several other executive positions
during his 22-year career with, Hercules, Incorporated, a global chemical specialties manufacturer
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Experience and Qualifications:Mr. MacKenzie
has extensive experience in corporate finance and accounting. He has served as the chief financial officer of a publicly traded
company, and he is a certified public accountant. Mr. MacKenzie also has experience in capital markets transactions; debt and equity
financings; global strategic planning and operations management; merger and acquisition transactions; and risk management. In addition,
he has extensive public company board experience, including service on multiple audit, compensation and nominating and corporate
governance committees.



16







|Maureen F. Morrison, age 63
        Director since: October, 2017
        Safeguard Board Committees:Audit |  | Other public directorships:None
        
        Former public directorships within past five years:None
|---------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------



Career Highlights:

| | — | Audit Partner with PriceWaterhouseCoopers LLP for 28 years, serving public and private multi-national clients in the technology
and manufacturing industries. Ms. Morrison led the Atlanta, Georgia Technology Audit Practice for six years, and held other positions
at the firm, prior to her retirement in 2015.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Experience and Qualifications:During her
tenure at PriceWaterhouseCoopers LLP, Ms. Morrison worked closely with clients concentrated in the technology industry dealing
with acquisitions, international expansion, financing transactions, subjective technical matters and regulatory compliance. Ms.
Morrison is a certified public accountant and has extensive experience in accounting, finance, mergers and acquisitions and capital
markets transactions.



|John J. Roberts, age 73
        Director since: 2003
        Safeguard Board Committees:Audit, Compensation,
        Nominating & Corporate Governance (Chair) |  | Other public directorships:Armstrong World
        Industries, Inc., Vonage Holdings Corp., Inc. and Trustee, Pennsylvania Real Estate Investment Trust
        Former public directorships within past five years:None
|-------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Career Highlights:

| | — | Global Managing Partner and a Member of the Leadership Team, PricewaterhouseCoopers LLP at the time of his retirement in June
2002, completing a 35-year career with the professional services firm during which he served in a variety of client service and
operating positions
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Experience and Qualifications:Mr. Roberts
is a certified public accountant and has extensive experience in corporate finance and accounting; capital markets transactions;
debt and equity financings; global strategic planning, corporate development and operations management; management and technology
consulting; risk management; and merger and acquisition transactions. He also has extensive public and private company board service
experience, including service on multiple audit committees.



17







|Robert J. Rosenthal, PhD, age 61
        Chairman of the Board (effective May 2016)
        Director since: 2007
        Safeguard Board Committees:None* |  | Other public directorships:Bruker Corporation
        Former public directorships within past five years:
        None
|--------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------



*As our current Chairman of the Board, Dr. Rosenthal is an ex
officio member of each of our standing committees.



Career Highlights:

| | — | Chief Executive Officer and director, Taconic Biosciences, Inc., a provider of research models for pharmaceutical and biotechnology
researchers (June 2014 – present)
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | — | Chairman and Chief Executive Officer, IMI Intelligent Medical Implants, AG, a medical technology company that developed an
intelligent retinal implant for degenerative retinal disorders (January 2010 – December 2013)
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | — | President and Chief Executive Officer, Magellan Biosciences, Inc., a provider of clinical diagnostics and life sciences research
tools (October 2005 – December 2009)
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | — | President and Chief Executive Officer, TekCel, Ltd., a provider of life sciences research tools (October 2003 –
January 2007)
| | - | -----------------------------------------------------------------------------------------------------------------------------

| | — | President and Chief Executive Officer, Boston Life Sciences, Inc., a diagnostic and therapeutic development company (July 2002
– October 2003)
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------

| | — | President and Chief Executive Officer, Magellan Discovery Technologies, LLC, a life sciences acquisition company (January 2001
– July 2002)
| | - | -------------------------------------------------------------------------------------------------------------------------------------------

| | — | Senior Vice President, Perkin Elmer Corporation and President of its instrument division (March 1999 – November 2000)
| | - | ---------------------------------------------------------------------------------------------------------------------

| | — | Various executive positions, Thermo Optek Corporation (September 1995 – February 1999)
| | - | --------------------------------------------------------------------------------------



Experience and Qualifications:Dr. Rosenthal
has 30 years of experience relating to companies involved in the development of diagnostics, therapeutics, medical devices and
life sciences tools and technologies. His specific experience includes strategic planning and positioning; corporate, business
and product development; operations management; capital markets transactions; debt and equity financings; fund-raising; merger
and acquisition transactions; and corporate finance. Dr. Rosenthal also has significant public and private company board experience.



Names of Officers and Biographical Information



|Name                 | Age |  | Position                                                                |  | Executive Officer Since
|-------------------- | --- |  | ----------------------------------------------------------------------- |  | -----------------------
|Stephen T. Zarrilli  | 56  |  | President, Chief Executive Officer and Director                         |  | 2008                   
|Jeffrey B. McGroarty | 48  |  | Senior Vice President and Chief Financial Officer                       |  | 2012                   
|Brian J. Sisko       | 57  |  | Chief Operating Officer, Executive Vice President and Managing Director |  | 2007                   



Mr. Zarrilli joined Safeguard as Senior Vice President
and Chief Financial Officer in June 2008 and became President and Chief Executive Officer in November 2012. Prior to joining Safeguard,
Mr. Zarrilli co-founded, in 2004, the Penn Valley Group, a middle-market management advisory and private equity firm, and
served as a Managing Director there until June 2008. Mr. Zarrilli also served as Acting Senior Vice President, Acting Chief
Administrative Officer and Acting Chief Financial Officer of Safeguard from December 2006 to June 2007. Mr. Zarrilli also
served as the Chief Financial Officer, from 2001 to 2004, of Fiberlink Communications Corporation, a provider of mobile access
solutions for large enterprises; as the Chief Executive Officer, from 2000 to 2001, of Concellera Software, Inc., a developer of
content management software; as the Chief Executive Officer, from 1999 to 2000, and Chief Financial Officer, from 1994 to 1998,
of US Interactive, Inc. (at the time a public company), a provider of Internet strategy consulting, marketing and technology services;
and, previously, with Deloitte & Touche from 1983 to 1994. Mr. Zarrilli is a director of Virtus Investment Partners,
Inc. and currently serves as Chair of the Audit Committee and, until June 2015, was a director and Chairman of the Audit Committee
of NutriSystem, Inc.



18







Mr. McGroarty joined Safeguard as Vice President and Corporate
Controller in December 2005, subsequently became Vice President - Finance and Corporate Controller, and served as Senior Vice President
- Finance from November 2012 until his promotion to Senior Vice President and Chief Financial Officer in April 2013. Prior to joining
Safeguard, Mr. McGroarty served as Interim Controller of Cephalon, Inc. from October 2005 to December 2005; Vice President-Financial
Planning & Analysis and previously Assistant Controller at Exide Technologies from March 2002 to September 2005; and, previously,
with PricewaterhouseCoopers from 1991 to 2001.



Mr. Sisko joined Safeguard as Senior Vice President and General
Counsel in August 2007 and served as Executive Vice President and Managing Director from November 2012 until his promotion to Chief
Operating Officer, Executive Vice President and Managing Director in January 2014. Prior to joining Safeguard, Mr. Sisko served
as Chief Legal Officer, Senior Vice President and General Counsel of Traffic.com (at the time, a public company), a former partner
company of Safeguard, from February 2006 until June 2007 (following its acquisition by NAVTEQ Corporation in March 2007); Chief
Operating Officer from February 2005 to January 2006 of Halo Technology Holdings, Inc., a public holding company for enterprise
software businesses (Halo Technology Holdings filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy
Code in August 2007); ran B/T Business and Technology, an advisor and strategic management consultant to a variety of public and
private companies, from January 2002 to February 2005; and was a Managing Director from April 2000 to January 2002, of Katalyst,
LLC, a venture capital and consulting firm. Mr. Sisko also previously served as Senior Vice President-Corporate Development and
General Counsel of National Media Corporation, at the time a New York Stock Exchange-listed multi-media marketing company with
operations in 70 countries, and as a partner in the corporate finance, mergers and acquisitions practice group of the Philadelphia-based
law firm, Klehr, Harrison, Harvey, Branzburg LLP.



Skills and Qualifications of Board








The following table includes the skills and qualifications of
each director that led our Board to conclude that the director is qualified to serve on our Board.





|                                                     | GeorgeMacKenzie |  | RussellGlass |  | IraLubert |  | MaureenMorrison |  | JohnRoberts |  | RobertRosenthal |  | StephenZarrilli |  | JulieDobson |  | StephenFisher
|---------------------------------------------------- | --------------- |  | ------------ |  | --------- |  | --------------- |  | ----------- |  | --------------- |  | --------------- |  | ----------- |  | -------------
|Operational / Direct Management Experience           | ü               |  | ü            |  | ü         |  | ü               |  | ü           |  | ü               |  | ü               |  | ü           |  | ü            
|Capital Markets Experience                           | ü               |  | ü            |  | ü         |  | ü               |  | ü           |  | ü               |  | ü               |  | ü           |  | ü            
|Private Equity / Venture Capital Industry Experience | ü               |  | ü            |  | ü         |  | ü               |  | ü           |  | ü               |  | ü               |  | ü           |  | ü            
|Financial Expertise / Literacy                       | ü               |  | ü            |  | ü         |  | ü               |  | ü           |  | ü               |  | ü               |  | ü           |  | ü            
|C-level Experience                                   | ü               |  | ü            |  | ü         |  |                 |  | ü           |  | ü               |  | ü               |  | ü           |  | ü            
|Other Public / Private Director Experience           | ü               |  | ü            |  | ü         |  |                 |  | ü           |  | ü               |  | ü               |  | ü           |  | ü            







Audit Committee. The
Audit Committee held four meetings during 2017. The Audit Committee’s responsibilities, which are described in detail in
its charter, include, among other duties, the responsibility to:



| | · | Assist the Board in fulfilling its responsibilities regarding general oversight of the integrity of Safeguard’s financial
statements, Safeguard’s compliance with legal and regulatory requirements and the performance of Safeguard’s internal
audit function;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Interact with and evaluate the performance, qualifications and independence of Safeguard’s independent registered public
accounting firm;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------



| | · | Review and approve related party transactions; and
| | - | --------------------------------------------------



| | · | Prepare the report required by SEC regulations to be included in the proxy statement.
| | - | -------------------------------------------------------------------------------------



19







The Audit Committee has the sole authority to retain, set compensation
and retention terms for, terminate and oversee the relationship with Safeguard’s independent registered public accounting
firm (which reports directly to the Audit Committee). The Audit Committee also oversees the activities of the internal auditor,
reviews the effectiveness of the internal audit function and approves the appointment of the internal auditor. The Audit Committee
has the authority to obtain advice, counsel and assistance from internal and external legal, accounting or other advisors as the
Audit Committee deems necessary to carry out its duties and to receive appropriate funding from Safeguard for such advice and assistance.
Although the Audit Committee has the powers and responsibilities set forth in its charter, its role is oversight, and management
has primary responsibility for the financial reporting process of Safeguard.



The Board has determined that each member of the Audit Committee
meets the independence requirements established by SEC regulations, the NYSE listing standards and our Corporate Governance Guidelines.
The Board has determined that Ms. Morrison, Mr. Roberts and Dr. Rosenthal are “audit committee financial experts” within
the meaning of the SEC regulations, and the Board has determined that each member of the Audit Committee has accounting and related
financial management expertise within the meaning of the NYSE listing standards. The Board previously determined that Mr. MacKenzie,
who is not standing for re-election at this year’s annual meeting, was an “audit committee financial expert”
within the meaning of the SEC regulations. Mr. Roberts serves as a member of the audit committee of the board of directors of four
publicly traded companies, including our Audit Committee. The Board has determined that such simultaneous service does not impair
Mr. Roberts’ ability to effectively serve on our Audit Committee.



20









Code of Business Conduct and other Charters.



Safeguard’s Corporate Governance Guidelines, Code of Business
Conduct and Ethics, Audit Committee Charter, Compensation Committee Charter and Nominating & Corporate Governance Committee
Charter are available at www.safeguard.com/governance. The Code of Business Conduct and Ethics is applicable to all employees of
Safeguard, including each of our executive and financial officers, and the members of our Board. Safeguard will post information
regarding amendments to or waivers from our Code of Business Conduct and Ethics (to the extent applicable to Safeguard’s
directors or executive officers) in the Corporate Governance section of our website. Our website is not part of this report. All
references to our website address are intended to be inactive textual references only.



Section 16(a) Beneficial Ownership Reporting Compliance.



Section 16(a) of the Securities Exchange Act of 1934 requires
our directors, executive officers and greater than 10% holders of our common stock to file with the SEC reports of ownership of
our securities and changes in ownership of our securities. Based solely on our review of the copies of reports we have received
and upon written representations from the reporting persons that no Form 5 reports were required to be filed by those persons,
Safeguard believes there were no late filings by our directors and executive officers during 2017. There were no known holders
of greater than 10% of our common stock during 2017 who failed to file the required reports.



| | ITEM 11. | EXECUTIVE COMPENSATION
| | -------- | ----------------------



Compensation Discussion and Analysis



Executive Summary



Our Compensation Committee (for purposes of this discussion,
the “Committee”) is responsible for establishing our company-wide compensation philosophy and practices, for determining
the compensation for our “named executive officers,” and for approving the compensation for our other senior executives,
based on the recommendations of our President and Chief Executive Officer. This Compensation Discussion and Analysis describes
our executive compensation program and the compensation decisions made for 2017 for our named executive officers. At December 31,
2017, there were three individuals serving as named executive officers of Safeguard:



|Stephen T. Zarrilli  |  | President and Chief Executive Officer                                  
|-------------------- |  | -----------------------------------------------------------------------
|Jeffrey B. McGroarty |  | Senior Vice President and Chief Financial Officer                      
|Brian J. Sisko       |  | Chief Operating Officer, Executive Vice President and Managing Director



Our senior executive group is currently comprised of a total
of six executives with the title of Senior Vice President or higher, including our current three named executive officers. This
Compensation Discussion and Analysis (“CD&A”) also describes programs that apply to our senior executive group
as a whole.



In January 2018, the Company announced that, effective immediately,
the Company would cease making capital deployments into any new partner company opportunities and that it would focus its efforts
on managing and financially supporting its existing partner companies to exit events, and ultimately returning the net proceeds
of such efforts to its shareholders. This strategy is sometimes referred to in this CD&A as the “New Strategy.”
Further, on April 6, 2018, the Company announced that the Company promoted Mr. Sisko to the position of President and Chief Executive
Officer, effective as of July 1, 2018, to succeed Mr. Zarrilli. Mr. Zarrilli will act as a special advisor to the Company through
September 30, 2018 and then retire. In addition, Mr. McGroarty will depart from the Company, effective June 30, 2018. David Kille,
currently the Company’s Corporate Controller, will assume the role of Chief Financial Officer, effective June 1, 2018.



21







Other than as specifically noted, the discussion set forth in
this CD&A concerning the Company’s compensation policies and practices, relates to periods prior to the establishment
of the New Strategy and, therefore, does not necessarily reflect policies and practices that will prevail or apply under the New
Strategy. Set forth below under the heading “New Strategy - Changes in Compensation Policies and Practices” is a summary
regarding changes in compensation policies and practices recently adopted by the Committee in the context of the New Strategy.



2017 Business Highlights



Highlights of the year are included below because the Committee
believes senior executive compensation should correlate with Safeguard’s performance.



Overall, the Committee believes
that Safeguard executed well against its 2017 strategic plan.



| | · | We deployed $36.8 million of additional capital to support the growth of partner companies in which we already had an interest
at December 31, 2016.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Most of our partner companies performed on or ahead of plan, with year over year revenue growth in excess of 23%.
| | - | -----------------------------------------------------------------------------------------------------------------



| | · | We returned an aggregate of $16.9 million to our balance sheet, consisting of $15.5 million in cash related to the sale of
our interest in Nexxt, Inc., formerly Beyond.com, and $1.4 million from escrows related to prior years’ transactions.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | In addition, we received a $10.5 million promissory note bearing 9.5% interest payable on or before March 1, 2020 in connection
with the Beyond.com transaction.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | We repurchased an aggregate of $14 million of our outstanding convertible debentures.
| | - | -------------------------------------------------------------------------------------



| | · | We entered into a $75 million debt facility with HPS Investment Partners, LLC.
| | - | ------------------------------------------------------------------------------



Key 2017 Compensation Decisions



| | · | The 2017 base salaries and target management incentive plan awards for Messrs. Zarrilli, McGroarty and Sisko were unchanged
from their 2016 levels.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------



| | · | After reviewing Safeguard’s performance against the objectives set forth in the 2017 management incentive plan, the Committee
approved a 90% achievement level in the partner company performance component of the corporate objectives and a 60% achievement
level in overall corporate performance, resulting in a 75% payout (against targeted amounts) to our named executive officers. While
the Committee believed the year included positive results in corporate operations, and in most of the partner companies, Safeguard
did not meet all of our objectives, particularly in the returns provided to shareholders.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | As part of the deliberations regarding long-term incentive awards made to our management team, the Committee reviewed the competitive
market data provided by its consultant, the individual performance of each of our named executive officers and an assessment of
the long-term compensation element relative to our peers. Based on such review and taking into consideration that no deployments
were made in 2017 into new partner companies and, therefore, a pool of new partner companies to measure performance against does
not exist, for the grants made in 2017, the Committee (1) chose to reduce the opportunity to earn long-term incentives by approximately
40% for each of Messrs. Zarrilli, McGroarty and Sisko as compared to the grants made in 2016 and (2) awarded such incentives solely
in the form of restricted stock grants subject to time-based vesting. This compares to the value of the 2016 grants that were awarded
at a ratio of 1/3 in time-based restricted stock and 2/3 in performance based stock units.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



22







Effective Corporate Governance Principles



Below is a summary of what we did and what we didn’t do
relating to executive compensation during and related to 2017, and prior to our announcement of the New Strategy:







|WHAT WE DID:      
|------------------
|                  
|ü                 
|                  
|ü                 
|                  
|ü                 
|                  
|ü                 
|                  
|ü                 
|                  
|ü                 
|                  
|ü                 
|                  
|WHAT WE DIDN’T DO:
|                  
|Ä                 
|                  
|Ä                 
|                  
|Ä                 
|                  
|Ä                 
|                  
|Ä                 
|                  
|Ä                 
|                  
|Ä                 





The Committee reviews our compensation philosophy each year
to ensure that its principles and objectives are aligned with our overall business strategy and aligned with the interests of our
shareholders. We seek to apply a consistent philosophy across our executive group, not just among our named executive officers.



