Document:

exv10w28

Exhibit 10.28

EXECUTIVE SEVERANCE AGREEMENT – SCOTT MILFORD

     Executive Severance Agreement, dated as of December 7, 2009 (this “Agreement”), between Town
Sports International, LLC (the “Company”) and Scott Milford (the “Executive”).

     WHEREAS, the Compensation Committee of the Board of Directors of Town Sports International
Holdings, Inc., the parent of the Company (the “Holdings”) has authorized this offer of Severance
Payments in the event of a Qualifying Termination of employment due to a Change in Control of
Holdings or the Company;

     WHEREAS, the Severance Payments in this Agreement are offered in exchange for the commitments
of the Executive as set forth herein.

     WHEREAS, by signing and returning this Agreement, the Executive acknowledges and agrees to
comply with the provisions of this Agreement and acknowledges that the execution of a Separation
and Release Agreement is a requirement for receiving the Severance Payments under this Agreement.

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements
herein contained, and intending to be legally bound hereby, the parties hereby agree as follows:

1. Definitions. As used herein, the terms identified below shall have the meanings
indicated:

     (a) “Cause” means the Company’s termination of the Executive’s employment with the Company as
a result of: (i) Executive’s willful failure to perform any material portion of his duties; (ii)
the commission of any fraud, misappropriation or misconduct by Executive that causes demonstrable
injury, monetarily or otherwise, to the Company or an affiliate; (iii) the conviction of, or
pleading guilty or no contest to, a felony involving moral turpitude; (iv) an act resulting or
intended to result, directly or indirectly, in material gain or personal enrichment to the
Executive at the expense of the Company or an affiliate; (v) any material breach of Executive’s
fiduciary duties to the Company or an affiliate as an employee or officer; (vi) a material
violation of the Town Sports International Code of Ethics and Business Conduct, as amended from
time to time, and such material policies and procedures of the Company; (vii) any material breach
of the terms of any agreement between Executive and the Company or any affiliate, including any of
the restrictive covenants imposed pursuant to the Holdings’ stock option and similar incentive
plans and the related stock option agreement issued thereunder, if such breach is reasonably likely
to result in a material injury to the Company or an affiliate.

     (b) “Change in Control” means:

          (i) The acquisition by any “person” or “group” (as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than BRS, the
BRS Investors and their respective Permitted Transferees (each as defined in the Credit Agreement),
of beneficial ownership (within the meaning of Rules 13d-3 and 13d-5 promulgated under the Exchange
Act) of 35% or more of either (A) the then outstanding shares of common stock of Holdings (the
“Outstanding Holdings Common

 

 

Stock”), or (B) the combined voting power of the then outstanding voting securities of
Holdings entitled to vote generally in the election of directors (the “Outstanding Holdings Voting
Securities”);

          (ii) Individuals who, as of the date of this Agreement, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to the date hereof whose election, or nomination
for election by Holdings’ stockholders, was approved or recommended by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the Board;

          (iii) Consummation of a reorganization, merger or consolidation involving Holdings (a
“Business Combination”), in each case, unless, following such Business Combination, all or
substantially all of the Persons who were the beneficial owners, respectively, of the Outstanding
Holdings Common Stock and Outstanding Holdings Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 65% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case may be, of the
Person resulting from such Business Combination (including, without limitation, a Person which as a
result of such transaction owns Holdings or all or substantially all of Holdings’ assets either
directly or through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the Outstanding Holdings Common Stock
and Outstanding Holdings Voting Securities, as the case may be;

          (iv) Sale or other disposition of all or substantially all the assets of Holdings or the
Company; or

          (v) Approval by the stockholders of Holdings or approval by the member(s) of the Company of a
complete liquidation, winding up or dissolution of Holdings or the Company, as the case may be.

     (b) “Code” means the Internal Revenue Code of 1986, as amended, and the regulations and other
guidance promulgated by the Treasury Department and the Internal Revenue Service thereunder.

     (c) “Constructive Termination” means the Executive’s voluntary termination of employment with
the Company as a result of (i) a material diminution in the Executive’s authority, duties, or
responsibilities, or a change in the Executive’s supervisory reporting relationship within the
Company, except as part of, and consistent with, an organizational change; (ii) a change, caused by
the Company, in geographic location of greater than 50 miles of the location at which the Executive
primarily performs services for the Company; or (iii) a material reduction in the Executive’s base
pay or incentive cash compensation; provided,

2

 

however, that none of the foregoing conditions or events shall constitute Constructive
Termination unless (A) the Executive shall have provided written notice to the Company within
ninety (90) days after the occurrence of such condition or event describing the condition or event
claimed to constitute Constructive Termination and (B) the Company shall have failed to remedy the
condition or event within thirty (30) days of its receipt of such written notice.

     (d) “Credit Agreement” means the Credit Agreement among Holdings, the Company, the Various
Lenders party thereto, and Deutsche Bank Trust Company Americas, dated February 27, 2007, as in
effect as of the date of this Agreement.

     (e) “Disability” means any medically determinable physical or mental impairment resulting in
the Executive’s inability to perform the duties of his or her position or any substantially similar
position, where such impairment is expected to result in death or is expected to last for a
continuous period of not less than six (6) months.

     (f) “Person” means any individual, firm, corporation, partnership, limited liability company,
trust, joint venture, governmental entity or other entity.

     (g) “Severance Payments” means the aggregate gross amount of severance payments determined in
accordance with Sections 2 and 3 of this Agreement to be paid to the Executive who is entitled to
receive such severance benefits under this Agreement.

