UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported):
March 28, 2007
Town Sports International Holdings, Inc.
(Exact Name of Registrant as Specified in its Charter)
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Delaware
(State or other Jurisdiction
of Incorporation)
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333-114210
(Commission File Number)
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20-0640002
(I.R.S. Employer
Identification No.)
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888 Seventh Avenue, New York, New York
(Address of Principal Executive Offices)
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10106
(Zip Code)
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Registrants telephone number, including area code:
(212) 246-6700
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 5.02.
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Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
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On March 28, 2007, the Compensation Committee of the Board of Directors approved the
provisions of the form of Non-Qualified Stock Option Agreement pursuant to the Companys 2006 Stock
Incentive Plan. The form will be used under the 2006 Stock Incentive Plan to evidence
non-qualified stock options granted to Non-Employee Directors. The form of the Non-Qualified Stock
Option Agreement is filed as Exhibit 10.1 hereto and the terms and provisions of the form of the
Non-Qualified Stock Option Agreement are incorporated by reference herein.
On March 6, 2007, the Board of Directors approved certain compensation arrangements for
non-employee directors, which include grants of stock options. On March 28, 2007, the Compensation
Committee of the Board of Directors approved grants of options to purchase 1,000 shares of common
stock consistent with the terms of the Companys 2006 Stock Incentive Plan to each of the following
non-employee directors of the Company: Keith E. Alessi; Paul N. Arnold; and Jason M. Fish. The
Board also approved the grant of an option to purchase 5,000 shares of common stock shares to a
fourth non-employee director of the Company, Thomas J. Galligan III. Each option has an exercise
price equal to the last sales price reported for the Companys common stock on March 28, 2007, the
effective date of the Compensation Committees stock option grant approval. For Messrs. Alessi,
Arnold and Fish, the options will vest on the first anniversary of the grant dates. For Mr.
Galligan, the option will vest in three equal installments on the first, second and third
anniversaries of the grant date. The foregoing summary of the stock option grants is qualified in
its entirety by reference to the form of the Non-Qualified Stock Option Agreement approved by the
Compensation Committee and filed as an Exhibit hereto.
On March 29, 2007, the Board of Directors of the Company unanimously appointed Kevin McCall as
a director of the Company. In connection with Mr. McCalls appointment, the Board of Directors
increased the size of the Board to eight members. Mr. McCall will receive an annual retainer of
$20,000, and will be granted an option to purchase 5,000 shares of common stock in accordance with
the terms of the Town Sports International Holdings, Inc. 2006 Stock Incentive Plan, as amended.
On March 29, 2007, the Board of Directors of the Company unanimously reconstituted (1) the
Audit Committee, such that Keith E. Alessi (Chairman), Jason M. Fish and Thomas J. Galligan III
constitute the Audit Committee, (2) the Compensation Committee, such that Paul N. Arnold, Jason M.
Fish (Chairman) and Kevin McCall constitute the Compensation Committee, and (3) the Nominating and
Corporate Governance Committee, such that Paul N. Arnold, Jason M. Fish (Chairman) and Thomas J.
Galligan III constitute the Nominating and Corporate Governance Committee.
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Item 9.01.
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Financial Statements and Exhibits.
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(d) Exhibits.
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10.1
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Form of the Non-Qualified Stock Option Agreement for Non-Employee Directors pursuant to
the Companys 2006 Stock Incentive Plan.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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TOWN SPORTS INTERNATIONAL HOLDINGS, INC.
(Registrant)
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Date: April 2, 2007
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By:
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/s/ RICHARD PYLE
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Richard Pyle
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Chief Financial Officer
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EXHIBIT INDEX
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10.1
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Form of the Non-Qualified Stock Option Agreement for Non-Employee Directors pursuant to the
Companys 2006 Stock Incentive Plan.
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Exhibit 10.1
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR NON-EMPLOYEE DIRECTORS PURSUANT TO THE
TOWN SPORTS INTERNATIONAL HOLDINGS, INC.
2006 STOCK INCENTIVE PLAN
THIS AGREEMENT, dated as of [ ], 2007 (this
Agreement
), between Town Sports
International Holdings, Inc. (the
Company
) and [ ] (the
Participant
).
