EXHIBIT 10.21

 

SEVERANCE AND RELEASE AGREEMENT

 

This Agreement is between Anthony Priore (for himself and anyone acting for him)
(the “Employee”) and Rewards Network Services Inc. (for itself or any affiliated
company, or its or their present and past officers, directors, supervisors,
employees and anyone else acting for it or them) (the “Employer”).

 

WHEREAS, the Employer previously employed the Employee as Chief Marketing
Officer;

 

WHEREAS, the employment relationship between the Employer and the Employee has
been terminated; and

 

WHEREAS, the Employer and Employee wish to enter into this Severance and Release
Agreement (“Agreement”).

 

THEREFORE, the parties agree as follows:

 

1. Termination. Effective January 5, 2005 (“Termination Date”), the Employee’s
employment with the Employer will end.

 

2. Accrued Benefits. The Employee will be entitled to any accrued benefits as of
the Termination Date in the same manner as any other employee whose employment
with the Employer has terminated, all in accordance with the terms of the
Employer’s applicable benefit plans. The Employer will pay the Employee his 2004
Management Bonus in the amount of $38,367.45 no later than February 25, 2005.

 

3. Expense Reports. The Employer will reimburse the Employee for reasonable
expenses incurred through the Termination Date provided the Employee submits
appropriate expense reports detailing the expenses within 30 days of the
Termination Date.

 

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4. Return of Employer Property. The Employee acknowledges and warrants that he
has returned to the Employer all Employer property in the Employee’s possession,
custody or control, whether at the office or off premises, including, but not
limited to, confidential information of the Employer, computer equipment,
Blackberry personal digital assistant and software. To the extent that the
Employee has not returned such Employer property, he will do so immediately.

 

5. Severance Arrangements. The Employer will pay the Employee $207,000 in the
aggregate over the twelve month period following January 5, 2005 on an equal
basis in accordance with the Employer’s normal bi-weekly salary schedule in the
form of a salary continuation (less applicable deductions). The Employer will
pay Employee COBRA reimbursement for the twelve month period following January
5, 2005.

 

6. Protection of Proprietary Interests.

 

(a) The Employee agrees that for a period of 12 months after the Termination
Date, the Employee will not, directly or indirectly, on behalf of the Employee
or any other person, company or entity, solicit or participate in soliciting,
products or services competitive with or similar to products or services offered
by, manufactured by, designed by or distributed by Rewards Network to any
person, company or entity which was a Rewards Network customer, merchant, member
or partner for such products or services and with which the Employee had contact
regarding those products or services at any time during the last 12 months of
the Employee’s employment with Rewards Network.

 

(b) The Employee agrees that for a period of 12 months after the Termination
Date, the Employee will not directly or indirectly, in any capacity, provide
products or services competitive with or similar to products or services offered
by Rewards Network to any person,

 

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company or entity which was a Rewards Network customer, merchant, member or
partner for such products or services and with which the Employee had contact
regarding those products or services at any time during the last 12 months of
the Employee’s employment with Rewards Network.

 

(c) The Employee agrees that for a period of 12 months after the Termination
Date, the Employee will not in any capacity sell, manage, supervise or offer
products or services competitive with or similar to the merchant marketing,
restaurant financing or merchant rewards business of Rewards Network in any
territory in which the Employee worked while employed by Rewards Network during
the last 12 months of the Employee’s employment with Rewards Network.

 

(d) The Employee agrees that for a period of 12 months after the Termination
Date, the Employee will not, directly or indirectly hire, solicit, attempt to
persuade or communicate with any employee of Rewards Network, or any person who
was an employee of Rewards Network within the two months preceding contact
between the Employee and that person, to leave the employ of Rewards Network or
otherwise interfere with the performance of their duties for Rewards Network.

