EX-10.2






RESTRICTED STOCK AGREEMENT

PURSUANT TO THE

TOWN SPORTS INTERNATIONAL HOLDINGS, INC.

2006 STOCK INCENTIVE PLAN

(as amended and restated effective as of March 26, 2008)




     THIS AGREEMENT (this “Agreement”) made as of the ___ day of                     , 2008, by and between Town Sports
International Holdings, Inc. (the “Company”) and                      (the “Participant”).



WITNESSETH:




     WHEREAS, the Company has adopted the Town Sports International Holdings, Inc. 2006 Stock
Incentive Plan, as amended and restated effective as of March 26, 2008 (the “Plan”), which is
administered by a Committee appointed by the Company’s Board of Directors (the “Committee”); and



     WHEREAS, pursuant to Section 8.1 of the Plan, the Committee may grant to Eligible Employees
shares of its common stock, par value $0.001 per share (“Common Stock”), in the amount set forth
below; and



     WHEREAS, the Shares (as defined below) are to be subject to certain restrictions;



     NOW, THEREFORE, for and in consideration of the mutual promises herein contained, and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:



     1. Grant of Shares. Subject to the restrictions, terms and conditions of this
Agreement, the Company awarded the Participant [•] shares of validly issued Common Stock (the
“Shares”) on
                     ,
2008 (the “Grant Date”). Pursuant to Section 2 hereof, the Shares are
subject to certain restrictions, which restrictions relate to the passage of time as an employee of
the Company or its Affiliates. While such restrictions are in effect, the Shares subject to such
restrictions shall be referred to herein as “Restricted Stock.”



     2. Restrictions on Transfer. The Participant shall not sell, transfer, pledge,
hypothecate, assign or otherwise dispose of the Shares, except as set forth in the Plan or this
Agreement. Any attempted sale, transfer, pledge, hypothecation, assignment or other disposition of
the Shares in violation of the Plan or this Agreement shall be void and of no effect and the
Company shall have the right to disregard the same on its books and records and to issue “stop
transfer” instructions to its transfer agent.



     3. Restricted Stock.



          (a) Retention of Certificates. Promptly after the date of this Agreement, the
Company shall issue stock certificates representing the Restricted Stock unless, to the extent
permitted under applicable law, it elects to issue the Shares in the form of uncertificated shares
and recognize such ownership through an uncertificated book entry account maintained by the Company
(or its designee) on behalf of the Participant or through another similar method. The stock
certificates shall be registered in the Participant’s name and shall bear any legend required under
the Plan or Section 4(a) hereof Unless held in uncertificated book entry form, such stock
certificates shall be held in custody by the Company (or its designated agent) until the
restrictions thereon shall have lapsed. Upon the Company’s request, the Participant shall deliver
to the Company a duly signed stock power, endorsed in blank, relating to the Restricted Stock. If
the Participant receives a stock dividend on the Restricted Stock or the shares of




 









 







Restricted Stock are split or the Participant receives any other shares, securities, moneys or
property representing a dividend on the Restricted Stock (other than cash dividends on or after the
date of this Agreement) or representing a distribution or return of capital upon or in respect of
the Restricted Stock or any part thereof, or resulting from a split-up, reclassification or other
like changes of the Restricted Stock, or otherwise received in exchange therefor, or any warrants,
rights or options issued to the Participant in respect of the Restricted Stock (collectively “RS
Property”), the Participant will also immediately deposit with and deliver to the Company any of
such RS Property, including, without limitation, any certificates representing shares duly endorsed
in blank or accompanied by stock powers duly executed in blank, and such RS Property shall be
subject to the same restrictions, including, without limitation, the restrictions in this
Section 3(a) hereof, as the Restricted Stock with regard to which they are issued and shall
herein be encompassed within the term “Restricted Stock.”