     (h) “Termination Date” means the date on which the Executive has a termination of employment
from the Company.

2. Eligibility. The Executive shall be eligible for Severance Payments under this
Agreement following a Qualifying Termination as follows:

     (a) Qualifying Termination. The Company will pay Severance Payments under Section 3
of this Agreement on account of either of these events occurring within a period of six (6) months
following the date of a Change in Control:

          (i) involuntary termination of the Executive’s employment by the Company that is not for
Cause, or

          (ii) voluntary separation of the Executive as a result of a Constructive Termination.

     (b) Non-Qualifying Termination. Notwithstanding Section 2(a) of this Agreement,
nothing in this Agreement shall be construed to require the Company to pay severance benefits to
the Executive if the Executive terminates Employment with the Company as the result of:

          (i) voluntary separation (a separation, including retirement, initiated by the Executive),
other than a voluntary separation pursuant to Section 2(a)(ii);

          (ii) retirement, whether early retirement, retirement at normal retirement age or retirement
following normal retirement age;

3

 

          (iii) the Company having terminated such Executive’s employment for Cause;

          (iv) death;

          (v) Disability; or

          (vi) a separation or termination for any reason more than six (6) months following the date of
a Change in Control.

     (c) Separation Release Agreement. The eligibility for receipt of benefits under this
Agreement as described in Section 3 (the “Severance Benefits”) is expressly conditioned upon the
following: (i) the Executive’s signing of a release in which the Executive releases and/or waives
any and all claims the Executive may have against the Company within the time specified therein but
in no event later than fifty (50) days of the Termination Date and (ii) the release becoming
effective. The Company shall provide to Executive the release no later than three (3) days
following Executive’s Termination Date. If Executive does not timely execute and deliver to the
Company such release, or if Executive executes such release but revokes it, no Severance Benefits
shall be paid.

3. Amount, Payment and Timing of Severance.

     (a) Amount and Payment of Severance.

          (i) Unless otherwise provided herein, the Executive shall receive the following severance
payments: An amount equal to the sum of one (1) times the Executive’s annual base salary as of the
Executive’s Termination Date payable in a twelve (12) equal monthly installments (such twelve-month
period, the “Severance Period”), less all applicable withholding taxes, payable as described in
Section 3(b) below; provided however, that the Severance Period shall immediately terminate, and no
further amounts shall be due pursuant to this Section 3(i) in the event Executive has materially
breached any of the terms and conditions of this Agreement, including Section 4 hereunder.

          (ii) An amount equivalent to Executive’s pro-rata annual bonus (based on the number of days in
fiscal year through the Termination Date) with respect to the fiscal year in which the Termination
Date occurred that Executive would otherwise have been entitled to receive had Executive remained
in the employ of the Company through the payment date of such bonus. The bonus amount will be
based upon the bonus plan and targets approved by the Board of Directors of Holdings (or a
committee thereof) and assuming the approved bonus target had been met, which amount shall be
payable at such time as bonuses are paid to the Company’s employees generally but no later than
March 15 of the year following the year to which the bonus relates. This bonus payment shall be
subject to all other terms of Holdings’ bonus plan and shall be and subject to deduction for all
required income and payroll taxes.

          (iii) The Company shall continue Executive’s health and dental coverage (or provide comparable
substitute coverage), and continue to pay that portion of the premium that it pays for active
employees at such times as the Company makes such payments for its active employees on a monthly
basis until the earlier of (i) the last day of the Severance Period and (ii) the date on which
Executive is eligible for coverage under another group health and dental

4

 

insurance plan; provided however, that the Severance Period shall immediately terminate, and
no further amounts shall be due pursuant to this Section 3(iii) in the event Executive has
materially breached any of the terms and conditions of this Agreement, including Section 4
hereunder. Executive agrees to promptly notify the Company in writing in the event that Executive
is eligible for coverage under another such plan. If not otherwise covered by a group health or
dental plan as the end of the Severance Period, Executive shall be eligible for COBRA continuation
coverage on such date on the same terms and conditions as offered to other eligible plan
participants, and, if you elect such coverage, you shall be fully responsible for the associated
premiums.

          (iv) During the Severance Period, Executive and his immediate family will continue to have
Passport Memberships (or its equivalent) at no cost to such Executive (provided however that such
memberships shall cease in the event Executive has materially breached the terms and conditions of
this Agreement, including Section 4 hereunder). The aforementioned memberships are subject to all
of the Company’s membership rules, regulations and policies currently in effect and as may be
amended from time to time.

	 	(b)	 	Timing of Payments.

	 	(i)	 	The Severance Benefits described in section 3(a)(i) shall be
paid, minus applicable deductions, including deductions for tax withholding, in
equal payments on the regular payroll dates during the one-year period
following Executive’s termination of employment. Commencement of payments of
the Severance Benefits described in Section 3(a)(i) shall begin on the first
payroll date that occurs at least 60 days after the Termination Date, but which
may be accelerated by no more than 30 days (the “Starting Date”)
provided that Executive has satisfied the requirements of Section 2(c). The
first payment on the payment Starting Date shall include those payments that
would have previously been paid if the payments of the Severance Benefits had
begun on the first payroll date following the Termination Date. This timing of
the commencement of benefits is subject to Section 15 below.
	 
	 	(ii)	 	All Severance Benefits shall be completed by, and no further
Severance Benefits shall be payable after, December 31 of the second taxable
year following the year in which Executive’s termination of employment occurs.
	 
