Exhibit 10.3
NON-QUALIFIED STOCK OPTION AGREEMENT
PURSUANT TO THE
TOWN SPORTS INTERNATIONAL HOLDINGS, INC.
2006 STOCK INCENTIVE PLAN
THIS AGREEMENT , dated as of
, 200___(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
, 200_ (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 an Eligible Employee of the
Company or an Affiliate 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 (the “ Code ”).
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 installments 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 of
Employment any time prior to such date (each of the dates set forth
below being herein called a “ Vesting Date
”):
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Percentage of
Option |
|
Vesting Date |
|
Shares Vested |
|
First Anniversary of Grant Date
|
|
|
25 |
% |
|
|
|
|
|
|
|
Second Anniversary
of Grant Date
|
|
|
50 |
% |
|
|
|
|
|
|
|
Third Anniversary of Grant Date
|
|
|
75 |
% |
|
|
|
|
|
|
|
Fourth Anniversary
of Grant Date
|
|
|
100 |
% |
(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 of Employment 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 10 th anniversary of
the Grant Date, subject to earlier termination in the event of the
Participant’s Termination of Employment 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 of Employment, 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 of Employment for any reason shall
terminate and expire as of the date of such Termination of
Employment.
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
2
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.
Non-Compete; Nonsolicitation .
(a)
(i) As an inducement to the Company to enter into this
Agreement and grant the Option, the Participant agrees that
(A) during the Participant’s period of employment with
the Company or any of its Affiliates, and (B) if the
Participant resigns or the Participant’s employment is
terminated by the Company or any of its Affiliates for any reason,
during the period which the Company or any of its Affiliates is
paying the Participant severance compensation (which shall be at a
rate and an amount equal to the Participant’s base salary
received by the Participant immediately prior to the
Participant’s Termination of Employment), such period not to
exceed one year (the “ Noncompete Period
” ), the Participant 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 Participant’s
period of employment with the Company or any of its Affiliates or
at the time of the Participant’s Termination of Employment or
with any other business that is the logical extension of the
Company’s and its Affiliates’ business during the
Participant’s period of employment with the Company or any of
its Affiliates or at the time of
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