          (b) Rights with Regard to Restricted Stock. Subject to Section 8, the
Participant will have the right to vote the Restricted Stock, to receive and retain any dividends
payable to holders of record of Restricted Stock on and after the transfer of the Restricted Stock
(although such dividends shall be treated, to the extent required by applicable law, as additional
compensation for tax purposes if paid on Restricted Stock and stock dividends will be subject to
the restrictions provided in Section 3(a)), and to exercise all other rights, powers and
privileges of a holder of Common Stock with respect to the Restricted Stock set forth in the Plan,
except that: (i) the Participant shall not be entitled to delivery of the stock certificate or
certificates representing the Restricted Stock until the Restriction Period shall have expired;
(ii) the Company (or its designated agent) shall retain custody of the stock certificate or
certificates representing the Restricted Stock and the other RS Property during the Restriction
Period; (iii) no RS Property shall bear interest or be segregated in separate accounts during the
Restriction Period; and (iv) the Participant shall not sell, assign, transfer, pledge, exchange,
encumber or dispose of the Restricted Stock during the Restriction Period.




          (c) Vesting. The Restricted Stock shall become vested and cease to be Restricted
Stock (but shall remain subject to Section 5) pursuant to the following schedule, which
shall be cumulative; provided that the Participant has not had a Termination any time prior to the
applicable vesting date:




	 	 	 	 	 
	Vesting Date	 	Number of Shares
	First Anniversary of Grant Date
	 	 	[25%]	 
	Second Anniversary of Grant Date
	 	 	[25%]	 
	Third Anniversary of Grant Date
	 	 	[25%]	 
	Fourth Anniversary of Grant Date
	 	 	[25%]	 






     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,
however, that no Termination has occurred prior to such date.



     The Restricted Stock will become fully vested on a Change in Control.



     The provisions of the second paragraph of Section 8.1 of the Plan regarding Detrimental
Activity shall apply to the Restricted Stock.



     When any shares of Restricted Stock become vested, the Company shall promptly issue and
deliver, unless the Company is using book entry, to the Participant a new stock certificate
registered in the



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name of the Participant for such shares of Restricted Stock without the legend set forth in
Section 4(a) and deliver to the Participant any related other RS Property, subject to
applicable withholding.



          (d) Forfeiture. The Participant shall forfeit to the Company, without compensation,
other than repayment of any par value paid by the Participant for the Shares (if any), any and all
Restricted Stock (but no vested Shares) and RS Property upon the Participant’s Termination of
Employment for any reason.




          (e) Withholding. Participant shall pay, or make arrangements to pay, in a manner
satisfactory to the Company, an amount equal to the amount of all applicable federal, state and
local or foreign taxes that the Company is required to withhold at any time. In the absence of
such arrangements, the Company or one of its Affiliates shall have the right to withhold such taxes
from the Participant’s normal pay or other amounts payable to the Participant, including, but not
limited to, the right to withhold any of the Shares otherwise deliverable to the Participant
hereunder. In addition, any statutorily required withholding obligation may be satisfied, in whole
or in part, at the Participant’s election, in the form and manner prescribed by the Committee, by
delivery of shares of Common Stock (including, without limitation, the Shares issued under this
Agreement).




          (f) Section 83(b). If the Participant properly elects (as required by Section 83(b)
of the Code) within 30 days after the issuance of the Restricted Stock to include in gross income
for federal income tax purposes in the year of issuance the fair market value of such shares of
Restricted Stock, the Participant shall pay to the Company or make arrangements satisfactory to the
Company to pay to the Company upon such election, any federal, state or local taxes required to be
withheld with respect to the Restricted Stock. If the Participant shall fail to make such payment,
the Company shall, to the extent permitted by law, have the right to deduct from any payment of any
kind otherwise due to the Participant any federal, state or local taxes of any kind required by law
to be withheld with respect to the Restricted Stock, as well as the rights set forth in Section
3(e). The Participant acknowledges that it is the Participant’s sole responsibility, and not
the Company’s, to file timely and properly the election under Section 83(b) of the Code and any
corresponding provisions of state tax laws if the Participant elects to utilize such election.




