Document:

Exhibit 10.11

EXHIBIT 10.11

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”), made and entered into on this 29th day of
December, 2008 (the “Effective Date”), by and between Safeguard Scientifics, Inc. a Pennsylvania
corporation (the “Company”), and Kevin L. Kemmerer (the “Executive”), reads as follows:

ARTICLE I

RECITALS

WHEREAS, Executive is an individual qualified by education and experience to serve as the
Company’s Executive Vice President and Managing Director, Technology Group; and

WHEREAS, the Company desires to appoint the Executive as the Company’s Executive Vice
President and Managing Director, Technology Group and to employ the Executive on the terms and
conditions set forth in this Agreement; and

WHEREAS, the Company and Executive are parties to a letter agreement made and entered into on
the 15th day of September, 2006 (“Existing Agreement”); and

WHEREAS, the Company and Executive desire to replace the Existing Agreement in its entirety.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound hereby, the Existing Agreement is hereby
terminated and replaced with this Agreement upon the terms and conditions set forth below:

ARTICLE II

DEFINITIONS

Section 2.1. “Board” means the Board of Directors of the Company.

Section 2.2. “Cause” means (a) Executive’s material failure to adhere to any written Company
policy after Executive has been given written notice with a reasonable opportunity, to comply with
such policy or cure Executive’s failure to comply of not less than thirty (30) days, (which
reasonable opportunity must be granted during the period preceding termination of this Agreement);
(b) Executive’s appropriation (or attempted appropriation) of a material business opportunity of
the Company, including attempting to secure or securing any personal profit in connection with any
transaction entered into on behalf of the Company, excluding any benefit derived from the existence
or exercise of Executive’s rights in the Company’s stock consistent with Company’s option and
restricted stock plans; (c) Executive’s misappropriation (or attempted misappropriation) of any
Company fund or property; (d) Executive’s conviction of, or his entering a guilty plea or plea of
no contest with respect to, a
felony, the equivalent thereof, or any other crime with respect to which imprisonment is a
possible punishment; or (e) a material breach of this Agreement or any other agreement with or duty
owed to the Company or any of its subsidiaries or affiliates if not cured within 30 days following
receipt from the Company of written notice thereof.

 

 

 

Section 2.3. “Change of Control” shall be deemed to have occurred if (i) any “person” or
“group” (as such terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)), other than any Company employee stock ownership plan or an
equivalent retirement plan, becomes the beneficial owner (as such term is used in Section 13(d) of
the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of
the combined voting power of the Company’s then outstanding voting securities, (ii) the Board
ceases to consist of a majority of Continuing Directors (as defined below), (iii) the consummation
of a sale of all or substantially all of the Company’s assets or a liquidation (as measured by the
fair value of the assets being sold compared to the fair value of all of the Company’s assets), or
(iv) a merger or other combination occurs such that a majority of the equity securities of the
resultant entity after the transaction are not owned by those who owned a majority of the equity
securities of the Company prior to the transaction. A “Continuing Director” shall mean a member of
the Board of Directors who either (i) is a member of the Board of Directors as of the Effective
Date or (ii) is nominated or appointed to serve as a Director by a majority of the then Continuing
Directors.

Section 2.4. “Change of Control Termination” means the termination of Executive’s employment
under this Agreement by the Company without Cause or by Executive for Good Reason, which occurs
either (i) following the commencement of serious discussions with an unrelated third party
regarding the possibility of a transaction that would, if consummated, constitute a Change of
Control, which discussions lead to a transaction with such unrelated third party that constitutes a
Change of Control, provided that the closing of such transaction occurs within six months following
the termination of Executive’s employment or (ii) within 12 months following a Change of Control.

Section 2.5. “Code” means the Internal Revenue Code of 1986, as amended.

Section 2.6. “Disability” means the inability of Executive, due to mental or physical
impairment or disability, despite reasonable accommodations by the Company, to fully perform the
material duties performed by Executive for the Company immediately prior to such disability for a
period of at least 120 consecutive days or for at least 180 non-consecutive days in any
12-consecutive month period.

 

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Section 2.7. “Good Reason” means: (i) Executive’s assignment to or reduction in assignment of
(without his consent) responsibilities, or duties that serve to diminish the status or degree of
responsibility of Executive’s position, responsibilities, or duties from those in effect
immediately before such assignment or reduction; (ii) a change in Executive’s reporting
relationships as in effect immediately before such change that serves to diminish Executive’s
position, responsibilities or duties; (iii) a change in Executive’s title to one of a lesser status
to the extent that such change serves to diminish Executive’s position, responsibilities or duties;
(iv) a material reduction of Executive’s base salary; (v) a material breach of this Agreement by
Company; (vi) the relocation of the Company’s principal executive offices to a location which is
more than 30 miles away from the location of the Company’s principal executive offices on the
date of this Agreement; or (vii) Executive’s assignment (without his consent) to be based anywhere
other than the Company’s principal executive offices to the extent that such assignment requires a
material change in geographic location for Executive or to the extent that such assignment serves
to diminish Executive’s position, responsibilities or duties. For purposes of this definition, a
material change in geographic location will be deemed to have occurred if Executive is required to
travel to a location that is more than 30 miles from the location of the Company’s principal
executive offices on the date of this Agreement. Notwithstanding the foregoing, no event or
condition described in clauses (i) through (vii) shall constitute Good Reason unless (a) Executive
gives the Company written notice of Executive’s intention to terminate Executive’s employment for
Good Reason and the grounds for such termination, (b) the notice described in (a) is provided
within 90 days after the event giving rise to the Good Reason termination occurs, and (c) such
grounds for termination (if susceptible to correction) are not corrected by the Company within 30
days after its receipt of such notice. If the Company does not correct the ground(s) for
termination during the 30-day period following Executive’s notice of termination, Executive’s
termination of employment for Good Reason may become effective within 90 days after the end of the
cure period, in order for Executive’s termination to be treated as a Good Reason termination under
this Agreement. If Executive’s termination occurs more than 90 days after the end of the cure
period, such termination shall be treated as a voluntary termination other than for Good Reason and
Executive will not be entitled to severance benefits under this Agreement.

Section 2.8. “Restricted Period” means the period commencing on the day that Executive’s
employment with the Company terminates for any reason and ending on the first anniversary thereof.

ARTICLE III

EMPLOYMENT AND COMPENSATION

Section 3.1. Employment Term.

(a) The Company has employed Executive since June 14, 2004 (the “Commencement Date”). This
Agreement will govern Executive’s continued employment by the Company until that employment ceases
in accordance with the terms of this Agreement (such period of Executive’s employment is herein
referred to as the “Term”).

(b) If Executive dies while employed by the Company, this Agreement and Executive’s employment
by the Company shall automatically terminate on the date of Executive’s death. The Company may
terminate Executive’s employment and all other positions with the Company upon written notice to
Executive at any time (i) due to the Disability of Executive, (ii) for Cause, or (iii) without
Cause, for any or no reason. Executive may terminate his employment and all other positions with
the Company at any time (i) for Good Reason, so long as Executive provides notice of his intent to
terminate for Good Reason within 90 days following the date of the situation giving rise to
Executive’s Good Reason occurs and, to the extent the Company fails to cure within the cure period
described in Section 2.7 above, Executive actually resigns from employment with the Company within
90 days following the
expiration of the Company’s cure period, or (ii) without Good Reason, for any or no reason.
Notwithstanding the generality of the preceding sentence, in the event that Executive terminates
his employment pursuant to this Section 3.1(b) for any or no reason (other than as described in
clause (i) with respect to Good Reason), Executive shall give 60 days’ prior written notice to the
Company prior to the effectiveness of such resignation of his employment with the Company, and such
resignation shall not be effective until the expiration of such notice period, unless such notice
is waived by the Company (in which case such resignation shall be effective as of the date of such
waiver).

 

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Section 3.2. Positions and Duties. Executive will serve as Executive Vice President
and Managing Director, Technology Group (“EVP & MD”) of the Company, reporting directly to the
Chief Executive Officer and will have all duties customarily associated with the position of an EVP
& MD, all duties as are set forth in the Company’s bylaws for such position and all duties as are
delegated to the EVP & MD from time to time by the CEO or the Company’s Board consistent with his
position as EVP & MD. Executive shall devote his best efforts and substantially all of his
business time and services to the Company and shall render his services hereunder to the Company
and use his best efforts, judgment and energy in the performance of the duties assigned to him.
The parties expressly agree that Executive may continue to serve as a board member for the
Association of Corporate Growth Philadelphia and as an advisory board member for Ben Franklin
Technology Partners so long as such service does not interfere with Executive’s performance of his
duties to the Company and that such activities do not compete with the activities of the Company or
its subsidiaries or affiliates. Executive shall not serve as a director of any company that is not
affiliated with the Company without the consent of the Board.

