Document:

Amend No 1 to Long Term Incentive Plan

 Exhibit 10.3 
  
 AMENDMENT NUMBER ONE 
 TO THE 
 REWARDS NETWORK INC. 
 2004 LONG-TERM INCENTIVE PLAN 
  
 WHEREAS, Rewards Network Inc. (the “Company”) has heretofore adopted and maintains the Rewards Network Inc. 2004 Long-Term Incentive Plan (the “Plan”); and 
  
 WHEREAS, the Company desires to amend the Plan to limit, in certain
respects, the discretion that may be exercised by the Company in granting awards under the Plan and in amending the Plan or any outstanding award thereunder. 
  
 NOW, THEREFORE, pursuant to the power of amendment contained in Section 8(e) of the Plan, the Plan is hereby amended as follows, effective as of
the date hereof: 
  
 1. Clause (i) of Section 6(b) of the Plan is
hereby amended to read as follows: 
  
 (i) Exercise Price.
The exercise price per share of Stock purchasable under an Option shall be determined by the Committee; provided, however, that the exercise price of an Option shall not be less than 100 percent (110 percent in the case of an ISO granted to a person
who owns (within the meaning of Section 422(b)(6) of the Code) 10 percent of the Stock) of the Fair Market Value of a share on the date of grant of such Option. 
  

2. Clauses (i) and (ii) of Section 6(d) of the Plan are hereby amended to read as follows: 
  
 (i) Grant and Restrictions. Restricted Stock shall be subject to such
restrictions on transferability and other restrictions, if any, as the Committee may impose, which restrictions may lapse separately or in combination at such times, under such circumstances, in such installments, or otherwise, as the Committee may
determine; provided, however, that except in the case of a Change in Control or a Participant’s death or disability, (A) the restrictions on each Restricted Stock Award that is 

  

 
subject to vesting conditions based solely on continued employment or service shall lapse at a rate not faster than one-third per year over the three-year
period beginning on the award date evidenced in the Award Agreement, and (B) the restrictions on each Restricted Stock Award that is subject to vesting conditions based on the attainment of performance goals shall lapse not earlier than one year
after the award date evidenced in the Award Agreement (the “Minimum Restriction Schedule”). Except to the extent restricted under the terms of the Plan and any Award Agreement relating to the Restricted Stock, a Participant granted
Restricted Stock shall have all of the rights of a stockholder including, without limitation, the right to vote Restricted Stock or the right to receive dividends thereon. 
  
 (ii) Forfeiture. Upon termination of employment or service or failure to attain established performance goals (as
determined under criteria established by the Committee) during the applicable restriction period, Restricted Stock that is at that time subject to restrictions shall be forfeited and reacquired by the Company. The Committee may provide, by rule or
regulation or in any Award Agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Restricted Stock will be waived in whole or in part in the event of termination resulting from specified causes;
provided that no action taken by the Committee pursuant to this clause (ii) shall cause the restrictions on a Restricted Stock Award to lapse at a rate faster than the Minimum Restriction Schedule. 
  
 3. A new section 7(i) is inserted to read as follows: 
  
 (i) No Repricing of Awards. Notwithstanding anything in this Plan to
the contrary and subject to Section 8(e), without the approval of stockholders, the Committee will not amend or replace previously granted Options or SARs in a transaction that constitutes a “repricing,” within the meaning of rules
prescribed by the American Stock Exchange or, if the Stock is not listed on the American Stock Exchange, any rule of the principal national stock exchange on which the Stock is then traded. 
  
 4. Section 8(e) is hereby amended to read as follows: 
  
 (e) Changes to the Plan and Awards. The Board may amend, alter,
suspend, discontinue, or terminate the Plan or the Committee’s authority to grant Awards under the Plan, subject to any requirement of stockholder approval required by applicable law, rule or regulation, including any rule of the American Stock
Exchange or, if the Stock is not listed on the American Stock Exchange, any rule of the principal national stock 

  

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exchange on which the Stock is then traded; provided, however, that (i) no amendment shall be made without stockholder approval if such amendment would (A)
increase the maximum number of shares of Stock that may be subject to outstanding Awards under Section 4(a) (subject to adjustment in Section 4(c)) or (B) extend the term of this Plan, and (ii) no such action may materially impair the rights of a
Participant under any Award theretofore granted to him without such Participant’s consent. Except as provided in Sections 6(d) and 7(i), the Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue, or
terminate, any Award theretofore granted and any Award Agreement relating thereto; provided, however, that, without the consent of an affected Participant, no such action may materially impair the rights of such Participant under such Award.

