Exhibit 10.7

 

AMENDMENT NUMBER ONE

TO THE

REWARDS NETWORK INC.

2004 NON-EMPLOYEE DIRECTOR AWARDS PROGRAM

 

WHEREAS, Rewards Network Inc. (the “Corporation”) has heretofore adopted and
maintains the Rewards Network Inc. 2004 Non-Employee Director Awards Program
(the “Program”); and

 

WHEREAS, the Corporation desires to amend the Program to (a) grant restricted
stock units instead of stock options as a component of the Program and (b) amend
the structure of the Quarterly Awards under the Program.

 

NOW, THEREFORE, pursuant to the power of amendment contained in Section 8.3 of
the Program, the Program is hereby amended as follows, effective as of the date
hereof:

 

1. Section 4.1 of the Program is hereby amended to read in its entirety as
follows:

 

Section 4.1 Director Restricted Stock Awards

 

On the date which is two full market days after each quarterly earnings
announcement by the Corporation, each person who on such date is a Non-Employee
Director shall receive a restricted stock unit award (the “Restricted Stock
Award”) with respect to 2,000 shares of Common Stock. The Restricted Stock Award
shall be granted pursuant to a Restricted Stock Award Agreement between the
Corporation and the Non-Employee Director. The Restricted Stock Award shall vest
on account of the Non-Employee Director’s continued service on the Board (i) on
the first anniversary of the grant date with respect to one-third of the number
of shares of Common Stock subject to the Restricted Stock Award on the grant
date, rounded up to the nearest whole share, (ii) on the second anniversary of
the grant date with respect to one-third of the number of shares of Common Stock
subject to the Restricted Stock Award on the grant date, rounded down to the
nearest whole share and (iii) on the third anniversary of the grant date with
respect to the remaining shares of Common Stock subject to the Restricted Stock
Award. The vesting of the Restricted Stock Award shall accelerate upon a Change
in Control, as defined in the Restricted Stock Award Agreement. If the
Non-Employee Director’s service on the Board terminates for any reason, the
Non-Employee Director shall forfeit all rights with respect to the shares of
Common Stock which are not vested as of the effective date of the Non-Employee
Director’s termination of service on the Board and such unvested portion of the
Restricted Stock Award shall be cancelled by the Corporation. The first
Restricted Stock Award pursuant to this Section shall be made in the first
quarter of 2005.

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2. Section 4.2(a) of the Program is hereby amended to read in its entirety as
follows:

 

(a) Eligibility for Quarterly Awards. On the last trading day of each respective
calendar quarter, each Non-Employee Director will be eligible to receive a
Quarterly Award consisting of a Non-Employee Director Fee. In addition, as part
of the Quarterly Award, (i) the Chairman of the Board of Directors as of such
date will be eligible to receive a Board Chairman Fee, (ii) the Audit Committee
Chair as of such date will be eligible to receive an Audit Committee Chair Fee,
and (iii) each other member of the Corporation’s Audit Committee as of such date
will be eligible to receive an Audit Committee Member Fee. The Corporate
Governance Committee will determine the amount of each of the fees that is a
part of the Quarterly Award. Each Non-Employee Director may receive his or her
Quarterly Award in cash or in a number of shares of Common Stock determined by
dividing the Quarterly Award by the Fair Market Value of a share of Common Stock
determined on the last trading day of the applicable calendar quarter.
Fractional shares will be disregarded.

 

IN WITNESS WHEREOF, the Corporation has caused this instrument to be executed by
its duly authorized officer on this 12th day of October, 2004.

 

Rewards Network Inc. By:   /S/    KENNETH R. POSNER      

 

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