(Name of Person(s) Filing Proxy Statement, if ~~Other Than~~other than the Registrant)

	~~(4)~~	~~Proposed maximum aggregate value of transaction:~~

You are cordially invited to attend a special meeting of shareholders (the “special meeting”) of Safeguard Scientifics, Inc., a Pennsylvania corporation (“Safeguard,” the “Company,” “we”, “us” or “our”), to be held virtually at meetnow.global/MF922F5 on December 15, 2023, at 9:00 a.m. Eastern Time.

At the special meeting, you will be asked to consider and vote upon proposals to amend our Second Amended and Restated Articles of Incorporation, as amended (the “articles of incorporation”), to effect a reverse stock split of our common stock, par value $0.10 per share (the “Reverse Stock Split”), followed immediately by a forward stock split of our common stock (the “Forward Stock Split,” and together with the Reverse Stock Split, the “Stock Splits”), at a ratio (i) not less than 1-for-50 and not greater than 1-for-100, in the case of the Reverse Stock Split (the “Reverse Stock Split Ratio”), and (ii) not less than 50-for-1 and not greater than 100-for-1, in the case of the Forward Stock Split (the “Forward Stock Split Ratio” and, together with the Reverse Stock Split Ratio, the “Stock Split Ratios”), with the exact Stock Split Ratios to be set within the foregoing ranges at the discretion of our Board of Directors (the “Board”) (and, in all cases, with the Forward Stock Split Ratio being the inverse of the Reverse Stock Split Ratio), without further approval or authorization of our shareholders and with our Board, in its sole discretion, able to effect the Stock Splits immediately following the public announcement of the Stock Split Ratios or to elect not to effect the proposed Stock Splits (whether or not authorized by the shareholders) or to abandon the overall Transaction (as defined below) at any time (“Stock Split Proposals”). By asking you to consider and vote upon the Stock Split Proposals, we are effectively asking you to consider whether to authorize the Board to effect the overall Transaction and related adjustments to our management structure, as described below and in the accompanying proxy statement.

The primary purpose of the Stock Splits is to enable Safeguard to reduce the number of record holders of its common stock below 300, which is the level at or above which Safeguard is required to file public reports with the Securities and Exchange Commission (the “SEC”). As described in the accompanying proxy statement, the Board will consider various factors in determining the Stock Split Ratios; however, Safeguard believes that any Reverse Stock Split Ratio within the proposed range would reduce the number of record holders below 300. The Stock Splits are being undertaken as part of the Company’s plan to suspend its duty to file periodic and current reports and other information with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As described in the accompanying proxy statement, the Board has determined that the costs of being a public reporting company outweigh the benefits thereof. The actions we would take to suspend, and events that occur as a result of such actions that would have the effect of suspending, our reporting obligations under the Exchange Act, also referred to as the “going dark” transaction, including effectuating the Stock Splits, delisting our common stock from trading on The Nasdaq Stock Market LLC, terminating the registration of our common stock under Sections 12(b) and 12(g) of the Exchange Act and suspending of our reporting obligations under Section 15(d) of the Exchange Act, are collectively referred to as the “Transaction”.

We also plan to adjust our existing management structure in connection with the Transaction by reducing the size of the Board to two members and reorganizing our management to primarily use an external service provider, with our current executive officers and employees expected to provide limited consulting services to Safeguard on an as-needed basis, on the terms and schedule to be approved by the Board, at its discretion, depending on the timing of the Transaction. If shareholders approve the Stock Split Proposals and we proceed with the Transaction, the size of the Board is expected to be reduced to two members from the current governance structure of Safeguard, to be determined by the Board upon the filing of our Annual Report on Form 10-K for the fiscal year ending December 31, 2023, and there will be no standing committees of the Board. Each of such two directors is expected to serve on the Board for a term expiring at the 2024 annual meeting of shareholders and until such director’s successor is duly elected and qualified. In addition, starting from January 1, 2024, Eric Salzman, our current Chief Executive Officer, will no longer serve as our Chief Executive Officer and is expected to provide certain consulting services to Safeguard, on an as needed basis, on the terms and schedule to be approved by the Board, at its discretion, depending on the timing of the Transaction. In addition, if shareholders approve the Stock Split Proposals and we proceed with the Transaction, starting from January 1, 2024, we expect to begin transitioning Safeguard’s general and administrative functions, including, but not limited to, overseeing the remaining ownership interests, monitoring any continued escrow amounts due to Safeguard and other contractual arrangements, maintaining Safeguard’s books and records, overseeing the process of shareholder distributions when and if proceeds from the monetization of our ownership interests are available and maintaining quarterly and annual shareholder communications, to an external management service provider to be selected by the Board, with our remaining officers and employees no longer maintaining their current positions, but instead providing consulting services to Safeguard, on an as needed basis on the terms and schedule to be approved by the Board, at its discretion, depending on the timing of the Transaction.

Historically, Safeguard has provided capital and relevant expertise to fuel the growth of technology-driven businesses. In January 2018, Safeguard ceased deploying capital into new opportunities in order to focus on supporting the existing ownership interests and maximizing monetization opportunities to enable returning value to shareholders. Since January 2018, Safeguard’s individual ownership interests have been reduced from over 25 entities to only six companies, four of which are expected to provide the majority of remaining exit proceeds. This monetization process resulted in satisfying all of Safeguard’s historical debt obligations, paying a $1.00 per share dividend in 2019, and repurchasing 5.3 million shares of our common stock through a combination of open market purchases and a tender offer. We have also reduced the operating costs of Safeguard since January 2018 and intend to reduce them further, after giving effect to the Transaction and related adjustments to our management structure, assuming shareholder approval of the Stock Split Proposals, in order to maximize distributions available to shareholders from proceeds, if any, from future monetization of remaining individual ownership interests.

As described in the accompanying proxy statement, our common stock is thinly traded. This affects our ability to raise capital from the public markets, effectively use our common stock as transaction consideration, attract interest from institutional investors or market analysts and otherwise enjoy the traditional benefits of being a publicly traded company. Despite the lack of these benefits, we incur all of the significant, direct and indirect, annual expenses associated with being a public company. We believe the level of expenditures required to maintain our public company status has become too burdensome in light of our strategy to monetize our remaining ownership interests and return the maximum value to our shareholders. Upon giving effect to the Transaction, we will no longer be subject to the reporting requirements under the Exchange Act or other requirements applicable to a public company, including requirements under the Sarbanes-Oxley Act of 2002, as well as the listing standards of any national securities exchange. We anticipate annual cost savings of approximately $1.5 million in cash and a reduction in annual stock based compensation of approximately $1.2 million after effecting the Transaction and related adjustments to our management structure, primarily as a result of a potential reduction in: (i) professional fees of accountants associated with the audit process, (ii) insurance premiums for our directors’ and officers’ liability insurance, (iii) Board and employee related expenses, as well as (iv) legal, printing, and other miscellaneous costs associated with being a publicly traded company. Please note, however, that these projected annual cost savings and reduction in stock based compensation are only estimates and our savings and reduction in stock based compensation could be higher or lower than $1.5 million and $1.2 million, respectively.

Consistent with our strategy to return value to shareholders, we contemplate declaring a dividend during the quarter ending December 31, 2023, subject to the Board approval, using Safeguard’s excess cash that represents cash on hand less the estimated amounts required to be retained to support Safeguard��s operations, satisfy its liabilities and pay estimated costs of the Stock Splits and overall Transaction.

We also believe that the Transaction will not impact Safeguard’s federal tax status or the availability of the federal net operating loss carryforwards or other tax attributes.

While we currently intend to make our financial information, including our audited annual financial statements, available to our shareholders on a voluntary basis after giving effect to the Transaction, we are not required to do so by law and there is no assurance that even if we do make such information available immediately after giving effect to the Transaction that we would continue to do so in the future.

Even after giving effect to the Transaction, our corporate ethics standards will continue to reflect our commitment to integrity. Accordingly, our commitment to a high standard of accounting practices and regulatory compliance will remain. In addition, despite no longer being an SEC reporting company, Safeguard will continue to be subject to the general anti-fraud provisions of applicable federal and state securities laws.

Any trading in our common stock after giving effect to the Transaction would only occur in privately negotiated sales and potentially on an over-the-counter market, if one or more brokers chooses to make a market for our common stock on any such market and complies with applicable regulatory requirements; however, there can be no assurances regarding any such trading. Furthermore, after giving effect to the Transaction and as necessary to maintain Safeguard’s suspension of its SEC reporting obligations, Safeguard reserves the right to take additional actions that may be permitted under Pennsylvania law, including effectuating further reverse stock splits.

If the Stock Split Proposals are approved by our shareholders at the special meeting and the Board decides to proceed with the Stock Splits, it will then determine the Stock Split Ratios and direct Safeguard to file with the Pennsylvania Department of State articles of amendment to our articles of incorporation to effectuate the Stock Splits, which would likely occur immediately following the public announcement of the Stock Split Ratios chosen by the Board, at which date (the “effective time”) a shareholder of record owning immediately prior to the effective time fewer than a minimum number of shares, which, depending on the Stock Split Ratios chosen by the Board, would be between 50 and 100 (the “Minimum Number”), would be entitled to a fraction of a share of common stock upon the Reverse Stock Split and will be paid cash in lieu of such fraction of a share of common stock, on the basis of $1.65, without interest (the “Cash Payment”), for each share of common stock held by such holder (the “Cashed Out Shareholders”) immediately prior to effective time and the Cashed Out Shareholders would no longer be shareholders of Safeguard. Shareholders of record owning at least the Minimum Number of shares immediately prior to the effective time (the “Continuing Shareholders”) would not be paid cash in lieu of any fraction of a share of common stock such Continuing Shareholders may be entitled to receive upon the Reverse Stock Split and, upon the Forward Stock Split, the shares of common stock (including any fraction of a share of common stock) held by such Continuing Shareholders after the Reverse Stock Split will be reclassified into the same number of shares of common stock as such Continuing Shareholders held immediately prior to the effective time. As a result of the Forward Stock Split, the total number of shares of Safeguard’s common stock held by a Continuing Shareholder would not change due to the Stock Splits. At the special meeting, you will also be asked to consider and vote on a proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the Reverse Stock Split Proposal or the Forward Stock Split Proposal.

After careful consideration, the Board determined (by a unanimous vote) that effecting the Stock Splits and the overall Transaction is in the best interests of Safeguard’s shareholders and the specific terms of the Stock Splits are fair to both the unaffiliated Cashed Out Shareholders and the unaffiliated Continuing Shareholders.

The Board recommends (by a unanimous vote) that you vote “FOR” each of the Stock Split Proposals and “FOR” the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the Reverse Stock Split Proposal or the Forward Stock Split Proposal. The accompanying proxy statement and its annexes explain such amendments, the Stock Splits and the overall Transaction and provide specific information about the special meeting. Please read these materials carefully.

THE TRANSACTION (INCLUDING THE STOCK SPLITS) HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF THE TRANSACTION (INCLUDING THE STOCK SPLITS) OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT, INCLUDING THE PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Your vote is important. Whether or not you plan to attend the special meeting, we urge you to please vote by proxy as soon as possible. If you do attend the special meeting virtually and desire to vote in person, you may do so, even though you have previously voted by proxy.

We thank you for your ongoing support. Your prompt attention would be greatly appreciated.

SAFEGUARD SCIENTIFICS, INC.

~~SAFEGUARD SCIENTIFICS, INC.~~

NOTICE OF ~~ANNUAL~~SPECIAL MEETING OF SHAREHOLDERS

Dear Safeguard Shareholder:

You are invited to attend the Special Meeting of Shareholders of Safeguard Scientifics, Inc. ~~2016 Annual Meeting of Shareholders on May 18, 2016 at 8:00 a.m. ET.~~ This ~~year’s annual~~special meeting will be conducted solely as a virtual meeting over the Internet. You will be able to attend our ~~2016 annual~~special meeting via live webcast by visiting:~~www.virtualshareholdermeeting.com/SFE2016~~ meetnow.global/MF922F5 and entering the control number included inin: (i) the Notice of Internet availability of our proxy materials or (ii) other proxy materials that we will be ~~mailing~~mailed to shareholders on or about ~~April 6, 2016.~~November 2, 2023. Please see the “Questions and Answers About the Special Meeting and the Stock Splits to Effect the Transaction” section below for detailed instructions regarding the agenda of, and attendance at, this special meeting.

~~Only shareholders who owned stock at the close of business on March 18, 2016 can vote at our annual meeting and any adjournment that may take place.~~

~~The purposes of the annual meeting are to:~~

DATE AND TIME:	1. December 15, 2023, 9:00 a.m. Eastern Time.
PLACE:	~~Vote~~To be held virtually at meetnow.global/MF922F5.
RECORD DATE:	Only shareholders of record as of the close of business on October 24, 2023 are entitled to the notice of and to vote at the special meeting or any adjournments or postponements of the special meeting.
ITEMS OF BUSINESS:	1.    To consider and vote upon a proposal to amend our Second Amended and Restated Articles of Incorporation, as amended (the “articles of incorporation”), to effect a reverse stock split of our common stock, par value $0.10 per share (the “Reverse Stock Split”), at a ratio not less than 1-for-50 and not greater than 1-for-100 (the “Reverse Stock Split Ratio”), with the exact Reverse Stock Split Ratio to be set within the foregoing range at the discretion of our Board, without further approval or authorization of our shareholders and with our Board, in its sole discretion, able to effect the Reverse Stock Split immediately following the public announcement of the Reverse Stock Split Ratio or to elect not to effect the Reverse Stock Split (whether or not authorized by the shareholders) or to abandon the Transaction (as defined below) at any time (the “Reverse Stock Split Proposal”). 2.    To consider and vote upon a proposal to amend our articles of incorporation to effect, immediately after the Reverse Stock Split, a forward stock split of our common stock (the “Forward Stock Split,” and together with the Reverse Stock Split, the “Stock Splits”), at a ratio not less than 50-for-1 and not greater than 100-for-1 (the “Forward Stock Split Ratio” and, together with the Reverse Stock Split Ratio, the “Stock Split Ratios”), with the exact Forward Stock Split Ratio to be set within the foregoing range at the discretion of our Board, without further approval or authorization of our shareholders and with our Board, in its sole discretion, able to effect the Forward Stock Split immediately following the public announcement of the Forward Stock Split Ratio or to elect not to effect the Forward Stock Split (whether or not authorized by the shareholders) or to abandon the Transaction at any time (the “Forward Stock Split Proposal,” and together with the Reverse Stock Split Proposal, the “Stock Split Proposals”). As a result of the Stock Splits: ·         a shareholder of record owning fewer than a minimum number of shares, which, depending on the ~~election~~Stock Split Ratios chosen by the Board, would be between 50 and 100 (the “Minimum Number”) immediately prior to the effective time of ~~seven directors;~~

the Reverse Stock Split (the “effective time”) will only be entitled to a fraction of a share of common stock upon the Reverse Stock Split and will be paid cash in lieu of such fraction of a share of common stock, on the basis of $1.65, without interest, for each share of common stock held by such holder immediately prior to the effective time; and

~~Vote~~

·         a shareholder of record owning at least the Minimum Number of shares immediately prior to the effective time will not be paid cash in lieu of any fraction of a share of common stock such holder may be entitled to receive upon the Reverse Stock Split and, upon the Forward Stock Split, the shares of common stock (including any fraction of a share of common stock) held by such holder after the Reverse Stock Split will be reclassified into the same number of shares of common stock as such holder held immediately prior to the Reverse Stock Split.

Copies of the proposed form of amendments to our articles of incorporation are attached as Annex A and Annex B to the accompanying proxy statement.

The primary purpose of the Stock Splits is to enable Safeguard to reduce the number of record holders of its common stock below 300, which is the level at or above which we are required to file public reports with the SEC. The Board will consider various factors in determining the Stock Split Ratios; however, we believe that any Reverse Stock Split Ratio within the proposed range would reduce the number of record holders below 300. The Stock Splits are being undertaken as part of our plan to suspend Safeguard’s duty to file periodic and current reports and other information with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As described in this proxy statement, the Board has determined that the costs of being a public reporting company outweigh the benefits thereof. The actions we would take to suspend, and events that occur as a result of such actions that would have the effect of suspending, our reporting obligations under the Exchange Act, also referred to as the “going dark” transaction, including effectuating the Stock Splits, delisting our common stock from trading on The Nasdaq Stock Market LLC (“Nasdaq”), terminating the registration of our common stock under Sections 12(b) and 12(g) of the Exchange Act and suspending of our reporting obligations under Section 15(d) of the Exchange Act, are collectively referred to herein as the “Transaction.” By asking you to consider and vote upon the Stock Split Proposals, we are effectively asking you to consider whether to authorize the Board to effect the overall Transaction and related adjustments to our management structure, as described in the accompanying proxy statement.

3.     To consider and vote upon a ~~non-binding, advisory resolution~~proposal to approve the ~~compensation of our named executive officers;~~

~~Vote on the ratification~~adjournment of the ~~appointment~~special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of ~~KPMG LLP as our independent registered public accounting firm for 2016; and~~

~~Consider such other business as may properly come before~~ the ~~meeting.~~special meeting to approve the Reverse Stock Split Proposal or the Forward Stock Split Proposal.

YOUR VOTE IS IMPORTANT TO ~~US.~~US

The accompanying proxy statement contains important information, including a description of the business that will be acted upon at the special meeting, voting procedures, and documentation required to attend the meeting. We encourage you to read the proxy statement and (i) vote by proxy over the Internet or by telephone or (ii) if you received paper copies of the proxy materials by mail, vote by following the instructions on the proxy card or voting instruction form. Voting over the Internet or by telephone or completing and returning a proxy card or voting instruction form will ensure your representation at our ~~annual~~virtual special meeting, regardless of whether you plan to attend the virtual special meeting.

~~April 6, 2016~~November 2, 2023	By Order of the Board of Directors,



	~~Deirdre Blackburn,~~G. Matthew Barnard, General Counsel and CorporateSecretary

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
~~ANNUAL~~SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON ~~MAY 18, 2016~~DECEMBER 15, 2023

The Notice of ~~Annual~~Special Meeting and the Proxy Statement ~~and our Annual Report on Form 10-K for the fiscal year~~
~~ended December 31, 2015,~~ are available at ~~www.proxyvote.com.~~

www.envisionreports.com/SFE-SPC.

vii

TABLE OF CONTENTS

Page

SUMMARY TERM SHEET	4
The Stock Splits and the Transaction	4
Purpose of and Reasons for the Stock Splits and the Transaction	5
Effects of the Transaction (including the Stock Splits)	6
Board of Directors Recommendations Regarding the Transaction	7
Reservation of Rights	8
Fairness of the Stock Splits to Effect the Transaction	8
Interests of Executive Officers, Directors, and 10% Shareholders	9
Vote Required for Approval of the Stock Splits and the Adjournment Proposal at the Special Meeting	9
Treatment of Beneficial Holders (Shareholders Holding Shares in “Street Name”)	9
Determination of Shareholders of Record	10
Effectiveness of the Stock Splits	10
Financing for the Transaction	10
Recent Market Prices of our Common Stock	11
No Appraisal or Dissenters’ Rights	11
Material Federal Income Tax Consequences	11
QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE STOCK SPLITS TO EFFECT THE TRANSACTION	12
The Special Meeting	12
The Transaction, Including the Stock Splits	18
DISCUSSION AND SPECIAL FACTORS	23
The Stock Splits and the Transaction	23
Purpose of and Reasons for the Stock Splits and the Transaction	23
Background of the Stock Splits to Effect the Transaction	25
Alternatives to the Stock Splits to Effect the Transaction	27
Effects of the Transaction (including the Stock Splits)	28
Reservation of Rights	34
Nasdaq; OTC Market	34
Fairness of the Stock Splits to Effect the Transaction	35
Material Federal Income Tax Consequences	37
Planned Management Structure Adjustments	41
Interests of Executive Officers, Directors and 10% Shareholders	42
Source of Funds and Expenses	44
Effective Time of Stock Splits and the Overall Transaction	45
Termination of Transaction	45
Payment for Fractional Shares	46
No Appraisal or Dissenters’ Rights	47

~~TABLE~~Escheat Laws	47
Regulatory Approvals	47
Litigation	47
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS	48
INFORMATION ABOUT THE COMPANY	49
Market Price of Common Stock	49
Dividends	49
Shareholders	49
The Filing Person	49
Stock Purchases by Filing Person	49
Directors and Executive Officers	50
SECURITY OWNERSHIP OF ~~CONTENTS~~CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	53
FINANCIAL INFORMATION	55
Summary Historical Financial Information	55
Pro Forma Consolidated Financial Statements (Unaudited)	57
PROPOSAL ONE: REVERSE STOCK SPLIT PROPOSAL	61
PROPOSAL TWO: FORWARD STOCK SPLIT PROPOSAL	62
PROPOSAL THREE: APPROVAL OF ADJOURNMENT OF THE SPECIAL MEETING TO THE EXTENT THERE ARE INSUFFICIENT VOTES AT THE SPECIAL MEETING TO APPROVE REVERSE STOCK SPLIT PROPOSAL OR FORWARD STOCK SPLIT PROPOSAL	63
WHERE YOU CAN FIND MORE INFORMATION	64
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE	65
SHAREHOLDER PROPOSALS	66

~~Proxy Statement – Summary~~ANNEX A	1A-1

~~Questions and Answers about the Proxy Materials and our Annual Meeting~~ANNEX B	3

~~ITEM 1 – ELECTION OF DIRECTORS~~B-1	8
~~Director Nominee Experience and Qualifications~~	8
~~2016 Nominees for Director~~	9
~~Skills and Qualifications of Board~~	12

~~CORPORATE GOVERNANCE AND BOARD MATTERS~~	13
~~Board Independence~~	13
~~Director Attendance at Meetings~~	13
~~Executive Sessions of the Board~~	14
~~Leadership Structure and Committee Composition~~	14
~~Audit Committee~~	14
~~Capital Management Committee~~	14
~~Compensation Committee~~	15
~~Nominating & Corporate Governance Committee~~	15
~~Annual Performance Evaluations~~	15
~~Review and Approval of Transactions with Related Persons~~	16
~~Risk Management~~	16
~~Communications with Safeguard’s Board~~	16
~~Process for Nominating Potential Director Candidates~~	16
~~Board Compensation~~	17
~~Director Compensation – 2015~~	18
~~Stock Ownership Guidelines~~	19

~~ITEM 2 – ADVISORY VOTE ON EXECUTIVE COMPENSATION~~	19

~~COMPENSATION DISCUSSION AND ANALYSIS~~	20
~~Executive Summary~~	20
~~2015 Business Highlights~~	20
~~Key 2015 Compensation Decisions~~	20
~~Effective Corporate Governance Principles~~	21
~~Compensation Philosophy and Objectives~~	22
~~Role of the Compensation Committee in Compensation Decisions~~	22
~~Role of Executive Officers in Compensation Decisions~~	23
~~Role of Consultant~~	23
~~Setting Executive Compensation~~	23
~~Outcome of the 2015 Say-on-Pay Vote and Shareholder Outreach~~	25
~~2015 Compensation Program~~	26
~~Severance and Change-in-Control Arrangements~~	35
~~Key Employee Compensation Recoupment Policy~~	35
~~Deductibility of Executive Compensation~~	35
~~Stock Ownership Guidelines~~	36
~~Prohibition on Speculation in Safeguard Stock~~	36

~~COMPENSATION COMMITTEE REPORT~~	36

~~EXECUTIVE COMPENSATION~~	37
~~Summary Compensation Table – Fiscal Years Ended December 31, 2015, 2014, and 2013~~	37
~~Grants of Plan-Based Awards – 2015~~	38
~~Outstanding Equity Awards at Fiscal Year-End – 2015~~	39
~~Option Exercises and Stock Vested – 2015~~	41
~~Nonqualified Deferred Compensation – 2015~~	41
~~Potential Payments upon Termination or Change in Control~~	42

~~ITEM 3 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~	45

~~AUDIT COMMITTEE REPORT~~	46

~~STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND OFFICERS~~	47

~~SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE~~	48

~~OTHER MATTERS~~	48
~~Expenses of Solicitation~~	48
~~Procedures for Submitting Shareholder Proposals~~	48
~~Additional Information~~	48
~~General~~	48

~~PROXY STATEMENT~~

~~FOR ANNUAL MEETING OF SHAREHOLDERS~~

~~Proxy Statement – Summary~~SAFEGUARD SCIENTIFICS, INC.

150 N. Radnor Chester Rd., Suite F-200

Radnor, PA 19087

PROXY STATEMENT FOR

SPECIAL MEETING OF SHAREHOLDERS

DECEMBER 15, 2023

___________

General Information

This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Safeguard Scientifics, Inc. (“Safeguard,” the “Company,” “we,” “us,” “our”) for the Special Meeting of Shareholders and any adjournments or postponements of the special meeting, for the purpose of considering and acting upon the matters specified in the Notice of Special Meeting of Shareholders and in this proxy statement. The following summary highlights information contained elsewhere in this ~~Proxy Statement~~proxy statement but does not contain all of the information you should consider. You should read the entire ~~Proxy Statement~~proxy statement carefully before voting.

~~General Information~~
*Meeting:*	~~Annual~~Special Meeting of Shareholders to

*Meeting Location:*	To be held virtually via live webcast at ~~www.virtualshareholdermeeting.com/SFE2016~~ at: meetnow.global/MF922F5

*Time and Date:*	8:9:00 a.m. ETEastern Time on ~~May 18, 2016~~December 15, 2023

*Record Date:*	~~March 18, 2016~~October 24, 2023

*Shares of Common Stock Outstanding as of* *Record Date:*	~~20,153,184~~16,575,618

*Stock Exchange ~~/Stock~~/ Stock Symbol:*	~~NYSE:~~The NASDAQ Stock Market, LLC / SFE

*Registrar &Transfer Agent:*	Computershare Trust Company, N.A. / 1-800-736-3001 ~~/ https://www-us.computershare.com/~~
	www.computershare.com/investor

*State /Year of Incorporation:*	Pennsylvania / 1953

*Website:*	www.safeguard.com

Notice and Access Availability of Proxy Materials
On or about ~~April 6, 2016,~~November 2, 2023, we will furnish this proxy statement and related proxy materials over the Internet to our shareholders under the notice and access rules of the Securities and Exchange Commission (“SEC”). Most of our shareholders will receive a Notice Regarding the Availability of Proxy Materials (the “Notice”) in the mail or electronically instead of a paper copy of this proxy statement, a proxy card or voting instruction ~~form, and our 2015 annual report on Form 10-K.~~form. The Notice contains instructions on how to access our proxy materials and vote over the Internet and how shareholders can receive a paper copy of the materials, including this proxy statement, a proxy card or voting instruction ~~form, and our 2015 annual report on Form 10-K.~~form. The Notice is not itself a proxy card and should not be returned with voting instructions. Shareholders who do not receive athe Notice, including shareholders who have previously requested to receive paper copies of proxy materials, will receive a paper copy of the proxy materials by mail. Shareholders who have previously requested delivery of proxy materials electronically will not receive athe Notice and will instead receive an electronic notification with instructions for accessing the proxy materials.
~~Items~~Proposals to be Voted On
*Proposal*	*Board Recommendation*
1. ~~Election~~Adoption of ~~seven directors~~the Articles of Amendment to our Second Amended and Restated Articles of Incorporation, as amended (the “articles of incorporation”), to effect a reverse stock split (the “Reverse Stock Split”) of our common stock at a ratio not less than 1-for-50 and not greater than 1-for-100 (the “Reverse Stock Split Ratio”), with the exact Reverse Stock Split Ratio to be set within the foregoing range at the discretion of our Board, without further approval or authorization of our shareholders and with our Board, in its sole discretion, able to effect the Reverse Stock Split immediately following the public announcement of the Reverse Stock Split Ratio or to elect not to effect the Reverse Stock Split (whether or not authorized by the shareholders) or to abandon the Transaction (as defined below) at any time (the “Reverse Stock Split Proposal”).	“FOR~~all nominees~~” the Reverse Stock Split Proposal
2. ~~Advisory vote~~Adoption of the Articles of Amendment to our articles of incorporation to effect, immediately after the Reverse Stock Split, a forward stock split (the “Forward Stock Split” and together with the Reverse Stock Split, the “Stock Splits”) of our common stock at a ratio not less than 50-for-1 and not greater than 100-for-1 (the “Forward Stock Split Ratio” and, together with the Reverse Stock Split Ratio, the “Stock Split Ratios”), with the exact Forward Stock Split Ratio to be set within the foregoing range at the discretion of our Board, without further approval or authorization of our shareholders and with our Board, in its sole discretion, able to effect the Forward Stock Split immediately following the public announcement of the Forward Stock Split Ratio or to elect not to effect the Forward Stock Split (whether or not authorized by the shareholders) or to abandon the Transaction at any time (the “Forward Stock Split Proposal” and together with the Reverse Stock Split Proposal, the “Stock Split Proposals”).	“FOR” the Forward Stock Split Proposal
As a result of the Stock Splits: ·      a shareholder of record owning fewer than a minimum number of shares, which, depending on the Stock Split Ratios chosen by the Board, would be between 50 and 100 (the “Minimum Number”) immediately prior to the effective time of the Reverse Stock Split (the “effective time”) will only be entitled to a fraction of a share of common stock upon the Reverse Stock Split and will be paid cash in lieu of such fraction of a share of common stock, on the basis of $1.65, without interest, for each share of common stock held by such holder immediately prior to the effective time; and ·      a shareholder of record owning at least the Minimum Number of shares immediately prior to the effective time will not be paid cash in lieu of any fraction of a share of common stock such holder may be entitled to receive upon the Reverse Stock Split and, upon the Forward Stock Split, the shares of common stock (including any fraction of a share of common stock) held by such holder after the Reverse Stock Split will be reclassified into the same number of shares of common stock as such holder held immediately prior to the Reverse Stock Split. Copies of the proposed form of amendments to our articles of incorporation are attached as Annex A and Annex B to the accompanying proxy statement. The primary purpose of the Stock Splits is to enable Safeguard to reduce the number of record holders of its common stock below 300, which is the level at or above which we are required to file public reports with the SEC. The Board will consider various factors in determining the Stock Split Ratios; however, we believe that any Reverse Stock Split Ratio within the proposed range would reduce the number of record holders below 300. The Stock Splits are being undertaken as part of our plan to suspend Safeguard’s duty to file periodic and current reports and other information with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As described in this proxy statement, the Board has determined that the costs of being a public reporting company outweigh the benefits thereof. The actions we would take to suspend, and events that occur as a result of such actions that would have the effect of suspending, our reporting obligations under the Exchange Act, also referred to as the “going dark” transaction, including effectuating the Stock Splits, delisting our common stock from trading on The Nasdaq Stock Market LLC (“Nasdaq”), terminating the registration of our common stock under Sections 12(b) and 12(g) of the Exchange Act and suspending of our reporting obligations under Section 15(d) of the Exchange Act, are collectively referred to herein as the “Transaction.”
3. Approval of the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the Reverse Stock Split Proposal or the Forward Stock Split Proposal (the “Adjournment Proposal”).	“FOR” the Adjournment Proposal

Although both the Reverse Stock Split and the Forward Stock Split will be voted on separately, we will not effect either the Reverse Stock Split or the Forward Stock Split unless the Reverse Stock Split Proposal and the Forward Stock Split Proposal are each approved by shareholders. Additionally, even if approved by the shareholders, the Board, in its discretion, may determine not to proceed with the Stock Splits or the Transaction.

Upon giving effect to the Transaction, we will no longer be subject to the reporting requirements under the Exchange Act or other requirements applicable to a public company, including requirements under the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”), as well as the listing standards of any national securities exchange. We anticipate annual cost savings of approximately $1.5 million in cash and a reduction in annual stock based compensation of approximately $1.2 million after effecting the Transaction and related adjustments to our management structure described below, primarily as a result of a potential reduction in: (i) professional fees of accountants associated with the audit process, (ii) insurance premiums for our directors’ and officers’ liability insurance, (iii) Board and employee related expenses, as well as (iv) legal, printing, and other miscellaneous costs associated with being a publicly traded company. Please note, however, that these projected annual cost savings and reduction in stock based compensation are only estimates and our savings and reduction in stock based compensation could be higher or lower than $1.5 million and $1.2 million, respectively. See “Cautionary Statement Regarding Forward-Looking Statements.”

We plan to adjust our existing management structure in connection with the Transaction by reducing the size of the Board to two members and reorganizing our management to primarily use an external service provider, with our current executive officers and employees expected to provide limited consulting services to Safeguard on an as-needed basis, on the terms and schedule to be approved by the Board, at its discretion, depending on the timing of the Transaction. If shareholders approve the Stock Split Proposals and we proceed with the Transaction, the size of the Board is expected to be reduced to two members from the current governance structure of Safeguard, to be determined by the Board upon the filing of our Annual Report on Form 10-K for the fiscal year ending December 31, 2023, and there will be no standing committees of the Board. Each of such two directors is expected to serve on the Board for a term expiring at the 2024 annual meeting of shareholders and until such director’s successor is duly elected and qualified. In addition, starting from January 1, 2024, Eric Salzman, our current Chief Executive Officer, will no longer serve as our Chief Executive Officer and is expected to provide certain consulting services to Safeguard, on an as-needed basis, on the terms and schedule to be approved by the Board, at its discretion, depending on the timing of the Transaction. In addition, if shareholders approve the Stock Split Proposals and we proceed with the Transaction, starting from January 1, 2024, we expect to begin transitioning Safeguard’s general and administrative functions, including, but not limited to, overseeing the remaining ownership interests, monitoring any continued escrow amounts due to Safeguard and other contractual arrangements, maintaining Safeguard’s books and records, overseeing the process of shareholder distributions when and if proceeds from the monetization of our ownership interests are available and maintaining quarterly and annual shareholder communications, to an external management service provider to be selected by the Board, with our remaining officers and employees no longer maintaining their current positions, but instead providing consulting services to Safeguard, on an as-needed basis, on the terms and schedule to be approved by the Board, at its discretion, depending on the timing of the Transaction.

Any trading in our common stock after giving effect to the Transaction would only occur in privately negotiated sales and potentially on an over-the-counter market (an “OTC market”), if one or more brokers chooses to make a market for our common stock on any such market and complies with applicable regulatory requirements; however, there can be no assurances regarding any such trading.

SUMMARY TERM SHEET

The following summary term sheet, together with the Questions and Answers section that follows, highlights certain information about the Stock Splits and other aspects of the Transaction, but may not contain all of the information that is important to you. For a more complete description of the Stock Splits and other aspects of the Transaction, we urge you to carefully read this proxy statement and all of its annexes before you vote. For your convenience, we have directed your attention to the location in this proxy statement where you can find a more complete discussion of the items listed below.

The Stock Splits and the Transaction

	·	Our Board, comprised solely of independent directors, unanimously approved, subject to shareholder approval and subsequent final approval of the exact Stock Split Ratios by the Board in its discretion, the Transaction, including articles of amendment to our articles of incorporation to effect the Stock Splits as part of the plan to suspend our duty to file periodic and current reports and other information with the SEC under the Exchange Act and to delist our common stock from Nasdaq. The actions we would take to suspend, and events that occur as a result of such actions that would have the effect of suspending, our reporting obligations under the Exchange Act, also referred to as the “going dark” transaction, including effectuating the Stock Splits, delisting our common stock from trading on Nasdaq, terminating the registration of our ~~named executive officers~~	~~FOR~~common stock under Sections 12(b) and 12(g) of the ~~advisory resolutionapproving the compensation~~Exchange Act and suspending of our ~~named executive officers~~
~~3. Ratification~~reporting obligations under Section 15(d) of the ~~appointment of KPMG LLP~~Exchange Act, are collectively referred to as ~~our independent registered public accounting firm for 2016~~		~~FOR~~~~ratification of~~ the ~~appointment of KPMG LLP~~
			“Transaction”.

~~Corporate Governance~~
*~~Board Meetings~~·*	The Stock Splits will be at a ratio (i) not less than 1-for-50 and not greater than 1-for-100, in ~~2015:~~	5
*~~Standing Board Committees (meetings~~the case of the Reverse Stock Split, and (ii) not less than 50-for-1 and not greater than 100-for-1, in ~~2015):~~*
~~Audit – 4~~ ~~Compensation – 5~~			~~Capital Management (“CMC”) – 8~~ ~~Nominating & Corporate Governance (“N&CG”) – 2~~
*~~Separate Chairman & CEO:~~*			~~Yes (independent non-executive chairman)~~
*~~Staggered Board:~~*			~~No (all directors are elected annually)~~
*~~Shareholder Rights Plan:~~*			No
*~~Director and Officer Share~~* *~~Ownership Guidelines:~~*			~~Yes~~
*~~Hedging and Short Sale Policy:~~*			~~Yes~~
*~~Key Employee Compensation~~* *~~Recoupment Policy:~~*			~~Yes~~
~~2015 Business Highlights~~
· ~~We deployed $51.6 million~~the case of ~~capital into eight new partner companies and deployed an additional $33.3 million~~the Forward Stock Split, with the exact Stock Split Ratios to ~~support~~be set within the ~~growth of 12 partner companies in which we already had an interest~~foregoing ranges at the ~~end~~discretion of ~~2014.~~our Board (and, in all cases, with the Forward Stock Split Ratio being the inverse of the Reverse Stock Split Ratio), without further approval or authorization of our shareholders and with our Board, in its sole discretion, able to effect the Stock Splits immediately following the public announcement of the Stock Split Ratios or to elect to abandon the proposed Stock Splits or the overall Transaction (whether or not authorized by the shareholders) at any time.

Shareholders of record owning fewer than the Minimum Number of shares of common stock immediately prior to the effective time of the Reverse Stock Split, whom we refer to as the “Cashed Out Shareholders,” and who will only be entitled to a fraction of a share of common stock upon the effectiveness of the Reverse Stock Split, will be paid cash, in lieu of such fraction of a share of common stock, on the basis of $1.65, without interest, for each share of common stock held immediately prior to the effective time of the Reverse Stock Split, and they will no longer be shareholders of Safeguard.

Shareholders of record who own at least the Minimum Number of shares common stock immediately prior to the effective time of the Reverse Stock Split, whom we refer to as the “Continuing Shareholders,” will not receive any cash for their fractional share interests resulting from the Reverse Stock Split, if any. The Forward Stock Split that will immediately follow the Reverse Stock Split will reclassify whole shares and fractional shares held by the Continuing Shareholders after the Reverse Stock Split back into the same number of shares of common stock they held immediately before the effective time. As a result, the total number of shares of common stock held by a Continuing Shareholder will not change, but their ownership percentage will increase.

Although amendments to our articles of incorporation to effect each of the Reverse Stock Split and the Forward Stock Split will be voted on separately, we will not effect either the Reverse Stock Split or the Forward Stock Split unless the proposals to approve both amendments are each approved by shareholders. Even if the proposals are approved by our shareholders, the Board may still determine that it is no longer in the best interests of Safeguard or our shareholders to proceed with the Stock Splits or the Transaction.

See “Discussion and Special Factors—Effects of the Transaction (including the Stock Splits)” beginning on page 28 and “—Fairness of the Stock Splits to Effect the Transaction” beginning on page 35.

Purpose of and Reasons for the Stock Splits and the Transaction

The primary purpose of the Stock Splits is to enable Safeguard to reduce the number of record holders of its common stock below 300, which is the level at or above which Safeguard is required to file public reports with the SEC. If the Board determines to proceed with the Transaction, it will determine the Stock Split Ratios after the special meeting, however Safeguard believes that any Reverse Stock Split ratio within the proposed range would reduce the number of record holders below 300. The Stock Splits are being undertaken as part of the plan to suspend our duty to file periodic and current reports and other information with the SEC under the Exchange Act. After giving effect to the Transaction, we will no longer be subject to the reporting requirements under the Exchange Act or other requirements applicable to a public company, including requirements under the Sarbanes-Oxley Act and the listing standards of any national securities exchange. Any trading in our common stock after giving effect to the Transaction would only occur in privately negotiated sales and potentially on an OTC market, if one or more brokers chooses to make a market for our common stock on any such market and complies with applicable regulatory requirements; however, there can be no assurances regarding any such trading.

The Board has determined that the costs of being a public reporting company outweigh the benefits thereof and, thus, it is no longer in the best interests of our shareholders, including our unaffiliated shareholders (consisting of shareholders other than our executive officers, directors and shareholders who beneficially own more than 10% of our outstanding common stock, which we refer to as “10% shareholders”), for us to remain a public reporting company. The Stock Splits, along with the other actions constituting the Transaction, are intended to make us a non-SEC reporting company.

Our principal reasons for the Transaction (including the proposed Stock Splits) are as follows:

·      ~~We had 29 partner companies at~~ The low volume of trading limits our common stock’s liquidity. This affects our ability to raise capital from the ~~end~~public markets, effectively use our common stock as transaction consideration, attract interest from institutional investors or market analysts and otherwise enjoy the traditional benefits of ~~2015, compared to 24 at~~being a publicly traded company. Despite the ~~end~~lack of ~~2014.~~
·      ~~Our partner companies grew revenues by 25%, and the majority of our partner companies performed at or above plan on other key metrics.~~
·      We realized approximately $25 million in aggregate proceeds (excluding additional escrowed funds of $2.3 million) related to (i) two 2015 partner company exits (DriveFactor and Quantia) and (ii) prior years’ exit activity (ThingWorx, Crescendo Bioscience and Alverix). In addition,these benefits, we ~~have an earn-out related to our ThingWorx exit still pending, and Teva, the buyer of NuPathe, began its active marketing~~incur all of the ~~NuPathe Zecuity product in 2015, which action triggers~~significant annual expenses and indirect costs associated with being a public company.

We incur both direct and indirect costs to comply with the ~~measurement period~~filing and reporting requirements imposed on ~~which our earn-out related to the transaction depends.~~

· ~~We repurchased~~us as a result of being an ~~aggregate of approximately 300,000~~SEC reporting company with shares of our common ~~stock.~~stock listed on Nasdaq. We believe the level of expenditures required to maintain our public company status has become too burdensome in light of our strategy to monetize our remaining ownership interests, continue to reduce our operating costs, and return the maximum value to our shareholders. Our general and administrative expenses consist primarily of employee compensation, stock based compensation, insurance, and professional services. For the year ended December 31, 2022 and nine months ended September 30, 2023, we incurred approximately $4.8 million and $3.7 million, respectively, of general and administrative expenses to oversee the monetization of our individual ownership interests. We believe the remaining ownership interests could require up to two years, or longer, to be monetized. Upon giving effect to the Transaction, we will no longer be subject to the reporting requirements under the Exchange Act or other requirements applicable to a public company, including requirements under the Sarbanes-Oxley Act of 2002, as well as the listing standards of any national securities exchange. We anticipate annual cost savings of approximately $1.5 million in cash and a reduction in annual stock based compensation of approximately $1.2 million after effecting the Transaction and related adjustments to our management structure, primarily as a result of a potential reduction in: (i) professional fees of accountants associated with the audit process, (ii) insurance premiums for our directors’ and officers’ liability insurance, (iii) Board and employee related expenses, as well as (iv) legal, printing, and other miscellaneous costs associated with being a publicly traded company. We believe that these annual cost savings and a reduction in annual stock based compensation will result in a significant reduction in our operating costs. See “Financial Information—Pro Forma Consolidated Financial Statements (Unaudited)” for a discussion of the potential impact of effecting the Transaction and implementing related adjustments to our management structure. Please note, however, that these projected annual cost savings and reduction in stock based compensation are only estimates and our savings and reduction in stock based compensation could be higher or lower than $1.5 million and $1.2 million, respectively. See “Cautionary Statement Regarding Forward-Looking Statements.”