Preliminary Statement
The Compensation Committee of the Board of Directors of the Company (the
Committee
)
has authorized this grant of a non-qualified stock option (the
Option
) on [ ], 2007
(the
Grant Date
), to purchase the number of shares of the Companys common stock, par
value $0.001 per share (the
Common Stock
), set forth below to the Participant, as a
Non-Employee Director of the Company. Unless otherwise indicated, any capitalized term used but
not defined herein shall have the meaning ascribed to such term in the Town Sports International
Holdings, Inc. 2006 Stock Incentive Plan (as the same may be amended from time to time, the
Plan
). A copy of the Plan as in effect on the date hereof and prospectus has been
delivered to the Participant. By signing and returning this Agreement, the Participant
acknowledges having received and read a copy of the Plan as in effect on the date hereof and
prospectus and agrees to comply with the Plan, this Agreement and all applicable laws and
regulations.
Accordingly, the parties hereto agree as follows:
1.
Tax Matters
. No part of the Option granted hereby is intended to qualify as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended.
2.
Grant of Option
. Subject in all respects to the Plan and the terms and conditions
set forth herein and therein, the Participant is hereby granted an Option to purchase from the
Company [ ] shares of Common Stock (the
Option Shares
), at a price per share of $[ ] (the
Option Price
), which may not be less than Fair Market Value on the Grant
Date.
3.
Vesting and Exercise
.
(a) Except as set forth in
Section 3(c)
, the Option shall vest and become exercisable
in [one] installment[s] as provided below, which shall be cumulative. To the extent that the
Option has become vested and exercisable as provided below, the Option thereafter may be exercised
by the Participant, in whole or in part, at any time or from time to time prior to the expiration
or earlier termination of the Option as provided herein and in accordance with Section 6.3(d) of
the Plan, including, without limitation, the filing
of such written form of exercise notice, if any, as may be required by the Committee or the
Company and the payment in full of the Option Price multiplied by the number of Option Shares
underlying the portion of the Option exercised. Upon expiration of the Option, the Option shall be
canceled and no longer exercisable. The following table indicates each date upon which the
Participant shall be vested and entitled to exercise the Option with respect to the percentage of
the Option Shares indicated beside such date, provided that the Participant has not had a
Termination any time prior to such date (each of the dates set forth below being herein called a
Vesting Date
):
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Vesting Date
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Percentage of Option Shares
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[
]
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[ ]%
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(b) There shall be no proportionate or partial vesting in the periods prior to each Vesting
Date and all vesting shall occur only on the appropriate Vesting Date, provided that the
Participant has not had a Termination at any time prior to such Vesting Date.
(c) The Option will become fully vested on a Change in Control.
(d) In consideration for the grant of the Option and in addition to any other remedies
available to the Company, the Participant acknowledges and agrees that the Option is subject to the
provisions in the Plan regarding any Detrimental Activity. If the Participant engages in any
Detrimental Activity prior to the exercise of the Option, then the Option shall terminate and
expire as of the date the Participant engaged in such Detrimental Activity. As a condition of the
exercise of the Option, the Participant shall be required to certify (or be deemed to have
certified) at the time of exercise in a manner acceptable to the Company that the Participant is in
compliance with the terms and conditions of the Plan and that the Participant has not engaged in,
and does not intend to engage in, any Detrimental Activity. If the Participant engages in any
Detrimental Activity, then, in accordance with the terms of the Plan, the Company shall be entitled
to recover from the Participant, and the Participant shall pay over to the Company, an amount equal
to any gain realized as a result of the exercise (whether at the time of exercise or thereafter).
4.
Option Term
. The term of the Option shall be 10 years after the Grant Date and the
Option shall expire at 5:00 p.m. (New York City time) on the 10th anniversary of the Grant Date,
subject to earlier termination in the event of the Participants Termination as specified in
Section 5
.
5.
Termination
.
(a) Subject to
Section 4
, the terms of the Plan and this Agreement, the Option, to the
extent vested at the time of the Participants Termination, shall remain exercisable as provided in
Section 11.1(a) of the Plan.
(b) Any portion of the Option that is not vested as of the date of the Participants
Termination for any reason shall terminate and expire as of the date of such Termination.
6.
Restriction on Transfer of Option
. No part of the Option shall be subject to
Transfer other than by will or by the laws of descent and distribution. During the lifetime of the
Participant, the Option may be exercised only by the Participant or the Participants guardian or
legal representative. The Option shall not be subject to levy by reason of any execution,
attachment or similar process. Upon any attempt to Transfer the Option or in the event of any levy
upon the Option by reason of any execution, attachment or similar process contrary to the
provisions hereof, the Option shall immediately and automatically become null and void.
7.
Rights as a Stockholder
. The Participant shall have no rights as a stockholder
with respect to any Option Shares unless and until the Participant has become the holder of record
of the Option Shares. No adjustments shall be made to the Option, the Option Shares or the Option
Price for dividends in cash or other property, distributions or other rights in respect of any
Option Shares, except as otherwise may be specifically provided for in the Plan. No shares of
Common Stock shall be issued unless and until payment therefor has been made or provided and the
conditions set forth in Section 15.6 of the Plan are satisfied.
