EX-10.26



 





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








 









 









	 	 	 	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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