Section 3.3. Compensation. The Company shall pay or cause to be paid or provided to
Executive the following amounts and benefits:

(a) Base Salary. Executive’s initial base salary rate hereunder shall be $325,000
per annum, subject to review on an annual basis by the Board and possible increase from time to
time by the Board. The initial base salary or such later revised base salary is hereinafter
referred to as Executive’s “Base Salary.”

(b) Annual Bonus Beginning in Fiscal Year 2009. For each fiscal year ending during
the Term but after December 31, 2008, Executive will be eligible for an annual bonus subject to the
terms of the Company’s Management Incentive Plan (the “MIP”) (or such other management bonus
program as may be established by the Board from time to time). Executive’s target annual bonus
will be at least $325,000 if specified corporate and personal performance goals established by the
Board in good faith are met for that year in accordance with the MIP. Any reduction in Executive’s
target annual bonus opportunity below this minimum target shall constitute a material breach of
this Agreement by the Company. Bonus payment amounts, if any, will be determined by the Board
based upon the attainment of certain performance targets to be set forth in the MIP (or such other
management bonus program as may be established from time to time by the Board). Unless provided
otherwise by the MIP, the annual bonus shall be paid to Executive on or after January 1, but prior
to March 15, of the calendar year next following the calendar year in which the bonus is earned,
subject to completion of the Company’s audit for the applicable fiscal year. Notwithstanding the
foregoing, Executive’s target annual bonus for calendar year 2008 shall be calculated pro rata
based on his effective target bonus rates during such calendar year.

 

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(c) Fringe Benefits. Executive will be paid a car allowance at the rate of $10,000
per annum; will be reimbursed for country club dues at the rate of $8,000 per annum; will
participate in the Company’s executive medical plan (pursuant to which up to $5,000 of reasonable
and necessary medical, healthcare, vision or dental expenses not allowed under normal health plans
are reimbursed); will receive at the Company’s cost up to $750,000 of life insurance (assuming that
Executive meets normal insurability requirements); and will be permitted to participate in all
other benefit programs offered generally by the Company to its other executives.

(d) Equity Incentive Compensation Grants. In connection with the Executive’s
appointment as the Company’s Executive Vice President and Managing Director, Technology Group, on
September 30, 2008, Executive was granted an aggregate of 500,000 stock options under the Company’s
equity compensation plans, which options were granted at an exercise price equal to the average of
the high and low prices of a share of the Company’s common stock as reported on the New York Stock
Exchange composite tape on such date, have a term of eight years and shall vest as follows:

(i) 125,000 stock options (which shall be incentive stock options, to the extent permitted)
shall vest 25% on the first anniversary of the grant date and in 36 equal monthly installments
thereafter; and

(ii) 375,000 stock options (which shall be non-qualified stock options) shall vest based upon
the 2008 Capital Return Option Vesting Model adopted by the Compensation Committee of the Company’s
Board of Directors.

Section 3.4. Reimbursement of Expenses. Executive will be reimbursed by the Company
for all reasonable business expenses incurred by him in accordance with the Company’s customary
expense reimbursement policies as in effect from time to time.

Section 3.5. Indemnification. The Company will indemnify Executive for and defend
Executive from claims arising from Executive’s good faith performance of his duties as an employee
of the Company to the extent provided in the Company’s bylaws.

Section 3.6. Severance; Severance Payments. Upon cessation of his employment with the
Company, Executive will be entitled only to such compensation and benefits as described in this
Section 3.6.

(a) Termination without Cause or for Good Reason. Subject to Executive’s execution
and delivery of the “Release” described in Section 3.6(c) below as to subparagraphs (ii) through
(v) inclusive, if Executive’s employment by the Company is terminated by the Company without Cause
or by Executive for Good Reason, Executive will be entitled to:

(i) payment of all accrued and unpaid Base Salary through the date of such termination in the
Company’s normal payroll cycle;

 

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(ii) a lump sum payment, which shall be paid within 45 days of Executive’s termination of
employment, equal to Executive’s annual Base Salary as of the date of such termination;

(iii) a lump sum payment, which shall be paid within 45 days of Executive’s termination of
employment, equal to the greater of (A) Executive’s target annual bonus for the year of such
termination, or (B) the average of his actual bonus as received for the last three completed fiscal
years; and

(iv) waiver of the applicable premium otherwise payable by the Company if Executive were an
active employee for COBRA continuation coverage for Executive (and, to the extent covered
immediately prior to the date of Executive’s termination, his spouse and dependents) with respect
to medical insurance for a period equal to 12 months (Executive shall pay his portion of the cost
of such coverage as if Executive were still an active employee of the Company); and

(v) a lump sum payment, which shall be paid within 45 days of Executive’s termination of
employment, equal to the cost that would be incurred by the Company, as reasonably determined by
the Company, to waive the applicable premium otherwise payable for COBRA continuation coverage for
Executive (and, to the extent covered immediately prior to the date of Executive’s termination, his
spouse and dependents) with respect to dental insurance for a period of 12 months following the
date of Executive’s termination.

(b) Change of Control Termination. Subject to Executive’s execution and delivery of
the “Release” described in Section 3.6(c) below as to subparagraphs (ii) through (v) inclusive, in
lieu of any compensation and benefits payable under Section 3.6(a), in the event that Executive’s
employment by the Company ceases due to a Change of Control Termination, Executive will be entitled
to:

(i) payment of all accrued and unpaid Base Salary through the date of such termination in the
Company’s normal payroll cycle;

(ii) a lump sum payment, which shall be paid within 45 days of Executive’s termination of
employment, equal to the product of (A) two multiplied by (B) Executive’s annual Base Salary as of
the date of such termination;

(iii) a lump sum payment, which shall be paid within 45 days of Executive’s termination of
employment, equal to the product of (A) two multiplied by (B) the greater of (i) Executive’s target
annual bonus for the year of such termination, or (ii) the average of his actual bonus as received
for the last three completed fiscal years; and

(iv) waiver of the applicable premium otherwise payable by the Company if Executive were an
active employee for COBRA continuation coverage for Executive (and, to the extent covered
immediately prior to the date of Executive’s termination, his spouse and dependents) with respect
to medical insurance for a period equal to 24 months (Executive shall pay his portion of the cost
of such coverage as if Executive were still an active employee of the Company); and

 

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(v) a lump sum payment, which shall be paid within 45 days of Executive’s termination of
employment, equal to the cost that would be incurred by the Company, as reasonably determined by
the Company, to waive the applicable premium otherwise payable for COBRA continuation coverage for
Executive (and, to the extent covered immediately prior to the date of Executive’s termination, his
spouse and dependents) with respect to dental insurance for a period of 24 months following the
date of Executive’s termination.

(c) Except as otherwise provided in this Section 3.6, all compensation and benefits will cease
at the time of such termination, subject to the terms of any benefits or compensation plans then in
force and applicable to Executive, and the Company shall have no further liability or obligation by
reason of such termination. The payments and benefits described in this Section 3.6 are in lieu
of, and not in addition to, any other severance arrangement maintained by the Company.
Notwithstanding any provision of this Agreement, the payments and benefits described in Section 3.6
are conditioned on Executive’s execution and delivery to the Company of a release substantially
identical to that attached hereto as Appendix A in a manner consistent with the requirements of the
Older Workers Benefit Protection Act and any applicable state law (the “Release”). The severance
benefits described in this Section 3.6 will be paid (or, in the case of the benefits described in
Section 3.6(a)(iv) and 3.6(b)(iv), will begin to be paid or provided) as soon as the Release
becomes irrevocable.

(d) Other Terminations. If Executive’s employment with the Company ceases for any
reason other than as described in Section 3.6(a) and 3.6(b) above (including but not limited to
termination (a) by the Company for Cause, (b) as a result of Executive’s death, (c) as a result of
Executive’s Disability, or (d) as a result of resignation by Executive without Good Reason), then
the Company’s obligation to Executive will be limited solely to the payment of accrued and unpaid
Base Salary and, subject to the provisions of Section 3.4, business expenses incurred through the
date of such termination. All compensation and benefits will cease at the time of such termination
and, except as otherwise provided by COBRA, the Company will have no further liability or
obligation by reason of such termination. The foregoing will not be construed to limit Executive’s
right to payment or reimbursement for claims incurred prior to the date of such termination under
any insurance contract funding an employee benefit plan, policy or arrangement of the Company in
accordance with the terms of such insurance contract.

