SUPPLEMENT
DATED JANUARY 17, 2002
TO
OFFER TO EXCHANGE
DATED DECEMBER 21, 2001
SAFEGUARD SCIENTIFICS, INC.
OFFER TO EXCHANGE CERTAIN OUTSTANDING OPTIONS FOR RESTRICTED STOCK
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT EASTERN STANDARD TIME,
ON JANUARY 22, 2002, UNLESS THE OFFER IS EXTENDED.
Safeguard Scientifics, Inc. (the "Company" or "Safeguard") is offering to
the current employees of the Company and its wholly-owned subsidiary, aligne,
Inc., to exchange, for compensatory purposes, options outstanding under the
Company's 1990 Stock Option Plan, the 1999 Equity Compensation Plan and the 2001
Associates Equity Compensation Plan, all as amended to date (collectively, the
"Equity Plans") to acquire options to purchase shares of the Company's Common
Stock, par value $0.10 per share ("Option Shares"), having an exercise price of
more than $15.00 (the "Eligible Options"), in exchange for shares of the
Company's restricted common stock that will be granted under the Equity Plans
(the "Restricted Stock"), upon the terms and subject to the conditions described
in the Offer to Exchange, and the related cover letter (the "Cover Letter" and,
together with the Offer to Exchange, as they may be amended from time to time,
the "Offer").
We are making this offer upon the terms and subject to the conditions
described in this "Offer to Exchange," the related cover letter and the "Summary
of Terms" previously sent to you, together with this Supplement, as each may be
amended from time to time (collectively, the "Offering Documents").
You should direct questions about this offer or requests for assistance or
for additional copies of the Offering Documents to Deirdre Blackburn at (610)
975-4943 or N. Jeffrey Klauder at (610) 975-4984.
To the extent that any inconsistencies exist between this Supplement and
the other Offering Documents, this Supplement will govern.
IMPORTANT
If you wish to accept this offer, you must complete and sign the Election
Form previously sent to you and return it to Deirdre Blackburn before 12:00
midnight, Eastern Standard Time, on January 22, 2002 (i.e. just prior to 12:01
a.m. on January 23, 2002), in person if possible. You do not need to return the
stock option agreements for your options being exchanged to effectively elect to
accept this offer. If you sign and return an election form without checking the
boxes indicated on the election form to exchange your options, you will be
deemed to have rejected this offer, and you will keep all of your current
options and you will not receive any Restricted Stock.
If you have previously accepted this offer and wish to change your
election in any respect or to reject the offer, you must complete and sign the
appropriate Change in Election Form previously sent to you and return it to
Deirdre Blackburn before the expiration date of the offer.
IF YOU REQUIRE ADDITIONAL COPIES OF ANY ELECTION FORMS OR CHANGE IN
ELECTION FORMS, PLEASE CONTACT DEIRDRE BLACKBURN AT (610) 975-4943.
WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR
BEHALF AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR OPTIONS
PURSUANT TO THE OFFER. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS
DOCUMENT OR TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO GIVE
YOU ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER
OTHER THAN THOSE CONTAINED HEREIN OR IN THE RELATED LETTER OF TRANSMITTAL. IF
ANYONE MAKES ANY RECOMMENDATION OR GIVES ANY INFORMATION OR REPRESENTATION, YOU
MUST NOT RELY UPON THAT RECOMMENDATION, INFORMATION OR AUTHORIZATION AS HAVING
BEEN AUTHORIZED BY US.
We are not making this offer to, and we will not accept any options
from, option holders in any jurisdiction where it would be illegal to do so.
However, we may, at our discretion, take any actions necessary for us to make
this offer to option holders in any such jurisdiction.
TABLE OF CONTENTS
PAGE
----
Introductory Statement 1
What is Restricted Stock? 1
Conditions of Offer 1
Forward Looking Statements; Miscellaneous 2
INTRODUCTORY STATEMENT
The following information amends and supplements our Offer to Exchange
dated December 21, 2001. Pursuant to this Supplement, we are amending and
restating the information discussed below. Except to the extent expressly set
forth, this Supplement does not alter the terms and conditions previously set
forth in the Offer to Exchange, and should be read in conjunction with the Offer
to Exchange.
WHAT IS RESTRICTED STOCK?
Question 3 in the Offer to Exchange, and its related answer, describe the
Restricted Stock being offered to you in exchange for your eligible options.