Our shareholders of record holding fewer than the Minimum Number of shares of common stock, who represent a disproportionately large number of our record holders (but only approximately 0.035% and 0.016% of our outstanding shares, in the case of shareholders of record holding fewer than 100 shares and 50 shares, respectively, as of the record date) will receive a premium in cash over market prices prevailing at the time of our public announcement of the Transaction, without incurring brokerage commissions.

See “Discussion and Special Factors—Purpose of and Reasons for the Stock Splits and the Transaction” beginning on page 23.

Effects of the Transaction (including the Stock Splits)

As a result of the Transaction (including the Stock Splits):

We expect to reduce the number of our shareholders of record below 300, which, after taking additional steps and the occurrence of certain events described in this proxy statement, will allow us to cease the registration of our shares of common stock under the Exchange Act. Furthermore, after giving effect to the Transaction and as necessary to maintain Safeguard’s suspension of its SEC reporting obligations, we reserve the right to take additional actions that may be permitted under Pennsylvania law, including effectuating further reverse stock splits.

~~Director Nominees (7)~~

~~Board Committees~~·

We will no longer be subject to any reporting requirements under the Exchange Act or those required by the listing standards of a national securities exchange, the provisions of the Sarbanes-Oxley Act or the rules of the SEC applicable to SEC reporting companies. We will, therefore, cease to file annual, quarterly, current, and other reports and documents with the SEC.

~~Name~~

~~Director~~

~~Since~~

~~Inde-~~Our officers, directors and 10% shareholders will no longer be subject to the reporting requirements of Section 16 of the Exchange Act or be subject to the prohibitions against retaining short-swing profits in our shares of common stock. Persons acquiring 5% of our common stock will no longer be required to report their beneficial ownership under the Exchange Act.

~~pendent~~

~~Position~~

We will have no ability to access the public capital markets or to use public securities in attracting and retaining executives and other employees, and we will have a decreased ability to use stock to acquire other companies.

~~Audit~~

~~CMC~~

Our shares of common stock will cease to be listed on Nasdaq and we do not intend to list them on any other national securities exchange. Any trading in our common stock after the Transaction and deregistration under the Exchange Act will only occur in privately negotiated sales and potentially on an OTC market, if one or more brokers chooses to make a market for our common stock on any such market and complies with applicable regulatory requirements; however, there can be no assurances regarding any such trading.

~~Comp~~

~~N&CG~~

Shareholders of record holding fewer than the Minimum Number of shares of our common stock immediately prior to the effective time of the Reverse Stock Split, who will only be entitled to a fraction of a share of common stock upon the Reverse Stock Split, will be paid cash in lieu of such fraction of a share of common stock on the basis of $1.65, without interest (the “Cash Payment”), for each share of our common stock they hold immediately prior to the effective time of the Reverse Stock Split, will no longer have any ownership interest in us, and will cease to participate in potential appreciation in the value of our common stock or our future distributions to shareholders, if any.

~~Mara G. Aspinall~~

~~2014~~·

*Shareholders of record holding at least the Minimum Number of shares of our common stock immediately prior to the effective time of the Reverse Stock Split will not receive any payment for any fractional share of common stock they receive as a result of the Reverse Stock Split and, immediately following the Stock Splits, will continue to hold the same number of shares as before the Stock Splits.

~~Former President~~·

Options evidencing rights to purchase shares of our common stock would be unaffected by the Transaction because such options will, after the Transaction, be exercisable into the same number of shares of our common stock as they were before the Transaction.

Restricted stock or restricted stock unit grants would be unaffected by the Transaction because such restricted stock or restricted stock unit grants will, after the Transaction, represent the right, upon vesting, to receive the same number of shares of our common stock as they were before the Transaction.

Since our obligation to file periodic and ~~CEO, Ventana Medical Systems~~other reports with the SEC will be suspended after giving effect to the Transaction, we will no longer be required to publicly file audited financial statements, information about executive compensation and ~~Global Head~~other information about us and our business, operations and financial performance. We intend to continue to prepare quarterly business updates and audited annual financial statements. While we currently intend to make such financial information available to our shareholders on a voluntary basis after giving effect to the Transaction, we are not required to do so by law and there is no assurance that even if we do make such information available immediately after giving effect to the Transaction that we would continue to do so in the future. Nonetheless, Continuing Shareholders will have significantly less information about Safeguard and our business, operations, and financial performance than they have currently. We will continue to hold shareholder meetings as required under Pennsylvania law, including annual meetings, or to take actions by written consent of ~~Roche Tissue Diagnostics~~our shareholders in lieu of meetings as permitted under and in conformity with applicable Pennsylvania law.

ü·

üAt the effective time of the Stock Splits, the ownership percentage of our shares of common stock held by those of our directors, executive officers and 10% shareholders who will be Continuing Shareholders (see “Discussion and Special Factors—Interests of Executive Officers, Directors, and 10% Shareholders” beginning on page 42) is expected to increase at the same rate as the ownership percentage of all the other Continuing Shareholders, as a result of the reduction of the number of shares of common stock outstanding. However, the ownership percentage and the reduction in the number of shares outstanding following the Stock Splits may increase or decrease depending on purchases, sales and other transfers of our shares of common stock by our shareholders prior to the effective time of the Stock Splits and the number of “street name” shares that are actually cashed out in the Stock Splits.

	·	ü
~~Julie A. Dobson~~	~~2003~~	*	~~Former COO, Telecorp PCS, Inc.~~		ü	ü	ü
~~Stephen Fisher~~	~~2015~~	*	~~Senior Vice President~~There will be no differences between the respective rights, such as dividend, voting, liquidation or other rights, preferences or limitations of our common stock prior to the Stock Splits and ~~Chief Technology Officer, eBay Inc.~~	ü	ü	ü
~~George MacKenzie~~	~~2003~~	*	~~Retired Vice Chairman and CFO, Hercules, Incorporated~~	ü		ü	ü
~~John J. Roberts~~	~~2003~~	*	~~Retired Global Managing Partner, PricewaterhouseCoopers LLP~~	ü		ü	ü
~~Robert J. Rosenthal~~	~~2007~~	*	~~CEO and director, Taconic Biosciences, Inc.~~	ü	ü	ü
~~Stephen T. Zarrilli~~	~~2012~~		~~President and CEO, Safeguard Scientifics, Inc.~~		ü
~~Retiring Directors (2)~~				~~Board Committees~~
*~~Name~~*	*~~Director~~* *~~Since~~*	*~~Inde-~~* *~~pendent~~*	*~~Position~~*	*~~Audit~~*	*~~CMC~~*	*~~Comp~~*	*~~N&CG~~*
~~Andrew E. Lietz~~	~~2003~~	*	~~Retired Founder and Managing Director, Rye Capital Management~~
~~Jack L. Messman~~	~~1994~~	*	~~Former Chairman and CEO, Novell, Inc.~~		ü		ü
							our common stock after the Stock Splits.

See “Discussion and Special Factors—Effects of the Transaction (including the Stock Splits)” beginning on page 28, “Discussion and Special Factors—Fairness of the Stock Splits to Effect the Transaction” beginning on page 35, and “Discussion and Special Factors—Interests of Executive Officers, Directors, and 10% Shareholders” beginning on page 42.

Board of Directors Recommendations Regarding the Transaction

The Board considered whether the Transaction, including the Stock Splits, was in the best interests of our shareholders, including our unaffiliated shareholders. In that regard, the Board considered the purposes of and certain alternatives to the Stock Splits as a method to achieve the Transaction (see “Discussion and Special Factors—Alternatives to the Stock Splits to Effect the Transaction” beginning on page 27), the related advantages and disadvantages to our unaffiliated shareholders of the Stock Splits and the overall Transaction, and the fairness of the terms of the Stock Splits both to unaffiliated Cashed Out Shareholders and to unaffiliated Continuing Shareholders. On September 30, 2023, the Board determined (by unanimous vote) that the overall Transaction, including the specific terms of the Stock Splits, is fair to, and in the best interests of, our shareholders, including all unaffiliated shareholders of Safeguard, and approved effecting the Transaction via the Stock Splits.

The Board consists of Ross D. DeMont, Russell D. Glass, Joseph M. Manko, Jr. and Beth S. Michelson. Each of such directors also serves as a member of the Audit Committee of the Board, is independent within the meaning of Nasdaq listing standards and Rule 10A-3(b) of the Exchange Act and satisfies the categorical independence standards contained in our Corporate Governance Guidelines.

See “Discussion and Special Factors—Fairness of the Stock Splits to Effect the Transaction” beginning on page 35.

Reservation of Rights

Following the special meeting, the Board will need to evaluate updated ownership data impacting the various Stock Split Ratios so that it can determine the aggregate costs of the Stock Splits within the range of Stock Split Ratios before choosing a Stock Split Ratio. Depending on the number of shareholders of record owning fewer than the Minimum Number of shares, the Board may abandon the Stock Splits if the Stock Splits become too costly. The Board may also abandon the overall Transaction at any time (even if the Stock Splits are effected) if the Board believes that it is no longer in the best interests of Safeguard or its shareholders.

Subject to the Board’s ability to abandon the proposed Stock Splits and the overall Transaction, the Board intends to determine the Stock Split Ratios and effect the Stock Splits as soon as reasonably practicable after the Stock Splits are approved by our shareholders. Furthermore, after giving effect to the Transaction and as necessary to maintain our suspension of its SEC reporting obligations, Safeguard reserves the right to take additional actions that may be permitted under Pennsylvania law, including effectuating further reverse stock splits.

See “Discussion and Special Factors—Background of the Stock Splits to Effect the Transaction” beginning on page 25, “Discussion and Special Factors—Fairness of the Stock Splits to Effect the Transaction” beginning on page 35, and “Discussion and Special Factors—Termination of Transaction” beginning on page 45.

~~Questions~~Fairness of the Stock Splits to Effect the Transaction

The Board fully considered and ~~Answers about~~reviewed the ~~Proxy Materials~~terms, purpose, effects, disadvantages and alternatives to the Stock Splits to effect the Transaction, and determined (by unanimous vote) that the Transaction taken as a whole, including the specific terms of the Stock Splits, is procedurally and substantively fair to, and in the best interests of, the unaffiliated Cashed Out Shareholders as well as the unaffiliated Continuing Shareholders.

The Board considered a number of factors in reaching its determination, noting in particular, in addition to the factors listed below in “Discussion and Special Factors—Fairness of the Stock Splits to Effect the Transaction” beginning on page 35 that:

the limited trading volume and liquidity of our shares of common stock and the effect of enabling our smallest shareholders of record (those holding fewer than the Minimum Number of shares), who represent a disproportionately large number of our record holders (but only approximately 0.035% and 0.016% of our outstanding shares in the case of shareholders of record holding fewer than 100 shares and 50 shares, respectively, as of the record date), to receive a premium in cash over market prices prevailing at the time of our public announcement of the Transaction, without incurring brokerage commissions.

the small effect of the proposed transaction on the relative voting power of Continuing Shareholders;

our business is expected to continue following the Transaction (including the Stock Splits) substantially as presently conducted, but our management structure will be adjusted to provide potential additional cost savings for Safeguard, as discussed in this proxy statement;

our affiliated shareholders, including our directors and executive officers and 10% shareholders, will be treated, in connection with the Stock Splits, no differently than unaffiliated shareholders, including unaffiliated Cashed Out Shareholders and unaffiliated Continuing Shareholders; and

financial analyses reviewed by the Board in connection with the Board’s evaluation of the Stock Splits, including the Cash Payment.

See “Discussion and Special Factors—Fairness of the Stock Splits to Effect the Transaction” beginning on page 35.

Interests of Executive Officers, Directors, and 10% Shareholders

Upon the effectiveness of the Stock Splits, the aggregate number of shares of our common stock owned by our directors, executive officers and 10% shareholders will not increase. The ownership percentage of our shares of common stock held by those of our directors, executive officers and 10% shareholders who will be Continuing Shareholders is expected to increase at the same rate as the ownership percentage of all the other Continuing Shareholders, as a result of the reduction of the number of shares of common stock outstanding. However, the ownership percentage and the reduction in the number of shares outstanding following the Stock Splits may increase or decrease depending on purchases, sales and other transfers of our shares of common stock by our shareholders prior to the effective time of the Stock Splits and the number of “street name” shares that are actually cashed out in the Stock Splits.

See “Discussion and Special Factors—Interests of Executive Officers, Directors, and 10% Shareholders” beginning on page 42 and “Discussion and Special Factors—Planned Management Structure Adjustments” beginning on page 41.

Vote Required for Approval of the Stock Splits and the Adjournment Proposal at the Special Meeting

The presence of the holders of a majority of the issued and outstanding shares of our common stock entitled to vote at the special meeting, present in person or represented by proxy, will constitute a quorum for the purposes of the special meeting. Abstentions are treated as present at our special meeting for purposes of establishing a quorum, but “non-votes” will not be counted as present for purposes of determining whether a quorum is present at the special meeting. If your shares are held in “street name” by your broker, bank or other nominee, you should instruct your broker, bank or other nominee how to vote your shares using the instructions provided by your broker, bank or other nominee. If you have not received such voting instructions or require further information regarding such voting instructions, we encourage you to promptly contact your broker, bank or other nominee to obtain information on how to vote your shares.

Your broker, bank or other nominee will not vote your shares on any of the proposals at the special meeting without instruction from you because they are not allowed to exercise their voting discretion with respect to any proposals that are considered non-routine. All proposals at this special meeting are non-routine, and, if you hold your shares in “street name” and do not provide your broker, bank or other nominee with specific instructions regarding how to vote on any proposal, your broker, bank or other nominee will not be permitted to vote your shares on any proposal at the special meeting, resulting in a “non-vote” for each proposal. Please note that if you want your vote to be counted on the Stock Splits and the Adjournment Proposal, you must instruct your bank, broker or other nominee how to vote your shares. If you do not provide voting instructions, no votes will be cast on your behalf with respect to those proposals.

In the event a quorum is not present at the special meeting and such meeting is adjourned to a later date at least fifteen days after the initial date of the special meeting, then those shareholders who attend the adjourned meeting shall nevertheless constitute a quorum for the purpose of acting upon the matters to be considered.

The affirmative vote of a majority of the votes cast by all shareholders entitled to vote thereon is required for the approval of the Reverse Stock Split Proposal, the Forward Stock Split Proposal and the Adjournment Proposal.

Abstentions will not be counted for the purpose of determining the number of votes cast at the special meeting and will have no effect on the outcome of such vote.

As of the record date, approximately 9.7% and 12.6% of the issued and outstanding shares of our common stock was held, directly or indirectly, by our directors and executive officers and 10% shareholders, respectively. Our directors and executive officers have indicated that they intend to vote all of the shares of our common stock held by them “FOR” the Stock Split Proposals and “FOR” the Adjournment Proposal.

Treatment of Beneficial Holders (Shareholders Holding Shares in “Street Name”)

If you hold fewer than the Minimum Number of shares of our common stock in “street name”, your broker, bank or other nominee is considered the shareholder of record with respect to those shares and not you. You are considered the beneficial owner of these shares. Pursuant to the SEC rules and regulations, we intend to treat each bank, broker or other nominee as one shareholder of record. These banks, brokers and other nominees may have different procedures for processing the Stock Splits. It is possible that the bank, broker or other nominee also holds shares for other beneficial owners of our common stock and that it may hold at least the Minimum Number, or more than the Minimum Number, of shares of our common stock in the aggregate. Therefore, depending upon their procedures, your bank, broker or other nominee may not be obligated to treat the Reverse Stock Split or the Forward Stock Split as affecting beneficial owners’ shares.

If you hold an account with fewer than the Minimum Number of shares of our common stock in “street name” and want to ensure that your shares are cashed out, we encourage you to promptly contact your bank, broker or other nominee to change the manner in which your shares are held from “street name” into a record holder account in your own name so that you will be a record owner of the shares and could receive the Cash Payment for your fractional shares.

See “Discussion and Special Factors—Effects of the Transaction (including the Stock Splits)” beginning on page 28.

Determination of Shareholders of Record

In determining whether the number of our shareholders of record of our common stock is below 300 for regulatory purposes, we will count shareholders of record in accordance with Rule 12g5-1 under the Exchange Act. Rule 12g5-1 provides, with certain exceptions, that in determining whether issuers, including Safeguard, are subject to the registration provisions of the Exchange Act, securities are considered to be “held of record” by each person who is identified as the owner of such securities on the respective records of security holders maintained by or on behalf of the issuers. However, institutional custodians such as Cede & Co. and other commercial depositories are not considered a single holder of record for purposes of these provisions. Rather, Cede & Co.’s and these depositories’ accounts are treated as the record holder of shares. Based on information available to us, as of the record date, there were approximately 388 holders of record of shares of common stock (with 295 registered and 93 through the Depository Trust Company (“DTC”)).

See “Discussion and Special Factors—Effects of the Transaction (including the Stock Splits)” beginning on page 28.

Effectiveness of the Stock Splits

We anticipate that the Stock Splits will be effected as soon as reasonably practicable after the date of the special meeting, although the Board has reserved the right not to proceed with the Stock Splits or any other actions with respect to the Transaction if it believes it is no longer in the best interests of our shareholders. Following the special meeting, the Board will need to evaluate updated ownership data impacting the various Stock Split Ratios so that it can determine the aggregate costs of the Stock Splits within the range of Stock Split Ratios before choosing a Stock Split Ratio. Depending on the number of shareholders owning fewer than the Minimum Number of shares, the Board may abandon the Stock Splits if the Stock Splits become too costly. The Board may also determine to abandon the overall Transaction.

Some of our shareholders of record hold their shares in book-entry form, which means that those shareholders do not have stock certificates evidencing their ownership of common stock. Accordingly, each such Cashed Out Shareholder will receive a check by mail at such Cashed Out Shareholder’s registered address as soon as practicable after the effective time. By signing and cashing this check, the Cashed Out Shareholder will warrant that the Cashed Out Shareholder owns the shares for which the cash payment was received.

Certain of our shares of common stock are held in certificated form. Cashed Out Shareholders of record who hold shares of our common stock in certificated form will be sent a transmittal letter by the transfer agent after the effective time of the Reverse Stock Split that will contain the necessary materials and instructions on how such shareholder should surrender his, her or its certificates, if any, representing shares of our common stock to the transfer agent and receive the cash payments. Please do not turn in your stock certificates at this time.

See “Discussion and Special Factors—Effective Time of Stock Splits and the Overall Transaction” on page 45.

Financing for the Transaction

Since we do not know how many record holders of our common stock will be Cashed Out Shareholders, we do not know the exact cost of the Stock Splits. However, based on information that we have received as of the record date from our transfer agent, as well our estimates of other expenses relating to the Stock Splits and the overall Transaction, we believe that the total cash requirement of the Stock Splits and overall Transaction is approximately $1.2 million, if the Minimum Number were 75, which is the approximate midpoint within the proposed range of Stock Split Ratios. This amount includes approximately $10,000, if the Minimum Number is 75, needed to cash out fractional shares as a result of the Stock Splits, and approximately $1.2 million of legal, accounting, severance and other costs to effect the Transaction. However, this total amount, which is for illustrative purposes only, could be larger or smaller depending on, among other things, the Reverse Stock Split Ratio the Board chooses, the number of persons owning fewer than the Minimum Number immediately prior to the effective time and the number of fractional shares that will be outstanding after the Stock Splits as a result of purchases, sales and other transfers of our shares of common stock by our shareholders. If the Board determines that the total cash requirement of the Transaction is prohibitively expensive, including as a result of subsequent trading activity, it may abandon the Stock Splits as well as the overall Transaction even if approved by our shareholders.

We expect to pay the Cash Payment to the Cashed Out Shareholders and the costs relating to the Stock Splits and the overall Transaction from cash on hand

See “Discussion and Special Factors—Source of Funds and Expenses” beginning on page 44.

Recent Market Prices of our Common Stock

The closing prices of our common stock on October 4, 2023, the last trading day before the public announcement of the approval of the Transaction by the Board, and on the record date, were $1.01 per share and $1.05 per share, respectively.

See “Information About the Company—Market Price of Common Stock” beginning on page 49.

No Appraisal or Dissenters’ Rights

Under Pennsylvania law, our articles of incorporation and our ~~Annual~~bylaws, no appraisal or dissenters’ rights are available to our shareholders who vote against (or abstain from voting on) the Stock Splits.

Material Federal Income Tax Consequences

Generally, a Cashed Out Shareholder that is a U.S. holder (as defined below) who receives cash in lieu of a fractional share of common stock as a result of the Reverse Stock Split will recognize a capital gain or loss for United States federal income tax purposes. A Continuing Shareholder who does not receive cash for a fractional share as a result of the Reverse Stock Split generally will not recognize any gain or loss for United States federal income tax purposes.

See “Discussion and Special Factors—Material Federal Income Tax Consequences” beginning on page 37.

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND
THE STOCK SPLITS TO EFFECT THE TRANSACTION

Following are some commonly asked questions that may be raised by our shareholders and answers to each of those questions.

The Special Meeting

Why am I receiving these materials?

~~We have~~The Board has made these proxy materials available to you in connection with the ~~solicitation by our Board of votes for business that will be presented for a vote at our annual~~special meeting, which will take place on ~~May 18, 2016,~~December 15, 2023, at 8:9:00 a.m. ~~ET,~~, Eastern Time, virtually via live webcast at~~www.virtualshareholdermeeting.com/SFE2016~~.at: meetnow.global/MF922F5. As a shareholder, you are invited to attend ~~our annual~~the special meeting virtually and are entitled to and requested to vote on the proposals described in ~~the~~this proxy statement. ~~The~~This proxy statement includes information that we are required to provide to you under ~~SEC~~ rules ~~and~~promulgated by the SEC. This information is ~~designed~~intended to assist you in voting your shares.

Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a paper copy of the full set of proxy materials?

In accordance with SEC rules, we are providing our shareholders of record at the close of business on ~~March 18, 2016,~~October 24, 2023 with access to the proxy materials over the Internet for our ~~annual meeting over the Internet.~~special meeting. We believe that this process expedites receipt of the proxy materials by our shareholders, reduces the cost of our ~~annual~~special meeting and conserves natural resources. The Notice contains instructions on how to access our proxy materials over the Internet and how to vote online. The Notice is not itself a proxy card and should not be returned with voting instructions. As described in the Notice, you will not receive a printed copy of our ~~annual~~special meeting proxy materials (including a proxy card) unless you specifically request paper copies or have previously asked to receive paper copies. You may request printed copies of our proxy materials free of charge by following the instructions contained in the Notice. For shareholders who have previously elected delivery of our proxy materials electronically, those shareholders should receive an email containing a link to the website where those materials are available.

How can I attend the ~~annual~~special meeting?

~~This year’s annual~~The special meeting will be conducted solely as a virtual meeting over the Internet. You will be able to attend our ~~2016 annual~~special meeting via live webcast at~~www.virtualshareholdermeeting.com/SFE2016~~.at: meetnow.global/MF922F5. You are entitled to attend our ~~annual~~special meeting only if you were a Safeguard shareholder as of the close of business on ~~March 18, 2016,~~October 24, 2023, or if you hold a valid proxy for our ~~annual~~special meeting.

To ~~attend~~participate in the special meeting, you will need to review the ~~control number~~information included inon your Notice, on your proxy card ~~voting instruction form~~ or ~~other~~on the instructions ~~you received regarding our~~that accompanied your proxy materials. If ~~the Notice or other proxy materials~~ you ~~receive do not include~~hold your shares through an intermediary, such as a ~~control number, you will need to contact your~~bank, broker or other nominee, ~~holder of your shares to request a control number~~you must register in ~~order to attend~~advance using the ~~meeting.~~ instructions below.

The meeting will begin promptly at 8:9:00 a.m. ~~ET.~~, Eastern Time. We encourage you to access the meeting prior to the start time.

How do I register to attend the special meeting virtually on the Internet?

If you are a registered shareholder (i.e., you hold your shares through our transfer agent, Computershare), you do not need to register in advance to attend the special meeting virtually on the Internet. Please follow the instructions on the Notice or proxy card that you received to attend the special meeting.

If you hold your shares through an intermediary, such as a bank, broker or other nominee, you must register in advance to attend the special meeting virtually on the Internet.

To register in advance to attend the special meeting online by webcast you must submit proof of your proxy power (legal proxy) reflecting your Safeguard holdings along with your name and email address to Computershare. Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on December 11, 2023.

You will receive a confirmation of your registration by email after Computershare receives your registration materials. Requests for registration should be directed as follows:

By email: Forward the email from your broker, or attach an image of your legal proxy, to: legalproxy@computershare.com

By mail:

Computershare
Safeguard Legal Proxy
P.O. Box 43001
Providence, RI 02940-3001

What if I have technical problems accessing the special meeting virtually?

The virtual meeting platform is fully supported across MS Edge, Firefox, Chrome and Safari browsers and devices (desktops, laptops, tablets and cell phones) running the most up-to-date version of applicable software and plugins. Please note that Internet Explorer is no longer supported. Participants should ensure that they have a strong Wi-Fi connection wherever they intend to participate in the meeting. We encourage you to access the meeting prior to the start time. A link on the meeting page will provide further assistance should you need it, or you may call in the U.S. & Canada: 1-888-724-2416 or 1-781-575-2748.

How many shares must be present to hold the ~~annual~~special meeting?

~~To hold our annual meeting, a quorum must be present and represented by proxy. A quorum is~~The presence of the holders of a majority of ~~our~~the issued and outstanding shares of our common stock entitled to vote at the special meeting, present in person or represented by proxy, will constitute a quorum for the purposes of the special meeting. For purposes of determining whether a quorum exists, we count as ~~of March 18, 2016.~~present any shares that are voted over the Internet, by telephone, by mail or that are represented at our virtual special meeting. Abstentions ~~and broker non-votes~~ are treated as present at our special meeting for purposes of establishing a quorum, ~~purposes.~~but “non-votes” will not be counted as present for purposes of determining whether a quorum is present at the special meeting. If your shares are held in “street name” by your broker, bank or other nominee, you should instruct your broker, bank or other nominee how to vote your shares using the instructions provided by your broker, bank or other nominee. If you have not received such voting instructions or require further information regarding such voting instructions, we encourage you to promptly contact your broker, bank or other nominee to obtain information on how to vote your shares.

If a quorum is not present, we expect to adjourn our special meeting until we obtain a quorum. In the event a quorum is not present at the special meeting and such meeting is adjourned to a later date at least fifteen days after the initial date of the special meeting, then those shareholders who attend the adjourned meeting shall nevertheless constitute a quorum for the purpose of acting upon the matters to be considered.

Who can vote on the matters to be presented for a vote at the ~~annual~~special meeting?

You ~~can~~are entitled to vote your shares of common stock on the matters to be presented for a vote at our ~~annual~~special meeting and any adjournments or postponements that may take place if you were a shareholder at the close of business on ~~March 18, 2016,~~October 24, 2023, the record date for our ~~annual~~special meeting. On the record date, we had ~~20,153,184~~16,575,618 shares of common stock ~~issued and~~ outstanding, each of which entitles the holder to one vote for each matter to be voted on at our ~~annual meeting. In the election of directors, shareholders may elect to cumulate their votes as described below under~~~~“What does cumulative voting mean?”~~

~~What does cumulative voting mean?~~

Cumulative voting applies only in the election of directors. It means that you may cast a number of votes equal to the number of Safeguard shares you own multiplied by the number of directors to be elected. For example, since seven directors are standing for election at the annual meeting, if you hold 100 shares of Safeguard stock, you may cast 700 votes (seven times 100) in the election of directors. You may distribute those votes among as few or as many of the seven nominees as you wish. In other words, in the example provided, you may cast all 700 votes~~FOR~~ ~~one nominee or allocate your 700 votes among two or more nominees, as long as the total equals 700 votes.~~

~~The cumulative voting feature for the election of directors isnot~~ available if you vote by telephone or the Internet. If you are a shareholder of record and choose to cumulate your votes, you will need to request, complete and submit a proxy card, providing explicit instructions of your intent to vote cumulatively by:

~~Checking the appropriate box on the proxy card; and~~

~~Writing the number of each nominee and the number of votes to be cast for each nominee in the space provided on the proxy card.~~

If you vote cumulatively, please check to be sure that the votes you cast add up to the number of shares you own multiplied by seven. If the number of votes does not add up correctly, your votes will not be counted until a properly completed proxy card has been received. If you plan to vote cumulatively, we encourage you to do so before our annual meeting. Automated cumulative voting on the day of our annual meeting is not available and the opportunity to submit a proxy card providing instructions of your intent to vote cumulatively before the polls close the day of the annual meeting will be limited.

~~If you are the~~~~beneficial owner~~ ~~of shares held in street name and wish to vote cumulatively, you will need to contact your broker, bank, or other nominee holder of your shares before the day of our annual~~special meeting.

What is the difference between holding shares as a “shareholder of record” and as a “beneficial owner”?

Most of Safeguard’s shareholders hold their shares through a broker, bank or other nominee rather than directly in their own name. There are important distinctions between shares held of record and those owned beneficially.

Shareholder of Record.If your shares are registered directly in your name with our transfer agent, Computershare, you are considered theshareholder of record with respect to those shares. By voting before our ~~annual~~special meeting by Internet, by telephone or by submitting a proxy card, you will have granted your voting proxy to Safeguard and your shares will be voted as you have instructed. You also may cast your vote directly by voting at our ~~annual~~special meeting.

Beneficial Owner.If your shares are held in ~~street name~~“street name” (such as in a brokerage account or by another nominee, such as a bank or trust company), you are considered thebeneficial owner of the shares. You have the right to direct your broker or other nominee with respect to how to vote your shares, which you can do by Internet, by telephone or by voting instruction form (depending on the voting procedures of your broker or other nominee) before our ~~annual~~special meeting. You also are invited to attend, and may vote at, our ~~annual~~special meeting.

How do I vote my shares?

You are encouraged to vote prior to our ~~annual~~special meeting to ensure that your shares will be represented. If you are a shareholder of record, you have three ways to vote prior to our ~~annual~~special meeting:

By Internet or smartphone (24 hours a day)	Go to ~~www.proxyvote.com~~www.envisionreports.com/SFE-SPC or scan the QR code on your Notice or proxy card with your smartphone
By telephone (24 hours a day)	Shareholders who live in the United States or Canada may call ~~1-800-690-6903~~1-800-652-8683
By mail	If you received proxy materials by mail, you may vote by completing, signing and returning a properly executed and dated proxy card that was sent to you.

You also may vote at our ~~annual~~special meeting. If you vote by Internet or by telephone, or wish to attend and/or vote at our ~~annual~~special meeting, you will need to use the control number provided in your Notice or other proxy materials you received. ~~Telephone and Internet voting will close at 11:59 p.m. ET the day prior to our annual meeting.~~

If you hold your shares through a broker or other nominee, please follow the directions provided to you by your broker or other nominee; your ability to vote over the Internet or by telephone depends on the voting procedures of your broker or other nominee. Beneficial owners also may attend and vote at our ~~annual~~special meeting, but will need to ~~use~~register in advance of the ~~control number provided~~special meeting in accordance with the above instructions under “How do I register to attend the special meeting virtually on the Internet?”

What am I being asked to vote on at the special meeting?

Our shareholders will consider and vote upon proposals to amend our articles of incorporation to effect the Reverse Stock Split of our shares of common stock, followed immediately by the Forward Stock Split of our shares of common stock, at a ratio of (i) not less than 1-for-50 and not greater than 1-for-100, in the ~~Notice, voting instruction form,~~case of the Reverse Stock Split, and (ii) not less than 50-for-1 and not greater than 100-for-1, in the case of the Forward Stock Split, with the exact Stock Split Ratios to be set within the foregoing ranges at the discretion of our Board (and, in all cases, with the Forward Stock Split Ratio being the inverse of the Reverse Stock Split Ratio), without further approval or ~~other instructions~~authorization of our shareholders and with our Board, in its sole discretion, able to effect the Stock Splits immediately following the public announcement of the Stock Split Ratios or to elect to abandon the proposed Stock Splits or the overall Transaction (whether or not authorized by the shareholders) at any time.

Shareholders whose shares are converted into less than one share of our common stock as a result of the Reverse Stock Split (meaning they ~~received regarding~~own fewer than the Minimum Number of shares of our ~~proxy materials.~~common stock immediately prior to the effective time of the Reverse Stock Split, which is the time that the articles of amendment to our articles of incorporation to effect the Reverse Stock Split are filed with the Pennsylvania Department of State) will receive cash in lieu of such fraction of a share on the basis of $1.65, without interest, for each share of our common stock held by them immediately before the Reverse Stock Split.

Shareholders who own at least the Minimum Number of shares of our common stock immediately prior to the effective time of the Reverse Stock Split will not receive cash in lieu of any fraction of a share and will continue to own the same number of shares of our common stock after the completion of the Stock Splits. Although the Reverse Stock Split and the Forward Stock Split will be voted on separately, we will not effect either the Reverse Stock Split or the Forward Stock Split unless the proposals to approve the Reverse Stock Split and the Forward Stock Split are each approved by our shareholders.

Our shareholders will also consider and vote upon a proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the Reverse Stock Split Proposal or the Forward Stock Split Proposal.

How does Safeguard’s Board recommend I vote and what vote is required for ~~adoption or~~the approval of each ~~matter~~proposal to be voted on?

Proposal	~~Directors’~~ Board Recommendation	Vote Required for Approval	Effect of Abstentions	Broker Discretionary Voting Allowed
~~Election~~1. Adoption of ~~Directors~~	~~FOR~~~~all nominees~~	~~The seven nominees who receive~~ the ~~highest number~~articles of~~FOR~~ ~~votes~~ amendment to our articles of incorporation to effect the Reverse Stock Split of our common stock at a ratio not less than 1-for-50 and not greater than 1-for-100 (the “Reverse Stock Split Ratio”), with the exact Reverse Stock Split Ratio to be set within the foregoing range at the ~~annual meeting will be elected as directors~~
~~Advisory vote to approve executive compensation~~	~~FOR~~~~the resolutionapproving the compensation~~discretion of our ~~named executive officers~~Board, without further approval or authorization of our shareholders and with our Board, in its sole discretion, able to effect the Reverse Stock Split immediately following the public announcement of the Reverse Stock Split Ratio or to elect not to effect the Reverse Stock Split (whether or not authorized by the shareholders) or to abandon the Transaction at any time.	“FOR” the Reverse Stock Split Proposal	Affirmative vote of ~~the~~a majority of the votes cast by all shareholders entitled to vote ~~for the proposal~~thereon.	No effect – not counted as a “vote cast”	No
~~Ratification~~2. Adoption of the ~~appointment~~articles of ~~independent registered~~amendment to our articles of incorporation to effect, immediately after the Reverse Stock Split, the Forward Stock Split of our common stock at a ratio not less than 50-for-1 and not greater than 100-for-1 (the “Forward Stock Split Ratio”), with the exact Forward Stock Split Ratio to be set within the foregoing range at the discretion of our Board, without further approval or authorization of our shareholders and with our Board, in its sole discretion, able to effect the Forward Stock Split immediately following the public ~~accounting firm~~	~~FOR~~~~ratification~~announcement of the ~~appointment of KPMG LLP~~Forward Stock Split Ratio or to elect not to effect the Forward Stock Split (whether or not authorized by the shareholders) or to abandon the Transaction at any time.	“FOR” the Forward Stock Split Proposal	Affirmative vote of ~~the~~a majority of the votes cast by all shareholders entitled to vote ~~for~~thereon.	No effect – not counted as a “vote cast”	No
3. Approval of the ~~proposal~~adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the Reverse Stock Split Proposal or the Forward Stock Split Proposal.	“FOR” the Adjournment Proposal	Affirmative vote of a majority of the votes cast by all shareholders entitled to vote thereon.	No effect – not counted as a “vote cast”	No

Unless a contrary choice is specified, proxies solicited by our Board will be voted ~~for the election of our seven director nominees and for~~“FOR” each of the other ~~proposals. Other than the above three~~ proposals we are not aware of any other business to be acted upon at our annual meeting. If you grant Safeguard a proxy, the persons named as proxy holders, Brian J. Sisko and Jeffrey B. McGroarty, will have the discretion to vote your shares on any additional matters properly presented for a vote at our annual meeting and may cumulate and cast your votes in favor of the election of some or all of the applicable director nominees, in their sole discretion, except that none of your votes will be cast for any nominee as to whom you have withheld your vote.referenced above.

~~What are my choices for casting my vote on each matter to be voted on?~~

~~Proposal~~	~~Voting Options~~	~~Effect of Withheld~~ ~~Votes or Abstentions~~	~~Broker Discretionary~~ ~~Voting Allowed?~~	~~Effect of Broker~~ ~~Non-votes~~
~~Election of Directors~~	~~FOR ALL, WITHHOLD ALL, or FOR ALL EXCEPT~~	~~No effect – not counted as a “vote cast”~~	No	~~No effect, assuming a quorum is present~~
~~Advisory vote to approve executive compensation~~	~~FOR, AGAINST, or ABSTAIN~~	~~No effect – not counted as a “vote cast”~~	No	~~No effect, assuming a quorum is present~~
~~Ratification of the appointment of independent registered public accounting firm~~	~~FOR, AGAINST, or ABSTAIN~~	~~No effect – not counted as a “vote cast”~~	~~Yes~~	~~No effect, assuming a quorum is present~~

~~How can I ask a question at the annual meeting?~~

~~If you have any questions relevant to the business~~Are there other matters to be voted on at the special meeting?

We do not know of any matters that may come before the special meeting other than as discussed in this proxy statement. If any other matters are properly presented at the special meeting, the persons named in the accompanying proxy card intend to vote, or otherwise act, in accordance with their judgment on the matter.

Who will serve as proxies for the special meeting?

In soliciting your proxy, our ~~annual~~Board is asking you to give your proxy to Mark Herndon, our Chief Financial Officer, and G. Matthew Barnard, our General Counsel and Corporate Secretary. Giving your proxy to Messrs. Herndon and Barnard means that you authorize Mr. Herndon, Mr. Barnard, either of them or their duly appointed substitutes to vote your shares at our special meeting in accordance with your instructions. All shares represented by a proxy will be voted, and where a shareholder specifies by means of the proxy a choice with respect to any matter to be acted upon, the shares will be voted in accordance with the specification so made. If you elect to grant us your proxy and do not specifically instruct otherwise, you are authorizing the proxy holders to vote your shares in accordance with their discretion and at the instruction of the Board.

Who will solicit proxies on behalf of the Board?

Proxies may ~~submit your question online through~~be solicited on behalf of the ~~Q&A text box on your screen.~~Board by Safeguard’s directors and certain of its executive officers by telephone, electronic mail, Internet, other electronic means and personal solicitation by our directors and certain executive officers (who will receive no additional compensation for such solicitation activities).

Who will bear the cost of the solicitation of proxies?

The entire cost of soliciting proxies, including the costs of preparing, assembling, printing and mailing this proxy statement, the proxy card and any additional soliciting materials furnished to shareholders, will be borne by Safeguard. Solicitation material will be furnished to banks, brokerage houses, dealers, voting trustees, their respective nominees and other agents holding shares in their names, which are beneficially owned by others, so that they may forward such solicitation material to beneficial owners. In addition, if asked, we will reimburse these persons for their reasonable expenses in forwarding these materials to the beneficial owners.

Where can I find the voting results of the ~~annual~~special meeting?

~~We intend to announce preliminary~~You can find the official results of the voting ~~results~~ at our ~~annual~~special meeting ~~and publish final results~~ in ~~a current report~~our Current Report on Form 8-K ~~to be filed~~that we will file with the SEC within four business days ofafter our ~~annual~~special meeting.

~~What is~~ If the official results are not available at that time, we will provide preliminary voting results in a ~~broker non-vote?~~

~~A broker non-vote occurs when your broker submits a proxy for~~Current Report on Form 8-K and will provide the ~~meeting with respect~~final results in an amendment to the ~~ratification of the appointment of our independent registered public accounting firm but does not vote on non-discretionary matters, absent specific instructions from you.~~

~~Will my shares be voted if I do not vote by Internet or by telephone or do not sign and return a proxy card or voting instruction form?~~

~~Shareholder of Record.~~If youdo not vote by Internet or by telephone or complete and return a proxy card, your shares will not be voted unless you attend our annual meeting and vote your shares. If you vote by Internet or by telephone and submit your vote without selecting any items individually, or if you sign and return a proxy card but do not mark any boxes showing how you wish to vote, then the proxy holders designated by our Board to act on behalf of shareholders will vote your shares and cumulate your votesForm 8-K as ~~recommended by our Board and, in their discretion, will vote on any other matters that may properly arise at our annual meeting.~~

~~Beneficial Owner.~~If you do not vote by Internet or by telephone or do not otherwise provide your broker or other nominee with voting instructions, your broker may cast a vote on your behalf for ratification of the appointment of our independent registered public accounting firm or may leave your shares unvoted. Your broker may not vote on your behalf on any other proposals, absent specific instructions from you.soon as they become available.

What do I do if I change my mind after I vote my shares?

If you are ashareholder of record, you may revoke your proxy and/or change your vote at any time prior to the closing of the polls at our ~~annual~~special meeting by:

Re-voting by telephone or by Internet (only your latest vote will be counted); ~~note that telephone and Internet voting will close at 11:59 p.m. ET the day prior to our annual meeting;~~

~~Submitting~~Signing another proxy card with a later date and delivering it to us before our special meeting (again, only your latest vote will be counted);

Sending written notice to our Corporate Secretary (which must be received at our corporate headquarters no later than 5:00 p.m. ~~ET the day before our annual meeting)~~Eastern Time on December 13, 2023) stating that you would like to revoke (that is, cancel) your proxy; or

Voting at our ~~annual meeting.~~special meeting before the polls close.

If you are ~~the~~a beneficial owner of shares held in ~~street name,~~“street name”, you may submit new voting instructions by following the instructions provided by your bank, broker or other nominee. You also may vote at ~~our annual meeting.~~

~~Who will count~~ the ~~votes?~~

~~A representative of American Election Services, LLC will serve as the Judge of Election. If you are planning to vote cumulatively at our virtual~~special meeting, but you will need to ~~deliver your~~register in advance of the special meeting in accordance with the above instructions under “How do I register to attend the ~~Judge of Election by fax at 800-722-8813 or by email to jimraitt@americanelectionservices.com before~~special meeting virtually on the ~~polls close.~~ Internet?”

What is Safeguard’s Internet address?

Our Internet website address is https://www.safeguard.com. You can access this proxy statement on our website at www.safeguard.com/proxy. Safeguard’s filings with the SEC are available free of charge via a link from this address. The information contained on our website or connected thereto is not intended to be incorporated by reference into this proxy statement. All references to our website address are intended to be inactive textual references only.

What is “householding” and how does it affect me?

