<PAGE> 1
Registration No. 33-
As filed with the Securities and Exchange Commission on November 25, 1997
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------
BALLY TOTAL FITNESS HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 36-3228107
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
8700 WEST BRYN MAWR AVENUE
CHICAGO, ILLINOIS 60631
(773) 380-3000
(Address of principal executive offices including zip code)
---------------
BALLY TOTAL FITNESS HOLDING CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
(Full title of plan)
---------------
Copy to:
CARY A. GAAN, ESQ. IRV BERLINER, ESQ.
BALLY TOTAL FITNESS HOLDING CORPORATION BENESCH, FRIEDLANDER,
8700 WEST BRYN MAWR AVENUE COPLAN & ARONOFF LLP
CHICAGO, ILLINOIS 60631 2300 BP AMERICA BUILDING
(773) 380-3000 200 PUBLIC SQUARE
CLEVELAND, OHIO 44114-2378
(216) 363-4500
(Name and address including zip code; and telephone number,
including area code, of agent for service)
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------- ------------------------- ------------------------ -------------------------- ----------------------
Title of securities to be Amount to be registered(2) Proposed maximum Proposed maximum Amount of registration
registered offering price per share(3) aggregate offering price(3) fee
- ----------------------- ------------------------- ------------------------ -------------------------- ----------------------
<S> <C> <C> <C> <C>
Common Stock, par value 250,000 shares $17.4375 $4,359,375 $1,321.02
$.01 per share
- ----------------------- ------------------------- ------------------------ -------------------------- ----------------------
</TABLE>
1 This Registration Statement covers an indeterminate amount of
interests in the Bally Total Fitness Holding Corporation Employee Stock
Purchase Plan.
2 This Registration Statement also includes an indeterminable number of
shares of Common Stock which may be issued under the anti-dilution
provisions of the plan.
3 Estimated in accordance with Rule 457 under the Securities Act of
1933, solely for the purpose of calculating the registration fee, on the
basis of the average of the high and low prices of the Common Stock on
November 19, 1997 as reported on the NASDAQ (NMS).
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed or to be filed by Bally Total Fitness
Holding Corporation (the "Company") with the Securities and Exchange Commission
("Commission") are hereby incorporated or deemed to be incorporated by reference
in this Registration Statement.
(1) The Company's Annual Report on Form 10-K/A for the year ended
December 31, 1996, File No. 0-27478.
(2) The Company's Quarterly Report on Form 10-Q/A for the quarter
ended March 31, 1997, File No. 0-27478.
(3) The Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1997, File No. 0-27478.
(4) The Company's Current Report on Form 8-K filed with the
Commission on August 4, 1997, File No. 0-27478.
(5) The Company's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997, File No. 0-27478.
(6) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A/A filed with the
Commission on January 3, 1996, File No. 0-27478.
(7) All documents subsequently filed by the Company or the Plan
pursuant to Sections 13(a), 13(c), 14 or 15(a) of the
Securities Exchange Act of 1934 (the "Exchange Act"), prior to
the termination of the offering made hereby, shall be deemed
to be incorporated by reference in this Registration Statement
and to be a part hereof from the respective date of filing
each such document.
Any statement contained in a document incorporated by, or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Registration
Statement.
II-2
<PAGE> 3
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law ("DGCL") permits
the indemnification of the directors and officers of the Company. The Company's
Amended and Restated By-laws provide that it will indemnify the officers,
directors, employees and agents of the Company to the extent permitted by the
DGCL.
The Company's Restated Certificate of Incorporation provides for the
indemnification of directors and officers of the Company, and persons who serve
or served at the request of the Company as a director, officer, employee or
agent of another corporation, including service with respect to employee benefit
plans, against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties in amounts paid or to be paid
in settlement) reasonably incurred with respect to any actions, suit or
proceeding, whether civil, criminal, administrative or investigative, provided,
however, the Company shall indemnify any such person seeking indemnification in
connection with a proceeding initiated by such person only if such proceeding
was authorized by the Board of Directors of the Company. In the event a claim
for indemnification by any person has not been paid in full by the Company after
written request has been received by the Company, the claimant may at any time
thereafter bring suit against the Company to recover the unpaid amount of the
claim and, if successful in whole or in part, the claimant shall be entitled to
be paid also the expense of prosecuting such claim. The right to indemnification
conferred in the Company's Restated Certificate of Incorporation is a contract
right and shall include the right to be paid by the Company the expenses
incurred in defending any such proceeding in advance of its final disposition.
The Company maintains insurance, at its expense, to protect itself and any
director, officer, employee or agent of the Company against any such expense,
liability or loss, whether or not the Company would have the power to indemnify
such person against such expense, liability or loss under state law.
Item 7. Exemption from Registration Claimed.