	 	(iii)	 	Executive’s entitlement to the payments of the Severance
Benefits described in the Section 3(a)(i) shall be treated as the entitlement
to a series of separate payments for purposes of Section 409A of the Internal
Revenue Code of 1986, as amended, (the “Code”).
	 
	 	(iv)	 	For purposes of this Agreement, “termination of employment”
shall mean a “separation of service” as defined in Section 409A of the Code and
Treasury Regulations Section 1.409A-1(h) without regard to the optional
alternative definitions available thereunder.

5

 

4. Non-Compete and Non-solicitation.

     (a) As an inducement to the Company to enter into this Agreement, the Executive agrees that
(i) during the Executive’s period of employment with the Company or any of its Affiliates, and (ii)
during the twelve (12)-month period following the Termination Date (the “Non-compete Period”), the
Executive 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 Executive’s period of
employment with the Company or any of its Affiliates or at the time of the Termination Date or with
any other business that is the logical extension of the Company’s and its Affiliates’ business
during the Executive’s period of employment with the Company or any of its Affiliates or at the
time of the Executive’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 the Executive shall not be precluded from purchasing or holding publicly
traded securities of any entity so long as the Executive 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. The Executive agrees that the following entities are examples of competitive businesses
and are not exclusive: Crunch, 24 Hour, Equinox, NY Health and Racquet Club, LA Fitness, Sports &
Health, Lifetime and Bally’s.

     (b) As an inducement to the Company to enter into this Agreement the Executive agrees that
during the Non-compete Period, the Executive shall not directly or indirectly (i) 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, (ii) hire any person who was an employee of the Company
or any of its Affiliates at any time during the Executive’s employment period except for such
employees who have been terminated for at least six months, or (iii) 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.

     (c) The provisions of this Section 4 shall survive any expiration or termination of this
Agreement.

     (d) If it is determined by a court of competent jurisdiction that any of the provisions of
this Section 4 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.

5. Confidential Information. The Executive expressly recognizes and acknowledges that
during the Executive’s employment with the Company, the Executive became entrusted with, had access
to, or gained possession of confidential and proprietary information, data, documents, records,
materials, and other trade secrets and/or other proprietary business information of the Company
that is not readily available to competitors, outside third parties and/or the public, including
without limitation, information about (i) current or prospective customers and/or suppliers,
(ii) employees, research, goodwill, production, and prices, (iii) business methods,

6

 

processes, practices or procedures; (iv) computer software and technology development, and
(v) business strategy, including acquisition, merger and/or divestiture strategies, (collectively
or with respect to any of the foregoing, the “Confidential Information”). The Executive agrees, by
acceptance of the right to receive Severance Payments under this Agreement, that: (i) unless
pursuant to prior written consent by the Company, the Executive shall not disclose any Confidential
Information for any purpose whatsoever unless compelled by court order of subpoena; (ii) the
Executive shall treat as confidential all Confidential Information and shall take reasonable
precautions to prevent unauthorized access to the Confidential Information; (iii) the Executive
shall not use the Confidential Information in any way detrimental to the Company or any of its
affiliates; and (iv) the Executive agrees that the Confidential Information obtained during the
Executive’s employment with the Company shall remain the exclusive property of the Company and its
affiliates, and the Executive shall promptly return to the Company all material which incorporates,
or is derived from, all such Confidential Information upon termination of the Executive’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 Executive or obtained from a source not bound by a
confidentiality agreement with the Company or any of its affiliates.

6. 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 United States mail (registered or
certified mail, postage prepaid and return receipt requested), to the appropriate party at the
address set forth below, 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 will be deemed given and
effective upon actual receipt (or refusal of receipt).

   

If to the Company, to:

Town Sports International, LLC

5 Penn Plaza (4th Floor)

New York, New York 10001

Attention: President

With a copy to: General Counsel

If to the Executive, to:

The address for the Executive on file with the Company.

7. No Obligation to Continue Employment. This Agreement is not an agreement of continued
employment. This Agreement does not guarantee that the Company or its Affiliates will employ,
retain or continue to, employ or retain the Executive, nor does it modify in any respect any right
of the Company or of any Affiliate of the Company to terminate or modify the Executive’s employment
or compensation.

8. 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

7

 

COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR ACTION OF ANY PARTY HERETO.

9. Governing Law. 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.

10. Consent to Jurisdiction. In the event of any dispute, controversy or claim between the
Company or any Affiliate and the Executive in any way concerning, arising out of or relating to
this Agreement (a “Dispute”), including without limitation any Dispute concerning, arising out of
or relating to the interpretation, application or enforcement of this Agreement, the parties hereby
(a) 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, (b) agree that those courts in the Agreed Venue, and only those courts, shall have
exclusive jurisdiction to determine any Dispute, including any appeal, and (c) 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 (i) submit to the
jurisdiction of any competent court in the Agreed Venue (and of the appropriate appellate courts
therefrom), (ii) 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 (iii) consent
to 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 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.

11. Counterparts. This Agreement may be executed (including by facsimile transmission)
with counterpart signature pages or in separate counterparts each of which shall be an original and
all of which taken together shall constitute one and the same agreement.

12. Waiver. The failure of the Company to enforce at any time any of the provisions of
this Agreement, or to require at any time performance of any of the provisions of this Agreement,
shall in no way be construed to be a waiver of these provisions, nor in any way to affect the
validity of this Agreement or any part thereof, or the right of the Company thereafter to enforce
every provision.

