Document:

Exhibit
10.1

 

March 14, 2005

 

 

Mr. Larry M. Segall

12 Escher Drive

Marlboro, New Jersey 07746

 

Dear Larry:

 

It is my pleasure to
extend to you an offer for the position of Executive Vice President and Chief
Financial Officer for Equinox Holdings, Inc., the consolidated business of
Equinox Fitness Clubs comprising all of the businesses that carry the “Equinox”
brand name including the fitness clubs, management company and related products
or businesses (the “Company”).  As Chief
Financial Officer, you will report directly to the Chief Executive Officer of
the Company and will have duties consistent with the job description.  The position offered is full-time employment
at our corporate headquarters in New York City, beginning April 11, 2005.

 

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 $270,000.00,
payable in biweekly installments of $10,384.62. 
As additional compensation, you are eligible to receive an annual
performance incentive bonus 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
60,000 shares of the common stock of the Company at an exercise price equal to
the Fair Market Value at the next meeting Board of Directors, as described more
fully in a separate option agreement. 
Additionally, we will grant you options to purchase an additional 25,000
shares of the common stock of the Company on January 1, 2006, at an
exercise price equal to the Fair Market Value at that date. Your compensation
will be reviewed annually by the Compensation Committee of the Board of
Directors and may be increased but not decreased.

 

You will be eligible for
medical and dental benefits through our Executive Benefits Program beginning on
the first day of the month following three calendar months of employment. The
Company will reimburse you for your COBRA expenses during the period prior to
your eligibility for the Company program.

 

Additionally, after 1
year of employment you may elect to participate in the 401(k) plan with a 25%
employer matching contribution, up to 6%, which vests after two (2) years.  You are eligible for 4 weeks of paid vacation
per year.  You are also entitled to three
(3) complimentary memberships during your first year of employment
and  one (1) membership thereafter.

 

 

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 in your joining the
Equinox team.

 

	
   

  	
  Sincerely yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Joel Greengrass

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Joel Greengrass

  
	
   

  	
   

  
	
  Agreed and Accepted:

  	
   

  
	
   

  	
   

  
	
  /s/ Larry M. Segall

  	
   

  	
   

  
	
   

  	
   

  
	
  Larry M. Segall

  	
   

  
				

 

 

Attachment 1

 

Performance
Incentive Bonus Plan

Chief Financial
Officer

 

1.                                       The
performance incentive bonus will be based upon the Company’s earnings before
interest expense, income taxes and depreciation and amortization (“EBITDA”)
during any fiscal year.  Your bonus will
be prorated for 2005.

 

2.                                       Corporate EBITDA On an annual basis, the actual 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 (“Goal”).

 

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

 

b.              If the actual 2005
EBITDA is equal to or greater than 90% of Goal but less than 95% of Goal, a
performance bonus in the amount of $37,800.00 will be awarded.

 

c.               If the 2005 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 $56,700.00 plus $7,560.00 for each
one percent (1%) in excess of 95% of Goal, subject to a maximum performance
bonus of $94,500.00 will be awarded.

 

d.              If the 2005 actual
EBITDA is greater than 100% of Goal, a performance bonus in the amount of
$94,500.00 plus $9,450.00 for each one percent (1%) in excess of 100% of Goal
will be awarded.

 

3.                                       Performance
incentive bonuses will be paid no later than April 10, 2006.Exhibit
10.2

 

March 14, 2005

 

 

Mr. Larry M. Segall

12 Escher Drive

Marlboro, New Jersey 07746

 

 

Re:                               Non-Disclosure
and Non-Competition Agreement

 

Dear Larry:

 

This will confirm the
terms of the agreement between Equinox Holdings, Inc. with offices at 895
Broadway, New York, New York (“Equinox”) and Mr. Larry M. Segall (“You”
and “Your”) 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 Executive Vice President and
Chief Financial Officer for Equinox’s consolidated businesses pursuant to the
terms and provisions of the offer letter dated March 14, 2005 (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 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  twelve (12) 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  twelve (12) 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, You
will be entitled to receive severance pay equal to six months of base salary,
paid out in accordance with the Company’s normal payroll schedule, plus one
additional month of salary continuation for each year you had been employed
with Equinox prior to Your termination. 
The amount of such severance pay shall be no more than fifteen months 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 subparagraphs 3(c)(ii), 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/ Joel S. Greengrass

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Joel S. Greengrass

  
	
   

  
	
  Accepted and Agreed to
  this

  
	
  14th day of
  March 2005

  
	
   

  
	
  /s/ Larry M. Segall

  	
   

  
	
   

  	
   

  
	
  Larry M. Segall

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