Exhibit 10.12
August 28, 2001
Mr. Gerald A. Blitstein
411 North Rose Lane
Haverford, Pennsylvania 19041
Dear Mr. Blitstein:
This letter agreement sets forth the terms of an agreement between you and
Safeguard Scientifics, Inc. ("Safeguard") as a result of your resignation as an
executive officer of the Company. Safeguard has agreed to provide you with the
benefits set forth in this letter on the terms and conditions described herein.
- On the first business day which is at least eight days after the date
upon which you have signed and returned to Safeguard the Release,
described below, you will be paid an aggregate amount of $1,308,500,
of which $308,500 will be paid to you and $1 Million will be deposited
in a rabbi trust having distribution terms and a trustee acceptable to
you which satisfies the provision of the Internal Revenue Code related
to "rabbi trusts", payable in the amounts and on the dates set forth
below:
- You will become vested in all stock options granted to you as set
forth on the attached schedule and may exercise those stock options
during the 36-month period following your termination of employment
(unless any of the options would by their terms expire sooner, in
which case you may exercise such options at any time before their
expiration).
- Vesting of your interest in the various LTIPs in which you participate
will cease on the date hereof and you will receive benefits under the
various LTIP's in accordance with the terms and conditions of such
plans; provided, however that if SOTAS, Inc. is disposed of before
year-end, your LTIP interest with respect to the Sotas, Inc.
disposition will be deemed to be 100% accelerated.
- You will receive reimbursement of reasonable relocation expenses
(together with reimbursement of loss and expenses, if any, on the sale
of your Philadelphia residence) if you choose to irrevocably list for
sale your residence at the address below to relocate to New York.
- You will continue to be provided to the benefits set forth in the
letter, dated March 6, 2001 from the Chief Executive Officer of
Safeguard on behalf of Safeguard to you with respect to reimbursement
for losses and
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expenses for 411 North Rose Lane, Haverford, Pennsylvania (the
"Residence"), subject to the following modifications to which you
agree: (i) the letter shall only apply if the Residence is irrevocably
listed for sale on or before December 31, 2002; (ii) Safeguard may
direct and prosecute the sales process provided it uses a licensed real
estate broker agreed to by you and Safeguard (or if the parties are
unable to reach such agreement, chosen by Safeguard with your approval
which shall not be unreasonably withheld) to market the property; and
(iii) in determining any loss or expense on the Residence, no more than
$50,000 of capital improvements made by you shall be included in
determining your basis in the Residence. You will receive all amounts
due under this paragraph within 5 days after the closing of the sale of
the Residence and delivery of reasonable documentation supporting the
reimbursement amount or if earlier, on the 90th day following such
listing for sale of the Residence.
- You will receive up to 18-month's continued coverage under Safeguard's
medical and health plans and life insurance plans (including the
Executive Medical Plan); coverage will end if you obtain coverage from
a subsequent employer.
- You will be reimbursed promptly for all your documented reasonable and
necessary business expenses incurred on behalf of Safeguard prior to
your termination date.
- If you elect to rollover your 401(k) or pension plan into another plan
or an IRA, you should consult with our Vice-President - Taxes on the
tax efficient handling of Safeguard shares held in your 401(k) and
pension plan.
- You will be able to keep your computer, dockstation, and Palm Pilot.
You will be able to use your e-mail address, phone number, voicemail
and Help Desk services until the 180th day after the date of this
letter.
- You will be paid for 14 accrued vacation days, which constitutes all
back vacation days not taken by you, payable on or before the next pay
period following your termination date.
Pursuant to a Consulting Services Agreement, of even date herewith
("the Agreement") between Safeguard and GB Inc., GB Inc. will provide consulting
services to Safeguard for a period of up to six months for a base amount of
$41,667 per month.
All obligations of Safeguard under this letter agreement and the
Agreement will become effective only on the first business day which is eight
days after the date upon which you have signed and returned to Safeguard the
release in the form attached to this letter.
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All payments will be made to you within five business days of the date
on which they become due or, in the case of payments payable on notice from you,
within five business days of such notice.
You hereby resign immediately from your office as Executive Vice
President and Chief Financial Officer of Safeguard and from all other offices or
directorships which you hold for Safeguard or any Safeguard direct or indirect
subsidiary or partner company. You acknowledge that your authority to sign or
act on behalf of Safeguard Scientifics, Inc. or its affiliates is hereby revoked
except as expressly authorized in writing by the Acting Chief Executive Officer.
The agreement will inure to the benefit of your personal
representatives, executors, and heirs. In the event you die while any amount
payable under this agreement remains unpaid, all such amounts will be paid in
accordance with the terms and conditions of this letter.
No term or condition set forth in this letter may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by you and the Chief Executive Officer of Safeguard or
another duly authorized officer of Safeguard.
You acknowledge that the arrangements described in this letter will be
the only obligations of Safeguard or its affiliates in connection with the
termination of your employment relationship with Safeguard. This letter does not
terminate, alter, or affect your rights under any plan or program of Safeguard
in which you may participate, except as explicitly set forth herein. Your
participation in such plans or programs will be governed by the terms of such
plans and programs.
This agreement will be construed and enforced in accordance with the
law of the Commonwealth of Pennsylvania without regard to the conflicts of laws
rules of any state.
Any controversy or claim arising out of or relating to this agreement,
or the breach thereof, will be settled by arbitration in Philadelphia,
Pennsylvania, in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association, using one
arbitrator, and judgment upon the award rendered by the arbitrator may be
entered in any court of competent jurisdiction.
The obligations of Safeguard set forth in this letter are absolute and
unconditional and will not be subject to any right of set-off, counterclaim,
recoupment, defense, or other right which Safeguard may have against you,
subject to, in the event of your termination of employment, your execution of
the relevant release of claims against Safeguard in the form attached to this
letter.
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Safeguard may withhold applicable taxes and other legally required
deductions from all payments to be made hereunder.
If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to us the enclosed copy of this letter which will then
constitute our legally binding agreement on this subject.
Sincerely,
/s/ N. Jeffrey Klauder
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Safeguard Scientifics, Inc.
By: N. Jeffrey Klauder
Title: Executive Vice President
and General Counsel
I agree to the terms and conditions of this letter:
/s/ Gerald A. Blitstein
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Gerald A. Blitstein