13. Severability and Interpretation. Whenever possible, each provision of this Agreement
and any portion hereof shall be interpreted in such a manner as to be effective and valid under
applicable law, rules and regulations. If any covenant or other provision of this Agreement (or

8

 

portion thereof) shall be held to be invalid, illegal, or incapable of being enforced, by reason of
any rule of law, rule, regulation, administrative order, judicial decision or public policy, all
other conditions and provisions of this Agreement shall, nevertheless, remain in full force and
effect, and no covenant or provision shall be deemed dependent upon any other covenant or provision
(or portion) unless so expressed herein. The parties hereto desire and consent that the court or
other body making such determination shall, to the extent necessary to avoid any unenforceability,
so reform such covenant or other provision or portions of this Agreement to the minimum extent
necessary so as to render the same enforceable in accordance with the intent herein expressed.

14. No Mitigation Required. The Executive shall not be required to mitigate the amount
provided for in Section 3 hereof by seeking other employment or otherwise, nor shall the amount of
any payment provided for in Section 3 hereof be reduced by any compensation earned by the Executive
as the result of employment by another employer after the date of termination, or otherwise.

15. Section 409A.

     (a) Potential Delay of Payment. Notwithstanding any other provisions of this
Agreement, any payment under this Agreement of the Severance Benefits that the Company reasonably
determines is subject to Section 409(a)(2)(B)(i) of the Code shall not be paid or payment commenced
until six months after Executive’s Termination Date of Executive’s death. On the earlies date on
which such payments can be made or commenced without violating the requirements of Section
409(a)(2)(B)(i) of the Code, Executive shall be paid, in a single cash lump sum, an amount equal to
the aggregate amount of all payments delayed pursuant to the preceding sentence.

     (b) Section 409A Savings Clause. It is intended that any amounts payable under this
Agreement shall either be exempt from Section 409A of the Code or shall comply with Section 409A
(including Treasury regulations and other published guidance related thereto) so as not to subject
Executive to payment of any additional tax, penalty or interest imposed under Section 409A of the
Code. The provisions of this Agreement shall be construed and interpreted to avoid the imputation
of any such additional tax, penalty or interest under Section 409A of the Code yet preserve (to the
nearest extent reasonably possible) the intended benefit payable to Executive. Notwithstanding the
foregoing, the Company makes no representations regarding the tax treatment of any payments
hereunder, and the Executive shall be responsible for any and all applicable taxes, other than the
Company’s share of employment taxes on the severance payments provided by the Agreement.

9

 

16. IN WITNESS WHEREOF, the parties have executed this agreement, effective as of the date and year
first above written.

	 	 	 	 	 	 	 
	 	 	TOWN SPORTS INTERNATIONAL, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Alex Alimanestianu 
	 	 
	 

	 	Name:
	 	Alex Alimanestianu
	 	 
	 

	 	Title:	 	Chief Executive Officer and
President	 	 
	 
	 	 	 	 	 	 
	 	 	Executive:	 	 
	 
	 	 	/s/ Scott Milford	 	 
	 	 	 	 	 
	 	 	Scott Milford	 	 

10exv10w30

Exhibit 10.30

EXECUTION COPY

TOWN SPORTS INTERNATIONAL, LLC

5 PENN PLAZA

NEW YORK, NY 10001

As of
December 7, 2009

Mr. James Rizzo

c/o Town Sports International Holdings, Inc.

5 Penn Plaza -4th Floor

New York, NY 10001

Dear Jim:

     This letter agreement (the “Agreement”) confirms the terms that Town Sports International, LLC
(the “Company”) is offering you in connection with your resignation from the employ of the Company
and its affiliates and from all officer and other positions that you currently hold with the
Company and its affiliates, including Town Sports International Holdings, Inc. (“TSI Holdings”).

1. Separation Date.

     (a) The employment relationship between you and the Company and its subsidiaries and
affiliates, as applicable, will end on December 22, 2009 (the “Separation Date”).

     (b) During the period between the date hereof and the Separation Date, you will receive your
base salary at the rate in effect on the date hereof, participate in the Company’s benefit plans in
accordance with their terms and your TSI Holdings equity will remain outstanding and continue to
vest. During this period, you will have no authority to act on behalf of the Company or bind the
Company and you will not give any person the appearance that you have such authority. Promptly
following the Separation Date, you will be paid for any accrued, but not taken, vacation days
(which we hereby agree equals two weeks) in accordance with the Company’s prevailing payroll
practices. Information regarding your ability to continue your health insurance coverage under the
Company’s group health plan pursuant to the federal “COBRA” law will be sent to you separately by
the applicable plan administrator following the Separation Date.

2. Separation Benefits. In return for your agreement (without revocation) to, and
compliance with, your commitments and obligations set forth in this Agreement, and subject to
the terms of this Agreement:

 

 

     (a) The Company will continue to pay you your base salary (at the rate in effect on the
Separation Date) for a period commencing on the Separation Date and
ending on September 30, 2010
(the “Severance Period”), payable in accordance with the Company’s prevailing payroll practices;
provided, however, that such payments will commence within 30 days after the expiration of the
revocation period (without revocation) and such first payment will include those payments that
would have previously been paid if these severance payments had begun on the first payroll date
following the Separation Date; provided, further, that (i) such payments will cease immediately
upon you having obtained employment or a full-time consulting
arrangement on or after July 1, 2010
or (ii) such payments will be reduced dollar-for-dollar by any other compensation (including,
part-time consulting fees) that you receive for services rendered on or after July 1, 2010 but
before September 30, 2010. You agree to give the Company prompt written notice of any employment or
engagement to provide services to any third party that may occur during the Severance Period.

