Exhibit
10.9


 


	
  

  



 


November 25, 2002


 


 


Mr. Christopher J. Peluso


150 Columbus Avenue, Apt 7F


New York, NY 10023


 


Dear Chris:


 


It is my pleasure to extend to you an offer for the
position of Chief Operating Officer for Equinox Holdings, Inc. (the “Company”).  As Chief Operating Officer, you will report
directly to Chief Executive Officer and will have duties consistent with the
job description. The position offered is full-time employment to be performed
at our corporate headquarters in New York City, starting on or about December
3, 2002.


 


Your employment is subject to your execution of
Equinox’s Non-Disclosure and Non-Competition Agreement for senior executives, a
copy of which is attached. Your annual base salary will be $230,000, payable in
biweekly installments. As additional compensation, you are eligible to receive
an annual performance incentive as described more fully in Attachment 1 to this
letter. As an inducement to accept this offer of employment, the Company will
grant you options to purchase up to 85,000 shares of the common stock of the
Company at an exercise price equal to the current Fair Market Value (such Fair
Market Value not to exceed $15.00 per share), as described more fully in a
separate option agreement.  Your
compensation will be reviewed annually beginning on January 1, 2004 by the
Compensation Committee of the Board of Directors and may be increased but not
decreased.


 


After 90 days of employment, you are eligible for
single health insurance and group term life insurance (in an amount equal to
your base salary) coverage under our executive benefits program offered by
Health Net/Guardian. After 180 days of employment, you are entitled to three
weeks’ paid vacation and you may participate in the Company’s 401(k) plan with
a 25% match by the Company.  In addition
to your own employee membership, you are entitled to three complimentary
memberships.


 


 


	
  895 broadway

  	
   

  	
   

  	
   

  	
  new york, new york 10003

  	
   

  	
   

  	
   

  	
  tel 212.677.0180

  	
   

  	
   

  	
   

  	
  fax 212.777.9510

  



 


www.equinoxfitness.com


 
















 


If the terms of this offer letter are acceptable to
you, please indicate your agreement by countersigning both originals of this
letter and the Non-Disclosure and Non-Competition Agreement, returning one copy
of each to me. On behalf of the Board of Directors and the employees of Equinox,
I wish to express my excitement at the prospect of your joining us.


 


	
   

  	
  Sincerely
  yours,

  
	
   

  	
   

  
	
   

  	
  /s/ Harvey Spevak

  	
   

  
	
   

  	
  Harvey Spevak

  
	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
  Agreed and Accepted:

  	
   

  
	
   

  	
   

  
	
  /s/
  Christopher J. Peluso

  	
   

  	
   

  
	
  Christopher
  J. Peluso

  	
   

  
				



 
















 


2003
Performance Bonus Plan


Chief
Operating Officer


 


1.     This performance bonus plan
replaces all previous incentive plans.


 


2.     The incentive compensation
will be based upon an objective evaluation of the Company’s profitability.


 


3.     Corporate EBITDA On an annual basis, the actual earnings
before interest expense, income taxes and depreciation and amortization
(“EBITDA”) during the given fiscal year (as confirmed by the Company’s outside
auditors) will be compared with the amount of EBITDA forecast to be generated
during such period as outlined in the approved operating budget.


 


a.             If the actual EBITDA
is less than 90% of goal, no performance bonus will be awarded.


 


b.             If the actual EBITDA
is equal to or greater than 90% of goal but less than 95% of goal, a
performance bonus in the amount of $36,800 will be awarded.


 


c.             If the actual EBITDA
is equal to or greater than 95% of goal but less than 100% of goal, a
performance bonus incentive in the amount of $55,200 plus $7,360 for each one
percent (1%) in excess of 95% of goal, subject to a maximum performance bonus
of $92,000 will be awarded.


 


d.             If the actual EBITDA
is greater than 100% of goal, a performance bonus in the amount of $92,000 plus
$9,200 for each one percent (1%) in excess of 100% of goal will be awarded.