If you and other residents at your mailing address are thebeneficial owner of shares held in ~~street name,~~“street name”, you may receive only one paper copy of our proxy materials or Notice, as applicable, unless you have provided contrary instructions. This practice is commonly referred to as “householding” and potentially provides extra convenience for shareholders and cost savings for companies. If you would like to receive a separate set of proxy materials or Notice in the future, please request the additional copy by contacting your bank, broker or other nominee. If you wish to receive a separate set of proxy materials or Notice now, please request the additional copy by contacting (or if you would like to revoke your consent for receiving such “householded” materials, please contact) Broadridge Financial Solutions, Inc.:

	By Internet:	www.proxyvote.com
	By telephone:	1-800-579-1639
	By email:	sendmaterial@proxyvote.com

If you request a separate set of proxy materials or Notice by email, please be sure to include your control number in the subject line. A separate set of proxy materials or Notice will be sent promptly following receipt of your request.

The Transaction, Including the Stock Splits

~~How may I obtain a copy~~What is the purpose of ~~Safeguard’s 2015 Annual Report on Form 10-K?~~the Stock Splits?

~~Shareholders may request a free copy~~The primary purpose of the Stock Splits is to enable Safeguard to reduce the number of record holders of its common stock below 300, which is the level at or above which we are required to file public reports with the SEC. If the Board determines to proceed with the Transaction, it will determine the Stock Split Ratios after the special meeting; however, we believe that any Reverse Stock Split Ratio within the proposed range would reduce the number of record holders below 300. The Stock Splits are being undertaken as part of our ~~2015 Annual Report on Form 10-K by contacting:~~

~~Safeguard Scientifics, Inc.~~

~~Attention: Investor Relations~~

~~170 North Radnor-Chester Road, Suite 200~~

~~Radnor, PA 19087~~

~~Alternatively, shareholders can access our 2015 Annual Report on Form 10-K on our website at: www.safeguard.com/proxy.~~

~~ITEM 1 — ELECTION OF DIRECTORS~~

~~Our directors are elected annually~~plan to suspend Safeguard’s duty to file periodic and ~~serve until our next annual meeting of shareholders.~~current reports and other information with the SEC under the Exchange Act. As planned, Messrs. Lietz and Messman are retiring from our Board as of, and will not stand for re-election at, our 2016 annual meeting. Effective immediately prior to our annual meeting, the size of our Board will be decreased from nine to seven members; therefore, there are seven nominees for election at this year’s annual meeting. All of the nominees are currently serving as directors, and each nominee has consented to serve until our next annual meeting if elected. If any director is unable to stand for re-election after distribution ofdescribed in this proxy statement, the Board ~~may reduce its size~~has determined that the costs of being a public reporting company outweigh the benefits thereof. After giving effect to the Transaction, we will no longer be subject to the reporting requirements under the Exchange Act or ~~designate~~other requirements applicable to a ~~substitute. If~~public company, including requirements under the ~~Board designates~~Sarbanes-Oxley Act and the listing standards of any national securities exchange. In addition to being delisted from Nasdaq, we do not intend to list our common stock on any other national securities exchange. Any trading in our common stock after giving effect to the Transaction would only occur in privately negotiated sales and potentially on an OTC market, if one or more brokers chooses to make a ~~substitute, proxies voted~~market for our common stock on ~~the original director candidate will~~any such market and complies with applicable regulatory requirements; however, there can be ~~cast for the substituted candidate.~~

~~Director Nominee Experience and Qualifications~~no assurances regarding any such trading.

Our Board believes that the Board should collectively possess a broad range of skills, expertise, industry and other knowledge, and business experience that meets the needs of our corporate strategy and provides effective oversight of our business. The Nominating & Corporate Governance Committee has developed a matrix of skills and experience that it has determined would be beneficial to have represented on our Board. The Nominating & Corporate Governance Committee regularly reviews the appropriate skills and experience required of directors in the context of the fit between Safeguard’s needs regarding its Board composition and the individual skills and experience of the current Board members.

The Nominating & Corporate Governance Committee does not have a formal policy with respect to diversity. However, the Nominating & Corporate Governance Committee’s charter provides that the committee shall “seek members from diverse backgrounds” and will evaluate nominees for election to our Board “with the objective of recommending a group that through its diversity of experience can provide relevant advice and counsel to management.” The Board and the Nominating & Corporate Governance Committee believe that it is essential that our Board members have diverse professional experience and differences in viewpoints and skills.

In considering whether to recommend any candidate for inclusion in the Board’s slate of recommended director nominees, the Nominating & Corporate Governance Committee considers the needs of the Board as a whole as well as the staffing needs of each of its committees. With respect to the nomination of continuing directors for re-election, an individual’s past contributions to the Board also are considered. The Board monitors the effectiveness of this approach via an annual internal board and peer assessment, as well as ongoing director succession planning discussions by the Board and its Nominating & Corporate Governance Committee. From time to time, the Nominating & Corporate Governance Committee may conduct informal or formal searches and consider specific new candidates for potential nomination for election or for appointment to our Board. In considering potential director candidates, the Nominating & Corporate Governance Committee seeks the following attributes for director nominees:

~~A strong record of personal integrity and ethical conduct;~~

~~A leader in the companies or institutions with which he or she is affiliated;~~

~~Competencies, skills and experiences that are complementary to the background and experience represented on Safeguard’s Board and that meet the needs of Safeguard’s strategy and business;~~

~~A willingness and ability to devote sufficient time to fulfill his or her responsibilities to Safeguard and our shareholders;~~

~~The ability to represent the long-term interests of our shareholders; and~~

~~The ability to provide relevant advice and counsel to management and best perpetuate the success of Safeguard’s business.~~

~~2016 Nominees for Director~~

Our Board believes that all of the nominees named below are highly qualified and bring executive leadership skills and experience, resulting in a talented and diverse Board. The biography of each of our director nominees includes the specific experiences, qualifications, attributes, and skills that caused the Nominating & Corporate Governance Committee and our Board to determine that the individual should be nominated to serve as a director until our 2017 annual meeting, given our business and structure.

~~The Board recommends a vote FOR each nominee. The seven nominees who receive the highest number of affirmative votes will be elected as directors.~~

~~Stephen T. Zarrilli~~,~~age 54~~

~~President and Chief Executive Officer~~

~~Director since~~: ~~2012~~

~~Safeguard Board Committees~~:~~Capital Management~~

~~Other public directorships~~:~~Virtus Investment Partners, Inc.~~

~~Former public directorships within past five years~~:~~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.

~~Mara G. Aspinall~~,~~age 53~~

~~Director since~~: ~~2014~~

~~Safeguard Board Committees~~:~~Audit, Capital Management, Nominating & Corporate Governance~~

~~Other public directorships~~:~~Abcam plc~~

~~Former public directorships within past five years~~:~~None~~

~~Career Highlights~~:

—

President and Chief Executive Officer, Ventana Medical Systems, and Global Head of Roche Tissue Diagnostics, a leader in the development, manufacturing and commercialization of tissue-based cancer diagnostic equipment and products (September 2011 – June 2014)

—

~~Founder, Chief Executive Officer and a director of On-Q-ity, Inc., a research-stage company focused on transforming cancer patient management (September 2009 – May 2011)~~

—

Various leadership roles with Genzyme Corporation, including President of Genzyme Genetics and President of Genzyme Pharmaceuticals, the leading provider of esoteric and genetic tests in the U.S. focused in the reproductive, oncology and personalized medicine markets (June 1997 – August 2009)

~~Experience and Qualifications~~:Ms. Aspinall has 18 years of experience as an active participant in the life sciences community, including being a frequent industry speaker; authoring articles, case studies and editorials on healthcare topics; and spearheading industry-wide outreach initiatives. Ms. Aspinall’s corporate and entrepreneurial experience includes experience relevant to strategic planning, business development and operations management; equity financing; and growing businesses organically and through merger and acquisition transactions. Ms. Aspinall also has experience serving on the boards of healthcare and life sciences companies.

~~Julie A. Dobson~~,~~age 59~~

~~Director since~~: ~~2003~~

~~Safeguard Board Committees~~:~~Capital Management, Compensation (Chair), Nominating & Corporate Governance~~

~~Other public directorships~~:~~American Water Works Company Inc.~~

~~Former public directorships within past five years~~:~~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.~~

~~Stephen Fisher~~,~~age 51~~

~~Director since~~: ~~2015~~

~~Safeguard Board Committees~~:~~Audit, Capital Management, 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.

~~George MacKenzie~~,~~age 67~~

~~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~~:~~C&D Technologies, Inc.~~

~~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.

~~John J. Roberts,~~~~age 71~~

~~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.

~~Robert J. Rosenthal~~~~, PhD, age 59~~

~~Director since~~: ~~2007~~

~~Safeguard Board Committees~~:~~Audit,Capital Management (Chair), Compensation~~

~~Other public directorships~~:~~Bruker Corporation~~

~~Former public directorships within past five years~~: ~~None~~

~~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.

~~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.~~

	~~Stephen~~ ~~Zarrilli~~	~~Mara~~ ~~Aspinall~~	~~Julie~~ ~~Dobson~~	~~Stephen~~ ~~Fisher~~	~~George~~ ~~MacKenzie~~	~~John~~ ~~Roberts~~	~~Robert~~ ~~Rosenthal~~
~~Operational / Direct Management Experience:~~ ~~Healthcare~~ ~~Technology~~	ü ü	ü	ü ü	ü		ü	ü
~~Capital Markets Experience~~	ü		ü		ü	ü	ü
~~Private Equity / Venture Capital Industry Experience~~	ü	ü	ü		ü	ü	ü
~~Financial Expertise / Literacy~~	ü	ü	ü	ü	ü	ü	ü
~~C-level Experience~~	ü	ü	ü	ü	ü	ü	ü
~~Other Public / Private Director Experience~~	ü	ü	ü	ü	ü	ü	ü

~~CORPORATE GOVERNANCE AND BOARD MATTERS~~

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 proxy statement. All references to our website address are intended to be inactive textual references only.

~~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 Mara Aspinall, Julie Dobson, Stephen Fisher, Andrew Lietz, George MacKenzie, Jack Messman, John Roberts, and Robert Rosenthal, and previously determined that former director, Keith Jarrett (who resigned from our Board in March 2015) meet 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. Mr. Zarrilli, our President and Chief Executive Officer, is our only non-independent director.

~~Director Attendance at Meetings.~~At the date of this proxy statement, Safeguard’s Board has nine members and four standing committees. The Board held five meetings in 2015 and committees of the Board (including one special-purpose committee that met during 2015) held a total of 20 meetings. Each incumbent director attended well over 75% of the total number of meetings of the Board and committees of which he or she was a member during 2015. Overall attendance at such meetings was at least 85%. Each year, the Board meets on the same day as our annual meeting of shareholders. Although there is no policy requiring Board members to attend our annual meeting, all Board members are encouraged to attend and typically do so. All of our then directors attended our 2015 annual meeting.

~~Executive Sessions of the Board.~~Under our Corporate Governance Guidelines and NYSE listing standards, non-employee directors meet in executive session at each regularly scheduled Board meeting, outside of the presence of any management directors and any other members of Safeguard’s management. The Chairman of the Board presides at these sessions.

~~Leadership Structure and Committee Composition.~~Based upon the recommendation of our Nominating & Corporate Governance Committee, the Board has determined that separating the roles of the Chief Executive Officer and Chairman of the Board is in the best interests of the shareholders at the present time. The Board views the role of the Chief Executive Officer as having responsibilityreasons for the ~~day-to-day leadership and performance of Safeguard, while~~Transaction (including the ~~Chairman of the Board provides guidance to the Chief Executive Officer, sets the agenda for Board meetings, and presides over meetings of the Board.~~

~~Based on the recommendation of our Nominating & Corporate Governance Committee, our Board has determined that our current Board committee structure is the most appropriate for Safeguard, at present.~~

~~Audit Committee.~~~~The Audit Committee held four meetings during 2015.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.~~

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 Messrs. MacKenzie and Roberts, Ms. Aspinall, 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. 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.

~~Capital Management Committee.~~The Capital Management Committee held eight meetings during 2015. As described in detail in its charter, the Board has delegated to the Capital Management Committee the authority to approve, between regularly scheduled Board meetings, the following transactions:

~~Follow-on transactions in existing partner companies involving amounts in the aggregate between $10 million and $20 million; and~~

~~New transactions involving amounts between $10 million and $20 million.~~

The Capital Management Committee also reviews, and recommends to the Board, any new or follow-on transactions involving amounts equal to or in excess of $20 million and divestitures of existing partner companies into which we have previously deployed $20 million or more capital.

~~Compensation Committee.~~ The Compensation Committee held five meetings during 2015. The Compensation Committee’s responsibilities, which are described in detail in its charter, include, among other duties, the responsibility to:

~~Approve the philosophy for compensation of our executives and other employees;~~

~~Establish compensation (including base salary, incentive compensation, and equity-based programs) for our Chief Executive Officer and other executive officers;~~

~~Administer the long- and short-term compensation and performance-based incentive plans (which are cash and equity based);~~

~~Approve employment agreements and perquisites provided to our executive officers;~~

~~Review management’s recommendations for our broad-based employee benefit plans;~~

~~Evaluate and recommend to the Board the compensation for all non-employee directors for service on the Board and its committees; and~~

~~Review and discuss with management the Compensation Discussion and Analysis and recommend to the Board its inclusion in our Annual Report on Form 10-K and proxy statement.~~

It also is the responsibility of the Compensation Committee to assess Safeguard’s compensation policies and practices insofar as they may create risk for Safeguard. The Compensation Committee evaluates this risk annually and in early 2016 made the affirmative determination that it does not believe that any of our compensation policies and practices are reasonably likely to have a material adverse effect on Safeguard. Safeguard’s Audit Committee and our Board have concurred in that determination.

The Board has determined that each member of the Compensation Committee meets the independence requirements established by SEC regulations, the NYSE listing standards, and our Corporate Governance Guidelines.

~~Nominating & Corporate Governance Committee.~~ The Nominating & Corporate Governance Committee held two meetings during 2015. The Nominating & Corporate Governance Committee’s responsibilities, which are described in detail in its charter, include, among other duties, the responsibility to:

~~Establish criteria for the selection of directors;~~

~~Evaluate and consider qualified Board candidates, including those recommended by shareholders;~~

~~Recommend to the Board the nominees for director, including nominees for director in connection with Safeguard’s annual meeting of shareholders;~~

~~Conduct an annual evaluation of the Board and its members and oversee the evaluations of each of the Board committees;~~

Take a leadership role in shaping Safeguard’s corporate governance policies, including developing and recommending to the Board Safeguard’s Corporate Governance Guidelines and Code of Business Conduct and Ethics;

~~Review with management Safeguard’s strategic direction and Safeguard’s strategic plan and the implementation of management’s long-term strategy and report to the Board on such activities;~~

~~Evaluate the performance of the Chief Executive Officer; and~~

~~Monitor the process of succession planning for the Chief Executive Officer and executive management.~~

The Board has determined that each member of the Nominating & Corporate Governance Committee meets the independence requirements established in the NYSE listing standards and by our Corporate Governance Guidelines.

~~Annual Performance Evaluations.~~The Nominating & Corporate Governance Committee annually assesses the performance of the Board and the individual performance of each Board member, based on input from all directors, and shares its assessment with the Board. The Audit Committee, Capital Management Committee, Compensation Committee, and Nominating & Corporate Governance Committee also annually assess their respective performance and committee processes.

~~Review and Approval of Transactions with Related Persons.~~The Board has adopted a written policy which 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.

~~Risk Management.~~Our Board, as a whole and at the committee level, is actively involved in the oversight of risks that affect Safeguard’s business. The Compensation Committee is responsible for overseeing the management of risks relating to our compensation plans and arrangements. The Audit Committee oversees the management of financial related risks and related party transactions. The Nominating & Corporate Governance Committee manages risks associated with the independence of our Board and potential conflicts of interest. Although the oversight of certain risks is conducted through committees of the Board, our full Board retains responsibility for risk oversight and no individual committee has been delegated responsibility for such function. Our Board receives reports at each regularly scheduled Board meeting by each committee chair regarding each committee’s considerations and actions, as well as regular reports directly from our senior management team regarding particular risks that may impact Safeguard. This allows our Board and its committees to coordinate the risk oversight role and to keep our Board timely apprised of all risks that might impact Safeguard’s business.

~~Communications with Safeguard’s Board.~~~~Any shareholder or other interested party may communicate with our Board or any specified non-management director(s) by addressing the communication as follows:~~

~~c/o Corporate Secretary~~

~~Safeguard Scientifics, Inc.~~

~~170 North Radnor-Chester Road, Suite 200~~

~~Radnor, PA 19087~~

~~The guidelines for communications with our Board are available on our website at www.safeguard.com/governance.~~

~~Process for Nominating Potential Director Candidates.~~ In addition to its other responsibilities, the Nominating & Corporate Governance Committee is responsible for screening potential director candidates and recommending qualified candidates to the Board for nomination. The Nominating & Corporate Governance Committee may use any number of methods to identify and evaluate potential director nominees, including personal, management and industry contacts; recruiting firms; and candidates recommended by shareholders.

The Nominating & Corporate Governance Committee considers properly submitted shareholder recommendations of director candidates in substantially the same manner as it considers director candidate recommendations from other sources. Any shareholder recommendation must include the following: the nominee’s name and the information about the nominee that would be required in a proxy statement under the SEC’s rules; information about the relationship between the nominee and the nominating shareholder; proof of the number of shares of Safeguard common stock that the nominating shareholder owns and the length of time the shares of Safeguard common stock have been owned; and a letter from the nominee certifying his or her willingness to serve, if elected, as a director.

~~Recommendations should be addressed to the Chairperson, Nominating & Corporate Governance Committee:~~

~~c/o Corporate Secretary~~

~~Safeguard Scientifics, Inc.~~

~~170 North Radnor-Chester Road, Suite 200~~

~~Radnor, PA 19087~~

~~Board Compensation.~~~~During 2015, 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~~
~~Capital Management Committee~~		~~15,000~~
~~Compensation Committee~~		~~10,000~~
~~Nominating & Corporate Governance Committee~~		~~10,000~~
~~Meeting Attendance Fees~~:
~~Each committee meeting~~		~~1,500~~

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 2014, at the Compensation Committee’s request, Semler Brossy assisted the committee in assessing our Board compensation practices relative to current market practices. After reviewing Semler Brossy’s findings and recommendations, the Compensation Committee recommended that the Board increase the annual retainer for the Chairman of the Board from $80,000 to $100,000. The Board concurred with that recommendation, and such increase became effective beginning with the new director term that commenced following our 2015 annual meeting.

On May 29, 2015, each non-employee director who stood for re-election at our 2015 annual meeting was awarded a recurring annual service grant that consisted of 5,000 deferred stock units (“DSUs”). 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. Mr. Fisher, who joined our Board in May 2015, was awarded an initial stock option grant on June 30, 2015, to purchase 8,333 shares of Safeguard common stock at an exercise price of $19.41 per share. The stock option has an eight-year term and vests 25% each year commencing on the first anniversary of the grant date. The stock option exercise price is equal to average of the high and low trading prices of our common stock, as reported on the NYSE composite tape, on the grant date.

~~Safeguard also maintains a Group Deferred~~proposed Stock Unit Program for Directors (“Directors’ DSU Program”) which allows each outside director, at his or her election, to receive DSUs in lieu of cash retainer and meeting fees 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 – 2015.~~~~The following table provides information on compensation earned for services provided during 2015 by each non-employee director who served on our Board at any time during 2015:~~

Name

Fees Earned or
Paid in Cash
($)(1)

Stock
Awards
($)(2)(3)

Option
Awards
($)(3)

All Other Compensation
($)(4)

Total
($)(5)
Mara G. Aspinall 69,500 105,365 — 775 175,640
Julie A. Dobson 84,000 95,553 — 4,225 183,778
Stephen Fisher 42,769 5,699 42,000 — 90,468
Keith B. Jarrett 9,972 1,279 — — 11,251
Andrew E. Lietz 92,308 95,682 — — 187,990
George MacKenzie 80,000 90,225 — — 170,225
Jack L. Messman 66,500 90,225 — — 156,725
John J. Roberts 76,500 90,225 — — 166,725
Robert J. Rosenthal 90,500 90,225 — 775 181,500

~~(1)~~

The amounts included in this column reflect Directors’ Fees earned for services provided during 2015, including amounts deferred under our Directors’ DSU Program. Of the amount of Directors’ Fees earned for services provided during 2015, Dr. Jarrett deferred payment of 20%, Ms. Dobson and Mr. Lietz each deferred payment of 25%, and Ms. Aspinall and Mr. Fisher 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), excluding the effect of estimated forfeitures related to service-based vesting conditions. 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 2015 related to fees deferred that were earned during the fourth quarter of 2014. The following table presents the grant date fair value for each DSU award made to each non-employee director during 2015:

Grant Date Fair Value ($)
Name 1/15/15 3/2/15 4/15/15 5/29/15 7/15/15 10/15/15
Mara G. Aspinall 2,385 — 4,257 90,225 4,247 4,251
Julie A. Dobson 1,491 — 1,407 90,225 1,213 1,217
Stephen Fisher — — — — 1,448 4,251
Keith B. Jarrett 783 496 — — — —
Andrew E. Lietz 1,249 — 1,259 90,225 1,389 1,560
George MacKenzie — — — 90,225 — —
Jack L. Messman — — — 90,225 — —
John J. Roberts — — — 90,225 — —
Robert J. Rosenthal — — — 90,225 — —

~~(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, 2015, were as follows:~~

Name

DSUs
(#)

Stock Options
(#)
Mara G. Aspinall 9,112 8,333
Julie A. Dobson 43,180 15,000
Stephen Fisher 1,609 8,333
Keith B. Jarrett 3,023 8,333
Andrew E. Lietz 39,867 15,000
George MacKenzie 29,696 23,332
Jack L. Messman 62,818 10,000
John J. Roberts 35,376 10,000
Robert J. Rosenthal 31,134 23,332

~~(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. Aspinall and Mr. Fisher, who joined our Board in 2014 and 2015, respectively, have achieved the required ownership levels.

~~ITEM 2 – ADVISORY VOTE ON EXECUTIVE COMPENSATION~~

In 2011, our Board determined that an annual advisory “say-on-pay” vote on executive compensation would be the most appropriate alternative for Safeguard and approximately 90% of the votes cast by our shareholders at our 2011 annual meeting were voted in favor of future advisory say-on-pay votes being held annually. Accordingly, pursuant to Section 14A of the Securities Exchange Act of 1934, as amended, we are providing our shareholders with the opportunity to endorse or not endorse Safeguard’s 2015 executive compensation as described in this proxy statement. Shareholders also may abstain from voting.

In considering your vote, we invite you to review the Compensation Discussion and Analysis beginning on page 20 of this proxy statement. As described in the Compensation Discussion and Analysis, the purpose of Safeguard’s compensation policies and procedures is to attract and retain experienced, highly qualified executives crucial to Safeguard’s long-term success and enhancement of shareholder value. The Compensation Committee has developed an executive compensation program designed to pay for performance and to align the long-term interests of our named executive officers with the long-term interests of our shareholders. The vote is intended to provide an overall assessment of our executive compensation program rather than focus on any specific item of compensation.

~~Our Board recommends that shareholders indicate their support for the 2015 executive compensation afforded to Safeguard’s named executive officers by voting FOR the following resolution:~~

“RESOLVED, that the compensation paid to Safeguard’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables and related narrative disclosure included in this proxy statement, is hereby APPROVED.”

This vote will not be binding on our Board or the Compensation Committee and may not be construed as overruling a decision by our Board or the Compensation Committee or imply any additional fiduciary duty on our Board. Further, it will not affect any compensation paid or awarded to any executive.

~~Unless our Board modifies its policy on the frequency of future advisory say-on-pay votes, the next advisory say-on-pay vote will be held at our 2017 annual meeting of shareholders.~~

~~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 2015 for our named executive officers. At December 31, 2015, 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 eight executives with the title of Senior Vice President or higher, including our named executive officers. This Compensation Discussion and Analysis also describes programs that apply to our senior executive group as a whole.

~~2015 Business Highlights~~

Our 2015 performance demonstrates continued execution of our strategic goals: deploying capital into defined vertical markets; building value; and realizing gains through well-timed exit transactions. 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 2015 strategic plan.~~

We deployed $51.6 million of capital into eight new partner companies and deployed an additional $33.3 million to support the growth of 12 partner companies in which we already had an interest at the end of 2014.

~~We had 29 partner companies at the end of 2015, compared to 24 at the end of 2014.~~

~~Our partner companies grew revenues by 25%, and the majority of our partner companies performed at or above plan on other key metrics.~~

We realized approximately $25 million in aggregate proceeds (excluding additional escrowed funds of $2.3 million) related to (i) two 2015 partner company exits (DriveFactor and Quantia) and (ii) prior years’ exit activity (ThingWorx, Crescendo Bioscience and Alverix). In addition, we have an earn-out related to our ThingWorx exit still pending, and Teva, the buyer of NuPathe, began its active marketing of the NuPathe Zecuity product in 2015, which action triggers the measurement period on which our earn-out related to that transaction depends.

~~We repurchased an aggregate of approximately 300,000 shares of our common stock.~~

~~Key 2015 Compensation Decisions~~

Base salaries for Messrs. Zarrilli and Sisko were maintained at their 2014 levels, while Mr. McGroarty received approximately an 11% increase in his base salary for 2015 based upon multiple factors, including an assessment of competitive compensation data.

Based upon 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 increased the target management incentive plan awards for 2015 for Messrs. Zarrilli and McGroarty by 20% and 11%, respectively.

In reviewing Safeguard’s performance against the objectives set forth in the 2015 management incentive plan, the Committee approved a 90% achievement level in connection with the partner company performance component of the corporate objectives and a 70% achievement level in connection with overall corporate performance, resulting in an 80% payout to our named executive officers. While the Committee felt the year

~~included significant 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.~~

In December 2015, the Committee reviewed the competitive market data provided by its consultant and determined that an increase in long-term incentive values for each of our named executive officers was necessary to better match the market in which Safeguard competes for executive talent and to better align the long-term interests of Safeguard management and our shareholders. The long-term incentive values for the 2015 equity grants for Messrs. Zarrilli, McGroarty and Sisko were increased by 28.5%, 26.1% and 41.2%, respectively. These increases also serve the Committee’s objective of continuing to put a greater emphasis on the long-term component of incentive compensation.

~~Effective Corporate Governance Principles~~

We believe that our executive compensation philosophy is reflected in the corporate governance principles that support our business and align with our shareholders’ long-term interests. Below is a summary of what we do and what we don’t do relating to our executive compensation.

~~WHAT WE DO:~~

ü~~Emphasize variable pay for performance by linking our named executive officers’ target incentive compensation to Safeguard’s financial performance and the attainment of specified metrics~~

ü~~Maintain short-term and long-term incentive programs with distinct performance-based measures~~

üGrant approximately two-thirds of the equity awards under our long-term incentive programs subject to the achievement of performance-based measures that are aligned with the creation of shareholder value

ü~~Apply double-trigger vesting of equity awards to our senior executives upon a change in control~~

ü~~Retain an independent compensation consulting firm that provides no other services to Safeguard~~

ü~~Maintain a compensation recoupment policy that will permit us to seek reimbursement of cash and incentive compensation and/or equity grants in certain instances of financial statement restatement~~

ü~~Maintain meaningful stock ownership guidelines for our senior executives and Board members~~

~~WHAT WE DON’T DO:~~

V~~Provide golden parachute excise tax or other tax gross-ups upon a change in control~~

V~~Provide any material perquisites~~

V~~Permit repricing of underwater options without shareholder approval~~

V~~Grant stock option awards or stock appreciation rights (“SARs”) below 100% of fair market value~~

V~~Permit hedging or short-sales transactions in our stock by our senior executives, or permit the use of Safeguard stock as collateral for indebtedness by our executive officers~~

V~~Provide a pension plan or special retirement program other than our 401(k) plan, which is available to all employees~~

V~~Provide post-retirement health coverage~~

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 in increasing the value of our common stock over the long term. We seek to apply a consistent philosophy across our executive group, not just among our named executive officers.

~~Compensation Philosophy and Objectives~~

~~Our overall goals in compensating our executives~~Splits) are as follows:

~~Attract, retain,~~The low volume of trading limits our common stock’s liquidity. This affects our ability to raise capital from the public markets, effectively use our common stock as transaction consideration, attract interest from institutional investors or market analysts and ~~motivate executives who are particularly qualified,~~otherwise enjoy the traditional benefits of being a publicly traded company. Despite the lack of these benefits, we incur all of the significant annual expenses and indirect costs associated with being a public company.

We incur both direct and indirect costs to comply with the filing and reporting requirements imposed on us as a result of their professional experience, to shape our business model and pursue our business plan, and whose experience and skills can be leveraged across our partner companies to facilitate the partner companies’ growth and success;

~~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~~being an ~~incentive to increase shareholder value.~~

~~Our executive compensation program is intended to:~~

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

~~Balance rewards for short-term performance~~SEC reporting company 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 recruitment and retention.~~

As has been the case in recent years, in 2015, a significant portion of our executives’ long-term compensation opportunity was granted subject to capital-return based vesting, under which equity awards vest based on partner company monetizations and the aggregate cash returns produced for Safeguard by such monetizations. The Committee believes a capital-return based vesting model directly links our executives’ compensation opportunity to the accomplishment of specific objectives which, it is believed, will result directly in share price appreciation. Therefore, when the Committee considers the relationships between the different components of our overall compensation philosophy, especially the relationship between fixed compensation and variable annual and long-term incentive compensation opportunity, the Committee carefully considers the challenging performance metrics it incorporates into all of our incentive compensation programs.

~~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 advisory board members, 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 and new advisory board members). 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. Our other named executive officers annually assess the other executives who report to them and make recommendations to our President and Chief Executive Officer concerning the achievement of individual objectives by such executives. 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.

~~Role of Consultant~~

During 2015, 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. In addition, Semler Brossy also provided information related to specific issues arising during the year. In 2015, these included advising the Committee in connection with compensation adjustments for certain members of our executive management team. Semler Brossy also assisted the Committee with the reporting of executive compensation matters relating to 2015 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 2015, 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 2015 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.

~~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.” The Committee principally utilizes variable/at-risk cash compensation and performance-based equity awards to accomplish its objectives in this regard. The following graphs represent the percentage of total compensation for the various elements (assuming the annual and long-term awards are paid at target levels) for our Chief Executive Officer and the average percentage of total compensation for each of these elements for the other named executive officers in 2015, further illustrating our emphasis on pay for performance:

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. The Committee has found these tally sheets to be useful in its evaluation of the total compensation program for our named executive officers and other senior executives. From time to time, the Committee requests that supplemental information be included in such tally sheets as its discussions require.

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 2014 for purposes of the Committee’s consideration of 2015 cash and total compensation levels measured our compensation against data from the following sources:

~~Proxy Peer Group Data~~

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; Harris & Harris Group, Inc.; Hercules Technology Growth Capital, Inc.; Actua, Inc. (formerly ICG Group, Inc.); KCAP Financial, Inc.; Main Street Capital Corporation; MCG Capital Corporation; and Triangle Capital Corporation

~~Venture Capital Survey Data~~

~~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.)~~

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 2015 compensation review, in July 2014, the Committee determined that reviewing compensation from multiple perspectives was still appropriate given Safeguard’s unique business model. In reviewing the Proxy Peer Group in connection with that undertaking, the Committee determined that all peers in the peer group remained appropriate. The Committee does not focus on any one single peer or data point in setting compensation levels.

When the Committee prepared to conduct its annual review of total compensation levels for 2016, Semler Brossy recommended that the Committee consider slightly revising its size and business fit screens for naming peers. The recommended changes would enable the Committee to increase the number of companies in the peer group to a more typical size, especially given the fact that one of the companies in the existing peer group is expected to be acquired. The Committee concurred with the recommendation and expanded the peer group to include American Capital Ltd., Medallion Financial Corp., and Rand Capital Corp., and these companies were included in the competitive assessment used to determine the increase in long-term incentive values for the named executive officers in connection with the December 2015 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 2015 Say-on-Pay Vote and Shareholder Outreach~~

At our 2015 annual meeting of shareholders, our shareholders approved the compensation of our named executive officers, with approximately 97% of shareholder votes being cast in favor of our say-on-pay proposal on executive compensation. The Committee believes that this strong support from our shareholders is evidence that our pay-for-performance policies are working and are aligned with our shareholders’ interests. As part of Safeguard’s ongoing investor relations program, our senior management regularly engages with many of our largest shareholders. Safeguard management views this shareholder engagement as an important opportunity to develop strong relationships with our key investors over the long term, and to engage in an open dialogue regarding our business strategy and our specific short-term and long-term objectives, as well as governance and compensation issues. As a result of our shareholder outreach, management believes that our shareholders overwhelmingly support our pay-for-performance policies and our compensation program. Accordingly, after considering the results of the advisory vote on executive compensation in the context of its overall review of Safeguard’s compensation policies, and considering our management’s discussions with significant shareholders, the Committee has not and does not expect to implement any significant changes to the structure of our executive compensation program for 2016. 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.

~~2015 Compensation Program~~

~~During 2015, 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.~~
~~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.~~

~~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 2015, 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 2014 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 2014, the Committee reviewed the base salaries of our named executive officers and approved an increase in Mr. McGroarty’s base salary for 2015 from $275,000 to $305,000 based upon multiple factors, including an assessment of competitive compensation data, which illustrated that he was below median for his position. No adjustments to base salaries were made for our other named executive officers for 2015.

~~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.

In early March 2015, the Committee approved corporate objectives and target award levels for 2015 for our named executive officers. For 2015, the Committee determined that each of our named executive officers would continue to be eligible to receive an award under the MIP based 100% on the achievement by Safeguard of corporate objectives. Our remaining senior executives and other employees also participated in our 2015 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 long-term growth in shareholder value.

~~2015 Performance Measures.~~ In March 2015, the Committee reviewed and approved the 2015 MIP, including the corporate objectives and weightings to align the short-term incentive provided by the 2015 MIP with our 2015 business strategy. Specifically, the Committee approved the following weighting for the corporate objectives:

~~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 2015 MIP (27 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 2015 MIP is set forth below.)

·Determined that, for 2015, 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 $155 million deployed into nine partner companies, constitute 55% of the target total points; the middle group of companies, representing the deployment of approximately $88 million into ten partner companies, constitute 31% of the target total points; and the smaller group of companies, representing the deployment of approximately $43 million into eight partner companies, constitute 14% 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 2015. In March 2015, the Committee specifically identified the following corporate objectives that would be considered in making its assessment of overall corporate performance:

·Capital deployments: specifically, a target of seven to nine new partner companies during 2015; target capital deployments totaling between $35 and $50 million in the aggregate during 2015 to new partner companies; and target follow-on capital deployments of less than $50 million in the aggregate to existing partner companies;

·~~A target of two to four partner company exits during 2015 with target proceeds to Safeguard totaling between $50 and $70 million in the aggregate; 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 2015 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 years’ experiences, 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 2015 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 2015 MIP.

~~Partner Companies~~

~~AdvantEdge Healthcare Solutions~~

~~AppFirst~~

~~Apprenda~~

~~Aventura~~

~~Beyond.com~~

~~Bridgevine~~

~~CloudMine~~

~~Clutch Holdings~~

~~Dabo~~

~~DriveFactor~~

~~Full Measure~~

~~Good Start Genetics~~

~~Hoopla~~

~~InfoBionic~~

~~Lumesis~~

~~MediaMath~~

~~Medivo~~

~~NovaSom~~

~~Pneuron~~

~~Propeller Health~~

~~Putney~~

~~Quantia~~

~~Spongecell~~

~~Syapse~~

~~Transactis~~

~~Trice~~

~~WebLinc~~

~~2015 Objectives / Targets (may include one or more of the following performance metrics)~~

·~~Achieve specified level of annual revenue, annualized contract value, bookings, etc.~~

·~~Achieve specified level of EBITDA or specified margin~~

·~~Complete additional equity or debt financing~~

·~~Augment management team or board of directors~~

·~~Explore strategic and corporate development options~~

·~~Expand sales efforts to additional territories~~

·~~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 2015 for our named executive officers:

Name
2014 MIP Target
Variable Incentive (1) 2015 MIP Target
Variable Incentive (1) 2016 MIP Target
Variable Incentive (1)
Stephen T. Zarrilli $ 550,000 $ 660,000 $ 696,000
Jeffrey B. McGroarty $ 206,250 $ 228,750 $ 228,750
Brian J. Sisko $ 337,500 $ 337,500 $ 360,000

~~(1)~~

The 2014 and 2016 MIP target variable incentive amounts have been included for comparison purposes. The 2016 MIP target variable incentives for Messrs. Zarrilli and Sisko were increased in connection with overall adjustments to their compensation packages that will be further discussed in our 2017 proxy statement.

There were no mandatory minimum awards payable under the 2015 MIP, and awards were paid based upon the Committee’s determination of the level of achievement of the corporate (and, for certain members of the senior executive group, individual performance) objectives. Payouts were measured in the aggregate on a sliding scale basis from 0% to a possible 150%.

~~Determination of 2015 Payouts.~~

In late 2015 and early 2016, 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 2015 consolidated financial statements and internal control over financial reporting without any unexpected material adjustments). Overall, the Committee determined that 2015 was a year of significant 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%~~
·~~24 of 27 partner companies met or exceeded the majority of their applicable performance goals established as part of the 2015 MIP;~~ ·~~Aggregate 2015 revenue for our partner companies as a whole grew by approximately 25% 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~~	~~70%~~
·~~We consummated eight new partner company transactions during 2015 (against an objective of seven to nine);~~ ·Our total capital deployments in 2015 approximated $85 million, with new deployments of approximately $51.6 million for eight new partner companies (against an objective of seven to nine new partner company capital deployments consisting of $35-$50 million) and follow-on deployments of approximately $33.3 million (against an objective of less than $50 million) for 12 existing partner companies; ·We realized approximately $25 million in aggregate proceeds (excluding additional escrowed funds of $2.3 million) related to (i) two 2015 partner company exits (DriveFactor and Quantia) (against an objective of two to four exits consisting of $50-$70 million in proceeds) and (ii) prior years’ exit activity (ThingWorx, Crescendo Bioscience and Alverix); ·~~We moved our corporate headquarters to Radnor, PA and accomplished the move on time and under budget;~~ ·~~Our stock price performed below the median performance of our proxy peer group;~~ ·~~We repurchased an aggregate of approximately 300,000~~ shares of our common stock listed on Nasdaq. We believe the level of expenditures required to maintain our public company status has become too burdensome in light of our strategy to monetize our remaining ownership interests, continue to reduce our operating costs, and return the maximum value to our shareholders. Our general and administrative expenses consist primarily of employee compensation, stock based compensation, insurance, and professional services. For the year ended December 31, 2022 and nine months ended September 30, 2023, we incurred approximately $4.8 million and $3.7 million, respectively, of general and administrative expenses to oversee the monetization of our individual ownership interests. We believe the remaining ownership interests could require up to two years, or longer, to be monetized. Upon giving effect to the Transaction, we will no longer be subject to the reporting requirements under the Exchange Act or other requirements applicable to a public company, including requirements under the Sarbanes-Oxley Act of 2002, as well as the listing standards of any national securities exchange. We anticipate annual cost savings of approximately $1.5 million in cash and a reduction in annual stock based compensation of approximately $1.2 million after effecting the Transaction and related adjustments to our management structure, primarily as a result of a potential reduction in: (i) professional fees of accountants associated with the audit process, (ii) insurance premiums for ~~an aggregate~~our directors’ and officers’ liability insurance, (iii) Board and employee related expenses, as well as (iv) legal, printing, and other miscellaneous costs associated with being a publicly traded company. We believe that these annual cost savings and a reduction in annual stock based compensation will result in a significant reduction in our operating costs. See “Financial Information—Pro Forma Consolidated Financial Statements (Unaudited)” for a discussion of ~~$5 million;~~the potential impact of effecting the Transaction and ·~~We set the stage for 2016 success with multiple exit strategies~~ implementing related adjustments to our management structure. Please note, however, that these projected annual cost savings and reduction in ~~play.~~
~~Total Percentage~~	~~80%~~stock based compensation are only estimates and our savings and reduction in stock based compensation could be higher or lower than $1.5 million and $1.2 million, respectively. See “Cautionary Statement Regarding Forward-Looking Statements.”

30·

Based on its assessment of the achievement of the 2015 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 2015 MIP payments to our executives solely in cash.

Name Payout Level (1) Total Variable Incentive Payment
Stephen T. Zarrilli 80% $ 528,000
Jeffrey B. McGroarty 80% $ 183,000
Brian J. Sisko 80% $ 270,000
Named Executive Officers, as a group (3 persons) 80% $ 981,000

~~(1)~~

~~In percentage terms versus targeted incentive amount.~~Our shareholders of record holding fewer than the Minimum Number of shares of common stock, who represent a disproportionately large number of our record holders (but only approximately 0.035% and 0.016% of our outstanding shares, in the case of shareholders of record holding fewer than 100 shares and 50 shares, respectively, as of the record date) will receive a premium in cash over market prices prevailing at the time of our public announcement of the Transaction, without incurring brokerage commissions.

~~Long-Term Incentives~~What is the effect of the Transaction?. ~~As noted above,~~

After giving effect to the Transaction, we ~~compete~~will no longer have to file annual, quarterly and other reports with the SEC, and our executive officers, directors and 10% shareholders will no longer be required to file reports relating to their transactions in our common stock. Persons acquiring 5% of our common stock will no longer be required to report their beneficial ownership under the Exchange Act. In addition, we will delist our common stock from Nasdaq and we will no longer be subject to its rules. Any trading in our common stock after the Transaction will only occur in privately negotiated sales and potentially on an OTC market, if one or more brokers chooses to make a market for our common stock on any such market and complies with applicable regulatory requirements; however, there can be no assurances regarding any such trading. In addition, after the effective time of the Stock Splits, Cashed Out Shareholders will no longer have a continuing interest as shareholders of Safeguard and will not share in any future increase in the value of Safeguard, if any.

What will shareholders of record receive in the Stock Splits to effect the Transaction?

If you are a shareholder of record and own fewer than the Minimum Number of shares of our common stock immediately prior to the effective time of the Reverse Stock Split, you will receive $1.65 in cash, without interest, from us for each pre-Reverse Stock Split share that you own (subject to any applicable U.S. federal, state and local withholding tax). If you are a shareholder of record and own at least the Minimum Number of shares of our common stock immediately prior to the effective time of the Reverse Stock Split, you will not receive any Cash Payment for your shares in connection with the Stock Splits and will continue to hold immediately following the Stock Splits the same number of shares of our common stock as you held before the Stock Splits.

Do our directors, executive ~~talent with venture capital~~officers and ~~private equity firms,~~10% shareholders have an interest in the Stock Splits and the ~~Committee reviews~~overall Transaction?

As of the record date, approximately 9.7% and 12.6% of the issued and outstanding shares of our common stock was held by our directors and executive officers and 10% shareholders, respectively. Our directors and executive officers have indicated that they intend to vote all of the shares of our common stock held by them “FOR” the Stock Split Proposals and “FOR” the Adjournment Proposal.

Upon the effective time of the Stock Splits, the aggregate number of shares of our common stock owned by our directors, executive officers and 10% shareholders will not increase and the ownership percentage of the shares of our voting stock held by those of our directors, executive officers and 10% shareholders who will be Continuing Shareholders will increase at the same rate as the ownership percentage of all the other Continuing Shareholders, as a result of the reduction of the number of shares of our common stock outstanding.