     (b) If you timely elect to continue your health coverage through COBRA, the Company will pay
that portion of the premium that it would have paid if you were an active employee with the same
level of coverage through the end of the Severance Period or, if earlier, until you become eligible
for comparable coverage.

     (c) Until the end of the Severance Period, each of you and your wife may continue to utilize a
Passport Membership (or its equivalent) at no cost, and be entitled to receive Personal Training
sessions at employee rates. The aforementioned memberships are subject to all of the Company’s
membership rules, regulations and policies currently in effect and as may be amended from time to
time.

     (d) The Company will pay up to $2,500 for your legal fees incurred in connection with the
negotiation of this Agreement upon presentment of an invoice.

     (e) You shall be reimbursed for up to $10,000 of outplacement assistance with a firm of your
own choosing upon presentment of an invoice. Such services must be commenced within 60 days of the
Separation Date.

     (f) All payments described herein will be subject to deduction for all required income and
payroll taxes.

3. Release.

     (a) In consideration of the obligations contained in Section 2 of this Agreement, you
(for yourself, your heirs, legal representatives, executors or administrators (collectively, your
“Representatives”)) hereby release and forever discharge the Company, TSI Holdings, their
respective subsidiaries and affiliates and each of their respective officers, employees, directors
and agents (collectively, the “Released Parties”) from any and all claims and rights which you may
have against them, and you hereby specifically release, waive and forever hold them harmless from
and against any and all such claims, liability, causes of action, compensation, benefits, damages,
attorney fees, costs or expenses, of whatever nature or kind and whether known or unknown, fixed or
contingent, and by reason of any matter, cause, charge, claim, right or action whatsoever, which
have arisen at any time up to and including the date of execution of

-2-

 

this Agreement, including, but not limited to, those arising during or in any manner out of
your employment with, or your resignation from, the Company, or anything else that may have
happened up to and including the day you sign this Agreement. The rights, claims, causes of action,
and liabilities that you are releasing and waiving include, but are not limited to, those that
concern, relate to, or might arise out of the following: salary, overtime, bonuses, equity and
severance arrangements, benefit plans; commissions; breach of express or implied contract or
promise; harassment, intentional injury or intentional tort, fraud, misrepresentation, battery,
assault, defamation, breach of fiduciary duty, tort or public policy claims, whistleblower claims,
negligence (including negligent hiring, retention and/or supervision), wrongful or retaliatory
discharge, infliction of emotional injury, or any other facts or claims; retirement, stock option
or any other benefits; the Equal Pay Act (29 U.S.C. §206(d), et seq.); the Age Discrimination in
Employment Act (ADEA) (29 U.S.C. §621, et seq.); Title VII of the Civil Rights Act of 1964 (42
U.S.C. §2000e, et seq.); ERISA (the Employee Retirement Income Security Act of 1974 (29 U.S.C.
§1001, et seq.) other than any vested ERISA benefit; COBRA (the Consolidated Omnibus Budget
Reconciliation Act of 1986, 29 U.S.C. §21161, et seq.); the federal and NY WARN Act; the American
with Disabilities Act (42 U.S.C. §12101, et seq.); the National Labor Relations Act and the Labor
Management Relations Act, 29 U.S.C. §141 et seq.; the Family and Medical Leave Act (29 U.S.C.
§2601, et seq.); the United States Constitution; the Civil Rights Act of 1991; the Civil Rights
Acts of 1866 or 1871 (42 U.S.C. §§1981,1983,1985, et seq.); retaliation under any federal, state,
or local law; any claims for costs or attorney fees; the fair employment practices (FEP) laws and
employment-related laws of any federal, state, or local jurisdiction (including the New York State
Human Rights Law, New York Administrative Code), and any other federal, state, city, county or
other common law, law, or ordinance, including but not limited to those where you work and/or
reside. You are not releasing any rights or claims that arise following the effective date of this
Agreement.

     (b) Notwithstanding the foregoing, the release set forth in Section 3(a), will not apply to
(i) the obligations of the Company under this Agreement, (ii) your vested benefits under the
Company’s 401(k) plan, and (iii) the Company’s obligations under the Option Plans (as defined and
set forth below in Section 4), and any related option agreement or vested benefit(s) to which you
are legally entitled. You further agree that the payments and benefits described in this Agreement
will be in full satisfaction of any and all claims for payments or benefits, whether express or
implied, that you may have against the Company, TSI Holdings or any of their respective
subsidiaries or affiliates arising out of your employment relationship, your service as an employee
or officer of the Company, TSI Holdings or any of their respective subsidiaries or affiliates and
your resignation therefrom. You hereby acknowledge and confirm that you are providing the release
and discharge set forth in this Section 3 only in exchange for consideration in addition to
anything of value to which you are already entitled.

