exv10w1



 





Exhibit
10.1



[Bally Total Fitness Letterhead]




________, 2007




[Name]

[Title]

[Address]




     Re: Restructuring Transaction Bonus


Dear [   ]:




     As you know, the board of directors of Bally Total Fitness Holding Corporation (“Bally”) has
determined that it is in the best interests of Bally and its shareholders to explore the
possibility of accomplishing a Restructuring. In that regard, in order to incentivize you to
assist Bally in accomplishing such Restructuring, Bally has determined to grant you a Restructuring
Transaction Bonus (the “Restructuring Bonus”) subject to the terms and conditions set forth in this
Letter Agreement.



     A. Restructuring Transaction Bonus



     You will be eligible for a Restructuring Bonus equal to $[ ] (less applicable tax withholding
thereon), subject to adjustment provided below in the event that:



     (i) the Restructuring occurs;



     (ii) you have performed your obligations under this Letter Agreement and, if applicable your
employment agreement with Bally, and are not in breach of any of the terms hereof or thereof; and



     (iii) you are employed by Bally on the Effective Date, or your employment has been terminated
by Bally without Cause or you resign for Good Reason within the six-month period prior to the
Effective Date.



     B. Reduction of Restructuring Bonus



     If the Restructuring has not occurred by September 30, 2007 the Restructuring Bonus will be
reduced by 15% for each month by which the Effective Date is after September 30, 2007; provided
that the Effective Date occurs by December 31, 2007. If the Effective Date does not occur by
December 31, 2007, then the Restructuring Bonus shall be reduced by 10% for each month by which the
Effective Date is after December 31, 2007; provided that no such



 









 







reductions shall occur if the Effective Date is after February 29, 2008. Schedule I
attached hereto sets forth the calculation of each such reduction.



     C. Payment of the Restructuring Bonus.



     If payable, the Restructuring Bonus will be paid as soon as practicable following the
Effective Date, but not later than March 15th of the year following the year in which
the Effective Date occurs.



     D. Definitions



     “Cause” shall have the meaning set forth in any employment agreement that you have entered
into with Bally prior to the date hereof, and if you have not entered into an employment agreement
shall mean a termination of your employment by Bally due to your (i) conviction of a crime,
including by a plea of guilty or nolo contendere, involving theft, fraud, perjury, or moral
turpitude; (ii) intentional or grossly negligent disclosure of confidential or trade secret
information of Bally to anyone not entitled to such information; (iii) omission or dereliction of
any statutory or common law duty of loyalty to Bally; (iv) failure to cure a material violation of
Bally’s Code of Conduct or any other written policy of Bally within thirty (30) days following
Bally’s written notice to your of such material violation and the steps required by you to effect
such cure; or (v) repeated failure to carry out the material components of your duties despite
specific written notice to do so by Bally.



     “Effective Date” means the date of effectiveness of the plan of reorganization which is the
subject of the Restructuring.



     “Good Reason” shall have the meaning set forth in any employment agreement that you have
entered into with Bally prior to the date hereof, and if you have not entered into an employment
agreement shall mean the occurrence of any of the following events without your express written
consent: (i) the assignment to you of any duties that are materially inconsistent with your
position (which may include status, offices, titles, and reporting requirements), authority,
duties, or responsibilities, which results in a material reduction in your position or authority;
(ii) a reduction in your base salary; or (iii) a change in your principal work location to a
location that is more than twenty (20) highway miles from your principal work location on the date
hereof, and increases your commuting distance in highway mileage. However, regardless of whether
the foregoing definition or a definition in your employment agreement applies, prior to terminating
for Good Reason, you must provide Bally with notice of Good Reason within thirty (30) days of any
event giving rise to Good Reason, and Bally shall have thirty (30) days in which to remedy any such
event. If you do not give notice of Good Reason within thirty (30) days of an event giving rise to
Good Reason, then you will not be eligible to terminate for Good Reason.



     “Restructuring” will occur at the time of the consummation of a plan of reorganization filed
under Chapter 11 of the U.S. Bankruptcy Code as to which the Company is a debtor.



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     E. Other Terms



     In consideration of the agreements of Bally set forth in this Letter Agreement, you agree to
promptly comply with the reasonable requests of and provide reasonable assistance to Bally and its
representatives in connection with the Restructuring.



     This Letter Agreement shall be governed in accordance with the laws of the Sate of Illinois
and the exclusive jurisdiction for enforcing this Letter Agreement shall be the federal and/or
state courts located in Cook County, Illinois. Each of the parties to this Letter Agreement
specifically waives all rights to a jury trial in connection with this Letter Agreement and any
disputes arising hereunder. Exercise by any party hereto of a remedy set forth in this Letter
Agreement shall not constitute an election of remedies. In the event that you are awarded any
damages for breach of the Letter Agreement by Bally, such damages shall be limited to contractual
damages and shall exclude (a) punitive damages and (b) consequential and/or incidental damages
(e.g., lost profits and other indirect or speculative damages). This Letter Agreement may be
executed in one or more counterparts.



     Except as expressly set forth in this Letter Agreement or as required to be modified pursuant
to the terms hereof, this Letter Agreement does not revoke, replace, modify, change or supercede
the terms and conditions set forth in your employment agreement with Bally.



     Please indicate your acceptance and agreement with the terms of this Letter Agreement by
signing and dating where indicated below.






	 	 	 	 	 
	 	Sincerely,
 	 
	 	BALLY TOTAL FITNESS HOLDING CORPORATION
 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 



	 	 	 
	Accepted and agreed to:
	 	 
	 
	 	 
	 
	 	 
	 

	 	 
	 

	 	Date







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