Not applicable.
II-3
<PAGE> 4
Item 8. Exhibits.
4.1 Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-1 filed January 3, 1996,
Registration No. 33-99844).
4.2 Amended and Restated By-Laws of the Company (incorporated by
reference to Exhibit 3.2 to the Company's Registration
Statement on Form S-1 filed January 3, 1996, Registration No.
33-99844).
4.3 Bally Total Fitness Holding Corporation Employee Stock
Purchase Plan.
5.1 Opinion of Benesch, Friedlander, Coplan & Aronoff LLP, Counsel
to the Company, regarding legality.
23.1 Consent of Ernst & Young LLP, independent public accountants.
23.2 Consent of Benesch, Friedlander, Coplan & Aronoff LLP
(contained in their opinion filed as Exhibit 5.1 to this
Registration Statement).
24.1 Power of Attorney (included in Part II of this Registration
Statement).
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement;
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the
Registration Statement (or the most recent
post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change
in the information set forth in the Registration
Statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the Registration Statement or any
material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the Registration Statement is on Form S-3 or Form
S-8, and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section
13 or Section 15(d) of the
II-4
<PAGE> 5
Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-5
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago, State of Illinois, on the 21st day of
November, 1997.
BALLY TOTAL FITNESS
HOLDING CORPORATION
(Registrant)
By:/s/ Lee S. Hillman
--------------------------------------
Lee S. Hillman
Chief Executive Officer, President and
Director
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Lee S. Hillman and John W. Dwyer, or
either of them, his true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact, agent,
or their substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on behalf of the
Company in the capacities and on the dates indicated.
Dated: November 21, 1997 /s/ Arthur M. Goldberg
------------------------------------
Arthur M. Goldberg
Chairman of the Board of Directors
Dated: November 21, 1997 /s/ Lee S. Hillman
------------------------------------
Lee S. Hillman
Chief Executive Officer, President
and Director
Dated: November 21, 1997 /s/ John W. Dwyer
------------------------------------
John W. Dwyer
Executive Vice President, Chief
Financial Officer and Treasurer
Dated: November 21, 1997 /s/ Geoff M. Scheitlin
------------------------------------
Geoff M. Scheitlin
Vice President and Controller
Dated: November 21, 1997 /s/ Aubrey C. Lewis
------------------------------------
Aubrey C. Lewis
Director
Dated: November 21, 1997 /s/ J. Kenneth Looloian
------------------------------------
J. Kenneth Looloian
Director
Dated: November 21, 1997 /s/ James F. Mc Anally, M.D.
------------------------------------
James F. Mc Anally, M.D.
Director
Dated: November 21, 1997 /s/ Liza M. Walsh
------------------------------------
Liza M. Walsh
Director
<PAGE> 8
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT DESCRIPTION PAGE NO.
- ----------- ------------------- --------
<S> <C> <C>
4.1 Restated Certificate of Incorporation of the Company (incorporated
by reference to Exhibit 3.1 to the Company's Registration Statement
on Form S-1 filed January 3, 1996, Registration No. 33-99844).
4.2 Amended and Restated By-Laws of the Company (incorporated by
reference to Exhibit 3.2 to the Company's Registration Statement on
Form S-1 filed January 3, 1996, Registration No. 33-99844).
4.3 Bally Total Fitness Holding Corporation Employee Stock Purchase Plan.
5.1 Opinion of Benesch, Friedlander, Coplan & Aronoff LLP, Counsel to
the Company, regarding legality.
23.1 Consent of Ernst & Young LLP, independent public accountants.
23.2 Consent of Benesch, Friedlander, Coplan & Aronoff LLP (contained in
their opinion filed as Exhibit 5.1 to this Registration Statement).
24.1 Power of Attorney (included in Part II of this Registration
Statement).
</TABLE>
<PAGE> 1
Exhibit 4.3
BALLY TOTAL FITNESS HOLDING CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE OF THE PLAN. This Employee Stock Purchase Plan of Bally
Total Fitness Holding Corporation adopted on this 21st day of November, 1997, is
intended to encourage eligible employees of the Company and its Subsidiaries to
acquire or increase their ownership of common stock of the Company on reasonable
terms. The opportunity so provided is intended to foster in participants a
strong incentive to put forth maximum effort for the continued success and
growth of the Company and its Subsidiaries, to aid in retaining individuals who
put forth such efforts, and to assist in attracting the best available
individuals to the Company and its Subsidiaries in the future. It is not
intended that this Employee Stock Purchase Plan qualify as an "employee stock
purchase plan" under Section 423 of the Code.