 


4.     Incentive compensation will
be paid no later than April 10, 2004.


 
















 


	
  

  



 


November
25, 2002


 


 


Mr.
Christopher J. Peluso


150
Columbus Avenue, Apt 7F


New
York, NY 10023


 


Re:          Non-Disclosure
and Non-Competition Agreement


 


Dear Chris:


 


This will confirm the terms of the
agreement between Equinox Holdings, Inc. with offices at 895 Broadway, New
York, New York (“Equinox”) and Mr. Christopher J. Peluso (“You”) regarding the protection of Confidential
Information and certain restrictions on Your competing with Equinox.


 


1.             GENERAL


 


Equinox agrees to employ You, and You agree to be
employed by Equinox as Chief Operating Officer for Equinox’s consolidated
businesses pursuant to the terms and provisions of the offer letter dated
November 25, 2002 (the “Offer Letter”). Your employment relationship with
Equinox will be on an “at will” basis, and either Equinox or You may terminate
the employment for any reason and at any time, without notice.


 


2.             WORKS
FOR HIRE


 


You agree that all work products including, but not
limited to, patents, copyrights, product developments, service developments,
ideas and concepts created by You during Your employment and which relate to
the business of Equinox shall remain the exclusive property of Equinox.


 


3.             CONFIDENTIALITY
AGREEMENT AND RESTRICTIVE COVENANTS


 


(a)           You recognize and acknowledge
that the lists and files relating to Equinox’s members, prospects, employees,
independent contractors and suppliers as well as its business plans, policies,
operating procedures and financial information (including operating budgets)
concerning Equinox or its shareholders and affiliates (collectively,
“Confidential Information”), as same may exist from time to time, are valuable,
special and unique assets of Equinox’s business. You agree that, except as required
by law, You will not disclose Confidential Information to any person, firm,
corporation, association or other entity for any reason or any purpose at all
and that


 


 


	
  895 broadway

  	
   

  	
   

  	
   

  	
  new york, new york 10003

  	
   

  	
   

  	
   

  	
  tel 212.677.0180

  	
   

  	
   

  	
   

  	
  fax 212.777.9510

  



 


www.equinoxfitness.com


 
















 


You
will not use such Confidential Information for Your own benefit or the benefit
of any third party(s). You also agree that all equipment, records, files,
memoranda, computer printouts and data, reports, correspondence and the like,
relating to the business of Equinox, that You might use or prepare or with
which You might come into contact, shall remain the sole property of Equinox.
You further agree to turn over immediately to Equinox any such material in Your
possession at such time as Your employment is terminated.


 


(b)           You
agree that, during Your employment and for a period of twelve (12) months
immediately following termination of Your employment, You will not, without
Equinox’s prior written consent, directly or indirectly, own, manage, be
employed by, operate, consult for or participate in, or be connected as an
officer, employee, partner, or otherwise with any fitness club within a twelve
(12) block radius of Equinox or any of its affiliates’ facilities; provided
however that, in the event that Your employment is terminated by Equinox
without cause, the period of time of your non-compete will be the same as the
equivalent number of months during which You receive severance pay as described
more fully in paragraph 3(c). Notwithstanding the foregoing, the parties agree
that You will be released from the terms of the preceding non-compete provision
in the event that Equinox fails to fulfill any of its financial obligations
under the Offer Letter or this letter agreement. You also agree that, during
Your employment and for a period of eighteen (18) months immediately following
termination of Your employment, You will not in any manner, directly or
indirectly, disparage Equinox or its employees and operations in any way. You
further agree that, during Your employment and for a period of eighteen (18)
months immediately following termination of Your employment, You will not in
any manner, directly or indirectly, encourage, induce or attempt to induce any
person who is then or was (within six (6) months before the date of such
inducement) an employee or consultant of Equinox to alter or terminate his or
her employment or consultation with Equinox or otherwise solicit, attempt to
hire or hire any such employee or consultant. If the period of time or area
herein specified should be adjudged unreasonable in any court proceeding, then
the period of time shall be reduced by such number of months or the area shall
be reduced geographically, or both, so that this covenant may be enforced during
such period of time and in such areas as are adjudged to be reasonable.


