EXHIBIT 10.1
SEVERANCE AND RELEASE
AGREEMENT
This Agreement is between Bryan Adel
(for himself and anyone acting for him) (the “
Employee ”) and Rewards Network, 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) (collectively, the “ Employer ” or “
Rewards Network ”).
WHEREAS, the Employer and the
Employee currently are parties to that certain offer letter dated
March 14, 2003 (“ Offer Letter ”);
and
WHEREAS, the Employer and the
Employee wish to enter into this Severance and Release Agreement
(“ Agreement ”) regarding the Employee’s
remaining employment with the Employer, separation and a release of
claims.
THEREFORE, the parties agree as
follows:
1. Reassignment and
Termination . The parties acknowledge and agree that effective
August 3, 2006 (“ Reassignment Date ”
) , the Employee was reassigned from his positions as Senior
Vice President, General Counsel and Secretary of the Employer (and
any and all other offices and positions that the Employee held with
the Employer). Subject to the terms and conditions of this
Agreement and provided that the Employee signs and returns this
Agreement to the Employer within 21 days of his receipt thereof,
complies with this Agreement’s terms and does not revoke it
in accordance with Paragraph 25 below, the Employee shall remain
employed by the Employer in a special transitional role described
in Paragraph 2 below through December 31, 2006 (“
Termination Date ”), at which time his employment
shall terminate, provided that upon 10 business days’ advance
notice to the other, the Employee or the Employer, as the case may
be, may, in his or its sole discretion, accelerate the Termination
Date to a date before December 31, 2006 (and thereby shorten
the Transition Period) (such period between the Reassignment Date
and the Termination Date hereinafter referred to as the “
Transition Period ”).
2. The Transition Period .
Subject to the terms and conditions of this Agreement and provided
that the Employee signs and returns this Agreement to the Employer
within 21 days of his receipt thereof, complies with this
Agreement’s terms and does not revoke it in accordance with
Paragraph 25 below, during the Transition Period:
(a) the Employee will report to, and
perform such reasonable transitional duties and responsibilities
consistent with his prior position with the Employer as requested
by, the Employer’s President and Chief Executive Officer.
Such duties shall be limited to, assisting and cooperating with the
Employer to transition the Employee’s duties to such other
person or persons as are designated by the Employer and cooperating
in any pending litigation or other actual or potential claims
involving the Employer. The Employee agrees to perform all such
duties and responsibilities diligently and faithfully in the best
interests of the Employer. Notwithstanding the foregoing, during
the Transition Period, the Employee may spend reasonable time to
conduct a search for other employment, provided that such search
does not unreasonably interfere with the Employee’s duties
and responsibilities to the Employer during the Transition
Period;
(b) the Employer will continue to
pay the Employee his pro-rated base salary at his current
annualized rate, less required and authorized withholdings and
deductions, in accordance with the Employer’s normal payroll
schedule;
(c) the Employee will continue to
receive his current monthly car allowance; and
(d) subject to the first two
sentences of Paragraph 3 below, the Employee will continue to
participate in any available Employer employee benefit plans and
policies in which he currently
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participates, subject to the terms and
conditions of such plans and policies, which plans, policies, terms
and conditions the Employer may amend, modify, suspend or terminate
at any time for any or no reason in its discretion.
The Employee shall not be entitled
to receive any of the amounts or benefits set forth in
subparagraphs (b), (c) or (d) above at any time after the
Termination Date except as otherwise provided in this Agreement.
The parties acknowledge and agree that the Employee’s
participation in the Employer’s senior management bonus pool
shall be in accordance with the terms and conditions set forth in
Paragraph 6 of this Agreement.
3. Accrued Benefits .
Promptly following his execution of this Agreement, Employee shall
be paid for 80 hours of accrued and unused PTO, which Employee
acknowledges and agrees is the total amount of accrued and unused
PTO that he has as of the Reassignment Date. Employee acknowledges
and agrees that he shall not accrue or receive any PTO or PTO pay
for any period after the Reassignment Date. 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.
4. 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
after the Termination Date.
5. Return of Employer
Property . The Employee agrees that on or before the
Termination Date or upon the Employer’s request, whichever is
earlier, he will return 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, Blackberry, key card, computer
equipment, and software.
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6. Severance Arrangements .
Subject to the terms and conditions of this Agreement and provided
that the Employee signs and returns to the Employer the
Supplemental Release (attached as Exhibit A hereto) as set forth in
Paragraph 18 below and does not revoke it per its terms, signs and
returns this Agreement to the Employer within 21 days of his
receipt thereof, complies with this Agreement’s terms and
does not revoke it in accordance with Paragraph 25
below:
(a) the Employer shall continue to
pay the Employee his current base salary, in accordance with the
Employer’s payroll practices, for 12 months following the
Termination Date;
(b) the Employee shall be eligible
to participate in the 2006 senior management bonus pool based on a
pro-rated year through the Termination Date, with such bonus
payment to be determined in accordance with the terms and
conditions of such bonus program and paid, as applicable, on or
promptly following the date that bonus payments (if any) are made
generally to members of the Employer’s senior management
personnel; and
(c) the Employer shall pay the
Employee’s cost of continued health coverage under the
Employer’s group health plan pursuant to COBRA, at the
Employee’s current coverage level as of the Termination Date,
for 12 months following the Termination Date. The Employee shall be
solely responsible for the full costs of any COBRA coverage
thereafter.
The Employee acknowledges and agrees
that the severance benefits set forth in this Agreement are the
only severance benefits that the Employee is eligible to receive
from the Employer, and that such benefits are in lieu of any and
all severance benefits set forth in the Offer Letter.
The
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Employee further acknowledges and agrees that
there shall be no double-payment to, or double-recovery by, the
Employee of any severance benefit(s) from the Employer. Without
limiting the foregoing in any way, the Employee acknowledges and
agrees that he is not eligible for and will not receive any 2007
bonus payment or employee-dining privileges. Any and all payments
to the Employee under this Agreement shall be reduced by required
and authorized withholding and deductions.
7. Stock Options . The
Employer and the Employee acknowledge and agree that the Employee
shall be allowed to exercise any stock options that are fully
vested as of the Termination Date at any time up to and including
the 90 th calendar day following the
Termination Date, subject to and in accordance with any and all
other terms and conditions applicable to the exercise of such
options under the Employer’s 1996 Long Term Incentive Plan,
as in effect or amended from time to time (“ LTIP
”). The status of all unvested options as of the Termination
Date and all unexercised options after the 90
th
calendar day following
the Termination Date shall be determined in accordance with the
LTIP.
8. Protection of Proprietary
Interests .
(a) The Employee agrees that during
the Transition Period and 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.
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(b) The Employee agrees that during
the Transition Period and 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, 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 during
the Transition Period and 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 Employe