8.
Provisions of Plan Control
. This Agreement is subject to all the terms, conditions
and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to
such rules, regulations and interpretations relating to the Plan as may be adopted by the Committee
and as may be in effect from time to time. The Plan is incorporated herein by reference. If and
to the extent that this Agreement conflicts or is inconsistent with the terms, conditions and
provisions of the Plan, the Plan shall control, and this Agreement shall be deemed to be modified
accordingly. This Agreement contains the entire agreement and understanding of the parties with
respect to the subject matter hereof and supersedes any prior agreements and understandings
(whether written or oral) between the Company and the Participant with respect to the subject
matter hereof.
9.
Notices
. Any notice or communication given hereunder (each a
Notice
)
shall be in writing and shall be sent by personal delivery, by courier or by United States mail
(registered or certified mail, postage prepaid and return receipt requested), to the appropriate
party at the address set forth below:
If to the Company, to:
Town Sports International Holdings, Inc.
888 Seventh Avenue
New York, New York 10106
Attention: Richard Pyle
with a copy to:
Town Sports International Holdings, Inc.
888 Seventh Avenue (25
th
Floor)
New York, New York 10106
Attention: Robert Herbst, General Counsel
If to the Participant, to the address for the Participant on file with the Company; or such other address or to the attention of such other person as a party shall have specified by
prior Notice to the other party. Each Notice will be deemed given and effective upon actual
receipt (or refusal of receipt).
10.
No Obligation to Continue Directorship
. This Agreement is not an agreement of
directorship. This Agreement does not guarantee that the Company or its Affiliates will retain, or
to continue to retain, the Participant as a director or in any other capacity during all or any
part of the term of this Agreement, including but not limited to any period during which any Option
is outstanding, nor does it modify in any respect any right of the Company or of any Affiliate of
the Company to terminate or modify the Participants directorship or compensation.
11.
Waiver of Jury Trial
.
EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR ACTION
OF ANY PARTY HERETO.
12.
Governing Law
.
All questions concerning the construction, validity and
interpretation of this Agreement will be governed by, and construed in accordance with, the
domestic laws of the State of New York, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of New York.
13.
Consent to Jurisdiction
. In the event of any dispute, controversy or claim
between the Company or any Affiliate and the Participant in any way concerning, arising out of or
relating to the Plan or this Agreement (a
Dispute
), including without limitation any
Dispute concerning, arising out of or relating to the interpretation, application or enforcement of
the Plan or this Agreement, the parties hereby (a) agree and consent to the personal jurisdiction
of the courts of the State of New York located in New York County and/or the Federal courts of the
United States of America located in the Southern District of New York (collectively, the
Agreed Venue
) for resolution of any such Dispute, (b) agree that those courts in the
Agreed Venue, and
only those courts, shall have exclusive jurisdiction to determine any Dispute, including any
appeal, and (c) agree that any cause of action arising out of this Agreement shall be deemed to
have arisen from a transaction of business in the State of New York. The parties also hereby
irrevocably (i) submit to the jurisdiction of any competent court in the Agreed Venue (and of the
appropriate appellate courts therefrom), (ii) to the fullest extent permitted by law, waive any and
all defenses the parties may have on the grounds of lack of jurisdiction of any such court and any
other objection that such parties may now or hereafter have to the laying of the venue of any such
suit, action or proceeding in any such court (including without limitation any defense that any
such suit, action or proceeding brought in any such court has been brought in an inconvenient
forum), and (iii) consent to service of process in any such suit, action or proceeding, anywhere in
the world, whether within or without the jurisdiction of any such court, in any manner provided by
applicable law. Without limiting the foregoing, each party agrees that service of process on such
party pursuant to a Notice as provided in
Section 9
shall be deemed effective service of
process on such party. Any action for enforcement or recognition of any judgment obtained in
connection with a Dispute may enforced in any competent court in the Agreed Venue or in any other
court of competent jurisdiction.
14.
Counterparts
.
This Agreement may be executed (including by facsimile
transmission) with counterpart signature pages or in separate counterparts each of which shall be
an original and all of which taken together shall constitute one and the same agreement.
[Remainder of Page Left Blank]
IN WITNESS WHEREOF
, the parties have executed this Agreement as of the date and year first
above written.
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Company
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TOWN
SPORTS INTERNATIONAL
HOLDINGS, INC.
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By:
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Name:
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Title:
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Director
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[Name]
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