 


(c)           Equinox
agrees that, in the event that Your employment is terminated by Equinox during
the first six months of employment, You will be entitled to receive severance
pay equal to the equivalent of three months’ base salary. Equinox further
agrees that, in the event that Your employment is terminated by Equinox after
six months of employment but prior to the first anniversary of Your employment
date, You will be entitled to receive severance pay equal to the equivalent of
four months’ base salary. At each anniversary of Your employment date, such
severance pay will increase by one month’s base salary; provided however, that
the amount of such severance pay shall be limited to one-half of Your effective
base salary at the time of termination, less any applicable deductions as
required by law. All severance payments are payable at the option of Equinox,
either in one lump sum or in biweekly installments of no less the equivalent
biweekly installment of Your effective base salary at the time of termination,
less any applicable deductions as required by law. In the event that You are
terminated for cause, Equinox is not obligated to make any severance payment.  For the purposes of this Agreement, “cause”
shall be deemed to exist if:


 


(i)            You are terminated for
embezzlement of corporate funds;


 
















 


(ii)           You enter a business or
employment that Equinox reasonably determines to be detrimentally competitive
with the business of Equinox and substantially injurious to the financial
interests of Equinox;


(iii)          You willfully refuse to perform
services consistent with Your position;


(iv)          You engage in acts of dishonesty
or fraud in connection with Your employment; or


(v)           You engage in acts of misconduct
of such nature that Your continued employment could reasonably be expected to
adversely affect the business or properties of Equinox.


 


For
the purposes of determining “cause” in subparagraph 3(c)(iii) and 3(c)(v)
above, You will have thirty (30) days, after written notice from Equinox’s
Board of Directors, to remedy the reason(s) given by the Board in such notice
for the assertion of a “cause” event. If You fail to remedy the reason(s)
within such thirty (30) day period, Equinox may terminate You for cause.


 


(d)           You
agree that, upon a breach, threatened breach or violation by You of any of the
foregoing provisions of this paragraph 3, Equinox, in addition to all other
remedies, shall be entitled as a matter of right to injunctive relief in any
court of competent jurisdiction without being required to post bond or other
security and without having to prove the inadequacy of the available remedies
at law, to enjoin and restrain You and each and every other person,
partnership, association, corporation or organization concerned therein, from
the continuance of any action constituting such breach.


 


4.             NOTICES


 


Any and all notices or other communications given
under this Agreement shall be in writing and shall be deemed to have been duly
given on the date of delivery, if delivered in person, or four (4) days after
mailing, if mailed within the continental United States, postage prepaid by
certified or registered mail, return receipt requested, to the party entitled
to receive the same at his or its address first set forth above. We may
designate by notice to each other any new address for the purposes of this
Agreement as provided in this paragraph 4.


 


5.             MISCELLANEOUS
PROVISIONS


 


(a)           This instrument, in conjunction
with the Offer Letter, represents the entire Agreement between us and
supersedes any prior agreement or understanding with respect to the subject
matter hereof. In the event that a conflict arises between this Agreement and
the Offer Letter, the Offer Letter will govern. No provision hereof may be amended,
modified, terminated or revoked except by a writing signed by both of us.


 


(b)           This Agreement will be governed
by, and construed and enforced according to, the laws of the State of
New York without regard to its conflicts of law rules.


 
















 


(c)           No waiver of any breach or
default hereunder shall be considered valid unless in writing, and no such
waiver shall be deemed the waiver of subsequent breach or default of the same
or similar nature.


 


(d)           If any provision of this
Agreement shall be held invalid or unenforceable, such invalidity or
unenforceability shall affect only such provision and shall not in any manner
affect or render invalid or unenforceable any other severable provision of this
Agreement, and this Agreement shall be carried out as if any such invalid or
unenforceable provision were not contained herein.


 


(e)           We agree that we will
each take such action and execute and deliver such documents as may be
reasonably necessary to fulfill the terms of this Agreement.


 


(f)            The
agreements and covenants set forth in Paragraph 3 above shall
survive termination and expiration of this Agreement for the various time
periods specified therein.


 


If this letter accurately sets forth the terms of our
agreement, please countersign the enclosed copy and return it to us.


 


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  EQUINOX
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  /s/ Harvey Spevak

  	
   

  
	
   

  	
  Harvey Spevak

  
	
   

  	
   

  
	
  Accepted
  and Agreed to this

  	
   

  
	
  30th
  day of November 2002

  	
   

  
	
   

  	
   

  
	
  /s/
  Christopher J. Peluso

  	
   

  	
   

  
	
  Christopher
  J. Peluso