Safeguard Scientifics, Inc. (the "Company") previously disclosed that the Company had promoted Stephen T. Zarrilli to the position of President and Chief Executive Officer, effective as of November 1, 2012, and Jeffrey B. McGroarty to the position of Senior Vice President - Finance, effective as of November 26, 2012. The Company also promoted Brian J. Sisko from the position of Senior Vice President and General Counsel to the position of Executive Vice President and Managing Director - Strategy, Development and Operations.

On December 5, 2012, the Compensation Committee of the Company's Board of Directors approved the following compensation arrangements in recognition of these promotions, which arrangements are effective retroactive to November 1, 2012:

Stephen T. Zarrilli    Base Salary - $550,000
                       Management Incentive Plan Target Variable Incentive - $550,000
                       (100% of base salary)

Brian J. Sisko         Management Incentive Plan Target Variable Incentive - $337,500
                       (90% of base salary)

Jeffrey B. McGroarty   Base Salary - $250,000
                       Management Incentive Plan Target Variable Incentive - $187,500
                       (75% of base salary)

The changes to the Management Incentive Plan target variable incentives for 2012 apply only to the period from November 1, 2012 through December 31, 2012. As a result, any payments awarded under the 2012 Management Incentive Plan will be pro-rated, so that ten months will be based on Messrs. Zarrilli's, Sisko's and McGroarty's prior target variable incentives of $400,000 (100% of base salary), $281,250 (75% of base salary) and $139,050 (60% of base salary), respectively, and two months will be based on the above new target variable incentives.

The Compensation Committee also awarded additional equity grants to Messrs. Zarrilli, Sisko and McGroarty as follows:

                                                              Restricted       Performance
                                 Stock Options                  Stock          Stock  Units
                                      (#)                        (#)               (#)
                         Time-based       Performance-        Time-based       Performance-
                          Vesting         based Vesting        Vesting        based Vesting
 Stephen T. Zarrilli          19,813              59,437            9,906             29,719
 Brian J. Sisko                  810               2,430              405              1,215
 Jeffrey B. McGroarty          1,800               5,400              900              2,700

The equity grants were allocated with 25% of the total value of the underlying shares being subject to time-based vesting and 75% of the total value of the underlying shares being subject to performance-based vesting. For those grants that are subject to time-based vesting, 25% of the underlying shares vest on the first anniversary date of the grant date and the remaining 75% of the underlying shares vest in 36 equal monthly installments on the same date of each month thereafter. The grants subject to performance-based vesting are based on the 2012 Capital Return Model previously approved by the Compensation Committee, which links vesting to the net proceeds produced from exit transactions involving the companies into which the Company first deployed capital during the period November 2010 through September 2012. The hurdle amount (the point at which vesting begins to occur) equals 100% of capital deployed into the relevant group of partner companies, plus an amount based on the Company's annual cost of overhead. The target amount (the point at which all instruments become vested) equals three times capital deployed in the relevant group of partner companies.