2. DEFINITIONS. When used herein, the following terms shall have the
meanings set forth below:
2.1 "ACCOUNT" means the funds accumulated with respect to an
Employee as a result of deductions from his paycheck for the purpose of
purchasing Shares and paying the applicable withholding taxes on the
purchase of the Shares under the Plan. The funds allocated to an
Employee's Account shall remain the property of the Employee at all
times but may be commingled with the general funds of the Company.
2.2 "AFFILIATE" means an "affiliate within the meaning of Rule
12b-2 of the General Rules and regulations under the Exchange Act (as
in effect on the date the Plan is adopted by the Board).
1
<PAGE> 2
2.3 "ASSOCIATE" means an "associate" within the meaning of
Rule 12b-2 of the General Rules and Regulations under the Exchange Act
(as in effect on the date the Plan is adopted by the Board).
2.4 "BENEFICIAL OWNER" means with respect to any Person, and a
Person shall be deemed to "beneficially own" and be the beneficial
owner of, any securities (i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or Associates
has (a) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, securities
tendered pursuant to a tender or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange; or (b) the
right to vote pursuant to any agreement, arrangement or understanding;
provided, however, that Person shall not be deemed the Beneficial Owner
of, or to beneficially own, any security if the agreement, arrangement
or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations promulgated under the Exchange Act
and (2) is not also then reportable on Schedule 13D under the Exchange
Act (or any comparable or successor report); or (iii) which are
beneficially owned, directly or indirectly, by any other Person with
which such Person or
2
<PAGE> 3
any of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements with and
between underwriters and selling group members with respect to a bona
fide public offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the proviso to
(ii)(b) above) or disposing of any securities of the Company.
Notwithstanding anything in this definition of beneficial ownership to
the contrary, the phrase "then outstanding" when used with reference to
a Person's beneficial ownership of securities of the Company, shall
mean the number of such securities then issued and outstanding together
with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially
hereunder.
2.5 "BOARD" means the Board of Directors of Bally Total
Fitness Holding Corporation.
2.6 "CHANGE IN CONTROL" means a change in control of the
Company of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Exchange Act (as in effect on the date the Plan is adopted by the
Board), whether or not the Company is then subject to such reporting
requirement; provided that, without limitation, a Change in Control
shall be deemed to have occurred if:
(a) any Person other than an Exempt Person (an
"Acquiring Person") is or becomes the Beneficial Owner of
Shares representing ten percent (10%) or more of the combined
voting power of the Company's then outstanding Shares other
than either in connection with a transaction or series of
related transactions approved by the Board (which transaction
or series of related transactions must have been approved by a
majority of the Continuing
3
<PAGE> 4
Directors) or as the result of the reduction in the number of
issued and outstanding Shares pursuant to a transaction or
series of related transactions approved by the Board;
(b) any Person other than an Exempt Person commences,
or publicly announces an intent to commence, a tender or
exchange offer, the consummation of which would result in such
Person becoming the Beneficial Owner of Shares representing
twenty percent (20%) or more of the combined voting power of
the Company's then outstanding Shares;
(c) during any period of two (2) consecutive years
(not including any period prior to the adoption of this Plan)
there shall cease to be a majority of the Board comprised of
Continuing Directors; or
(d) (i) the stockholders of the Company approve a
merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent more than
eighty percent (80%) of the combined voting power of the
voting securities of the Company outstanding immediately after
such merger or consolidation, or (ii) the stockholders of the
Company approve a plan of complete liquidation of the Company
or an agreement for the sale or disposition by the Company of
all or substantially all the Company's assets.
4
<PAGE> 5
2.7 "CODE" means the Internal Revenue Code of 1986, as in
effect at the time of reference, or any successor revenue code which
may hereafter be adopted in lieu thereof, and reference to any specific
provisions of the Code shall refer to the corresponding provisions of
the Code as it may hereafter be amended or replaced.
2.8 "COMMITTEE" means the Compensation and Stock Option
Committee of the Board or any other committee appointed by the Board
which is invested by the Board with responsibility for the
administration of the Plan.
2.9 "COMPANY" means Bally Total Fitness Holding Corporation.
2.10 "CONTINUING DIRECTOR" means a director of the Company who
is not an Acquiring Person or an Affiliate or Associate thereof or any
of their representatives and who either was a director of the Company
before any Person became an Acquiring Person or whose nomination or
election to the Board was recommended or approved by a majority of the
then Continuing Directors.
2.11 "ELIGIBLE COMPENSATION" means the regular compensation
(i.e., straight time earnings or draw) earned by an Employee during a
payroll period, before deductions or withholdings, and shall exclude,
unless the Committee determines otherwise, all other amounts,
including, but not limited to, (i) amounts paid as commissions or
bonuses, for overtime, as the reimbursement of expenses and other
additional compensation, (ii) all amounts contributed by the Company or
any Subsidiary under any profit-sharing, pension, retirement, group
insurance or other employee welfare benefit plan or trust whether now
in existence or hereinafter adopted and (iii) any income from stock
option exercises or other equity based compensation. Notwithstanding
the foregoing, the maximum amount of eligible compensation for any
Employee in any calendar year is $250,000.