 

(e) The Employee agrees that for a period of 12 months after the Termination
Date, the Employee will not directly or indirectly, on behalf of the Employee or
any other person, company or entity, participate in the development of any
products or services similar to or competitive with products or services of
Rewards Network with which the Employee had product or service research or
development responsibilities during the last 12 months of the Employee’s
employment with Rewards Network.

 

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7. Future Cooperation. After the Termination Date, the Employee will cooperate
with, and assist the Employer in any investigations, proceedings or actions
relating to any matters in which he was involved or had knowledge while employed
by the Employer, subject to reimbursement for approved expenses.

 

8. No Disruption. The Employee will not disrupt, interfere with, or in any way
disturb the Employer’s business.

 

9. References. In the event the Employer receives any inquiry from prospective
employers of the Executive, the Employer will not make any statement that
reflects negatively on the Executive concerning the Executive so long as the
Executive directs any prospective employers’ inquiries regarding his employment
with the Employer to the Employer’s Human Resources Department. The Employer
will provide potential employers only with the Executive’s job title, dates of
employment, and wage or salary at time of separation and shall advise potential
employers that is the only information that may be provided under the Employer’s
policy.

 

10. Stock Options. Employer hereby acknowledges that (i) Employee has been
granted and possesses stock options (the “Options”) to purchase 22,500 shares of
common stock of the Employer, at an exercise price of $13.10 per share which are
fully vested, and (ii) the Options may be exercised by Employee at any time up
to and including April 5, 2005.

 

11. Non-Disparagement. The Employee will not take any action or make any
statement that reflects negatively on the Employer, or in any way disparages, in
any manner, the Employer’s management, business or business practices.

 

12. Disclosure of Confidential Information. The Employee will not, without the
Employer’s prior permission, directly or indirectly disclose to anyone outside
of the Employer

 

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any trade secrets or other confidential information of the Employer, or any
information received in confidence from third parties by the Employer or about
third parties by the Employer, as long as such matters remain trade secrets or
confidential. Trade secrets and other confidential information shall include any
information or material which has not been made available generally to the
public and which (a) is generated or collected by or utilized in the operations
of the Employer and relates to the actual or anticipated business or research or
development of the Employer; or (b) is suggested by or results from any task
assigned to the Employee by the Employer or work performed by the Employee for
or on behalf of the Employer.

 

13. Confidentiality. Except as otherwise required by law, the parties agree that
the terms of this Severance Agreement and Release are strictly confidential and
must not be disclosed in any manner to any person. The only exceptions to this
prohibition on disclosure are to the parties’ attorneys and/or tax advisors, and
Employee’s domestic partner and the Employer’s employees necessary to comply
with the Employer’s obligations under this Agreement, all of whom are similarly
bound by this confidentiality provision.

 

14. Non-Admission. The parties agree that the Employer’s offer of this Severance
Agreement and Release and/or the payment of severance under this Agreement are
not an admission of any kind that the Employee has any viable claims against the
Employer or that the Employer admits to any liability whatsoever.

 

15. Release. The Employee releases the Employer with respect to any and all
known and unknown claims of any type to date arising out of any aspect of their
employment relationship or the termination of their employment relationship.
This includes, but is not limited to, breach of any implied or express
employment contracts, covenants or duties; entitlement to any pay or benefits,
including insurance benefits or attorney fees; claims for wrongful

 

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termination, violation of public policy, defamation, emotional distress,
invasion of privacy, loss of consortium, negligence, other federal, state, local
or common law matters or any act or omission; or claims of discrimination based
on age (Age Discrimination in Employment Act) (“ADEA”), ancestry, color,
concerted activity, disability, entitlement to benefits, marital status,
national origin, parental status, race, religion, retaliation, sex, sexual
harassment, sexual orientation, source of income, union activity, veteran’s
status or other protected status. The Employee also acknowledges that he has not
suffered any on-the-job injury for which he has not already filed a claim.