23







Compensation Philosophy and Objectives



Our overall goals in compensating our executives in 2017 were
as follows:



| | · | Attract, retain and motivate executives whose experience and skills could be leveraged across our partner companies to facilitate
the partner companies’ growth, success and ultimate monetization;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Promote and reward the achievement of short-term and long-term corporate and individual objectives that our Board and management
believe will lead to long-term growth in shareholder value; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Encourage meaningful equity ownership and the alignment of executive and shareholder interests as an incentive to increase
shareholder value.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------



Our executive compensation
program in 2017 was intended to:



| | · | Provide a mix of fixed and variable at-risk cash compensation;
| | - | --------------------------------------------------------------



| | · | Balance rewards for short-term performance with our ultimate goal of producing long-term shareholder value;
| | - | -----------------------------------------------------------------------------------------------------------



| | · | Link variable compensation to specific, identifiable metrics that demonstrate value creation for Safeguard; and
| | - | ---------------------------------------------------------------------------------------------------------------



| | · | Facilitate executive retention.
| | - | -------------------------------



In January 2018, Safeguard announced the New Strategy. See “New
Strategy - Changes in Compensation Policies and Practices” below.



Role of the Compensation Committee in Compensation Decisions



The Committee is responsible for the design of our executive
compensation program and for making decisions regarding our named executive officers’ compensation. The Committee also makes,
or has final approval authority regarding, all compensation decisions for our other senior executives. Annually, the Committee
reviews executive compensation practices, including the methodology for setting total named executive officers’ compensation,
the goals of the program, and the overall compensation philosophy for Safeguard. In setting executive compensation and designing
our overall compensation program, the Committee considers the data and advice provided by its independent compensation consultant
(as well as information that may be provided by management) to determine the appropriate level, on an absolute and relative basis,
of compensation, as well as the mix of compensation components. The Committee has looked to competitive information for guidance
rather than rigid adherence to specific percentages. The Committee believes that the overall objectives of its compensation philosophy
are better achieved through flexibility. The Committee ultimately makes decisions regarding executive compensation based on its
assessment of Safeguard’s performance and the achievement of individual, partner company and corporate goals.



The Committee is also responsible for approving and granting
equity awards to our directors, executives, employees and, from time to time, other independent advisors and consultants, with
the exception of certain limited authority that the Committee has delegated to the President and Chief Executive Officer to make
small equity grants between regularly scheduled Committee meetings (primarily to new hires). The Committee’s responsibilities
are more fully described in its charter, which is available at www.safeguard.com/governance.



Role of Executive Officers in Compensation Decisions



Within the parameters approved by the Committee each year, our
named executive officers are responsible for evaluating and setting compensation for our other employees. Our President and Chief
Executive Officer annually assesses the performance of each other named executive officer and each of his other senior executive
direct reports. When applicable, he also makes recommendations to the Committee concerning the achievement by our other senior
executives of their individual short-term objectives as well as other performance achievements. In determining the compensation
of our executives, the Committee considers our President and Chief Executive Officer’s assessment and recommendations. However,
other than for compensation that has been established contractually or under quantitative formulas established by the Committee
each year under our management incentive program, the Committee exercises its own discretion in determining whether to accept or
modify our President and Chief Executive Officer’s recommendations. These individuals are not present when the Committee
and our President and Chief Executive Officer review their performance or when the Committee makes its determinations concerning
their compensation.



24







Role of Consultant



During 2017, as in recent years, the Committee engaged Semler
Brossy Consulting Group, LLC, an independent compensation consulting firm, to assist the Committee by providing compensation expertise
regarding peer group analysis and compensation data, helping the Committee select appropriate performance measures and goals and
advising the Committee regarding evolving compensation best practices and trends. Specifically, Semler Brossy provided information
relating to competitiveness of pay levels, compensation plan design, specific equity grant matters, market trends, risk assessment
and management and technical considerations concerning named executive officers, other executives and directors. Semler Brossy
also assisted the Committee with the reporting of executive compensation matters relating to 2017 under applicable SEC disclosure
rules. Semler Brossy does not provide services to Safeguard other than those provided to the Committee. Semler Brossy reported
to and acted at the direction of, and attended selected meetings as requested by, the Chairperson of the Committee.



The Committee, which has the sole authority to hire and terminate
its consultant, evaluates the performance of its consultant annually. In 2017, the Committee considered whether Semler Brossy was
“independent,” pursuant to SEC and NYSE rules and our corporate governance documents, and determined that Semler Brossy
and its consultants meet those independence standards. In addition, based on its evaluation of Semler Brossy’s independence
and information provided by Semler Brossy, the Committee also determined in 2017 that Semler Brossy’s services did not present
any conflict of interest.



The Committee has utilized the services of Semler Brossy since
2008. Semler Brossy is compensated on an hourly billing basis. Invoices are directed to and reviewed and approved by the Chairperson
of the Committee before payment by Safeguard.



With respect to the New Strategy, Semler Brossy provided assistance
to the Committee regarding compensation changes for executives and directors in support of the New Strategy, which included providing
competitive information on similar initiatives, developing alternatives and working with the Committee’s other advisors to
finalize executive employment agreements and long-term incentive programs.



Setting Executive Compensation



The Committee believes that a very significant portion of each
executive’s total compensation should be variable or “at-risk.” It is the view of the Committee that the greater
the ability of an executive (based on role and responsibilities at Safeguard) to impact Safeguard’s achievement of its short-
and long-term objectives, the greater the percentage of such executive’s overall compensation that should be “at-risk.”
In 2017, the Committee principally utilized variable/at-risk cash compensation and time-based equity awards to pursue its objectives
in this regard. See “New Strategy - Changes in Compensation Policies and Practices” below.



Because no deployments were made in 2017 into new partner companies
and, therefore, a pool of new partner companies to measure performance against does not exist, for the grants made in 2017, the
Committee (1) chose to reduce the opportunity to earn long-term incentives by approximately 40% for each of Messrs. Zarrilli, McGroarty
and Sisko as compared to the grants made in 2016 and (2) awarded such incentives solely in the form of restricted stock grants
subject to time-based vesting. This compares to the value of the 2016 grants that were awarded at a ratio of 1/3 in time-based
restricted stock and 2/3 in performance based stock units.



The following graphs represent the percentage of total 2017
compensation for the various elements (assuming the short-term and long-term awards are paid at target levels) for our Chief Executive
Officer (approximately 70% of his compensation being variable/at-risk) and the average percentage of total compensation for each
of these elements for the other two named executive officers (approximately 59% of their collective compensation being variable/at-risk)
in 2017, further illustrating our emphasis on pay for performance:



25











Safeguard management provides the Committee with comprehensive
tally sheets on an annual basis to facilitate the Committee’s review of the total compensation of our named executive officers
and other senior executives.



Specifically with regard to our named executive officers, the
Committee annually reviews each element of total compensation and compares them to comparable elements at a group of specific companies
and industries against which we believe we compete for talent and for shareholder investment, including the venture capital and
private equity industries. The Committee also reviews each element of compensation by reference to industry-specific compensation
surveys. The analysis provided to the Committee by Semler Brossy at its meeting in July 2016 for purposes of the Committee’s
consideration of 2017 cash and total compensation levels measured our compensation against data from the following sources:



|Proxy Peer Group Data       | à | Business development companies, registered investment companies and holding companies that are representative of the unique nature of our business model for a publicly owned company. Included in this group were: Capital Southwest Corporation; 180 Degree Capital Corp. (f/k/a Harris & Harris Group, Inc.); Hercules Capital, Inc. (f/k/a Hercules Technology Growth Capital, Inc.); Actua, Corp. (formerly ICG Group, Inc.); KCAP Financial, Inc.; Main Street Capital Corporation; Triangle Capital Corporation; American Capital Ltd.; Medallion Financial Corp.; and Rand Capital Corp.
|--------------------------- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Venture Capital Survey Data | à | Surveys used included the following:
        
        Dow Jones Private Equity Analyst – Glocap Compensation
        Survey (data used is limited to venture capital funds with up to $500 million in assets under management)
        
        US Mercer Benchmark Database – Executive (data used is
        limited to companies with revenues/sales under $500 million)
        
        (Each of the surveys utilized is broad-based and, therefore,
        is not highly influenced by the data relating to any one company included in the survey.)                                     



26







The Committee annually evaluates the companies and surveys used
for comparison purposes to be certain that the comparables reviewed by the Committee remain appropriate given mergers/acquisitions
that may have occurred and any changes in relevant business scope. In connection with the commencement of its process for its 2017
compensation review, in July 2016 the Committee determined that reviewing compensation from multiple perspectives was still appropriate
given Safeguard’s unique business model. At such time, when the Committee prepared to conduct its annual review of total
compensation levels for 2017, Semler Brossy did not recommend any changes to the proxy peer group. In July 2017, when the Committee
prepared to conduct its annual review of total compensation levels for 2018, Semler Brossy recommended that the Committee remove
American Capital Ltd. from the peer group (as American Capital Ltd. had been acquired). The Committee concurred with such recommendation
and American Capital Ltd. was excluded in the competitive assessment used to determine the long-term incentive values for the named
executive officers in connection with the December 2017 equity grants.



Recognizing that our business strategy, industry focus, and
diverse array of partner companies make comparisons to other companies difficult, and based on the inherent challenge in matching
companies, job positions and skill sets, the Committee has looked to competitive information for general guidance rather than rigid
adherence to specific percentages. The Committee has determined that the overall objectives of our compensation philosophy are
better achieved through flexibility in determining pay levels to address differences in duties and responsibilities, individual
experience, skill levels and achievements and any retention concerns.



Outcome of the 2017 Say-on-Pay Vote and Shareholder Outreach



At our 2017 annual meeting of shareholders, our shareholders
approved the compensation of our named executive officers, with approximately 82% of shareholder votes being cast in favor of our
say-on-pay proposal on executive compensation. The Committee believes that this support from our shareholders is evidence that
our pay-for-performance policies were aligned with our shareholders’ interests.



The Committee will continue to consider the outcome of our shareholders’
advisory vote on executive compensation and shareholder feedback when making future compensation decisions for our named executive
officers.



27







2017 Compensation Program



During 2017, the Committee used the following principal elements
of executive compensation to meet its overall goals:



|Compensation Element                                                                      |  | Objective                                                                                                                                                                             |  | Key Features                                                                                                                                                                              |  | Performance /At Risk?                                                                                                             
|----------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------
|Base Pay                                                                                  |  | Rewards an executive’s core competencies relative to skills, experience, responsibilities and anticipated contributions to us and our partner companies.                              |  | Reviewed annually in comparison to market data to ensure competitive base pay; subject to adjustment annually based on individual performance, experience, leadership and market factors. |  | No.                                                                                                                               
|                                                                                          |  |                                                                                                                                                                                       |  |                                                                                                                                                                                           |  |                                                                                                                                   
|Annual Incentives                                                                         |  | Rewards an executive’s contributions towards the achievement of annual corporate objectives and, if applicable, an executive’s achievement of individual performance objectives.      |  | The Committee establishes annual performance objectives that align our compensation practices with our shareholders’ interests.                                                           |  | Yes; payout occurs only upon achievement of established measurable goals. May not pay out if annual performance goals are not met.
|                                                                                          |  |                                                                                                                                                                                       |  |                                                                                                                                                                                           |  |                                                                                                                                   
|Stock Options and/or Restricted Stock (each subject to time-based vesting)                |  | Encourages executive ownership of our stock and promotes continued employment with us through the use of vesting based on extended tenure with Safeguard.                             |  | Value is realized based on future stock price, with a direct correlation to changes in shareholder value.                                                                                 |  | Yes; value increases or decreases in correlation to share price.                                                                  
|                                                                                          |  |                                                                                                                                                                                       |  |                                                                                                                                                                                           |  |                                                                                                                                   
|Stock Options and/or Performance Stock Units (each subject to performance-based vesting)* |  | Correlates realized pay with increases in shareholder value over a long-term period.                                                                                                  |  | Aligns the long-term incentive award with the factors critical to the creation of shareholder value.                                                                                      |  | Yes; executives may realize little or no value if pre-determined performance metrics are not achieved.                            
|                                                                                          |  |                                                                                                                                                                                       |  |                                                                                                                                                                                           |  |                                                                                                                                   
|Health and Welfare Benefits                                                               |  | Provides benefits that are part of our broad-based employee benefit programs, including medical, dental, life insurance, disability plans and our 401(k) plan matching contributions. |  | Ensures competitive market practices and promotes continued employment.                                                                                                                   |  | No.                                                                                                                               
|                                                                                          |  |                                                                                                                                                                                       |  |                                                                                                                                                                                           |  |                                                                                                                                   
|Severance and Change-in-Control Arrangements                                              |  | Helps us retain certain of our named executive officers and other executives, providing us with continuity of executive management.                                                   |  | Equity awards to our senior executives provide for double-trigger vesting upon a change in control.                                                                                       |  | No.                                                                                                                               



* Note that this statement refers to grants made at the end
of 2016 as we entered the 2017 calendar year. Because no deployments were made in 2017 into new partner companies and, therefore,
a pool of new partner companies to measure performance against does not exist, for the grants made in 2017, long-term performance-based
incentives were not awarded in 2017.



28







Base Pay. Base pay is established initially on
the basis of several factors, including market competitiveness; past practice; individual performance and experience; the level
of responsibility assumed; the level of skills and experience that can be leveraged across our partner companies to facilitate
their growth and success; and individual employment negotiations with executives. Each of our named executive officers has an agreement
with us that sets a minimum base salary.



Base salaries typically are reviewed annually (at the end of
one year and the beginning of the upcoming calendar year) by the Committee, as well as in connection with a promotion or other
changes in job responsibilities. As noted above, Safeguard believes it competes for executive talent with venture capital and private
equity firms, among others. In considering whether to adjust base salary levels of any of our executives for 2017, the Committee
took into account:



| | · | The proxy peer group and survey data provided by Semler Brossy;
| | - | ---------------------------------------------------------------



| | · | The Committee’s assessment of Safeguard’s overall performance during 2016 and the ongoing individual performance
of each of our named executive officers;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | United States economic conditions, in general; and
| | - | --------------------------------------------------



| | · | Changes in scope of job responsibility.
| | - | ---------------------------------------



The Committee does not typically make adjustments to the base
salary levels for our executives based on cost-of-living types of factors.



In December 2016, the Committee reviewed the base salaries of
our named executive officers, the individual performance of each of our named executive officers and the base salary compensation
of our named executive officers relative to our proxy peers and, based on such review, the Committee determined that the base salaries
of our named executive officers for 2017 would remain the same as the respective base salaries of our named executive officers
for 2016.



Annual Incentives.



Incentive Opportunity. The Committee annually awards
bonuses to our executives under Safeguard’s Management Incentive Program (“MIP”). The MIP is designed to provide
a variable short-term incentive to each of our named executive officers and our other executives and employees principally based
on Safeguard’s annual performance. These awards are determined annually following the end of each calendar year, based on
the Committee’s assessment of: (i) the achievement by Safeguard of its objectives as a whole; and (ii) if applicable, the
achievement by certain executives of individual performance objectives, as measured against target personal and corporate objectives
established at the beginning of the year. Payments may be made in cash and/or equity, in the Committee’s discretion. The
awards have been paid solely in cash in recent years. Neither the actual awards to be made under the MIP nor the minimum long-term
value of any equity grants made is guaranteed.



For 2017, the Committee determined that each of our named executive
officers and other senior executives would be eligible to receive an award under the MIP based 100% on the achievement by Safeguard
of corporate objectives. Other employees also participated in our 2017 MIP. These other participants were eligible for MIP awards
based on varied ratios of corporate and individual achievement based upon each individual’s position within Safeguard. The
Committee may adjust the relative weightings of corporate and individual objectives for specified employees under our MIP, including
our named executive officers, in the future in light of Safeguard’s overall compensation goals.



We believe that short-term compensation (such as base salary
and annual incentive awards under the MIP) should not be based solely on the short-term performance of our stock, whether favorable
or unfavorable, but also on our executives’ management of Safeguard towards achieving the annual goals that we believe will
contribute to shareholder value.



29







2017 Performance Measures. Specifically, the Committee approved
the following weighting for the corporate objectives under the 2017 MIP:



|Weighting                           |  | Corporate Objectives                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|----------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|50% - Partner Company Performance   |  | 50% of the total possible points attributable to corporate objectives
        were based on the achievement by our partner companies of specific performance-related goals (with three or more measurable goals
        identified for each partner company). Specifically, the Committee:
        
        ·     Defined
        performance-related metrics for each of our partner companies as of the creation of the 2017 MIP (29 partner companies) that varied
        by partner company based on their business plans and strategies and stages of development. (A table highlighting a summary of the
        types of performance metrics for the partner companies in which Safeguard had deployed capital and held an active interest as of
        the adoption of the 2017 MIP is set forth below.)
        