5
<PAGE> 6
2.12 "EMPLOYEE" means a person employed by the Company or any
of its Subsidiaries; provided, however, that no person shall be
considered an Employee unless he (i) is customarily employed by the
Company or any of its Subsidiaries for more than thirty (30) hours per
week and (ii) has been employed by the Company or any of its
Subsidiaries for at least twelve (12) consecutive months as of the
Offering Commencement Date of any such offering; and provided further
that no person employed by the Company in the position of Vice
President, or any position of higher authority as determined by the
Committee shall be considered an Employee for purposes of this Plan.
2.13 "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as in effect at the time of reference, or any successor law which may
hereafter be adopted in lieu thereof, and any reference to any specific
provisions of the Exchange Act shall refer to the corresponding
provisions of the Exchange Act as it may hereafter be amended or
replaced.
2.14 "EXEMPT PERSON" means the Company, any subsidiary of the
Company, any employee benefit plan of the Company or any subsidiary of
the Company, any entity holding shares for or pursuant to the terms of
any such plan, any director of the Company holding office as of the
close of business on the date the Plan is adopted by the Board who is
also an officer of the Company on such date, any immediate family
member of or Person controlled by any such director.
2.15 "FAIR MARKET VALUE" means, with respect to the Shares,
the closing price of the Shares on the last business day prior to the
date on which the value is to be determined, as reported on the Nasdaq
National Market of the National Association of Securities Dealers, Inc.
Automated Quotations System (NASDAQ) or such other source of quotation
for, or reports of, trading activity in Shares as the Committee may
from time to time select.
6
<PAGE> 7
2.16 "OFFERING COMMENCEMENT DATE" means April 1 or October 1,
as the case may be, or any other date determined by the Committee, on
which a particular offering begins.
2.17 "OFFERING TERMINATION DATE" means March 31 or September
30, as the case may be, or any other date determined by the Committee,
on which a particular offering terminates.
2.18 "OPTION" means the right granted to an Employee to
purchase Shares pursuant to an offering made under the Plan and
pursuant to such Employee's election to purchase Shares in such
offering, at a price, and subject to such limitations and restrictions
as the Plan and the Committee may impose.
2.19 "PARENT" means any corporation, other than the employer
corporation, in an unbroken chain of corporations ending with the
employer corporation if each of the corporations other than the
employer corporation owns stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of
the other corporations in such chain.
2.20 "PLAN" means the Bally Total Fitness Holding Corporation
Employee Stock Purchase Plan.
2.21 "PURCHASE PERIOD" means the period commencing on the
Offering Commencement Date and ending on the Offering Termination date
during which installment payments for Shares purchased pursuant to
Options granted pursuant to an offering made under the Plan shall be
made.
2.22 "RULE 16B-3" means Rule 16b-3 of the General Rules and
Regulations of the Exchange Act, as in effect at the time of reference,
or any successor rules or regulations
7
<PAGE> 8
which may hereafter be adopted in lieu thereof, and any reference to
any specific provisions of Rule 16b-3 shall refer to the corresponding
provision of Rule 16b-3 as it may hereafter be amended or replaced.
2.23 "SHARES" means shares of the Company's $.01 par value
common stock or, if by reason of the adjustment provisions contained
herein, any rights under the Plan pertain to any other security, such
other security.
2.24 "SUBSIDIARY" or "SUBSIDIARIES" means any corporation or
corporations other than the employer corporation in an unbroken chain
of corporations beginning with the employer corporation if each of the
corporations other than the last corporation in the unbroken chain owns
stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations
in such chain.
2.25 "SUCCESSOR" means the legal representative of the estate
of a deceased Employee.
3. STOCK SUBJECT TO THE PLAN. There will be reserved for use, upon the
exercise of Options to be granted from time to time pursuant to offerings made
under the Plan, an aggregate of 250,000 Shares, which Shares may be, in whole or
in part, as the Board shall from time to time determine, authorized but unissued
Shares, or issued Shares which shall have been reacquired by the Company. The
number of Shares reserved under the Plan may be issued pursuant to the exercise
of Options granted pursuant to one or more offerings made under the Plan. Any
Shares subject to issuance upon exercise of Options but which are not issued
because of a surrender, lapse, expiration or termination of any such Option
prior to issuance of the Shares shall once again be available for issuance in
satisfaction of Options.
