EXHIBIT 10.26
AMENDMENT NO. 1
TO THE
TOWN SPORTS INTERNATIONAL HOLDINGS, INC.
2006 STOCK INCENTIVE PLAN
     WHEREAS, Town Sports International Holdings, Inc. (the “Corporation”)
maintains the Town Sports International Holdings, Inc. 2006 Stock Incentive Plan
(the “Plan”);
     WHEREAS, pursuant to Section 13.1 of the Plan, the Compensation Committee
of the Board of Directors of the Corporation (the “Compensation Committee”) may
at any time, and from time to time, amend, in whole or in part, any of or all
the provisions of the Plan; and
     WHEREAS, the Compensation Committee desires to amend the Plan, effective as
of August 4, 2006;
     NOW, THEREFORE, pursuant to Section 13.1 of the Plan, the Plan hereby is
amended, effective as of August 4, 2006, as follows:

  1.   Section 2.13 of the Plan is amended in its entirety to read as follows:

           “ ‘Detrimental Activity’ means:

  (a)   disclosing, divulging, furnishing or making available to anyone at any
time, except as necessary in the furtherance of Participant’s responsibilities
to the Company or any of its Affiliates, either during or subsequent to
Participant’s service relationship with the Company or any of its Affiliates,
any knowledge or information with respect to confidential or proprietary
information, methods, processes, plans or materials of the Company or any of its
Affiliates, or with respect to any other confidential or proprietary aspects of
the business of the Company or any of its Affiliate, acquired by the Participant
at any time prior to the Participant’s Termination;     (b)   any activity while
employed or performing services that results, or if known could reasonably be
expected to result, in the Participant’s Termination that is classified by the
Company as a termination for Cause;     (c)   (i) directly or indirectly
soliciting, enticing or inducing any employee of the Company or of any of its
Affiliates to be employed by a person or entity that is, directly or indirectly,
in competition with the business or activities of the Company or any of its
Affiliates; (ii) directly or indirectly approaching any such employee for these
purposes; (iii) authorizing or knowingly approving the taking of any such action
by a third party on behalf of any such person or entity, or assisting any such
person or entity in taking such action; or (iv) directly or indirectly
soliciting, raiding, enticing or inducing any person or entity (other than the
U.S. Government or its agencies) that is, or at any time from and after the date
of grant of the Award was, a customer of the Company or any of its Affiliates to

 

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      become a customer of the Participant or a third party for the same or
similar products or services that it purchased from the Company or any of its
Affiliates, or approaching any customer of the Company or any of its Affiliates
for such purpose, or authorizing or knowingly approving the taking of any action
by a third party for such purpose;

  (d)   the Participant’s Disparagement, or inducement of others to do so, of
the Company or any of its Affiliates or their past and present officers,
directors, employees or products;     (e)   the Participant’s owning, managing,
controlling, participating in, consulting with, rendering services for, or in
any manner engaging in, any business that, directly or indirectly, is
competitive with the business conducted by the Company or any of its Affiliates
within any metropolitan area in which the Company or any of its Affiliates
engages or has definitive plans to engage in such business, or the rendering of
services to such business if such business is otherwise prejudicial to or in
conflict with the interests of the Company or any of its Affiliates; or     (f)
  a material breach of any agreement between the Participant and the Company or
any of its Affiliates (including, without limitation, any employment agreement
or noncompetition or nonsolicitation or confidentiality agreement).

Unless otherwise determined by the Committee at grant, Detrimental Activity
shall not be deemed to occur after the end of the one-year period following the
Participant’s Termination.
For purposes of clauses (a), (c), (e) and (f) above, the Chief Executive Officer
of the Company has the authority to provide the Participant with written
authorization to engage in the activities contemplated thereby and no other
person shall have authority to provide the Participant with such authorization.
If it is determined by a court of competent jurisdiction that any provision in
the Plan in respect of Detrimental Activities is excessive in duration or scope
or otherwise is unenforceable, then such provision may be modified or
supplemented by the court to render it enforceable to the maximum extent
permitted by law.”

  2.   Section 4.2(b) of the Plan is amended in its entirety to read as follows:

“Subject to the provisions of Section 4.2(d), if there shall occur any such
change in the capital structure of the Company by reason of any stock split,
reverse stock split, stock dividend, subdivision, combination or
reclassification of shares that may be issued under the Plan, any
recapitalization, any merger, any consolidation, any spin off, any
reorganization or any partial or complete liquidation, or any other corporate
transaction or event having an effect similar to any of the foregoing (a
“Section 4.2 Event”), then (i) the aggregate number and/or

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kind of shares that thereafter may be issued under the Plan, (ii) the number
and/or kind of shares or other property (including cash) to be issued upon
exercise of an outstanding Award or under other Awards granted under the Plan,
(iii) the purchase price thereof, and/or (iv) the individual Participant
limitations set forth in Section 4.1(b) (other than those based on cash
limitations) shall be appropriately adjusted. In addition, subject to
Section 4.2(d), if there shall occur any change in the capital structure or the
business of the Company that is not a Section 4.2 Event (an “Other Extraordinary
Event”), including by reason of any extraordinary dividend (whether cash or
stock), any conversion, any adjustment, any issuance of any class of securities
convertible or exercisable into, or exercisable for, any class of stock, or any
sale or transfer of all or substantially all the Company’s assets or business,
then the Committee, in its sole discretion, may adjust any Award and make such
other adjustments to the Plan. Any adjustment pursuant to this Section 4.2 shall
be consistent with the applicable Section 4.2 Event or the applicable Other
Extraordinary Event, as the case may be, and in such manner as the Committee
may, in its sole discretion, deem appropriate and equitable to prevent
substantial dilution or enlargement of the rights granted to, or available for,
Participants under the Plan. Any such adjustment determined by the Committee
shall be final, binding and conclusive on the Company and all Participants and
their respective heirs, executors, administrators, successors and permitted
assigns. Except as expressly provided in this Section 4.2 or in the applicable
Award agreement, a Participant shall have no rights by reason of any Section 4.2
Event or any Other Extraordinary Event.”
     IN WITNESS WHEREOF, the Corporation has caused this Amendment to be
executed as of the 4th day of August, 2006.

            TOWN SPORTS INTERNATIONAL HOLDINGS, INC.
      By:   /s/ Richard Pyle         Name:   Richard Pyle        Title:   Chief
Financial Officer     

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