Document:

EX-10.1

 

Exhibit 10.1

NON-QUALIFIED STOCK OPTION AGREEMENT

FOR NON-EMPLOYEE DIRECTORS PURSUANT TO THE

TOWN SPORTS INTERNATIONAL HOLDINGS, INC.

2006 STOCK INCENTIVE PLAN

     THIS AGREEMENT, dated as of [     ], 2007 (this “Agreement”), between Town Sports
International Holdings, Inc. (the “Company”) and [     ] (the
“Participant”).

Preliminary Statement

     The Compensation Committee of the Board of Directors of the Company (the “Committee”)
has authorized this grant of a non-qualified stock option (the “Option”) on [ ], 2007
(the “Grant Date”), to purchase the number of shares of the Company’s common stock, par
value $0.001 per share (the “Common Stock”), set forth below to the Participant, as a
Non-Employee Director of the Company. Unless otherwise indicated, any capitalized term used but
not defined herein shall have the meaning ascribed to such term in the Town Sports International
Holdings, Inc. 2006 Stock Incentive Plan (as the same may be amended from time to time, the
“Plan”). A copy of the Plan as in effect on the date hereof and prospectus has been
delivered to the Participant. By signing and returning this Agreement, the Participant
acknowledges having received and read a copy of the Plan as in effect on the date hereof and
prospectus and agrees to comply with the Plan, this Agreement and all applicable laws and
regulations.

     Accordingly, the parties hereto agree as follows:

     1.      Tax Matters. No part of the Option granted hereby is intended to qualify as an
“incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended.

     2.      Grant of Option. Subject in all respects to the Plan and the terms and conditions
set forth herein and therein, the Participant is hereby granted an Option to purchase from the
Company [     ] shares of Common Stock (the “Option Shares”), at a price per share of $[     ] (the “Option Price”), which may not be less than Fair Market Value on the Grant
Date.

     3.      Vesting and Exercise.

     (a) Except as set forth in Section 3(c), the Option shall vest and become exercisable
in [one] installment[s] as provided below, which shall be cumulative. To the extent that the
Option has become vested and exercisable as provided below, the Option thereafter may be exercised
by the Participant, in whole or in part, at any time or from time to time prior to the expiration
or earlier termination of the Option as provided herein and in accordance with Section 6.3(d) of
the Plan, including, without limitation, the filing

 

 

of such written form of exercise notice, if any, as may be required by the Committee or the
Company and the payment in full of the Option Price multiplied by the number of Option Shares
underlying the portion of the Option exercised. Upon expiration of the Option, the Option shall be
canceled and no longer exercisable. The following table indicates each date upon which the
Participant shall be vested and entitled to exercise the Option with respect to the percentage of
the Option Shares indicated beside such date, provided that the Participant has not had a
Termination any time prior to such date (each of the dates set forth below being herein called a
“Vesting Date”):

	 	 	 
	Vesting Date	 	Percentage of Option Shares
	[                    ]
	 	[          ]%

     (b)     There shall be no proportionate or partial vesting in the periods prior to each Vesting
Date and all vesting shall occur only on the appropriate Vesting Date, provided that the
Participant has not had a Termination at any time prior to such Vesting Date.

     (c)     The Option will become fully vested on a Change in Control.

     (d)     In consideration for the grant of the Option and in addition to any other remedies
available to the Company, the Participant acknowledges and agrees that the Option is subject to the
provisions in the Plan regarding any Detrimental Activity. If the Participant engages in any
Detrimental Activity prior to the exercise of the Option, then the Option shall terminate and
expire as of the date the Participant engaged in such Detrimental Activity. As a condition of the
exercise of the Option, the Participant shall be required to certify (or be deemed to have
certified) at the time of exercise in a manner acceptable to the Company that the Participant is in
compliance with the terms and conditions of the Plan and that the Participant has not engaged in,
and does not intend to engage in, any Detrimental Activity. If the Participant engages in any
Detrimental Activity, then, in accordance with the terms of the Plan, the Company shall be entitled
to recover from the Participant, and the Participant shall pay over to the Company, an amount equal
to any gain realized as a result of the exercise (whether at the time of exercise or thereafter).

     4.     Option Term. The term of the Option shall be 10 years after the Grant Date and the
Option shall expire at 5:00 p.m. (New York City time) on the 10th anniversary of the Grant Date,
subject to earlier termination in the event of the Participant’s Termination as specified in
Section 5.

 

 

     5.     Termination.

     (a)     Subject to Section 4, the terms of the Plan and this Agreement, the Option, to the
extent vested at the time of the Participant’s Termination, shall remain exercisable as provided in
Section 11.1(a) of the Plan.

     (b)     Any portion of the Option that is not vested as of the date of the Participant’s
Termination for any reason shall terminate and expire as of the date of such Termination.

     6.     Restriction on Transfer of Option. No part of the Option shall be subject to
Transfer other than by will or by the laws of descent and distribution. During the lifetime of the
Participant, the Option may be exercised only by the Participant or the Participant’s guardian or
legal representative. The Option shall not be subject to levy by reason of any execution,
attachment or similar process. Upon any attempt to Transfer the Option or in the event of any levy
upon the Option by reason of any execution, attachment or similar process contrary to the
provisions hereof, the Option shall immediately and automatically become null and void.

