Filed by Bowne Pure Compliance



 





Exhibit
10.1







Ronald L. Blake




President and Chief Executive Officer




November 7, 2007




Re:      Severance Agreement




Dear Chris:




As you are aware, you currently participate in the Rewards Network Inc. Severance Plan, which
is applicable to all employees who do not have individual severance arrangements with Rewards
Network Inc. (“Rewards Network”). Rewards Network desires to provide you with an individual
severance agreement, as provided in this letter agreement (“Agreement”), in lieu of any payments
you may be eligible to receive under the Severance Plan.



If your employment with Rewards Network is terminated by Rewards Network for any reason other
than Cause (as defined below), disability or death, or if there is a Change in Control (as defined
below) and a diminution in your duties resulting from such Change in Control , or you voluntarily
terminate your employment by Rewards Network with Good Reason upon 30 days prior written notice to
Rewards Network (or such shorter period as may be permitted by the Board of Directors), your
entitlement to compensation and benefits shall cease immediately, except that you will be entitled
to:




	 	(i)	 	continuation of your then-current base salary for a period of 12 months after
the date on which you separate from service with Rewards Network (your “separation
date”);
	 
	 	(ii)	 	continued coverage of you and your spouse and dependents under Rewards
Network’s group health plan for 12 months after your separation date, at no cost to you
but otherwise on the same basis as such plan is offered to active employees of Rewards
Network, and following the expiration of such period the right to elect continued
coverage under such plan for up to 18 additional months pursuant to COBRA; and
	 
	 	(iii)	 	the continued right to exercise any outstanding vested options held by you to
purchase shares of Common Stock for a period of 90 days after your separation date.









 


 









 







You will not be entitled to the foregoing in the event your employment terminates for any
other reason. As used in this letter, a voluntary termination of your employment with “Good Reason”
shall mean a termination by you of your employment with Rewards Network pursuant to a written
notice delivered to Rewards Network within 30 days after the occurrence of the
 following event without your written consent; provided, that an isolated, insubstantial or
inadvertent action or failure which is remedied by Rewards Network within 30 days after receipt of
such notice given by you shall not constitute Good Reason: a material diminution in your duties and
responsibilities that is inconsistent with your position as Senior Vice President, Chief Financial
Officer and Treasurer of Rewards Network, which shall not include an adverse change in your
reporting responsibilities.



The severance payments provided hereunder shall be made in lieu of any other severance
payments under any severance agreement, plan, program or arrangement of Rewards Network that may be
applicable to you. Each of the payments described in clause (i) above shall be considered a
separate payment for purposes of Section 409A of the Internal Revenue Code of 1986, as amended,
including the application of the “short-term deferral” exception thereunder. Payments under this
Agreement are intended to be exempt from Section 409A as short-term deferrals or, alternatively,
under the separation pay exemption set forth in Treasury regulations, and the Agreement shall be
interpreted consistently with such intention.



Notwithstanding anything to the contrary, no amount shall be payable to you (or your executor
or other legal representative in the case of your death or disability) under this Agreement unless
and until eight days after you (or your executor or other legal representative in the case of your
death or disability) execute and deliver to Rewards Network a general waiver and release of claims
against Rewards Network and its affiliates (other than any claims related to the enforcement of
your rights under this Agreement) in a form prescribed by Rewards Network; provided such
release (A) is executed and delivered to Rewards Network within 22 days of your separation from
service, or such longer period of time, not later than 45 days of your separation from service, as
permitted by the Board of Directors in its sole discretion and (B) is not revoked by you (or your
executor or other legal representative in the case of your death or disability) within the
revocation period, if any, made available by Rewards Network with respect to such release.