In addition, certain members of the Board and management were awarded restricted stock or restricted stock unit grants that entitle them to shares of our common stock upon vesting. Restricted stock or restricted stock unit grants would be unaffected by the Transaction because such restricted stock or restricted stock unit grants will, after the Transaction, represent the right, upon vesting, to receive the same number of shares of our common stock as they were before the Transaction.

None of our directors, executive officers or 10% shareholders has any interest, direct or indirect, in the Stock Splits, other than interests arising from (i) the ownership of shares of our common stock, where those directors, executive officers or 10% shareholders receive no extra or special benefit from the Transaction that is not shared on a pro rata basis by all other holders of our common stock, (ii) the ownership of restricted stock or restricted stock unit grants relating to the right to receive shares of our common stock upon the vesting of these grants, which will not be affected by the Stock Splits, (iii) severance arrangements, or (iv) potential arrangements related to the planned adjusted management structure of Safeguard.

Please see “Discussion and Special Factors—Interests of Executive Officers, Directors and 10% Shareholders” and “Discussion and Special Factors—Planned Management Structure Adjustments” for a further description of these interests.

Why is Safeguard proposing to carry out a Forward Stock Split following the Reverse Stock Split?

The Forward Stock Split is not necessary for us to reduce the number of holders of record of our shares of common stock and to deregister our shares of common stock under Section 12(g) of the Exchange Act. However, we have determined that it is in the best interests of our shareholders to effect the Forward Stock Split to avoid the administrative burden and cost associated with cashing out fractional shares of Continuing Shareholders.

What if I hold fewer than the Minimum Number of shares of common stock and hold all of my shares in “street name”?

For more information, see “Discussion and Special Factors—Effects of the Transactions (including the Stock Splits)—Illustrative Examples.”

What happens if I own a total of the Minimum Number or more shares of common stock beneficially, but I hold fewer than the Minimum Number of shares of record in my name and fewer than the Minimum Number of shares with my broker in “street name”?

We may not have the information to compare your holdings in two or more different brokerage firms. As a result, if you hold more than the Minimum Number of shares, you may nevertheless have your shares cashed out if you hold them in a combination of accounts in several brokerage firms. If you are in this situation and desire to remain a shareholder of Safeguard after the Stock Splits, we recommend that you combine your holdings in one brokerage account or become a record holder prior to the effective time of the Stock Splits. You should be able to determine whether your shares will be cashed out by examining your brokerage account statements to see if you hold more than the Minimum Number of shares in any one account. However, even if the Board determines to continue with the Stock Splits and the overall Transaction following the special meeting, because the Board will not determine the Minimum Number until after the special meeting and it is likely that such determination will only be publicly announced immediately prior to us effecting the Stock Splits, you would need to assume that the Minimum Number is 100 in order to ensure that you remain a Continuing Shareholder. To determine the effect of the Stock Splits on any shares you hold in “street name” (and possible payment of the cash consideration), we encourage you to promptly contact your broker, bank or other nominee. For more information, see “Discussion and Special Factors—Effects of the Transactions (including the Stock Splits)—Illustrative Examples.”

If I own fewer than the Minimum Number of shares of common stock, is there any way I can continue to be a shareholder of Safeguard after the Stock Splits?

If you own fewer than the Minimum Number of shares of our common stock before the Stock Splits, the only way you can continue to be a shareholder of Safeguard immediately after the Stock Splits is to purchase, prior to the effective time of the Stock Splits, sufficient additional shares to cause you to own the Minimum Number of shares at the effective time of the Stock Splits. However, even if the Board determines to continue with the Stock Splits and the overall Transaction following the special meeting, because the Board will not determine the Minimum Number until after the special meeting and it is likely that such determination will only be publicly announced immediately prior to us effecting the Stock Splits, you would need to assume that the Minimum Number is 100 in order to ensure that you remain a Continuing Shareholder. However, given the limited liquidity in our stock, we cannot assure you that any shares will be available for purchase and thus there is a risk that you may not be able to purchase sufficient shares to achieve or exceed the Minimum Number of shares. In this instance, you would no longer remain a shareholder after the effective time of the Stock Splits. For more information, see “Discussion and Special Factors—Effects of the Transactions (including the Stock Splits)—Illustrative Examples.”

If I own more than the Minimum Number of shares, will I continue to be a shareholder of Safeguard after the Stock Splits?

If you own more than the Minimum Number of shares of our common stock, which the Board will determine following the special meeting and will likely not be publicly announced until immediately prior to us effecting the Stock Splits, you will not receive any Cash Payment for your shares and will be a Continuing Shareholder of Safeguard. This means that, after giving effect to the Transaction, you will hold shares of a private company that is no longer required to file information with the SEC and whose shares will no longer trade on Nasdaq. Because of the possible limited liquidity for our common stock following the Transaction and the termination of our obligation to publicly disclose financial and other information, as a Continuing Shareholder, you may potentially experience a significant decrease in the value of your common stock. For more information, see “Discussion and Special Factors—Effects of the Transactions (including the Stock Splits)—Illustrative Examples.”

How many shares of common stock must I own in order to receive the Cash Payment for such shares as a result of the Stock Splits?

You can only receive cash for all of your shares if, prior to the effective time of the Reverse Stock Split, you own fewer than the Minimum Number of shares. If you attempt to reduce your ownership below the Minimum Number of shares, we cannot assure you that any purchaser for your shares will be available. Additionally, even if the Board determines to continue with the Stock Splits and the overall Transaction following the special meeting, because the Board will not determine the Minimum Number until after the special meeting and it is likely that such determination will only be publicly announced immediately prior to us effecting the Stock Splits, it will be difficult for you to know with any certainty whether you will own fewer than the Minimum Number of shares without assuming the Minimum Number is 50. For more information, see “Discussion and Special Factors—Effects of the Transactions (including the Stock Splits)—Illustrative Examples.”

What will happen if the Stock Splits are approved by our shareholders?

Assuming the Board determines that the proposed Stock Splits will result in us having fewer than 300 record holders of our common stock after the effective time of the Stock Splits, we intend to file applicable forms with the SEC to deregister our shares of common stock under the federal securities laws and to delist our shares from Nasdaq. Specifically, in connection with the Transaction, we intend to file a Form 25 to delist our common stock from Nasdaq, which will terminate the registration of our common stock under Section 12(b) of the Exchange Act ten days thereafter. On or around the tenth day following the Form 25 filing, we intend to file a Form 15 with the SEC certifying that we have less than 300 shareholders, which will terminate the registration of our common stock under Section 12(g) of the Exchange Act. After the 90-day waiting period following the filing of the Form 15: (1) our obligation to comply with the requirements of the proxy rules and to file proxy statements under Section 14 of the Exchange Act will also be terminated; (2) our executive officers, directors and 10% shareholders will no longer be required to file reports relating to their transactions in our common stock with the SEC and our executive officers, directors and 10% shareholders will no longer be subject to the recovery of profits provision of the Exchange Act; and (3) persons acquiring 5% of our common stock will no longer be required to report their beneficial ownership under the Exchange Act. Our duty to file periodic and current reports with the SEC will not be suspended with respect to the current fiscal year due to our existing registration statements filed under the Securities Act of 1933, as amended (the “Securities Act”), including the Annual Report on Form 10-K for the fiscal year ending December 31, 2023. However, we intend to cease filing periodic and current reports required under the Exchange Act as soon as we are permitted to do so under applicable laws, rules and regulations.

After giving effect to the Transaction, we will no longer be subject to the reporting requirements under the Exchange Act or other requirements applicable to a public company, including requirements under the Sarbanes-Oxley Act and the listing standards of any national securities exchange. In addition, after the effective time of the Stock Splits, Cashed Out Shareholders will no longer have a continuing interest as shareholders of Safeguard and will not share in any future increase in the value of Safeguard. Our shares of common stock also would cease to be listed on Nasdaq and we do not intend to list them on any other national securities exchange. Any trading in our common stock after giving effect to the Transaction will only occur in privately negotiated sales and potentially on an OTC market, if one or more brokers chooses to make a market for our common stock on any such market and complies with applicable regulatory requirements; however, there can be no assurances regarding any such trading.

What will happen if the Stock Splits are not approved or the Stock Splits fail to reduce the number of record holders of our common stock to below 300?

In the event that the Stock Splits are not approved or the Stock Splits fail to reduce the number of record holders of our common stock to below 300 to allow us to terminate the registration of our common stock under the Exchange Act and take additional actions to effect the Transaction, we will evaluate appropriate adjustments to our management structure and explore all viable alternatives to the Stock Splits with a goal of returning value to our shareholders; however, we will continue to incur the costs associated with being a public company. Although our Board has not yet made any determination, it may authorize us to pursue alternative methods of effecting a going private transaction in order to reduce the costs associated with being a public company.

If the Stock Splits are approved by the shareholders, can the Board determine not to proceed with the Stock Splits or the overall Transaction?

Yes, if the Stock Splits are approved by the shareholders, the Board may determine not to proceed with the Stock Splits or the overall Transaction if it believes that proceeding with the Stock Splits or the overall Transaction is no longer in the best interests of the shareholders. For example, depending on the number of shareholders owning fewer than the Minimum Number of shares, the Board may abandon the Stock Splits, if the Stock Splits become too costly, or the overall Transaction at any time. In that event, we will evaluate appropriate adjustments to our management structure and explore all viable alternatives to the Stock Splits with a goal of returning value to our shareholders.

What are the federal income tax consequences of the Stock Splits to me?

If you are not subject to any special rules that may be applicable to you under federal tax laws, then generally, a Cashed Out Shareholder that is a U.S. holder (as defined below) that receives cash in lieu of a fractional share as a result of the Stock Splits will recognize a capital gain or loss for United States federal income tax purposes. Generally, a Cashed Out Shareholder that is a non-U.S. holder (as defined below) that receives cash in lieu of a fractional share as a result of the Stock Splits will not recognize any gain or loss for United States federal income tax purposes. A Continuing Shareholder who does not receive cash for a fractional share as a result of the Stock Splits will not recognize any gain or loss for United States federal income tax purposes. We urge you to consult with your personal tax advisor with regard to the tax consequences to you of the Stock Splits.

What is the total cost of the Stock Splits and the overall Transaction to Safeguard?

Since we do not know how many record holders of our common stock will be Cashed Out Shareholders, we do not know the exact cost of the Stock Splits. However, based on information that we have received as of the record date from our transfer agent, as well our estimates of other expenses relating to the Stock Splits and the overall Transaction, we believe that the total cash requirement of the Stock Splits and overall Transaction is approximately $1.2 million, if the Minimum Number were 75, which is the approximate midpoint within the proposed range of Stock Split Ratios. This amount includes ~~comparative information regarding venture capital~~approximately $10,000, if the Minimum Number is 75, needed to cash out fractional shares as a result of the Stock Splits, and ~~private equity industry compensation practices~~approximately $1.2 million of legal, accounting, severance and other costs to effect the Transaction. However, this total amount, which is for illustrative purposes only, could be larger or smaller depending on, among other things, the Reverse Stock Split Ratio the Board chooses, the number of persons owning fewer than the Minimum Number immediately prior to the effective time and the number of fractional shares that will be outstanding after the Stock Splits as a result of purchases, sales and other transfers of our shares of common stock by our shareholders. If the Board determines that the total cash requirement of the Stock Splits is prohibitively expensive, including as a result of subsequent trading activity, it may abandon the Stock Splits or the overall Transaction even if approved by our shareholders.

Am I entitled to appraisal rights in connection with the Stock Splits?

No. Under Pennsylvania law, our articles of incorporation and our bylaws, no appraisal or dissenters’ rights are available to our shareholders who vote against (or abstain from voting on) the Stock Split Proposals.

DISCUSSION AND SPECIAL FACTORS

The Stock Splits and the Transaction

Our Board, comprised solely of independent directors, unanimously approved, subject to shareholder approval and subsequent final approval of the exact Stock Split Ratios by the Board in its discretion, the Transaction, including articles of amendment to our articles of incorporation to effect the Stock Splits as part of ~~its overall compensation analysis. In these industries, executives (referred~~the plan to suspend our duty to file periodic and current reports and other information with the SEC under the Exchange Act and to delist our common stock from Nasdaq. The actions we would take to suspend, and events that occur as a result of such actions that would have the effect of suspending, our reporting obligations under the Exchange Act, also referred to as ~~“managing partners”~~the “going dark” transaction, including effectuating the Stock Splits, delisting our common stock from trading on Nasdaq, terminating the registration of our common stock under Sections 12(b) and 12(g) of the Exchange Act and suspending of our reporting obligations under Section 15(d) of the Exchange Act, are collectively referred to as the “Transaction”.

The Stock Splits will be at a ratio (i) not less than 1-for-50 and not greater than 1-for-100, in the case of the Reverse Stock Split, and (ii) not less than 50-for-1 and not greater than 100-for-1, in the case of the Forward Stock Split, with the exact Stock Split Ratios to be set within the foregoing ranges at the discretion of our Board (and, in all cases, with the Forward Stock Split Ratio being the inverse of the Reverse Stock Split Ratio), without further approval or ~~“managing directors”) typically have compensation programs heavily weighted towards long-term incentive, structured~~authorization of our shareholders and with our Board, in its sole discretion, able to effect the Stock Splits immediately following the public announcement of the Stock Split Ratios or to elect to abandon the proposed Stock Splits or the overall Transaction (whether or not authorized by the shareholders) at any time.

Shareholders of record owning fewer than the Minimum Number of shares of common stock immediately prior to the effective time of the Reverse Stock Split, whom we refer to as the “Cashed Out Shareholders,” and who will only be entitled to a fraction of a share of common stock upon the ~~fund’s profits, payable~~effectiveness of the Reverse Stock Split, will be paid cash, in ~~cash (referred~~lieu of such fraction of a share of common stock, on the basis of $1.65, without interest, for each share of common stock held immediately prior to the effective time of the Reverse Stock Split, and they will no longer be shareholders of Safeguard.

Shareholders of record who own at least the Minimum Number of shares common stock immediately prior to the effective time of the Reverse Stock Split, whom we refer to as ~~“carry”). We currently do~~the “Continuing Shareholders,” will not ~~provide~~receive any cash for their fractional share interests resulting from the Reverse Stock Split, if any. The Forward Stock Split that will immediately follow the Reverse Stock Split will reclassify whole shares and fractional shares held by the Continuing Shareholders after the Reverse Stock Split back into the same number of shares of common stock they held immediately before the effective time. As a result, the total number of shares of common stock held by a Continuing Shareholder will not change, but their ownership percentage will increase.

Although amendments to our ~~executives~~articles of incorporation to effect each of the Reverse Stock Split and the Forward Stock Split will be voted on separately, we will not effect either the Reverse Stock Split or the Forward Stock Split unless the proposals to approve both amendments are each approved by shareholders. Even if the proposals are approved by our shareholders, the Board may still determine that it is no longer in the best interests of Safeguard or our shareholders to proceed with the ~~equivalent~~Stock Splits or the Transaction.

Purpose of ~~a “carry.” Instead,~~and Reasons for the Stock Splits and the Transaction

The primary purpose of the Stock Splits is to enable Safeguard to reduce the number of record holders of its common stock below 300, which is the level at or above which Safeguard is required to file public reports with the SEC. If the Board determines to proceed with the Transaction, it will determine the Stock Split Ratios after the special meeting, however Safeguard believes that any Reverse Stock Split ratio within the proposed range would reduce the number of record holders below 300. The Stock Splits are being undertaken as part of our ~~overall executive compensation program, we review~~plan to suspend our ~~equity compensation plans in light of~~duty to file periodic and current reports and other information with the type of economic benefit and performance metrics that would be included in a “carry” approach to compensation. We compare 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 availableSEC pursuant 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).Exchange Act.

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 may vary 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 are still granted from time to time. The decision to use primarily restricted stock and restricted stock units, a significant percentage of which are 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 same practice was followed for the 2014 and 2015 equity grants. The Committee also determined that such capital-return based vesting model best aligns the long-term incentive awardAfter giving effect to the ~~factors critical to the creation of shareholder value. Our executive officers~~Transaction, we will ~~receive value from these capital-return based vesting awards only if the pre-determined performance conditions are met.~~

~~While the Committee has decided to use primarily restricted stock and restricted stock units~~no longer be subject to the ~~capital-return based vesting model,~~reporting requirements under the Exchange Act or other requirements applicable to a public company, including requirements under the Sarbanes-Oxley Act and the listing standards of any national securities exchange. In addition to being delisted from Nasdaq, we do not intend to list our shares of common stock on any other national securities exchange. Any trading in ~~general,~~our common stock after giving effect to the ~~Committee allocates equity grants (both initial~~Transaction would only occur in privately negotiated sales and potentially on an OTC market, if one or more brokers chooses to make a market for our common stock on any ~~annual grants) between (i) equity grants subject to performance-based vesting (such performance measured using either~~such market and complies with applicable regulatory requirements; however, there can be no assurances regarding any such trading.

The Board has determined that the ~~market–based vesting model or~~costs of being an SEC reporting company outweigh the ~~capital-return based vesting model, each as discussed~~benefits and, thus, it is no longer in ~~more detail below) and (ii) equity grants subject to simple time-based vesting. The Committee believes that allocating equity grants in this way aligns~~ the ~~long-term~~best interests of ~~Safeguard management and~~ our shareholders, including our unaffiliated shareholders (consisting of shareholders other than our executive officers, directors and ~~creates~~shareholders who own more than 10% of our outstanding common stock), for us to remain an SEC reporting company. The Stock Splits, along with other actions constituting the Transaction, are intended to make us a ~~balance for our senior executives between incentive and retention. The Committee may allocate equity grants in a different manner in special circumstances.~~non-SEC reporting company.

~~At present, our issued and outstanding performance-based equity grants~~Our principal reasons for the Transaction (including the proposed Stock Splits) are subject to one of the following vesting models: (i) “market-based vesting” (for performance-based equity grants made in June 2008) or (ii) “capital-return based vesting” (for performance-based equity grants made beginning in the third quarter of 2008). Both of these types of performance-based equity are described in more detail below.

~~All equity grants to our named executive officers in 2015 were allocated between (i) performance-based vesting (all of which use the capital-return based vesting model) and (ii) time-based vesting~~ as follows:

~~Two-thirds~~Limited Trading Volume. Our common stock is thinly traded. As of September 29, 2023, which was prior to the announcement of the Transaction on October 5, 2023, the average daily trading volume of the stock for the previous 90 days was approximately 47,600 shares per day (or 0.3% of our total ~~underlying~~ shares ~~are~~of common stock outstanding). The low volume of trading limits our common stock’s liquidity. This affects our ability to raise capital from the public markets, effectively use our common stock as transaction consideration, attract interest from institutional investors or market analysts and otherwise enjoy the traditional benefits of being a publicly traded company. Despite the lack of these benefits, we incur all of the significant annual expenses and indirect costs associated with being a public company.

Reduced Costs and Expenses. We incur both direct and indirect costs to comply with the filing and reporting requirements imposed on us as a result of being an SEC reporting company with shares of our common stock listed on Nasdaq. We believe the level of expenditures required to maintain our public company status has become too burdensome in light of our strategy to monetize our remaining ownership interests, continue to reduce our operating costs, and return the maximum value to our shareholders. Our general and administrative expenses consist primarily of employee compensation, stock based compensation, insurance, and professional services. For the year ended December 31, 2022 and nine months ended September 30, 2023, we incurred approximately $4.8 million and $3.7 million, respectively, of general and administrative expenses to oversee the monetization of our individual ownership interests. We believe the remaining ownership interests could require up to two years, or longer, to be monetized. Upon giving effect to the Transaction, we will no longer be subject to ~~performance-based vesting using~~ the ~~capital-return~~reporting requirements under the Exchange Act or other requirements applicable to a public company, including requirements under the Sarbanes-Oxley Act of 2002, as well as the listing standards of any national securities exchange. We anticipate annual cost savings of approximately $1.5 million in cash and a reduction in annual stock based ~~vesting model;~~compensation of approximately $1.2 million after effecting the Transaction and related adjustments to our management structure, primarily as a result of a potential reduction in: (i) professional fees of accountants associated with the audit process, (ii) insurance premiums for our directors’ and officers’ liability insurance, (iii) Board and employee related expenses, as well as (iv) legal, printing, and other miscellaneous costs associated with being a publicly traded company. We believe that these annual cost savings and a reduction in annual stock based compensation will result in a significant reduction in our operating costs. See “Financial Information—Pro Forma Consolidated Financial Statements (Unaudited)” for a discussion of the potential impact of effecting the Transaction and implementing related adjustments to our management structure. Please note, however, that these projected annual cost savings and reduction in stock based compensation are only estimates and our savings and reduction in stock based compensation could be higher or lower than $1.5 million and $1.2 million, respectively. See “Cautionary Statement Regarding Forward-Looking Statements.”

Liquidity for Small Stockholdings. The Board also believes that holders of small amounts of shares of our common stock may be deterred from selling their shares because of the lack of an active trading market and high brokerage costs. The Stock Splits will offer Cashed Out Shareholders the opportunity to obtain cash for their shares without incurring high brokerage costs because of the limited trading market for our common stock. Accordingly, the Stock Splits will provide our smallest shareholders of record (those holding fewer than the Minimum Number of shares), who represent a disproportionately large number of our record holders (but only approximately 0.035% and 0.016% of our outstanding shares, in the case of shareholders of record holding fewer than 100 shares and 50 shares, respectively, as of the record date), with the ability to receive a premium in cash over market prices prevailing at the time of our public announcement of the Transaction, without incurring brokerage commissions.

Background of the Stock Splits to Effect the Transaction

Historically, Safeguard has provided capital and relevant expertise to fuel the growth of technology-driven businesses. In January 2018, Safeguard ceased deploying capital into new opportunities in order to focus on supporting the existing ownership interests and maximizing monetization opportunities to enable returning value to shareholders. We have considered and taken action on various initiatives, including the sale of individual ownership interests, the sale of certain or all ownership interests in secondary market transactions, as well as other opportunities to maximize shareholder value. Since January 2018, Safeguard’s individual ownership interests have been reduced from over 25 entities to only six companies, four of which are expected to provide the majority of remaining exit proceeds. This monetization process resulted in satisfying all of Safeguard’s historical debt obligations, paying a $1.00 per share dividend in 2019 and repurchasing 5.3 million shares of our common stock through a combination of open market purchases and a tender offer.

We are actively involved with certain of our remaining ownership interests, influencing development through board representation and management support in addition to the influence we exert through our equity ownership. We also continue to hold relatively small equity interests in other enterprises where we do not exert significant influence and do not participate in management activities. In some cases, those ownership interests relate to residual interests from prior larger interests or from companies that had acquired companies in which we had ownership interests.

We have also reduced the operating costs of Safeguard since January 2018 and intend to reduce them further, after giving effect to the Transaction assuming shareholder approval of the Stock Split Proposals, in order to maximize distributions available to shareholders from proceeds, if any, from future monetization of remaining individual ownership interests.

In January 2022, while continuing to seek monetization opportunities for its ownership interests, Safeguard’s Board met to discuss a range of strategic alternatives for the Company, including a potential sale of all of its ownership interests in a single transaction or a series of transactions, merger, business combinations or other strategic transaction involving Safeguard.

In February 2022, Safeguard engaged Houlihan Lokey (the “financial advisor”) to serve as its financial advisor in connection with Safeguard’s consideration of potential strategic opportunities and engaged Blank Rome LLP (“Blank Rome”), Safeguard’s outside legal counsel, to represent Safeguard in connection with a potential strategic transaction.

Ultimately, from February 2022 to July, 2023, at the direction of the Board, the financial advisor contacted approximately 393 parties that might be interested in exploring a strategic transaction with Safeguard, and Safeguard negotiated and entered into 42 non-disclosure agreements with potential parties to such transactions. The potential parties that executed non-disclosure agreements received access to a non-public electronic data room. As a result of this process, Safeguard received eight (8) initial non-binding indications of interest in June, 2022. Each of the eight (8) parties that submitted non-binding indications of interest were invited to a second round of due diligence, and invited to submit a formal transaction proposal. In August 2022, four (4) parties submitted formal transaction proposals. In March 2023, Safeguard entered into exclusivity with one of the unaffiliated parties that submitted a formal transaction proposal (“Party A”). From March to July 2023, Safeguard was engaged in the process of negotiating a potential transaction with this unaffiliated Party A. However, Safeguard and Party A were unable to agree on the terms of a potential transaction and suspended their respective efforts to reach mutually agreeable terms of the deal, as discussed below. Throughout this process, the management and financial advisor provided updates to the Board on the status of these negotiations.

Since late August 2022 until May 2023, as part of its ongoing strategic planning process, the Board held a series of telephonic meetings, at which it started to explore, together with Safeguard’s management, whether Safeguard’s status as a public reporting and Nasdaq-listed company is an advantage to Safeguard and its shareholders, whether Safeguard realizes any of the traditional benefits of such status (given the significant annual expenses and indirect costs associated with being a public reporting and Nasdaq-listed company), and whether Safeguard should consider a “going dark” transaction, and if so, the proper method for effectuating such a transaction.

On January 17, 2023, the Board held a meeting with management and discussed establishing a timeline for the specific strategic decision-making process in 2023, including undertaking a “going dark” transaction in the third or fourth quarter of 2023 if an alternative strategic transaction could not be entered into during such time frame.

On May 24, 2023, the Board held a telephonic meeting with management and the financial advisor to discuss the potential strategic transaction with Party A and potential alternatives to such transaction, including the possibility of a “going dark” transaction.

On June 9, 2023, the Board held a telephonic meeting with management to discuss, among other matters, strategic alternatives to the potential strategic transaction, including a “going dark” transaction, Safeguard remaining a public reporting company through the fiscal year ending December 31, 2024 and Safeguard’s merger opportunities, if any.

On June 22, 2023, the Board held a telephonic meeting with management to review additional information regarding the “going dark” strategy, including the process, timing, projected costs, the estimated annual cost savings, the advantages and disadvantages of “going dark,” and the requirements and process of delisting our common stock from Nasdaq and deregistering our common stock with the SEC. The Board and management also discussed the costs and timing of the potential strategic transaction.

On July 24, 2023, the Board held a telephonic meeting with management, at which the management informed the Board that Safeguard and Party A mutually had suspended their efforts to reach aggregable terms of a potential transaction, and that there was not an alternative strategic transaction available with another party at such time. At that meeting, the Board, management and representatives of Blank Rome further discussed the timing and costs of, and a series of actions related to the “going dark” process. The Board agreed that management and Blank Rome would provide the Board with further information on the “going dark” process so that Board could continue to evaluate it.

On August 8, 2023, the Board held a telephonic meeting with management to discuss the “going dark” process, as well as an outsourced management structure. The Board directed management to commence work on the reverse stock split, including, without limitation, conducting a valuation of the common stock in connection with the determination of the cash to be paid in connection with the reverse stock split and determining the appropriate ratio.

On August 10, 2023, Safeguard issued its earnings press release related to the financial results of the quarter ended June 30, 2023 and announced, among other matters, that Safeguard was no longer in discussions regarding a potential strategic transaction, due to, among other things, certain valuation, tax and structural issues that were fundamental to the transaction, and that, in order to substantially reduce its ongoing operating costs, Safeguard was exploring delisting from Nasdaq and becoming a non-reporting company.

In August, 2023, after the earnings call related to financial results of the quarter ended June 30, 2023, management requested that its financial advisor review any parties that were originally contacted as part of the strategic process to determine whether Safeguard’s announcement that it was exploring delisting from Nasdaq and becoming a non-reporting company would lead to renewed interest in a strategic transaction. Based on this review and further discussions with its financial advisor, Safeguard determined that there were no parties to re-engage with at the time.

On September 22, 2023, the Board held a telephonic meeting with management and representatives of Blank Rome to discuss a potential “going dark” transaction using a reverse stock split followed immediately by the forward stock split and related SEC requirements. Management provided information regarding assumptions and estimates related to the potential payment to Cashed Out Shareholders, as well as potential adjustments to Safeguard’s management structure. Following this discussion, representatives of Blank Rome provided additional information, and responded to questions from the Board and management regarding the potential “going dark” transaction, including the timing of required SEC filings.

On September 30, 2023, the Board held a telephonic meeting with management and representatives of Blank Rome. The purpose of the meeting was to formally review and approve, as appropriate, the specific terms of the proposed Stock Splits and the overall Transaction. At the request of the Board, management reviewed with the Board its financial analyses of Safeguard and the Cash Payment to be received by the Cashed Out Shareholders in the Reverse Stock Split, and the Board discussed the following: (i) the purpose of and reasons for the Stock Splits and the overall Transaction; and (ii) various advantages and potential disadvantages relating to the Stock Splits and the overall Transaction, including whether to proceed with the Transaction.

Based on all the factors which had been considered by the Board at this and at its other meetings, although not relying upon any one factor but considering all factors as a whole, the Board determined (by a unanimous vote) that the Stock Splits and the overall Transaction would be in the best interests of all of Safeguard’s shareholders, including the unaffiliated Cashed Out Shareholders and the unaffiliated Continuing Shareholders, and unanimously approved the Stock Splits and the overall Transaction, including the Cash Payment of $1.65 and a range of split ratios of (i) not less than 1-for-50 and not greater than 1-for-100, in the case of the Reverse Stock Split, and (ii) not less than 50-for-1 and not greater than 100-for-1, in the case of the Forward Stock Split, with the exact Stock Split Ratios to be set within the foregoing ranges at the discretion of the Board after the special meeting, and recommended the Stock Splits to effect the Transaction to the shareholders of Safeguard. The Board also retained the right to abandon the proposed Stock Splits or the overall Transaction at any time prior to its completion, whether prior to or following the special meeting, if it believes either the Stock Splits or the overall Transaction is no longer in the best interests of Safeguard or its shareholders (for example, among other things, if prior to the effective time, the Board determines that there is no Reverse Stock Split Ratio for which Safeguard can accomplish its goal of reducing its holders of record below 300 with acceptable costs to cash out shareholders owning fewer than the Minimum Number chosen by the Board). The Board also considered that, subject to its compliance with Pennsylvania law and the federal proxy rules, it can change the terms of the Stock Splits and the overall Transaction, including the Stock Split Ratios and the amount of the Cash Payment, at any time to the extent it believes it is necessary or desirable in order to accomplish Safeguard’s goal of staying below 300 record holders.

On October 5, 2023, we announced that the Board had approved the Stock Splits to effect the Transaction. Safeguard also filed with the SEC a preliminary proxy statement and a Schedule 13E-3 relating to the Stock Splits.

Alternatives to the Stock Splits to Effect the Transaction

Prior to selecting the Stock Splits as the appropriate approach to achieve the Transaction and as further discussed below, the Board considered alternative transactions to reduce the number of shareholders of record below 300 shareholders and to effect a “going dark” transaction. When considering various alternatives to the Stock Splits, our primary objective was to ensure that the selected approach would result in Safeguard having fewer than 300 record holders of our common stock within our desired timeframe, and the Board ultimately concluded that the Stock Splits would be the best approach to achieve this objective. In making its determination, the Board also considered the potential costs of the Stock Splits and the alternative transactions discussed below.

Purchases of Shares in the Open Market or Issuer Tender Offer. In this alternative, we would purchase shares in the open market or offer to purchase a set number of shares within a specific timeframe. The results of an open market purchase or issuer tender offer would be unpredictable, however, due to its voluntary nature, and we would have no assurance that enough shareholders would sell in open market transactions, or tender in an issuer tender offer, all of their shares of our common stock to reduce the number of record owners of our common stock to fewer than 300. In addition, the rules governing tender offers require equal treatment of all shareholders, including the pro rata acceptance of offers from all shareholders. The Board determined that, since participation in an issuer tender offer is voluntary, it may not be successful in reducing the number of holders of record to below 300. In addition, the estimated costs of this type of transaction potentially could be higher than the costs of the Stock Splits because Safeguard would need to purchase the shares tendered by all tendering shareholders, not just the shareholders who were being cashed out. As a result of these disadvantages, the Board determined not to pursue this alternative.

Odd-Lot Tender Offer. Unlike a traditional tender offer, an odd-lot tender offer would offer to purchase the shares of our common stock only from those shareholders owning 99 or fewer shares. As of the record date, there were approximately 235 holders of record owning 99 or fewer shares of our common stock. However, like an issuer tender offer, this method would be voluntary on the part of shareholders and there could be no assurance that a requisite number of shareholders would participate. While the time frame for completing an odd-lot tender offer is shorter than for the Stock Splits and would be less expensive, the Board decided this alternative was not the best option due to a lack of certainty that it would produce the desired result.

Merger into an Operating Company or Sale of Substantially All Assets of Safeguard. Under this alternative, we attempted (subject to the shareholders’ approval) to negotiate a merger of Safeguard into an operating company or a sale of substantially all of the assets of Safeguard. However, the Board concluded that its efforts were ineffective in reaching a mutually agreeable deal with potential buyers, as discussed above, and that, under the current conditions, the interest in the market to purchase the shares or assets of Safeguard was extremely low or absent. Further, this alternative would take an extended amount of time while likely incurring significant legal and audit fees to complete, and, there would be no assurance that a potential buyer would be found or, if found, such potential buyer would proceed to completion of the acquisition.

Dissolution of Safeguard and Liquidation of Its Assets. Under this alternative, we would (subject to the shareholders’ approval) dissolve Safeguard under Pennsylvania law and wind up and liquidate our assets. However, winding up and selling (as part of liquidation) our assets would require costly engagement of an investment banking firm or a business broker to market our assets in order to reach potential buyers (if any). Even after filing the Articles of Dissolution, Safeguard may still be deemed to have the number of record shareholders in excess of the Exchange Act Rule 12g-4 thresholds. Accordingly, Safeguard would likely be required to continue its reporting under the Exchange Act until the time all assets and liabilities of Safeguard are wound up and sorted out pursuant to state law, which would continue to be costly for Safeguard.

Maintaining the Status Quo. The Board also considered maintaining the status quo. In that case, Safeguard would continue to incur the significant expenses of being an SEC reporting company, including retaining the employee base necessary to comply with Safeguard’s SEC reporting obligations, without enjoying the benefits traditionally associated with SEC reporting company status, including, but not limited to, raising capital in the public markets, stock liquidity and the ability to use its common stock as currency for acquisitions. However, the Board believed that becoming a private company would be in the best interests of our shareholders and rejected this alternative.

After carefully reviewing all of these alternatives, for the reasons discussed above, the Board unanimously approved the Stock Splits as the most expeditious and economical way of changing our status from that of a reporting company to that of a non-reporting company.

Effects of the Transaction (including the Stock Splits)

Effect of the Transaction (including the Stock Splits) on Safeguard. The primary purpose of the Stock Splits is to reduce the number of our shareholders of record below 300, which will allow us to cease our reporting obligations with the SEC. If the Board determines to proceed with the Transaction, it will determine the Stock Split Ratios after the special meeting, however Safeguard believes that any Reverse Stock Split ratio within the proposed range would reduce the number of record holders below 300. In determining whether the number of our shareholders of record is below 300 for regulatory purposes, we will count shareholders of record in accordance with Rule 12g5-1 under the Exchange Act. Rule 12g5-1 provides, with certain exceptions, that in determining whether issuers, including Safeguard, are subject to the registration provisions of the Exchange Act, securities are considered to be “held of record” by each person who is identified as the owner of such securities on the respective records of security holders maintained by or on behalf of the issuers. However, institutional custodians such as Cede & Co. and other commercial depositories are not considered a single holder of record for purposes of these provisions. Rather, Cede & Co.’s and these depositories’ accounts are treated as the record holder of our shares. Based on information available to us as of the record date and for illustrative purposes only, if the Reverse Stock Split Ratio were 1-for-75, which is the approximate midpoint within the proposed range of the Reverse Stock Split Ratios, we expect that as a result of the Stock Splits the number of our shareholders of record would be reduced from approximately 388 to approximately 169 and we estimate that there are approximately 219 holders of record who own fewer than 75 shares of our common stock whose shares would be cashed out as a result of the Stock Splits.

We believe that if the Stock Splits and the overall Transaction occur, there will be certain advantages to the shareholders, including the following:

Termination of Exchange Act Registration and Elimination of SEC Reporting Obligations. After giving effect to the Transaction, we will no longer need to comply with the Exchange Act, Sarbanes-Oxley Act and Nasdaq requirements applicable to public companies. Our common stock is currently registered under the Exchange Act. The registration may be terminated upon application by us to the SEC if there are fewer than 300 holders of record of our common stock. Assuming the Board determines that the proposed Stock Splits will result in us having fewer than 300 record holders of our common stock after the effective time of the Stock Splits, we intend to file a Form 25 with the SEC to delist our common stock from Nasdaq and to deregister our common stock under Section 12(b) of the Exchange Act. We expect the delisting of our common stock will be effective 10 days after we file the Form 25 with the SEC and the deregistration of our common stock under Section 12(b) of the Exchange Act will take effect 90 days after the filing of the Form 25. Our duty to file periodic and current reports under Section 13(a) of the Exchange Act and the rules and regulations thereunder as a result of our common stock’s registration under Section 12(b) of the Exchange Act will be suspended 10 days after we file the Form 25 with the SEC. We will also be required to terminate our registration under other applicable provisions of the Exchange Act. Accordingly, we will also file with the SEC a Form 15 certifying that we have less than 300 shareholders. After the 90-day waiting period following the filing of the Form 15: (1) our obligation to comply with the requirements of the proxy rules and to file proxy statements under Section 14 of the Exchange Act will also be terminated; (2) our executive officers, directors and 10% shareholders will no longer be required to file reports relating to their transactions in our common stock with the SEC and our executive officers, directors and 10% shareholders will no longer be subject to the recovery of profits provision of the Exchange Act; and (3) persons acquiring 5% of our common stock will no longer be required to report their beneficial ownership under the Exchange Act. However, our obligation to file periodic and current reports with the SEC will not be suspended with respect to the 2023 fiscal year due to our existing registration statements filed under the Securities Act, and we will file with the SEC our Annual Report on Form 10-K for the fiscal year ending December 31, 2023. However, if on the first day of any fiscal year we have more than 300 shareholders of record, we will once again become subject to the reporting requirements of the Exchange Act. If necessary to maintain its suspension of SEC reporting obligations, Safeguard reserves the right to take additional actions that may be permitted under Pennsylvania law, including effectuating further reverse stock splits. Despite no longer being an SEC reporting company, Safeguard will continue to be subject to the general anti-fraud provisions of applicable federal and state securities laws.

~~One-third~~Conduct of Our Business. If shareholders approve the Stock Split Proposals and we proceed with the Transaction, we will continue to pursue our strategy to monetize our remaining ownership interests and return the maximum value to our shareholders, and we will have additional corporate governance flexibility as a result of no longer needing to comply with corporate governance rules applicable to publicly listed companies. We plan to adjust our existing management structure in connection with the Transaction by reducing the size of the ~~total underlying shares are subject~~Board to ~~time-based vesting;~~two members and reorganizing our management to primarily use an external service provider, with our current executive officers and employees expected to provide limited consulting services to Safeguard on an as-needed basis, on the terms and schedule to be approved by the Board, at its discretion, depending on the timing of the Transaction. If shareholders approve the Stock Split Proposals and we proceed with the Transaction, the size of the Board is expected to be reduced to two members from the current governance structure of Safeguard, to be determined by the Board upon the filing of our Annual Report on Form 10-K for the fiscal year ending December 31, 2023, and there will be no standing committees of the Board. Each of such ~~amount, 25% vest~~two directors is expected to serve on ~~March~~the Board for a term expiring at the 2024 annual meeting of shareholders and until such director’s successor is duly elected and qualified. In addition, starting from January 1, ~~2017,~~2024, Eric Salzman, our current Chief Executive Officer, will no longer serve as our Chief Executive Officer and is expected to provide certain consulting services to Safeguard, on an as-needed basis, on the terms and schedule to be approved by the Board, at its discretion, depending on the timing of the Transaction. In addition, if shareholders approve the Stock Split Proposals and we proceed with the Transaction, starting from January 1, 2024, we expect to begin transitioning Safeguard’s general and administrative functions, including, but not limited to, overseeing the remaining ~~75% vest in 12 equal~~ownership interests, monitoring any continued escrow amounts due to Safeguard and other contractual arrangements, maintaining Safeguard’s books and records, overseeing the process of shareholder distributions when and if proceeds from the monetization of our ownership interests are available and maintaining quarterly ~~installments commencing~~and annual shareholder communications, to an external management service provider to be selected by the Board, with our remaining officers and employees no longer maintaining their current positions, but instead providing consulting services to Safeguard, on ~~March 15, 2017, and~~an as-needed basis, on the ~~fifteenth day~~terms and schedule to be approved by the Board, at its discretion, depending on the timing of ~~each June, September, December,~~the Transaction. While we currently intend to make our financial information, including our audited annual financial statements, available to our shareholders on a voluntary basis after giving effect to the Transaction, we are not required to do so by law and ~~March thereafter.~~there is no assurance that even if we do make such information available immediately after giving effect to the Transaction that we would continue to do so in the future.

As discussed above, the performance-based equity grants that were made in June 2008 are subject to performance-based vesting using the market-based vesting model (such equity grants currently consist of only options that we granted in June 2008 to Mr. Zarrilli). The market-based vesting model applicable to such options determines the vesting of such options based on the market price of Safeguard’s common stock on the NYSE over specified periods. Mr. Zarrilli receives a benefit from these market-based options only if our common stock achieves and sustains a target market price (based on the average closing price of a share of our common stock as reported on the NYSE composite tape for 20 consecutive trading days). More information regarding outstanding market-based options granted to Mr. Zarrilli is set forth below under “Executive Compensation – Outstanding Equity Awards at Fiscal Year-End — 2015.”

As discussed above, beginning in the third quarter of 2008, the Committee transitioned to the capital-return based vesting model for performance-based equity grants. The capital-return based vesting model vests the equity grants awarded in a given period based on aggregate cash returns received by Safeguard from the ultimate monetizations of phantom “pools” of Safeguard’s partner companies. Typically, for performance-based equity grants using the capital-return based vesting model, the vesting of such equity grants will be based on aggregate cash returns received by Safeguard from the ultimate monetizations of new partner companies first funded during the same calendar year in which those equity grants were made. The 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 model provides that, subject to minimum time periods having expired, 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.

~~For the performance-based equity grants (which use the capital-return based vesting model) that were granted from 2008 through 2012, as well as those granted in 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 between 2008 and 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 2008 through 2012 deployments) is 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 (which use the capital-return based vesting model) granted in 2014 and 2015. In addition, in making revisions to the predetermined target amounts of proceeds needed for initial vesting and full vesting for performance-based equity grants (which use the capital-return based vesting model) granted in 2014 and 2015, the Committee 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 (which use the capital-return based vesting model) granted in 2014 and 2015, 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). At that point, 25% of such equity grants will vest. Incremental 25% tranches of such equity grants will vest on a cliff basis as 1.5 times, 1.75 times and 2.0 times the aggregate capital deployed by Safeguard in such applicable pool of partner companies (plus allocated overhead) are received by Safeguard. When Safeguard receives 2.0 times the aggregate capital deployed by Safeguard in the applicable pool of partner companies (plus allocated overhead), vesting equal to 100% of the shares underlying the 2014 and 2015 performance-based equity grants (which use the capital-return based vesting model), as applicable, will have been achieved. If such proceeds received by Safeguard exceed 2.0 times the aggregate capital deployed by Safeguard in the applicable pool of partner companies (plus allocated overhead), cash payments will then accrue for, and be made to, holders of such equity grants in amounts approximating a percentage of the value of the such equity grants (the value of the 2015 equity grants is set forth in the table below). Specifically, such cash payments will be equal to: (i) 25% of such equity grant value if Safeguard receives 2.25 times the aggregate capital deployed by Safeguard in the applicable pool of partner companies (plus allocated overhead); (ii) an additional 25% of such equity grant value if Safeguard receives 2.5 times the aggregate capital deployed by Safeguard in the applicable pool of partner companies (plus allocated overhead); and (iii) up to an additional 50% of such equity grant value, made on a linear basis, if Safeguard receives in excess of 2.5 times the aggregate capital deployed by Safeguard in the applicable pool of partner companies (plus allocated overhead). Once Safeguard receives 3.0 times the aggregate capital deployed by Safeguard in the applicable pool of partner companies (plus allocated overhead), no named executive officer (each of whom received performance-based equity grants (which use the capital-return based vesting model) in 2015) will receive any additional cash payments, 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 performance-based equity grants (which use the capital-return based vesting model) 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 the 2015 performance-based equity grants (which use the capital-return based vesting model) not vest (or cash amounts be paid) more quickly than based upon the following schedule following grant: March 15, 2017 - 25%; each semi-annual anniversary of the grant thereafter through March 15, 2020 - 12 ½% increments. In addition, recipients must be actively employed/providing service to Safeguard through such dates.