     7.     Rights as a Stockholder. The Participant shall have no rights as a stockholder
with respect to any Option Shares unless and until the Participant has become the holder of record
of the Option Shares. No adjustments shall be made to the Option, the Option Shares or the Option
Price for dividends in cash or other property, distributions or other rights in respect of any
Option Shares, except as otherwise may be specifically provided for in the Plan. No shares of
Common Stock shall be issued unless and until payment therefor has been made or provided and the
conditions set forth in Section 15.6 of the Plan are satisfied.

     8.     Provisions of Plan Control. This Agreement is subject to all the terms, conditions
and provisions of the Plan, including, without limitation, the amendment provisions thereof, and to
such rules, regulations and interpretations relating to the Plan as may be adopted by the Committee
and as may be in effect from time to time. The Plan is incorporated herein by reference. If and
to the extent that this Agreement conflicts or is inconsistent with the terms, conditions and
provisions of the Plan, the Plan shall control, and this Agreement shall be deemed to be modified
accordingly. This Agreement contains the entire agreement and understanding of the parties with
respect to the subject matter hereof and supersedes any prior agreements and understandings
(whether written or oral) between the Company and the Participant with respect to the subject
matter hereof.

     9.     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:

 

 

If to the Company, to:

Town Sports International Holdings, Inc.

888 Seventh Avenue

New York, New York 10106

Attention: Richard Pyle

with a copy to:

Town Sports International Holdings, Inc.

888 Seventh Avenue (25th Floor)

New York, New York 10106

Attention: Robert Herbst, General Counsel

     If to the Participant, to the address for the Participant on file with the Company; 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).

     10.     No Obligation to Continue Directorship. This Agreement is not an agreement of
directorship. This Agreement does not guarantee that the Company or its Affiliates will retain, or
to continue to retain, the Participant as a director or in any other capacity during all or any
part of the term of this Agreement, including but not limited to any period during which any Option
is outstanding, nor does it modify in any respect any right of the Company or of any Affiliate of
the Company to terminate or modify the Participant’s directorship or compensation.

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

     12.     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.

     13.     Consent to Jurisdiction. In the event of any dispute, controversy or claim
between the Company or any Affiliate and the Participant in any way concerning, arising out of or
relating to the Plan or this Agreement (a “Dispute”), including without limitation any
Dispute concerning, arising out of or relating to the interpretation, application or enforcement of
the Plan or 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 as provided in Section 9 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.

     14.     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.

[Remainder of Page Left Blank]

 

 

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

	 	 	 	 	 
	 	Company:

TOWN
SPORTS INTERNATIONAL
 HOLDINGS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 
	 	Director:	 
	 
	 
	 	 	 
	 	[Name]EX-4.1

 

Exhibit 4.1

Form of Certificate

Representing

Common Stock

			
	 	 	 
	NUMBER
	 	SHARES
	[                    ]
	 	[                    ]

[LOGO]

THE BANK OF NEW YORK MELLON CORPORATION

Incorporated Under the Laws of the State of Delaware

Total Authorized Issue

3,500,000,000 Shares Par Value $0.01 Each, Common Stock

CUSIP [                    
                    ]

This certifies that [STOCKHOLDER] is the registered holder of [                                        
                    ]
Shares transferable only on the books of The Bank of New York Mellon Corporation by
the holder hereof in person or by Attorney upon surrender of this Certificate properly
endorsed.

In witness whereof, the said Corporation has caused this Certificate to be signed by
its duly authorized officers and its Corporate Seal to be hereunto affixed this      
day of
                    
A.D. 20       .

[THE BANK OF NEW YORK MELLON CORPORATION SEAL]

	 	 	 	 	 	 	 	 	 
	/s/

	 	 	 	 	 	/s/	 	 
	 

	 	 
	 	 	 	 	 	 
	PRESIDENT	 	 	 	 	 	SECRETARY

 

 

     The Corporation shall furnish, without charge, to the holder hereof, upon request, the powers, designations,
preferences and relative, participating, options or other special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such preferences and/or rights.

     The following abbreviations, when used in the inscription on the face of this Certificate, shall be construed as
though they were written out in full according to applicable laws or regulations. Additional abbreviations may also
be used although not in the list.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	TEN COM

	 	—
	 	as tenants in common
	 	UNIF GIFT MIN ACT-
	 	 	 	Custodian	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 
	TEN ENT
	 	—	 	as tenants by the entireties	 	 	 	(Cust)	 	 	 	(Minor)
	JT TEN	 	—	 	as joint tenants with right of
survivorship and not as tenants in common	 	 	 	
under Uniform Gifts to Minors Act
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	(State)

For Value Received, the undersigned hereby sells, assigns and transfers unto PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE                                                              Shares represented by the within Certificate, and hereby
irrevocably constitutes and appoints                                                              Attorney to transfer the said Shares on the books of the within
named Corporation with full power of substitution in the premises.

	 	 	 	 	 
	Dated

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	In presence of
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 
	 	 	 	 
	 
	 
	 	 	 	 
	 
	 	 	 	 
	NOTICE: THE SIGNATURES OF THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

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