For purposes of this Agreement, a “Change in Control” shall be deemed to have occurred if:




	 	(i)	 	any person (as defined in Sections 3(a)(9) and 13(d)(3) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), other than Rewards Network,
Equity Group Investments, L.L.C. (“EGI”), an affiliate of Rewards Network or EGI or an
employee benefit plan of Rewards Network, acquires directly or indirectly the
beneficial ownership (within the meaning of Rule 13d-3 promulgated pursuant to the
Exchange Act) of any voting security of Rewards Network and immediately after such
acquisition such person is, directly or indirectly, the beneficial owner of voting
securities representing 50 percent or more of the total voting power of all of the
then-outstanding voting securities of Rewards Network;
	 
	 	(ii)	 	the individuals (i) who constitute the Board of Directors as of the date of
this Agreement (the “Original Directors”) or (ii) who thereafter are elected to the
Board of Directors and whose election, or nomination for election, to the Board of
Directors was approved by a vote of a majority of the Original Directors then still in
office (such directors becoming “Additional Original Directors” immediately following
their election) or (iii) who are elected to the Board of Directors and whose election, or nomination for election, to the Board of Directors was approved
by a vote of a majority of the Original Directors and Additional Original Directors
then still in office (such directors also becoming “Additional Original Directors”
immediately following their election), cease for any reason to constitute a majority
of the members of the Board of Directors;




 


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	 	(iii)	 	the stockholders of Rewards Network shall approve a merger, consolidation,
recapitalization, or reorganization of Rewards Network, a reverse stock split of
outstanding voting securities, or consummation of any such transaction if stockholder
approval is not sought or obtained, other than any such transaction which would result
in at least 50 percent of the total voting power represented by the voting securities
of the surviving entity outstanding immediately after such transaction being
beneficially owned (within the meaning of Rule 13d-3 promulgated pursuant to the
Exchange Act) by the holders of outstanding voting securities of Rewards Network
immediately prior to the transaction, with the voting power of each such continuing
holder relative to other such continuing holders not substantially altered in the
transaction; or
	 
	 	(iv)	 	the stockholders of Rewards Network shall approve a plan of complete
liquidation of Rewards Network or an agreement for the sale or disposition by Rewards
Network of all or a substantial portion of Rewards Network ‘s assets (i.e., 50 percent
or more of the total assets of Rewards Network).




For purposes of this Agreement, the term “Cause” shall mean any one or more of the following:





	 	(i)	 	any willful refusal by you to follow lawful directives of the President and
Chief Executive Officer or the Board of Directors which are consistent with the scope
and nature of your duties and responsibilities; provided that an isolated,
insubstantial or inadvertent action or failure which is remedied by you within 10 days
after written notice from the President and Chief Executive Officer or the Board of
Directors shall not constitute Cause hereunder;
	 
	 	(ii)	 	your conviction of, or plea of guilty or nolo contendere to, a felony or of any
crime involving moral turpitude, fraud or embezzlement;
	 
	 	(iii)	 	any gross negligence or willful misconduct by you resulting in a material loss
to Rewards Network or any of its subsidiaries, or material damage to the reputation of
Rewards Network or any of its subsidiaries;
	 
	 	(iv)	 	any material breach by you of any one or more of the covenants contained in
your Proprietary Interest Protection and Non-Solicitation Agreement; or
	 
	 	(v)	 	any violation of any statutory or common law duty of loyalty to Rewards Network
or any of its subsidiaries.





Please note that the purpose of this letter is merely to describe the terms of your severance
agreement. This letter does not constitute a contract of employment and does not create any right
to continued employment for any period of time. Your employment with Rewards Network at all times remains “at will”. This means that either you or Rewards Network may end your employment
at any time for any or no reason.






 


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To indicate your acceptance should you decide to do so, please sign this letter agreement
where indicated and return it to me. In the meantime, please do not hesitate to call me should you
have any questions.



	 	 	 	 	 
	 	Very truly yours,

 	 
	 	/s/ Ronald L. Blake

 	 
	 	Ronald L. Blake 	 
	 	President and Chief Executive Officer 	 
	 



cc: Personnel File




AGREED AND ACCEPTED




	 	 	 
	/s/ Christopher J. Locke
 

Christopher J. Locke

	 	 






Date: November 7, 2007





 


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