Section 3.7. Limitation on Payments. Upon Executive’s termination of employment with
the Company in connection with a Change of Control, if it is determined that any payment or
distribution by the Company of benefits provided under this Agreement or any other payments or
benefits due upon a Change of Control (the “Change of Control Benefits”) would constitute an
“excess parachute payment” within the meaning of section 280G of the Code that would be subject to
an excise tax under section 4999 of the Code (the “Excise Tax”) the following provisions shall
apply. If the aggregate present value to Executive of receiving the Change of Control Benefits and
paying the Excise Tax is not greater than the aggregate present value to Executive of the Change of
Control Benefits reduced to the safe harbor amount (as defined below), then the Company shall
reduce the Change of Control Benefits such that the aggregate present value to Executive of
receiving the Change of Control Benefits is equal to the safe harbor amount. Otherwise Executive
shall receive the full amount of the Change of Control Benefits and

 

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Executive shall be responsible
for payment of the Excise Tax. For purposes of this
paragraph “present value” shall be determined in accordance with Section 280G(d)(4) of the
Code and the term “safe harbor amount” shall mean an amount expressed in the present value that
maximizes the aggregate present value of the Change of Control Benefits without causing any of the
Change of Control Benefits to be subject to the deduction limitations set forth in Section 280G of
the Code. All determinations made pursuant to this Section 3.7 shall be made by the Company’s
independent public accountant immediately prior to the Change of Control (the “Accounting Firm”),
which firm shall provide its determinations and any supporting calculations both to the Company and
to Executive within ten days of the termination date. For purposes of determining whether payments
or benefits due upon a Change of Control would constitute an “excess parachute payment,” the
Accounting Firm shall take into account the relevant provisions of the Code, Treasury Regulations
and rulings issued by the Internal Revenue Service that it shall determine are relevant to such
determination, including, but not limited to such provisions that require the “Base Amount,”
pursuant to Section 280G(b)(3) of the Code to take into account all compensation paid to Executive
by the Company during the “base period,” (as defined in Section 280G(d)(2) of the Code) to the
extent such compensation is includible in Executive’s ordinary income, including, but not limited
to non-deferred amounts of base salary and bonus, and amounts recognized as ordinary compensation
income on Executive’s exercise of non-qualified stock options issued by the Company. Any such
determination by the Accounting Firm shall be binding upon Executive and the Company. Executive
shall then, in his sole discretion, determine which and how much of the Change of Control Benefits
shall be eliminated or reduced consistent with the requirements of the foregoing paragraph. All of
the fees and expenses of the Accounting Firm in performing the determinations referred to above
shall be borne solely by the Company.

ARTICLE IV

RESTRICTIVE COVENANTS AND REMEDIES

Section 4.1. Confidential Information.

(a) In consideration of the employment by the Company of Executive and the consideration
outlined in Article 3 of this Agreement, and as an inducement to the Company to continue to entrust
Executive with its Trade Secrets (as hereinafter defined), Executive agrees that Executive will not
use for himself or disclose to any person any Trade Secret of the Company obtained by Executive as
a result of his employment by the Company unless authorized in writing by the Company to do so.
For purposes of this Agreement, Trade Secrets will be deemed to include, but not be limited to, all
confidential information (which will be deemed to be all information not otherwise available to the
general public), price lists, production techniques, patents, designs, inventions, copyrighted
materials, product lists, marketing strategies, equipment designs, personnel files, customer lists,
and all other information or material received by Executive in connection with his employment by
the Company. Upon cessation of Executive’s service to the Company for any reason, all written or
electronic materials evidencing Trade Secrets, and all copies thereof, in the possession or control
of Executive shall be delivered to the Company. The term Trade Secrets shall exclude (i)
information that is or subsequently becomes publicly available other than as a result of
Executive’s breach of this Agreement; (ii) is acquired from another source not under a duty of
confidentiality to Company and not as a result of a breach of this Agreement; or (iii) is
independently developed by Executive without use of the Trade Secrets.

 

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(b) Executive further agrees, covenants and promises that he will not in any way communicate
the terms of this Agreement to any person other than his immediate family and his attorney and
financial consultant or when necessary to enforce this Agreement or to advise a third party of his
obligations under this Agreement until this Agreement becomes a public document by reason of its
disclosure by the Company.

Section 4.2. Ownership of Inventions and Ideas. Executive acknowledges that the
Company shall be the sole owner of all the results and proceeds of his service to the Company,
including but not limited to, all patents, patent applications, patent rights, formulas,
copyrights, inventions, developments, discoveries, other improvements, data, documentation,
drawings, charts, and other written, audio and/or visual materials relating to equipment, methods,
products, processes or programs in connection with or useful to the business of the Company or any
of its subsidiaries or affiliates (collectively, the “Developments”) which Executive, by himself or
in conjunction with any other person, may conceive, make, acquire, acquire knowledge of, develop or
create during Executive’s employment by the Company, free and clear of any claims by Executive (or
any successor or assignee of Executive) of any kind or character whatsoever. Executive
acknowledges that all copyrightable Developments shall be considered works made for hire under the
Federal Copyright Act. Executive hereby assigns and transfers his right, title and interest in and
to all such Developments and agrees that he shall, at the request of the Company, execute or
cooperate with the Company in any patent applications, execute such assignments, certificates or
other instruments, and do any and all other reasonable acts, as the Company from time to time
reasonably deems necessary or desirable to evidence, establish, maintain, perfect, protect, enforce
or defend the Company’s right, title and interest in or to any such Developments.

Section 4.3. Restrictive Covenants. In consideration of the employment by the Company
of Executive and the consideration outlined in Article 3 of this Agreement, Executive agrees to be
bound by this Section 4.3. Executive will not, directly or indirectly, do any of the following
during the period of his employment by the Company and the Restricted Period:

(a) engage or participate in any business activity substantially similar to an activity from
which the Company or any of its subsidiaries or affiliates derives revenue (or, with respect to the
application of this provision during the Restricted Period, engage or participate in any business
activity substantially similar to an activity from which the Company or any of its subsidiaries or
affiliates derived revenue during the 12 months preceding the date Executive’s employment ends) (a
“Competing Business”), provided that notwithstanding the foregoing, Executive’s activities as or on
behalf of a private equity investor, venture capital investor or a business enterprise operating
multiple companies or businesses shall not be treated as a Competing Business except to the extent
such activities involve activities that compete with entities that were the Company’s subsidiaries
or affiliates from which the Company derived revenue during the 12 months preceding the date
Executive’s employment ends;

(b) become interested in (as owner, stockholder, lender, partner, co-venturer, director,
officer, employee, agent or consultant) any person, firm, corporation,
association or other entity engaged in any Competing Business. Notwithstanding the foregoing,
Executive may hold up to 4.9% of the outstanding securities of any class of any publicly traded
securities of any company;

 

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(c) solicit or call on, either directly or indirectly, for purposes of selling goods or
services competitive with goods or services sold by the Company or any of its subsidiaries or
affiliates, any customer with whom the Company shall have dealt or any prospective customer that
the Company has identified and solicited during the preceding 12 months of Executive’s employment
by the Company;

(d) adversely influence or attempt to adversely influence any supplier, customer or potential
customer of the Company to terminate or modify any written or oral agreement or course of dealing
with the Company;

(e) adversely influence or attempt to adversely influence any person to terminate or modify
any employment, consulting, agency, distributorship or other arrangement with the Company; or

(f) employ or retain, or arrange to have any other person or entity employ or retain, any
employee or consultant of the Company or any of its subsidiaries or affiliates (or with respect to
the application of this provision during the Restricted Period, any person or entity who, within
the 12 months preceding the date Executive’s employment by the Company ends, was employed or
engaged by the Company or any of its subsidiaries or affiliates as an employee or consultant).

Executive acknowledges that the restrictions contained in Sections 4.1, 4.2 and 4.3 are
reasonable and necessary to protect the legitimate interests of the Company and its subsidiaries
and affiliates and that the duration of the Restricted Period, and the provisions of Sections 4.1,
4.2 and 4.3, are reasonable given Executive’s position within the Company and the substantial
consideration payable under this Agreement. Executive further acknowledges that Sections 4.1, 4.2
and 4.3 are included herein in order to induce the Company to enter into this Agreement and that
the Company would not have entered into this Agreement or in the absence of these provisions.

Section 4.4. Enforcement.

(a) Specific Enforcement. Executive acknowledges that any breach by him, willfully or
otherwise, of this Article 4 will cause continuing and irreparable injury to the Company for which
monetary damages would not be an adequate remedy. Executive will not, in any action or proceeding
to enforce any of the provisions of this Agreement, assert the claim or defense that such an
adequate remedy at law exists. In the event of any such breach by Executive, the Company will have
the right to enforce this Agreement by seeking injunctive or other relief in any court and this
Agreement will not in any way limit remedies of law or in equity otherwise available to the
Company.