          (g) Delivery Delay. The delivery of any certificate representing the Restricted Stock
or other RS Property may be postponed by the Company for such period as may be required for it to
comply with any applicable federal or state securities law, or any national securities exchange
listing requirements and the Company is not obligated to issue or deliver any securities if, in the
opinion of counsel for the Company, the issuance of the Shares shall constitute a violation by the
Participant or the Company of any provisions of any applicable federal or state law or of any
regulations of any governmental authority or any national securities exchange.




          (h) Legend. All certificates representing the Restricted Stock shall have endorsed
thereon the following legends:





“The anticipation, alienation, attachment, sale, transfer, assignment,
pledge, encumbrance or charge of the shares of stock represented hereby are
subject to the terms and conditions (including forfeiture) of the Town
Sports International Holdings, Inc. (the “Company”) 2006 Stock Incentive
Plan (as the same may be amended or amended and restated from time to time,
the “Plan”), and an agreement entered into between the registered owner and
the Company evidencing the award under the Plan. Copies of such Plan and
agreement are on file at the principal office of the Company.”



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          (i) Any legend required to be placed thereon by applicable blue sky laws of any state.




     Notwithstanding the foregoing, in no event shall the Company be obligated to deliver to the
Participant a certificate representing the Restricted Stock prior to the vesting dates set forth
above.



     4. Securities Representations. The Shares are being issued to the Participant and
this Agreement is being made by the Company in reliance upon the following express representations
and warranties of the Participant.



          The Participant acknowledges, represents and warrants that:




          (a) The Participant has been advised that the Participant may be an “affiliate” within the
meaning of Rule 144 under the Securities Act of 1933, as amended (the “Act”) and in this connection
the Company is relying in part on the Participant’s representations set forth in this Section
5.




          (b) If the Participant is deemed an affiliate within the meaning of Rule 144 of the Act, the
Shares must be held indefinitely unless an exemption from any applicable resale restrictions is
available or the Company files an additional registration statement (or a “re-offer prospectus”)
with regard to the Shares and the Company is under no obligation to register the Shares (or to file
a “re-offer prospectus”).




          (c) If the Participant is deemed an affiliate within the meaning of Rule 144 of the Act, the
Participant understands that the exemption from registration under Rule 144 will not be available
unless (i) a public trading market then exists for the Common Stock of the Company, (ii) adequate
information concerning the Company is then available to the public, and (iii) other terms and
conditions of Rule 144 or any exemption therefrom are complied with; and that any sale of the
Shares may be made only in limited amounts in accordance with such terms and conditions.




     5. No Obligation to Continue Employment. This Agreement is not an agreement of
employment. This Agreement does not guarantee that the Company or its Affiliates will employ or
retain, or continue to employ or retain, the Participant during the entire, or any portion of the,
term of this Agreement, including, but not limited to, any period during which the Restricted Stock
is outstanding, nor does it modify in any respect the Company’s or its Affiliate’s right to
terminate or modify the Participant’s employment or compensation.



     6. Power of Attorney. The Company, its successors and assigns are hereby appointed
the attorneys-in-fact, with full power of substitution, of the Participant for the purpose of
carrying out the provisions of this Agreement and taking any action and executing any instruments
which such attorneys-in-fact may deem necessary or advisable to accomplish the purposes of this
Agreement, which appointment as attorneys-in-fact is irrevocable and coupled with an interest. The
Company, as attorney-in-fact for the Participant, may in the name and stead of the Participant,
make and execute all conveyances, assignments and transfers of the Shares and property provided for
in this Agreement, and the Participant hereby ratifies and confirms all that the Company, as said
attorney-in-fact, shall do by virtue hereof. Nevertheless, the Participant shall, if so requested
by the Company, execute and deliver to the Company all such instruments as may, in the judgment of
the Company, be advisable for such purpose.