        ·     Determined
        that, for 2017, partner companies would be grouped into three groups, based on the amount of capital deployed into each partner
        company by Safeguard. Partner companies representing our largest deployments, approximately $177.1 million deployed into 9 partner
        companies, constitute 47.45% of the target total points; the middle group of companies, representing the deployment of approximately
        $135.4 million into 11 partner companies, constitute 36.28% of the target total points; and the smaller group of companies, representing
        the deployment of approximately $60.7 million into 9 partner companies, constitute 16.26% of the target total points. The weighting
        of partner companies’ performance may vary from year to year based on such factors as the Committee determines to be appropriate.
        The intent of the weighting is to reward the activities that have the most impact on Safeguard’s value creation.
|                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|50% - Overall Corporate Performance |  | 50% of the total possible points attributable to corporate objectives
        were based on the Committee’s evaluation of the overall corporate performance of Safeguard during 2017. The Committee specifically
        identified the following corporate objectives that would be considered in making its assessment of overall corporate performance:
        
        ·     Judiciously
        managing capital deployed to coincide with cash in-flow expectations;
        
        ·     Returning
        sufficient capital to pursue overall strategic intentions and exploring alternative financing methods; and
        
        ·     Share
        value appreciation in line with Safeguard’s proxy peer group.
        
        The Committee also reserved the ability to consider its subjective
        analysis of the achievement of other corporate objectives and factors, such as strategic initiatives and accomplishments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            



The Committee established the specific performance-based corporate
and partner company target metrics based on recommendations of management and taking into consideration the stage of development
of each of our partner companies. Within the specific parameters of the 2017 MIP, the Committee reserved a significant level of
discretion in reaching final determinations of achievement levels attained, as described above. The determination to reserve such
discretion and flexibility arose from the Committee’s belief, based on prior experience, that, given Safeguard’s business
activities, as circumstances change throughout a given fiscal year, on a macro and/or a micro level, specific/rigid formulas or
guidelines for measuring achievement set in the beginning of a year, if strictly applied, may well incent activity that does not
result in, or compensation grants that do not match, actual shareholder value creation. The award criteria finally adopted were
designed to provide management with a meaningful guideline for meeting the Committee’s criteria for a target award, but not
guarantee achievement or make achievement somewhat inevitable or impossible. This approach is also intended to provide the possibility
of exceeding target awards and some economic recognition, albeit reduced, for near achievement of the target.



The following table summarizes the specific types of performance
metrics that we used to assess our partner companies included in the 2017 MIP. The achievement of the specific performance objectives
set for our partner companies represents the basis upon which the Committee determined corporate achievement attributable to our
partner companies under the 2017 MIP.





30












Partner Companies








|AdvantEdge Healthcare Solutions
        Aktana
        Apprenda
        Nexxt, Inc. (formerly Beyond.com)
        Brickwork
        Cask
        CloudMine
        Clutch Holdings
        Full Measure
        Good Start Genetics | Hoopla
        InfoBionic
        Lumesis
        MediaMath
        Prognos (formerly Medivo)
        meQuilibrium
        Moxe
        NovaSom
        Pneuron | Propeller Health
        QuanticMind
        Sonobi
        Spongecell
        Syapse
        Transactis
        T-Rex
        Trice
        WebLinc
        Zipnosis
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------








2017 Objectives / Targets (may include one or more of the following
performance metrics)








| | · | Achieve specified level of annual revenue, annualized contract value, bookings, etc. with a significant focus on growth
| | - | -----------------------------------------------------------------------------------------------------------------------

| | · | Achieve specified level of EBITDA or specified margin
| | - | -----------------------------------------------------

| | · | Complete additional equity or debt financing
| | - | --------------------------------------------

| | · | Complete one or more acquisitions
| | - | ---------------------------------

| | · | Augment management team, board of directors or advisory board
| | - | -------------------------------------------------------------

| | · | Explore strategic and corporate development options
| | - | ---------------------------------------------------

| | · | Expand sales efforts to additional territories
| | - | ----------------------------------------------

| | · | Achieve regulatory approval of specified products
| | - | -------------------------------------------------

| | · | Achieve product launch or expansion of product reach
| | - | ----------------------------------------------------

| | · | Achieve commercial sales of product(s) or service(s), or successful product implementation
| | - | ------------------------------------------------------------------------------------------

| | · | Increase customer base
| | - | ----------------------

| | · | Increase user base
| | - | ------------------










Consistent with their respective employment agreements and Safeguard’s
overall compensation philosophy, and based upon multiple factors reviewed by the Committee, including an assessment of competitive
compensation data in the market in which Safeguard competes for executive talent and to better align the interests of Safeguard
management and our shareholders, the Committee set the following target MIP awards for 2017 for our named executive officers:



|Name                 |  | 2016 MIP Target Variable Incentive (1) |         |  | 2017 MIP Target Variable Incentive (1) |   |         | 2018 MIP Target Variable Incentive (1) | 
|-------------------- |  | -------------------------------------- | ------- |  | -------------------------------------- | - | ------- | -------------------------------------- | 
|Stephen T. Zarrilli  |  | $                                      | 696,000 |  |                                        | $ | 696,000 |                                        | 
|Jeffrey B. McGroarty |  | $                                      | 228,750 |  |                                        | $ | 228,750 |                                        | 
|Brian J. Sisko       |  | $                                      | 360,000 |  |                                        | $ | 360,000 |                                        | 



| | (1) | The 2016 and 2018 MIP target variable incentive amounts
have been included for comparison purposes.
| | --- | ---------------------------------------------------------------------------------------------------



There were no mandatory minimum awards payable under the 2017 MIP,
and awards were paid based upon the Committee’s determination of the level of achievement of the corporate (and, for certain
employees, individual performance) objectives. Payouts were measured in the aggregate on a sliding scale basis from 0% to a possible
150%.





31







Determination of 2017 Payouts.



In late 2017 and early 2018, the Committee reviewed Safeguard’s
corporate performance against the corporate objectives set forth above and determined the following payout levels (with the final
payouts conditioned upon the completion of the audit of our 2017 consolidated financial statements and internal control over financial
reporting without any unexpected material adjustments, each of which has now occurred). Overall, the Committee determined that
2017 was a year of positive results for Safeguard, though not all goals were achieved. The key factors upon which the Committee
based its determination of the payout level are also summarized below.





|Corporate Objectives:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | Payout Level
        (as a % of target) |   
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------------------- | --
|Partner Company Performance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                                         | 90
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                         |   
|·More than two-thirds of partner companies met or exceeded the majority of their applicable performance goals established as part of the 2017 MIP;                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                         |   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                         |   
|·Aggregate 2017 revenue for our partner companies as a whole grew by approximately 23% year over year; and                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |                                         |   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                         |   
|·Management teams were augmented, follow-on capital was successfully raised and partner companies were positioned for the next stage of development.                                                                                                                                                                                                                                                                                                                                                                                                               |  |                                         |   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                         |   
|Overall Corporate Performance                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                         | 60
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                         |   
|·Our total capital provided in the form of follow-on deployments in 2017 approximated $36.8 million to 18 of our partner companies;                                                                                                                                                                                                                                                                                                                                                                                                                                |  |                                         |   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                         |   
|·We realized approximately $16.9 million in aggregate cash proceeds (not including amounts deposited and held in escrow subject to release in future periods, or marketable securities sold for cash in subsequent periods) as follows: (i) $15.5 million related to the sale of our interest in Nexxt, Inc. (formerly, Beyond.com), not including a $10.5 million promissory note which was repaid in full in cash in March 2018 and (ii) $1.4 million in released escrow funds related to three prior year partner company exits (Putney, Quantia and AppFirst); |  |                                         |   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                         |   
|·We entered into a $75 million secured, revolving credit facility with HPS Investment Partners, LLC;                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                                         |   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                         |   
|·Our stock price performed below the median performance of our proxy peer group; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                                         |   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                         |   
|·We set the stage for 2018 success with multiple exit strategies in play.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                         |   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                         |   
|Total Percentage                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                         | 75





Based on its assessment of the partial achievement of the 2017 MIP
corporate objectives, the Committee authorized the following individual awards to Safeguard’s named executive officers. The
Committee determined, based on consultations with the Committee’s independent consultant and analysis of data related to
incentive payment practices being followed within Safeguard’s peer group and throughout the U.S. financial services industry
as a whole, to pay 2017 MIP payments to our executives solely in cash.



|Name                                             |  | Payout Level (1) |    |   | Total Variable Incentive Payment |  
|------------------------------------------------ |  | ---------------- | -- | - | -------------------------------- | -
|Stephen T. Zarrilli                              |  |                  | 75 | % |                                  | $
|Jeffrey B. McGroarty                             |  |                  | 75 | % |                                  | $
|Brian J. Sisko                                   |  |                  | 75 | % |                                  | $
|Named Executive Officers, as a group (3 persons) |  |                  | 75 | % |                                  | $



| | (1) | In percentage terms versus targeted incentive amount.
| | --- | -----------------------------------------------------



32







Long-Term Incentives.



As noted above, we compete for executive talent with venture capital
and private equity firms, and the Committee reviews and includes comparative information regarding venture capital and private
equity industry compensation practices as part of its overall compensation analysis. In these industries, executives (referred
to as “managing partners” or “managing directors”) typically have compensation programs heavily weighted
towards long-term incentive, structured as a share of the fund’s profits, payable in cash (referred to as “carry”).
We historically have not, and in 2017 did not, provide our executives with the equivalent of a “carry.” Instead, as
part of our overall executive compensation program we review our equity compensation plans in light of the type of economic benefit
and performance metrics that would be included in a “carry” approach to compensation. We compared the initial equity
awards made to our named executive officers against our assessment of the carry, which would typically be provided to executives
in positions of comparable responsibility at private equity and/or venture capital firms at that time. Based upon information available
to the Committee through its consultant, we continually reassess the competitiveness of our executives’ long-term compensation
opportunity against a carry methodology as well as other relevant metrics from other types of businesses within our peer group.
The potential value for long-term equity grants is intended to be competitive with those held by comparable executives at companies
included in the comparison data that is reviewed annually by the Committee (as adjusted for the senior executive’s experience).



Through 2017, the principal approach utilized by the Committee to
meet the need for a long-term incentive component to Safeguard’s executive compensation program has been the granting of
significant amounts of equity to our named executive officers. Our equity compensation plans allow for the grant of: (i) stock
options, (ii) restricted stock, (iii) restricted stock units (which include deferred stock units (“DSUs”) and
performance stock units (“PSUs”)) and (iv) such other equity-based awards as the Committee may determine to be appropriate
from time to time. The mix of the types of equity-based awards have varied from time to time.



Beginning in 2013, the Committee decided that equity grants in the
form of restricted stock and restricted stock units would be the principal component of Safeguard’s long-term incentive program,
although stock options have been granted from time to time. The decision to use primarily restricted stock and restricted stock
units, a significant percentage of which have been subject to performance-based vesting based on the capital-return based vesting
model (which the Committee initially implemented in 2008 and is discussed in more detail below) was based, in part, on a recommendation
from the Committee’s compensation consultant to further align management’s interests with our shareholders’ interests
and to create an appropriate balance for our senior executives between incentive and retention. The Committee also determined at
that time that such capital-return based vesting model best aligned the long-term incentive award to the factors critical to the
creation of shareholder value.



Entering 2017, the Committee once again determined to allocate equity
grants (both initial and any annual grants) between (i) equity grants subject to performance-based vesting using the capital-return
based vesting model, as discussed in more detail below, and (ii) equity grants subject to simple time-based vesting. It was the
Committee’s view that allocating equity grants in this way aligned the long-term interests of Safeguard management and our
shareholders and created a balance for our senior executives between incentive and retention. The Committee has always reserved
the right to allocate equity grants in a different manner as circumstances dictate.



Our performance-based equity grants that remain outstanding are
all subject to “capital-return based vesting.”



The capital-return based vesting model vests the particular equity
grants awarded based on aggregate cash returns received by Safeguard from the ultimate monetizations of phantom “pools”
of Safeguard’s partner companies that were typically first funded during the same calendar year in which those equity grants
were made.



The capital-return based vesting model has evolved over time as
conditions in the marketplace have changed and as the Committee has gained further experience with predicting intended or targeted
outcomes. The basic capital-return based vesting model utilized entering 2017 provided that, subject to minimum time periods having
expired with respect to grants that were granted on or after 2014, vesting will begin to occur once a minimum cash return hurdle
with respect to the relevant partner company pool is reached and will continue to occur incrementally over time as cash returned
on the relevant partner company pool approaches targeted levels. In all instances since the inception of the capital-return based
vesting model, adjustments are made to the required cash return hurdle amounts if and when Safeguard deploys additional capital
into any of the partner companies included in the relevant pool of partner companies.





33







For the performance-based equity grants that were granted through
2013, vesting of such grants begins to occur after cash proceeds received by Safeguard from the ultimate monetization
of the pool of partner companies applicable to such grants equals the aggregate capital deployed by Safeguard in such pool of partner
companies plus an amount approximating Safeguard’s annual overhead (“allocated overhead”). Proceeding on a linear
basis from that point, all such grants will fully vest upon the achievement of a predetermined target amount of proceeds that must
be received by Safeguard from the ultimate monetization of the pool of partner companies applicable to such grants. For such performance-based
equity grants made through 2012, such predetermined target amounts of proceeds needed for full vesting are equal to 3 times the
aggregate capital deployed by Safeguard in the relevant pool of partner companies (plus allocated overhead). For such performance-based
equity grants made in 2013, such predetermined target amounts of proceeds needed for full vesting are equal to 2.4 times the aggregate
capital deployed by Safeguard in the relevant pool of partner companies (plus allocated overhead). The foregoing change in target
amounts for full vesting (i.e., 2.4 times capital deployed for 2013 deployments versus 3 times capital deployed for deployments
through 2012) was due to the Committee’s determination that such a reduction was appropriate given the overall lower returns
experienced generally within the venture capital and private equity markets since 2008. For the same reason, the Committee decided
to further revise the predetermined target amounts of proceeds needed for initial vesting and full vesting for performance-based
equity grants that were granted starting in 2014, and also considered the actual vesting that was occurring over time relating
to the partner company pools previously created in the earliest years of the capital-return based vesting model as well as market
feedback regarding Safeguard’s long-term incentive program.



For performance-based equity grants that were granted since 2014,
the predetermined target amounts of proceeds that must be received by Safeguard from the ultimate monetizations of the applicable
pool of partner companies before any vesting occurs for such equity grants was raised to 1.25 times the aggregate
capital deployed by Safeguard in the applicable pool of partner companies (plus allocated overhead). Subject to minimum time
periods having been reached as described below, such performance-based equity grants will vest, as follows:



|Required Multiple of Capital Deployed in
        Applicable Pool (plus allocated overhead)* |  | Resulting Cliff Vesting and Cash Payment Metrics                 
|------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------
|1.25x                                                                                       |  | 25% vesting                                                      
|1.50x                                                                                       |  | 50% (incremental 25%) vesting                                    
|1.75x                                                                                       |  | 75% (incremental 25%) vesting                                    
|2.00x                                                                                       |  | 100% (incremental 25%) vesting                                   
|2.25x                                                                                       |  | Cash equal to 25% of performance grant values                    
|2.50x                                                                                       |  | Cash equal to 50% (incremental 25%) of performance grant values**



* Notwithstanding the above vesting thresholds, so as to ensure
against the unlikely possibility that performance-based equity grants do not vest too quickly (for example, if cash proceeds relating
to a particular pool are achieved very soon after the equity grant date), the Committee required that such performance-based equity
grants not vest (or cash amounts be paid) more quickly than based upon the following schedule following grant:



| | · | March 15th of the second calendar year following the grant date - 25%; and
| | - | --------------------------------------------------------------------------



| | · | Each September 15th and March 15th thereafter - 12 1⁄2% increments.
| | - | -----------------------------------------------------------------



In addition, recipients must be actively employed/providing service
to Safeguard through such dates.



**Cash amounts will continue to accrue/be paid at the rate of 25%
of performance grant values for each .25x of additional return of deployed capital in the applicable pool; provided, however, no
cash amounts shall accrue/be payable to any participant who is considered a named executive officer (for reporting purposes under
the Securities Exchange Act of 1934) relating to any returns of capital beyond 3x deployed capital in the applicable pool, effectively
capping the combined equity and cash incentive payout for named executive officers at 200%. No further vesting or cash accruals/payments
will be made beyond the term of the grant, which is 10 years following the grant date.



34







As referenced elsewhere in this CD&A, in January 2018, Safeguard
announced its New Strategy, representing a significant change in its business strategy going forward. See also “New Strategy
- Changes in Compensation Policies and Practices” below. Because no deployments were made in 2017 into new partner companies
and, therefore, a pool of new partner companies to measure performance against does not exist, for the grants made in 2017, the
Committee (1) chose to reduce the opportunity to earn long-term incentives by approximately 40% for each of Messrs. Zarrilli, McGroarty
and Sisko as compared to the grants made in 2016 and (2) awarded such incentives solely in the form of restricted stock grants
subject to time-based vesting. This compares to the value of the 2016 grants that were awarded at a ratio of 1/3 in time-based
restricted stock and 2/3 in performance based stock units.



|Named Executive Officer |  | Restricted Shares (1) |        |  | Nominal Value of Restricted Shares (2) |   |         | PSUs |  |  | Target Value of PSUs | 
|----------------------- |  | --------------------- | ------ |  | -------------------------------------- | - | ------- | ---- |  |  | -------------------- | 
|Stephen T. Zarrilli     |  |                       | 56,495 |  |                                        | $ | 660,000 |      |  |  | -                    | 
|Jeffrey B. McGroarty    |  |                       | 12,840 |  |                                        | $ | 150,000 |      |  |  | -                    | 
|Brian J. Sisko          |  |                       | 23,111 |  |                                        | $ | 270,000 |      |  |  | -                    | 



| | (1) | The shares of restricted stock granted vest 25% on March 1, 2019, and in 12 equal quarterly installments commencing on March
15, 2019, and on the fifteenth day of each June, September, December, and March thereafter, assuming the executive’s continued
employment by Safeguard as of such dates.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Based on the average closing price of our stock for the 20 consecutive trading days immediately preceding the grant date (December
29, 2017).
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------



As of December 31, 2017, the following vesting under capital-return
based vesting grants had been achieved:



|Performance Pool |  | Expiration Date                          |  | Vested Percentage |   
|---------------- |  | ---------------------------------------- |  | ----------------- | --
|2008             |  | September 30, 2016 and December 23, 2020 |  |                   | 37
|2009             |  | October 30, 2019                         |  |                   | 0 
|2010             |  | November 5, 2020                         |  |                   | 0 
|2011             |  | September 30, 2021                       |  |                   | 3 
|2012             |  | October 2, 2022 and December 5, 2022     |  |                   | 0 
|2013             |  | October 31, 2023                         |  |                   | 0 
|2014             |  | December 31, 2024                        |  |                   | 0 
|2015             |  | December 31, 2025                        |  |                   | 0 
|2016             |  | December 31, 2026                        |  |                   | 0 



More information regarding the equity grants made to our named executive
officers during 2017 can be found below under “Executive Compensation — Grants of Plan-Based Awards – 2017”
as well as “New Strategy - Changes in Compensation Policies and Practices.”