 

16. Covenant Not To Sue. The Employee agrees not to sue the Employer for any
claims covered by the release in this Agreement. This Agreement not to sue does
not apply to an ADEA claim to the extent such an exception is required by law;
nor to any claim pertaining to a breach by Employer of any provision of this
Agreement. If the Employee sues in violation of this Agreement, the Employee
agrees (a) to pay all costs and expenses incurred by the Employer in defending
against a suit or enforcing this Agreement, including court costs, expenses and
reasonable attorney fees, or (b) to be obligated upon written demand to repay to
the Employer, as liquidated damages, all of the payment paid to the Employee
pursuant to this Agreement except One Hundred Dollars ($100), and (c) in
addition to either (a) or (b), that the Employer shall not be obligated to
continue payment to the Employee of any remaining payments under this Agreement.

 

17. Exclusions from Release. Excluded from the release and the agreement not to
sue are any claims which cannot be waived by law, and the filing of a
discrimination charge with a government agency. But the Employee agrees to waive
any right to any monetary recovery should any government agency pursue any
claims on the Employee’s behalf.

 

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18. Modification. This Agreement may only be modified in a writing signed by
both parties. If any part of this Agreement is found to be illegal or invalid by
a final non-appealable ruling of a court of competent jurisdiction, it will be
deemed severed from this Agreement, and the remainder of the Agreement will
remain in effect and will be enforceable within the bounds of applicable law. If
any restriction or limitation in this Agreement is found to be unreasonable,
onerous or unduly restrictive, it will not be stricken in its entirety, but will
remain effective to the maximum extent permissible.

 

19. Waiver of Breach. Should the Employee breach any provision of this
Agreement, and should the Employer decide not to enforce its rights against the
Employee, that decision will not operate or be construed as a waiver of any
subsequent breach by the Employee. No such waiver will be valid unless in
writing and signed by an officer of the Employer.

 

20. Attorney Fees. The prevailing party in any dispute regarding this Agreement
is entitled to payment of its reasonable attorneys’ fees and costs incurred in
enforcing this Agreement.

 

21. Complete Agreement. This Agreement resolves all matters between the Employee
and the Employer and supersedes any other written or oral agreement between
them, including without limitation, that certain letter agreement dated June 18,
2003.

 

22. Voluntariness. The Employee is signing this Agreement knowingly and
voluntarily, has not been coerced or threatened into signing this Agreement and
has not been promised anything else in exchange for signing this Agreement.

 

23. Attorney Consultation. By this Agreement, the Employee has been advised to
consult with an attorney of the Employee’s choice at the Employee’s own expense
before signing below.

 

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24. Time Periods. The Employee has been given at least 21 days to consider this
Agreement. After the Employee signs this Agreement, the Employee has seven days
to revoke it by giving the Employer written notice of revocation. If this
Agreement is not revoked, the Employee will receive the severance and other
benefits provided in this Agreement.

 

25. Jurisdiction, Choice of Law, Injunctive Relief, and Attorney Fees. The
parties consent to the jurisdiction of the courts of Illinois and the
application of Illinois law with respect to any matter or thing arising out of
this Agreement. In the event of a breach or a threatened breach of this
Agreement by the Employee, the Employee acknowledges that the Employer will face
irreparable injury which may be difficult to calculate in dollar terms and that
the Employer shall be entitled, in addition to remedies otherwise available at
law or in equity, to temporary restraining orders and preliminary injunctions
and final injunctions enjoining such breach or threatened breach. In the event
the Employer shall successfully enforce any part of this Agreement through legal
proceedings, the Employee agrees to pay the Employer all costs and attorneys’
fees reasonably incurred by the Employer in connection therewith.

 

Signed:

 

EMPLOYEE

     

REWARDS NETWORK SERVICES INC.

/s/ Anthony Priore

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      By:  

/s/ Kenneth R. Posner

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Anthony Priore

     

Name:

Title:

 

Kenneth R. Posner

Senior Vice President, Finance and

Administration, and Chief Financial Officer

 

            2/8/05

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            2/10/05

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Date

 

     

Date

   

 

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