(b) Restitution. If Executive breaches any part of Section 4.1, 4.2 or 4.3, the
Company will have the right and remedy to require Executive to account for and pay over to the
Company all compensation, profits, monies, accruals, increments or other benefits derived or
received by Executive as the result of such breach. This right and remedy will be in addition
to, and not in lieu of, any other rights and remedies available to the Company under law or in
equity.

 

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(c) Extension of Restricted Period. If Executive breaches Section 4.1, 4.2 or 4.3,
the Restricted Period will be extended by an amount of time equal to the period that Executive was
in breach.

(d) Judicial Modification. If any court determines that Section 4.1, 4.2 or 4.3, or
this Section 4.4 (or any part thereof) is unenforceable because of its duration or geographic
scope, that court will have the power to modify that section and, in its modified form, that
section will then be enforceable.

(e) Restrictions Enforceable in All Jurisdictions. If any court holds that Section
4.1, 4.2 or 4.3, or this Section 4.4 (or any part thereof) is unenforceable by reason of its
breadth or scope or otherwise, it is the intention of the parties hereto that such determination
not bar or in any way affect the right of the Company to the relief provided above in the courts of
any other jurisdiction within the geographic scope of this section.

(f) Disclosure of Protective Provisions. Executive agrees to disclose the existence
and terms of Sections 4.1, 4.2 and 4.3 to any employer for whom Executive works during the two year
period following Executive’s cessation of employment by the Company. Executive also agrees that
for a period of one year following his cessation of employment by the Company, Executive will
provide, and that at all times after the date hereof the Company may similarly provide, a copy of
this Section 4 to any business or enterprise (i) which Executive may directly or indirectly own,
manage, operate, finance, join, control or of which he may participate in the ownership,
management, operation, financing, or control, or (ii) with which Executive may be connected as an
officer, director, employee, partner, principal, agent, representative, consultant or otherwise, or
in connection with which Executive may use or permit to be used Executive’s name.

ARTICLE V

MISCELLANEOUS

Section 5.1. No Liability of Officers and Directors for Severance Upon Insolvency.
Notwithstanding any other provision of the Agreement and intending to be bound by this provision,
Executive hereby (a) waives any right to claim payment of amounts owed to him, now or in the
future, pursuant to this Agreement from directors or officers of the Company if the Company becomes
insolvent, and (b) fully and forever releases and discharges the Company’s officers and directors
from any and all claims, demands, liens, actions, suits, causes of action or judgments arising out
of any present or future claim for such amounts.

Section 5.2. Other Agreements. Executive represents and warrants to the Company that
there are no restrictions, agreements or understandings whatsoever to which he is a party that
would prevent or make unlawful his execution of this Agreement, that would be inconsistent or in
conflict with this Agreement or Executive’s obligations hereunder, or that would otherwise prevent,
limit or impair the performance by Executive of his duties under this Agreement.

 

11

 

Section 5.3. Payments Subject to Tax Withholding. All payments and transfers of
property described in this Agreement will be made net of any applicable tax withholding.

Section 5.4. Successors and Assigns. This Agreement will inure to the benefit of and
be binding upon the Company and Executive and their respective successors, executors,
administrators and heirs. Executive may not make any assignment of this Agreement or any interest
herein, by operation of law or otherwise. The Company shall assign this Agreement to any successor
to all or substantially all of its assets and business by means of liquidation, dissolution,
merger, consolidation, transfer of assets, or otherwise.

Section 5.5. Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law. However, if any
provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability will not affect any other provision, and this Agreement
will be reformed, construed and enforced as though the invalid, illegal or unenforceable provision
had never been herein contained.

Section 5.6. Entire Agreement; Amendments. Except as otherwise provided herein, this
Agreement contains the entire agreement and understanding of the parties hereto relating to the
subject matter hereof. Therefore, other than as specifically set forth below, this Agreement
merges and supersedes all prior and contemporaneous discussions, agreements and understandings of
every nature relating to Executive’s employment, compensation, severance, termination or any
related matter, including, but not limited to, the Existing Agreement. Notwithstanding the
foregoing, this Agreement shall not effect the continuing validity of that certain Employee
Agreement, dated May 7, 2004, a copy of which is attached hereto as Exhibit 1. This Agreement may
not be changed or modified, except by an Agreement in writing signed by both Executive and the
Company.

Section 5.7. Notice. Any notice or communication required or permitted under this
Agreement will be made in writing and (a) sent by overnight courier, (b) mailed by certified or
registered mail, return receipt requested or (c) sent by telecopier, addressed as follows:

If to Executive:

Mr. Kevin Kemmerer

40 Meadow Creek Lane

Malvern, PA 19355

If to the Company:

Safeguard Scientifics, Inc.

435 Devon Park Drive, Building 800

Wayne, PA 19087

Attn: General Counsel

 

12

 

Section 5.8. Governing Law/Arbitration. This agreement will be construed and enforced
in accordance with the law of the Commonwealth of Pennsylvania without regard to the
conflicts of laws rules of any state. Executive hereby irrevocably and unconditionally
consents to submit to the exclusive jurisdiction of the courts of the Commonwealth of Pennsylvania
and of the United States of America, in each case located in Philadelphia, Pennsylvania, for any
actions, suits or proceedings arising out of or relating to this Agreement and equity incentive
grants made pursuant to this Agreement (“Litigation”) and agrees not to commence any Litigation
except in any such court, and further agrees that service of process, summons, notice or document
by U.S. registered mail to his respective address shall be effective service of process for any
Litigation brought against him in any such court. Each party hereby irrevocably and
unconditionally waives any objection to the laying of venue of any Litigation in the courts of the
Commonwealth of Pennsylvania or of the United States of America, in each case located in
Philadelphia, Pennsylvania, and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any Litigation brought in any such court has been
brought in an inconvenient forum.

Section 5.9. Counterparts and Facsimiles. This Agreement may be executed, including
execution by facsimile signature, in one or more counterparts, each of which will be deemed an
original, and all of which together will be deemed to be one and the same instrument.

Section 5.10. Compliance with Section 409A of the Code.

(a) Compliance. This Agreement shall be interpreted to avoid any penalty sanctions
under Section 409A of the Code. If any payment or benefit cannot be provided or made at the time
specified herein without incurring sanctions under Section 409A, then such benefit or payment shall
be provided in full at the earliest time thereafter when such sanctions will not be imposed. For
purposes of Section 409A of the Code, all payments to be made upon a termination of employment
under this Agreement may only be made upon a “separation from service” within the meaning of such
term under Section 409A of the Code, each payment made under this Agreement shall be treated as a
separate payment and the right to a series of installment payments under this Agreement is to be
treated as a right to a series of separate payments. In no event shall Executive, directly or
indirectly, direct the calendar year of payment. All reimbursements and in-kind benefits provided
under this Agreement shall be made or provided in accordance with the requirements of Section 409A,
including, where applicable, the requirement that (i) any reimbursement is for expenses incurred
during Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii)
the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar
year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in
any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before
the last day of the calendar year following the year in which the expense is incurred, and (iv) the
right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another
benefit.

 

13

 

(b) Payment Delay. Notwithstanding any provision in this Agreement to the contrary,
if at the time of Executive’s separation from service with the Company, the Company has securities
which are publicly traded on an established securities market and Executive is a “specified
employee” (as defined in Section 409A of the Code) and it is necessary to postpone the
commencement of any severance payments otherwise payable pursuant to this Agreement as a result of
such termination of employment to prevent any accelerated or additional tax under Section 409A of
the Code, then the Company will postpone the
commencement of the payment of any such payments or benefits hereunder (without any reduction
in such payments or benefits ultimately paid or provided to Executive) that are not otherwise paid
within the short-term deferral exception under Section 409A of the Code and are in excess of the
lesser of two times (i) Executive’s then-annual compensation or (ii) the limit on compensation then
set forth in Section 401(a)(17) of the code, until the first payroll date that occurs after the
date that is six months following Executive’s “separation from service” with the Company (as
defined under Section 409A of the Code). If any payments are postponed due to such requirements,
such postponed amounts will be paid in a lump sum to Executive on the first payroll date that
occurs after the date that is six months following Executive’s “separation from service” with the
Company. If Executive dies during the postponement period prior to the payment of the postponed
amount, the amounts withheld on account of Section 409A of the Code shall be paid to the personal
representative of Executive’s estate within 60 days after the date of Executive’s death.

Section 5.11. Terms of Employment, Agreements, Miscellaneous. You are an employee at
will and subject to the arrangements described in the Company’s employee handbook as modified from
time to time.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above
written.