For performance-based equity grants (which use the capital-return based vesting model) that were granted in 2015, the pool of partner companies against which vesting will be measured are those companies into which we first deployed capital during 2015, consisting of: Aventura, Inc., Cask Data, Inc., Cloudmine, Inc., Full Measure Education, Inc., New Life Solution, Inc. d/b/a meQuilibrium, QuanticMind, Sonobi, Inc. and Zipnosis, Inc. The aggregate capital deployed to such partner companies at December 31, 2015, was $51.6 million and the approximate annual overhead amount for 2015 was $16 million.

As of December 31, 2015, (i) the capital-return based vesting model grants awarded in connection with the 2008 pool had achieved cumulative vesting equal to 30.67%, and (ii) no vesting had been achieved under the capital-return based vesting grants awarded in connection with the 2009 through 2015 pools.

In December 2015, the Committee reviewed the competitive market data provided by its consultant and determined that an increase in long-term incentive values was necessary to better match the market in which Safeguard competes for executive talent and to better align the long-term interests of Safeguard management and our shareholders. The long-term incentive values for the 2015 equity grants for Messrs. Zarrilli, McGroarty and Sisko represent an increase over 2014 long-term incentive values of 28.5%, 26.1%, and 41.2%, respectively. These increases also serve the Committee’s objective of continuing to put a greater emphasis on the long-term component of incentive compensation. With these inputs, the Committee approved the following grants of equity under our 2014 Equity Compensation Plan to our named executive officers:

Named Executive Officer

Restricted
Shares (1)

Nominal Value of
Restricted Shares (2)

PSUs (3)

Target Value of
PSUs (2)
Stephen T. Zarrilli 20,180 $300,006 40,359 $599,997
Jeffrey B. McGroarty 5,605 $ 83,327 11,211 $166,668
Brian J. Sisko 10,090 $150,003 20,179 $299,991

~~(1)~~·

~~The~~Reduced Costs and Expenses. We incur both direct and indirect costs to comply with the filing and reporting requirements imposed on us as a result of being an SEC reporting company with shares of ~~restricted~~our common stock ~~granted vest 25%~~listed on ~~March 1, 2017,~~Nasdaq. We believe the level of expenditures required to maintain our public company status has become too burdensome in light of our strategy to monetize our remaining ownership interests, continue to reduce our operating costs, and return the maximum value to our shareholders. Our general and administrative expenses consist primarily of employee compensation, stock based compensation, insurance, and professional services. For the year ended December 31, 2022 and nine months ended September 30, 2023, we incurred approximately $4.8 million and $3.7 million, respectively, of general and administrative expenses to oversee the monetization of our individual ownership interests. We believe the remaining ownership interests could require up to two years, or longer, to be monetized. Upon giving effect to the Transaction, we will no longer be subject to the reporting requirements under the Exchange Act or other requirements applicable to a public company, including requirements under the Sarbanes-Oxley Act of 2002, as well as the listing standards of any national securities exchange. We anticipate annual cost savings of approximately $1.5 million in ~~12 equal quarterly installments commencing on March 15, 2017,~~cash and ona reduction in annual stock based compensation of approximately $1.2 million after effecting the ~~fifteenth day~~Transaction and related adjustments to our management structure, primarily as a result of ~~each June, September, December,~~a potential reduction in: (i) professional fees of accountants associated with the audit process, (ii) insurance premiums for our directors’ and ~~March thereafter, assuming~~officers’ liability insurance, (iii) Board and employee related expenses, as well as (iv) legal, printing, and other miscellaneous costs associated with being a publicly traded company. We believe that these annual cost savings and a reduction in annual stock based compensation will result in a significant reduction in our operating costs. See “Financial Information—Pro Forma Consolidated Financial Statements (Unaudited)” for a discussion of the ~~executive’s continued employment by Safeguard as~~potential impact of ~~such dates.~~effecting the Transaction and implementing related adjustments to our management structure. Please note, however, that these projected annual cost savings and reduction in stock based compensation are only estimates and our savings and reduction in stock based compensation could be higher or lower than $1.5 million and $1.2 million, respectively. See “Cautionary Statement Regarding Forward-Looking Statements.”

~~(2)~~·

~~Based~~Opportunity to Liquidate Shares of Common Stock in a Limited Liquidity Environment for our Common Stock. The trading volume in our common stock is relatively limited. As of September 29, 2023, which was prior to the announcement of the Transaction, the average daily trading volume of the stock for the previous 90 days was approximately 47,600 shares per day (or 0.3% of our total shares of common stock outstanding). Accordingly, The Stock Splits present for shareholders of record owning fewer than the Minimum Number of shares of our common stock an opportunity to receive a premium in cash over market prices prevailing at the time of our public announcement of the Transaction, without incurring brokerage commissions.

We also believe that if the Stock Splits and the overall Transaction occur, there will be certain disadvantages to the shareholders, including the following:

No Participation in Future Growth by Cashed Out Shareholders. Following the Stock Splits, holders of fewer than the Minimum Number of shares of our common stock would receive the Cash Payment and would cease to be shareholders of Safeguard. Cashed Out Shareholders will have no further financial interest in us with respect to their cashed out shares and thus will not have the opportunity to participate in the potential appreciation in the value of such shares or our future distributions to shareholders, if any.

Reduction in Information about Safeguard for Continuing Shareholders. After completion of the Transaction and the filing of our Annual Report on Form 10-K for the fiscal year ending December 31, 2023, we will cease to file annual, quarterly, current, and other reports and documents with the SEC, and continuing Shareholders will have significantly less information about Safeguard and our business, operations, and financial performance than they have currently. We intend to continue to provide our shareholders with quarterly business updates and audited annual financial statements. While we currently intend to make financial information available to our shareholders on a voluntary basis after giving effect to the Transaction, we are not required to do so by law and there is no assurance that even if we do make such information available immediately after giving effect to the Transaction that we would continue to do so in the future. We will continue to hold shareholder meetings as required under Pennsylvania law, including annual meetings, or to take actions by written consent of our shareholders in lieu of meetings as permitted under and in conformity with applicable Pennsylvania law, but we will no longer have to comply with proxy solicitation rules and related disclosure requirements under the Exchange Act.

Limited Liquidity and Possible Decline in the Value of Our Common Stock. After giving effect to the Transaction, we will no longer be listed on Nasdaq, which may have an adverse effect on the ~~average closing~~liquidity of our common stock. Any trading in our common stock after giving effect to the Transaction will only occur in privately negotiated sales and potentially on an OTC market, but only if one or more brokers chooses to make a market for our common stock on any such market and complies with applicable regulatory requirements, which may adversely affect the liquidity of our common stock and result in a significantly increased spread between the bid and asked prices of our common stock. Additionally, the overall price of our stock may be significantly reduced due to the potential that investors may view the investment as inherently riskier given the fact that publicly available information about Safeguard will be significantly more limited, as well as due to possible limited liquidity of our common stock. As of September 29, 2023, which was prior to the announcement of the Transaction, the average daily trading volume of the stock for the ~~20 consecutive trading~~previous 90 days ~~immediately preceding the grant date (December 31, 2015)~~was approximately 47,600 shares per day (or 0.3% of our total shares of common stock outstanding).

~~(3)~~·

~~The PSUs (which are restricted stock units~~Limited Regulatory Oversight. After giving effect to the Transaction, we will no longer be subject to ~~performance-based vesting) vest (as described above)~~the reporting requirements under the Exchange Act or other requirements applicable to a public company, including requirements under the Sarbanes-Oxley Act and the listing standards of any national securities exchange.

Reporting Obligations of Certain Insiders. Our executive officers, directors and 10% shareholders will no longer be required to file reports relating to their transactions in our common stock with the SEC. In addition, our executive officers, directors and 10% shareholders will no longer be subject to the recovery of profits provision of the Exchange Act, and persons acquiring 5% of our common stock will no longer be required to report their beneficial ownership under the Exchange Act.

Loss of Access to Public Markets. We will have no ability to access the public capital markets or to use public securities in attracting and retaining executives and other employees, and we will have a decreased ability to use stock to acquire other companies.

Future Share Purchases. Safeguard will not be prevented from repurchasing shares of our common stock from the Continuing Shareholders in the future as a result of the Transaction.

Aggregate Shareholders’ Equity. Our aggregate shareholders’ equity will decrease as a result of the Stock Splits. The amount of such decrease will depend on the number of persons owning fewer than the Minimum Number of shares immediately prior to the effective time. For illustrative purposes only, if the Minimum Number were 75, which is the approximate midpoint within the proposed range of Stock Split Ratios, and based upon information provided as of the ~~2015 capital-return~~record date, with the Reverse Stock Split ratio of 1-for-75 and the Forward Split Ration of 75-for-1, our aggregate shareholders’ equity would decrease from approximately $29.9 million as of September 30, 2023 to approximately $29.0 million on a pro forma basis (after giving effect to (i) the payment of approximately $10,000 for the cash out of the shares of Cashed Out Shareholders as a result of the Reverse Stock Split, (ii) expenses of the Transaction, and (iii) severance payments).

Filing Requirements Reinstituted. The Transaction will merely suspend our reporting obligations under the Exchange Act. If on the first day of any fiscal year we have more than 300 shareholders of record, then we must resume reporting pursuant to Section 15(d) of the Exchange Act.

No Appraisal Rights. Under Pennsylvania law, our articles of incorporation and our Third Amended and Restated Bylaws, no appraisal or dissenters’ rights are available to our shareholders who vote against (or abstain from voting on) the Stock Splits.

Reduced Cash Balance. For illustrative purposes only and based ~~vesting model adopted~~upon information provided to us as of the record date by our transfer agent, we estimate that the total cash requirement of the Stock Splits and overall Transaction to Safeguard is approximately $1.2 million if the Minimum Number were 75, which is the approximate midpoint within the proposed range of Stock Split Ratios. This amount includes approximately $10,000 needed to cash out fractional shares as a result of the Stock Splits, and approximately $300,000 of legal, accounting, and other costs to effect the Transaction, as well as approximately $0.9 million of severance expenses. However, this total amount could be larger or smaller depending on, among other things, the number of persons owning fewer than the Minimum Number of shares of our common stock immediately prior to the effective time and the number of fractional shares that will be outstanding after the Reverse Stock Split as a result of purchases, sales and other transfers of our shares of common stock by our shareholders. The consideration to be paid to the Cashed Out Shareholders and other costs related to the Transaction will be paid from funds on hand. As a result, immediately after the Transaction, we will have less cash on hand than we would have had if the Transaction did not occur. See “Discussion and Special Factors—Source of Funds and Expenses.” However, these costs will be offset over time by the ~~Committee.~~cost savings of approximately $1.5 million in cash per year we expect to realize as a result of the Transaction. See “Discussion and Special Factors—Purpose of and Reasons for the Stock Splits and the Transaction.”

~~More information regarding~~Effect of the ~~equity grants made to~~Transaction (including the Stock Splits) on our ~~named~~Directors, Executive Officers and 10% Shareholders. Shares held by affiliated shareholders will be treated in the same manner as shares held by unaffiliated shareholders. As of the record date, approximately 9.7% and 12.6% of the issued and outstanding shares of our common stock was held by our directors and executive officers ~~during 2015 can~~and 10% shareholders, respectively. Our directors and executive officers have indicated that they intend to vote all of the shares of our common stock held by them “FOR” the Stock Split Proposals and “FOR” the Adjournment Proposal.

Upon the effectiveness of the Stock Splits, the aggregate number of shares of our common stock owned by our executive officers, directors and affiliated shareholders will not increase. The ownership percentage of the shares of our common stock held by those of our directors, executive officers and 10% shareholders who will be ~~found below under “Executive Compensation — Grants~~Continuing Shareholders will increase at the same rate as the ownership percentage of ~~Plan-Based Awards – 2015.~~all the other Continuing Shareholders, as a result of the reduction of the number of shares of our common stock outstanding. However, the ownership percentage and the reduction in the number of shares outstanding following the Stock Splits may increase or decrease depending on the Stock Split Ratio ultimately selected by the Board, as well as the purchases, sales and other transfers of our shares of common stock by our shareholders prior to the effective time of the Stock Splits. The ownership percentage of our shares of common stock held by those of our directors, executive officers and 10% shareholders who will be Continuing Shareholders, as well as the ownership percentage of the other Continuing Shareholders, will proportionally increase or decrease as a result of such purchases, sales and other transfers of our shares of common stock by our shareholders prior to the effective time of the Stock Splits.

In addition, our directors, executive officers and 10% shareholders may have interests in the Stock Splits that are different from your interests as a shareholder in Safeguard, including holding restricted stock or restricted stock unit grants that will remain outstanding following the Stock Splits, although these grants will not increase in value.

See “Discussion and Special Factors—Interests of Executive Officers, Directors and 10% Shareholders.”

Illustrative Examples. The number of shares held by a shareholder of record in two or more separate but identical record holder accounts will be combined to determine the number of shares of our common stock owned by that holder and, accordingly, whether the holder will be a Cashed Out Shareholder or a Continuing Shareholder.

Shares held by record holders in joint accounts, such as by a husband and wife, and shares held in similar capacities will be treated separately, and will not be combined with individual accounts in determining whether a holder will be a Cashed Out Shareholder or a Continuing Shareholder.

The ~~Committee annually reviews~~effect of the ~~equity awards~~Stock Splits on both Cashed Out Shareholders and Continuing Shareholders may be illustrated, in part, by the below illustrative examples, which, solely for the purposes of these illustrative examples, assume the Board determines to use 75 as the Minimum Number, which is the approximate midpoint within the proposed range of the Stock Split Ratios.

Hypothetical Scenario (Assuming 75 is the Minimum Number)	Result
Holder A is a shareholder of record who holds 74 shares of our common stock of record at the effective time of the Stock Splits, and Holder A holds no other Safeguard’s shares.	Holder A will receive cash in the amount of $122.10, without interest, for 74 shares of common stock held prior to the Reverse Stock Split.
Holder B holds 74 shares of our common stock in a brokerage account at the effective time of the Stock Splits, and Holder B holds no other shares.	If the broker holding Holder B’s shares also holds shares for other beneficial owners of our common stock and thus holds at least 75 of Safeguard shares in the aggregate, then Holder B will not receive cash for Holder B’s shares.
Holder C holds 50 shares of our common stock of record and 30 shares in a brokerage account at the effective time of the Stock Splits, and Holder C holds no other shares.	Each of Holder C’s holdings will be treated separately. Accordingly, assuming the brokerage firm with whom Holder C holds 30 shares in “street name” does not hold Safeguard shares for other beneficial owners, Holder C will receive cash in the amount of $82.50, without interest, for the 80 shares of common stock held prior to the Reverse Stock Split.
Holder D holds 75 shares of our common stock of record and 75 shares in a brokerage account at the effective time of the Stock Splits.	Holder D will continue to hold 75 shares of common stock in her own name and 75 shares in a brokerage account after the Stock Splits.

Holder E holds 50 shares of common stock in one brokerage account and 30 shares in another brokerage account at the effective time of the Stock Splits.	Each of Holder E’s holdings will be treated separately. Assuming each of the brokerage firms with whom Holder E holds shares in “street name” does not hold Safeguard shares for other beneficial holders, Holder E will receive cash in the amount of $132, without interest, for the 80 shares of common stock held prior to the Reverse Stock Split.
Holder F holds 50 shares in one record holder account and 25 shares in another identical record holder account at our transfer agent at the effective time of the Stock Splits.	Holder F will continue to hold 75 shares of common stock after the Reverse Stock Split.
Holder G and Holder H each hold 75 shares in separate, individual record holder accounts, but also hold 25 shares of common stock jointly in another record holder account.	Shares held in joint accounts will not be added to shares held individually in determining whether a shareholder will be a Cashed Out Shareholder or a Continuing Shareholder. Accordingly, Holder G and Holder H will each continue to own 75 shares of common stock after the Stock Splits in their separate accounts, but will receive $41.25, without interest, for 25 shares held in their joint account.

Reservation of Rights

Subject to its compliance with Pennsylvania law and the federal proxy rules, the Board reserves the right to change the terms of the Stock Splits and the overall Transaction, including the Stock Split Ratios and the amount of the Cash Payment, to the extent it believes it is necessary or desirable in order to accomplish our goal of remaining below 300 record holders. The Board may also abandon the proposed Stock Splits or the overall Transaction at any time prior to its completion, whether prior to or following the special meeting, if it believes either the Stock Splits or the overall Transaction is no longer in the best interests of Safeguard or its shareholders. Following the special meeting, the Board will need to evaluate updated ownership data impacting the various Stock Split Ratios so that it can determine the aggregate costs of the Stock Splits within the range of Stock Split Ratios before choosing a Stock Split Ratio. Depending on the number of shareholders owning fewer than the Minimum Number of shares, the Board may abandon the Stock Splits if the Stock Splits become too costly. The Board may also abandon the overall Transaction. For more information, see “—Termination of Transaction.” Subject to the Board’s ability to abandon the proposed Stock Splits and the overall Transaction, the Board intends to determine the Stock Split Ratios and effect the Stock Splits as soon as practicable after the Stock Splits are approved by our ~~executives~~shareholders, which would likely occur immediately following the public announcement of the Stock Split Ratios chosen by the Board. Furthermore, after giving effect to the Transaction and as necessary to maintain our suspension of SEC reporting obligations, Safeguard reserves the right to take additional actions that may be permitted under Pennsylvania law, including effectuating further reverse stock splits.

Nasdaq; OTC Market

Our common stock is currently listed on Nasdaq. To obtain the cost savings we anticipate by no longer preparing and filing annual, periodic and current reports with the SEC, our common stock will need to be delisted from Nasdaq. Any trading in our common stock after the Transaction will only occur in privately negotiated sales and potentially on an OTC market, if one or more brokers chooses to make a market for our common stock on any such market and complies with applicable regulatory requirements; however, there can be no assurances regarding any such trading.

Fairness of the Stock Splits to Effect the Transaction

The Board fully considered and reviewed the terms, purpose, effects, advantages, disadvantages of, and alternatives to, the Stock Splits and unanimously determined that effecting the Transaction by means of the Stock Splits is procedurally and substantively fair to all shareholders of Safeguard, including the unaffiliated shareholders who will receive cash consideration in the Stock Splits and unaffiliated shareholders who will continue as owners of Safeguard. The Board has approved the Transaction, including the specific terms of the Stock Splits, with the exact Stock Split Ratios to be set within the approved range at the discretion of the Board, without further approval or authorization of our shareholders and with our Board, in its sole discretion, able to effect the Stock Splits immediately following the public announcement of the Stock Split Ratios or to elect to abandon the proposed Stock Splits or the overall Transaction (whether or not authorized by the shareholders) at any time, and recommended that shareholders vote “FOR” the Stock Split Proposals and “FOR” the Adjournment Proposal. See “—Effects of the Transaction (including Stock Splits).”

Substantive Fairness. The Board considered, among other things, the factors listed below, as well as the alternatives to the Stock Splits as a means to effect the Transaction as noted above in “Discussion and Special Factors—Alternatives to the Stock Splits to Effect the Transaction,” in reaching its conclusion as to the substantive fairness of the Stock Splits to our shareholders as a means to effect the Transaction, including both unaffiliated Cashed Out Shareholders and unaffiliated Continuing Shareholders. The Board did not assign specific weight to any factors they considered, nor did it apply them in a formulaic fashion, although the Board particularly noted the opportunity in the Stock Splits for shareholders to sell their holdings at a premium, as well as the significant anticipated cost and time savings for Safeguard resulting from the overall Transaction, which will also benefit Continuing Shareholders. The discussion below is not meant to be exhaustive, but we believe it addresses all material factors considered by the Board in its determinations.

Future Cost Savings and Reduction in Stock Based Compensation. If shareholders approve the Stock Split Proposals and we proceed with the Transaction, we will be able to eliminate costs associated with our public reporting and other ~~employees~~related obligations, as well as implement our planned adjusted management structure due to additional corporate governance flexibility as a result of no longer needing to comply with corporate governance rules applicable to publicly listed companies. We anticipate annual cost savings of approximately $1.5 million in cash and ~~also may consider awards periodically during~~ a ~~year~~reduction in ~~an effort~~annual stock based compensation of approximately $1.2 million after effecting the Transaction and related adjustments to ~~retain~~our management structure, primarily as a result of a potential reduction in: (i) professional fees of accountants associated with the audit process, (ii) insurance premiums for our directors’ and ~~motivate employees~~officers’ liability insurance, (iii) Board and employee related expenses, as well as (iv) legal, printing, and other miscellaneous costs associated with being a publicly traded company. We believe that these annual cost savings and a reduction in annual stock based compensation will result in a significant reduction in our operating costs. See “Financial Information—Pro Forma Consolidated Financial Statements (Unaudited)” for a discussion of the potential impact of effecting the Transaction and implementing related adjustments to ~~ensure continuing alignment~~our management structure. Please note, however, that these projected annual cost savings and reduction in stock based compensation are only estimates and our savings and reduction in stock based compensation could be higher or lower than $1.5 million and $1.2 million, respectively. See “Cautionary Statement Regarding Forward-Looking Statements.”

Cash Payment. To determine the Cash Payment, Safeguard reviewed the potential monetization of ~~executive~~its remaining ownership interests under different scenarios and ~~shareholder interests. Grants may be made at regularly scheduled meetings or at special meetings convened~~determined that the range of likely exit values is $25.0 million to ~~approve compensation arrangements for newly hired executives or for executives who have been promoted or~~$45.0 million, based on current assumptions, which are ~~otherwise~~ subject to ~~changes in responsibilities. All~~change. In addition, Safeguard estimated the follow-on cash required to fund Safeguard’s operations and contingencies after giving effect to this Transaction. For purpose of ~~our stock options are granted with an exercise price equal to~~calculating the Cash Payment, Safeguard used the average of the ~~high~~$25.0 million to $45.0 million range -- $35.0 million -- in its calculations, factoring in estimates of: (i) Safeguard’s recurring operating costs and ~~low~~contingencies, (ii) exit timing of Safeguard’s ownership interests, and (iii) a discount rate of 20% applied to those cash flows. Safeguard determined this discount rate to be appropriate based on its estimate of the risks commensurate with the remaining ownership interests and its evaluation of a traditional cost of capital determination.

In addition, in determining the Cash Payment, Safeguard excluded any excess cash that represents cash on hand less the estimated amounts required to be retained to support Safeguard’s operations, satisfy its liabilities and pay estimated costs of the Stock Splits and overall Transaction.

The Board also considered both the historical market prices and recent trading activity as well as the current market prices of our common stock. On September 29, 2023, which was prior to the Board’s approval of the Stock Splits and the Transaction, our common stock closed at $1.00 per share. For each of the ten trading days and twenty trading days prior to September 29, 2023, our average closing stock price was $1.03 per share and $1.08 per share, respectively.

The Cash Payment of $1.65 represents a 65%, 60%, and 53% premium to the September 29, 2023, closing price and the average ten trading day and twenty trading day closing prices prior to September 29, 2023, respectively. On a volume weighted basis, the 30-day, 60-day, and 90-day closing prices per share prior to September 29, 2023 were $1.07, $1.14, and $1.18. The Cash Payment of $1.65 represents a 55%, 44%, and 39% premium to such volume weighted closing prices, respectively.

In reaching its conclusion as to the fairness of the Cash Payment, the Board did not base such conclusion on the ~~date~~liquidation value of ~~grant. From 2008 through 2013,~~Safeguard, as there is no present intention of liquidating Safeguard. In addition, the ~~Committee utilized~~Board believes that the ~~end~~value of Safeguard’s ~~fiscal third quarter each year as an acceptable and administratively convenient time~~assets that might be realized in liquidation may be substantially less than its going concern value, with the going concern value being similar to ~~make annual determinations regarding executive equity compensation matters. Based~~the value based on the ~~structure~~expected sales of Safeguard’s ownership interests over a reasonable period of time less the ~~capital-return based vesting model~~expected costs to operate during that time period, as described above. Further, the ~~Committee adopted in 2014, the Committee~~Board believes that a liquidation process would involve substantial legal fees, costs of sale and other expenses that would reduce any amounts that shareholders might receive upon liquidation.

Safeguard determined that the ~~end~~net book value of ~~Safeguard’s fiscal fourth quarter would be~~$1.81 per share at September 30, 2023 and previous share repurchases of our common stock were not relevant factors in the determination of the fairness of the Cash Payment. Specifically, the net book value is a historical measure that does not reflect our results since September 30, 2023 or the potential impact of other future events. Prior common stock repurchases by Safeguard were based primarily upon prevailing market prices at the time of each repurchase, as well as an assessment of the estimated value of our ownership interests at the time of those repurchases, each of which was subject to a variety of market circumstances that were different from the current market condition. Therefore, we believe that recent market prices per share of our common stock and our current evaluation of the range of likely exit values, as set forth above, are more ~~appropriate time to award annual equity grants. For administrative convenience,~~relevant than our historic net book value per share or our prior stock repurchases for the ~~Committee has adopted~~determination of the fairness of the Cash Payment.

The Board did not request, receive or rely on a ~~policy~~fairness opinion on behalf of ~~generally issuing approved grants~~unaffiliated shareholders or potential Cashed Out Shareholders. Safeguard performed valuation work on the ~~last business day~~ownership interests and considered its costs to operate for a period of time estimated to be sufficient for the remaining ownership interests to pursue exit opportunities. Safeguard’s valuation work of its existing ownership interests was used by the Board as a benchmark to evaluate any potential strategic opportunities. The potential costs of a fairness opinion were considered to be quite substantial compared to any potential value of such an opinion.

In addition, the Board also believes that the Reverse Stock Split provides a large number of our record holders with the opportunity to obtain cash for their shares in a limited trading market and at a premium over the recent trading price range of our common stock.

No Firm Offers. Despite multiple efforts, the Board did not have the benefit of any firm offers during the past two years by any affiliate or unaffiliated person for the merger or consolidation of Safeguard with or into any other company, the sale or other transfer of all or any substantial part of the ~~quarter for new hires~~assets of Safeguard, or ~~advisory board grants and on~~a purchase of our shares of common stock or other securities that would enable the ~~last business day~~holder to exercise control of ~~the month in which grants are approved by the Committee for all other grants.~~

~~Subject~~Safeguard to ~~availability under our shareholder approved equity compensation plan, we expect to continue to use stock options, restricted stock, and other equity awards~~consider as part of its deliberations.

Procedural Fairness. No unaffiliated representative acting solely on behalf of our ~~executive compensation program, including performance-based options and PSUs. Equity grants~~unaffiliated shareholders for the purpose of negotiating the terms of the Stock Splits was retained by Safeguard, nor were special provisions made to grant unaffiliated shareholders access to our ~~key employees may~~corporate files or to obtain counsel or appraisal services. The Board considered and evaluated whether such a deregistration/delisting transaction, or so-called “going dark” transaction, would be ~~subject to forfeiture~~ in ~~certain limited circumstances under our Key Employee Compensation Recoupment Policy.~~

~~Perquisites (fringe benefits)~~. ~~During 2015, we provided life insurance coverage ranging from $750,000 to $1,000,000 to each~~the best interests of our ~~named executive officers at~~shareholders and approved the specific terms of such a transaction for recommendation to our shareholders. We believe that the Board, whose members are each independent within the meaning of Nasdaq Corporate Governance Listing Standards and Section 10A-3(b) of the Exchange Act, was sufficient to protect the interests of unaffiliated shareholders. In addition, the Board took note of the fact that the interests of unaffiliated shareholders inherently varied depending upon whether any particular unaffiliated shareholder held more or less than the Minimum Number of shares. Although there was no unaffiliated representative that acted solely on behalf of the unaffiliated shareholders for the purpose of negotiating the terms of the Stock Splits, the independent members of the Board protected the unaffiliated shareholders by recommending effecting the Transaction in a way that is fair to them.

The Board believes this proxy statement, along with our other filings with the SEC and provisions of Pennsylvania law that provide shareholders with the right to review our books and records, provide a great deal of information for unaffiliated shareholders to make an ~~average annual cost~~informed decision as to ~~Safeguard~~the Stock Splits and the overall Transaction, and that no special provision for the review of ~~approximately $2,466 per named executive officer. Our named executive officers also are eligible to participate in~~our files is necessary.

The affirmative vote of a majority of the ~~fringe benefits that Safeguard may offer, from time to time, on a non-discriminatory basis to~~votes cast by all of our ~~employees.~~

~~Severance~~shareholders entitled to vote thereon, and ~~Change-in-Control Arrangements~~

~~All~~not a majority vote of unaffiliated shareholders, is necessary to approve the Stock Split Proposals. The Board determined not to condition the approval of the Stock Split Proposal on the approval by a majority of the votes cast by unaffiliated shareholders entitled to vote thereon. The Board noted that affiliated and unaffiliated shareholders will be treated equally as a result of the Stock Splits; however, because the number of shares owned by a shareholder is a factor considered in determining affiliate status, as a practical matter, the stock of certain affiliated shareholders will not be cashed out in the Reverse Stock Split. If separate approval of unaffiliated shareholders were required, our affiliated shareholders would receive lesser voting rights than unaffiliated shareholders solely on the basis of their affiliate status even though they will receive no additional benefits or different treatment as a result of the Stock Splits. As of the record date, approximately 9.7% and 12.6% of the issued and outstanding shares of our common stock was held by our directors and executive officers ~~are employed on an at-will basis. However,~~and 10% shareholders, respectively. Our directors and executive officers have indicated that they intend to vote all of the shares of our ~~named executive officers also have an agreement with Safeguard that provides for certain severance benefits in~~common stock held by them “FOR” the ~~event~~Stock Split Proposals and “FOR” the Adjournment Proposal (see “Discussion and Special Factors—Interests of ~~termination of employment by Safeguard without “cause” or by the officer for “good reason” (as defined in the agreements)~~Executive Officers, Directors and 10% Shareholders”).

~~Upon the occurrence of~~Furthermore, 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, extensionseparate vote of the ~~post-termination exercise period within which~~majority of the shares of common stock outstanding as of the record date held by unaffiliated shareholders is not required under Pennsylvania law. Finally, shareholders can increase, divide, or otherwise adjust their existing holdings at any time prior to the effective time of the Stock Splits, so as to retain some or all of their shares of common stock, or to receive cash for some or all of their shares, as they see appropriate.

The Board also noted that there will be no material change in the ~~equity awards held by~~percentage ownership of the executive ~~may~~officers and directors as a group.

Recommendation of the Board. Based on the foregoing analyses, including a consideration of the disadvantages of the Stock Splits as a means to effect the Transaction, the Board believes that the Transaction, including the specific terms of the Stock Splits, is procedurally and substantively fair to all shareholders, including the unaffiliated shareholders, regardless of whether a shareholder receives cash or continues to be ~~exercised, coverage under~~a shareholder following the Stock Splits, and believes that the cash payment of $1.65 per pre-split share to be fair consideration for those shareholders of record holding fewer than the Minimum Number of shares of record. As a result, at a meeting held on September 30, 2023, the Board determined by a unanimous vote that the Transaction, including the specific terms of the Stock Splits, is fair to, and in the best interests of, our ~~medical, health~~shareholders, including all unaffiliated shareholders, 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~~recommends that you vote “FOR” the Stock Split Proposals.

Material Federal Income Tax Consequences

The following is a summary of the ~~specific benefits that each named executive officer will receive upon the occurrence of a termination event.~~

~~All~~material U.S. federal income tax consequences 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 reimburseStock Splits 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”~~its shareholders. This summary 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.

~~Deductibility of Executive Compensation~~

~~Section 162(m) of~~upon the Internal Revenue Code of 1986, as amended (the “Code”), ~~disallows~~existing Treasury Regulations promulgated thereunder, published rulings, administrative pronouncements and judicial decisions, any changes to which could affect the tax consequences described herein, possibly on a retroactive basis. This summary only addresses shareholders who hold their shares of our common stock as a capital asset. This summary does not address any state, local, foreign, or the U.S. federal estate or gift, Medicare net investment income, or alternative minimum tax ~~deduction~~provisions of the Code. No assurance can be given that possible changes in such United States federal income tax laws or interpretations will not adversely affect this summary. This summary is not binding on the Internal Revenue Service (the “IRS”).

Except as otherwise noted, the federal income tax consequences to shareholders described below is the same for ~~any publicly held corporation~~both affiliated shareholders and unaffiliated shareholders. The following summary does not address all United States federal income tax considerations that may be relevant to particular shareholders in light of their individual circumstances or to shareholders that may be subject to special tax rules, including, without limitation: financial institutions, tax-exempt organizations (including private foundations), insurance companies, dealers in securities, foreign investors, pass-through entities such as partnerships, S corporations, disregarded entities for federal income tax purposes and limited liability companies (and investors therein), holders that received their shares pursuant to the exercise of employee stock options or otherwise as compensation, and investors that hold the shares as part of a straddle, hedge, conversion, constructive sale, or other integrated transaction for United States federal income tax purposes, certain ~~executive compensation exceeding $1,000,000~~former citizens or long-term residents of the United States, and persons for ~~each “covered employee” in any taxable year, unless it is “performance based”~~whom our common stock constitutes “qualified small business stock” within the meaning of Section ~~162(m). The stock options and PSUs awarded under our equity compensation plan are intended to comply with~~1202 of the ~~provisions~~Code or “Section 1244 stock” for purposes of Section ~~162(m). The portion~~1244 of ~~cash compensation paid to Mr. Zarrilli in 2015 in excess of $1,000,000 was not “performance-based” compensation within~~ the ~~meaning of Section 162(m) and, therefore, was not deductible by Safeguard. We believe that providing an appropriate level of cash compensation and maintaining flexibility in determining compensation~~Code.

~~may be more important than preserving~~For purposes of this ~~tax deduction. Therefore, the Committee does not currently plan to take any action to qualify any~~summary, a “U.S. holder” means a beneficial owner of shares of our ~~other incentive compensation plans under Section 162(m).~~

~~Stock Ownership Guidelines~~

~~Our Board has established~~common 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. Our current ownership guidelines are:

~~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~~is for U.S. federal income tax purposes one of the ~~end of each calendar year. Shares counted toward these guidelines include:~~following:

~~Shares beneficially owned by~~a citizen or resident of the ~~executive officer;~~United States;

~~Vested portion of restricted stock units (including DSUs and PSUs) and restricted stock awards; and~~a corporation or an entity taxable as a corporation created or organized under U.S. law (federal or state);

~~Net value~~an estate the income of ~~shares underlying vested, in-the-money options (“Net Option Value”).~~which is subject to federal income taxation regardless of its sources; or

a trust if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have authority to control all substantial decisions of the trust or a valid election is in effect under applicable Treasury Regulations to be treated as a domestic trust.

A "non-U.S. holder” is, for U.S. federal income tax purposes, a beneficial owner of shares of our common stock that is a not a U.S. holder or a partnership for U.S. federal income tax purposes.

If a partnership (including any entity treated as a partnership for U.S. federal income tax purposes) holds common stock, the tax treatment of a partner with respect to the Transaction generally will depend upon the status of the partner and the activities of the partnership. Such partner or partnership is urged to consult its own tax advisor as to the U.S. federal, state, local, and foreign income tax consequences of the Stock Splits.

NO RULING FROM THE IRS OR OPINION OF COUNSEL HAS BEEN OR WILL BE OBTAINED REGARDING THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO SHAREHOLDERS IN CONNECTION WITH THE STOCK SPLITS. ACCORDINGLY, EACH SHAREHOLDER IS ENCOURAGED TO CONSULT THEIR OWN TAX ADVISOR AS TO THE PARTICULAR FEDERAL, STATE, LOCAL, FOREIGN, AND OTHER TAX CONSEQUENCES OF THE TRANSACTION, IN LIGHT OF THEIR INDIVIDUAL CIRCUMSTANCES.

Tax Consequences to Safeguard. We believe that the Stock Splits generally should be treated as a tax-free “recapitalization” or other non-recognition event for federal income tax purposes in which case the Transaction should have no material federal income tax consequences to Safeguard. Safeguard has significant tax assets, in the form of carryforwards of net operating losses and tax credits, which are fully reserved. These assets nonetheless represent potential value to Safeguard by virtue of their ability to reduce income taxes payable. Safeguard’s ability to utilize such assets may be limited by transactions such as the Stock Splits, particularly if ownership changes trigger certain provisions of Section 382 of the Code (“Section 382”). Safeguard has evaluated its exposure to Section 382 and believes that the Stock Splits are not expected to trigger these provisions. However, Safeguard cannot guarantee that there will be no impact, particularly since it depends on actions of shareholders, who are not within our control.

Federal Income Tax Consequences to U.S. Holders Who Do Not Receive Cash in the Stock Splits. If you are a U.S. holder that receives no cash as a result of the Stock Splits, but continue to hold our shares of common stock immediately after the Stock Splits, you will not recognize any gain or loss for United States federal income tax purposes. The aggregate adjusted tax basis of the shares you hold immediately after the Stock Splits will equal the aggregate adjusted tax basis of the shares you held immediately prior to the Stock Splits, and the holding period in those shares will be the same as immediately prior to the Stock Splits.

Federal Income Tax Consequences to U.S. Holders Who Receive Cash in the Stock Splits and Who Will Own, or Will Be Considered under the Code to Own, Shares of Common Stock After the Stock Splits. In some instances, you may be entitled to receive cash in the Stock Splits for shares of our common stock you hold in one capacity but continue to hold shares in another capacity. For example, you may own fewer than the Minimum Number of shares in your own name (for which you will receive cash) and own at least the Minimum Number of shares in your brokerage account in “street name.” Alternatively, for federal income tax purposes you may be deemed to own shares held by others. For instance, if you own fewer than the Minimum Number of shares in your own name (for which you will receive cash) and your spouse owns at least the Minimum Number of shares (which will continue to be held following the completion of the Stock Splits), the shares owned by your spouse generally will be attributable to you. Furthermore, in determining whether you are considered to continue to hold shares of our common stock, for federal income tax purposes, immediately after the Stock Splits, you generally will be treated as owning shares actually or constructively owned by certain family members and entities in which you, or a member of your family, have an interest (such as trusts and estates of which you are beneficiary and corporations and partnerships of which you are an owner, and shares you have an option to acquire). Accordingly, in some instances the shares of common stock you own in another capacity, or which are attributed to you, may remain outstanding.

If you are a U.S. holder that receives cash as a result of the Stock Splits, but are treated as continuing to own shares of common stock through attribution as described above, you will recognize capital gain or loss for federal income tax purposes equal to the difference between the cash you receive for the shares of common stock and your aggregate adjusted tax basis in those shares, provided that the receipt of cash either is “a complete termination of interest,” “not essentially equivalent to a dividend,” or constitutes a “substantially disproportionate redemption of stock,” as described below. Gain or loss must be calculated separately with respect to each block of shares of common stock exchanged in the Stock Splits.

Complete Termination of Interest. Notwithstanding the continued constructive ownership of shares of our common stock from certain family members under the attribution rules described above, the receipt of cash as a result of the Stock Splits may qualify as “a complete termination of interest” if (i) you have no interest in Safeguard after the Transaction other than as a creditor, (ii) you do not acquire any such interest in Safeguard in the next ten years (other than stock acquired by bequest or inheritance), (iii) you file an agreement with the IRS to notify the IRS if you acquire any such interest during such ten-year period, (iv) none of the redeemed shares of our common stock was acquired, within the ten-year period ending on the date of the receipt of cash in the Stock Splits, by you from a person whose stock ownership would be attributed to you under the attributable rules described above, and (v) no person owns, at the time of the redemption, shares of our common stock which is attributable to you under the attribution rules described above and was acquired from you within the ten-year period ending on the date of the redemption, unless such stock acquired from you is also exchanged for cash in the Stock Splits. The rules for qualifying for a complete termination of interest despite family attribution of shares are complex and you must rely on your own tax adviser to determine whether or not you are able to meet such requirements.

Not Essentially Equivalent to a Dividend. The receipt of cash is “not essentially equivalent to a dividend” if the reduction in your proportionate interest in us resulting from the Stock Splits (taking into account for this purpose shares of common stock which you are considered to own under the attribution rules described above) is considered a “meaningful reduction” given your particular facts and circumstances. The IRS has ruled that a small reduction by a minority shareholder whose relative stock interest is minimal and who exercises no control over the affairs of a corporation can satisfy this test.

Substantially Disproportionate Redemption of Stock. The receipt of cash in the Stock Splits will be a “substantially disproportionate redemption of stock” if (a) you own less than 50% of the total combined voting power of all classes of stock entitled to vote, and (b) the percentage of our voting stock owned by you immediately after the Stock Splits is less than 80% of the percentage of shares of voting stock owned by you immediately before the Stock Splits. For purposes of ~~calculating~~these percentage ownership tests, you are considered to own common stock owned directly as well as indirectly through the ~~value to be used in monitoring compliance with the ownership guidelines, we utilize (a) the greater~~application of the ~~current value~~attribution ownership rules described above.

Capital gain or loss recognized by a U.S. holder will be long-term if your holding period with respect to the ~~cost basis~~common stock surrendered is more than one year at the time of ~~purchased shares~~the Transaction. The deductibility of capital loss is subject to limitations. If you are an individual U.S. holder, long-term capital gain and dividend income should generally be subject to United Stated federal income tax at a maximum rate of 20%. In general, dividends are taxed at ordinary income rates. However, a U.S. holder may qualify for a 20% federal income tax rate on any cash received in the Stock Splits that is treated as a dividend as described above, if (i) you are an individual or ~~vested restricted~~other non-corporate shareholder; (ii) you have held the common stock ~~units/restricted stock awards as~~with respect to which the ~~executive has declared income~~dividend was received for more than 60 days during the 120-day period beginning 60 days before the ex-dividend date, as determined under the Code; and ~~paid taxes; and (b) our trailing six-month average share price~~(iii) you were not obligated during such period (pursuant to a short sale or otherwise) to make related payments with respect to positions in ~~determining Net Option Value.~~substantially similar or related property. You should consult with your tax advisor regarding your eligibility for such lower tax rates on dividend income.

~~The Nominating & Corporate Governance Committee also approved~~If the receipt of cash by a U.S. holder in exchange for shares of common stock is not treated as capital gain or loss under either of the tests, it will be treated first as ordinary dividend income to the extent of your ratable share of our current and accumulated earnings and profits, then as a tax-free return of capital to the extent of (and in reduction of) your aggregate adjusted tax basis in the shares, and any remaining amount will be treated as capital gain.