     (c) You represent and agree that you have not filed any lawsuits against any Released Party,
or filed or caused to be filed any charges or complaints against any Released Party with any
municipal, state or federal agency charged with the enforcement of any law. Pursuant to and as a
part of your release and discharge of the Released Parties, you agree, except for your right, if
any, to bring a proceeding pursuant to the Older Workers Benefit Protection Act to challenge the
validity of the release of claims pursuant to the Age Discrimination in Employment Act contained in
Section 3 of this Release, and consistent with the EEOC Enforcement Guidance On

-3-

 

Non-Waivable Employee Rights Under EEOC-Enforced Statutes dated April 11,1997, and otherwise
to the maximum extent permitted by applicable law, not to sue or file a charge or complaint against
any Released Party in any forum or assist or otherwise participate willingly or voluntarily in any
claim, suit, action, investigation or other proceeding of any kind which relates to any matter that
involves any Released Party, and that occurred up to and including the date of your execution of
this Agreement, unless as required to do so by court order, subpoena or other directive by a court,
administrative agency or legislative body, other than to enforce this Agreement. With respect to
the claims you are waiving herein, you are waiving any right to receive money or any other relief
in any action instituted on your behalf by any other person, entity or government agency.

     (d) You expressly understand and acknowledge that it is possible that unknown losses or claims
exist or that present losses may have been underestimated in amount or severity, and that you
explicitly took that into account in determining the amount of consideration to be paid for the
giving of this Release, and a portion of said consideration and the mutual covenants contained
herein, having been agreed between the parties with the knowledge of the possibility of such
unknown claims, were given in exchange for a full satisfaction and discharge of all such claims.

     (e) Nothing in this release will affect the Company and TSI Holdings’ obligation to indemnify,
defend and hold you harmless to the fullest extent allowable by applicable law and their respective
charter and by-laws with respect to your acts or omissions in your capacity as an officer of the
Company, TSI Holdings and their respective subsidiaries and affiliates. The Company will continue
to maintain directors’ and officers’ liability insurance with respect to actions or omissions by
you as an officer of TSI Holdings, the Company (or any of its subsidiaries) in the same manner that
it maintains such insurance for other officers and directors.

4. Equity. Your options to purchase TSI Holdings common stock granted pursuant to
TSI Holdings’ 2006 Stock Option Incentive Plan, as amended (the “Option Plan”), to the
extent vested as of the Separation Date, will remain outstanding for the post-termination
exercise period specified in Option Plan and any applicable agreement. Such vested options
will expire at the conclusion of such post-termination exercise period to the extent not
previously exercised. That portion of the stock options that remain unvested as of the
Separation Date as well as any unvested shares of TSI Holdings restricted common stock will
be forfeited on the Separation Date without any payment.

5. No Other Compensation or Benefits. Except as otherwise specifically provided
herein, you will not be entitled to any compensation or benefits or to participate in any
past, present or future employee benefit programs or arrangements of the Company, TSI
Holdings or any of their respective subsidiaries or affiliates on or after the Separation
Date.

6. Return of Company Property. As of the date of this Agreement, you hereby
represent that you have delivered to the Company all Company property and equipment in your
possession or control, including, but not limited to, any and all records, manuals, customer
lists, notebooks, computers, computer programs and files, Company credit cards, papers,
electronically stored information and documents kept or made by you in connection with your
employment and you will not retain any copies thereof. You also represent that you have left
intact all electronic

-4-

 

Company documents or files, including those that you developed or helped develop. You are required
to return all such property whether or not you sign this Agreement.

7. Nondisclosure of Confidential Information.

     (a) You acknowledge and agree that in the course of your employment with the Company,
you have acquired certain confidential company information which you knew or understood was
confidential or proprietary to the Company and which, as used in this Agreement, means:
information belonging to or possessed by the Company which is not available in the public
domain or not released by some third-party through no fault of yours, including, without
limitation (i) information received from the customers, suppliers, vendors, employees or
agents of the Company under confidential conditions; (ii) customer and prospect lists, and
details of agreements and communications with customers and prospects; (iii) sales plans and
projections, product pricing information, acquisition, expansion, marketing, financial and
other business information and existing and future products and business plans of
the Company; (iv) the Company’s confidential accounting, tax, or financial information,
results, procedures and methods; (v) information relating to existing claims, charges and
litigations; (vi) sales proposals, demonstrations systems, sales material; and (vii) employee
information (including, but not limited to, personnel, payroll, compensation and benefit data
and plans), including all such information recorded in manuals, memoranda, projections,
reports, minutes, plans, drawings, sketches, designs, formula books, data, specifications,
software programs and records, whether or not legended or otherwise identified by the Company
as confidential information, as well as such information that is the subject of meetings and
discussions and not recorded. You understand that such confidential company information has
been disclosed to you for the Company’s use only. You understand and agree that you (i) will
not disclose or communicate confidential information to any person or persons; and (ii) will
not make use of confidential information on your own behalf, or on behalf of any other person
or persons. You will give immediate notice to the Company if you are ordered by a court or
otherwise compelled by law to reveal any confidential information to any third party.

     (b) In view of the nature of your employment and the nature of the confidential information to
which you have had access to, you acknowledge and agree that any unauthorized disclosure to any
person or persons of confidential information, or other violation or threatened violation of this
Agreement (including, without limitation, Sections 8(a) or 8(b)) will cause irreparable damage to
the Company and that, therefore, the Company will, in addition to any other available remedy, be
entitled to an injunction prohibiting you from any further disclosure, attempted disclosure,
violation or threatened violation of this Agreement and the Company will be entitled to recover the
reasonable attorneys fees and costs incurred in enforcing its rights.

     (c) The obligations described in this Section 7 are in addition to, and in no way limit, your
obligations regarding the protection of confidential information as described in the agreement that
you executed at the inception of your employment with the Company (the “Original Confidentiality
Agreement”), the Executive Severance Agreement between you and the Company (the “Executive
Severance Agreement”) or in any option or other equity award agreement between you and the Company,
which provisions are incorporated by reference herein. In the event of a conflict between the
provisions of this Section 7 and the obligations

-5-

 

described in the Original Confidentiality Agreement, the Executive Severance Agreement or such
award agreement, the provisions that are more restrictive upon you will govern.