8
<PAGE> 9
4. ADMINISTRATION OF THE PLAN. The Board shall appoint the Committee to
administer the Plan. Subject to the provisions of the Plan, the Committee shall
have full authority, in its discretion, to determine when offerings will be made
under the Plan, the number of Shares available for purchase in any such
offering, and the terms and conditions of any such offering; to amend or cancel
options (subject to Section 24 of the Plan); to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to the Plan; and
generally to interpret and determine any and all matters whatsoever relating to
the administration of the Plan. All decisions, determinations and
interpretations made by the Committee shall be binding and conclusive on all
participants in the Plan and on their legal representatives, heirs and
beneficiaries. The Board may from time to time appoint members to the committee
in substitution for or in addition to members previously appointed and may fill
vacancies, however caused, in the Committee. No member of the Committee shall be
liable, in the absence of bad faith, for any act or omission with respect to his
service on the Committee.
5. OFFERINGS. Unless the Committee, in its discretion, determines
otherwise, and except with respect to the first offering, the Plan will be
implemented by consecutive six (6) month offerings. The first offering under the
Plan shall commence on January 1, 1998 and terminate on March 31, 1998.
Thereafter, offerings shall commence on each subsequent April 1 and October 1
and terminate on the following September 30 and March 31, respectively, until
the Plan is terminated or no additional Shares are available for purchase under
the Plan.
6. PARTICIPATION. An eligible Employee may become a participant in the
Plan by completing, signing and filing a subscription agreement ("Subscription
Agreement") which shall designate a whole percentage of his Eligible
Compensation, not to exceed ten percent (10%), to be withheld during the
Purchase Period of any offering in which he participates, and any other
necessary papers, including, but not limited to, any forms required to establish
a brokerage account at a
9
<PAGE> 10
brokerage firm designated by the Committee in the Employee's name for the
purpose of holding any Shares purchased pursuant to the Plan, with such person
as the Committee may designate at least fourteen (14) business days prior to the
Offering Commencement Date of the first offering in which he wishes to
participate. After completing, signing and filing a Subscription Agreement and
any other necessary papers in accordance with the preceding sentence, an
Employee shall be deemed to have become a participant in the Plan for each
subsequent offering until the Employee withdraws from the Plan in accordance
with Section 13 hereof, is deemed to have withdrawn from the Plan in accordance
with Section 18 hereof, or otherwise gives written notice of his intent to
withdraw to such person as the Committee may designate. Except as otherwise
provided in Section 13, if an Employee desires to change the percentage of his
Eligible Compensation to be withheld and applied to the purchase of Shares, or
if an Employee who withdraws from the Plan desires to re-enter the Plan, he must
file a new Subscription Agreement in accordance with this Section 6 at least
fourteen (14) business days prior to the Offering Commencement Date of the
particular offering to which such change or re-entry is intended to apply. An
Employee's re-entry into the Plan cannot become effective before the beginning
of the next offering following his withdrawal; provided, however, if an Employee
is subject to Section 16(b) of the Exchange Act, his re-entry into the Plan must
comply with the requirements of Rule 16b-3 for all transactions under the Plan
to be exempt from Section 16(b) of the Exchange Act. Participation in one
offering under the Plan shall neither limit nor require participation in any
other offering. Notwithstanding any foregoing reference to completing, signing
and filing any Subscription Agreement or papers, if the Committee authorizes an
automated, paperless enrollment or change procedure for purposes of the Plan,
the Employee will be considered to have completed, signed and filed the
necessary Subscription Agreement if he follows the automated procedures so
established.
10
<PAGE> 11
7. GRANT OF OPTIONS. Subject to the limitations set forth in Section 8
of the Plan, on the Offering Commencement Date of each offering made under the
Plan, each Employee who has previously elected to participate in the Plan shall
automatically be granted an Option for as many full Shares as he will be able to
purchase with the payroll deductions credited to his Account during the Purchase
Period of that offering that are not utilized to pay the applicable withholding
taxes on the purchase of the Shares. In the event the total maximum number of
Shares resulting from all elections to purchase under any offering of Shares
made under the Plan exceeds the number of Shares offered, the Company reserves
the right to reduce the maximum number of Shares which Employees may purchase
pursuant to their elections to purchase, to allot the Shares available in such
manner as it shall determine, but generally pro rata to subscriptions received,
and to grant Options to purchase only for such reduced number of Shares. Notice
of any such reduction shall be given to each participating Employee. In the
event an Employee's election to purchase Shares pursuant to an offering made
under the Plan is cancelled, in whole or in part, pursuant to the provisions of
the Plan, a proportionate portion of the Option granted to such Employee shall
automatically terminate.
8. LIMITATIONS OF NUMBER OF SHARES WHICH MAY BE PURCHASED. The
following limitations shall apply with respect to the number of Shares which may
be purchased by each Employee who elects to participate in an offering made
under the Plan:
(a) No Employee may purchase, or elect to purchase, Shares
during any one offering pursuant to the Plan for an aggregate purchase
price in excess of ten percent (10%) of his Eligible Compensation
during the Purchase Period applicable to such offering.