Please refer to Question 19 and Section 13 for a discussion of withholding taxes
and material U.S. federal income tax consequences in connection with this offer.
CONDITIONS OF OFFER
As described in Section 6 of the Offer to Exchange, the offer is subject
to certain conditions. You must be an active employee of Safeguard on the date
the offer is made and continue to be an active employee on the date it expires.
If you accept this offer with respect to any eligible option, you must exchange
all eligible options. However, you are not required to exchange any of your
eligible options.
Notwithstanding any other provision of the Offer to Exchange, we will not
be required to accept any eligible options that you tender for exchange, and we
may terminate or amend the offer, or postpone our acceptance and cancellation of
any eligible options that you elect to exchange, in each case at any time on or
before 12:00 midnight, Eastern Standard Time, on January 22, 2002 (or such later
date if we extend the Offer to Exchange), if we determine that any event has
occurred that, in our reasonable judgment, makes it inadvisable for us to
proceed with the Offer to Exchange or to accept and cancel eligible options that
you tender for exchange, including, but not limited to, the following:
- any action proceeding by any government agency, authority or
tribunal or any other person, domestic or foreign, is threatened or
pending before any court, authority, agency or tribunal that
directly or indirectly challenges the making of the Offer to
Exchange, the acquisition of some or all of the eligible options,
the issuance of Restricted Stock, or otherwise relates to the Offer
to Exchange or that, in our reasonable judgment, could materially
and adversely affect our business, condition (financial or
otherwise), income, operations or prospects or materially impair the
benefits we believe we will receive from the Offer to Exchange;
- any action is threatened, pending or taken, or any approval is
withheld, by any court or any authority, agency, tribunal or any
person that, in our reasonable judgment, would or might directly or
indirectly:
(a) make it illegal for us to accept some or all of the eligible
options or to issue some or all of the Restricted Stock or
otherwise restrict or prohibit consummation of the Offer to
Exchange or otherwise relate to the Offer to Exchange;
(b) delay or restrict our ability, or render us unable, to accept
the eligible options for exchange and cancellation or to issue
Restricted Stock for some or all of the exchanged eligible
options;
(c) materially impair the benefits we believe we will receive from
the Offer to Exchange; or
(d) (materially and adversely affect our business, condition
(financial or other), income, operations, or prospects;
- any change or changes occur in our business, condition (financial or
other), assets, income, operations, prospects or stock ownership
that, in our reasonable judgment, is or may be material to us. The
conditions to the Offer to Exchange are for our benefit. We may
assert them in our discretion before the expiration date and we may
waive them at any time before the expiration date, whether or not we
waive any other condition to the Offer to Exchange. Should we decide
to waive any of the conditions to the Offer to Exchange, we must do
so before 12:00 midnight, Eastern Standard Time, on January 22, 2002
(or by a later expiration date if the Offer to Exchange is
extended). Our failure to exercise any of these rights is not a
waiver of any of these rights. The waiver of any particular right is
not, and shall not be construed as, the waiver of any other right.
However, once we choose to waive a particular right, we may not
reassert that particular right again in this Offer to Exchange. Any
determination we make concerning the events as described above will
be final and binding on everyone.
FORWARD LOOKING STATEMENTS; MISCELLANEOUS
THE STATEMENTS CONTAINED IN THE OFFER TO EXCHANGE THAT ARE NOT HISTORICAL
FACTS ARE FORWARD-LOOKING STATEMENTS. THESE STATEMENTS INVOLVE CERTAIN RISKS,
UNCERTAINTIES AND OTHER FACTORS THAT COULD CAUSE ACTUAL RESULTS TO BE MATERIALLY
DIFFERENT THAN THOSE CONTEMPLATED BY THESE STATEMENTS. THESE RISKS AND
UNCERTAINTIES INCLUDE THE FACTORS DESCRIBED ELSEWHERE IN THIS REPORT AND IN OUR
FILINGS WITH THE SEC, INCLUDING OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 2000. THE FORWARD-LOOKING STATEMENTS INCLUDED IN THE OFFER TO
EXCHANGE ARE NOT PROTECTED BY THE SAFE HARBOR SET FORTH IN THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. WE DO NOT ASSUME ANY OBLIGATION TO
UPDATE ANY FORWARD-LOOKING STATEMENTS OR OTHER INFORMATION CONTAINED IN THIS
OFFER.