8. Non-Solicitation and Non-Competition Obligations.

     (a) Non-Solicitation. You agree that from the date hereof through the one year
anniversary of the Separation Date, you will not, directly or indirectly: (i) solicit or recruit
for employment, offer employment to, or hire, on a temporary, permanent or contract basis, anyone
who was employed by the Company during the last six months of your employment (a “Covered
Employee”); or (ii) encourage or persuade any Covered Employee to leave the Company.

     (b) Non-Competition. During the period from the date hereof through September 30,
2010, you will 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 at the Separation Date or with
any other business that is the logical extension of the Company’s and its Affiliates’ business at
the Separation Date, 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 you will not be
precluded from purchasing or holding publicly traded securities of any entity so long as you hold
less than 2% of the outstanding units of any such class of securities and have no active
participation in the business of such entity. For purposes of this Section 8(b), the term
“Affiliate” will have the meaning ascribed to such term in the 2006 Stock Incentive Plan.

     (c) The obligations described in this Section 8 are in addition to, and in no way limit, your
obligations regarding noncompetition and non-solicitation as described in the Original
Confidentiality Agreement, the Executive Severance Agreement or in any option or other equity award
agreement with the Company, which provisions are incorporated by reference herein, except that,
notwithstanding anything to the contrary contained in such agreements, the restrictions on
competition (but not solicitation) contained therein shall end on September 30, 2010. In the event
of a conflict between the provisions of this Section 8 and the obligations described in the
Original Confidentiality Agreement, the Executive Severance Agreement or such award agreement, the
provisions that are more restrictive upon you will govern.

9.
Non-Disparagement; Cooperation.

     (a) You understand and agree that as a condition for payment to you of the consideration
herein described, you, on your behalf and on behalf of your Representatives, will not (and your
Representatives will not) at any time engage in any form of conduct, or make any statements or
representations that disparage or otherwise impair the reputation, goodwill, or commercial
interests of the Company, its management, stockholders, subsidiaries, parent, and/or other
affiliates.

     (b) From and after the Separation Date, you will (i) cooperate in all reasonable respects with
the Company and its affiliates and their respective directors, officers, attorneys and experts in
connection with the conduct of any dispute, action, proceeding, investigation or litigation
involving the Company or any of its affiliates, including, without limitation, any such dispute,
action, proceeding, investigation or litigation in which you are called to testify and (ii)

-6-

 

promptly respond to all requests by the Company and its affiliates relating to information
concerning the Company which may be in your possession. The Company will, as a condition to your
obligations under this Section 9(b), reimburse you for any reasonable out of pocket expenses and
costs incurred as a result of such cooperation (including all reasonable, out-of-pocket attorney
fees), provided that such expenses have been approved in writing in advance by an executive officer
of the Company.

     (c) You hereby consent to the disclosure of information about you that TSI Holdings is
required to disclose in its Annual Report on Form 10-K, its Proxy Statement and in any other
report(s) required to be filed with the Securities and Exchange Commission under the Securities Act
of 1933, the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder.

10. Waiver of Rights. No delay or omission by the Company in exercising any right under
this Agreement will operate as a waiver of that or any other right. A waiver or consent given by
the Company on any one occasion will be effective only in that instance and will not be construed
as a bar or waiver of any right on any other occasion.

11. Applicable Law. This Agreement will be interpreted and construed by the laws of the
State of New York, without regard to conflict of laws provisions. You hereby irrevocably submit to
and acknowledge and recognize the jurisdiction of the courts of the State of New York, or, if
appropriate, a federal court within New York (which courts, together with all applicable appellate
courts, for purposes of this agreement, are the only courts of competent jurisdiction), over any
suit, action or other proceeding arising out of, under or in connection with this Agreement or the
subject matter hereof.

12.
Entire Agreement/Severability. This Agreement constitutes the sole and complete
understanding and agreement between the parties with respect to the matters set forth herein, and
there are no other agreements or understandings, whether written or oral and whether made
contemporaneously or otherwise (other than the Original Confidentiality Agreement and any
confidentiality and/or non-competition provisions and related covenants set forth in the Executive
Severance Agreement (as amended hereby) and any agreement granting you options under the Company’s
Options Plans that you executed during your employment with the Company the terms of which will
survive execution of this Agreement). No term, condition, covenant, representation or
acknowledgment contained in this Release may be amended unless in a writing signed by both parties.
If any section of this Agreement is determined to be void, voidable or unenforceable, it will have
no effect on the remainder of the Agreement which will remain in full force and effect.

13. Acceptance. You will have twenty-one (21) days from the date set forth above to
consider the terms of this Agreement. In order to receive the benefits and payments provided for by
Section 2 of this Agreement, you must execute this Agreement, have your signature notarized and
return the executed Agreement to the Company, addressed to the Company, Attention: General Counsel,
at the address specified in Section 20 so that it is received any time on or before the expiration
of the twenty-one (21) day period. After executing the Agreement, you will have seven (7) days (the
“Revocation Period”) to revoke it by indicating your desire to do

-7-

 

so in writing addressed to and received by the General Counsel at the address set forth in
Section 20 no later than the seventh (7th) day following the date you executed the
Agreement. In the event you do not accept this Agreement or in the event you revoke this Agreement
during the Revocation Period, the obligations of the Company to make the payments and provide the
benefits set forth herein will automatically be deemed null and void. No payments or benefits will
be paid or provided under Section 2 of this Agreement following the Separation Date, until you have
signed this Agreement, had your signature notarized and the Revocation Period has expired without a
revocation by you.