  
 IN WITNESS WHEREOF, the Company has caused this
instrument to be executed by its duly authorized officer on this 13th day of July, 2004. 
  

			
	 Rewards Network Inc.

		
	 By:
	 	/s/ George S. Wiedemann

  

 32004 Non-Employee Director Awards Program

 Exhibit 10.4 
  
 REWARDS NETWORK INC. 
 2004 NON-EMPLOYEE DIRECTOR AWARDS PROGRAM 
  
 ARTICLE I 
 Purposes 
  
 The purposes of this 2004 Non-Employee Director Awards Program, which is being adopted by the Board of Directors of Rewards
Network Inc. pursuant to Section 6 of the Rewards Network Inc. 2004 Long-Term Incentive Plan are (i) to provide for the quarterly grant under the Program to Non-Employee Directors of, at the Non-Employee Director’s election, either cash or a
number of shares of Common Stock having a fixed dollar value, (ii) to provide Non-Employee Directors who elect to receive shares with the opportunity to defer the receipt of such shares and (iii) to provide for the annual grant to Non-Employee
Directors of an option to purchase a fixed number of shares of the Corporation’s Common Stock. All capitalized terms used in the Program shall have the meanings set forth in Article II. 
  
 ARTICLE II 
 Definitions 
  
 “Board” means the Board of Directors of the Corporation. 
  
 “Code” means the Internal Revenue Code of 1986, as amended. 
  
 “Common Stock” means the common stock of the Corporation. 
  
 “Corporation” means Rewards Network Inc., a Delaware corporation. 
  
 “Deferral Account” means a bookkeeping account in the name of a
Non-Employee Director who elects to defer, pursuant to the Program, all or a portion of his or her Director Shares. 
  
 “Deferral Election” means an election to defer receipt of Director Shares pursuant to Section 4.2. 
  
 “Director Options” means the options to purchase Common Stock to be
granted to Non-Employee Directors pursuant to Section 4.1 of this Program. 
  
 “Director Shares” means the shares of Common Stock to be granted to Non-Employee Directors who choose to receive shares pursuant to Section 4.2 of this Program. 
  
 “Distribution Date” shall have the meaning set forth in Section
6.1. 
  
 “Disability” has the meaning assigned to such
term in Section 22(e)(3) of the Code. 
  

 “Effective Date” means the date on which the Plan is approved by the stockholders of the
Corporation. 
  
 “Fair Market Value” means, with respect
to a share of Common Stock, the fair market value of such share, determined by such methods or procedures as shall be established from time to time by the Board, provided, however, that if the Common Stock is listed on a national securities exchange
or quoted in an interdealer quotation system, the Fair Market Value of a share of Common Stock on a given date shall be based upon the last sales price or, if unavailable, the average of the closing bid and asked prices per share of a share of
Common Stock on such date (or, if there was no trading or quotation in shares of Common Stock on such date, on the next preceding date on which there was trading or quotation) as provided by one of such organizations. 
  
 “Non-Employee Director” means any director of the Corporation who
is not an officer or employee of the Corporation or any subsidiary of the Corporation. 
  
 “Plan” means the Corporation’s 2004 Long-Term Incentive Plan. 
  
 “Program” means this 2004 Non-Employee Director Awards Program. 
  
 “Program Year” means the 12-month period coincident with the calendar year. 
  
 “Quarterly Awards” means the quarterly awards, in the form of cash
or Director Shares, that Non-Employee Directors are eligible to receive pursuant to Section 4.2 of this Program. 
  
 “Share Equivalent” means a bookkeeping unit credited to a Non-Employee Director’s Share Deferral Account having a value equal to one share
of Common Stock. 
  
 “Termination Date” means the date
on which a Non-Employee Director ceases to serve as a member of the Board. 
  
 ARTICLE III 
 Administration 
  
 The Program shall be administered by the Board. The Board shall, subject to the terms of this Program and the Plan,
interpret this Program and the application thereof, and establish rules and regulations it deems necessary or desirable for the administration of this Program. All such interpretations, rules and regulations shall be final, binding and conclusive.
The Board may delegate administrative duties under the Program to one or more agents, as it shall deem necessary or advisable. 
  

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 ARTICLE IV 
 Director Awards 
  
 Section 4.1.
Director Options. 
  