(b) No Employee shall be granted an Option to purchase Shares
under the Plan if such Employee immediately after such Option is
granted, owns stock (within
11
<PAGE> 12
the meaning of Section 424(d) of the Code, and including stock subject
to purchase under any outstanding options) possessing five percent (5%)
or more of the total combined voting power or value of all classes of
stock of the Company or, if applicable, any Subsidiary or, if
applicable, a Parent.
(c) No employee shall be granted an Option to purchase Shares
which permits his right to purchase stock under the Plan and all other
employee stock purchase plans of the Company and, if applicable, a
Subsidiary, and, if applicable, a Parent, to accrue (as determined
under Section, 423(b)(8) of the Code) at a rate which exceeds ($25,000)
of fair market value of such stock (determined on the date the Option
to purchase is granted) for each calender year in which such Option is
outstanding at any time.
9. EXERCISE PRICE. Unless the Committee, in its discretion, determines
to set a higher per Share exercise price, the per Share exercise price for
Shares subject to purchase under Options granted pursuant to an offering made
under the Plan shall be an amount equal to the lesser of (a) ninety-five (95%)
of the Fair Market Value of the Shares on the Offering Commencement Date, and
(b) ninety-five (95%) of the Fair Market Value of the Shares on the Offering
Termination Date.
10. METHOD OF PAYMENT. Payment of the exercise price of any Option
granted pursuant to the Plan and the applicable withholding taxes resulting from
the exercise of an Option shall be made in installments through payroll
deductions, with no right of prepayment. Each Employee electing to participate
in an offering of Shares made under the Plan shall authorize the Company
pursuant to Section 6 of the Plan to withhold a designated amount from his
regular weekly, bi-weekly, semimonthly or monthly pay for each payroll period
during the Purchase Period, which amount, expressed as a percentage, may not
exceed ten percent (10%) of his Eligible Compensation. All such payroll
deductions made for an Employee shall be credited to his Account. An Employee
12
<PAGE> 13
may not make any separate cash payments into his Account, nor may payment for
Shares be made other than by payroll deduction. No interest shall accrue on the
amounts credited to an Employee's Account pursuant to this Section 10.
11. EXERCISE OF OPTIONS. As of the close of business on the Offering
Termination Date of any offering of Shares made under the Plan, each outstanding
Option shall automatically be exercised. Subject to the limitations in Sections
7 and 8 of the Plan, upon the exercise of an Option, the aggregate amount of the
payroll deductions credited to the Account of each Employee as of the date will
automatically be applied for the purchase of that number of Shares, rounded to
the nearest whole share, which can be purchased by the amount credited, after
first deducting from such amount the applicable withholding taxes resulting from
the purchase of the shares. A certificate representing the Shares so purchased
shall be delivered to the Employee, or, in the Committee's discretion, to a
brokerage account established for the benefit of the Employee, (which contains
such terms and conditions as the Committee may designate), as soon as reasonably
practicable after the exercise of the Option. Unless an Employee notifies the
Company in writing not to carry over the balance of his Account to the next
offering, the Company shall carry over the balance of his Account to the next
offering. Upon termination of the Plan, or upon termination of his employment,
the balance of each Employee's Account shall be returned to him.
12. RIGHTS AS STOCKHOLDER. An Employee will become a stockholder of the
Company with respect to Shares for which payment has been received at the close
of business on the Offering Termination Date. An Employee will have no rights as
a stockholder with respect to Shares under an election to purchase Shares until
he has become a stockholder as provided above.
13
<PAGE> 14
13. CANCELLATION OF ELECTION TO PURCHASE. An Employee who has elected
to purchase Shares pursuant to any offering made under the Plan may cancel his
election in its entirety (as set forth in his Subscription Agreement) by
cancelling the percentage amount which he has authorized the Company to withhold
from his Eligible Compensation for each payroll period during the Purchase
Period. Any such cancellation shall be effective upon the delivery by the
Employee of written notice of cancellation to such person as the Committee may
designate or execution of any automated procedure which has been established to
request cancellation. Such notice of cancellation must be so delivered before
the close of business on the fourteenth to last business day of the Purchase
Period. An Employee's rights upon the cancellation of his election to purchase
Shares shall be limited to the following:
(a) He may receive in cash, as soon as practicable after the
Offering Termination Date, the amount then credited to his Account.
(b) He may have the amount credited to his Account at the time
the cancellation becomes effective applied to the purchase of the
number of Shares such amount will then purchase, after first deducting
from such amount the applicable withholding taxes resulting from the
purchase of the Shares. The purchase of Shares will become effective at
the close of business on the Offering Termination Date.