	 	 	 	 	 	 	 	 	 	 	 
	SAFEGUARD SCIENTIFICS, INC.	 	 	 	KEVIN L. KEMMERER	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Brian J. Sisko	 	 	 	/s/ Kevin L. Kemmerer	 	 
	 	 	 	 	 	 	 	 	 
	 	 	Brian J. Sisko	 	 	 	Kevin L. Kemmerer	 	 
	 

	 	Title:
	 	Senior Vice President and	 	 	 	 	 	 
	 

	 	 	 	General Counsel	 	 	 	 	 	 

 

14

 

Appendix A

Release

RELEASE OF CLAIMS

FOR AND IN CONSIDERATION OF the benefits to be provided to Kevin L. Kemmerer (“Executive”) in
connection with the termination of his employment, as set forth in that certain Employment
Agreement by and between Safeguard Scientifics, Inc. (the “Company”) and Executive, dated December
29, 2008 (the “Employment Agreement”), which are conditioned on Executive signing this Release of
Claims and to which Executive is not otherwise entitled, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, Executive does hereby
REMISE, RELEASE, AND FOREVER DISCHARGE the Company and each of its past or present subsidiaries and
affiliates, its and their past or present officers, directors, stockholders, employees and agents,
their respective successors and assigns, heirs, executors and administrators, the pension and
employee benefit plans of the Company, or of its past or present subsidiaries or affiliates, and
the past or present trustees, administrators, agents, or employees of the pension and employee
benefit plans (hereinafter collectively included within the term the “Company”), acting in any
capacity whatsoever, of and from any and all manner of actions and causes of actions, suits, debts,
claims and demands whatsoever in law or in equity, which Executive ever had, now have, or hereafter
may have, or which Executive’s heirs, executors or administrators hereafter may have, by reason of
any matter, cause or thing whatsoever from the beginning of Executive’s employment with the Company
to the date of this Agreement and particularly, but without limitation of the foregoing general
terms, any claims arising from or relating in any way to Executive’s employment relationship and/or
the termination of Executive’s employment relationship with the Company, including but not limited
to, any claims which have been asserted, could have been asserted, or could be asserted now or in
the future under any federal, state or local laws, including any claims under the Pennsylvania
Human Relations Act, 43 PA. C.S.A. §§ 951 et seq., as amended, the Rehabilitation Act of 1973, 29
USC §§ 701 et seq., as amended, Title VII of the Civil Rights Act of 1964, 42 USC §§ 2000e et seq.,
as amended, the Civil Rights Act of 1991, 2 USC §§ 60 et seq., as applicable, the Age
Discrimination in Employment Act of 1967, 29 USC §§ 621 et seq., as amended ( “ADEA”), the
Americans with Disabilities Act, 29 USC §§ 706 et seq., and the Employee Retirement Income Security
Act of 1974, 29 USC §§ 301 et seq., as amended, any contracts between the Company and Executive and
any common law claims now or hereafter recognized and all claims for counsel fees and costs;
provided, however, that this Release of Claims shall not apply to any entitlements under the terms
of the Employment Agreement or under any other plans or programs of the Company in which Executive
participated and under which Executive has accrued and become entitled to a benefit other than
under any Company separation or severance plan or programs and provided, further, that this Release
of Claims shall not apply to any claims Executive may have as a stockholder of the Company so long
as Executive is not the moving, initiating or lead party.

Executive acknowledges that the restrictive covenants contained in Article IV of the
Employment Agreement will survive the termination of his employment. The Executive affirms that
those restrictive covenants are reasonable and necessary to protect the legitimate interests of
the Company, that he received adequate consideration in exchange for agreeing to those
restrictions and that he will abide by those restrictions.

 

 

 

In signing this Release of Claims, Executive acknowledges his understanding that he may not
sign it prior to the termination of his employment, but that he may consider the terms of this
Release of Claims for up to twenty-one (21) days (or such longer period as the Company may specify)
from the date Executive’s employment with the Company terminates. Executive also acknowledges that
he is advised by the Company and its subsidiaries and other affiliates to seek the advice of an
attorney prior to signing this Release of Claims; that Executive has had sufficient time to
consider this Release of Claims and to consult with an attorney, if he wished to do so, or to
consult with any other person of his choosing before signing; and that he is signing this Release
of Claims voluntarily and with a full understanding of its terms. Executive further acknowledge
that, in signing this Release of Claims, he has not relied on any promises or representations,
express or implied, that are not set forth expressly in the Employment Agreement. Executive
understands that he may revoke this Release of Claims at any time within seven (7) days of the date
of his signing by written notice to the Company and that this Release of Claims will take effect
only upon the expiration of such seven-day revocation period and only if Executive has not timely
revoked it.

Intending to be legally bound, Executive has signed this Release of Claims under seal as of
the date written below.

	 	 	 	 	 	 	 
	Signature: 
	 	 	 	 	 
	Name (please print): Kevin L. Kemmerer

	 

	Date Signed:
	 	 	 	 	 	 

 

A-2Exhibit 10.12

EXHIBIT 10.12

435 Devon Park Drive

Building 800

Wayne, PA 19087

610.293.0600

(FAX) 610.293.0601

December 3, 2008

Mr. Brian J. Sisko

230 Oakwood Lane

Phoenixville, PA 19460

Dear Brian:

You previously entered into an employment letter, dated August 20, 2007 (the “Prior Agreement”)
with Safeguard Scientifics, Inc. (“Safeguard”) and commenced employment with Safeguard on or after
the date of the Prior Agreement (the actual date your employment began is herein referred to as
your “Commencement Date”). In order to address concerns raised by certain terms of the Prior
Agreement under Section 409A of the Internal Revenue Code of 1986, as amended (“Code”), we hereby
modify your Prior Agreement to incorporate certain changes relating to Section 409A in this letter
(“New Agreement”). This New Agreement replaces the Prior Agreement, which is hereby terminated.

Salary and Cash Incentives. Your current annual salary is $340,000. As a matter of
maintaining competitive employment terms, salaries are reviewed annually against internal and
external peer groups, and individual performance, and, if appropriate, adjusted upwards.

You will also be eligible to participate in the Safeguard annual management incentive program
(MIP), at a minimum target payout of $250,000. Any reduction in your target payout or annual bonus
opportunity will constitute a material breach of this New Agreement by Safeguard. The overall MIP
goals are determined at the beginning of each year, and approved for payment annually, after the
year-end audited results, by the Compensation Committee of the Board. Actual payments of amounts
pursuant to your MIP award will be made to you on or after January 1, but prior to March 15, of the
calendar year next following the calendar year in which the payment is earned, subject to
completion of Safeguard’s audit for the applicable fiscal year. Your individual actual payout
amount will be determined by your performance against your individual objectives and by the overall
performance of Safeguard against established corporate objectives. Per the terms of the Prior
Agreement, you were paid a bonus following the Commencement Date, the net after-tax proceeds of
such bonus amount to be used to purchase Safeguard’s Common Stock in one or more market
transactions.

 

 

 

Fringe Benefits. You are also eligible to participate in Safeguard’s health, dental,
vision, disability, 401(k), deferred compensation program, and other benefit plans generally
available to Safeguard executive employees from time to time. In addition, so long as you are an
employee and Safeguard offers these benefits generally to other principals or executives, you will
be paid a car allowance at the rate of $10,000 per annum; you will receive a non-accountable annual
expense allowance of $8,000 per annum (payable in February of each year; you will be entitled to
participate in Safeguard’s executive medical plan as in effect from time to time; and, subject to
evidence of insurability, you will be entitled to company-paid universal life insurance providing
coverage of $750,000 in addition to Safeguard’s normal group life insurance plans offered to
employees generally. You will also be entitled to vacation at the annual rate of four weeks of
vacation per year and other benefits as outlined on the description of Safeguard benefits
previously provided to you.

Severance. Subject to the terms and conditions set forth below, in the event that (A) your
employment with Safeguard is terminated by Safeguard without “cause” (as defined below) or by you
for “good reason” (as defined below) within 18 months following a “change of control” (as defined
below) of Safeguard (“Change of Control Termination”) or (B) your employment with Safeguard
terminates for any reason other than (i) your death or disability, (ii) Safeguard’s termination of
your employment for cause or (iii) your resignation without good reason (such a termination, a
“Severance Termination”), Safeguard will provide you with the following benefits, which together
with any benefits provided under the applicable terms of any other plan or program sponsored by the
Safeguard (other than any plan, program or arrangement intended to pay severance benefits following
termination of employment), and applicable to you, will be the only severance benefits or other
payments in respect of your employment with Safeguard to which you will be entitled. The benefits
you receive under this New Agreement will be in lieu of all salary, accrued vacation and other
rights that you may have against Safeguard or its affiliates, and, except as otherwise noted below,
will be paid within the later of 45 days after your date of termination or Safeguard’s receipt of
your request for reimbursement, subject to your execution and nonrevocation of the General Release
described below.