 On the first trading day immediately
following the Corporation’s Annual Meeting of Stockholders each year, each person who on such date is a Non-Employee Director shall receive an option to purchase 10,000 shares of Common Stock at an exercise price equal to the Fair Market Value
of a share of Common Stock on such date. Director Options shall become exercisable with respect to all of the shares of Common Stock subject to such option as of the first anniversary of the date of grant, provided the Non-Employee Director
continues to serve on the Board through such anniversary date. If the Non-Employee Director does not continue to serve on the Board through such anniversary date, his or her Director Option shall be forfeited, provided that if the Non-Employee
Director’s termination of service is on account of death or Disability the Director Option shall become exercisable in full and shall remain exercisable during the one-year period following such termination. Director Options shall expire on the
earliest of (i) the tenth anniversary of the date of grant, (ii) 90 days after the date on which the Non-Employee Director’s service as such terminates, provided that if such service terminates on account of death or Disability, Director
Options granted to such Non-Employee Director will expire one year after the date of termination of service or (iii) the date on which such option expires or is exercised or forfeited pursuant to the terms of this Program and the Plan. 

 
 Section 4.2. Quarterly Awards. 
  
 (a) Eligibility for Quarterly Awards. On the last trading day of each
respective calendar quarter, each Non-Employee Director will be eligible to receive either (i) $7,500 or (ii) a number of shares of Common Stock determined by dividing $7,500 by the Fair Market Value of a share of Common Stock on such date.
Fractional shares will be disregarded. 
  
 (b) Election.
Prior to each Program Year, Non-Employee Directors will make an election as to whether they wish to receive their Quarterly Awards for such Program Year in the form of cash or Director Shares, and if they wish to receive their Quarterly Awards in
Director Shares, whether they wish to receive such Director Shares on a deferred basis. If the Non-Employee Director makes no election, he or she will receive cash. A person who becomes a Non-Employee Director after the first day of any Program Year
shall be permitted to make the election described in this Section 4.2(b) not later than 30 days after becoming a Non-Employee Director, and such election shall apply to subsequent Quarterly Awards earned during such Program Year. 
  
 (c) Payment of Awards. For directors who are to receive cash or
non-deferred Director Shares, the Company shall pay such cash, or issue such non-deferred Director Shares, promptly following the day on which the Non-Employee Director becomes eligible to receive such cash or non-deferred Director Shares. For
directors who elect to receive deferred Director Shares, such deferred Director Shares will be distributed in accordance with the terms of this Program. 
  

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 (d) Automatic Deferrals Prior to 2005. Notwithstanding anything to the contrary set forth herein,
all Quarterly Awards made prior to the 2005 Program Year will be made in the form of deferred Director Shares. 
  
 ARTICLE V 
 Deferral Accounts 
  
 Section 5.1. Deferral Account. All Director Shares deferred pursuant
to a Non-Employee Director’s Deferral Election under the Program shall be credited to a Deferral Account maintained on behalf of such Non-Employee Director as of the date on which, in the absence of a Deferral Election, the Non-Employee
Director would otherwise have received the Director Shares. A Non-Employee Director shall be fully vested at all times in the balance of his or her Deferral Account. 
  
 Section 5.2. Crediting of Share Equivalents. The Deferral Account of a Non-Employee Director will be credited with
Share Equivalents equal to the number of Director Shares the Non-Employee Director has elected to defer pursuant to Article IV. An amount equal to the number of Share Equivalents in a Non-Employee Director’s Deferral Account multiplied by the
dividend paid on a share of Common Stock on each dividend payment date shall be credited to the Non-Employee Director’s Deferral Account within 10 days after the dividend payment date and “invested” in additional Share Equivalents as
though such dividend credit was deferred Director Shares for such year. The number of shares of Common Stock to be paid to a Non-Employee Director on a Distribution Date, as defined in Section 6.1, shall be equal to the number of Share Equivalents
accumulated in the Deferral Account on the Distribution Date divided by the total number of distributions to be made. 
  
 ARTICLE VI 
 Payment of Deferral Accounts

  
 Section 6.1. Time and Method of Payment. Distribution
of a Non-Employee Director’s Deferral Account shall be made in a single distribution or in installments as elected by the Non-Employee Director prior to his or her Termination Date. If a Non-Employee Director’s Deferral Account is payable
in a single distribution, the distribution shall be made as soon as practicable after the first day of the Program Year following the Termination Date, but not earlier than six months after the Termination Date (the “Distribution Date”).
If a Non-Employee Director’s Deferral Account is distributed in installments, then the Non-Employee Director’s Deferral Account shall be distributed in substantially equal annual installments over the period, not longer than 10 years, as
elected by the Non-Employee Director, and commencing as soon as practicable following the Distribution Date. 
  