     7. Rights as a Stockholder. The Participant shall have no rights as a stockholder
with respect to any Restricted Stock unless and until the Participant has become the holder of
record of the Shares, whether the Shares are represented by a certificate or through book entry or
another similar



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method, and no adjustments shall be made for dividends in cash or other property,
distributions or other rights in respect of any Shares, except as otherwise specifically provided
for in the Plan or this Agreement.



     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.
Capitalized terms in this Agreement that are not otherwise defined shall have the respective
meanings set forth in the Plan. 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
understanding of the parties with respect to the subject matter hereof and supersedes any prior
agreements between the Company and the Participant with respect to the subject matter hereof.



     9. Amendment. To the extent applicable, the Board or the Committee may at any time
and from time to time amend, in whole or in part, any or all of the provisions of this Agreement to
comply with Section 409A of the Code and the regulations thereunder or any other applicable law and
may also amend, suspend or terminate this Agreement subject to the terms of the Plan. The award of
Restricted Stock pursuant to this Agreement is not intended to be considered “deferred
compensation” for the purposes of Section 409A of the Code.



     10. 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 regular United States mail,
first class and prepaid, to the appropriate party at the address set forth below:




If to the Company, to:




Town Sports International Holdings, Inc.

5 Penn Plaza — 4th Floor

New York, NY 10001

Attention.: General Counsel



          If to the Participant, to the address of 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 shall only be given and effective upon
actual receipt (or refusal of receipt).




     11. Acceptance. As required by Section 8.2(b) of the Plan, the Participant shall
forfeit the Restricted Stock if the Participant does not execute this Agreement within a period of
60 days from the date the Participant receives this Agreement (or such other period as the
Committee shall provide).



     12. Non-Compete; Nonsolicitation.



          (a) (i) As an inducement to the Company to enter into this Agreement and to grant the Shares,
the Participant agrees that (A) during the Participant’s period of employment with the Company or
any of its Affiliates, and (B) if the Participant resigns or the Participant’s employment is
terminated by the Company or any of its Affiliates for any reason, during the period which the
Company or any of its Affiliates is paying the Participant severance compensation (which shall be
at a rate and an amount equal to the Participant’s base salary received by the Participant
immediately prior to the




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Participant’s Termination of Employment), such period not to exceed one year (the “Noncompete
Period”), the Participant shall not, directly or indirectly, own, manage, control, participate in,
consult with, render services for, or in any manner engage in, any business competing directly or
indirectly with the business as conducted by the Company or any of its Affiliates during the
Participant’s period of employment with the Company or any of its Affiliates or at the time of the
Participant’s Termination of Employment or with any other business that is the logical extension of
the Company’s and its Affiliates’ business during the Participant’s period of employment with the
Company or any of its Affiliates or at the time of the Participant’s Termination of Employment,
within any metropolitan area in which the Company or any of its Affiliates engages or has
definitive plans to engage in such business; provided, however, that (1) the Participant shall not
be precluded from purchasing or holding publicly traded securities of any entity so long as the
Participant shall hold less than 2% of the outstanding units of any such class of securities and
has no active participation in the business of such entity, and (2) the Company shall have notified
the Participant of its agreement to provide (or cause to be provided) such severance compensation
(x) in the event of resignation, within five days following the date of the Participant’s
Termination of Employment, or (y) in the event of termination, on or before the date of the
Participant’s Termination of Employment. Notwithstanding anything contained herein to the contrary,
the Participant’s agreement set forth in clause (B) above shall not apply if the date of the
Participant’s Termination of Employment occurs after the fifth anniversary of the Grant Date.