If you, or a person or entity whose ownership of shares would be attributed to you, will continue to hold common stock immediately after the Stock Splits, you are urged to consult with your tax advisor as to the particular federal, state, local, foreign, and other tax consequences of the Stock Splits, in light of your specific circumstances.

Federal Income Tax Consequences to U.S. Holders Who Receive Cash in the Stock Splits and Who Will Not Own, and Will Not Be Considered under the Code to Own, Shares of Common Stock After the Stock Splits. If you are a U.S. holder that receives cash as a result of the Stock Splits and you do not own, and are not considered to own, shares of our common stock immediately after the Stock Splits, you will recognize capital gain or loss for federal income tax purposes equal to the difference between the cash you receive for the shares of common stock and your aggregate adjusted tax basis in those shares. Capital gain or loss recognized will be long-term if your holding period with respect to the common stock surrendered is more than one year at the time ~~within which each executive must attain~~of the Stock Splits. The deductibility of capital loss is subject to limitations.

Backup Withholding. If you are a U.S. holder that receives cash as a result of the Stock Splits, you will be required to provide your social security or other taxpayer identification number (or, in some instances, additional information) in connection with the Stock Splits to avoid backup withholding requirements that might otherwise apply. Failure to provide such information may result in backup withholding. Backup withholding is not an additional tax. Rather, the amount of the backup withholding can be credited against your United States federal income tax liability provided that the required ~~holding levels. The stock ownership guidelines~~information is given to the IRS. If backup withholding results in an overpayment of tax, a refund can be obtained by you upon filing an appropriate income tax return on a timely basis.

Non-U.S. Holders. Generally, non-U.S. holders will not recognize any gain or loss as ~~approved provide~~a result of the Stock Splits. In particular, gain or loss will not be recognized with respect to cash received as a result of the Stock Splits provided that ~~each executive generally must meet~~(a) such gain or loss is not effectively connected with the ~~stock ownership requirement by December 31~~^stconduct of a trade or business in the United States (or, if certain income tax treaties apply, is not attributable to a non-U.S. holder’s permanent establishment in the United States), (b) with respect to non-U.S. holders who are individuals, such non-U.S. holders are present in the United States for less than 183 days in the taxable year of the ~~fifth anniversary~~Stock Splits and other conditions are met, and (c) such non-U.S. holders comply with certain certification requirements. If such gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the U.S., and if an applicable income tax treaty so provides, the gain is attributable to a permanent establishment or fixed base maintained by the non-U.S. holder in the United States, the non-U.S. holder will be taxed on a net income basis at the regular tax rates and in the manner applicable to U.S. holders, and if the non-U.S. holder is a corporation, an additional branch profits tax at a rate of 30%, or a lower rate as may be specified by an applicable income tax treaty, may also apply. If the non-U.S. holder is an individual present in the United States for 183 days or more in the taxable year of the ~~event triggering~~Stock Splits and certain other requirements are met, the non-U.S. holder will be subject to a 30% tax (or such lower rate as may be specified by an applicable income tax treaty between the United States and such holder’s country of residence) on the net gain from the exchange of the shares of our common stock, ~~ownership requirement (or any increase~~which may be offset by certain U.S.-source capital losses of the non-U.S. holder, if any.

Notwithstanding the foregoing, if the receipt of cash by a non-U.S. holder in exchange for shares of common stock has the effect of a dividend distribution under the tests set forth above under “Federal Income Tax Consequences to U.S. Holders Who Receive Cash in the ~~stock ownership requirement). No sales~~Stock Splits and Who Will Own, or Will Be Considered under the Code to Own, Shares of Common Stock After the Stock Splits,” the gain will be treated as a dividend rather than capital gain to the extent of your ratable share of our current or accumulated earnings and profits as calculated for U.S. federal income tax purposes, then as a tax-free return of capital to the extent of (and in reduction of) your aggregate adjusted tax basis in the shares, and any remaining amount will be treated as capital gain.

Safeguard ~~stock by our named executive officers are permitted during~~will withhold U.S. federal income taxes equal to 30% of any cash payments made to a non-U.S. holder as a result of the ~~period~~Stock Splits that may be treated as a dividend, unless such holder properly demonstrates that a reduced rate of U.S. federal income tax withholding or an exemption from such withholding is applicable. For example, an applicable income tax treaty may reduce or eliminate U.S. federal income tax withholding, in which case a non-U.S. holder claiming a reduction in (or exemption from) such tax must provide Safeguard with a properly completed IRS Form W-8BEN (or other appropriate IRS Form W-8) claiming the ~~ownership requirement~~applicable treaty benefit. Alternatively, an exemption generally should apply if the non-U.S. holder’s gain is effectively connected with a U.S. trade or business of such holder, and such holder provides Safeguard with an appropriate statement to that effect on a properly completed IRS Form W-8ECI. Moreover, Safeguard may withhold U.S. federal income taxes at a 30% rate on cash payments to a non-U.S. holder regardless of whether the non-U.S. holder satisfies a test described above under “Federal Income Tax Consequences to U.S. Holders Who Receive Cash in the Stock Splits and Who Will Own, or Will Be Considered under the Code to Own, Shares of Common Stock After the Stock Splits.” A non-U.S. holder may be eligible to obtain a refund of all or a portion of any tax withheld if the non-U.S. holder (i) meets one of the tests described above that would characterize the exchange as a sale (as opposed to a dividend) with respect to which the non-U.S. holder is not ~~met (except~~subject to U.S. federal income tax or (ii) is otherwise able to establish that no tax or a reduced amount of tax is due

Non-U.S. holders should consult their own tax advisors regarding possible dividend treatment and should consult their own tax advisor regarding the U.S. federal, state, local, and foreign income and other tax consequences of the Stock Splits.

U.S. Information Reporting and Backup Withholding. In general, backup withholding and information reporting will not apply to payment of cash in lieu of a fractional share of our common stock to a non-U.S. holder pursuant to the Stock Splits if the non-U.S. holder certifies under penalties of perjury that it is a non-U.S. holder and the applicable withholding agent does not have actual knowledge to the contrary. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or allowed as a credit against the non-U.S. holder’s U.S. federal income tax liability, if any, provided that certain required information is timely furnished to the IRS. In certain circumstances the amount of cash paid to a non-U.S. holder in lieu of a fractional share of our common stock, the name and address of the beneficial owner and the amount, if any, of tax withheld may be reported to the IRS.

FATCA. Under the Foreign Account Tax Compliance Act (‘‘FATCA’’), withholding taxes may apply to certain types of payments made to ‘‘foreign financial institutions’’ (as specially defined in the Code) and certain other non-United States entities. Specifically, a 30% withholding tax may be imposed on dividends on stock paid to a foreign financial institution or to a non-financial foreign entity, unless (1) the foreign financial institution undertakes certain diligence and reporting, (2) the non-financial foreign entity either certifies it does not have any substantial United States owners or furnishes identifying information regarding each substantial United States owner, or (3) the foreign financial institution or non-financial foreign entity otherwise qualifies for ~~limited~~an exemption from these rules. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements in clause (1) above, then, pursuant to an agreement between it and the U.S. Treasury or an intergovernmental agreement between, generally, the jurisdiction in which it is resident and the U.S. Treasury, it must, among other things, identify accounts held by certain United States persons or United States-owned foreign entities, annually report certain information about such accounts and withhold 30% on payments to non-compliant foreign financial institutions and certain other account holders.

Any cash paid to a non-U.S. holder as a result of the Stock Splits that is treated as dividend may be subject to withholding under FATCA unless the requirements set forth above are satisfied (if applicable) and appropriate certifications are made. While withholding under FATCA would have applied also to payments of gross proceeds from the sale or other disposition of our common stock ~~sales~~on or after January 1, 2019, proposed Treasury Regulations eliminate FATCA withholding on payments of gross proceeds entirely. Taxpayers generally may rely on these proposed Treasury Regulations until final Treasury Regulations are issued.

Planned Management Structure Adjustments

Upon giving effect to ~~meet tax obligations), without~~ the ~~approval~~Transaction, we will no longer be subject to the reporting requirements under the Exchange Act or other requirements applicable to a public company, including governance requirements under the Sarbanes-Oxley Act and the listing standards of any national securities exchange, and we plan to adjust our management structure by reducing the size of the Board orto two members and reorganizing our ~~Nominating & Corporate Governance Committee. As of the date of this proxy statement, one of~~management to primarily use an external service provider, with 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. Ourcurrent executive officers and ~~directors also are prohibited from pledging, directly or indirectly, our common stock or~~employees expected to provide limited consulting services to Safeguard, on an as-needed basis, on the ~~stock~~terms and schedule to be approved by the Board, at its discretion, depending on the timing of ~~any of our partner companies, as collateral for indebtedness.~~the Transaction.

~~COMPENSATION COMMITTEE REPORT~~

~~We have reviewed~~If shareholders approve the Stock Split Proposals and ~~discussed~~we proceed with the ~~foregoing Compensation Discussion and Analysis with management. Based on our review and discussion with management, we have recommended to~~Transaction, the size of the Board is expected to be reduced to two members from the current governance structure of ~~Directors that~~Safeguard, to be determined by the ~~Compensation Discussion and Analysis be included in Safeguard’s~~Board upon the filing of our Annual Report on Form 10-K for the fiscal year ~~2015~~ ending December 31, 2023, and ~~Safeguard’s proxy statement~~ there will be no standing committees of the Board. Each of such two directors is expected to serve on the Board for ~~its 2016~~a term expiring at the 2024 annual meeting of ~~shareholders.~~shareholders and until such director’s successor is duly elected and qualified. Each Board member is expected to receive $75,000 per year as an annual cash retainer fee for the Board service instead of equity grants under the current director compensation structure.

~~Members~~Pursuant to the terms of ~~the Compensation Committee:~~

~~Julie A. Dobson, Chairperson~~
~~Stephen Fisher~~	~~George MacKenzie~~	~~John J. Roberts~~	~~Robert J. Rosenthal~~

~~EXECUTIVE COMPENSATION~~

~~Summary Compensation Table — Fiscal Years Ended December 31, 2015, 2014 and 2013~~

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, 2015, 2014, and 2013. At December 31, 2015, there were three individuals serving as executive officers of Safeguard.

Change in
Pension Value
and
Non-Equity Nonqualified
Stock Option Incentive Plan Deferred All Other
Name and Salary Bonus Awards Awards Compensation Compensation Compensation Total
Principal Position Year ($) ($) ($)(1)(2) ($)(1) ($)(3) Earnings ($) ($)(4) ($)
Stephen T. Zarrilli 2015 550,000 — 729,748 — 528,000 — 17,924 1,825,672
President and Chief 2014 550,000 — 599,413 — 632,500 — 17,674 1,799,587
Executive Officer 2013 550,000 — 466,877 — 737,000 — 19,727 1,773,604

Jeffrey B. McGroarty 2015 305,000 — 202,701 — 183,000 950 15,080 706,731
Senior Vice President and 2014 275,000 — 169,760 — 237,188 8,623 14,776 705,347
Chief Financial Officer 2013 250,000 — 127,327 — 232,500 15,813 15,537 641,177

Brian J. Sisko 2015 375,000 — 364,868 — 270,000 621 17,521 1,028,010
Chief Operating Officer, 2014 375,000 — 272,951 — 388,125 5,634 16,491 1,058,201
Executive Vice President 2013 375,000 — 233,436 — 425,250 10,331 17,447 1,061,464
and Managing Director

~~(1)~~

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.”

~~(2)~~

For 2015, the Compensation Committee awarded a combination of time-based vesting restricted stock and PSUs. The fair value of the restricted stock and PSUs is based on $14.465 per share for awards granted on December 31, 2015, which was the average of the high and low trading prices of a share of our common stock on the grant date. The PSUs 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. Assuming the highest level of performance conditions will be achieved (that is, the full number of shares underlying the PSUs will vest upon 100% achievement of the target and the full cash incentives will be paid upon achievement of 200% of the target), the full grant date fair value for all stock awards granted during 2015 would be as follows: Mr. Zarrilli – $1,475,693; Mr. McGroarty – $409,911; and Mr. Sisko – $737,831.

~~(3)~~

The amounts reported in this column represent payments made in March 2016 for awards earned under our 2015 Management Incentive Plan, which is described in detail under “Compensation Discussion and Analysis—2015 Compensation Program.”

~~(4)~~

~~For 2015, All Other Compensation includes the following amounts:~~

Name 401(k) Matching
Contribution
($) Life Insurance
Premiums
($) Group Life Insurance
Imputed Income
($)
Stephen T. Zarrilli 13,250 3,432 1,242
Jeffrey B. McGroarty 13,250 1,371 459
Brian J. Sisko 13,250 2,594 1,677

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~~his employment agreement, ~~with us that sets his initial base salary and respective initial minimum annual cash incentive target award~~Eric C. Salzman serves 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~~our Chief Executive Officer 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 — 2015~~

~~The following table shows non-equity and equity incentive plan awards and stock awards granted during 2015 to our named executive officers.~~

Grant
All Other All Other Date
Estimated Possible Payouts Estimated Future Payouts Stock Option Fair
Under Non-Equity Incentive Under Equity Incentive Plan Awards: Awards: Exercise Closing Value of
Plan Awards (1) Awards (2)(3) Number of Number of or Base Market Stock
Date of Shares of Securities Price of Price on and
Grant Committee Stock or Underlying Option Date of Option
Date Action Threshold Target Maximum Threshold Target Maximum Units Options Awards Grant Awards
Name (2015) (2015) ($) ($) ($) (#) (#) (#) (#)(2)(3)(4) (#) ($/Sh) ($/Sh) ($)(5)
Stephen T. Zarrilli 03/03 03/03 — 660,000 990,000 — — — — — — — —
12/31 12/09 — — — — — — 20,180 — — — 291,903
12/31 12/09 — — — — 40,359 (6) (6) — — — — 437,845
Jeffrey B. McGroarty 03/03 03/03 — 228,750 343,125 — — — — — — — —
12/31 12/09 — — — — — — 5,605 — — — 81,076
12/31 12/09 — — — 11,211 (6) (6) — — — — 121,625
Brian J. Sisko 03/03 03/03 — 337,500 506,250 — — — — — — — —
12/31 12/09 — — — — — — 10,090 — — — 145,951
12/31 12/09 — — — — 20,179 (6) (6) — — — — 218,917

~~(1)~~

These awards were made under our 2015 MIP. There were no mandatory minimum awards payable under our 2015 MIP and the maximum awards payable were 150% of the target amounts. The amounts in the table represent payouts that might have been achieved basedending on performance at target or maximum performance levels. Actual payments under these awards, which have already been determined and were paid in March 2016, are included for 2015 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 2015 long-term incentive value of the grants made to each of our named executive officers was as follows: Mr. Zarrilli – $900,000; Mr. McGroarty – $250,000; and Mr. Sisko – $450,000. The number of shares of restricted stock and number of PSUs 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 $14.8665.

~~(4)~~

The restricted stock vests as to 25% of the underlying shares on March 1, 2017, and as to the remaining 75% of the underlying shares in 12 equal quarterly installments commencing on March 15, 2017, 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 our Annual Report on Form 10-K.

~~(6)~~

As described in detail under “Compensation Discussion and Analysis — Long-Term Incentives,” these PSUs are subject to capital-return based vesting criteria and vest based on the aggregate cash produced as a result of monetizations involving our partner companies that constitute the 2015 pool relative to the amount of cash deployed in connection with such partner companies, plus allocated overhead. 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 (up to a 2.0 times return of capital deployed plus allocated overhead, at which point full vesting of the shares underlying the PSUs will have been achieved), and, if applicable, cash accruals/payments if the capital returned to Safeguard equals or exceeds 2.25 times the capital deployed plus allocated overhead. There is no minimum number of PSU shares potentially issuable. The maximum amount payable is equal to the total of the target number of shares underlying the PSUs if the capital returned to Safeguard equals 2.0 times capital deployed (plus allocated overhead) plus, if the capital returned to Safeguard equals 3.0 times capital deployed (plus allocated overhead), cash accruals/payments as follows: Mr. Zarrilli – $599,997; Mr. McGroarty – $166,668; and Mr. Sisko – $299,991. 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%. 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 that none of such equity may vest (or cash amounts be paid) more quickly than based upon the following schedule following grant: March 15, 2017 - 25%; each semi-annual

~~anniversary of the grant thereafter through March 15, 2020 - 12 ½% increments. The PSUs have a 10-year term and were granted under our 2014 Equity Compensation Plan.~~

~~Outstanding Equity Awards at Fiscal Year-End — 2015~~

~~The following table shows the equity awards we have made to our named executive officers that were outstanding at~~ December 31, ~~2015.~~

Option Awards Stock Awards
Equity Incentive
Equity Incentive Market Equity Incentive Plan Awards:
Plan Awards: Number Value of Plan Awards: Market or
Number of Number of Number of of Shares Shares or Number of Payout Value of
Securities Securities Securities or Units Units of Unearned Unearned
Underlying Underlying Underlying of Stock Stock Shares, Units or Shares, Units or
Unexercised Unexercised Unexercised Option That That Have Other Rights Other Rights
Options Options Unearned Exercise Option Have Not Not That Have Not That Have Not
Grant (#)(1) (#)(1)(2) Options Price Expiration Vested Vested Vested Vested
Name Date Exercisable Unexercisable (#)(2) ($) Date (#)(2)(3) ($)(4) (#)(2)(5) ($)(4)
Stephen T. 06/30/08 62,500 — — 7.650 06/30/16 — — — —
Zarrilli 06/30/08 51,666 — 135,834 (6) 7.650 06/30/16 — — — —
09/30/08 1,458 — — 7.410 09/30/16 — — — —
09/30/08 1,342 — 3,033 (7) 7.410 09/30/16 — — — —
10/30/09 3,625 — — 9.825 10/30/17 — — — —
10/30/09 — — 10,875 (7) 9.825 10/30/19 — — — —
10/30/09 — — — — — — — 7,250 105,198
11/05/10 3,755 — — 15.105 11/05/18 — — — —
11/05/10 — — 11,265 (7) 15.105 11/05/20 — — — —
11/05/10 — — — — — — — 5,630 81,691
09/30/11 4,914 — — 15.070 09/30/19 — — — —
09/30/11 — — 14,741 (7) 15.070 09/30/21 — — — —
09/30/11 — — — — — — — 7,371 106,953
10/02/12 3,791 998 — 15.435 10/02/20 — — — —
10/02/12 — — 14,368 (7) 15.435 10/02/22 — — — —
10/02/12 — — — — — 499 7,240 7,184 104,240
12/05/12 14,860 4,953 — 13.890 12/05/20 — — — —
12/05/12 — — 59,437 (7) 13.890 12/05/22 — — — —
12/05/12 — — — — — 2,476 35,927 29,719 431,223
10/31/13 — — — — — 3,952 57,344 24,745 359,050
12/31/14 — — — — — 12,018 174,381 24,037 348,777
12/31/15 — — — — — 20,180 292,812 40,359 585,610
Jeffrey B. 09/30/08 4,166 — — 7.410 09/30/16 — — — —
McGroarty 10/30/09 875 — — 9.825 10/30/17 — — — —
10/30/09 — — 2,625 (7) 9.825 10/30/19 — — — —
10/30/09 — — — — — — — 1,750 25,393
11/05/10 875 — — 15.105 11/05/18 — — — —
11/05/10 — — 2,625 (7) 15.105 11/05/20 — — — —
11/05/10 — — — — — — — 1,313 19,052
09/30/11 875 — — 15.070 09/30/19 — — — —
09/30/11 — — 2,625 (7) 15.070 09/30/21 — — — —
09/30/11 — — — — — — — 1,313 19,052
10/02/12 692 183 — 15.435 10/02/20 — — — —
10/02/12 — — 2,625 (7) 15.435 10/02/22 — — — —
10/02/12 — — — — — 91 1,320 1,313 19,052
12/05/12 1,350 450 — 13.890 12/05/20 — — — —
12/05/12 — — 5,400 (7) 13.890 12/05/22 — — — —
12/05/12 — — — — — 225 3,265 2,700 39,177
10/31/13 — — — — — 1,078 15,642 6,748 97,913
12/31/14 — — — — — 3,404 49,392 6,807 98,770
12/31/15 — — — — — 5,605 81,329 11,211 162,672

~~(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 and 2015 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 $14.51, 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, and 2015 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 and 2015, 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 and 2015 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 ½% increments.

	~~(6)~~	These options are market-based vesting options and vest upon the achievement of improvement in Safeguard’s stock price. Achievement is measured based on the average daily closing price of Safeguard common stock as reported on the NYSE composite tape for 20 consecutive trading days. The following table shows the per share stock prices at which portions of the shares underlying these market-based vesting options vest:

~~Percentage of Shares Underlying Options That Vest~~		~~Per Share Stock Price~~
~~First 20%~~		~~$18.9288~~
~~Next 30%~~		~~$27.8796~~
~~Next 40%~~		~~$39.0684~~
~~Final 10%~~		~~$43.3476~~

In addition to vesting upon the achievement of a specified per share stock price, the shares underlying the options may vest on a pro rata basis on each six-month anniversary of the grant date if the per share stock price is between the designated stock prices (based on the highest average closing price of a share of our common stock as reported on the NYSE composite tape for 20 consecutive trading days during each six-month period).

~~(7)~~

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.” With the initial award of capital-return based vesting options in 2008, the Compensation Committee established an initial group of companies which consisted of our partner companies existing as of September 30, 2008, other than Clarient, Inc. (“Initial Group”), and tied the vesting for the options awarded in 2008 to predetermined levels of net proceeds returned to us based on monetizations involving the Initial Group. The capital-return based vesting for the options awarded in subsequent years 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 — 2015~~

~~The following table shows stock options that were exercised by our named executive officers during 2015 and restricted stock awards that vested during 2015.~~

Option Awards Stock Awards

Name

Number of Shares
Acquired on Exercise
(#)

Value Realized on Exercise
($)(1)

Number of Shares Acquired on Vesting
(#)

Value Realized on
Vesting
($)(2)

Stephen T. Zarrilli —   — 5,598 100,120
Jeffrey B. McGroarty —   — 978 17,484
Brian J. Sisko 76,110   461,505 1,955 34,977

~~(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~~ ~~— 2015~~

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 2009,2023, and we do not expect to ~~make~~be entering into a new employment agreement with Mr. Salzman or extending the term of the existing employment agreement. Starting from January 1, 2024, Mr. Salzman will no longer serve as our Chief Executive Officer and is expected to provide certain consulting services to Safeguard, on an as needed basis, on the terms and schedule to be approved by the Board, at its discretion, depending on the timing of the Transaction.

In addition, if shareholders approve the Stock Split Proposals and we proceed with the Transaction, starting from January 1, 2024, we expect to begin transitioning Safeguard’s general and administrative functions, including, but not limited to, overseeing the remaining ownership interests, monitoring any continued escrow amounts due to Safeguard and other contractual arrangements, maintaining Safeguard’s books and records, overseeing the process of shareholder distributions when and if proceeds from the monetization of our ownership interests are available and maintaining quarterly and annual shareholder communications, to an external management service provider to be selected by the Board, with our remaining officers and employees no longer maintaining their current positions, but instead providing consulting services to Safeguard, on an as needed basis, on the terms and schedule to be approved by the Board, at its discretion, depending on the timing of the Transaction.

Interests of Executive Officers, Directors and 10% Shareholders

General Information

Upon the effectiveness of the Stock Splits, the aggregate number of shares of our common stock owned by our directors and executive officers will not increase and the ownership percentage of the shares of our voting stock held by those of our directors, executive officers and 10% shareholders who will be Continuing Shareholders will increase at the same rate as the ownership percentage of all the other Continuing Shareholders, as a result of the reduction of the number of shares of our common stock outstanding. Safeguard will not be prevented from repurchasing shares of our common stock in the future ~~contributions~~from the Continuing Shareholders, including the affiliated Continuing Shareholders, as a result of the Transaction.

The ownership percentage and the reduction in the number of shares outstanding following the Stock Splits may increase or decrease depending on purchases, sales and other transfers of our shares of common stock by our shareholders prior to the effective time of the Stock Splits. The ownership percentage of our shares of common stock held by those of our directors, executive officers and 10% shareholders who will be Continuing Shareholders, as well as the ownership percentage of our other Continuing Shareholders, will proportionally increase or decrease as a result of such purchases, sales and other transfers of our shares of common stock by our shareholders prior to the effective time of the Stock Splits.

On January 17, 2023, Eric C. Salzman, our Chief Executive Officer, received a restricted stock award of 125,000 shares of our common stock, which vests on a monthly basis through December 31, 2023, subject to Mr. Salzman’s continued employment at Safeguard, of which approximately 10,417 shares are expected to vest on each of November 15, 2023 and December 15, 2023. In March 2023, Mr. Salzman received a performance stock unit grant representing a right to receive 125,000 shares of our common stock, which will vest based on the discretion of the Compensation Committee of the Board and if certain performance criteria are achieved by December 31, 2023, subject to Mr. Salzman’s continued employment at Safeguard. See “—Agreements with Safeguard” below for additional information related to Mr. Salzman’s equity grants.

On June 30, 2023, each member of our Board received a restricted stock grant of 44,497 shares of our commons stock vesting on the first anniversary of the date of the grant. If prior to such first anniversary, a director ceases to be a member of the Board for any reason other than (i) death, (ii) disability or (iii) as a result of not being nominated by Safeguard’s Nominating and Corporate Governance Committee for re-election to the Board, the unvested shares of common stock under this ~~plan. Amounts accrued for prior periods~~grant will ~~remain credited,~~be forfeited. If shareholders approve the Stock Split Proposals and ~~earnings on those prior amounts will continue~~we proceed with the Transaction, the size of the Board is expected to be ~~credited,~~reduced to ~~prior participants~~two members from the current governance structure of Safeguard, to be determined by the Board upon the filing of our Annual Report on Form 10-K for the fiscal year ending December 31, 2023, and the remaining directors are expected to resign from the Board. We expect to deem such resignation related to the Transaction to be an equivalent of not being nominated for re-election for the purposes of the vesting of the restricted stock grant.

None of our directors, executive officers or 10% shareholders has any interest, direct or indirect, in ~~accordance~~the Stock Splits, other than interests arising from (i) the ownership of shares of our common stock, where those directors, executive officers or 10% shareholders receive no extra or special benefit from the Transaction that is not shared on a pro rata basis by all other holders of our common stock, (ii) the ownership of restricted stock or restricted stock unit grants relating to the right to receive shares of our common stock upon the vesting of these grants, which will not be affected by the Stock Splits, (iii) severance arrangements, or (iv) potential arrangements related to the planned adjusted management structure of Safeguard.

As of the record date, approximately 9.7% and 12.6% of the issued and outstanding shares of our common stock was held by our executive officers and 10% shareholders, respectively. Our executive officers have indicated that they intend to vote all of the shares of our common stock held by them “FOR” the Stock Split Proposals and “FOR” the Adjournment Proposal. Safeguard’s affiliated shareholders, including our directors and executive officers, will be treated no differently than unaffiliated shareholders, including unaffiliated Cashed Out Shareholders and unaffiliated Continuing Shareholders.

For information relating to the beneficial ownership of our common stock by executive officers, directors and 10% shareholders, see “Security Ownership of Certain Beneficial Owners and Management.”

See “—Effects of the Transaction (including the Stock Splits)—Effect of the Transaction (including the Stock Splits) on our Directors, Executive Officers and 10% Shareholders.”

Agreements with Safeguard

During the last two years, none of our directors, executive officers or 10% shareholders have entered into any agreements with Safeguard, except as follows:

On January 1, 2023, Safeguard entered into an employment agreement (the “Salzman Agreement”) with Eric C. Salzman, which provides for the terms and conditions of Mr. Salzman’s continued employment as our Chief Executive Officer. The Salzman Agreement amended and restated in its entirety the employment agreement previously entered into between Safeguard and Mr. Salzman on December 21, 2021 (the “Prior Employment Agreement”). Pursuant to the terms of the ~~plan.~~Salzman Agreement, Mr. Salzman serves as our Chief Executive Officer for a term ending on December 31, 2023 (the ��Term”) on substantially similar terms as the Prior Employment Agreement.

~~Lump sum distributions~~Under the terms of the ~~vested balance in~~Salzman Agreement, Mr. Salzman receives an annual base salary equal to $500,000. In addition, Mr. Salzman has received under our 2014 Equity Compensation Plan (the “Plan”): (i) 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~~restricted stock award of ~~calculating the earnings that are credited to each participant’s account based~~125,000 shares of common stock, which vests and becomes payable ratably on a ~~notional investment~~monthly basis over the Term, subject to Mr. Salzman’s continued employment (the “Restricted Stock Grant”); and (ii) a restricted stock unit grant representing a right to receive 125,000 shares of common stock, which will vest if certain performance criteria are achieved, subject to Mr. Salzman’s continued employment (the “Performance Unit Grant”). The Restricted Stock Grant and Performance Unit Grant include dividend or dividend equivalent rights (as applicable) which accrue and/or become payable when the underlying shares are vested or no longer subject to forfeiture, as applicable. Mr. Salzman is also eligible to participate 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~~our welfare and benefit plans generally available to ~~participants in~~ our ~~401(k) plan. The committee, in its discretion, may replace this fund and add new funds.~~executive employees.

The ~~following table shows earnings during 2015~~Salzman Agreement provides that if Mr. Salzman is terminated without “Cause” (as defined in the Salzman Agreement) or resigns for “Good Reason” (as defined in the Salzman Agreement), Mr. Salzman will be paid an amount equivalent to the unpaid portion of his base salary which would have been payable for the remainder of the Term. Any shares subject to the Restricted Stock Grant and ~~account balances at December 31, 2015, 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 —    950 —    70,712
Brian J. Sisko —    621 —    46,197

~~(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, 2015, each of our named executive officers was fully vested.

~~Potential Payments~~the Performance Unit Grant awarded prior to Mr. Salzman’s termination date and not previously vested and paid will vest 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~~Mr. Salzman’s 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~~

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~~

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~~

~~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.~~

~~Payments Made upon Involuntary Termination of Employment~~ without Cause or for Good ~~Reason~~Reason. Any shares subject to the Restricted Stock Grant and the Performance Unit Grant awarded prior to a Change of Control (as defined in the Plan) and not previously vested and paid will vest in the event of a Change of Control. We will also pay the cost of COBRA continuation coverage for Mr. Salzman with respect to medical insurance, less such co-payment amount payable by him under the terms of our medical insurance program as in effect on the date of such termination, for the balance of the Term.

This summary description of the Salzman Agreement is not complete and is qualified in its entirety by, and should be read in conjunction with, the complete text of the Salzman Agreement, which is filed as an exhibit to Safeguard’s Current Report on Form 8-K, dated January 4, 2023 and is incorporated herein by reference.

Golden Parachute Compensation

~~Messrs. Zarrilli, McGroarty,~~This section sets forth information required by Item 402(t) of Regulation S-K regarding the compensation for each of Safeguard’s named executive officers that is based on or otherwise relates to the Transaction and ~~Sisko~~related adjustments to Safeguard’s management structure. This compensation is referred to as “golden parachute compensation” by the applicable SEC disclosure rules. The amounts set forth in the table below are estimates based on multiple assumptions that may or may not actually occur, including assumptions described in this proxy statement. As a result, the actual amounts, if any, that a named executive officer receives may materially differ from the amounts set forth in the table.

The table below assumes that (i) our named executive officers willno longer maintain their current positions on January 1, 2024, (ii) the Salzman Agreement will expire on December 31, 2023 pursuant to its terms, and (iii) Mr. Herndon’s employment will be terminated in a manner entitling the executive to receive the severance benefits described below.

The amounts shown in the table below do not include the value of payments or benefits that would have been earned, or any amounts associated with equity awards that would vest pursuant to their terms, on or prior to the Effective Time of the Merger, or the value of payments or benefits that are not based on or otherwise related to the Transaction or related adjustments to Safeguard’s management structure.

Name Cash
($) Equity
($) Pension/
NQDC
($) Perquisites/
Benefits
($) Tax
Reimbursement
($) Other
($) Total
($)
Eric C. Salzman — — — — — — —

Mark A. Herndon 313,500 — — — — 10,816 324,316
Mr. Herndon is entitled to receive the following benefits upon involuntary termination of employment without cause ~~or for good reason:~~by Safeguard in connection with the Transaction:
· Payment equal to six months of his base annual salary, payable in semi-monthly installments over six months;
· Up to six months’ continued COBRA coverage under Safeguard’s medical insurance program; provided, however, that such coverage shall terminate immediately upon his commencement of full-time employment with any other employer during the severance period; and

· A lump sum payment equal to ~~1.5 times~~ the ~~executive’s then current base salary and the executive’s earned prorated bonus~~applicable premium otherwise payable for ~~the year of termination;~~
· ~~All time-vested stock options will fully vest and remain exercisable~~COBRA continuation coverage with respect to dental insurance 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.~~a six-month period.

~~Payments Made upon~~Mr. Herndon is also entitled to receive payment of his 2023 Management Incentive Program target variable incentive at 100% achievement, prorated through the date of his termination of employment.
See “—Planned Management Structure Adjustments” for a ~~Change in Control or Involuntary Termination~~description of ~~Employment without Cause or for Good Reason in Connection with a Change in Control~~potential arrangements between Safeguard and our directors and executive officers.
Source of Funds and Expenses
Expenses

~~Messrs. Zarrilli, McGroarty,~~Based on information we have received as of the record date from our transfer agent as to holdings of our record holders, as well our estimates of other expenses relating to the Transaction, we believe that the total cash to be paid in connection with the Transaction to Safeguard is approximately $1.2 million if the Minimum Number were 75, which is the approximate midpoint within the proposed range of Stock Split Ratios. This amount includes approximately $10,000 needed to cash out fractional shares as a result of the Stock Splits if the Minimum Number were 75. However, this amount, which is for illustrative purposes only, could be larger or smaller depending on, among other things, the Stock Split Ratios ultimately selected by the Board, the number of fractional shares that will be outstanding at the time of the Stock Splits as a result of purchases, sales and ~~Sisko will not~~other transfers of our shares of common stock by our shareholders. In addition, $1.2 million of the total cash to be ~~entitled to any other payments or benefits (except those that are provided on a non-discriminatory basis to our employees generally upon termination~~paid in connection with the Transaction includes approximately $0.9 million of ~~employment) unless the change in control is coupled with a loss of employment or a substantial change in job duties~~severance expenses, 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~~well as the following ~~benefits:~~approximated legal, accounting and other costs will be incurred by Safeguard to effect the Stock Splits and the overall Transaction:

· ~~A lump sum payment equal to 1.5 times the executive’s then current base salary~~$225,000 for legal 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;accounting expenses; and

· ~~Upon his death or disability, payment of benefits under our other broad-based employee benefit programs,~~$75,000 for solicitation expenses, including ~~short-term~~fees associated with filing, printing and ~~long-term disability plans, life insurance program, accidental death and dismemberment plan, and business travel insurance plan, as applicable.~~mailing proxy materials.

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, 2015, and represent estimatesSafeguard is responsible for paying all 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 2015 annualized target incentive award for the full year; and (ii) by using our 2016 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.above expenses.

Life Insurance Health
Proceeds or and Total
Salary and Disability Welfare Acceleration of Termination
Bonus Income Benefits Equity Awards Benefits
($) ($) ($) ($)(1) ($)
Stephen T. Zarrilli
· Normal Retirement (65+) — — — — —
· Permanent disability — 3,109,400 — 3,071 3,112,471
· Death — 1,550,000 — 3,071 1,553,071
· Involuntary termination without cause or for good reason 1,485,000 — 42,184 3,071 1,530,255
· Change-in-control termination, involuntarily or for good reason 1,485,000 — 42,184 3,734,671 5,261,855
Jeffrey B. McGroarty
· Normal Retirement (65+) — — — — —
· Permanent disability — 3,448,483 — 279 3,448,762
· Death — 1,025,000 — 279 1,025,279
· Involuntary termination without cause or for good reason 686,250 — 35,135 279 721,664
· Change-in-control termination, involuntarily or for good reason 686,250 — 35,135 647,954 1,369,339
Brian J. Sisko
· Normal Retirement (65+) — — — — —
· Permanent disability — 2,278,688 — 126 2,278,814
· Death — 1,125,000 — 126 1,125,126
· Involuntary termination without cause or for good reason 900,000 — 35,070 126 935,196
· Change-in-control termination, involuntarily or for good reason 900,000 — 35,070 1,394,908 2,329,978
Source of Funds

~~(1)~~ Under SEC rules, the value related to the acceleration of equity awards in each scenario is calculated as of December 31, 2015, 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.
Safeguard expects to pay the Cash Payment to the Cashed Out Shareholders and the costs relating to the Stock Splits and the overall Transaction from cash on hand.

~~ITEM 3 – RATIFICATION OF APPOINTMENT OF~~Effective Time of Stock Splits and the Overall Transaction
~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~

The ~~Audit Committee, composed entirely of independent, non-employee members~~Stock Splits will become effective as of the time that Safeguard amends our articles of incorporation through the filing of articles of amendment to our articles of incorporation with the Pennsylvania Department of State to effectuate the Reverse Stock Split and the Forward Stock Split. Following the special meeting, the Board will need to evaluate updated ownership data impacting the various Stock Split Ratios so that it can determine the aggregate costs of the Stock Splits within the range of Stock Split Ratios before choosing a Stock Split Ratio. Depending on the number of shareholders owning fewer than the Minimum Number of shares, the Board may abandon the Stock Splits, if the Stock Splits become too costly, or the overall Transaction. Subject to the Board’s ability to abandon the proposed Stock Splits and the overall Transaction, the Board intends to determine the Stock Split Ratios and effect the Stock Splits as soon as reasonably practicable after the Stock Splits are approved by our shareholders, which would likely occur immediately following the ~~appointment~~public announcement of ~~KPMG LLP (“KPMG”)~~the Stock Split Ratios chosen by the Board. Our common stock acquired by us in connection with the Stock Splits will be held as ~~Safeguard’s independent registered public accounting firm~~treasury shares, retired or restored to the status of authorized but unissued shares.
Assuming the Board determines that the Stock Splits will result in us having fewer than 300 record holders of our common stock after the effective time of the Stock Splits, we intend to file applicable forms with the SEC to deregister our shares of common stock under the federal securities laws and to delist our shares from Nasdaq. Specifically, in connection with the Transaction, we intend to file a Form 25 to delist our common stock from Nasdaq, which will terminate the registration of our common stock under Section 12(b) of the Exchange Act ten days thereafter. On or around the tenth day following the Form 25 filing, we intend to file a Form 15 with the SEC certifying that we have less than 300 shareholders, which will terminate the registration of our common stock under Section 12(g) of the Exchange Act. After the 90-day waiting period following the filing of the Form 15: (1) our obligation to comply with the requirements of the proxy rules and to file proxy statements under Section 14 of the Exchange Act will also be terminated; (2) our executive officers, directors and 10% shareholders will no longer be required to file reports relating to their transactions in our common stock with the SEC and our executive officers, directors and 10% shareholders will no longer be subject to the recovery of profits provision of the Exchange Act; and (3) persons acquiring 5% of our common stock will no longer be required to report their beneficial ownership under the Exchange Act. However, our obligation to file periodic and current reports with the SEC will not be suspended with respect to the 2023 fiscal year due to our existing registration statements filed under the Securities Act, and we will file with the SEC our Annual Report on Form 10-K for the ~~2016~~ fiscal year ending December 31, 2023. However, if on the first day of any fiscal year we have more than 300 shareholders of record, we will once again become subject to the reporting requirements of the Exchange Act. If necessary to maintain its suspension of SEC reporting obligations, Safeguard reserves the right to take additional actions that may be permitted under Pennsylvania law, including effectuating further reverse stock splits. Despite no longer being an SEC reporting company, Safeguard will continue to be subject to the general anti-fraud provisions of applicable federal and state securities laws.
Termination of Transaction
Although we are requesting your approval of the Stock Split Proposals, the Board has ~~recommended that~~retained authority, in its discretion, to withdraw the Stock Splits from the agenda of the Special Meeting prior to any vote. Subject to its compliance with Pennsylvania law and the federal proxy rules, the Board also reserves the right to change the terms of the Stock Splits and the overall Transaction, including the ratios of Stock Splits and the amount of the Cash Payment, to the extent it believes it is necessary or desirable in order to accomplish our shareholders ratify the appointment. If the shareholders do not ratify the appointment, the Audit Committee may reconsider its recommendation and may retain KPMG or another accounting firm without resubmitting the matter to shareholders. Evengoal of staying below 300 record holders. In addition, even if the Stock Splits are approved by shareholders ~~ratify~~at the ~~appointment of KPMG,~~Special Meeting, the ~~Audit Committee~~Board may ~~select another firm~~determine not to implement the Stock Splits if subsequently it determines ~~such selection to be~~that the Stock Splits are not in the best interests of Safeguard and its shareholders.
~~Services provided~~ By approving the Stock Splits you are also authorizing the Board to ~~Safeguard and its subsidiaries by KPMG in fiscal year 2015 and fiscal year 2014~~abandon the Stock Splits or the overall Transaction. If for any reason the Stock Splits are ~~described below under “Independent Registered Public Accounting Firm—Audit Fees.” Representatives of KPMG~~not approved, or if approved, are ~~expected to attend the annual meeting. They~~not implemented, our common stock will ~~have an opportunity to make a statement if they desire~~not be deregistered until such time as we otherwise elect to do so, if Safeguard is eligible to do so at such time (i.e., if the number of record holders of our common stock continued to be below 300). Reasons to withdraw the proposed Stock Splits from the agenda, amend the terms of the proposed Stock Splits or to abandon the proposed Stock Splits or the overall Transaction, may include, among other things:

· any change in the nature of the holdings of shareholders which would result in us not being able to reduce the number of our record holders below 300 as a result of the Stock Splits;
· any reduction in the number of record holders to a number below 300 such that Safeguard is eligible to file a Form 15 to suspend its reporting obligations and the Stock Splits are determined to be no longer necessary as a means of terminating our reporting obligations under the Exchange Act;
· any change in the number of shares that will be exchanged for cash in connection with the Stock Splits that would increase in any material respect the cost and expense of the Stock Splits compared to what we presently estimate;
· any material change in the closing price of our common stock prior to the effective time of the Stock Splits; and
· any change in the general political, market, economic or financial conditions in the United States or abroad or any change in our financial condition, business or prospects that could, in our reasonable judgment, have a material effect on our business, condition (financial or other), assets, income, operations or prospects or that of any of our subsidiaries or the trading in shares of our common stock, or that would otherwise materially affect in any way the contemplated future conduct of our business or that of any of our subsidiaries, and that would cause us to believe that the Stock Splits and/or the overall Transaction would no longer be in the best interests of our shareholders.
If the Board decides to withdraw the proposed Stock Splits from the agenda of the Special Meeting, amend the terms of the proposed Stock Splits or to abandon the proposed Stock Splits or the overall Transaction, Safeguard will promptly notify shareholders of the decision. See “Discussion and Special Factors—Reservation of Rights.”
Payment for Fractional Shares
Shareholders of record owning fewer than the Minimum Number of shares immediately prior to the effective time of the Reverse Stock Split would be entitled to a fraction of a share of common stock upon the Reverse Stock Split and will be ~~available~~paid cash in lieu of such fraction of a share of common stock on the basis of $1.65, without interest, for each share of common stock held by the Cashed Out Shareholder immediately prior to ~~respond~~the effective time of the Reverse Stock Split. Shareholders of record who own at least the Minimum Number of shares immediately prior to ~~appropriate questions.~~the effective time will not receive any cash for their fractional share interests resulting from the Reverse Stock Split. The Forward Stock Split that will immediately follow the Reverse Stock Split will reclassify the whole shares and fractional share interests held by Continuing Shareholders after the Reverse Stock Split back into the same number of shares of our common stock held by them immediately before the effective time of the Stock Splits. As a result, the total number of shares held by Continuing Shareholders will not change after completion of the Stock Splits.