 Section 6.2. Change in Payment Election. A Non-Employee Director may elect to change the method of distribution in accordance with procedures
prescribed by the Board; provided that such election shall not be effective unless it is received by the Board prior to the Termination Date. 
  
 Section 6.3. Form of Distribution. The distribution of Share Equivalents shall be in whole shares of Common Stock with fractional shares
disregarded. 
  

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 ARTICLE VII 
 Payment Upon Death of a Non-Employee Director  
  
 Section 7.1. Payment to Beneficiary. In the event a Non-Employee Director dies before all Share Equivalents credited to his or her Deferral Account have been distributed, distribution of the Non-Employee
Director’s Deferral Account shall be paid or shall commence to the Non-Employee Director’s beneficiary in the form of distribution elected by the Non-Employee Director or in such other form designated by the Board in its sole
discretion. 
  
 Section 7.2. Designation of
Beneficiary. Each Non-Employee Director may file with the Corporate Secretary a written designation of one or more persons as such Non-Employee Director’s beneficiary or beneficiaries (both primary and contingent) in the event of the
Non-Employee Director’s death. Each beneficiary designation shall become effective only when filed in writing with the Corporate Secretary during the Non-Employee Director’s lifetime on a form prescribed by the Corporation. The filing with
the Corporate Secretary of a new beneficiary designation shall cancel all previously filed beneficiary designations. If a Non-Employee Director fails to designate a beneficiary, or if all designated beneficiaries of a Non-Employee Director
predecease the Non-Employee Director, then the Deferral Account shall be paid to the Non-Employee Director’s estate. 
  
 ARTICLE VIII 
 General 
  
 Section 8.1. Relationship to Plan. This Program has been adopted by
the Board under the terms of the Plan. Director Shares and Director Options granted hereunder shall be deemed to have been granted under the Plan. The number of shares of Common Stock available for issuance under the Plan shall be reduced by the
number of shares of Common Stock issued under this Program. 
  
 Section 8.2. Effective Date; Termination. This Program shall be effective as of the Effective Date. The Board may terminate this Program at any time. Termination of this Program shall not affect the payment of any amounts credited to
a Non-Employee Director’s Deferral Account. 
  
 Section 8.3.
Amendments. The Board may amend this Program as it shall deem advisable, subject to any requirements of applicable law, rule or regulation. No amendment may impair the rights of a Non-Employee Director to distribution of his or her Deferral
Account without the consent of such Non-Employee Director. 
  
 Section 8.4. Non-Transferability of Benefits. No benefit distributable at any time under the Program shall be subject in any manner to alienation, sale, transfer, assignment, pledge, attachment, or other legal process, or encumbrance
of any kind. Any attempt to alienate, sell, transfer, assign, pledge or otherwise encumber any such benefits, whether currently or thereafter distributable, shall be void. No person shall, in any manner, be liable for or subject to the debts or
liabilities of any person entitled to such benefits. If any person shall attempt to, or shall alienate, sell, transfer, assign, pledge or otherwise encumber his or her benefits under the Program, or if by any reason of his or her bankruptcy or other
event happening at any time, such 

  

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benefits would devolve upon any other person or would not be enjoyed by the person entitled thereto under the Program, then the Board, in its discretion, may
terminate the interest in any such benefits of the person entitled thereto under the Program and hold or apply them for or to the benefit of such person entitled thereto under the Program or his spouse, children or other dependents, or any of them,
in such manner as the Board may deem proper. 
  
 Section 8.5.
Adjustment. In the event of any stock split, stock dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, liquidation, spin-off or other similar change in capitalization or event, or any
distribution to holders of Common Stock other than a regular cash dividend, the number of Share Equivalents credited to each Deferral Account under the Program shall be appropriately adjusted by the Board. The decision of the Board regarding any
such adjustment shall be final, binding and conclusive. 
  
 Section 8.6. Forfeitures and Unclaimed Amounts. Unclaimed amounts shall consist of the Share Equivalents in the Deferral Account of a Non-Employee Director that are not distributed because of the Board’s inability, after a
reasonable search, to locate a Non-Employee Director or his or her beneficiary, as applicable, within a period of two (2) years after the Distribution Date upon which the payment of any benefits becomes due. Unclaimed amounts shall be forfeited at
the end of such two-year period. These forfeitures will reduce the obligations of the Corporation under the Program and the Non-Employee Director or beneficiary, as applicable, shall have no further right to his Deferral Account. 
  
 Section 8.7. Governing Law. This Program and all determinations made
and actions taken pursuant thereto shall be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws. 
  

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