          (ii) During the Noncompete Period, the Participant shall not directly or indirectly (A) induce
or attempt to induce any employee of the Company or any of its Affiliates to leave the employ of
the Company or any of its Affiliates, or in any way interfere with the relationship between the
Company or any of its Affiliates and any employee thereof, (B) hire any person who was an employee
of the Company or any of its Affiliates at any time during the Participant’s employment period
except for such employees who have been terminated for at least six months, or (C) induce or
attempt to induce any customer, supplier, licensee, franchisor or other business relation of the
Company or any of its Affiliates to cease doing business with such member, or in any way interfere
with the relationship between any such customer, supplier, licensee, franchisor or business
relation, on the one hand, and the Company or any of its Affiliates, on the other hand.




          (iii) The provisions of this Section 13(a) shall survive any expiration or termination
of this Agreement, any Termination of Employment of the Participant, or any forfeiture of the
shares of Restricted Stock.




          (iv) If it is determined by a court of competent jurisdiction that any of the provisions of
this Section 13(a) 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.




          (b) The Participant acknowledges that the Participant may have access to certain confidential,
non-public and proprietary information (the “Confidential Information”), concerning the Company and
its Affiliates and their respective officers, directors, stockholders, employees, agents and
representatives and agrees that: (i) unless pursuant to prior written consent by the Company, the
Participant shall not disclose any Confidential Information to any Person for any purpose
whatsoever unless compelled by court order or subpoena; (ii) the Participant shall treat as
confidential all Confidential Information and shall take reasonable precautions to prevent
unauthorized access to the Confidential Information; (iii) the Participant shall not use the
Confidential Information in any way detrimental to the Company or any of its Affiliates and shall
use the Confidential Information for the exclusive purpose of effecting the Participant’s duties of
employment with the Company or any of its Affiliates; and (iv) the Participant agrees that the
Confidential Information obtained during the Participant’s employment with the Company shall remain
the exclusive property of the Company and its Affiliates, and the Participant




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shall promptly return to the Company all material which incorporates, or is derived from, all
such Confidential Information upon termination of the Participant’s employment with the Company or
any of its Affiliates. It is hereby agreed that Confidential Information does not include
information generally available and known to the public other than through the disclosure thereof
by or through the Participant or obtained from a source not bound by a confidentiality agreement
with the Company or any of its Affiliates.




          (c) The Participant hereby agrees that all inventions, innovations or improvements in the
method of conducting the business (including, without limitation, improvements, ideas and
discoveries, whether patentable or not) of the Company or any of its Affiliates, whether prior to
the date hereof or thereafter, in each case conceived or made by the Participant in the course of
the Participant’s employment with the Company or any of its Affiliates, belong to the Company and
its Affiliates, except for such inventions, innovations and improvements that have become part of
the public domain other than through the disclosure thereof by or through the Participant and are
not entitled to statutory or common law protection. The Participant will promptly disclose such
inventions, innovation or improvements to the Company and perform all actions reasonably requested
by the Company to establish and confirm such ownership by the Company or any of its Affiliates.




     13. 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.



     14. Miscellaneous.



          (a) This Agreement shall inure to the benefit of and be binding upon the parties hereto and
their respective heirs, legal representatives, successors and assigns.




          (b) 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.




          (c) 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 (i)
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, (ii)
agree that those courts in the Agreed Venue, and only those courts, shall have exclusive
jurisdiction to determine any Dispute, including, without limitation, any appeal, and (iii) 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 (A) submit
to the jurisdiction of any competent court in the Agreed Venue (and of the appropriate appellate
courts therefrom), (B) 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 (C) consent
to




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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 11 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.




          (d) This Agreement may be executed in one or more counterparts, all of which taken together
shall constitute one contract.




          (e) The failure of any party hereto at any time to require performance by another party of any
provision of this Agreement shall not affect the right of such party to require performance of that
provision, and any waiver by any party of any breach of any provision of this Agreement shall not
be construed as a waiver of any continuing or succeeding breach of such provision, a waiver of the
provision itself, or a waiver of any right under this Agreement.




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     IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above
written.



	 	 	 	 	 
	 	TOWN SPORTS INTERNATIONAL HOLDINGS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	PARTICIPANT

 	 
	
 	 
	Signature