The Committee annually reviews the equity awards held by our executives
and other employees and also may consider awards periodically during a year in an effort to retain and motivate employees and to
ensure continuing alignment of executive and shareholder interests. Grants may be made at regularly scheduled meetings or at special
meetings convened to approve compensation arrangements for newly hired executives or for executives who have been promoted or are
otherwise subject to changes in responsibilities. Any stock options granted are granted with an exercise price equal to the average
of the high and low trading prices of our common stock on the date of grant. For administrative convenience, the Committee has
adopted a policy of generally issuing approved grants on the last business day of the quarter for new hires and on the last business
day of the month in which grants are approved by the Committee for all other grants.





35







Perquisites (fringe benefits). During 2017, we provided
life insurance coverage ranging from $750,000 to $1,000,000 to each of our named executive officers at an average annual cost to
Safeguard of approximately $2,466 per named executive officer. Our named executive officers also are eligible to participate in
the fringe benefits that Safeguard may offer, from time to time, on a non-discriminatory basis to all of our employees.



Severance and Change-in-Control Arrangements



During 2017, all of our executive officers were employed on an at-will
basis. However, each of our named executive officers also have an agreement with Safeguard that provides for certain severance
benefits in the event of termination of employment by Safeguard without “cause” or by the officer for “good reason”
(as defined in the agreements).



Pursuant to those agreements, upon the occurrence of a termination
event, each executive will be entitled to those benefits outlined in his agreement with us, which include a multiple of his then
current base salary, payment of his pro rata bonus for the year of termination, accelerated vesting of certain equity awards, extension
of the post-termination exercise period within which some or all of the equity awards held by the executive may be exercised, coverage
under our medical, health and life insurance plans for a designated period of time and outplacement services or office space. See
“Executive Compensation—Potential Payments upon Termination or Change in Control” below for a summary of the
specific benefits that each named executive officer will receive upon the occurrence of a termination event.



All of the agreements under which our named executive officers receive
benefits in the event of a “change in control” require a “double trigger,” namely a change in control coupled
with a loss of employment or a substantial change in job duties. We believe a “double trigger” provides retention incentives
as well as continuity of management in the event of an actual or threatened change in control.



Key Employee Compensation Recoupment Policy



In April 2013, the Board approved a Key Employee Compensation Recoupment
Policy (the “Recoupment Policy”). Under the Recoupment Policy, we have the right to require any “key employee”
to reimburse to Safeguard all or any part of an amount equal to any cash incentive award, and/or to forfeit all or any part of
any equity grant (whether vested or not), awarded, paid and/or made to such key employee within three years of a “Triggering
Event” under the Recoupment Policy. For purposes of the Recoupment Policy, the term “key employee” means each
of our named executive officers, each other Safeguard employee who holds the title of Vice President or above, and our controller
and assistant controller. A “Triggering Event” is one or more of the following, as determined by the Board or the Committee,
in its sole discretion: (i) it is determined that (a) a key employee engaged in any fraud, misconduct, gross negligence or ethical
misconduct which resulted in a financial restatement by Safeguard, or any material adverse impact on Safeguard, and (b) the key
employee received any cash incentive award or equity grant from Safeguard, the payment or issuance of which was based in whole
or in part on such actions of the key employee; or (ii) it is determined that Safeguard’s consolidated financial statements
or any other metric utilized by the Committee to establish, in whole or in part, a cash incentive award or equity grant to the
key employee were inaccurate due, in whole or in part, to the fraud, misconduct, gross negligence or ethical misconduct of the
key employee. The Committee will administer and enforce the Recoupment Policy on behalf of Safeguard and has broad, sole discretionary
authority to interpret and to make determinations with respect to the Recoupment Policy. The Committee’s determinations will
be final and binding on all key employees and other persons.



The Recoupment Policy was adopted in furtherance of the commitment
by the Committee and the Board to sound executive compensation practices and effective corporate governance, and not in response
to any particular situation or circumstance. Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires
the SEC to promulgate regulations applicable to public companies that require the recovery of incentive compensation in the event
of a financial statement restatement and certain other circumstances. The Board intends to review the Recoupment Policy following
SEC adoption of final rules to implement Section 954 of Dodd-Frank and the effectiveness of the applicable NYSE listing standards
to ensure compliance.





36







Deductibility of Executive Compensation



Section 162(m) of the Internal Revenue
Code of 1986, as amended (the “Code”) generally disallows a tax deduction to public companies for compensation in excess
of $1 million paid to any of the companies’ chief executive officer and certain other NEOs. Prior to the effectiveness of
the Tax Cuts and Jobs Act, performance-based compensation satisfying certain requirements was not subject to this deduction limitation.
Effective January 1, 2018, the performance-based compensation exception is not available to public companies, except for certain
limited grandfathered arrangements.  We periodically reviewed potential consequences of Section 162(m) and, prior to
January 1, 2018, the stock options and PSUs awarded under our equity compensation plan were intended to comply with the provisions
of Section 162(m).



Stock Ownership Guidelines



Our Board has established stock ownership guidelines that are designed
to closely align the long-term interests of our named executive officers and other senior executives with the long-term interests
of our shareholders. During 2017 our ownership guidelines were as follows:



|Executive                                          |  | Ownership Requirement
|-------------------------------------------------- |  | ---------------------
|Chief Executive Officer                            |  | 4X Base Salary       
|Executive Vice President / Chief Financial Officer |  | 3X Base Salary       
|Senior Vice President                              |  | 2X Base Salary       



The Nominating & Corporate Governance Committee monitors compliance
with the ownership requirements as of the end of each calendar year. Shares counted toward these guidelines include:



| | · | Shares beneficially owned by the executive officer;
| | - | ---------------------------------------------------

| | · | Vested portion of restricted stock units (including DSUs and PSUs) and restricted stock awards; and
| | - | ---------------------------------------------------------------------------------------------------

| | · | Net value of shares underlying vested, in-the-money options (“Net Option Value”).
| | - | ---------------------------------------------------------------------------------



For purposes of calculating the value to be used in monitoring compliance
with the ownership guidelines, we utilize (a) the greater of the current value or the cost basis of purchased shares or vested
restricted stock units/restricted stock awards as to which the executive has declared income and paid taxes; and (b) our trailing
six-month average share price in determining Net Option Value.



The Nominating & Corporate Governance Committee has also established
the timeframe within which each executive must attain the required holding levels. The stock ownership guidelines in effect in
2017 provide that each executive generally must meet the stock ownership requirement by December 31st of the year of
the fifth anniversary of the event triggering the stock ownership requirement (or any increase in the stock ownership requirement).
No sales of Safeguard stock by our named executive officers are permitted during the period in which the ownership requirement
is not met (except for limited stock sales to meet tax obligations), without the approval of the Board or our Nominating &
Corporate Governance Committee. As of the date of this report, Mr. Sisko, one of our named executive officers, has achieved the
required stock ownership level.



Prohibition on Speculation in Safeguard Stock



Safeguard’s policy on securities trading prohibits our executive
officers, directors, and other employees from engaging in activities with regard to our stock that can be considered as speculative,
including but not limited to, short selling (profiting if the market price of our securities decreases); buying or selling publicly
traded options (e.g., a put option, which is an option or right to sell stock at a specific price prior to a specified date, or
a call option, which is an option or right to buy stock at a specific price prior to a specified date); and hedging or any other
type of derivative arrangement that has a similar economic effect. Our executive officers and directors also are prohibited from
pledging, directly or indirectly, our common stock or the stock of any of our partner companies, as collateral for indebtedness.



New Strategy - Changes in Compensation Policies and Practices



In January 2018, the Company announced its New Strategy. Under the
New Strategy, effective immediately, the Company ceased making capital deployments into any new partner company opportunities and
is focusing its efforts on managing and financially supporting its existing partner companies to exit events, and ultimately returning
the net proceeds of such efforts to its shareholders. Other than as specifically noted, the discussion set forth in this CD&A
concerning the Company’s compensation policies and practices, relates to periods prior to the establishment of the New Strategy,
and, therefore, does not necessarily reflect policies and practices that will prevail or apply under the New Strategy.





37







In connection with the New Strategy, on April 10, 2018, the Committee
approved, and the Board adopted, the Safeguard Scientifics, Inc. Transaction Bonus Plan (the “LTIP”). The purpose of
the LTIP is to promote the interests of the Company and its shareholders by providing an additional incentive to employees to maximize
the value of the Company in connection with the execution of the New Strategy.



Under the LTIP, participants may receive awards in connection with
sales of the Company’s partner company assets (“Sale Transaction(s)”). At the Board’s sole discretion following
a Sale Transaction, the Company may, but has no obligation to, provide a bonus pool under the LTIP in the amount of 0.5% or 1.0%
of the transaction consideration (as defined in the LTIP and set forth below), based on a range of transaction consideration and
subject to a minimum amount of transaction consideration. For purposes of the LTIP, “transaction consideration” means,
in connection with a Sale Transaction (A) the gross value of all cash, securities and other property actually received by the Company,
directly or indirectly, from an acquiror and the amount of all indebtedness of the Company assumed by the acquiror, directly or
indirectly, in connection with the Sale Transaction, minus (B) the sum of (i) all payments reasonably estimated by the Board to
be due from the Company as a result of the Sale Transaction and (ii) the amount of commissions, fees and expenses payable to the
Company’s investment bankers and the amount of fees and expenses payable to the Company’s professional advisors in
connection with the Sale Transaction.



All current officers and employees of the Company are eligible to
participate in the LTIP, provided that they remain employed by the Company through at least July 31, 2018. The Board, in its sole
discretion, will determine the participants to whom awards are granted under the LTIP, and the amounts of the awards relating to
the bonus pool, if any.



The Committee also awarded, to all holders of performance unit and
stock unit awards previously granted under the Company’s 2014 Equity Compensation Plan (the “Plan”), dividend
equivalents relating to such awards. The Committee awarded such dividend equivalents, meaning amounts determined by multiplying
(i) the number of shares of Company stock or stock units subject to an award under the Plan by (ii) the per-share extraordinary
dividend or distribution paid by the Company on its stock as described in Section 5(c) of the Plan (“Dividend Equivalents”),
to grantees to the extent the grantees held any of the following awards under the Plan: (1) stock units that have not yet been
vested and distributed, and (2) performance units that have not yet been vested and distributed. The Dividend Equivalents are subject
to the same vesting terms and other conditions of the existing awards and will be governed by the terms of the existing award and
the Plan.



Compensation Committee Report



We have reviewed and discussed the foregoing Compensation Discussion
and Analysis with management. Based on our review and discussion with management, we have recommended to the Board of Directors
that the Compensation Discussion and Analysis be included in Safeguard’s Annual Report on Form 10-K for fiscal year 2017
and Safeguard’s proxy statement for its 2018 annual meeting of shareholders.



Members of the Compensation Committee:



Julie A. Dobson, Chairperson





|Stephen Fisher | George F. MacKenzie, Jr. | John J. Roberts
|-------------- | ------------------------ | ---------------





38







Executive Compensation



Summary Compensation Table — Fiscal Years Ended December
31, 2017, 2016 and 2015



The table below is a summary of total compensation paid to or earned
by our named executive officers for the fiscal years ended December 31, 2017, 2016, and 2015. At December 31, 2017, there
were three individuals serving as named executive officers of Safeguard.



|Name
                                         and Principal
                                         Position |  | Year |  | Salary ($) |         |  | Bonus ($)(1) |  |         | Stock Awards ($)(2)(3) |  |  | Option Awards ($)(2) |  |  | Non-Equity Incentive
                                         Plan Compensation ($)(4) |   |  | Change
                                         in Pension
                                         Value and Nonqualified Deferred Compensation Earnings
                                         ($) |  |         | All
                                         Other Compensation ($)(5) |  |  | Total ($) | 
|------------------------------------------------------------------------------------------------------------- |  | ---- |  | ---------- | ------- |  | ------------ |  | ------- | ---------------------- |  |  | -------------------- |  |  | -------------------------------------------------------------------------------------- | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------- | ---------------------------------------------------------------------- |  |  | --------- | 
|Stephen T. Zarrilli                                                                                           |  | 2017 |  |            | 580,000 |  |              |  | —       |                        |  |  | 640,292              |  |  |                                                                                        | — |  |                                                                                                                                                                                                        |  | 522,000 |                                                                        |  |  | —         | 
|President
    and Chief                                                                                       |  | 2016 |  |            | 580,000 |  |              |  | 175,000 |                        |  |  | 1,007,718            |  |  |                                                                                        | — |  |                                                                                                                                                                                                        |  | 605,520 |                                                                        |  |  | —         | 
|Executive
    Officer                                                                                         |  | 2015 |  |            | 550,000 |  |              |  | —       |                        |  |  | 729,748              |  |  |                                                                                        | — |  |                                                                                                                                                                                                        |  | 528,000 |                                                                        |  |  | —         | 
|                                                                                                              |  |      |  |            |         |  |              |  |         |                        |  |  |                      |  |  |                                                                                        |   |  |                                                                                                                                                                                                        |  |         |                                                                        |  |  |           | 
|Jeffrey B. McGroarty                                                                                          |  | 2017 |  |            | 305,000 |  |              |  | —       |                        |  |  | 145,523              |  |  |                                                                                        | — |  |                                                                                                                                                                                                        |  | 171,563 |                                                                        |  |  | 18,216    | 
|Senior Vice
    President and                                                                                 |  | 2016 |  |            | 305,000 |  |              |  | —       |                        |  |  | 229,031              |  |  |                                                                                        | — |  |                                                                                                                                                                                                        |  | 199,013 |                                                                        |  |  | 8,655     | 
|Chief
    Financial Officer                                                                                   |  | 2015 |  |            | 305,000 |  |              |  | —       |                        |  |  | 202,701              |  |  |                                                                                        | — |  |                                                                                                                                                                                                        |  | 183,000 |                                                                        |  |  | 950       | 
|                                                                                                              |  |      |  |            |         |  |              |  |         |                        |  |  |                      |  |  |                                                                                        |   |  |                                                                                                                                                                                                        |  |         |                                                                        |  |  |           | 
|Brian J. Sisko                                                                                                |  | 2017 |  |            | 400,000 |  |              |  | —       |                        |  |  | 261,931              |  |  |                                                                                        | — |  |                                                                                                                                                                                                        |  | 270,000 |                                                                        |  |  | 11,901    | 
|Chief Operating
    Officer,                                                                                  |  | 2016 |  |            | 400,000 |  |              |  | —       |                        |  |  | 412,243              |  |  |                                                                                        | — |  |                                                                                                                                                                                                        |  | 313,200 |                                                                        |  |  | 5,654     | 
|Executive
    Vice President and Managing Director                                                            |  | 2015 |  |            | 375,000 |  |              |  | —       |                        |  |  | 364,868              |  |  |                                                                                        | — |  |                                                                                                                                                                                                        |  | 270,000 |                                                                        |  |  | 621       | 










| | (1) | The amount reported represents a discretionary bonus awarded
by the Compensation Committee for exceptional performance which was outside of the scope of the corporate objectives established
under our 2016 Management Incentive Plan (“MIP”).  Amounts earned by our named executive officers under each
year’s MIP are reported under “Non-Equity Incentive Plan Compensation.” Payment of this discretionary bonus
was made in March of 2017.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Consistent with SEC rules, stock and option awards are
required to be valued using the aggregate grant date fair value computed in accordance with stock-based compensation accounting
rules (FASB ASC Topic 718). Even though awards may be forfeited, the amounts reported do not reflect this contingency. Amounts
reported for these awards do not reflect our accounting expense for these awards during the year and may not represent the amounts
that our named executive officers will actually realize from the awards. Whether, and to what extent, our named executive officers
realize value will depend on (i) the achievement of the capital-return based vesting criteria associated with certain stock options
and PSUs awarded; (ii) our stock price; and (iii) an individual’s continued employment. Vesting of awards held by our named
executive officers may be accelerated in certain circumstances as detailed below under “Potential Payments upon Termination
or Change in Control.”
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | For 2017, the Compensation Committee awarded time-based
vesting restricted stock. No PSUs were awarded in 2017. The fair value of the restricted stock is based on $11.3336 per share
for awards granted on December 29, 2017, which was the average of the high and low trading prices of a share of our common stock
on the grant date. The PSUs issued in 2015 and 2016 are subject to capital-return based vesting criteria and vest based on the
aggregate cash produced as a result of monetizations involving certain of our partner companies relative to the amount of cash
deployed in connection with such partner companies over a 10-year period, plus allocated overhead, as described in detail under
“Compensation Discussion and Analysis –– Long-Term Incentives.” Each PSU entitles a named executive officer
to receive one share of Safeguard common stock on or about the date upon which the PSU vests, and, if applicable, cash accruals/payments
if the capital returned to Safeguard equals or exceeds 2.25 times the capital deployed plus allocated overhead. No named executive
officer may receive any cash amounts beyond the point at which the cash returned to Safeguard equals 3.0 times the capital deployed
plus allocated overhead, effectively capping the combined equity and cash incentive payout for such named executive officers at
200%. The grant date fair values for the PSUs included in this column were computed based upon the probable outcome of the performance
conditions as of the grant date.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | The amounts reported in this column represent payments
made in March 2018 for awards earned under our 2017 Management Incentive Plan, which is described in detail under “Compensation
Discussion and Analysis—2017 Compensation Program.”
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | For 2017, All Other Compensation includes the following
amounts:
| | --- | ----------------------------------------------------------------



|Name                 |  | 401(k) Matching Contribution ($) |        |  | Life Insurance Premiums ($) |  |       | Group Life Insurance Imputed Income ($) | 
|-------------------- |  | -------------------------------- | ------ |  | --------------------------- |  | ----- | --------------------------------------- | 
|Stephen T. Zarrilli  |  |                                  | 13,500 |  |                             |  | 3,432 |                                         | 
|Jeffrey B. McGroarty |  |                                  | 13,500 |  |                             |  | 1,371 |                                         | 
|Brian J. Sisko       |  |                                  | 13,500 |  |                             |  | 2,594 |                                         | 





39







Our named executive officers also have occasional personal
use of tickets to various sporting events at no incremental cost to us and are eligible to receive matching charitable contributions
under our program, which is available to all employees, subject to a maximum of $1,500 in matching contributions for each individual
for each calendar year.