	•	 	You will receive a payment in respect of your current year’s bonus
equal to the product of (i) your annual target bonus (of at least
$250,000), multiplied by (ii) Safeguard’s percentage achievement of
its annual Management Incentive Plan objectives as determined by the
Compensation Committee as of the end of the calendar quarter closest
to your date of termination, multiplied by (iii) a fraction, the
numerator of which is the number of days in Safeguard’s fiscal year
elapsed at the time of the termination and the denominator of which is
365. Payment under this provision will be made within 60 days after
the end of the quarter for which the determination in (ii) is made.
	 
	•	 	If (A) there is a Change of Control Termination or (B) a Severance
Termination, you will receive a lump sum payment equal to the product
of (i) 1.5 multiplied by (ii) your annual salary then in effect (which
will not be less than $340,000).
	 
	•	 	Except as provided below, you will only vest in your interests under
and you will receive benefits in accordance with the terms and
conditions set forth in Safeguard’s various long-term incentive plans.
	 
	•	 	You will receive up to 12 months’ continued coverage under Safeguard’s
medical and health plans(not including dental coverage), which
coverage will run concurrent with the coverage provided under Section
4980B of the Code.

 

-2-

 

	•	 	You will receive a lump sum payment equal to the cost that would be
incurred by Safeguard, as reasonably determined by Safeguard, to waive
the applicable premium otherwise payable for COBRA continuation
coverage for you (and, to the extent covered immediately prior to the
date of your termination, your spouse and dependents) with respect to
dental insurance for a period of 12 months following the date of your
termination.
	 
	•	 	You will be entitled to reimbursement of any medical, vision, or
dental expenses incurred by you (and, to the extent covered
immediately prior to the date of your termination, your spouse and
dependents) which are not covered by Safeguard’s medical, vision
and/or dental insurance for a period of 12 months following the date
of your termination. No such reimbursement will be made to the extent
such expenses exceed $5,000, in the aggregate, per calendar year.
	 
	•	 	You will be entitled to reimbursement of the cost of life insurance
coverage under the universal life insurance policy which was purchased
by Safeguard, in your name, during your employment (“Executive
Insurance Policy”) for a period of 12 months, based on Safeguard’s
monthly cost of such coverage on your termination date. Such
reimbursement will only be made to the extent you continue to pay the
premiums for such Executive Insurance Policy and thereafter submit to
Safeguard the paid bill for your Executive Insurance Policy.
	 
	•	 	On or before the end of the second calendar year beginning after your
termination of employment, Safeguard will reimburse you for up to
$20,000 for documented outplacement services or office space which you
secure within such time period.
	 
	•	 	You will be reimbursed promptly for all your reasonable and necessary
business expenses incurred on behalf of Safeguard prior to your
termination date in accordance with Safeguard’s customary policies.
	 
	•	 	If you experience a Change of Control Termination as described above,
(A) you will become fully vested in all of your outstanding stock
options and you may exercise (i) those stock options that were subject
to time-based vesting during the 36-month period following your
termination of employment (unless any of the options would by their
terms expire sooner, in which case you may exercise such options at
any time before their expiration), and (ii) those stock options that
were subject to market-based vesting during the 24-month period
following your termination of employment (unless any of the options
would by their terms expire sooner, in which case you may exercise
such options at any time before their expiration), and (B) you will
become fully vested in all of your outstanding restricted stock awards
and deferred stock units, if any.
	 
	•	 	If you experience a Severance Termination as described above, (A) you
will become fully vested in your outstanding time-based stock options
that were subject to time-based vesting and you may exercise those
stock options during the 36-month period following your termination of
employment (unless any of the options would by their terms expire
sooner, in which case you may exercise such options at any time before
their expiration), (B) you may exercise your vested outstanding
market-based options during the 12-month period following your
termination of employment (unless any of the options would by their
terms expire sooner, in which case you may exercise such options at
any time before their expiration), and (C) the Board, in its
discretion, may accelerate the vesting of any restricted stock grants
and deferred stock units, if any.

 

-3-

 

All compensation and benefits described in this New Agreement will be offered in return for and
contingent on your execution, non-revocation and performance of the General Release and Agreement
substantially in the form attached to this New Agreement as Exhibit A.

Upon your termination of employment with Safeguard in connection with a change of control, as
discussed above, if it is determined that any payment or distribution by Safeguard of benefits
provided under this New Agreement or any other benefits due upon a change of control (the “Change
of Control Benefits”) would constitute an “excess parachute payment” within the meaning of Section
280G of the Code that would be subject to an excise tax under Section 4999 of the Code (the “Excise
Tax”), the following provisions will apply, unless provided otherwise in the applicable plan,
program or agreement that provides change of control payments that are not paid pursuant to this
New Agreement. If the aggregate present value to you of receiving the Change of Control Benefits
and paying the Excise Tax is not greater than the aggregate present value to you of the Change of
Control Benefits reduced to the safe harbor amount (as defined below), then Safeguard will reduce
the Change of Control Benefits such that the aggregate present value to you of receiving the Change
of Control Benefits is equal to the safe harbor amount. Otherwise you will receive the full amount
of the Change of Control Benefits and you will be responsible for payment of the Excise Tax. For
purposes of this paragraph “present value” will be determined in accordance with Section 280G(d)(4)
of the Code and the term “safe harbor amount” will mean an amount expressed in the present value
that maximizes the aggregate present value
of the Change of Control Benefits without causing any of the Change of Control Benefits to be
subject to the deduction limitations set forth in Section 280G of the Code.

All determinations made pursuant to the foregoing paragraph will be made by a professional advisor
selected by Safeguard (the “Professional Advisor”), which firm will provide its determinations and
any supporting calculations both to Safeguard and to you within 10 days of the termination date.
Any such determination by the Professional Advisor will be binding upon you and Safeguard. You
will then, in your sole discretion, determine which and how much of the Change of Control Benefits
will be eliminated or reduced consistent with the requirements of the foregoing paragraph. All of
the fees and expenses of the Professional Advisor in performing the determinations referred to
above will be borne solely by Safeguard.

Except as otherwise specifically provided in the section entitled “Severance Termination and Change
of Control”, and subject to the requirements of the section entitled “Section 409A Compliance”
below, Safeguard will pay you the lump sum payments described above within 45 days of your date of
termination, subject to your execution and non-revocation of the General Release and Agreement
(which will be substantially in the form attached as Exhibit A to this New Agreement, but with such
changes, if any, as recommended by Safeguard’s counsel) and Non-Competition Agreement and such
agreements have become effective. Safeguard will prepare the final release within five business
days of your termination of employment. You will have 21 days in which to consider the release
although you may execute it sooner. Please note that the release has a rescission period of seven
days after which it becomes effective if not revoked. All other payments will be made to you on
the next regularly scheduled payroll date after the date on which they become due.

 

-4-

 

Except with respect to amounts subject to delayed payment because of the application of Section
409A of the Code (as described in the section entitled “Section 409A Compliance” below ), Safeguard
will pay interest on late payments at the prime rate at Safeguard’s agent bank plus two percent
compounded monthly. In addition, Safeguard will pay all reasonable costs and expenses (including
reasonable attorney’s fees and all costs of arbitration) incurred by you to enforce this New
Agreement or any obligation hereunder. Such payments will be made to you within 60 days of the date
the expense is incurred but in no event later than the date which is on or before the last day of
the calendar year following the year in which the expense is incurred.

In this New Agreement, the term “cause” means (a) your failure to adhere to any written Safeguard
policy if you have been given a reasonable opportunity to comply with such policy or cure your
failure to comply (which reasonable opportunity must be granted during the ten-day period preceding
termination of this New Agreement); (b) your appropriation (or attempted appropriation) of a
material business opportunity of Safeguard, including attempting to secure or securing any personal
profit in connection with any transaction entered into on behalf of Safeguard; (c) your
misappropriation (or attempted misappropriation) of any Safeguard fund or property; or (d) your
conviction of, or your entering a guilty plea or plea of no contest with respect to, a felony, the
equivalent thereof, or any other crime with respect to which imprisonment is a possible punishment.