~~Ratification requires~~Some of our shareholders of record hold their shares in book-entry form, which means that those shareholders do not have stock certificates evidencing their ownership of common stock. Accordingly, each such Cashed Out Shareholder will receive a check by mail at such Cashed Out Shareholder’s registered address as soon as practicable after the ~~affirmative vote~~effective time. By signing and cashing this check, the Cashed Out Shareholder will warrant that the Cashed Out Shareholder owns the shares for which the cash payment was received. Our transfer agent, Computershare, will act as our agent for purposes of paying for fractional shares in connection with the Transaction.
Certain of our shares of common stock are held in certificated form. Cashed Out Shareholders of record who hold shares of our common stock in certificated form will be sent a ~~majority~~transmittal letter by the transfer agent after the effective time of the ~~votes cast by all shareholders entitled~~Reverse Stock Split that will contain the necessary materials and instructions on how such shareholder should surrender his, her or its certificates, if any, representing shares of our common stock to ~~vote~~the transfer agent and receive the cash payments. Please do not turn in your stock certificates at this time.

For purposes of determining ownership of shares of our common stock on the ~~proposal.~~effective time of the Stock Splits, such shares will be considered held by the person in whose name such shares are registered on our transfer agent’s records (i.e., by shareholders of record). If you hold fewer than the Minimum Number of shares of our common stock in “street name”, your broker, bank or other nominee is considered the shareholder of record with respect to those shares and not you. You are considered the beneficial owner of these shares. Pursuant to the SEC rules and regulations, we intend to treat each bank, broker or other nominee as one shareholder of record. These banks, brokers and other nominees may have different procedures for processing the Stock Splits. It is possible that the bank, broker or other nominee also holds shares for other beneficial owners of our common stock and that it may hold at least the Minimum Number, or more than the Minimum Number, of shares of our common stock in the aggregate. Therefore, depending upon their procedures, your bank, broker or other nominee may not be obligated to treat the Reverse Stock Split or the Forward Stock Split as affecting beneficial owners’ shares.
If you hold an account with fewer than the Minimum Number of shares of our common stock in “street name” and want to ensure that your shares are cashed out, we encourage you to promptly contact your bank, broker or other nominee to change the manner in which your shares are held from “street name” into a record holder account in your own name so that you will be a record owner of the shares and could receive the Cash Payment for your fractional shares.
There will be no differences between the respective rights, preferences or limitations of our common stock prior to the Stock Splits and our common stock after the Stock Splits. There will be no differences with respect to dividend, voting, liquidation or other rights associated with our common stock.
No Appraisal or Dissenters’ Rights
Under Pennsylvania law, our articles of incorporation and our Third Amended and Restated Bylaws, no appraisal or dissenters’ rights are available to shareholders of Safeguard who vote against (or abstain from voting on) the Stock Split Proposals. The presence or absence of appraisal rights did not influence the recommendations from the Board regarding the Stock Split Proposals, as none of the alternatives considered by the Board, which are within the control of Safeguard, such as open market repurchases, issuer tender offers and odd-lot tender offers, would have given rise to appraisal rights.
Escheat Laws

The ~~Board recommends~~unclaimed property and escheat laws of each state provide that ~~shareholders vote FOR~~under circumstances defined in that state’s statutes, holders of unclaimed or abandoned property must surrender that property to the ~~proposal~~state. Persons whose shares are cashed out and whose addresses are unknown to ~~ratify~~us generally will have a certain period of years from the ~~appointment~~effective time of ~~KPMG as Safeguard’s independent registered public accounting firm~~the Stock Splits in which to claim the cash payment payable to them depending on applicable state laws. If we do not have an address for the ~~2016 fiscal year.~~holder of record of the shares, then unclaimed cash-out payments would be turned over to our state of incorporation, the Commonwealth of Pennsylvania, in accordance with its escheat laws.

~~Independent Registered Public Accounting Firm — Audit Fees~~Regulatory Approvals
Safeguard is not aware of any material governmental or regulatory approval required for completion of the Reverse Stock Split or the Forward Stock Split, other than compliance with the relevant federal securities laws and Pennsylvania law.
Litigation
There is no ongoing litigation related to the Reverse Stock Split or the Forward Stock Split, or the overall Transaction.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This proxy statement and the other reports that Safeguard files with the SEC contain forward-looking statements. For this purpose, any statements that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are based on management’s current expectations, and in some cases can be identified by the use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “outlook,” “may,” “should,” “plan,” “seek,” “forecast,” “target,” “will,” and “would” and other similar expressions.
Forward-looking statements are based on certain assumptions and analyses we make in light of our experience and perception of historical trends, current conditions, expected future developments, and other factors we believe are relevant. In addition, this proxy statement includes certain estimates and projections with respect to our anticipated cost savings and future performance. Such estimates and projections are based on significant assumptions and subjective judgment concerning anticipated results. Although we believe our assumptions, analyses and judgments are reasonable, based on information currently available to us, these assumptions, analyses and judgments are inherently subject to significant risks, variability and contingencies, many of which are beyond our control. These assumptions, analyses and judgments may prove to be incorrect and there can be no assurance that any estimated or projected results are obtainable or will be realized.
These forward-looking statements include, but are not limited to, statements concerning the following:
· the completion of the Transaction, including the Stock Splits, the delisting of our common stock from Nasdaq, and the termination of the registration of our common stock under the Exchange Act and the suspension of our SEC reporting requirements;
· the estimated number of shares of our common stock to be cashed-out as a result of the Stock Splits;
· the expected cost to Safeguard of the Transaction, including the estimated amount to be paid to cash-out the holders of fewer than the Minimum Number of shares of our common stock immediately prior to the effective time of the Reverse Stock Split and the other related costs of the Transaction;
· the cost savings that Safeguard expects to realize after giving effect to the Transaction; and
· the ability of Continuing Shareholders to sell their shares of our common stock over-the-counter following the Transaction.
These forward-looking statements are subject to a number of risks and uncertainties, and future events and actual results could differ materially from those described in, contemplated by, or underlying these forward-looking statements. These risks and uncertainties include, but are not limited to:
· the occurrence of any event, change, or other circumstances that could give rise to the abandonment of the Stock Splits or the overall Transaction;
· the commencement of any legal proceedings relating to the Stock Splits or the overall Transaction, and the outcome of any such proceedings that may be instituted;
· the occurrence of any event, change, or other circumstance that could prevent or delay Safeguard from terminating the registration of its common stock under the Exchange Act;
· the amount of the costs, fees, expenses, and charges that Safeguard incurs in connection with the Transaction, including as a result of the Stock Splits; and
· our inability to realize the cost savings and operational benefits we expect to achieve as a result of the Transaction.
For these reasons, you should not place undue reliance on any forward-looking statements included in this proxy statement. The forward-looking statements included in this proxy statement are made only as of the date of this proxy statement, and Safeguard expressly disclaims any intent or obligation to update any forward-looking statements to reflect subsequent events of circumstances, except as required by law.
Because the Stock Splits and the overall Transaction are part of a “going private” transaction within the meaning of Rule 13e-3 under the Exchange Act, the forward-looking statements contained in this proxy statement made in connection with the Stock Splits and the overall Transaction are excluded from the safe harbor protection provided by the Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act.

INFORMATION ABOUT THE COMPANY
Market Price of Common Stock
Our common stock is traded on Nasdaq under the symbol “SFE.” The following table sets forth the high and low sales prices reported by Nasdaq for our common stock during the periods indicated:
High ($) Low ($)
Fiscal Year 2023:
First Quarter 3.23 1.60
Second Quarter 2.07 1.51
Third Quarter 1.68 0.98
Fourth Quarter (through October 31, 2023) 1.19 0.97
Fiscal Year 2022:
First Quarter 7.53 4.81
Second Quarter 5.48 3.32
Third Quarter 4.54 3.60
Fourth Quarter 3.89 2.95
Fiscal Year 2021:
First Quarter 8.59 6.35
Second Quarter 7.90 5.95
Third Quarter 8.93 7.38
Fourth Quarter 8.98 6.23
On October 4, 2023, the last trading day before we announced the Transaction, and on the record date, the closing prices of our common stock on Nasdaq were $1.01 and $1.05, respectively.
Dividends
The declaration of dividends is subject to the discretion of our Board and is restricted by applicable state law limitations on distributions to shareholders. Safeguard did not pay any cash dividends during fiscal years ended December 2022 and 2021, respectively. On November 7, 2019, the Board declared a special cash dividend of $1.00 per share, payable on December 30, 2019 to shareholders of record as of the close of business on December 23, 2019. Consistent with our strategy to return value to shareholders, we contemplate declaring a dividend during the quarter ending December 31, 2023, subject to the Board approval, using Safeguard’s excess cash that represents cash on hand less the estimated amounts required to be retained to support Safeguard’s operations, satisfy its liabilities and pay estimated costs of the Stock Splits and overall Transaction.
Shareholders
As of the record date, there were approximately 388 holders of record of our common stock.
The Filing Person
Safeguard is the Filing Person for the purpose of the Transaction.
Stock Purchases by Filing Person
During fiscal years ended December 31, 2022 and 2021 and nine months ended September 30, 2023, Safeguard repurchased 5.3 million shares of common stock, in the aggregate, through a combination of open market purchases and a tender offer, for the aggregate purchase price of $45.4 million, for an average purchase price of $8.56 per share. The following table provides information about such quarterly purchases of shares of our common stock by Safeguard during fiscal years ended December 31, 2022 and 2021 and nine months ended September 30, 2023:

Range of Prices Paid
Number of Shares
Purchased High Low Average
Purchase
Price
Fiscal Year 2023
First Quarter 25,096 $ 3.06 $ 2.95 $ 3.01
Second Quarter — — — —
Third Quarter — — — —
Fiscal Year 2022
First Quarter 147,795 $ 5.35 $ 5.17 $ 5.27
Second Quarter 221,479 $ 5.43 $ 3.39 $ 4.27
Third Quarter 84,261 $ 4.44 $ 3.67 $ 4.00
Fourth Quarter 257,946 $ 3.80 $ 3.02 $ 3.41
Fiscal Year 2021
First Quarter — — —
Second Quarter 229,286 $ 7.51 $ 6.57 $ 6.93
Third Quarter 6,873 $ 7.52 $ 7.45 $ 7.47
Fourth Quarter 4,304,826 $ 9.06 $ 9.06 $ 9.06
In addition, Safeguard is deemed to repurchase shares of its common stock initially issued as restricted stock awards to employees and subsequently withheld from employees to satisfy the statutory withholding tax liability upon the vesting of such restricted stock awards.
Directors and Executive Officers
The business address for all of our directors and executive officers is c/o Safeguard Scientifics, Inc., 150 N. Radnor Chester Rd., Suite F-200, Radnor, PA 19087, and the business telephone number of all of our directors and executive officers is (610) 293-0600.

The following table ~~presents fees for professional services rendered by KPMG for~~sets forth information as of September 30, 2023, concerning the ~~audit~~name, age, and position of ~~Safeguard’s consolidated financial statements for fiscal year 2015~~each of our directors and fiscal year 2014 and fees billed for audit-related services, tax services and all other services rendered by KPMG for fiscal year 2015 and fiscal year 2014. This table includes fees billed to Safeguard’s consolidated subsidiaries for services rendered by KPMG.executive officers.
2015 2014
Audit Fees (1) $ 535,000 $ 585,000
Tax Fees (2) 98,700 125,000
All Other Fees — —
     Total $ 633,700 $ 710,000
~~(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, 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.

Name ~~(2)~~ ~~Tax fees include~~Age Position
Ross D. DeMont 50 Director
Russell D. Glass 61 Director
Joseph M. Manko, Jr. 57 Chairman of the ~~aggregate fees billed by KPMG for tax consultation~~Board
Beth S. Michelson 53 Director
Eric C. Salzman 56 Chief Executive Officer
Mark A. Herndon 54 Senior Vice President and ~~tax compliance services.~~Chief Financial Officer

~~The Audit Committee pre-approves~~Set forth below is a summary of the business experience of each ~~service to be performed by KPMG at its regularly scheduled meetings. For any service that may require pre-approval between regularly scheduled meetings,~~of our directors and executive officers.
Ross D. DeMont, Director. Mr. DeMont joined Safeguard as a Director in 2022. He serves on the Audit, ~~Committee~~Compensation, and Nominating & Corporate Governance committees of Safeguard. Mr. DeMont has ~~delegated to~~also served as a board observer of FREDsense Technologies since 2017, as well as the ~~Chairperson~~Chief Investment Officer at the Rainin Group, Inc., which manages the assets of both a family office and the investments of the Kenneth Rainin Foundation, since 2020. He was also the Director of Research for Public and Private Investments of Rainin Group, LLC from 2016 to 2019. Mr. DeMont served on the board of Desalitech, Inc., a private, venture backed company selling into the industrial water treatment industry, from 2017 to 2020 and on the board of Sierra Monitor Corp. (Ticker: SRMC), focused on device connectivity and environmental instrumentation, from 2018 to 2019. From 2002 to 2016, Mr. DeMont was a Managing Member and Portfolio Manager of Midwood Capital Management, a private investment partnership making concentrated investments in public companies. From 2001 to 2002, Mr. DeMont was a Senior Associate (Public/Private Investment Fund) at Igoe Capital Partners, LLC, a hybrid public/private equity investment firm with a primary focus on the small- and micro-cap sectors. Mr. DeMont also worked as an Associate at Presidio Strategies, LLC in Mergers and Acquisitions from 1998-1999 and as a Financial Analyst (Investment Banking) at J.P. Morgan, Inc. with a focus on Corporate Finance and Mergers and Acquisitions from 1996 to 1998. Mr. DeMont earned a B.A. with Honors in both Economics and Government from Connecticut College and an MBA from the Tuck School of Business at Dartmouth where he was a Tuck Scholar.

Russell D. Glass, Director. Mr. Glass joined Safeguard as a Director in 2018. He serves on the Audit, ~~Committee~~Compensation, and Nominating & Corporate Governance committees of Safeguard. 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 ~~authority~~boards of several public and private companies in a wide range of industries. Since 2005, Mr. Glass has served as a Managing Member of RDG Capital LLC, a private investment company, and since 2014, he has served as a Managing Member of RDG Capital Fund Management, a private investment company. Mr. Glass was Vice Chairman of Clarim Acquisition Corp., a special purpose acquisition company, from 2020 to ~~pre-approve services not prohibited by law~~2022, and Director of A.G. Spanos Corporation, a national real estate development company, since 1993. He previously was a Managing Member of Princeford Capital Management, an investment advisory firm, from 2009 to ~~be performed by Safeguard’s independent registered public accounting~~2014. Mr. Glass has served as an officer for several companies, including as Chief Executive Officer of Cadus Pharmaceutical Corporation (n/k/a Cadus Corporation), a biotechnology holding company from 2000 to 2003 and as a director from 1998 to 2011, as Co-Chairman and Chief Investment Officer of Ranger Partners, an investment fund company, from 2002 to 2003, and as President and Chief Investment Officer of Icahn Associates Corporation, a diversified investment firm and ~~associated fees up~~principal investment vehicle for Carl Icahn, from 1998 to 2002. From 1996 to 1998, Mr. Glass was a ~~maximum~~Partner at Relational Investors LLC, an investment fund management company, and from 1988 to 1996, he was a Partner at Premier Partners Inc., an investment banking and research firm. From 1984 to 1985, Mr. Glass was an Analyst with Kidder, Peabody & Co., an investment banking firm. Mr. Glass has also previously served as a Director of ~~$100,000,~~the Council for Economic Education, Automated Travel Systems, Inc., Axiom Biotechnologies, Blue Bite, Global Discount Travel Services/Lowestfare.com, National Energy Group, and Next Generation Technology Holdings, Inc. Mr. Glass earned a B.A. in Economics from Princeton University and an MBA from the Stanford Graduate School of Business.
Joseph M. Manko, Jr., Chairman of the Board. Mr. Manko joined Safeguard as a Director in 2019. He serves on the Audit, Compensation, and Nominating & Corporate Governance committees of Safeguard. Mr. Manko has experience serving on the boards of several companies and has participated in numerous shareholder value creation strategies and monetizations. Mr. Manko has been serving as a Managing Member and Senior Principal of Horton Capital Management, LLC, an investment fund, since 2013, and as a minority owner and Managing Director at Mufson Howe Hunter & Co., LLC, a boutique investment bank focusing on middle-market companies, since 2011. From 2005 to 2010, Mr. Manko was a Partner and Chief Executive Officer of Switzerland-based BZ Fund Management Limited, where he was responsible for corporate finance, private equity investments, three public equity funds and the ~~Chairperson communicates such pre-approvals~~firm’s Special Situations and Event-Driven strategies. Mr. Manko’s prior investment bank experience includes serving as a Managing Director of Deutsche Bank AG (NYSE:DB) from 1997 to 2004, and serving as Vice President of Merrill Lynch & Co., Inc. (n/k/a BofA Securities (NYSE:BAC)), from 1995 to 1997. Mr. Manko also has legal experience, having worked as a Corporate Finance Attorney at Skadden, Arps, Slate, Meagher & Flom LLP, from 1991 to 1995. Mr. Manko also serves as a director on the board of Koru Medical Systems, Inc., and has previously served as a director on the board of Creative Realties, Inc. and Wireless Telecom Group, Inc.
Beth S. Michelson, Director. Ms. Michelson joined Safeguard as a Director in 2022. She serves on the Audit, ~~Committee~~Compensation, and Nominating & Corporate Governance committees of Safeguard. Ms. Michelson is a private equity investor with more than two decades of experience building businesses globally. She is a Chartered Financial Analyst and has structured and deployed over $500 million of investment capital. Ms. Michelson has also served as the Chief Financial Officer and board member of Cartesian Growth Corporation II since 2021 and has been a Partner of Cartesian Capital Group since 2022. She was a member of the Management Team of Cartesian Growth Corporation I (NASDAQ:GLBL) from 2021 to January 2023. From 2006 to 2022, Ms. Michelson was Senior Managing Director of Cartesian Capital Group. From 1999 to 2006, she was Vice President at ~~its next regularly scheduled meeting.~~PH Capital/AIG Capital Partners. From 1996 to 1999, Ms. Michelson was an Associate at Wasserstein Perella Emerging Markets. Ms. Michelson’s other current board memberships include: Global Advisory Board, Columbia Business School Chazen Institute for Global Business, NorthStar Air & Space Inc., Thermal Management Solutions, Ltd., Brilia, S.A., Tiendamia (Xipron, Inc.), and Replications. Ms. Michelson’s prior board memberships include: redIT, Network Management Services, Public Mobile, BTS Torres BV, and AdSpace Networks. Ms. Michelson earned a B.A. with distinction from the University of Michigan, an MBA from Columbia Business School, and a Master of Internal Affairs from Columbia School of International and Public Affairs.

~~AUDIT COMMITTEE REPORT~~Eric C. Salzman, Chief Executive Officer. Mr. Salzman joined Safeguard as Chief Restructuring Officer in April 2020. Mr. Salzman began serving as the Chief Executive Officer in December 2020. Mr. Salzman has a 25-year track record partnering with growth companies as an investor, board member and strategic advisor. He has worked in M&A, restructuring, growth and special situations investing at a number of investment banks and private equity funds, including Credit Suisse and Lehman Brothers. Mr. Salzman helped oversee the monetization of a $2 billion portfolio of illiquid assets in the Lehman Brothers Bankruptcy Estate and subsequently advised several investment funds on value-maximization strategies for their respective portfolios. He currently serves as a director on a number of Safeguard portfolio companies as well as an independent director at publicly traded Leonardo DRS, Inc., Movella Holdings Inc. and 8x8, Inc. Mr. Salzman earned a B.A. Honors from the University of Michigan and an MBA from Harvard University.

~~The Audit Committee assists the Board~~Mark A. Herndon, Senior Vice President and Chief Financial Officer. Mr. Herndon joined Safeguard as Senior Vice President and Chief Financial Officer in September 2018. Prior to joining Safeguard, Mr. Herndon served in a variety of ~~Directors~~client service and national office roles at PricewaterhouseCoopers from 1991 to 2018, including his position as Assurance Partner from 2006 until 2018. Mr. Herndon earned a B.B.A in ~~fulfilling its responsibilities regarding general oversight of the integrity of Safeguard’s consolidated financial statements, Safeguard’s compliance with legal~~Accounting from Georgia Southern University and regulatory requirements, the performance of Safeguard’s internal audit function, review and approval of related party transactions, and the performance, qualifications and independence of Safeguard’s independent registered public accounting firm.an MBA from Emory University’s Goizueta Business School.

Safeguard’s management has primary responsibility for the financial reporting process, including the system of internal controls, and for preparation of Safeguard’s consolidated financial statements in accordance with U.S. generally accepted accounting principles. Safeguard’s independent registered public accounting firm is responsible for auditing those consolidated financial statements and issuing opinions as to the conformity of Safeguard’s audited consolidated financial statements with U.S. generally accepted accounting principles and the effectiveness of Safeguard’s internal control over financial reporting based on criteria established in~~Internal Control — Integrated Framework~~~~(2013)~~ ~~issued by the Committee of Sponsoring Organizations of the Treadway Commission.~~
Throughout the year, the Audit Committee regularly meets with management of Safeguard, Safeguard’s independent registered public accounting firm, and Safeguard’s internal auditor. The Audit Committee also regularly meets with each of these groups separately in closed sessions. In this context, the Audit Committee hereby reports as follows:
1. The Audit Committee reviewed Safeguard’s audited consolidated financial statements for fiscal year 2015 and met and held discussions with management and KPMG regarding the audited consolidated financial statements.
2. ~~The Audit Committee discussed with KPMG the matters required to be discussed by Auditing Standard No. 16, as adopted by the Public Company Accounting Oversight Board.~~
3. The Audit Committee received the written disclosures and the letter from KPMG required by applicable requirements of the Public Company Accounting Oversight Board regarding KPMG’s communications with the Audit Committee concerning independence and discussed with KPMG its independence.
4. Based on the review and discussion referred to in paragraphs 1 through 3 above, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in Safeguard’s Annual Report on Form 10-K for fiscal year 2015.
~~Members of the Audit Committee:~~
~~George MacKenzie, Chairperson~~
~~Mara G. Aspinall                    Stephen Fisher                    John J. Roberts                    Robert J. Rosenthal~~
~~STOCK~~SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
~~DIRECTORS~~ AND ~~OFFICERS~~MANAGEMENT

The following table shows the number of shares of Safeguard common stock beneficially owned as of ~~March 18, 2016~~the record date (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~~our named ~~in the Summary Compensation Table in this proxy statement,~~executive officers 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 ~~March 18, 2016,~~the record date through the ~~exercise~~vesting of ~~Safeguard stock options~~outstanding equity awards are included. On ~~March 18, 2016,~~the record date, there were ~~20,153,184~~16,575,618 shares of common stock ~~outstanding and 283,854 shares underlying stock options held by executive officers and directors, as a group, that were exercisable within 60 days of March 18, 2016.~~outstanding.

Shares
Outstanding Beneficially
Shares Options Owned Assuming Percent of Other Stock-Based
Beneficially Exercisable Exercise of Outstanding Holdings (2)
Name Owned Within 60 Days Options Shares (1) Vested Unvested
Blackrock, Inc.
55 East 52^nd Street
New York, NY 10055
1,419,292 — 1,419,292 6.90 % — —
Dimensional Fund Advisors LP Building One
   6300 Bee Cave Road
   Austin, TX 78746 1,151,123 — 1,151,123 5.57 % — —
First Manhattan Co.
   399 Park Avenue
   New York, NY 10022 1,550,084 — 1,550,084 7.50 % — —
RBC Global Asset Management (U.S.) Inc.
   50 South Sixth Street, Suite 2350
   Minneapolis, MN 55402 1,301,682 — 1,301,682 6.30 % — —
T. Rowe Price Associates, Inc.
   100 East Pratt Street
   Baltimore, MD 21202 2,052,929 — 2,052,929 9.60 % — —
Mara G. Aspinall — 2,083 2,083 * 5,183 5,849
Julie A. Dobson 16,332 15,000 31,332 * 38,514 5,250
Stephen Fisher — — — * 2,947 737
Andrew E. Lietz 16,689 15,000 31,689 * 40,516 —
George MacKenzie 8,951 23,332 32,283 * 29,696 —
Jack L. Messman 16,376 10,000 26,376 * 62,818 —
John J. Roberts 1,728 10,000 11,728 * 35,376 —
Robert J. Rosenthal 2,031 23,332 25,363 * 26,134 5,000
Stephen T. Zarrilli 84,415 150,473 234,888 1.16 % — —
Jeffrey B. McGroarty 24,768 9,111 33,879 * — —
Brian J. Sisko 91,132 25,523 116,655 * — —
Executive officers and directors as a
group (11 persons) 262,422 283,854 546,276 2.67 % 241,184 16,836
 
   
Outstanding
Shares
Beneficially
    Percent of
Outstanding  
Name   Owned     Shares (1)  
Thomas A. Satterfield, Jr.
15 Colley Cove Drive
Gulf Breeze, FL 32561
2,089,726 12.6 %

Contrarian Capital Management, L.L.C.
  411 West Putnam Avenue, Suite 425
Greenwich, CT 06830
1,199,204 7.2 %

First Manhattan Co.
   399 Park Avenue
   New York, NY 10022
    1,194,142       7.2 %

Yakira Partners, L.P., Yakira Enhanced Offshore Fund Ltd. and MAP 136 Segregated Portfolio
1555 Post Road East, Suite 202
Westport, CT 06880
1,153,745 7.0 %

Ross D. DeMont
610,203 (2) 3.7 %
Russell D. Glass     165,625       1.0 %
Joseph M. Manko, Jr. 371,622 (3) 2.2 %
Beth S. Michelson 103,846 *
Eric Salzman     295,902       1.8 %
Mark A. Herndon 57,469 *  
Executive officers and directors
as a group (6 persons)
    1,604,667       9.7 %
 _____________________________
(1) ~~Each~~Unless otherwise indicated by footnote, 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). The business address of each of our executive officers and directors is c/o Safeguard Scientifics, Inc., 150 N. Radnor Chester Rd., Suite F-200, Radnor, PA 19087. An * indicates ownership of less than 1% of the outstanding shares. Shareholding information for ~~BlackRock, Inc.~~Contrarian Capital Management, L.L.C., ~~Dimensional Fund Advisors LP,~~ First Manhattan Co., ~~RBC Global Asset Management (U.S.) Inc.~~and Yakira Partners, L.P., Yakira Enhanced Offshore Fund Ltd. and ~~T. Rowe Price Associates, Inc.~~MAP 136 Segregated Portfolio is based on information included in the Schedule 13G or Schedule 13G/A filed with the SEC by each such entity as of ~~December 31, 2015.~~March 22, 2023. Shareholding information for Thomas A. Satterfield, Jr. is based on information included in the Form 4 filed with the SEC on August 17, 2023.

(2) ~~The~~Mr. DeMont has sole voting and dispositive power over 266,481 shares directly held and may be deemed to be the beneficial owner of 12,000 shares held in ~~this column represent DSUs that have been credited~~a spousal IRA account, 30,000 shares held in a 401(k) account and 301,722 shares owned by Kenneth Rainin Foundation, which assets are managed by Mr. DeMont’s employer, Rainin Group.
(3) Mr. Manko has sole voting and dispositive power over 194,236 shares directly held and may be deemed to ~~each individual. The DSUs, which may not~~ be ~~voted or transferred, are payable, on a one-for-one basis, in~~the beneficial owner of 177,386 shares of ~~Safeguard~~ common stock ~~following an individual’s termination of service on the Board. See “Corporate Governance and Board Matters – Board Compensation.”~~owned by Horton Capital Partners Fund, L.P.
 
47

Transactions and Arrangements Concerning Shares of Common Stock

~~SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE~~
~~Section 16(a) of the~~Recent Securities ~~Exchange Act of 1934 requires~~Transactions. Based on our records and information provided to us by our directors, executive officers, and ~~greater than~~ 10% ~~holders~~shareholders, neither we nor any of our ~~common stock~~directors or executive officers, nor, to ~~file with~~ the ~~SEC reports of ownership~~best of our ~~securities and changes in ownership~~knowledge, any person controlling us or any executive officer or director of any such controlling entity or of our ~~securities. Based solely on~~associates or 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 2015. There were no known holders of greater than 10%subsidiaries, has effected any transactions involving shares of our common stock during ~~2015 who failed~~the 60 days prior to ~~file~~ the ~~required reports.~~record date, except as described below.

Consistent with past practice, on October 16, 2023, our directors were awarded the following shares of our common stock in lieu of quarterly fees for service on our Board during the third quarter of 2023:
Name of Director:
Number of Shares Awarded:
Ross D. DeMont 14,327
Russell D. Glass 14,327
Joseph M. Manko, Jr. 26,266
Beth S. Michelson 15,521
Pursuant to a restricted stock grant previously issued to Eric C. Salzman, certain shares of our common stock held by Mr. Salzman vested and were no longer subject to forfeiture as of September 15, 2023 and October 16, 2023. In connection with such vesting, 5,298 shares at a price of $1.134 per share and 5,298 shares at a price of $1.11 per share, respectively, were withheld from Mr. Salzman by us on such dates based on his previous instructions in connection with the tax withholdings related to such vesting.

~~OTHER MATTERS~~FINANCIAL INFORMATION

~~Expenses of Solicitation~~Summary Historical Financial Information

~~Proxies~~The following summary of consolidated financial information was derived from our audited consolidated financial statements as of and for each of the years ended December 31, 2022 and 2021 and from our unaudited consolidated condensed interim financial statements as of and for the nine months ended September 30, 2023 and 2022. This financial information is only a summary and should be read in conjunction with our historical financial statements and the accompanying footnotes. Please see the information set forth below under the captions “Where You Can Find More Information” and “Documents Incorporated By Reference.”
Condensed Consolidated Balance Sheets
(in thousands)
September 30,
2023 December 31,
2022
(unaudited)
Assets
Cash, cash equivalents, restricted cash and marketable securities $ 15,685 $ 19,312
Ownership interests — 860
Other current assets 593 1,251
Total current assets 16,278 21,423
Ownership interests in and advances 14,839 14,545
Other assets 1,310 1,724
Total Assets $ 32,427 $ 37,692

Liabilities and Equity
Other current liabilities $ 1,563 $ 1,817
Total current liabilities 1,563 1,817
Lease liability - non-current 888 1,249
Other long-term liabilities 50 50
Total equity 29,926 34,576
Total Liabilities and Equity $ 32,427 $ 37,692

Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Nine Months Ended
September 30
(unaudited) Twelve Months Ended
December 31
2023 2022 2022 2021
Operating expenses $ 3,684 $ 3,740 $ 4,775 $ 7,153
Operating loss (3,684 ) (3,740 ) (4,775 ) (7,153 )
Other income (loss), net 1,486 (2,979 ) (3,297 ) 22,035
Interest, net 721 476 794 276
Equity income (loss), net (3,937 ) (3,147 ) (6,985 ) 11,846
Net income (loss) before income taxes (5,414 ) (9,390 ) (14,263 ) 27,004
Income tax benefit (expense) — — — —
Net income (loss) $ (5,414 ) $ (9,390 ) $ (14,263 ) $ 27,004
Net income (loss) per share:
Basic $ (0.33 ) $ (0.57 ) $ (0.87 ) $ 1.36
Diluted $ (0.33 ) $ (0.57 ) $ (0.87 ) $ 1.36
Weighted average shares used in computing income (loss) per share:
Basic 16,167 16,405 16,337 19,827
Diluted 16,167 16,405 16,337 19,827
Condensed Consolidated Statements of Cash Flows
(in thousands)
Nine Months Ended
September 30
(unaudited) Twelve Months Ended
December 31
2023 2022 2022 2021
Net cash used in operating activities $ (2,490 ) $ (2,660 ) $ (3,258 ) $ (8,152 )
Net cash (used in) provided by investing activities 5,170 (4,463 ) (4,662 ) 58,114
Net cash (used in) financing activities (351 ) (2,583 ) (3,488 ) (40,799 )
Net change in cash, cash equivalents and restricted  cash 2,329 (9,706 ) (11,408 ) 9,163
Cash, cash equivalents and restricted cash equivalents at beginning of period 13,356 24,764 24,764 15,601
Cash, cash equivalents and restricted cash equivalents at end of period 15,685 15,058 $ 13,356 $ 24,764
The Company’s book value per share as of September 30, 2023 was $1.81 per share.

Pro Forma Consolidated Financial Statements (Unaudited)
The following unaudited pro forma consolidated condensed balance sheet as of September 30, 2023 and the unaudited pro forma consolidated statements of operations for the fiscal year ended December 31, 2022 and for the nine months ended September 30, 2023 show the pro forma effect of the Transaction (including the Stock Splits). The historical amounts as of and for the nine months ended September 30, 2023 were derived from our unaudited consolidated condensed financial statements that were included in our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023. The historical amounts for the fiscal year ended December 31, 2022 were derived from our audited consolidated financial statements that were included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
The pro forma information below gives effect to the Transaction (including the Stock Splits) based on non-recurring expenses incurred to effect the Transaction (including the Stock Splits). For the purpose of these unaudited pro forma condensed financial statements only, we are assuming that the Minimum Number is 75, which is the approximate midpoint within the proposed range of Stock Split Ratios, and that Stock Split Ratios to be determined by the Board will be ~~solicited on behalf~~1-for-75, in the case of the ~~Board by mail, telephone, other electronic means, or~~Reverse Stock Split, and 75-for-1, in ~~person, and Safeguard will pay~~ the ~~solicitation costs. Copies~~case of the ~~Notice and, if applicable,~~Forward Stock Split, which, based upon information as of the record date, would result in the purchase of 4,463 shares from our shareholders of record at a purchase price of $1.65 per pre-split share. As noted elsewhere in this proxy ~~materials~~statement, subject to its compliance with Pennsylvania law and the ~~2015 annual report,~~federal proxy rules, the Board reserves the right to change the terms of the Stock Splits and the overall Transaction, including the Stock Split Ratios and the amount of the Cash Payment, to the extent it believes it is necessary or desirable in order to accomplish Safeguard’s goal of staying below 300 record holders. Pro forma adjustments to the pro forma consolidated condensed balance sheet are computed as if the Transaction (including the Stock Splits) had occurred at September 30, 2023, while the pro forma consolidated statements of operations are computed as if the Transaction (including the Stock Splits) had occurred at the beginning of the periods.
The pro forma information, which assumes, for illustrative purposes only, that the Stock Split Ratios determined by the Board is 1-for-75, in the case of the Reverse Stock Split, and 75-for-1, in the case of the Forward Stock Split, is not necessarily indicative of what Safeguard’s financial position or results of operations actually would have been if the Transaction (including the Stock Splits) had occurred as of the dates presented, or of Safeguard’s financial position or results of operations in the future.
The unaudited pro forma financial statements should be read in conjunction with the historical financial statements and accompanying footnotes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and in our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023, which are incorporated by reference in this proxy statement.

SAFEGUARD SCIENTIFICS, INC.
PRO FORMA CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
September 30, 2023
Historical Pro Forma
Adjustments As Adjusted
Cash $ 15,685 $ (10 )⁽¹⁾ $ 15,675
Ownership Interests — —
Other current assets 593 593
Total current assets 16,278 (10 ) 16,268
Ownership interests and advances 14,839 14,839
Other assets 1,310 1,310
Total Assets $ 32,427 $ (10 ) 32,417

Liabilities and Equity
Other current liabilities 1,563 914 ⁽²⁾ 2,477
Total current liabilities 1,563 914 2,477
Lease liability - non-current 888 888
Other long-term liabilities 50 50
Total equity 29,926 (924 ) 29,002
Total Liabilities and Equity $ 32,427 $ (10 ) $ 32,417
(1) Represents the impact on the September 30, 2023 historical balance sheet Safeguard estimates would have been used to effect the Transaction, including the estimated cash payout for fractional shares subject to the Reverse Stock Split.
(2) Represents the recognition of liabilities associated with certain non-recurring costs, such as severance and transaction costs estimated to be paid in connection with the Transaction.

SAFEGUARD SCIENTIFICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR NINE MONTHS ENDED SEPTEMBER 30, 2023
(In thousands, except share and per share data)
(Unaudited)
Nine Months Ended September 30, 2023
Historical Pro Forma
Adjustments As Adjusted
Operating Expenses $ 3,684 $ (1,933 )⁽¹⁾ $ 1,751
Operating Loss (3,684 ) 1,933 (1,751 )
Other income (loss), net 1,486 1,486
Interest, net 721 721
Equity income (loss), net (3,937 ) (3,937 )
Net income (loss) before income taxes (5,414 ) 1,933 (3,481 )
Income tax benefit (expense) — —
Net income (loss) per share: $ (5,414 ) $ 1,933 $ (3,481 )

Basic $ (0.33 ) $ (0.22 )
Diluted $ (0.33 ) $ (0.22 )

Weighted average shares used in computing income loss per share:
Basic 16,167 (6 )⁽²⁾ 16,161
Diluted 16,167 (6 )⁽²⁾ 16,161
(1) Represents estimated cost savings, net, and a reduction in stock based compensation that would have been realized for the nine-month period ended September 30, 2023 as a result of the Transaction.
(2) Represents the reduction in shares of common stock issued and outstanding from the fractional share repurchases in connection with the Reverse Stock Split.

SAFEGUARD SCIENTIFICS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR YEAR ENDED DECEMBER 31, 2022
(In thousands, except share and per share data)
(Unaudited)
Year Ended December 31, 2022
Historical Pro Forma
Adjustments As Adjusted
Operating Expenses $ 4,775 $ (2,306 )⁽¹⁾ $ 2,469
Operating Loss (4,775 ) 2,306 (2,469 )
Other income (loss), net (3,297 ) (3,297 )
Interest, net 794 794
Equity income (loss), net (6,985 ) (6,985 )
Net income (loss) before income taxes (14,263 ) 2,306 (11,957 )
Income tax benefit (expense) — —
Net income (loss) per share: $ (14,263 ) $ 2,306 $ (11,957 )

Basic $ (0.87 ) $ (0.73 )
Diluted $ (0.87 ) $ (0.73 )

Weighted average shares used in computing income loss per share:
Basic 16,337 (6 )⁽²⁾ 16,331
Diluted 16,337 (6 )⁽²⁾ 16,331
(1) Represents estimated cost savings, net, and a reduction in stock based compensation that would have been realized for the year ended December 31, 2022 as a result of the Transaction.
(2) Represents the reduction in shares of common stock issued and outstanding from the fractional share repurchases in connection with the Reverse Stock Split.

PROPOSAL ONE: REVERSE STOCK SPLIT PROPOSAL
We are asking our shareholders to adopt the articles of amendment to our articles of incorporation, attached hereto as Annex A, to effect the Reverse Stock Split of our common stock at a ratio not less than 1-for-50 and not greater than 1-for-100, with the exact Reverse Stock Split Ratio to be set within the foregoing range at the discretion of our Board, without further approval or authorization of our shareholders and with our Board, in its sole discretion, able to effect the Reverse Stock Split immediately following the public announcement of the Reverse Stock Split Ratio or to elect not to effect the Reverse Stock Split (whether or not authorized by the shareholders) or to abandon the Transaction at any time (the “Reverse Stock Split Proposal”). For a summary of and detailed information regarding this proposal, see the information about the Stock Splits and the overall Transaction throughout this proxy statement.
This Proposal One is conditioned upon the approval of Proposal Two: Forward Stock Split Proposal. If we fail to obtain sufficient votes for this Reverse Stock Split Proposal or the Forward Stock Split Proposal, we may be prevented from effecting the overall Transaction and “going dark.” If the Forward Stock Split Proposal is not approved, this Reverse Stock Split Proposal will have no effect, even if approved by our shareholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE REVERSE STOCK SPLIT PROPOSAL.

PROPOSAL TWO: FORWARD STOCK SPLIT PROPOSAL
We are asking our shareholders to adopt the articles of amendment to our articles of incorporation, attached hereto as Annex B, to effect the Forward Stock Split of our common stock at a ratio not less than 50-for-1 and not greater than 100-for-1, with the exact Forward Stock Split Ratio to be ~~supplied~~set within the foregoing range at the discretion of our Board, without further approval or authorization of our shareholders and with our Board, in its sole discretion, able to ~~brokers, dealers, banks~~effect the Forward Stock Split immediately following the public announcement of the Forward Stock Split Ratio or to elect not to effect the Forward Stock Split (whether or not authorized by the shareholders) or to abandon the Transaction at any time (the “Forward Stock Split Proposal”). For a summary of and detailed information regarding this proposal, see the information about the Stock Splits and the overall Transaction throughout this proxy statement.
This Proposal Two is conditioned upon the approval of Proposal One: Reverse Stock Split Proposal. If we fail to obtain sufficient votes for this Forward Stock Split Proposal or the Reverse Stock Split Proposal, we may be prevented from effecting the overall Transaction and “going dark.” If the Reverse Stock Split Proposal is not approved, this Forward Stock Split Proposal will have no effect, even if approved by our shareholders.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE FORWARD STOCK SPLIT PROPOSAL.

PROPOSAL THREE: APPROVAL OF ADJOURNMENT OF THE SPECIAL MEETING TO THE EXTENT THERE ARE INSUFFICIENT VOTES AT THE SPECIAL MEETING TO APPROVE REVERSE STOCK SPLIT PROPOSAL OR FORWARD STOCK SPLIT PROPOSAL
This Adjournment Proposal, if adopted, will allow the Board to adjourn the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the special meeting, there are insufficient votes to approve the Reverse Stock Split Proposal or the Forward Stock Split Proposal. The Board believes that, if the number of shares of our common stock voting ~~trustees, or their nominees~~in favor of any such proposal is insufficient to approve such proposal, it is in the best interests of the shareholders to enable Safeguard, for a limited period of time, to seek to obtain a sufficient number of additional votes in favor of such proposals.
In the Adjournment Proposal, Safeguard is asking its shareholders to vote in favor of granting discretionary authority to the holders of any proxy solicited by the Board, and each of them individually, to approve a motion to adjourn the special meeting to another time and place for the purpose of soliciting additional proxies. For the avoidance of doubt, any proxy authorizing the adjournment of the special meeting will also authorize successive adjournments thereof, at any meeting so adjourned, to the extent necessary for us to solicit additional proxies ~~from beneficial owners, and we will reimburse such record holders for their reasonable expenses.~~in favor of the approval of the Reverse Stock Split Proposal or the Forward Stock Split Proposal.