Each of our current named executive officers has an employment agreement
with us that sets his initial base salary and respective initial minimum annual cash incentive target award as follows: Mr. Zarrilli
($340,000 salary; $195,000 target award); Mr. McGroarty ($275,000 salary; $206,250 target award); and Mr. Sisko ($340,000 salary;
$250,000 target award). Base salaries and annual cash incentive target awards for each named executive officer, which are reviewed
by the Compensation Committee each year, currently exceed these contractual minimum amounts. None of the employment agreements
provide for a term of employment and each of our executive officers is an “employee-at-will.” The primary focus of
these agreements is to provide our executive officers with severance benefits in the event of a termination of employment involuntarily,
without cause or for good reason, or upon a change in control, as described below under “Potential Payments upon Termination
or Change in Control.”



The components of compensation reported in the Summary Compensation
Table, including an explanation of the amount of salary and cash incentive compensation in proportion to total compensation, are
described in detail under “Compensation Discussion and Analysis.”



Grants of Plan-Based Awards — 2017



The following table shows non-equity and equity incentive plan
awards and stock awards granted during 2017 to our named executive officers.

|               |  | Grant       |  | Date
                                         of Committee |  | Estimated
                                         Possible Payouts Under
                                         Non-Equity Incentive Plan
                                         Awards (1) |   |  | Estimated
                                         Future Payouts Under
                                         Equity Incentive Plan Awards
                                         (2)(3) |  |         | All
                                         Other Stock Awards: Number
                                         of Shares
                                         of Stock
                                         or |  |  | All
                                         Other Option Awards: Number
                                         of Securities
                                                           Underlying |  |  | Exercise or
                                         Base Price
                                         of Option |   |  | Closing Market Price
                                         on Date
                                         of |  |   | Grant Date Fair Value
                                         of Stock And Option | 
|-------------- |  | ----------- |  | ---------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ------------------------------------------------------------------------------------------------------------------ | - |  | ----------------------------------------------------------------------------------------------------------------- |  | - | ---------------------------------------------------------------------------------- | 
|Name           |  | Date (2017) |  | Action (2017)                                              |  | Threshold ($)                                                                                                                                                                                    |   |  | Target ($)                                                                                                                                                                                    |  |         | Maximum ($)                                                                                                                                                                                                              |  |  | Threshold (#)                                                                                                                                                                                         |  |  | Target (#)                                                                                                         |   |  | Maximum (#)                                                                                                       |  |   | Units (#)(2)(3)(4)                                                                 | 
|Stephen T.     |  | 07/25       |  | 07/25                                                      |  |                                                                                                                                                                                                  | — |  |                                                                                                                                                                                               |  | 696,000 |                                                                                                                                                                                                                          |  |  | 1,044,000                                                                                                                                                                                             |  |  |                                                                                                                    | — |  |                                                                                                                   |  | — |                                                                                    | 
|Zarrilli       |  | 12/29       |  | 12/29                                                      |  |                                                                                                                                                                                                  | — |  |                                                                                                                                                                                               |  | —       |                                                                                                                                                                                                                          |  |  | —                                                                                                                                                                                                     |  |  |                                                                                                                    | — |  |                                                                                                                   |  | — |                                                                                    | 
|               |  |             |  |                                                            |  |                                                                                                                                                                                                  |   |  |                                                                                                                                                                                               |  |         |                                                                                                                                                                                                                          |  |  |                                                                                                                                                                                                       |  |  |                                                                                                                    |   |  |                                                                                                                   |  |   |                                                                                    | 
|Jeffrey B.     |  | 07/25       |  | 07/25                                                      |  |                                                                                                                                                                                                  | — |  |                                                                                                                                                                                               |  | 228,750 |                                                                                                                                                                                                                          |  |  | 343,125                                                                                                                                                                                               |  |  |                                                                                                                    | — |  |                                                                                                                   |  | — |                                                                                    | 
|McGroarty      |  | 12/29       |  | 12/29                                                      |  |                                                                                                                                                                                                  | — |  |                                                                                                                                                                                               |  | —       |                                                                                                                                                                                                                          |  |  | —                                                                                                                                                                                                     |  |  |                                                                                                                    |   |  |                                                                                                                   |  | — |                                                                                    | 
|               |  |             |  |                                                            |  |                                                                                                                                                                                                  |   |  |                                                                                                                                                                                               |  |         |                                                                                                                                                                                                                          |  |  |                                                                                                                                                                                                       |  |  |                                                                                                                    |   |  |                                                                                                                   |  |   |                                                                                    | 
|Brian J. Sisko |  | 07/25       |  | 07/25                                                      |  |                                                                                                                                                                                                  | — |  |                                                                                                                                                                                               |  | 360,000 |                                                                                                                                                                                                                          |  |  | 540,000                                                                                                                                                                                               |  |  |                                                                                                                    | — |  |                                                                                                                   |  | — |                                                                                    | 
|               |  | 12/29       |  | 12/29                                                      |  |                                                                                                                                                                                                  | — |  |                                                                                                                                                                                               |  | —       |                                                                                                                                                                                                                          |  |  | —                                                                                                                                                                                                     |  |  |                                                                                                                    | — |  |                                                                                                                   |  | — |                                                                                    | 












| | (1) | These awards were made under our 2017 MIP. There were no mandatory minimum awards payable under our 2017 MIP and the maximum
awards payable were 150% of the target amounts. The amounts in the table represent payouts that might have been achieved based
on performance at target or maximum performance levels. Actual payments under these awards, which have already been determined
and were paid in March 2018, are included for 2017 in the Non-Equity Incentive Plan Compensation column of the Summary Compensation
Table.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | The vesting of equity awards may be accelerated upon death, permanent disability, retirement on or after 65th birthday, termination
of employment for good reason or without cause, or termination of employment in connection with a change in control. Further information
regarding the equity awards that are subject to acceleration of vesting in each circumstance can be found below under “Potential
Payments upon Termination or Change in Control.”
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | The aggregate 2017 long-term incentive value of the grants made to each of our named executive officers was as follows: Mr.
Zarrilli – $660,000; Mr. McGroarty – $150,000; and Mr. Sisko – $270,000. The number of shares of restricted
stock awarded to each of our named executive officers was determined by dividing each such value by the average closing price of
a share of our common stock on the NYSE composite tape for the 20 consecutive trading days immediately preceding the grant date,
which was $11.6825.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | The restricted stock vests as to 25% of the underlying shares on March 1, 2019, and as to the remaining 75% of the underlying
shares in 12 equal quarterly installments commencing on March 15, 2019, and on the fifteenth day of each June, September, December,
and March thereafter. The restricted stock was granted under our 2014 Equity Compensation Plan.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | The amounts in this column represent the grant date fair value of the awards computed in accordance with FASB ASC Topic 718.
The assumptions used by us in calculating these amounts are incorporated by reference to Note 7 to our Consolidated Financial Statements in the Original Form 10-K.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





40







Outstanding Equity Awards at Fiscal Year-End — 2017



The following table shows the equity awards we have made to our
named executive officers that were outstanding at December 31, 2017.



|           |  |          |  | Option
    Awards                                                                                   |        |  | Stock
    Awards                                                                                       | 
|---------- |  | -------- |  | --------------------------------------------------------------------------------------------------- | ------ |  | ------------------------------------------------------------------------------------------------------ | 
|           |  | Grant    |  | Number
                                         of Securities Underlying Unexercised Options (#)(1) |        |  | Number
                                         of Securities Underlying Unexercised Options (#)(1)(2) | 
|Name       |  | Date     |  | Exercisable                                                                                         |        |  | Unexercisable                                                                                          | 
|Stephen T. |  | 10/30/09 |  |                                                                                                     | —      |  |                                                                                                        | 
|Zarrilli   |  | 10/30/09 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 11/05/10 |  |                                                                                                     | 3,755  |  |                                                                                                        | 
|           |  | 11/05/10 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 11/05/10 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 09/30/11 |  |                                                                                                     | 4,914  |  |                                                                                                        | 
|           |  | 09/30/11 |  |                                                                                                     | 453    |  |                                                                                                        | 
|           |  | 09/30/11 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 10/02/12 |  |                                                                                                     | 4,789  |  |                                                                                                        | 
|           |  | 10/02/12 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 10/02/12 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 12/05/12 |  |                                                                                                     | 19,813 |  |                                                                                                        | 
|           |  | 12/05/12 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 12/05/12 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 10/31/13 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 12/31/14 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 12/31/15 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 12/30/16 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 12/29/17 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  |          |  |                                                                                                     |        |  |                                                                                                        | 
|Jeffrey B. |  | 10/30/09 |  |                                                                                                     | —      |  |                                                                                                        | 
|McGroarty  |  | 10/30/09 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 11/05/10 |  |                                                                                                     | 875    |  |                                                                                                        | 
|           |  | 11/05/10 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 11/05/10 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 09/30/11 |  |                                                                                                     | 875    |  |                                                                                                        | 
|           |  | 09/30/11 |  |                                                                                                     | 81     |  |                                                                                                        | 
|           |  | 09/30/11 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 10/02/12 |  |                                                                                                     | 875    |  |                                                                                                        | 
|           |  | 10/02/12 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 10/02/12 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 12/05/12 |  |                                                                                                     | 1,800  |  |                                                                                                        | 
|           |  | 12/05/12 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 12/05/12 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 10/31/13 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 12/31/14 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 12/31/15 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 12/30/16 |  |                                                                                                     | —      |  |                                                                                                        | 
|           |  | 12/29/17 |  |                                                                                                     | —      |  |                                                                                                        | 





41









|         |  |          |  | Option
    Awards                                                                                   |       |  | Stock
    Awards                                                                                       | 
|-------- |  | -------- |  | --------------------------------------------------------------------------------------------------- | ----- |  | ------------------------------------------------------------------------------------------------------ | 
|         |  | Grant    |  | Number
                                         of Securities Underlying Unexercised Options (#)(1) |       |  | Number
                                         of Securities Underlying Unexercised Options (#)(1)(2) | 
|Name     |  | Date     |  | Exercisable                                                                                         |       |  | Unexercisable                                                                                          | 
|Brian J. |  | 10/30/09 |  |                                                                                                     | —     |  |                                                                                                        | 
|Sisko    |  | 10/30/09 |  |                                                                                                     | —     |  |                                                                                                        | 
|         |  | 11/05/10 |  |                                                                                                     | 3,755 |  |                                                                                                        | 
|         |  | 11/05/10 |  |                                                                                                     | —     |  |                                                                                                        | 
|         |  | 11/05/10 |  |                                                                                                     | —     |  |                                                                                                        | 
|         |  | 09/30/11 |  |                                                                                                     | 3,879 |  |                                                                                                        | 
|         |  | 09/30/11 |  |                                                                                                     | 358   |  |                                                                                                        | 
|         |  | 09/30/11 |  |                                                                                                     | —     |  |                                                                                                        | 
|         |  | 10/02/12 |  |                                                                                                     | 3,672 |  |                                                                                                        | 
|         |  | 10/02/12 |  |                                                                                                     | —     |  |                                                                                                        | 
|         |  | 10/02/12 |  |                                                                                                     | —     |  |                                                                                                        | 
|         |  | 12/05/12 |  |                                                                                                     | 810   |  |                                                                                                        | 
|         |  | 12/05/12 |  |                                                                                                     | —     |  |                                                                                                        | 
|         |  | 12/05/12 |  |                                                                                                     | —     |  |                                                                                                        | 
|         |  | 10/31/13 |  |                                                                                                     | —     |  |                                                                                                        | 
|         |  | 12/31/14 |  |                                                                                                     | —     |  |                                                                                                        | 
|         |  | 12/31/15 |  |                                                                                                     | —     |  |                                                                                                        | 
|         |  | 12/31/16 |  |                                                                                                     | —     |  |                                                                                                        | 
|         |  | 12/29/17 |  |                                                                                                     | —     |  |                                                                                                        | 



| | (1) | Unless otherwise identified by footnote, options are subject to time-based vesting, with 25% of the underlying shares vesting
on the first anniversary date of the grant date and the remaining underlying shares vesting in 36 equal installments each month
thereafter.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Vesting of equity awards may be accelerated upon death, permanent disability, retirement on or after 65th birthday, termination
of employment for good reason or without cause, or termination of employment in connection with a change in control. Further information
regarding the equity awards that are subject to acceleration of vesting in each circumstance can be found below under “Potential
Payments upon Termination or Change in Control.”
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | The shares included in this column vest as follows: (i) awards granted before 2013 vest 25% on the first anniversary date of
the grant date, with the remaining 75% of the shares vesting in equal monthly installments over the next 36 months thereafter;
(ii) awards granted in 2013 vest 25% on the fifteenth day of the month following the first anniversary of the grant date, with
the remaining 75% of the shares vesting in equal monthly installments over the next 36 months thereafter; and (iii) awards granted
in 2014, 2015, 2016 and 2017 vest 25% on March 1 in the second calendar year following the grant and in 12 equal quarterly installments
commencing on March 15 in the second calendar year following the grant and on the fifteenth day of each June, September, December,
and March thereafter.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Under SEC rules, the value is calculated based on the year-end closing stock price of $11.20, as reported on the NYSE composite
tape, multiplied by the number of shares or the number of shares of stock underlying the PSUs that have not vested.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | The PSUs included in this column are subject to capital-return based vesting and vest based on the aggregate cash produced
as a result of monetizations involving certain of our partner companies relative to the amount of cash deployed in connection with
such partner companies over a 10-year period, as described in detail under “Compensation Discussion and Analysis ––
Long-Term Incentives.” The capital-return based vesting for the PSUs included in this column is tied to the following partner
companies: (i) for the 2009, 2011, 2014, 2015 and 2016 grants, those partner companies into which we first deployed capital during
the preceding 12 months; (ii) for the 2010 and 2012 grants, those partner companies into which we first deployed capital during
the preceding 24 months; and (iii) for the 2013 grants, those partner companies into which we first deployed capital during the
period November 2012 through December 2013. Each PSU entitles a named executive officer to receive one share of Safeguard common
stock on or about the date upon which the PSU vests, and, for PSUs awarded in 2014, 2015 and 2016, cash accruals/payments if the
capital returned to Safeguard exceeds 2.0 times the capital deployed plus allocated overhead. No named executive officer may receive
any cash amounts relating to the 2014, 2015 and 2016 PSUs, respectively, beyond the point at which the cash returned to Safeguard
equals 3.0 times capital deployed (plus allocated overhead), effectively capping the combined equity and cash incentive payout
for such named executive officers at 200%. Notwithstanding the above, so as to ensure against the unlikely possibility that grants
could, in theory, vest quickly if cash proceeds relating to a particular pool are achieved very soon after the equity grant date,
the Committee required, beginning in 2014, that none of such equity may vest (or cash amounts be paid) more quickly than based
upon the following schedule following grant: March 15 in the second calendar year following the grant - 25%; each semi-annual anniversary
of the grant thereafter through March 15 in the fifth calendar year following the grant - 12 1⁄2% increments.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



42







| | (6) | These options are subject to capital-return based vesting and vest based on the aggregate cash produced as a result of monetizations
involving certain of our partner companies relative to the amount of cash deployed in connection with such partner companies, as
described in detail under “Compensation Discussion and Analysis –– Long-Term Incentives.” The capital-return
based vesting for the options is tied to the following partner companies: (i) for the 2009 and 2011 grants, those partner companies
into which we first deployed capital during the preceding 12 months; and (ii) for the 2010 and 2012 grants, those partner companies
into which we first deployed capital during the preceding 24 months.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Option Exercises and Stock Vested — 2017



The following table shows stock options that were exercised by our
named executive officers during 2017 and restricted stock awards that vested during 2017.



|                     |  | Option Awards                             |       |  | Stock Awards                      | 
|-------------------- |  | ----------------------------------------- | ----- |  | --------------------------------- | 
|Name                 |  | Number of Shares Acquired on Exercise (#) |       |  | Value Realized on Exercise ($)(1) | 
|Stephen T. Zarrilli  |  |                                           | 3,625 |  |                                   | 
|Jeffrey B. McGroarty |  |                                           | 875   |  |                                   | 
|Brian J. Sisko       |  |                                           | 3,625 |  |                                   | 










| | (1) | The value realized on exercise is determined by multiplying the number of shares acquired on exercise by the difference between
the exercise price and the average of the high and low trading prices of Safeguard’s common stock, as reported on the NYSE
consolidated tape, on the exercise date, or, for those shares that were sold upon exercise of the options, the difference between
the sales price of the shares underlying the options exercised and the applicable exercise price of those options.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | The value realized on vesting is determined by multiplying the number of shares vested by the average of the high and low trading
prices of Safeguard’s common stock, as reported on the NYSE consolidated tape, on each vesting date.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Nonqualified Deferred Compensation
— 2017



In 2003, Safeguard adopted an Executive Deferred Compensation Plan,
which is a nonqualified, unfunded plan that provided for a designated group of employees to obtain credits in the form of Safeguard
contributions that were allocated to accounts for the benefit of each participant. Participants were not able to defer compensation
under the plan. This plan was adopted in order to approximate matching contributions under our 401(k) plan which, based upon the
terms and structure of our 401(k) plan, were not available to our most highly compensated personnel.