In this New Agreement, the term “good reason” means (i) your assignment (without your consent) to a
position, title, responsibilities, or duties of a materially lesser status or degree of
responsibility than your current position, responsibilities, or duties; provided, however, that a
mere change in your area of responsibilities will not constitute a material change if you are
reasonably suited by your education and training for such responsibilities and you remain Senior
Vice-President and General Counsel of Safeguard; (ii) a reduction of your base salary; (iii) the
relocation of Safeguard’s principal executive offices to a location which is more than 30 miles
away from the location of Safeguard’s principal executive offices on the date of this New
Agreement; or (iv) Safeguard’s material breach of this New Agreement. Notwithstanding the
foregoing, no event or condition described in clauses (i) through (iv) will constitute good reason
unless (a) you give Safeguard written notice of your intention to terminate your employment for
good reason and the grounds for such termination, (b) the
notice described in (a) is provided within 90 days after the event giving rise to the good reason
termination occurs, and (c) such grounds for termination (if susceptible to correction) are not
corrected by Safeguard within 30 days after its receipt of such notice. If Safeguard does not
correct the ground(s) for termination during the 30-day period following your notice of
termination, your termination of employment for good reason must become effective within 90 days
after the end of the cure period in order for your termination to be treated as a “good reason”
termination under this New Agreement. If your termination occurs more than 90 days after the end
of the cure period, such termination will be treated as a voluntary termination other than for
“good reason” and you will not be entitled to severance benefits under this New Agreement.

 

-5-

 

A “change of control” will be deemed to have occurred if (i) any “person” or “group” (as such terms
are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), other than any Safeguard employee stock ownership plan or an equivalent
retirement plan, becomes the beneficial owner (as such term is used in Section 13(d) of the
Exchange Act), directly or indirectly, of securities of Safeguard representing 50% or more of the
combined voting power of Safeguard’s then outstanding voting securities, (ii) the Board ceases to
consist of a majority of Continuing Directors (as defined below), (iii) the consummation of a sale
of all or substantially all of Safeguard’s assets or a liquidation (as measured by the fair value
of the assets being sold compared to the fair value of all of Safeguard’s assets), or (iv) a merger
or other combination occurs such that a majority of the equity securities of the resultant entity
after the transaction are not owned by those who owned a majority of the equity securities of
Safeguard prior to the transaction. A “Continuing Director” will mean a member of the Board who
either (i) is a member of the Board at the date of this New Agreement or (ii) is nominated or
appointed to serve as a Director by a majority of the then Continuing Directors.

Terms of Employment, Agreements, Miscellaneous. You are an employee-at-will and subject to
the arrangements described in Safeguard’s employee handbook as modified from time to time. In
addition, your continued employment is subject to your compliance with various covenants designed
to protect Safeguard’s confidential information and employee, customer and other relationships, as
set forth in the Non-Competition Agreement executed by you in connection with the Prior Agreement.

We agree that you may continue to serve as a an adjunct professor at the Temple University Fox
School of Business and Management, and as a member of the Board of Overseers of the Annenberg
Center for Performing Arts so long as such service does not interfere with the performance of your
duties to Safeguard and that the activities of these organizations do not compete with the
activities of Safeguard or our subsidiaries, partner companies or affiliates. You will not serve
as a director of any other company that is not affiliated with Safeguard without the consent of our
Board of Directors.

The provisions set forth in this New Agreement will inure to the benefit of your personal
representative, executors and heirs. In the event you die while any amount payable under the New
Agreement remains unpaid, all such amounts will be paid in accordance with the terms and conditions
of this New Agreement.

No term or condition set forth in this New Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by you and the Board of
Safeguard or a duly authorized officer of Safeguard.

You will not be required to mitigate the amount of any payment provided for in this New Agreement
by seeking other employment or otherwise.

You acknowledge that the arrangements described in this New Agreement will be the only obligations
of Safeguard or its affiliates in connection with any determination by Safeguard to terminate your
employment with Safeguard. This New Agreement does not terminate, alter or affect your rights
under any plan or program
of Safeguard in which you may participate or under which you are due a benefit, except as
explicitly set forth herein. Your participation in such plans or programs will be governed by the
terms of such plans and programs.

 

-6-

 

The provisions set forth in this New Agreement will be construed and enforced in accordance with
the law of the Commonwealth of Pennsylvania without regard to the conflicts of laws rules of any
state.

Any controversy or claim arising out of or relating to this New Agreement, or the breach thereof,
will be settled by arbitration in Philadelphia, Pennsylvania, in accordance with the National Rules
for the Resolution of Employment Disputes of the American Arbitration Association, using one
arbitrator, and judgment upon the award rendered by the arbitrator may be entered in any court of
competent jurisdiction.

The obligations of Safeguard set forth herein are absolute and unconditional and will not be
subject to any right of set-off, counterclaim, recoupment, defense or other right which Safeguard
may have against you, subject to, in the event of your termination of employment, your execution
and performance of the General Release and Agreement substantially in the form attached to this New
Agreement as Exhibit A and your performance of the Non-Competition Agreement in the form
attached to this New Agreement as Exhibit B.

Safeguard may withhold applicable taxes and other legally required deductions from all payments to
be made hereunder.

Safeguard’s obligations to make payments under this New Agreement are unfunded and unsecured and
will be paid out of the general assets of Safeguard.

This New Agreement constitutes the entire agreement and understanding with respect to your
severance arrangements, and supersedes any and all prior agreements and understandings whether oral
or written, relating thereto.

Compliance with Section 409A of the Code. 

This New Agreement will be interpreted to avoid any penalty sanctions under Section 409A of the
Code. If any payment or benefit cannot be provided or made at the time specified herein without
incurring sanctions under Section 409A, then such benefit or payment will be provided in full at
the earliest time thereafter when such sanctions will not be imposed. For purposes of Section 409A
of the Code, all payments to be made upon your termination of employment under this New Agreement
may only be made upon a “separation from service” within the meaning of such term under Section
409A of the Code, each payment made under this New Agreement will be treated as a separate payment
and the right to a series of installment payments under this New Agreement is to be treated as a
right to a series of separate payments. In no event will you, directly or indirectly, designate
the calendar year of any payments to be made to you under this New Agreement. All reimbursements
and in-kind benefits provided under this New Agreement will be made or provided in accordance with
the requirements of Section 409A, including, where applicable, the requirement that (i) any
reimbursement is for expenses incurred during your lifetime (or during a shorter period of time
specified in this Agreement), (ii) the amount of expenses eligible for reimbursement, or in-kind
benefits provided, during a calendar year may not affect the expenses eligible for reimbursement,
or in-kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an
eligible expense will be made on or before the last day of the calendar year following the year in
which the expense is incurred, and (iv) the right to reimbursement or in-kind benefits is not
subject to liquidation or exchange for another benefit.

 

-7-

 

Notwithstanding any provision in this New Agreement to the contrary, if at the time of your
separation from service with Safeguard, Safeguard has securities which are publicly traded on an
established securities market and you are a “specified employee” (as defined in Section 409A of
the Code) and it is necessary to postpone
the commencement of any severance payments otherwise payable pursuant to this New Agreement as a
result of such termination of employment to prevent any accelerated or additional tax under Section
409A of the Code, then Safeguard will postpone the commencement of the payment of any such payments
or benefits hereunder (without any reduction in such payments or benefits ultimately paid or
provided to you) that are not otherwise paid within the short-term deferral exception under Section
409A of the Code and are in excess of the lesser of two times your then-annual compensation or (ii)
the limit on compensation then set forth in Section 401(a)(17) of the code, until the first payroll
date that occurs after the date that is six months following the your “separation from service”
with Safeguard (as defined under Section 409A of the Code). If any payments are postponed due to
such requirements, such postponed amounts will be paid in a lump sum to you on the first payroll
date that occurs after the date that is six months following your “separation from service” with
Safeguard. If you die during the postponement period prior to the payment of the postponed amount,
the amounts withheld on account of Section 409A of the Code will be paid to the personal
representative of your estate within 60 days after the date of your death.

If this New Agreement sets forth our agreement on the subject matter hereof, kindly sign and return
to us the enclosed copy of this New Agreement which will then constitute our legally binding
agreement.

Sincerely,

Safeguard Scientifics, Inc.

	 	 	 	 	 
	By:

	 	/s/ Peter J. Boni
 

	 	 
	 

	 	Peter J. Boni	 	 
	 

	 	President and Chief Executive Officer	 	 

I agree to be bound by the terms and conditions of this New Agreement.

	 	 	 
	/s/ Brian J. Sisko
 

	 	 
	Brian J. Sisko
	 	 

 

-8-

 

EXHIBIT A

GENERAL RELEASE AND AGREEMENT

This GENERAL RELEASE AND AGREEMENT (hereinafter the “Agreement”) is made and entered into as
of this _____ day of _____, 20 _____, by and between Safeguard Scientifics, Inc. (“Safeguard”) and
Brian J. Sisko (“Employee”).