In the case of a full cancellation, the Employee shall be deemed to have
withdrawn from the Plan. To re-enter the Plan, the Employee must file a new
Subscription Agreement in accordance with Section 6.
14. LEAVE OF ABSENCE OR LAYOFF. An Employee purchasing Shares under the
Plan who is granted a leave of absence (including a military leave) or is laid
off during the Purchase Period shall be deemed to have withdrawn from the Plan,
and the Employee's only right will be to receive in cash
14
<PAGE> 15
the amount credited to his Account. If the Employee returns to active service,
to re-enter the Plan the Employee must file a new Subscription Agreement in
accordance with Section 6.
15. EFFECT OF FAILURE TO MAKE PAYMENTS WHEN DUE. If in any payroll
period an Employee who has filed an election to purchase Shares under the Plan
has no pay or his pay is insufficient (after other authorized deductions) to
permit deduction of his installment payment, the amount of such deficiency shall
be treated as a partial cancellation of his election to purchase Shares.
16. RETIREMENT. If an Employee terminates his employment in a manner
entitling him to early, normal or late retirement benefits under the provisions
of any compensation or retirement plan of the Company or a Subsidiary in which
the Employee participates (or if no such plan then exists, at or after age
sixty-five (65)) has an election to purchase Shares in effect at the time of his
retirement, he may, within three (3) months after the date of his retirement
(but in no event later than the close of business on the third to last business
day of the Purchase Period), by delivering written notice to such person as the
Committee may designate, elect to:
(a) Receive in cash, as soon as practicable after delivery of
such notice, the amount then credited in his Account, or
(b) Have the amount credited to his Account at the time of the
termination of his employment by reason of retirement applied to the
purchase of the number of Shares such Account will then purchase, after
first deducting from such amount the applicable withholding taxes
resulting from the purchase of the Shares. The purchase of Shares will
become effective as of the close of business on the Offering
Termination Date.
15
<PAGE> 16
If no such notice is given within such period, the election will be
deemed cancelled as of the date of retirement and the only right of the Employee
will be to receive in cash the amount credited to his Account.
17. DEATH. If an Employee, including a retired Employee, dies and has
an election to purchase Shares in effect at the time of his death, the only
right of the Employee's Successor will be to receive in cash the amount credited
to the Employee's Account.
18. TERMINATION OF EMPLOYMENT OTHER THAN FOR RETIREMENT If an
Employee's employment is terminated for any reason other than retirement prior
to the end of the Purchase Period of any offering, the Employee's rights under
the Plan will terminate at such time. A notice to withdraw from the Plan will be
considered as having been received from the Employee on the day his employment
ceases, and the only right of the Employee will be to receive the cash then
credited to his Account.
19. NONTRANSFERABILITY OF OPTIONS. An Option, or an Employee's right to
any amounts held for his Account under the Plan, shall not be transferable,
other than by will or the laws of descent and distribution, and an Option may be
exercised, during the lifetime of the holder of the Option, only by the holder.
20. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of changes
in all of the outstanding Shares by reason of stock dividends, stock splits,
recapitalizations, mergers, consolidations, combinations, or exchanges of
shares, separations, reorganizations or liquidations, or similar events, or in
the event of extraordinary cash or non-cash dividends being declared with
respect to the Shares, or similar transactions or events, the number and class
of Shares available under the Plan in the aggregate, the number and class of
Shares subject to Options theretofore granted, applicable purchase prices and
all other applicable provisions, shall, subject to the provisions of the
16
<PAGE> 17
Plan, be equitably adjusted by the Committee. The foregoing adjustment and the
manner of application of the foregoing provisions shall be determined by the
Committee in its sole discretion. Any such adjustment may provide for the
elimination of any fractional Share which might otherwise become subject to an
Option.
21. CHANGE IN CONTROL. Notwithstanding anything to the contrary herein,
in the case of a Change in Control of the Company, the Board may, in its sole
discretion, elect to terminate the Purchase Period of any offering then in
effect as of the last day of the month during which the Change in Control
occurs, with the effect that such day will be the Offering Termination Date of
such offering.
22. TAXES. The Company shall deduct from the amount credited to an
Employee's Account the amount of any taxes which the Company is required to
withhold, as and when required by law, with respect to the Shares to be received
pursuant to the exercise of an Option granted under the Plan.
23. TERMINATION OF THE PLAN. Although the Company intends to continue
the Plan, the Company reserves the right to terminate the Plan at any time. Any
options outstanding at the time of termination shall continue in full force and
effect according to the terms and conditions of the Option and this Plan.
24. AMENDMENT OF THE PLAN. The Plan may be amended at any time and from
time to time by the Board. Notwithstanding the discretionary authority granted
to the Committee in Section 4 of the Plan, no amendment of the Plan or any
Option granted under the Plan shall impair any of the rights of any holder,
without the holder's consent, under any Option theretofore granted under the
Plan.