During 2008, the Compensation Committee approved a change to our
401(k) plan which allowed matching contributions for all of our employees beginning in 2009. Therefore, no contributions have been
made to this plan since 2009, and we do not expect to make any future contributions under this plan. Amounts accrued for prior
periods will remain credited, and earnings on those prior amounts will continue to be credited, to prior participants in accordance
with the terms of the plan.



Lump sum distributions of the vested balance in a named executive
officer’s account are made six months following termination.



A committee appointed by Safeguard’s Board selects the funds
or indices that are used for purposes of calculating the earnings that are credited to each participant’s account based on
a notional investment in the selected funds or indices. Since July 2011, we have calculated earnings based on the performance of
the notional investment in the Vanguard 500 Index Admiral Fund (VFIAX), one of the investment choices available to participants
in our 401(k) plan. The committee, in its discretion, may replace this fund and add new funds.



The following table shows earnings during 2017 and account balances
at December 31, 2017, for our named executive officers.



|Name                 |  | Registrant Contributions in Last Fiscal Year ($) |   |  | Aggregate Earnings in Last Fiscal Year ($)(1) |  |        | Aggregate Withdrawals/ Distributions ($) |  |  | Aggregate Balance at Last Fiscal Year End ($)(2) | 
|-------------------- |  | ------------------------------------------------ | - |  | --------------------------------------------- |  | ------ | ---------------------------------------- |  |  | ------------------------------------------------ | 
|Stephen T. Zarrilli  |  |                                                  | — |  |                                               |  | —      |                                          |  |  | —                                                | 
|Jeffrey B. McGroarty |  |                                                  | — |  |                                               |  | 18,216 |                                          |  |  | —                                                | 
|Brian J. Sisko       |  |                                                  | — |  |                                               |  | 11,901 |                                          |  |  | —                                                | 










| | (1) | Earnings in the last fiscal year are included in the Summary Compensation Table under “Change in Pension Value and Nonqualified
Deferred Compensation Earnings.”
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | The balance in each named executive officer’s account
consists of contributions credited by us and notional accrued gains or losses. At December 31, 2017, each of our named executive
officers was fully vested.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





43







CEO Pay Ratio – 7.3:1



The Committee reviewed a comparison of our President and Chief Executive
Officer’s annual total compensation in 2017 to that of all other Safeguard employees for the same period. The calculation
of annual total compensation of all employees was determined based on base salary received in 2017 and payment received under the
Management Incentive Program for performance in 2017 (which was paid in March 2018):



Our calculation includes all employees as of November 30, 2017.



We determined our median employee by: (i) calculating the annual
total compensation described above for each of our employees, (ii) ranking the annual total compensation of all employees except
for the CEO from lowest to highest (a list of 26 employees) and (iii) because we have an even number of employees when not including
the CEO, determining the average of the annual total compensation of the two employees ranked 13th and 14th
on the list (the “Median Employee”).



Following the same methodology used to calculate “Total ($)”
for our President and Chief Executive Officer as shown in the “Summary Compensation Table” in this report, the annual
total compensation for 2017 for our President and Chief Executive Officer was $1,761,546 and the annual total compensation for
2017 for the Median Employee was $240,276. The resulting ratio of our President and Chief Executive Officer’s pay to the
pay of our Median Employee for 2017 is 7.3 to 1.



Potential Payments upon Termination or Change in Control



Agreements with Messrs. Zarrilli, McGroarty, and Sisko



Messrs.  Zarrilli, McGroarty and Sisko each have agreements
with us that provide for certain benefits upon termination of employment without cause or for good reason, either involuntarily
or in connection with a change in control. Under these agreements, the following definitions apply:



|Cause             | à | Violation of any of our written policies; appropriation of a material business opportunity of our company; misappropriation of company assets; conviction of a felony or any other crime with respect to which imprisonment is a possible punishment; or breach of any material term of the executive’s employment agreement or any other agreement with, or duty owed to, us or any of our partner companies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|----------------- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Good Reason       | à | A material diminution, without the executive’s consent, in the nature or status of the executive’s position, title, reporting relationship, duties, responsibilities or authority; a material reduction of the executive’s base salary; a material breach by us of the executive’s agreement; the relocation of our principal office by more than 30 to 35 miles (as specified in each individual’s agreement); or an executive’s assignment, without his consent, to be based anywhere other than our principal office.                                                                                                                                                                                                                                                                                                                                                      
|                  |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Change in Control | à | A change in control generally occurs when:
        
        ·A
        person becomes the beneficial owner of securities having 50% or more of the combined voting power of our securities;
        
        ·Less
        than a majority of our Board consists of continuing directors (which means a director who either is a member of the Board as of
        the effective date of the change in control or is nominated or appointed to serve as a director by a majority of the then continuing
        directors);
        
        ·We
        are subject to a merger or other business combination transaction as a result of which holders of a majority of our equity securities
        do not own a majority of the equity securities of the surviving company; or
        
        ·We
        sell all or substantially all of our assets or are liquidated.





44







Payments Made upon Involuntary Termination of Employment without
Cause or for Good Reason



Messrs. Zarrilli, McGroarty and Sisko will receive the following
benefits upon involuntary termination of employment without cause or for good reason:



| | · | A lump sum payment equal to 1.5 times the executive’s then current
base salary and the executive’s earned prorated bonus for the year of termination;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------

| | · | All time-vested stock options will fully vest and remain exercisable
for 36 months and vested performance-based stock options will remain exercisable for 12 months (unless any of the options would
by their terms expire sooner, in which case they may be exercised at any time prior to expiration);
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | 12 months’ continued coverage under our medical, dental, and
life insurance plans; and
| | - | --------------------------------------------------------------------------------------

| | · | Up to $20,000 for outplacement services or office space.
| | - | --------------------------------------------------------



Payments Made upon a Change in Control or Involuntary Termination
of Employment without Cause or for Good Reason in Connection with a Change in Control



Messrs. Zarrilli, McGroarty and Sisko will not be entitled to any
other payments or benefits (except those that are provided on a non-discriminatory basis to our employees generally upon termination
of employment) unless the change in control is coupled with a loss of employment or a substantial change in job duties as described
above.



Upon involuntary termination of employment without cause or for
good reason within 18 months following a change in control, our named executive officers will receive the following benefits:



| | · | A lump sum payment equal to 1.5 times the executive’s then current
base salary and the executive’s earned prorated bonus for the year of termination;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------

| | · | All time-vested stock options will fully vest and remain exercisable
for 36 months and all performance-based stock options that have not otherwise vested will vest and remain exercisable for 24 months
(unless any of the options would by their terms expire sooner, in which case they may be exercised at any time prior to expiration);
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | All restricted stock awards and PSUs that have not otherwise vested
will vest;
| | - | ------------------------------------------------------------------------------

| | · | 12 months’ continued coverage under our medical, dental, and
life insurance plans; and
| | - | --------------------------------------------------------------------------------------

| | · | Up to $20,000 for outplacement services or office space.
| | - | --------------------------------------------------------



Other Payments Made upon Termination of Employment



Regardless of the manner in which a named executive officer’s
employment terminates, he also generally will receive payments and benefits that are provided on a non-discriminatory basis to
our employees upon termination of employment, including the following:



| | · | Amounts earned during his term of employment;
| | - | ---------------------------------------------

| | · | Upon his death, disability or voluntary termination of employment,
his accrued unused vacation pay;
| | - | ---------------------------------------------------------------------------------------------------

| | · | Amounts contributed by us for the year of termination under our 401(k)
plan (if he has completed the required hours of service, if any, and is an employee on the date as of which we make a contribution);
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Distribution of accrued and vested plan balances under our 401(k)
plan and nonqualified deferred compensation plan;
| | - | -------------------------------------------------------------------------------------------------------------------

| | · | Reimbursement of eligible dental expenses for services incurred prior
to termination;
| | - | -------------------------------------------------------------------------------------

| | · | Upon his death, disability or retirement on or after his 65th birthday,
accelerated vesting of stock options subject to time-based vesting that have not otherwise vested and extension of the post-termination
exercise period for all stock options from 90 days to 12 months; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Upon his death or disability, payment of benefits under our other
broad-based employee benefit programs, including short-term and long-term disability plans, life insurance program, accidental
death and dismemberment plan and business travel insurance plan, as applicable.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



45







The following table shows the potential incremental payments
and benefits which our named executive officers would have been entitled to receive upon termination of employment in each
situation listed in the table below under their respective agreements and our broad-based employee benefit programs. The
amounts shown do not include certain payments and benefits available generally to salaried employees upon termination of
employment, such as distributions from our 401(k) and deferred compensation plans. The amounts shown in the table are based
on an assumed termination as of December 31, 2017, and represent estimates of the maximum incremental amounts and benefits
that would have been paid to each executive upon his termination which we have calculated: (i) by assuming each executive
officer would have been entitled to his respective 2016 annualized target incentive award for the full year; and (ii) by
using our 2017 premium costs for calculating the value of the health and welfare benefits. The actual amounts to be paid to
each executive would depend on the time and circumstances of an executive’s separation from Safeguard. On April 6,
2018, the Company announced that it promoted Mr. Sisko to the position of President and Chief Executive Officer, effective as
of July 1, 2018, to succeed Mr. Zarrilli. Mr. Zarrilli will act as a special advisor to the Company through September 30,
2018 and then retire. In addition, Mr. McGroarty, will depart from the Company, effective June 30, 2018. David Kille,
currently the Company’s Corporate Controller, will assume the role of Chief Financial Officer, effective June 1, 2018.
In connection with the foregoing announcement, the Company entered into certain compensatory arrangements with such officers.
See our Current Report on Form 8-K filed on April 10, 2018 for a description of theses compensatory arrangements.





46







|                                                                 |  | Salary and Bonus ($) |           |  | Life Insurance Proceeds or Disability Income ($) |  |           | Health and Welfare Benefits ($) |  |  | Acceleration of Equity Awards ($)(1) |  |  | Total Termination Benefits ($) |          
|---------------------------------------------------------------- |  | -------------------- | --------- |  | ------------------------------------------------ |  | --------- | ------------------------------- |  |  | ------------------------------------ |  |  | ------------------------------ | ---------
|Stephen T. Zarrilli                                              |  |                      |           |  |                                                  |  |           |                                 |  |  |                                      |  |  |                                |          
|·Normal Retirement (65+)                                         |  |                      | —         |  |                                                  |  | —         |                                 |  |  | —                                    |  |  |                                | —        
|·Permanent disability                                            |  |                      | —         |  |                                                  |  | 2,548,400 |                                 |  |  | —                                    |  |  |                                | —        
|·Death                                                           |  |                      | —         |  |                                                  |  | 1,500,000 |                                 |  |  | —                                    |  |  |                                | —        
|·Involuntary termination without cause or for good reason        |  |                      | 1,566,000 |  |                                                  |  | —         |                                 |  |  | 34,933                               |  |  |                                | —        
|·Change-in-control termination, involuntarily or for good reason |  |                      | 1,566,000 |  |                                                  |  | —         |                                 |  |  | 34,933                               |  |  |                                | 3,435,411
|                                                                 |  |                      |           |  |                                                  |  |           |                                 |  |  |                                      |  |  |                                |          
|Jeffrey B. McGroarty                                             |  |                      |           |  |                                                  |  |           |                                 |  |  |                                      |  |  |                                |          
|·Normal Retirement (65+)                                         |  |                      | —         |  |                                                  |  | —         |                                 |  |  | —                                    |  |  |                                | —        
|·Permanent disability                                            |  |                      | —         |  |                                                  |  | 3,082,483 |                                 |  |  | —                                    |  |  |                                | —        
|·Death                                                           |  |                      | —         |  |                                                  |  | 1,055,000 |                                 |  |  | —                                    |  |  |                                | —        
|·Involuntary termination without cause or for good reason        |  |                      | 686,250   |  |                                                  |  | —         |                                 |  |  | 35,586                               |  |  |                                | —        
|·Change-in-control termination, involuntarily or for good reason |  |                      | 686,250   |  |                                                  |  | —         |                                 |  |  | 35,586                               |  |  |                                | 787,654  
|                                                                 |  |                      |           |  |                                                  |  |           |                                 |  |  |                                      |  |  |                                |          
|Brian J. Sisko                                                   |  |                      |           |  |                                                  |  |           |                                 |  |  |                                      |  |  |                                |          
|·Normal Retirement (65+)                                         |  |                      | —         |  |                                                  |  | —         |                                 |  |  | —                                    |  |  |                                | —        
|·Permanent disability                                            |  |                      | —         |  |                                                  |  | 1,950,600 |                                 |  |  | —                                    |  |  |                                | —        
|·Death                                                           |  |                      | —         |  |                                                  |  | 1,150,000 |                                 |  |  | —                                    |  |  |                                | —        
|·Involuntary termination without cause or for good reason        |  |                      | 960,000   |  |                                                  |  | —         |                                 |  |  | 30,495                               |  |  |                                | —        
|·Change-in-control termination, involuntarily or for good reason |  |                      | 960,000   |  |                                                  |  | —         |                                 |  |  | 30,495                               |  |  |                                | 1,526,685



| | (1) | Under SEC rules, the value related to the acceleration of equity awards in each scenario is calculated as of December 31, 2017,
based on (i) the number of shares underlying stock options for which vesting would have been accelerated, multiplied by the
difference between our year-end closing stock price, as reported on the NYSE composite tape, and the exercise price of stock options
for which vesting would have been accelerated; (ii) for restricted stock awards, the number of shares for which vesting would have
been accelerated, multiplied by our year-end closing stock price, as reported on the NYSE composite tape; and (iii) for PSUs, the
number of shares underlying PSUs for which vesting would have been accelerated, multiplied by our year-end closing stock price,
as reported on the NYSE composite tape.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Board Compensation.During 2017, each of our non-employee
directors was compensated for his or her service as a director through cash payments as shown in the table below:



|Compensation Item                                                                                   |  | Amount ($) |        
|--------------------------------------------------------------------------------------------------- |  | ---------- | -------
|                                                                                                    |  |            |        
|Annual Board Retainers (payable relative to a
    full year of Board service):                      |  |            |        
|Chairman of the Board                                                                               |  |            | 100,000
|Other Directors                                                                                     |  |            | 50,000 
|                                                                                                    |  |            |        
|Additional Annual Chairperson Retainers (payable
    relative to a full year of committee service): |  |            |        
|Audit Committee                                                                                     |  |            | 15,000 
|Compensation Committee                                                                              |  |            | 10,000 
|Nominating & Corporate Governance Committee                                                         |  |            | 10,000 
|                                                                                                    |  |            |        
|Additional Annual Committee Retainers (payable
    relative to a full year of committee service):   |  |            |        
|Audit Committee                                                                                     |  |            | 15,000 
|Compensation Committee                                                                              |  |            | 15,000 
|Nominating & Corporate Governance Committee                                                         |  |            | 10,000 



Directors’ fees are paid quarterly, in arrears, and retainers
are prorated based on actual days of service relative to a full year of Board service. We also reimburse our directors for expenses
they incur to attend our Board and committee meetings and for attendance at one director continuing education program during each
calendar year or the reasonable cost of one year’s membership in an organization that is focused on director education.



In December 2016, with assistance from Semler Brossy Consulting
Group, LLC, an independent compensation consulting firm, the Compensation Committee reviewed the compensation of our non-employee
directors and recommended the elimination of meeting fees paid to such directors for their service on the Board’s committees
and, in place of such meeting fees, recommended the payment of annual retainers to such directors in the amounts set forth in the
above table. Such change from the payment of meeting fees to the payment of annual retainers to directors for their service on
the Board’s committees became effective with the new director term that commenced following our 2017 annual meeting.





47







In connection with the Compensation Committee’s review of
the compensation of the non-employee directors in December 2016, the Compensation Committee recommended changing such annual equity
grant to non-employee directors from a fixed number of deferred stock units (“DSUs”) to a number of DSUs having a value
of $85,000, based upon the average closing price of a share of our common stock on the New York Stock Exchange composite tape for
the 20 consecutive trading days immediately preceding the grant date.  The Board concurred with this recommendation and on
May 31, 2017 each non-employee director received 7,406 DSUs, which had a value of $85,000 based upon the average closing price
of a share of our common stock on the New York Stock Exchange composite tape for the 20 consecutive trading days immediately preceding
May 31, 2017. The annual service DSU grants are fully vested at issuance for directors who have reached age 65 and otherwise vest
on the first anniversary of the grant date or, if earlier, once a director reaches age 65. The DSUs represent the right to receive
shares of Safeguard common stock, on a one-for-one basis, following the date upon which the director leaves the Board.



Safeguard also maintains a Group Deferred Stock Unit Program for
Directors (“Directors’ DSU Program”) which allows each outside director, at his or her election, to receive DSUs
in lieu of the cash retainers paid to each director, as described above, for service on the Board and its committees (“Directors’
Fees”). The deferral election applies to Directors’ Fees to be received for the calendar year following the year in
which the election is made and remains in effect for each subsequent year unless the director elects otherwise by the end of the
calendar year prior to the year in which the services are rendered. The number of DSUs awarded is determined by dividing the Directors’
Fees by the fair market value of Safeguard’s stock on the date on which the director would have otherwise received the Directors’
Fees. Each director also receives a number of matching DSUs, based on the same fair market value calculation, equal to 25% of the
Directors’ Fees deferred. A director is always fully vested in DSUs awarded in lieu of Directors’ Fees deferred; the
matching DSUs are fully vested at grant for directors who have reached age 65 and otherwise vest on the first anniversary of the
date the matching DSUs were credited to the director’s account or, if earlier, once a director reaches age 65. Each DSU entitles
the director to receive one share of Safeguard common stock following the date upon which the director leaves the Board. A director
also may elect to receive the stock in annual installments over a period of up to five years after leaving the Board.