1. Background. The parties hereto acknowledge that this Agreement is being entered
into pursuant to the terms of the employment letter agreement, dated December 3, 2008 between
Safeguard and Employee (the “Employment Agreement”). As used in this Agreement, any reference to
Safeguard shall include its predecessors and successors and, in their capacities as such, all of
its present, past, and future directors, officers, employees, attorneys, insurers, agents and
assigns; and any reference to Employee shall include, in their capacities as such, his attorneys,
heirs, administrators, representatives, agents and assigns.

2. General Release.

(a) Employee, for and in consideration of the special benefits offered to him by Safeguard
specified in the Employment Agreement and intending to be legally bound, does hereby REMISE,
RELEASE AND FOREVER DISCHARGE Safeguard, of and from any and all waivable causes of actions, suits,
debts, claims and demands whatsoever in law or in equity, which Employee ever had, now has, or
hereafter may have or which Employee’s heirs, executors or administrators may have, by reason of
any matter, cause or thing whatsoever, from the beginning of Employee’s employment with Safeguard
to the date of this Agreement, and particularly, but without limitation, any claims arising from or
relating in any way to Employee’s employment or the termination of Employee’s employment
relationship with Safeguard, including, but not limited to, any claims arising under any federal,
state, or local laws, including Title VII of the Civil Rights Act of 1964, as amended, 42
U.S.C. § 2000e et seq., (“Title VII”), the Age Discrimination in Employment Act, 29 U.S.C.
§ 621 et seq. (the “ADEA”), the Americans with Disabilities Act, 42 U.S.C. § 12101 et
seq. (“ADA”), Employee Retirement Income Security Act of 1974, as amended 29 U.S.C. § 301,
et seq., as amended (“ERISA”), the Pennsylvania Wage Payment and Collection Law, Pa. Stat.
Ann. tit. 43 §§ 260.1-260.11a (“WPCL”), the Pennsylvania Human Relations Act, 43 P.S. § 951 et
seq. (the “PHRA”), and any and all other federal, state or local laws, regulations, ordinances
or public policies and any common law claims now or hereafter recognized, including claims for
wrongful discharge, slander and defamation, as well as all claims for counsel fees and
costs; provided, however, that the Employee does not release or discharge Safeguard from
any of its continuing obligations to him expressly set forth in this Agreement and the
Employment Agreement.

(b) By signing this Agreement, Employee represents that Employee has not commenced any
proceeding against Safeguard in any forum (administrative or judicial) concerning Employee’s
employment or the termination thereof. If Employee’s employment with Safeguard has been
terminated on or before the date of this Agreement, Employee further acknowledges that Employee was
given sufficient notice under the Worker Adjustment and Retraining Notification Act (the “WARN
Act”) and that the termination of Employee’s employment does not give rise to any claim or right to
notice, or pay or benefits in lieu of notice under the WARN Act. In the event any WARN Act issue
does exist or arises in the future, Employee agrees and acknowledges that the payments and benefits
set forth in this Agreement shall be applied to any compensation or benefits in lieu of notice
required by the WARN Act, provided that any such offset shall not impair or affect the validity of
any provision of this Agreement or the Employment Agreement.

 

 

 

(c) Employee agrees that in the event of a breach of any of the terms of this Agreement,
Safeguard shall be entitled to recover attorneys’ fees and costs in an action to prosecute such
breach, in addition to
compensatory damages, and may cease to make any payments then due under this Agreement or the
Employment Agreement.

(d) Employee acknowledges that Safeguard’s obligations under the Employment Agreement and this
Agreement are the only obligations of Safeguard or its parent organizations or affiliates in
connection with the matters described herein and therein.

(e) Employee agrees and acknowledges that this Agreement is not and shall not be construed to
be an admission by Safeguard of any violation of any federal, state or local statue, ordinance or
regulation or of any duty owed by Safeguard to Employee.

4. Confidentiality; Non-Disparagement.

(a) Except to the extent required by law, including SEC disclosure requirements, Safeguard and
Employee agree that the terms of this Agreement will be kept confidential by both parties, except
that Employee may advise his family and confidential advisors, and Safeguard may advise those
people needing to know to implement the above terms.

(b) Employee acknowledges and agrees that he is bound by the confidentiality provisions of the
Employment Agreement and that such terms remain in full force and effect.

(c) Employee represents that Employee has not taken, used or knowingly permitted to be used
any notes, memorandum, reports, list, records, drawings, sketches, specifications, software
programs, data, documentation or other materials of any nature relating to any matter within the
scope of the business of Safeguard or its affiliated or parent companies or concerning any of its
dealings or affairs otherwise than for the benefit of Safeguard. Employee shall not, after the
termination of Employee’s employment, use or knowingly permit to be used any such notes, memoranda,
reports, lists, records, drawings, sketches, specifications, software programs, data, documentation
or other materials, it being agreed that all of the foregoing shall be and remain the sole and
exclusive property of Safeguard and that immediately upon the termination of Employee’s employment,
Employee shall deliver all of the foregoing, and all copies thereof, to Safeguard, at its main
office.

(d) In accordance with normal ethical and professional standards, Safeguard and Employee agree
that they shall not in any way engage in any conduct or make any statement that would defame or
disparage the other, or make to, or solicit for, the media or others, any comments, statements
(whether written or oral), and the like that may be considered to be derogatory or detrimental to
the good name or business reputation of either party. It is understood and agreed that Safeguard’s
obligation under this paragraph extends only to the conduct of Safeguard’s executive officers. The
only exception to the foregoing shall be in those circumstances in which Employee or Safeguard is
obligated to provide information in response to an investigation by a duly authorized governmental
entity or in connection with legal proceedings.

 

A-2

 

5. Indemnity and Assistance.

(a) This Agreement shall not release Safeguard, or any of its insurance carriers from any
obligation it or they might otherwise have to defend and/or indemnify Employee and hold harmless
any other director or officer and Safeguard hereby affirms its obligation to provide
indemnification to Employee as a director, officer or former director or officer of Safeguard, as
the case may be, as set forth in Safeguard’s bylaws and charter documents.

(b) Employee agrees that Employee will personally provide reasonable assistance and
cooperation to Safeguard in activities related to the prosecution or defense of any pending or
future lawsuits or claims involving Safeguard.

6. General.

(a) Employee acknowledges and agrees that he has 21 days to consider this Agreement, and that
Employee has been advised by Safeguard, in writing, to consult with his attorney before signing
this Agreement, and that Employee had discussed this matter with his attorney before signing it.
Employee further acknowledges that Safeguard has advised him that he may revoke this Agreement for
a period of seven calendar days after it has been executed, with the understanding that Safeguard
has no obligations under this Agreement until the seven day period has passed. If the seventh day
is a weekend or national holiday, Employee will have until the next business day to revoke. Any
revocation must be in writing and received by Safeguard at its facility located at 435 Devon Park
Drive, 800 Building, Wayne, PA 19087, Attention: President, with a copy to the General Counsel,
Safeguard Scientifics, Inc., 800 Building, 435 Devon Park Drive, Wayne, PA 19087.

(b) Employee has carefully read and fully understands all of the provisions of this Agreement
which set forth the entire agreement between him and Safeguard with respect to the subject matter
hereto, and he acknowledges that he has not relied upon any representation or statement, written or
oral, not set forth in this document.

(c) This Agreement is made in the Commonwealth of Pennsylvania and shall be interpreted under
the laws thereof. Its language shall be construed as a whole, to give effect to its fair meaning
and to preserve its enforceability.

(d) Employee agrees that any breach of this Agreement by Employee will cause irreparable
damage to Safeguard and that in the event of such breach Safeguard shall have, in addition to any
and all remedies of law, the right to an injunction, specific performance or other equitable relief
to prevent the violation of Employee’s obligations hereunder.

 

A-3

 

(e) No term or condition set forth in this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing and signed by Employee and an
officer of Safeguard specifically and duly authorized by the Board of Directors of Safeguard.

(f) Any waiver by Safeguard of a breach of any provision of this Agreement shall not operate
or be construed as a waiver of any subsequent breach of such provision or any other provision
hereof.

(g) Each covenant, paragraph and division of this Agreement is intended to be severable and
distinct, and if any paragraph, subparagraph, provision or term of this Agreement is deemed to be
unlawful or unenforceable, such a determination will not impair the legitimacy or enforceability of
any other aspect of the Agreement.

(h) This Agreement is intended to be for the benefit of, and shall be enforceable by,
Safeguard. Except as provided in the prior sentence, this Agreement is not intended to confer any
rights, benefits, remedies, obligations or liabilities hereunder upon any person or entity other
than the parties hereto and their respective heirs, representatives, successors and permitted
assigns.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date written above.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Date:

	 	                   , 20        	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Brian J. Sisko	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Safeguard Scientifics, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Date

	 	                   , 20        	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	Title:	 	 	 	 

 

A-4

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