14. Voluntary Assent. By your signature on this Agreement, you affirm and acknowledge
that:

     (i) you have read this Agreement, and understand all of its terms, including the full and
final release of claims set forth in Section 3;

     (ii) you have voluntarily entered into this Agreement and that you have not relied upon any
representation or statement, written or oral, not set forth in this Agreement;

     (iii) the only consideration for signing this Agreement is as set forth herein and that the
consideration received for executing this Agreement is greater than that to which you may otherwise
be entitled;

     (iii) you have been given the opportunity and you have been advised by the Company to have
this Agreement reviewed by your attorney and/or tax advisor; and

     (iv) you have been given up to twenty-one (21) days to consider this Agreement and that you
understand that you have seven (7) days after executing it to revoke it in writing, and that, to be
effective, such written revocation must be received by the Company within the seven (7) day
Revocation Period.

15. No Admission. Nothing contained in this Agreement, or the fact of its submission to
you, will constitute or be construed as an admission of liability or wrongdoing by either party.

16. Counterparts. The Agreement may be executed in two (2) signature counterparts, each of
which will constitute an original, but all of which taken together will constitute but one and the
same instrument.

17. Taxes; Section 409A. It is intended that the payments provided for herein are intended
to comply with, or be exempt from, the terms of Section 409A (“Section 409A”) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder. In the event,
however, that any such payments are determined to be subject to Section 409A, then the Company may
make such adjustments as are reasonably required to comply with such section, including delaying
any such payments that would have been required to be paid to you pursuant to this Agreement during
the first six months following the Separation Date until the end of such six-month period in
accordance with the requirements of Section 409A. In addition, any expense reimbursement under this
Agreement will be made on or before the last day of the taxable year

-8-

 

following the taxable year in which such expense was incurred by you, and no such reimbursement or
the amount of expenses eligible for reimbursement in any taxable year will in any way affect the
expenses eligible for reimbursement in any other taxable year. The termination of your employment
on December 22, 2009 is intended to constitute an “involuntary termination” for purposes of Section
409A. Notwithstanding any of the preceding, the Company makes no representations regarding the tax
treatment of any payments hereunder, and you will be responsible for any and all applicable taxes.

18. Breach of Agreement. In the event of any breach by you of any provision of this
Agreement (including, without limitation, Section 1(a), 7, 8 or 9 (and including the agreements
referenced and incorporated therein), in addition to any other remedy available to it, the Company
will cease to have any obligation to make payments or provide benefits to you under this Agreement,
and any continued exercisability of your options will cease, and the Company will be entitled to
recover the reasonable attorneys’ fees and costs incurred in enforcing its rights, to the extent
permitted by law. You agree that in the event you bring a claim covered by this release in which
you seek damages against the Company or in the event you seek to recover against any of such
entities in any claim brought by a governmental agency on your behalf, this Agreement shall serve
as a complete defense to such claims.

19. Third Party Beneficiaries. You acknowledge and agree that TSI Holdings and all its
direct and indirect subsidiaries (other than the Company) are third party beneficiaries of this
letter agreement. Without limiting the foregoing sentence, TSI Holdings and such subsidiaries may
enforce this letter agreement against you. This Agreement may be assigned by the Company to a
person or entity which is an affiliate, and will be assigned to any successor in interest to
substantially all of the business operations of the Company. Upon such assignment, the rights and
obligations of the Company hereunder will become the rights and obligations of such affiliate or
successor person or entity. This Agreement will be binding upon the successors, and assigns of the
Company.

20. Notices. Any notices required or made pursuant to this Agreement will be in writing and
will be deemed to have been given when delivered or mailed by United States certified mail, return
receipt requested, postage prepaid, as follows: if to you, to the address in the Company’s payroll
records; if to the Company, at 5 Penn Plaza, 4th Floor, New York, NY 10001, Attn:
General Counsel, or to such other address as either party may furnish to the other in writing in
accordance with this Section 20. Notices of change of address will be effective only upon receipt.

[Signatures continue on following page]

-9-

 

	 	 	 	 	 	 	 
	 	 	Acknowledged and accepted by:	 	 
	 
	 	 	 	 	 	 
	 	 	TOWN SPORTS INTERNATIONAL, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ David Kastin
 

Name: David Kastin
	 	 
	 

	 	 	 	Title: SVP - General Counsel	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ James Rizzo
 

James Rizzo
	 	 

	 	 	 
	STATE OF NEW YORK

	 	) 
	 

	 	) SS.:
	COUNTY OF NEW YORK

	 	) 

     On
the 4th day of January in the year 2010, before me, the undersigned,
personally appeared JAMES RIZZO, personally known to me or proved to me on the basis
of satisfactory evidence to be the individual whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which the
individual acted, executed the instrument.

	 	 	 
	 

	 	/s/ Judith P. Broach
	 

	 	 
	 

	 	Notary Public
	 
	 	 
	 

	 	JUDITH P. BROACH
	 

	 	Notary Public, State of New York
	 

	 	No. 02BR6164676
	 

	 	Qualified in New York County
	 

	 	Commission Expires Apr. 30, 2011

-10-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00170-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00170-of-00352.parquet"}]]