Director Compensation –
2017.The following table provides information on compensation earned for services provided during 2017 by each non-employee
director who served on our Board at any time during 2017:



|Name                |  | Fees Earned or Paid in Cash ($)(1) |         |  | Stock Awards ($)(2)(3) |  |         | Option Awards ($)(3) |  |  | All Other Compensation ($)(4) |  |  | Total ($)(5) |    
|------------------- |  | ---------------------------------- | ------- |  | ---------------------- |  | ------- | -------------------- |  |  | ----------------------------- |  |  | ------------ | ---
|Mara G. Aspinall    |  |                                    | 24,280  |  |                        |  | –       |                      |  |  | –                             |  |  |              | –  
|Julie A. Dobson     |  |                                    | 81,110  |  |                        |  | 86,424  |                      |  |  | –                             |  |  |              | –  
|Stephen Fisher      |  |                                    | 74,132  |  |                        |  | 99,249  |                      |  |  | –                             |  |  |              | –  
|George MacKenzie    |  |                                    | 98,176  |  |                        |  | 81,466  |                      |  |  | –                             |  |  |              | –  
|Maureen F. Morrison |  |                                    | 12,188  |  |                        |  | –       |                      |  |  | 19,659                        |  |  |              | –  
|John J. Roberts     |  |                                    | 91,676  |  |                        |  | 103,384 |                      |  |  | –                             |  |  |              | –  
|Robert J. Rosenthal |  |                                    | 100,000 |  |                        |  | 81,466  |                      |  |  | –                             |  |  |              | 831



| | (1) | The amounts included in this column reflect Directors’ Fees earned for services provided during 2017, including amounts
deferred under our Directors’ DSU Program. Of the amount of Directors’ Fees earned for services provided during 2017,
Ms. Dobson deferred payment of 25% and Mr. Fisher and Mr. Roberts deferred payment of 100%. Each director received DSUs in lieu
of Directors’ Fees that they deferred and matching DSUs equal to 25% of the Directors’ Fees that they deferred. Directors
who defer fees and receive DSUs are essentially investing in common stock equivalents that are initially valued based on the fair
market value of our common stock on the date of issuance. As a result, the value of their DSUs fluctuates with the market value
of our common stock.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | These amounts do not represent compensation actually received. Rather, these amounts represent the grant date fair values of
the matching DSUs and the annual service grant of DSUs computed in accordance with stock-based compensation accounting rules (FASB
ASC Topic 718). The fair value of the DSUs is determined by multiplying the number of shares underlying the DSUs by the average
of the high and low trading prices of Safeguard’s common stock, as reported on the NYSE composite tape, on the grant date.
The matching DSUs issued in January 2017 related to fees deferred that were earned during the fourth quarter of 2016. The following
table presents the grant date fair value for each DSU award made to each non-employee director during 2017:
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



48







|                    |  | Grant Date Fair Value ($) |      
|------------------- |  | ------------------------- | -----
|Name                |  | 1/15/17                   |      
|Julie A. Dobson     |  |                           | 1,214
|Stephen Fisher      |  |                           | 4,255
|George MacKenzie    |  |                           | –    
|Maureen F. Morrison |  |                           | –    
|John J. Roberts     |  |                           | 5,255
|Robert J. Rosenthal |  |                           | –    



| | (3) | The directors’ aggregate holdings of DSUs and stock options to purchase shares of our common stock (both vested and unvested),
as of December 31, 2017, were as follows:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Name                |  | DSUs (#) |        |  | Stock Options (#) | 
|------------------- |  | -------- | ------ |  | ----------------- | 
|Julie A. Dobson     |  |          | 59,365 |  |                   | 
|Stephen Fisher      |  |          | 27,258 |  |                   | 
|George MacKenzie    |  |          | 42,102 |  |                   | 
|Maureen F. Morrison |  |          | –      |  |                   | 
|John J. Roberts     |  |          | 61,338 |  |                   | 
|Robert J. Rosenthal |  |          | 43,540 |  |                   | 



*In connection with Ms. Morrison’s appointment
and consistent with the Company’s past practices, Ms. Morrison received an initial stock option grant to purchase 8,333 shares
of the Company’s common stock, which option will vest 25% each year commencing on the first anniversary of the grant date
and will have an eight-year term.



| | (4) | The amounts in this column represent costs associated with attendance at a director’s continuing education program or
a director’s reasonable annual dues for membership in an organization focused on director education.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Directors also are eligible for reimbursement of expenses incurred in connection with attendance at Board and committee meetings.
These amounts are not included in the table above.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Stock Ownership Guidelines. Each non-employee director is
expected to own a number of shares of our stock having a value at least equal to a designated multiple of the annual retainer paid
to such director for service on our Board. Such ownership is expected to be achieved within the later of five years after an individual’s
election to our Board or the fifth anniversary following any increase in the required multiple of the annual retainer. Since 2012,
the equity position threshold in our stock that is required to be held by non-employee directors is three times the annual cash
Board retainer. No sales of stock are permitted during the period in which the ownership requirement has not been met (except for
limited stock sales to meet tax obligations), without the approval of the Board. Shares counted toward these guidelines include:



| | · | Outstanding shares beneficially owned by the director;
| | - | ------------------------------------------------------

| | · | Vested shares of restricted stock;
| | - | ----------------------------------

| | · | Vested DSUs that have been credited to the director; and
| | - | --------------------------------------------------------

| | · | The net value of shares underlying vested, in-the-money options (“Net Option Value”).
| | - | -------------------------------------------------------------------------------------



For purposes of calculating the value to be used in monitoring compliance
with the ownership guidelines, we utilize (a) the greater of the current value or the cost basis of purchased shares; (b) the greater
of the current value or fees deferred in connection with vested DSUs; and (c) our trailing six-month average share price in determining
Net Option Value.



Based on information they have provided to us, all of our outside
directors, with the exception of Ms. Morrison, who joined our Board in 2017, and Mr. Glass and Mr. Lubert, who joined our Board
in 2018, have achieved the required ownership levels.



49











| | ITEM 12. | SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
| | -------- | ----------------------------------------------------------------------------------------------



Securities Authorized for Issuance Under Equity Compensation
Plans



Our equity compensation plans provide a broad-based program
designed to attract and retain talent while creating alignment with the long-term interests of our shareholders. Employees at all
levels participate in our equity compensation plans. In addition, members of our Board and members of our Advisory Board receive
equity grants for their service on our Board and Advisory Board, respectively. Members of our Board also receive deferred stock
unit (“DSU”) awards and are eligible to defer directors’ fees and receive DSUs with a value equal to the directors’
fees deferred and matching DSUs equal to 25% of the directors’ fees deferred.



Our 2001 Associates Equity Compensation Plan (“2001 Plan”)
provided for the grant of nonqualified stock options, stock appreciation rights, restricted stock, performance units, and other
stock-based awards to employees, consultants or advisors of Safeguard and its subsidiaries, provided that no grants could be made
under this plan to executive officers or directors of Safeguard. Under the NYSE rules that were in effect at the time this plan
was adopted in 2001, shareholder approval of the plan was not required. Except for the persons eligible to participate in the 2001
Plan and the inability to grant incentive stock options under the 2001 Plan, the terms of the 2001 Plan are substantially the same
as the other equity compensation plans approved by our shareholders (which are described herein or have been described in previous
filings).



A total of 900,000 shares of our common stock were authorized
for issuance under the 2001 Plan. At December 31, 2017, 129,902 shares were subject to outstanding options and performance
stock units (“PSUs”), no shares were available for future issuance, and 583,772 shares had been issued under
the 2001 Plan. The 2001 Plan expired by its terms on February 21, 2011. Equity grants previously awarded under this plan that
remained outstanding at December 31, 2017, continue to be administered in accordance with the terms of the grants. Any portions
of outstanding equity grants under the 2001 Plan that expire or become unexercisable for any reason shall be canceled and shall
be unavailable for future issuance.



During 2011, 2013 and 2016, the Compensation Committee granted
“employee inducement” awards to four then newly hired executives. The awards were granted outside of Safeguard’s
existing equity compensation plans in accordance with NYSE rules. The employee inducement awards consisted of: (i) options that
were outstanding at January 1, 2017 to purchase up to an aggregate of 92,230 shares of Safeguard common stock and (ii) 23,083
shares of restricted stock and 23,083 performance stock units that were granted as inducement awards during 2016. All of the “employee
inducement” awards that were granted as stock options have a per share exercise price equal to the average of the high and
low prices of Safeguard common stock on the grant date. 38,750 of such stock options were granted with an eight-year term and 53,480
of such stock options were granted with a 10-year term. The 23,083 performance stock units were granted with a 10-year term.



During 2017, there were no shares underlying inducement stock
options that were exercised, 6,508 shares of restricted stock underlying certain inducement awards vested and 22,230 of the shares
of underlying certain inducement stock options expired.



Of the shares underlying the “employee inducement”
awards that were outstanding at December 31, 2017, 40,583 shares (which include both stock options and shares of restricted
stock) were subject to time-based vesting, with an aggregate of: (i) 2,188 shares vesting on the first anniversary of the
grant date and 6,562 shares vesting in 36 equal monthly installments thereafter, and (ii) 2,188 shares vesting on the second
anniversary of the grant date and 6,562 shares vesting in 36 equal monthly installments thereafter, and (iii) 5,771 shares vesting
on the first anniversary of the fifteenth day of the first month following the quarter in which the employee began his or her employment
and 17,312 shares vesting in 12 quarterly installments thereafter. Of the remaining shares underlying the “employee inducement”
awards that were outstanding at December 31, 2017, 75,583 vest based on the aggregate cash produced as a result of monetizations
involving certain of our partner companies relative to the amount of cash deployed in connection with such partner companies. With
the exception of the market-based vesting or capital-return based vesting provisions, the terms and provisions of the employee
inducement awards are substantially the same as equity grants previously awarded to other executives under Safeguard’s equity
compensation plans.



50







The following table provides information as of December 31,
2017 about the securities authorized for issuance under our equity compensation plans. The material features of our equity compensation
plans are described in Note 7 to the Consolidated Financial Statements filed as part of our Annual Report on Form 10-K for the
year ended December 31, 2017.



|Equity Compensation Plan Information                          
|--------------------------------------------------------------
|                                                              
|Plan Category                                                 
|Equity compensation plans approved by security holders (3)    
|Equity compensation plans not approved by security holders (4)
|Total                                                         





| | (1) | Includes
a total of 900,380 shares underlying PSUs and DSUs awarded for no consideration and 66,821 shares underlying DSUs awarded
to directors in lieu of all or a portion of directors’ fees.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | The
weighted average exercise price calculation excludes 967,201 shares underlying outstanding DSUs and PSUs included in column (a) which
are payable in stock, on a one-for-one basis.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Represents
awards granted under the 1999 Equity Compensation Plan and the 2014 Plan and shares available for issuance under the 2014 Plan.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Includes
awards granted under the 2001 Plan and 93,0833 “employee inducement” awards.
| | --- | -------------------------------------------------------------------------------------



Security Ownership of Certain Beneficial Owners and Management



The following table shows the number of shares of Safeguard
common stock beneficially owned as of April 25, 2018 (unless otherwise indicated), by each person known to us to be the beneficial
owner of more than 5% of our outstanding shares of common stock, our directors, persons named in the Summary Compensation Table
in this report and our directors and executive officers as a group. For purposes of reporting total beneficial ownership, shares
that may be acquired within 60 days of April 25, 2018 through the exercise of Safeguard stock options are included. On April 25,
2018, there were 20,560,746 shares of common stock outstanding and 109,871 shares underlying stock options held by executive officers
and directors, as a group, that were exercisable within 60 days of April 25, 2018.



51









|                                                                                                                                                 |  | Outstanding Shares  Beneficially |           |     | Options  Exercisable |  |         | Shares  Beneficially  Owned Assuming 
Exercise of |  |  | Percent of  Outstanding |  |  | Other Stock-Based  Holdings (2) |    
|------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------------------------------- | --------- | --- | -------------------- |  | ------- | ------------------------------------------------- |  |  | ----------------------- |  |  | ------------------------------- | ---
|Name                                                                                                                                             |  | Owned                            |           |     | Within 60 Days       |  |         | Options                                           |  |  | Shares (1)              |  |  | Vested                          |    
|Ariel Investments, LLC
 200 E. Randolph Street
 Suite 2900
 New York, NY 10055                                                                   |  |                                  | 1,501,367 |     |                      |  | —       |                                                   |  |  | 1,501,367               |  |  |                                 | 7.3
|Blackrock, Inc.
 55 East 52nd Street
 New York, NY 10055                                                                                         |  |                                  | 1,575,085 |     |                      |  | —       |                                                   |  |  | 1,575,085               |  |  |                                 | 7.7
|Dimensional Fund Advisors LP
 Building One
 6300 Bee Cave Road
 Austin, TX 78746                                                                 |  |                                  | 1,113,799 |     |                      |  | —       |                                                   |  |  | 1,113,799               |  |  |                                 | 5.4
|First Manhattan Co.
 399 Park Avenue
 New York, NY 10022                                                                                         |  |                                  | 1,638,254 |     |                      |  | —       |                                                   |  |  | 1,638,254               |  |  |                                 | 8.0
|Horton Capital Partners, LLC, 
Maplewood Partners,
    LLC     and associated shareholders  1717 Arch Street, Suite 3920  Philadelphia, PA 19103 |  |                                  | 1,055,968 | (3) |                      |  | —       |                                                   |  |  | 1,055,968               |  |  |                                 | 5.1
|T. Rowe Price Associates, Inc.
 100 East Pratt Street
 Baltimore, MD 21202                                                                       |  |                                  | 1,680,445 |     |                      |  | —       |                                                   |  |  | 1,680,445               |  |  |                                 | 8.2
|Julie A. Dobson                                                                                                                                  |  |                                  | 16,332    |     |                      |  | 15,000  |                                                   |  |  | 31,332                  |  |  |                                 | *  
|Stephen Fisher                                                                                                                                   |  |                                  | —         |     |                      |  | 4,167   |                                                   |  |  | 4,167                   |  |  |                                 | *  
|George F. MacKenzie, Jr.                                                                                                                         |  |                                  | 11,250    |     |                      |  | 15,000  |                                                   |  |  | 26,250                  |  |  |                                 | *  
|Russell D. Glass                                                                                                                                 |  |                                  | —         |     |                      |  | —       |                                                   |  |  | —                       |  |  |                                 | *  
|Ira M. Lubert                                                                                                                                    |  |                                  | —         |     |                      |  | —       |                                                   |  |  | —                       |  |  |                                 | *  
|Maureen F. Morrison                                                                                                                              |  |                                  | —         |     |                      |  | —       |                                                   |  |  | —                       |  |  |                                 | *  
|John J. Roberts                                                                                                                                  |  |                                  | 1,728     |     |                      |  | 10,000  |                                                   |  |  | 11,728                  |  |  |                                 | *  
|Robert J. Rosenthal                                                                                                                              |  |                                  | 4,156     |     |                      |  | 15,000  |                                                   |  |  | 19,156                  |  |  |                                 | *  
|Stephen T. Zarrilli                                                                                                                              |  |                                  | 192,608   |     |                      |  | 33,724  |                                                   |  |  | 226,332                 |  |  |                                 | 1.1
|Jeffrey B. McGroarty                                                                                                                             |  |                                  | 43,131    |     |                      |  | 4,506   |                                                   |  |  | 47,637                  |  |  |                                 | *  
|Brian J. Sisko                                                                                                                                   |  |                                  | 126,181   |     |                      |  | 12,474  |                                                   |  |  | 138,655                 |  |  |                                 | *  
|Executive officers and directors as a group (11 persons)                                                                                         |  |                                  | 395,386   |     |                      |  | 109,871 |                                                   |  |  | 505,257                 |  |  |                                 | 2.5














| | (1) | Each director and named executive officer has the sole
power to vote and to dispose of the shares (other than shares held jointly with an individual’s spouse). An * indicates
ownership of less than 1% of the outstanding shares. Shareholding information for Ariel Investments, LLC, BlackRock, Inc., Dimensional
Fund Advisors LP, First Manhattan Co., and T. Rowe Price Associates, Inc. is based on information included in the Schedule 13G
or Schedule 13G/A filed with the SEC by each such entity as of April 25, 2018.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | The shares in this column represent DSUs that have been
credited to each individual, inclusive of any applicable matching DSUs credited to such individual as a result of the deferral
of director fees. The DSUs, which may not be voted or transferred, are payable, on a one-for-one basis, in shares of Safeguard
common stock following an individual’s termination of service on the Board. See “Corporate Governance and Board Matters
– Board Compensation.”
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | These securities are beneficially held by the following
                                                                              persons as                                                                               reported on
                                                                              a Schedule 13D/A filed with the SEC on April
                                                                              24,                                                                                 2018.
                                                                              Horton                                                                               Capital Management, LLC (1,045,870),
                                                                              Joseph M. Manko, Jr. (1,045,870),
                                                                              Maplewood                                                                               Advisors IM, LLC (1,022,665),
                                                                              Maplewood
                                                                              Partners, LLC (1,022,665), Darren C. Wallis (1,022,665), Horton Capital Partners, LLC (741,148), Sierra Capital Investments,
                                                                              LP (707,845), Maplewood Global Partners, LLC (707,845), AVI Capital Partners, LP (10,098), Horton Capital Partners Fund, LP
                                                                              (33,303), Maplewood Advisors GP, LLC (10,098), Russell D. Glass (0), Ira M. Lubert (0), Paul McNulty (0).
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ITEM 13. | CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
| | -------- | -------------------------------------------------------------------------



Review and Approval of Transactions with Related Persons.The Board has adopted a written policy that charges the Audit Committee with the responsibility of reviewing with management
at each regularly scheduled meeting and determining whether to approve any transaction (other than a transaction that is available
to all employees generally on a non-discriminatory basis) between us and our directors, director nominees and executive officers
or their immediate family members. Between regularly scheduled meetings of the Audit Committee, management may preliminarily approve
a related party transaction, subject to ratification of the transaction by the Audit Committee. If the Audit Committee does not
ratify the transaction, management will make all reasonable efforts to cancel the transaction.