If shareholders approve the Adjournment Proposal, Safeguard could adjourn the special meeting and any adjourned session of the special meeting and use the additional time to solicit additional proxies.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ADJOURNMENT PROPOSAL

~~Procedures for Submitting Shareholder Proposals~~WHERE YOU CAN FIND MORE INFORMATION

Because the Stock Splits are part of a plan to effect the Transaction, the Stock Splits are a “going private” transaction subject to Rule 13e-3 of the Exchange Act. Safeguard has filed a Rule 13e-3 Transaction Statement on Schedule 13E-3 under the Exchange Act with respect to the Stock Splits and the Transaction. The Schedule 13E-3 contains additional information about Safeguard.
Safeguard is currently subject to the information requirements of the Exchange Act and files periodic reports, proxy statements and other information with the SEC relating to its business, financial and other matters. Our SEC filings, including Schedule 13e-3, are available to the public at the SEC’s website at http://www.sec.gov.

~~Proposals~~INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
In our filings with the SEC, information is sometimes incorporated by reference. This means that we are referring you to information that we have filed separately with the SEC. The information incorporated by reference should be considered part of this proxy statement, except for ~~Inclusion~~any information superseded by information contained directly in this proxy statement or in any other subsequently filed document.
This proxy statement incorporates by reference the following documents that we have previously filed with the SEC, which contain important information about us and our financial condition:
· our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the SEC on March 10, 2023 (“Form 10-K”);
· our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30, 2023 and September 30, 2023 filed with the SEC on May 5, 2023, August 11, 2023 and November 2, 2023, respectively;
· sections of our Definitive Proxy Statement on Schedule 14A for the 2023 annual meeting of shareholders incorporated by reference in our Form 10-K; and
· our Current Reports on Form 8-K filed with the SEC on January 4, 2023, January 10, 2023, March 13, 2023, May 25, 2023 and October 5, 2023.
Without limiting the foregoing, this proxy statement incorporates by reference our financial statements that are contained in certain documents that we have previously filed with the SEC, as follows:
· our audited consolidated balance sheets as of December 31, 2022 and 2021, the related consolidated statements of operations, changes in shareholders' equity, and cash flows for each of the years in the two-year period ended December 31, 2022, and the related notes to our financial statements, in each case that are contained in our Form 10-K; and
· our unaudited consolidated condensed balance sheets as of September 30, 2023, the related consolidated condensed statements of operations, changes in shareholders’ equity, and cash flows for the nine months ended September 30, 2023 and 2022, and the related notes to our financial statements, in each case that are contained in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023.
Any shareholder of record as of the record date for the special meeting may obtain a copy of any document incorporated by reference into this proxy statement by written request addressed to our Corporate Secretary, at the following address: 150 N. Radnor Chester Rd., Suite F-200, Radnor, PA 19087. These documents also are available to the public electronically on the SEC's website at http://www.sec.gov.
We have not authorized anyone to give any information or make any representation about the Stock Splits, the overall Transaction or us that differs from, or adds to, the information in this proxy statement or in our documents that are publicly filed with the SEC. If anyone does give you different or additional information, you should not rely on it.

SHAREHOLDER PROPOSALS
Shareholders interested in submitting a proposal for consideration at Safeguard’s 2024 Annual meeting of Shareholders (the “Annual Meeting”) may do so by following the advance notice procedures set forth in our Third Amended and Restated Bylaws. Our Third Amended and Restated Bylaws establish advance notice procedures with regard to shareholder proposals that are not submitted for inclusion in the ~~Proxy Statement.~~proxy statement and director nominations. With respect to such shareholder proposals and director nominations intended to be presented at the Annual Meeting, a shareholder’s advance notice must be in writing, must meet the requirements set forth in our bylaws and must be delivered to and otherwise received by, our Corporate Secretary no earlier than January 25, 2024 and no later than the close of business on February 26, 2024. However, in the event the Annual Meeting is scheduled to be held on a date before April 24, 2024, or after June 23, 2024, then such advance notice must be received by us not later than the close of business on the tenth (10th) day following the day on which public disclosure of the date of the Annual Meeting is first made by Safeguard.
If the Transaction is not consummated and we remain a public company, any shareholder who desires to present a proposal for inclusion in the proxy statement for the Annual Meeting may also do so pursuant to procedures set forth in Rule 14a-8 of the Exchange Act. To be considered for inclusion in next year’s proxy statement and form of proxy pursuant to Rule 14a-8 of the Exchange Act, and acted upon at the Annual Meeting, shareholder proposals must be submitted in ~~accordance with SEC Rule 14a-8 must be received~~writing to the attention of our Corporate Secretary at our ~~executive offices~~principal office, no later than December 8, 2023. In order to avoid controversy, shareholders should submit proposals by means (including electronic) that permit them to prove the ~~close~~date of ~~business on December 7, 2016. Proposals should~~delivery. Such proposals also must comply with Rule 14a-8 of the Exchange Act and the interpretations thereof, and may be ~~addressed to:~~
~~Safeguard Scientifics, Inc.~~
~~Attention: Corporate Secretary~~
~~170 North Radnor-Chester Road, Suite 200~~
~~Radnor, PA 19087~~
~~Proposals not Included in the Proxy Statement.~~~~With respect to proposals not intended for inclusion in~~omitted from Safeguard’s proxy materials for ~~next year’s annual meeting,~~the Annual Meeting if ~~Safeguard does~~such proposals are not ~~receive notice~~in compliance with applicable requirements of ~~such a proposal by February 20, 2017, and~~ the matter is raised at that meeting, the proxy holders will have discretionary authority to vote on the matter. All proposals and notifications should be addressed to the Corporate Secretary at the above address.Exchange Act.

~~Additional Information~~
Safeguard’s annual report to shareholders for the year ended December 31, 2015, including consolidated financial statements and the related notes thereto and other information with respect to Safeguard and our partner companies, will be made available, together with this proxy statement, on or about April 6, 2016, to shareholders of record as of the close of business on March 18, 2016.
~~General~~
Our Internet website address included in this proxy statement is provided for the convenience of our shareholders. The information contained therein or connected thereto are not intended to be incorporated into this proxy statement. All references to our website address are intended to be inactive textual references only.
Safeguard is not aware of any other business to be presented at the annual meeting. If matters other than those described in this proxy statement should properly arise at the annual meeting, the proxies will use their discretion to vote on such matters.
BY ORDER OF THE BOARD OF DIRECTORS
~~Deirdre Blackburn,~~~~Corporate~~~~Secretary~~
~~April 6, 2016~~
~~SCAN TO~~
~~VIEW MATERIALS & VOTE~~
~~SAFEGUARD SCIENTIFICS, INC.~~
~~170 NORTH RADNOR-CHESTER ROAD~~
~~SUITE 200~~
~~RADNOR, PA 19087~~
~~VOTE BY INTERNET~~
~~Before The Meeting~~~~- Go to~~~~www.proxyvote.com~~ ~~or scan the QR Barcode above~~
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
~~During The Meeting~~ ~~- Go to~~~~www.virtualshareholdermeeting.com/SFE2016~~
~~You may attend the Meeting via the Internet and vote during the Meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.~~
~~VOTE BY PHONE - 1-800-690-6903~~
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
~~VOTE BY MAIL~~
~~Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.~~
~~The cumulative voting feature for the election of directors is available if you sign and return the proxy; however, it is not available if you vote by telephone or the Internet.~~

G. Matthew Barnard, General Counsel and Corporate Secretary
November 2, 2023

ANNEX A
ARTICLES OF AMENDMENT
TO
SECOND AMENDED AND RESTATED
ARTICLES OF INCORPORATION, AS AMENDED
In compliance with the requirements of the applicable provisions (relating to articles of amendment) of the Pennsylvania Business Corporation Law of 1988, as amended, the undersigned, desiring to amend its Second Amended and Restated Articles of Incorporation, as amended, hereby states that:
1. The name of the Corporation is Safeguard Scientifics, Inc. (the “Corporation”).
2. The address of the Corporation’s registered office in the Commonwealth of Pennsylvania is 150 N. Radnor Chester Road, Suite F-200, Radnor, PA.
3. The Corporation was incorporated under the Pennsylvania Business Corporation Law of 1988.
4. The date of the Corporation’s incorporation was September 11, 1953.
5. The amendment shall be effective upon filing these Articles of Amendment in the Pennsylvania Department of State.
6. The amendment was adopted by the Corporation by the Board of Directors and shareholders of the Corporation under 15 Pa.C.S. §§ 1912(a) and 1914(a).
7. The amendment adopted by the Corporation is:
RESOLVED, that the Second Amended and Restated Articles of Incorporation of the Corporation, as amended, are hereby amended (the “Amendment”) by amending and restating the first paragraph of Article Fifth in its entirety as follows:
5^THThe Corporation shall be authorized to issue 84,333,333 shares of capital stock, which shall be divided into 83,333,333 shares of common stock, par value $0.10 per share (the “Common Stock”), and 1,000,000 shares of preferred stock, par value of $0.10 per share (the “Preferred Stock”). As of the effective date of the filing of the Articles of Amendment containing this Amendment with the Pennsylvania Department of State, each [●]¹ shares of Common Stock of the Corporation, either issued and outstanding or held by the Corporation as treasury stock, immediately prior to the time this Amendment becomes effective shall be and is automatically reclassified and changed (without any further act) into one (1) fully paid and nonassessable share of Common Stock of the Corporation (the “Reverse Stock Split”), provided that no fractional shares shall be issued to any holder of record of fewer than [●] shares of Common Stock of the Corporation immediately prior to the time this Amendment becomes effective, and that instead of issuing such fractional shares, the Corporation shall pay an amount in cash, without interest, equivalent to $1.65 per share of Common Stock of the Corporation held by such holder of record immediately prior to the time this Amendment becomes effective and that such record shareholder shall no longer have any further rights as a shareholder of the Corporation.”
Except as set forth in these Articles of Amendment, the Second Amended and Restated Articles of Incorporation, as amended, remain in full force and effect.
¹ The Board of Directors will have the discretion to effect the Reverse Stock Split at a ratio of any whole number between not less than 1-for-50 and not greater than 1-for-100.

IN TESTIMONY WHEREOF, the undersigned Corporation has caused these Articles of Amendment to be signed by a duly authorized officer thereof on [●] day of [●], 2023.
SAFEGUARD SCIENTIFICS, INC.

By:
Name:
Title:

ANNEX B
ARTICLES OF AMENDMENT
TO
SECOND AMENDED AND RESTATED
ARTICLES OF INCORPORATION, AS AMENDED
In compliance with the requirements of the applicable provisions (relating to articles of amendment) of the Pennsylvania Business Corporation Law of 1988, as amended, the undersigned, desiring to amend its Second Amended and Restated Articles of Incorporation, as amended, hereby states that:
1. The name of the Corporation is Safeguard Scientifics, Inc. (the “Corporation”).
2. The address of the Corporation’s registered office in the Commonwealth of Pennsylvania is 150 N. Radnor Chester Road, Suite F-200, Radnor, PA.
3. The Corporation was incorporated under the Pennsylvania Business Corporation Law of 1988.
4. The date of the Corporation’s incorporation was September 11, 1953.
5. The amendment shall be effective upon filing these Articles of Amendment in the Pennsylvania Department of State.
6. The amendment was adopted by the Corporation by the Board of Directors and shareholders of the Corporation under 15 Pa.C.S. §§ 1912(a) and 1914(a).
7. The amendment adopted by the Corporation is:
RESOLVED, that the Second Amended and Restated Articles of Incorporation of the Corporation, as amended, are hereby amended (the “Amendment”) by amending and restating the first paragraph of Article Fifth in its entirety as follows:
5^THThe Corporation shall be authorized to issue 84,333,333 shares of capital stock, which shall be divided into 83,333,333 shares of common stock, par value $0.10 per share (the “Common Stock”), and 1,000,000 shares of preferred stock, par value of $0.10 per share (the “Preferred Stock”). As of the effective date of the filing of the Articles of Amendment containing this Amendment with the Pennsylvania Department of State (the “Effective Date”), each one (1) share of Common Stock of the Corporation, either issued and outstanding or held by the Corporation as treasury stock (and including each fractional share in excess of one (1) share held by any shareholder of record and each fractional interest in excess of one (1) share held by the Corporation or its agent pending disposition on behalf of those entitled thereto), immediately prior to the time this Amendment becomes effective shall be and is automatically reclassified and changed (without any further act) into [●]¹ fully paid and nonassessable shares of Common Stock of the Corporation (or, with respect to such fractional shares and interests, such lesser number of shares and fractional shares or interests as may be applicable based upon such [●]¹ -for-1 ratio) (the “Forward Stock Split”), provided that no fractional shares shall be issued.”
Except as set forth in these Articles of Amendment, the Second Amended and Restated Articles of Incorporation, as amended, remain in full force and effect.
¹ The Board of Directors will have the discretion to effect the Forward Stock Split at a ratio of any whole number between not less than 50-for-1 and not greater than 100 -for-1.

IN TESTIMONY WHEREOF, the undersigned Corporation has caused these Articles of Amendment to be signed by a duly authorized officer thereof on [●] day of [●], 2023.
SAFEGUARD SCIENTIFICS, INC.

By:
Name:

Title:
B-2
PROXY CARD
~~TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:~~
~~E01265-P74799~~ ~~KEEP THIS PORTION~~
1UPX Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. 03VZ3E + + A Proposals — The Board recommends a vote FOR ~~YOUR RECORDS~~
~~THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.~~ Proposals 1, 2 and 3. 3. Adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the Reverse Stock Split Proposal or the Forward Stock Split Proposal. q IF VOTING BY MAIL, SIGN, DETACH AND RETURN ~~THIS~~THE BOTTOM PORTION ~~ONLY~~
~~SAFEGUARD SCIENTIFICS, INC.~~ ~~For~~
~~All~~ ~~Withhold~~
~~All~~ ~~For All~~
~~Except~~ ~~To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s)~~IN THE ENCLOSED ENVELOPE. q 2023 Special Meeting Proxy Card 1. Adoption of the ~~nominee(s) on~~Articles of Amendment to the ~~line below.~~
Company’s Second Amended and Restated Articles of Incorporation, as amended, to effect a reverse stock split (the “Reverse Stock Split”) of common stock at a ratio not less than 1-for-50 and not greater than 1-for-100 (the “Reverse Stock Split Proposal”). The Board of Directors ~~recommends you vote FOR~~will retain discretion to elect to implement the ~~following:~~ ☐ ☐ ☐
~~Vote on Directors~~
1. ~~Election~~Reverse Stock Split in this range or to elect not to implement the Reverse Stock Split. For Against Abstain For Against Abstain 2. Adoption of ~~Directors~~
~~Nominees:~~
~~01)    Mara G. Aspinall~~ ~~05)    John J. Roberts~~
~~02)    Julie A. Dobson~~ ~~06)    Robert J. Rosenthal~~
~~03)    Stephen Fisher~~ ~~07)    Stephen T. Zarrilli~~
~~04)    George MacKenzie~~
~~Vote on Proposals~~
the Articles of Amendment to the Company’s Second Amended and Restated Articles of Incorporation, as amended, to effect, immediately after the Reverse Stock Split, a forward stock split (the “Forward Stock Split”) of common stock, at a ratio not less than 50-for-1 and not greater than 100-for-1 (the “Forward Stock Split Proposal”). The Board of Directors ~~recommends you~~will retain discretion to elect to implement the Forward Stock Split in this range or to elect not to implement the Forward Stock Split. For Against Abstain You may vote ~~FOR~~online or by phone instead of mailing this card. Online Go to www.envisionreports.com/SFE-SPC or scan the ~~following proposals:~~ ~~For~~ ~~Against~~ ~~Abstain~~
2. ~~Advisory resolution to approve the compensation of the Company’s named executive officers.~~ ☐ ☐ ☐
3. ~~Ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for 2016.~~ ☐ ☐ ☐
4. ~~To consider such other business as may properly come before the meeting.~~
~~The shares represented by this proxy when properly executed will be voted~~QR code — login details are located in the ~~manner directed herein~~shaded bar below. Save paper, time and money! Sign up for electronic delivery at www.envisionreports.com/SFE-SPC Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Your vote matters – here’s how to vote!
Small steps make an impact. Help the environment by ~~the undersigned Shareholder(s).~~~~If no direction is made, this proxy will be voted FOR items 1, 2 and 3.~~~~If any other matters properly come before the meeting, or if cumulative voting is required, the persons named in this proxy will vote in their discretion.~~
~~To cumulate votes in the Election~~consenting to receive electronic delivery; sign up at www.envisionreports.com/SFE-SPC Proxy — Safeguard Scientifics, Inc. q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q Change of ~~Directors, please check the box and write the number of the nominees(s) and the number of votes to be cast for each nominee in the space on the reverse side.~~ ☐
Address — Please print new address below. Comments — Please print your comments below. B Non-Voting Items + + Please sign exactly as ~~your~~ name(s) ~~appear(s)~~appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or ~~other fiduciary,~~custodian, please give full ~~title as such. Joint owners should each~~title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box. C Authorized Signatures — This section must be completed for your vote to count. Please date and sign ~~personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.~~
~~Signature [PLEASE SIGN WITHIN BOX]~~ ~~Date~~ ~~Signature (Joint Owners)~~ ~~Date~~
~~Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:~~
~~The Notice, Proxy Statement and Form 10-K are available at www.proxyvote.com.~~
~~E01266-P74799~~
~~SAFEGUARD SCIENTIFICS, INC.~~
below. Computershare is the stock transfer agent and registrar for Safeguard Scientifics, Inc. Computershare provides you the flexibility to access information and process transactions using its toll-free shareholder services center, automated telephone support system and Internet capabilities. Contacting Computershare Please direct your inquiries and transaction requests to Computershare using the options listed below: Telephone inquiries: 1-800-736-3001 (U.S., Canada, Puerto Rico) 1-781-575-3100 (non U.S.) 1-800-952-9245 (TDD) E-mail inquiries: web.queries@computershare.com Written requests: First Class/Registered/Certified Mail: Computershare Investor Services PO BOX 505000 Louisville, KY 40233-5000 Investor Centre You also can manage your account online via Investor Centre, Computershare’s Web-based tool for shareholders. Here you can view your account details, update your account information and process various transactions. Registration is quick and easy. You can access The Investor Centre at www.computershare.com/investor. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
~~ANNUAL MEETING~~ OF ~~SHAREHOLDERS~~
~~MAY 18, 2016~~
SAFEGUARD SCIENTIFICS, INC. No matter how many shares you hold, we consider your vote important and encourage you to vote as soon as possible. When you sign and return this proxy card, you • appoint ~~Brian J. Sisko~~Mark Herndon and ~~Jeffrey B. McGroarty, or~~G. Matthew Barnard (or either of them or any substitutes they may appoint), as proxies ~~each with~~to vote your shares, as you have instructed, at the ~~power to appoint his substitute,~~Special Meeting on December 15, 2023 and ~~hereby authorize them to represent~~at any adjournments, postponements, continuations or reschedulings of that meeting and ~~vote, as designated~~otherwise act on ~~the reverse side of this proxy card, all~~behalf of the ~~shares of Common Stock of Safeguard Scientifics, Inc.~~undersigned with all powers that the ~~shareholders are entitled~~undersigned would have if personally present thereat; • authorize the proxies to vote, in their discretion, upon any other business properly presented at the ~~Annual~~meeting subject to compliance with Rule 14a-4(c) of the Securities Exchange Act of 1934, as amended; and • revoke any previous proxies you may have signed, including any proxy previously given by telephone or internet. The undersigned acknowledges receipt of the Notice of the Special Meeting ~~of Shareholders to be held at 8:00 AM, Eastern Time on May 18, 2016,~~ and ~~any adjournment or postponement thereof.~~
~~THIS~~proxy statement dated November 2, 2023. IF YOU SIGN AND RETURN THE PROXY ~~WHEN~~BUT DO NOT INDICATE HOW YOU WISH TO VOTE, THE PROXIES WILL VOTE FOR ITEMS 1, 2 AND 3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY ~~EXECUTED, WILL BE VOTED AS DIRECTED BY~~COME BEFORE THE ~~SHAREHOLDERS. IF NO SUCH DIRECTIONS ARE MADE,~~MEETING AND AT ANY ADJOURNMENTS, POSTPONEMENTS, RESCHEDULINGS OR CONTINUATIONS OF THE MEETING. UNLESS OTHERWISE INSTRUCTED, THIS PROXY WILL BE VOTED ~~FOR~~IN ACCORDANCE WITH THE ~~ELECTION~~RECOMMENDATIONS OF ~~THE NOMINEES FOR~~ THE BOARD OF ~~DIRECTORS LISTED ON THE REVERSE SIDE AND FOR PROPOSALS 2 AND 3.~~
~~Whether or not direction is made, this proxy, when properly executed, will be voted in the discretion of the proxy holders upon such other business as may properly come before the Annual~~DIRECTORS. (sign and date below) The 2023 Special Meeting of Shareholders ~~or any adjournment or postponement thereof. The proxy holders reserve~~of Safeguard Scientifics, Inc. will be held on December 15, 2023 at 9:00 a.m. ET, virtually via the ~~right to cumulate votes and cast such votes~~internet at meetnow.global/MF922F5. To access the virtual meeting, you must have the information that is printed in ~~favor of~~ the ~~election of some or all of the applicable director nominees in their sole discretion.~~
~~PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING ENCLOSED REPLY ENVELOPE~~
~~CUMULATE~~
~~(If you noted cumulative voting instructions above, please check the corresponding box~~shaded bar located on the ~~reverse side.~~front of this form.)
~~CONTINUED AND TO BE SIGNED ON REVERSE SIDE~~

	~~(1)~~	~~Title of each class of securities to which transaction applies:~~

	~~(2)~~	~~Aggregate number of securities to which transaction applies:~~

	~~(3)~~	~~Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11(set forth the amount on which the filing fee is calculated and state how it was determined):~~

☐	~~Fee paid previously with preliminary materials:~~Sincerely,

	~~(4)~~	~~Date Filed:~~
		Eric C. Salzman, Chief Executive Officer

Name	Fees Earned or Paid in Cash ($)(1)		Stock Awards ($)(2)(3)		Option Awards ($)(3)		All Other Compensation ($)(4)		Total ($)(5)
Mara G. Aspinall		69,500		105,365		—		775		175,640
Julie A. Dobson		84,000		95,553		—		4,225		183,778
Stephen Fisher		42,769		5,699		42,000		—		90,468
Keith B. Jarrett		9,972		1,279		—		—		11,251
Andrew E. Lietz		92,308		95,682		—		—		187,990
George MacKenzie		80,000		90,225		—		—		170,225
Jack L. Messman		66,500		90,225		—		—		156,725
John J. Roberts		76,500		90,225		—		—		166,725
Robert J. Rosenthal		90,500		90,225		—		775		181,500

	Grant Date Fair Value ($)
Name	1/15/15	3/2/15	4/15/15	5/29/15	7/15/15	10/15/15
Mara G. Aspinall	2,385	—	4,257	90,225	4,247	4,251
Julie A. Dobson	1,491	—	1,407	90,225	1,213	1,217
Stephen Fisher	—	—	—	—	1,448	4,251
Keith B. Jarrett	783	496	—	—	—	—
Andrew E. Lietz	1,249	—	1,259	90,225	1,389	1,560
George MacKenzie	—	—	—	90,225	—	—
Jack L. Messman	—	—	—	90,225	—	—
John J. Roberts	—	—	—	90,225	—	—
Robert J. Rosenthal	—	—	—	90,225	—	—

Name	DSUs (#)		Stock Options (#)
Mara G. Aspinall		9,112		8,333
Julie A. Dobson		43,180		15,000
Stephen Fisher		1,609		8,333
Keith B. Jarrett		3,023		8,333
Andrew E. Lietz		39,867		15,000
George MacKenzie		29,696		23,332
Jack L. Messman		62,818		10,000
John J. Roberts		35,376		10,000
Robert J. Rosenthal		31,134		23,332

Name	2014 MIP Target Variable Incentive (1)	2015 MIP Target Variable Incentive (1)	2016 MIP Target Variable Incentive (1)
Stephen T. Zarrilli	$ 550,000	$ 660,000	$ 696,000
Jeffrey B. McGroarty	$ 206,250	$ 228,750	$ 228,750
Brian J. Sisko	$ 337,500	$ 337,500	$ 360,000

Name	Payout Level (1)	Total Variable Incentive Payment
Stephen T. Zarrilli	80%		$	528,000
Jeffrey B. McGroarty	80%		$	183,000
Brian J. Sisko	80%		$	270,000
Named Executive Officers, as a group (3 persons)	80%		$	981,000

	~~(1)~~	~~Amount previously paid:~~

	~~(3)~~	~~Filing Party:~~

Named Executive Officer	Restricted Shares (1)	Nominal Value of Restricted Shares (2)	PSUs (3)	Target Value of PSUs (2)
Stephen T. Zarrilli	20,180	$300,006	40,359	$599,997
Jeffrey B. McGroarty	5,605	$ 83,327	11,211	$166,668
Brian J. Sisko	10,090	$150,003	20,179	$299,991


							Change in
							Pension Value
							and
						Non-Equity	Nonqualified
				Stock	Option	Incentive Plan	Deferred	All Other
Name and		Salary	Bonus	Awards	Awards	Compensation	Compensation	Compensation	Total
Principal Position	Year	($)	($)	($)(1)(2)	($)(1)	($)(3)	Earnings ($)	($)(4)	($)
Stephen T. Zarrilli	2015	550,000	—	729,748	—	528,000	—	17,924	1,825,672
President and Chief	2014	550,000	—	599,413	—	632,500	—	17,674	1,799,587
Executive Officer	2013	550,000	—	466,877	—	737,000	—	19,727	1,773,604

Jeffrey B. McGroarty	2015	305,000	—	202,701	—	183,000	950	15,080	706,731
Senior Vice President and	2014	275,000	—	169,760	—	237,188	8,623	14,776	705,347
Chief Financial Officer	2013	250,000	—	127,327	—	232,500	15,813	15,537	641,177

Brian J. Sisko	2015	375,000	—	364,868	—	270,000	621	17,521	1,028,010
Chief Operating Officer,	2014	375,000	—	272,951	—	388,125	5,634	16,491	1,058,201
Executive Vice President	2013	375,000	—	233,436	—	425,250	10,331	17,447	1,061,464
and Managing Director

Name	401(k) Matching Contribution ($)		Life Insurance Premiums ($)		Group Life Insurance Imputed Income ($)
Stephen T. Zarrilli		13,250		3,432		1,242
Jeffrey B. McGroarty		13,250		1,371		459
Brian J. Sisko		13,250		2,594		1,677


																					Grant
													All Other		All Other						Date
			Estimated Possible Payouts				Estimated Future Payouts						Stock		Option						Fair
			Under Non-Equity Incentive				Under Equity Incentive Plan						Awards:		Awards:		Exercise		Closing		Value of
			Plan Awards (1)				Awards (2)(3)						Number of		Number of		or Base		Market		Stock
		Date of											Shares of		Securities		Price of		Price on		and
	Grant	Committee											Stock or		Underlying		Option		Date of		Option
	Date	Action	Threshold		Target	Maximum		Threshold	Target		Maximum		Units		Options		Awards		Grant		Awards
Name	(2015)	(2015)	($)		($)	($)		(#)	(#)		(#)		(#)(2)(3)(4)		(#)		($/Sh)		($/Sh)		($)(5)
Stephen T. Zarrilli	03/03	03/03		—	660,000	990,000		—	—			—		—		—		—		—		—
	12/31	12/09		—	—	—		—	—			—		20,180		—		—		—		291,903
	12/31	12/09		—	—	—		—	40,359	(6)		(6)		—		—		—		—		437,845
Jeffrey B. McGroarty	03/03	03/03		—	228,750	343,125		—	—			—		—		—		—		—		—
	12/31	12/09		—	—	—		—	—			—		5,605		—		—		—		81,076
	12/31	12/09		—		—		—	11,211	(6)		(6)		—		—		—		—		121,625
Brian J. Sisko	03/03	03/03		—	337,500	506,250		—	—			—		—		—		—		—		—
	12/31	12/09		—	—	—		—	—			—		10,090		—		—		—		145,951
	12/31	12/09		—	—	—		—	20,179	(6)		(6)		—		—		—		—		218,917


		Option Awards						Stock Awards
											Equity Incentive
				Equity Incentive					Market	Equity Incentive	Plan Awards:
				Plan Awards:				Number	Value of	Plan Awards:	Market or
		Number of	Number of	Number of				of Shares	Shares or	Number of	Payout Value of
		Securities	Securities	Securities				or Units	Units of	Unearned	Unearned
		Underlying	Underlying	Underlying				of Stock	Stock	Shares, Units or	Shares, Units or
		Unexercised	Unexercised	Unexercised		Option		That	That Have	Other Rights	Other Rights
		Options	Options	Unearned		Exercise	Option	Have Not	Not	That Have Not	That Have Not
	Grant	(#)(1)	(#)(1)(2)	Options		Price	Expiration	Vested	Vested	Vested	Vested
Name	Date	Exercisable	Unexercisable	(#)(2)		($)	Date	(#)(2)(3)	($)(4)	(#)(2)(5)	($)(4)
Stephen T.	06/30/08	62,500	—	—		7.650	06/30/16	—	—	—	—
Zarrilli	06/30/08	51,666	—	135,834	(6)	7.650	06/30/16	—	—	—	—
	09/30/08	1,458	—	—		7.410	09/30/16	—	—	—	—
	09/30/08	1,342	—	3,033	(7)	7.410	09/30/16	—	—	—	—
	10/30/09	3,625	—	—		9.825	10/30/17	—	—	—	—
	10/30/09	—	—	10,875	(7)	9.825	10/30/19	—	—	—	—
	10/30/09	—	—	—		—	—	—	—	7,250	105,198
	11/05/10	3,755	—	—		15.105	11/05/18	—	—	—	—
	11/05/10	—	—	11,265	(7)	15.105	11/05/20	—	—	—	—
	11/05/10	—	—	—		—	—	—	—	5,630	81,691
	09/30/11	4,914	—	—		15.070	09/30/19	—	—	—	—
	09/30/11	—	—	14,741	(7)	15.070	09/30/21	—	—	—	—
	09/30/11	—	—	—		—	—	—	—	7,371	106,953
	10/02/12	3,791	998	—		15.435	10/02/20	—	—	—	—
	10/02/12	—	—	14,368	(7)	15.435	10/02/22	—	—	—	—
	10/02/12	—	—	—		—	—	499	7,240	7,184	104,240
	12/05/12	14,860	4,953	—		13.890	12/05/20	—	—	—	—
	12/05/12	—	—	59,437	(7)	13.890	12/05/22	—	—	—	—
	12/05/12	—	—	—		—	—	2,476	35,927	29,719	431,223
	10/31/13	—	—	—		—	—	3,952	57,344	24,745	359,050
	12/31/14	—	—	—		—	—	12,018	174,381	24,037	348,777
	12/31/15	—	—	—		—	—	20,180	292,812	40,359	585,610
Jeffrey B.	09/30/08	4,166	—	—		7.410	09/30/16	—	—	—	—
McGroarty	10/30/09	875	—	—		9.825	10/30/17	—	—	—	—
	10/30/09	—	—	2,625	(7)	9.825	10/30/19	—	—	—	—
	10/30/09	—	—	—		—	—	—	—	1,750	25,393
	11/05/10	875	—	—		15.105	11/05/18	—	—	—	—
	11/05/10	—	—	2,625	(7)	15.105	11/05/20	—	—	—	—
	11/05/10	—	—	—		—	—	—	—	1,313	19,052
	09/30/11	875	—	—		15.070	09/30/19	—	—	—	—
	09/30/11	—	—	2,625	(7)	15.070	09/30/21	—	—	—	—
	09/30/11	—	—	—		—	—	—	—	1,313	19,052
	10/02/12	692	183	—		15.435	10/02/20	—	—	—	—
	10/02/12	—	—	2,625	(7)	15.435	10/02/22	—	—	—	—
	10/02/12	—	—	—		—	—	91	1,320	1,313	19,052
	12/05/12	1,350	450	—		13.890	12/05/20	—	—	—	—
	12/05/12	—	—	5,400	(7)	13.890	12/05/22	—	—	—	—
	12/05/12	—	—	—		—	—	225	3,265	2,700	39,177
	10/31/13	—	—	—		—	—	1,078	15,642	6,748	97,913
	12/31/14	—	—	—		—	—	3,404	49,392	6,807	98,770
	12/31/15	—	—	—		—	—	5,605	81,329	11,211	162,672

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		—		950		—		70,712
Brian J. Sisko		—		621		—		46,197

Name	Cash ($)	Equity ($)	Pension/ NQDC ($)		Perquisites/ Benefits ($)		Tax Reimbursement ($)		Other ($)	Total ($)
Eric C. Salzman	—	—		—		—		—	—	—

Mark A. Herndon	313,500	—		—		—		—	10,816	324,316

				Life Insurance		Health
				Proceeds or		and				Total
		Salary and		Disability		Welfare		Acceleration of		Termination
		Bonus		Income		Benefits		Equity Awards		Benefits
		($)		($)		($)		($)(1)		($)
Stephen T. Zarrilli
·	Normal Retirement (65+)		—		—		—		—		—
·	Permanent disability		—		3,109,400		—		3,071		3,112,471
·	Death		—		1,550,000		—		3,071		1,553,071
·	Involuntary termination without cause or for good reason		1,485,000		—		42,184		3,071		1,530,255
·	Change-in-control termination, involuntarily or for good reason		1,485,000		—		42,184		3,734,671		5,261,855
Jeffrey B. McGroarty
·	Normal Retirement (65+)		—		—		—		—		—
·	Permanent disability		—		3,448,483		—		279		3,448,762
·	Death		—		1,025,000		—		279		1,025,279
·	Involuntary termination without cause or for good reason		686,250		—		35,135		279		721,664
·	Change-in-control termination, involuntarily or for good reason		686,250		—		35,135		647,954		1,369,339
Brian J. Sisko
·	Normal Retirement (65+)		—		—		—		—		—
·	Permanent disability		—		2,278,688		—		126		2,278,814
·	Death		—		1,125,000		—		126		1,125,126
·	Involuntary termination without cause or for good reason		900,000		—		35,070		126		935,196
·	Change-in-control termination, involuntarily or for good reason		900,000		—		35,070		1,394,908		2,329,978

	High ($)		Low ($)
Fiscal Year 2023:
First Quarter		3.23		1.60
Second Quarter		2.07		1.51
Third Quarter		1.68		0.98
Fourth Quarter (through October 31, 2023)		1.19		0.97
Fiscal Year 2022:
First Quarter		7.53		4.81
Second Quarter		5.48		3.32
Third Quarter		4.54		3.60
Fourth Quarter		3.89		2.95
Fiscal Year 2021:
First Quarter		8.59		6.35
Second Quarter		7.90		5.95
Third Quarter		8.93		7.38
Fourth Quarter		8.98		6.23

			Range of Prices Paid
	Number of Shares Purchased		High		Low		Average Purchase Price
Fiscal Year 2023
First Quarter		25,096	$	3.06	$	2.95	$	3.01
Second Quarter		—		—		—		—
Third Quarter		—		—		—		—
Fiscal Year 2022
First Quarter		147,795	$	5.35	$	5.17	$	5.27
Second Quarter		221,479	$	5.43	$	3.39	$	4.27
Third Quarter		84,261	$	4.44	$	3.67	$	4.00
Fourth Quarter		257,946	$	3.80	$	3.02	$	3.41
Fiscal Year 2021
First Quarter		—		—		—
Second Quarter		229,286	$	7.51	$	6.57	$	6.93
Third Quarter		6,873	$	7.52	$	7.45	$	7.47
Fourth Quarter		4,304,826	$	9.06	$	9.06	$	9.06

	2015		2014
Audit Fees (1)	$	535,000	$	585,000
Tax Fees (2)		98,700		125,000
All Other Fees		—		—
Total	$	633,700	$	710,000

Name	~~(2)~~	~~Tax fees include~~Age	Position
Ross D. DeMont		50	Director
Russell D. Glass		61	Director
Joseph M. Manko, Jr.		57	Chairman of the ~~aggregate fees billed by KPMG for tax consultation~~Board
Beth S. Michelson		53	Director
Eric C. Salzman		56	Chief Executive Officer
Mark A. Herndon		54	Senior Vice President and ~~tax compliance services.~~Chief Financial Officer


			Shares
	Outstanding		Beneficially
	Shares	Options	Owned Assuming	Percent of		Other Stock-Based
	Beneficially	Exercisable	Exercise of	Outstanding		Holdings (2)
Name	Owned	Within 60 Days	Options	Shares (1)		Vested	Unvested
Blackrock, Inc. 55 East 52^nd Street New York, NY 10055	1,419,292	—	1,419,292	6.90	%	—	—
Dimensional Fund Advisors LP Building One 6300 Bee Cave Road Austin, TX 78746	1,151,123	—	1,151,123	5.57	%	—	—
First Manhattan Co. 399 Park Avenue New York, NY 10022	1,550,084	—	1,550,084	7.50	%	—	—
RBC Global Asset Management (U.S.) Inc. 50 South Sixth Street, Suite 2350 Minneapolis, MN 55402	1,301,682	—	1,301,682	6.30	%	—	—
T. Rowe Price Associates, Inc. 100 East Pratt Street Baltimore, MD 21202	2,052,929	—	2,052,929	9.60	%	—	—
Mara G. Aspinall	—	2,083	2,083	*		5,183	5,849
Julie A. Dobson	16,332	15,000	31,332	*		38,514	5,250
Stephen Fisher	—	—	—	*		2,947	737
Andrew E. Lietz	16,689	15,000	31,689	*		40,516	—
George MacKenzie	8,951	23,332	32,283	*		29,696	—
Jack L. Messman	16,376	10,000	26,376	*		62,818	—
John J. Roberts	1,728	10,000	11,728	*		35,376	—
Robert J. Rosenthal	2,031	23,332	25,363	*		26,134	5,000
Stephen T. Zarrilli	84,415	150,473	234,888	1.16	%	—	—
Jeffrey B. McGroarty	24,768	9,111	33,879	*		—	—
Brian J. Sisko	91,132	25,523	116,655	*		—	—
Executive officers and directors as a group (11 persons)	262,422	283,854	546,276	2.67	%	241,184	16,836

	Outstanding Shares Beneficially			Percent of Outstanding
Name	Owned			Shares (1)
Thomas A. Satterfield, Jr. 15 Colley Cove Drive Gulf Breeze, FL 32561		2,089,726			12.6	%

Contrarian Capital Management, L.L.C. 411 West Putnam Avenue, Suite 425 Greenwich, CT 06830		1,199,204			7.2	%

First Manhattan Co. 399 Park Avenue New York, NY 10022		1,194,142			7.2	%

Yakira Partners, L.P., Yakira Enhanced Offshore Fund Ltd. and MAP 136 Segregated Portfolio 1555 Post Road East, Suite 202 Westport, CT 06880		1,153,745			7.0	%

Ross D. DeMont		610,203	(2)		3.7	%
Russell D. Glass		165,625			1.0	%
Joseph M. Manko, Jr.		371,622	(3)		2.2	%
Beth S. Michelson		103,846			*
Eric Salzman		295,902			1.8	%
Mark A. Herndon		57,469			*
Executive officers and directors as a group (6 persons)		1,604,667			9.7	%

Name of Director:	Number of Shares Awarded:
Ross D. DeMont	14,327
Russell D. Glass	14,327
Joseph M. Manko, Jr.	26,266
Beth S. Michelson	15,521

	September 30, 2023		December 31, 2022
	(unaudited)
Assets
Cash, cash equivalents, restricted cash and marketable securities	$	15,685	$	19,312
Ownership interests		—		860
Other current assets		593		1,251
Total current assets		16,278		21,423
Ownership interests in and advances		14,839		14,545
Other assets		1,310		1,724
Total Assets	$	32,427	$	37,692

Liabilities and Equity
Other current liabilities	$	1,563	$	1,817
Total current liabilities		1,563		1,817
Lease liability - non-current		888		1,249
Other long-term liabilities		50		50
Total equity		29,926		34,576
Total Liabilities and Equity	$	32,427	$	37,692

	Nine Months Ended September 30 (unaudited)						Twelve Months Ended December 31
	2023			2022			2022			2021
Operating expenses	$	3,684		$	3,740		$	4,775		$	7,153
Operating loss		(3,684	)		(3,740	)		(4,775	)		(7,153	)
Other income (loss), net		1,486			(2,979	)		(3,297	)		22,035
Interest, net		721			476			794			276
Equity income (loss), net		(3,937	)		(3,147	)		(6,985	)		11,846
Net income (loss) before income taxes		(5,414	)		(9,390	)		(14,263	)		27,004
Income tax benefit (expense)		—			—			—			—
Net income (loss)	$	(5,414	)	$	(9,390	)	$	(14,263	)	$	27,004
Net income (loss) per share:
Basic	$	(0.33	)	$	(0.57	)	$	(0.87	)	$	1.36
Diluted	$	(0.33	)	$	(0.57	)	$	(0.87	)	$	1.36
Weighted average shares used in computing income (loss) per share:
Basic		16,167			16,405			16,337			19,827
Diluted		16,167			16,405			16,337			19,827

	September 30, 2023
	Historical		Pro Forma Adjustments			As Adjusted
Cash	$	15,685	$	(10	)⁽¹⁾	$	15,675
Ownership Interests		—					—
Other current assets		593					593
Total current assets		16,278		(10	)		16,268
Ownership interests and advances		14,839					14,839
Other assets		1,310					1,310
Total Assets	$	32,427	$	(10	)		32,417

Liabilities and Equity
Other current liabilities		1,563		914	⁽²⁾		2,477
Total current liabilities		1,563		914			2,477
Lease liability - non-current		888					888
Other long-term liabilities		50					50
Total equity		29,926		(924	)		29,002
Total Liabilities and Equity	$	32,427	$	(10	)	$	32,417

	Nine Months Ended September 30, 2023
	Historical			Pro Forma Adjustments			As Adjusted
Operating Expenses	$	3,684		$	(1,933	)⁽¹⁾	$	1,751
Operating Loss		(3,684	)		1,933			(1,751	)
Other income (loss), net		1,486						1,486
Interest, net		721						721
Equity income (loss), net		(3,937	)					(3,937	)
Net income (loss) before income taxes		(5,414	)		1,933			(3,481	)
Income tax benefit (expense)		—						—
Net income (loss) per share:	$	(5,414	)	$	1,933		$	(3,481	)

Basic	$	(0.33	)				$	(0.22	)
Diluted	$	(0.33	)				$	(0.22	)

Weighted average shares used in computing income loss per share:
Basic		16,167			(6	)⁽²⁾		16,161
Diluted		16,167			(6	)⁽²⁾		16,161

	Year Ended December 31, 2022
	Historical			Pro Forma Adjustments			As Adjusted
Operating Expenses	$	4,775		$	(2,306	)⁽¹⁾	$	2,469
Operating Loss		(4,775	)		2,306			(2,469	)
Other income (loss), net		(3,297	)					(3,297	)
Interest, net		794						794
Equity income (loss), net		(6,985	)					(6,985	)
Net income (loss) before income taxes		(14,263	)		2,306			(11,957	)
Income tax benefit (expense)		—						—
Net income (loss) per share:	$	(14,263	)	$	2,306		$	(11,957	)

Basic	$	(0.87	)				$	(0.73	)
Diluted	$	(0.87	)				$	(0.73	)

Weighted average shares used in computing income loss per share:
Basic		16,337			(6	)⁽²⁾		16,331
Diluted		16,337			(6	)⁽²⁾		16,331