17
<PAGE> 18
25. DELIVERY OF SHARES ON EXERCISE. Delivery of certificates for Shares
to or for the benefit of an Employee pursuant to the exercise of an Option may
be postponed by the Company such period as may be required for it with
reasonable diligence to comply with any applicable requirements of any federal,
state or local law or regulation or any administrative or quasi-administrative
requirement applicable to the sale, issuance, distribution or delivery of such
Shares. The Committee may, in its sole discretion, require an Employee to
furnish the Company with appropriate representations and a written investment
letter prior to the exercise of an Option or the delivery of any Shares pursuant
to the exercise of an Option.
26. FEES AND COSTS. The Company shall pay all original issue taxes on
the exercise of any Option granted under the Plan and all other fees and
expenses necessarily incurred by the Company in connection therewith.
27. NO CONTRACT OF EMPLOYMENT. Neither the adoption of this Plan nor
the grant of any Option shall be deemed to obligate the Company or any
Subsidiary to continue the employment of any Employee.
28. EFFECTIVENESS OF THE PLAN. The Plan shall become effective on
January 1, 1998.
29. OTHER PROVISIONS. As used in the Plan, and in other documents
prepared in implementation of the Plan, references to the masculine pronoun
shall be deemed to refer to the feminine or neuter, and references in the
singular or the plural shall refer to the plural or the singular, as the
identity of the person or persons or entity or entities being referred to may
require. The captions used in the Plan and in such other documents prepared in
implementation of the Plan are for convenience only and shall not affect the
meaning of any provision hereof or thereof.
Adopted on November 21, 1997
18
<PAGE> 1
November 24, 1997
EXHIBIT 5.1
Board of Directors
Bally Total Fitness Holding Corporation
8700 West Bryn Mawr Avenue
Chicago, Illinois 60631
Re: Registration Statement on Form S-8
Ladies and Gentleman:
It is our understanding that Bally Total Fitness Holding Corporation, a Delaware
corporation ("Company"), intends to file with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, a Registration
Statement on Form S-8 ("Registration Statement"), which Registration Statement
relates to 250,000 shares of common stock, par value $.01 per share, of the
Company ("Common Stock"), to be issued pursuant to the Bally Total Fitness
Holding Corporation Employee Stock Purchase Plan (the "Plan").
We have examined and relied on originals or copies, certified or otherwise
identified to our satisfaction as being true copies, of all such records of the
Company, all such agreements, certificates of officers of the Company and
others, and such other documents, certificates and corporate or other records as
we have deemed necessary as a basis for the opinion expressed in this letter.
In our examination, we have assumed the genuineness of all signatures, the legal
capacity of all natural persons, the authenticity of all documents submitted to
us as originals and the conformity to original documents of all documents
submitted to us as certified or photostatic copies.
We have investigated such questions of law for the purpose of rendering the
opinions in this letter as we have deemed necessary. We express no opinion in
this letter concerning any law other than the Delaware General Corporation Law.
This opinion is being rendered to you as of today. The opinion expressed herein
assumes that there is no change in the facts, circumstances and law in effect on
the date of this opinion, particularly as it relates to corporate authority and
the Company's good standing under Delaware law. We have assumed that the Company
will remain in good standing as a Delaware corporation at all times when shares
of Common Stock are sold pursuant to the Plan.
On the basis of the foregoing, we are of the opinion that the Common Stock to be
issued pursuant to the Plan, when and if issued and paid for in accordance with
the terms of the Plan, will be legally issued, fully paid and nonassessable.
<PAGE> 2
Board of Directors
Bally Total Fitness Holding Corporation
Page 2
November 24, 1997
The opinion in this letter is rendered only to the Company in connection with
the filing of the Registration Statement. We consent to the filing of this
letter as an exhibit to the Registration Statement. The opinion may not be
relied upon by the Company for any other purpose. This letter may not be
paraphrased, quoted or summarized, nor may it be duplicated or reproduced in
part.
Very truly yours,
BENESCH, FRIEDLANDER,
COPLAN & ARONOFF LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference of our reports dated
February 25, 1997, except for the "Summary of significant accounting policies -
Restatement, Membership revenue recognition and Impact of recently issued
accounting standards" and "Income Taxes" notes, as to which the date is July 14,
1997, in the Registration Statement (Form S-8) of Bally Total Fitness Holding
Corporation for the registration of 250,000 shares of Bally Total Fitness
Holding Corporation common stock to be issued pursuant to the Bally Total
Fitness Holding Corporation Employee Stock Purchase Plan.
Ernst & Young LLP
Chicago, Illinois
November 21, 1997