52







Board Independence.Safeguard’s common stock is
listed on the New York Stock Exchange (“NYSE”). To assist the Board in making independence determinations, the Board
has adopted categorical standards that are reflected in our Corporate Governance Guidelines. Generally, under these standards,
a director does not qualify as an independent director if any of the following relationships exist:



| | · | Currently or within the previous three years, the director has been employed by us; someone in the director’s immediate
family has been one of our executive officers; or the director or someone in the director’s immediate family has been employed
as an executive officer of another company where any of our present executive officers at the same time serves or served on that
company’s compensation committee;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The director is a current partner or employee, or someone in the director’s immediate family is a current partner of,
a firm that is our internal or external auditor; someone in the director’s immediate family is a current employee of the
firm and personally works on our audit; or the director or someone in the director’s immediate family is a former partner
or employee of such a firm and personally worked on our audit within the last three years;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The director or someone in the director’s immediate family received, during any 12-month period within the last three
years, more than $120,000 in direct compensation from us (other than director and committee fees and pension or other forms of
deferred compensation for prior service that are not contingent in any way on continued service);
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The director is a current employee or holder of more than 10% of the equity of another company, or someone in the director’s
immediate family is a current executive officer or holder of more than 10% of the equity of another company, that has made payments
to or received payments from us, in any of the last three fiscal years of the other company, that exceeds the greater of $1 million
or 2% of such other company’s consolidated gross revenues; or
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | The director is a current executive officer of a charitable organization to which we have made charitable contributions in
any of the charitable organization’s last three fiscal years that exceed the greater of $1 million or 2% of that charitable
organization’s consolidated gross revenues.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Board has determined that each of the directors,
other than Mr. Zarrilli, who serves as the Company’s President and Chief Executive Officer, meets the above
independence standards and have no other direct or indirect material relationships with us other than their directorship;
therefore, each of such directors is independent within the meaning of the NYSE listing standards and satisfies the
categorical standards contained in our Corporate Governance Guidelines.





| | ITEM 14. | PRINCIPAL ACCOUNTANT
FEES AND SERVICES
| | -------- | --------------------------------------



Independent Registered Public Accounting Firm — Audit
Fees



The following table presents fees for
professional services rendered by KPMG LLP (“KPMG”) for the audit of Safeguard’s consolidated financial
statements for fiscal year 2017 and fiscal year 2016 and fees billed for audit-related services, tax services and all other
services rendered by KPMG for fiscal year 2017 and fiscal year 2016. This table includes fees billed to Safeguard’s
consolidated subsidiaries for services rendered by KPMG.



|                   |  | 2017 |         |  | 2016 |  
|------------------ |  | ---- | ------- |  | ---- | -
|Audit Fees (1)     |  | $    | 742,000 |  |      | $
|Audit-Related Fees |  |      | —       |  |      |  
|Tax Fees (2)       |  |      | 91,350  |  |      |  
|All Other Fees     |  |      | —       |  |      |  
|Total              |  | $    | 833,350 |  |      | $










| | (1) | Audit fees include the aggregate fees for professional
services rendered in connection with the audit of the consolidated financial statements included in our Annual Report on Form
10-K, the review of the condensed consolidated financial statements included in our Quarterly Reports on Form 10-Q, services performed
relating to consents and consultations and KPMG’s assurance services provided in connection with the assessment and testing
of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Tax fees include the aggregate fees billed by KPMG for
tax consultation and tax compliance services.
| | --- | ----------------------------------------------------------------------------------------------------



The Audit Committee pre-approves each service to be performed
by KPMG at its regularly scheduled meetings. For any service that may require pre-approval between regularly scheduled meetings,
the Audit Committee has delegated to the Chairperson of the Audit Committee the authority to pre-approve services not prohibited
by law to be performed by Safeguard’s independent registered public accounting firm and associated fees up to a maximum of
$100,000, and the Chairperson communicates such pre-approvals to the Audit Committee at its next regularly scheduled meeting.



53









PART IV



| | ITEM 15. | EXHIBITS AND FINANCIAL
STATEMENT SCHEDULES
| | -------- | ------------------------------------------



| | (a) | Consolidated Financial Statements and Schedules
| | --- | -----------------------------------------------



Incorporated by reference to Item 8
of the Original Form 10-K.



| | (b) | Exhibits
| | --- | --------



The
exhibits required to be filed as part of thisAmendment are listed
in the exhibit index below.



| | (c) | Financial Statement Schedules
| | --- | -----------------------------



None.



Exhibits



The
following is a list of exhibits required by Item 601 of Regulation S-K filed as part of thisAmendment.
For exhibits that previously have been filed, the Registrant incorporates those exhibits herein by reference. The exhibit index
below includes the Form Type and Filing Date of the previous filing and the location of the exhibit in the previous filing
which is being incorporated by reference herein. Documents which are incorporated by reference to filings by parties other than
the Registrant are identified in footnotes to this exhibit index.



EXHIBIT INDEX



|              |  | Incorporated
    Filing Reference                                                                                                                                                    
|------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description                                                                                                                                                                          
|              |  |                                                                                                                                                                                      
|3.1.1         |  | Seconded
    Amended and Restated Articles of Incorporation of Safeguard Scientifics, Inc.                                                                                           
|              |  |                                                                                                                                                                                      
|3.1.2         |  | Amendment
    to Seconded Amended and Restated Articles of Incorporation of Safeguard Scientifics, Inc.                                                                              
|              |  |                                                                                                                                                                                      
|3.1.3         |  | Statement
    with Respect to Shares                                                                                                                                                 
|              |  |                                                                                                                                                                                      
|3.1.4         |  | Statement
    of Designation of Series B Junior Participating Preferred Stock                                                                                                        
|              |  |                                                                                                                                                                                      
|3.2           |  | Third
    Amended and Restated By-laws of Safeguard Scientifics, Inc.                                                                                                                
|              |  |                                                                                                                                                                                      
|4.1.1         |  | Indenture,
    dated as of November 19, 2012, between Safeguard Scientifics, Inc. and U.S. Bank National Association, as trustee                                                     
|              |  |                                                                                                                                                                                      
|4.1.2         |  | Section
    382 Tax Benefits Preservation Plan, dated as of February 19, 2018, by and among Safeguard Scientifics, Inc., Computershare
    Inc. and Computershare Trust Company, N.A.
|              |  |                                                                                                                                                                                      
|10.1*         |  | Safeguard
    Scientifics, Inc. 1999 Equity Compensation Plan, as amended and restated on October 21, 2008                                                                           
|              |  |                                                                                                                                                                                      
|10.2          |  | Safeguard
    Scientifics, Inc. 2001 Associates Equity Compensation Plan, as amended and restated on October 21, 2008                                                                





54







|10.3*    |  | Safeguard
    Scientifics, Inc. 2014 Equity Compensation Plan, as amended and restated on March 5, 2014                                                                                                               |  | Form
    10-Q 7/25/14 |  | 10.1   
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- |  | -------
|         |  |                                                                                                                                                                                                                       |  |                       |  |        
|10.4*    |  | Safeguard
    Scientifics, Inc. Executive Deferred Compensation Plan (amended and restated as of January 1, 2009)                                                                                                     |  | Form
    10-K 3/19/09 |  | 10.4   
|         |  |                                                                                                                                                                                                                       |  |                       |  |        
|10.5*    |  | Management
    Incentive Plan                                                                                                                                                                                         |  | Form
    8-K 4/25/08  |  | 10.1   
|         |  |                                                                                                                                                                                                                       |  |                       |  |        
|10.6*    |  | Transaction
    Bonus Plan                                                                                                                                                                                            |  | Form
    8-K 4/10/18  |  | 99.2   
|         |  |                                                                                                                                                                                                                       |  |                       |  |        
|10.7*    |  | Compensation
    Summary — Non-employee Directors                                                                                                                                                                     |  | Form
    10-Q 4/24/15 |  | 10.2   
|         |  |                                                                                                                                                                                                                       |  |                       |  |        
|10.8.1*  |  | Agreement
    by and between Safeguard Scientifics, Inc. and Stephen Zarrilli dated as of May 28, 2008                                                                                                                |  | Form
    8-K 5/29/08  |  | 10.1   
|         |  |                                                                                                                                                                                                                       |  |                       |  |        
|10.8.2*  |  | Letter
    Amendment dated December 9, 2008, to Agreement by and between Safeguard Scientifics, Inc. and Stephen Zarrilli dated as of
    May 28, 2008                                                                |  | Form
    10-K 3/19/09 |  | 10.9.2 
|         |  |                                                                                                                                                                                                                       |  |                       |  |        
|10.8.3*  |  | Compensation
    Agreement by and between Safeguard Scientifics, Inc. and Stephen T. Zarrilli dated December 28, 2012                                                                                                 |  | Form
    10-K 3/11/13 |  | 10.9.3 
|         |  |                                                                                                                                                                                                                       |  |                       |  |        
|10.8.4*  |  | Compensation
    Agreement by and between Safeguard Scientifics, Inc. and Stephen T. Zarrilli dated April 6, 2018                                                                                                     |  | Form
    8-K 4/10/18  |  | 99.8   
|         |  |                                                                                                                                                                                                                       |  |                       |  |        
|10.9.1*  |  | Amended
    and Restated Letter Agreement by and between Safeguard Scientifics, Inc. and Brian J. Sisko dated December 3, 2008                                                                                        |  | Form 10-K3/19/09      |  | 10.12  
|         |  |                                                                                                                                                                                                                       |  |                       |  |        
|10.9.2*  |  | Compensation
    Agreement by and between Safeguard Scientifics, Inc. and Brian J. Sisko dated December 14, 2009                                                                                                      |  | Form
    10-K 3/16/10 |  | 10.11.2
|         |  |                                                                                                                                                                                                                       |  |                       |  |        
|10.9.3*  |  | Compensation
    Agreement by and between Safeguard Scientifics, Inc. and Brian J. Sisko dated December 28, 2012                                                                                                      |  | Form
    10-K 3/11/13 |  | 10.10.3
|         |  |                                                                                                                                                                                                                       |  |                       |  |        
|10.9.3*  |  | Compensation
    Agreement by and between Safeguard Scientifics, Inc. and Brian J. Sisko dated April 6, 2018                                                                                                          |  | Form
    8-K 4/10/18  |  | 99.5   
|         |  |                                                                                                                                                                                                                       |  |                       |  |        
|10.10.1* |  | Compensation
    Agreement by and between Safeguard Scientifics, Inc. and Jeffrey B. McGroarty dated January 6, 2014                                                                                                  |  | Form
    8-K 1/7/14   |  | 10.1   
|         |  |                                                                                                                                                                                                                       |  |                       |  |        
|10.11.1* |  | Compensation
    Agreement by and between Safeguard Scientifics, Inc. and  David Kille dated September 1, 2015                                                                                                        |  | Form
    8-K 4/10/18  |  | 99.6   
|         |  |                                                                                                                                                                                                                       |  |                       |  |        
|10.11.2* |  | Compensation
    Agreement by and between Safeguard Scientifics, Inc. and  David Kille dated April 6, 2018                                                                                                            |  | Form
    8-K 4/10/18  |  | 99.7   
|         |  |                                                                                                                                                                                                                       |  |                       |  |        
|10.12.1* |  | Key
    Employee Compensation Recoupment Policy                                                                                                                                                                       |  | Form
    10-Q 7/26/13 |  | 10.2   
|         |  |                                                                                                                                                                                                                       |  |                       |  |        
|10.13.1  |  | Amended
    and Restated Loan and Security Agreement dated as of May 27, 2009, by and among Silicon Valley Bank, Safeguard Scientifics,
    Inc., Safeguard Delaware, Inc. and Safeguard Scientifics (Delaware), Inc. |  | Form
    8-K 5/28/09  |  | 10.1   





55







|10.13.2    |  | Joinder
    and First Loan Modification Agreement dated as of December 31, 2010, by and among Silicon Valley Bank, Safeguard Scientifics,
    Inc., Safeguard Delaware, Inc., Safeguard Scientifics (Delaware), Inc. and Safeguard Delaware II, Inc.                                                                                                                                                                          |  | Form
    8-K 1/4/11   |  | 10.1 
|---------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- |  | -----
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                       |  |      
|10.13.3    |  | Second
    Loan Modification Agreement dated as of April 29, 2011, by and among Silicon Valley Bank, Safeguard Scientifics, Inc., Safeguard
    Delaware, Inc., Safeguard Scientifics (Delaware), Inc. and Safeguard Delaware II, Inc.                                                                                                                                                                                        |  | Form
    10-Q 7/28/11 |  | 10.2 
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                       |  |      
|10.13.4    |  | Third
    Loan Modification Agreement dated as of December 21, 2012, by and among Silicon Valley Bank, Safeguard Scientifics, Inc.,
    Safeguard Delaware, Inc., Safeguard Delaware II, Inc. and Safeguard Scientifics (Delaware), Inc.                                                                                                                                                                                      |  | Form
    8-K 12/27/12 |  | 10.1 
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                       |  |      
|10.13.5    |  | Fourth
    Loan Modification Agreement dated as of December 22, 2014, by and among Silicon Valley Bank, Safeguard Scientifics, Inc.,
    Safeguard Delaware, Inc., Safeguard Delaware II, Inc. and Safeguard Scientifics (Delaware), Inc.                                                                                                                                                                                     |  | Form
    8-K 12/23/14 |  | 10.1 
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                       |  |      
|10.13.6    |  | Fifth
    Loan Modification Agreement dated as of December 29, 2015, by and among Silicon Valley Bank, Safeguard Scientifics, Inc.,
    Safeguard Delaware, Inc., Safeguard Delaware II, Inc. and Safeguard Scientifics (Delaware), Inc.                                                                                                                                                                                      |  | Form
    8-K 12/29/15 |  | 10.1 
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                       |  |      
|10.14      |  | Purchase
    and Sale Agreement dated as of December 9, 2005 by and among HarbourVest VII Venture Ltd., Dover Street VI L.P. and several
    subsidiaries and affiliated limited partnerships of Safeguard Scientifics, Inc.                                                                                                                                                                                                  |  | Form
    10-K 3/13/06 |  | 10.36
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                       |  |      
|10.15      |  | Consent
    Agreement, dated as of May 17, 2011, by and among Shire Pharmaceuticals, Inc. and certain stockholders of Advanced BioHealing,
    Inc.                                                                                                                                                                                                                                                                           |  | Form
    8-K 5/18/11  |  | 10.1 
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                       |  |      
|10.16      |  | Lease
    Agreement, Effective February 2, 2015, Between Safeguard Scientifics, Inc., a Pennsylvania Corporation, and Radnor Properties-SDC,
    L.P., a Delaware Limited Partnership                                                                                                                                                                                                                                         |  | Form
    10-Q 4/24/15 |  | 10.1 
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                       |  |      
|10.17      |  | Cooperation
    Agreement dated April 23, 2018 by and among Safeguard Scientifics, Inc. and Horton Capital Management, LLC, Joseph M. Manko,
    Jr., Maplewood Partners, LLC, Maplewood Advisors IM, LLC, Darren C. Wallis, Horton Capital Partners, LLC, Sierra Capital Investments,
    LP, Maplewood Global Partners, LLC, Horton Capital Partners Fund, LP, AVI Capital Partners, LP, and Maplewood Advisors GP,
    LLC |  | Form
    8-K 4/24/18  |  | 10.1 
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                       |  |      
|14.1       |  | Code
    of Business Conduct and Ethics                                                                                                                                                                                                                                                                                                                                                                                       |  | Form
    10-K3/7/18   |  | 14.1 
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                       |  |      
|21.1       |  | List
    of Subsidiaries                                                                                                                                                                                                                                                                                                                                                                                                      |  | Form
    10-K3/7/18   |  | 21.1 
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                       |  |      
|23.1       |  | Consent
    of Independent Registered Public Accounting Firm — KPMG LLP                                                                                                                                                                                                                                                                                                                                                       |  | Form
    10-K3/7/18   |  | 23.1 
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                       |  |      
|31.1       |  | Certification
    of Stephen T. Zarrilli pursuant to Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934                                                                                                                                                                                                                                                                                                     |  | Form
    10-K3/7/18   |  | 31.1 
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                       |  |      
|31.2       |  | Certification
    of Jeffrey B. McGroarty pursuant to Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934                                                                                                                                                                                                                                                                                                    |  | Form
    10-K3/7/18   |  | 31.2 
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                       |  |      
|31.3†      |  | Certification
    of Stephen T. Zarrilli pursuant to Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934                                                                                                                                                                                                                                                                                                     |  | -                     |  | -    
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                       |  |      
|31.4†      |  | Certification
    of Jeffrey B. McGroarty pursuant to Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934                                                                                                                                                                                                                                                                                                    |  | -                     |  | -    
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                       |  |      
|32.1
    ‡ |  | Certification
    of Stephen T. Zarrilli pursuant to 18 U.S.C. Section 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002                                                                                                                                                                                                                                                                         |  | Form
    10-K3/7/18   |  | 32.1 
|           |  |                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                       |  |      
|32.2
    ‡ |  | Certification
    of Jeffrey B. McGroarty pursuant to 18 U.S.C. Section 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002                                                                                                                                                                                                                                                                        |  | Form
    10-K3/7/18   |  | 32.2 





56







|101 |  | The
    following materials from Safeguard Scientifics, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2017,
    formatted     in XBRL (eXtensible Business Reporting Language) (i) Consolidated Balance Sheets; (ii) Consolidated Statements
    of Operations;     (iii) Consolidated Statements of Comprehensive Loss; (iv) Consolidated Statements of Changes in Equity;
    (v) Consolidated Statements     of Cash Flows; and (vi) Notes to Consolidated Financial Statements |  | Form
    10-K3/7/18 |  | 101
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------- |  | ---



|† | Filed herewith                                                                                                                                                                        
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                       
|‡ | Furnished rather than
    filed                                                                                                                                                       
|  |                                                                                                                                                                                       
|* | These exhibits relate
    to management contracts or compensatory plans, contracts or arrangements in which directors and/or executive officers of the
    Registrant may participate.



57









SIGNATURES



Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.



| |  | Safeguard Scientifics,
    Inc.
| |  | -------------------------------
| |  |                                
| |  | By:                            
| |  |                                
| |  |                                

Dated: April 30, 2018



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