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As filed with the Securities and Exchange Commission on May 2, 1997
Registration No. ____________
_______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
------------------
The Sports Club Company, Inc.
(Exact name of Registrant as Specified in Its Charter)
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<S> <C>
Delaware 95-4479735
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
11100 Santa Monica Blvd., Suite 300
Los Angeles, California 90025
(Address of Principal Executive Offices)
The Sports Club Company, Inc. 1994 Stock Compensation Plan
The Sports Club Company, Inc.1994 Stock Incentive Plan
(Full Title of the Plan)
D. Michael Talla
Chief Executive Officer
The Sports Club Company, Inc.
11100 Santa Monica Blvd., Suite 300
Los Angeles, California 90025
(Name and Address of Agent For Service)
(310) 479-5200
(Telephone number, including area code, of agent for service)
Copy to:
Joseph P. Bartlett, Esquire
Kinsella Boesch Fujikawa & Towle, LLP
1901 Avenue of the Stars, 7th Floor
Los Angeles, California 90067
(310) 201-2032
CALCULATION OF REGISTRATION FEE
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<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Title of each Proposed Maximum Proposed Maximum Amount of
class of Securities Amount to be Offering Price Aggregate Offering Registration
to be registered registered Per Share Price Fee
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<S> <C> <C> <C> <C>
Common Stock,
$1.00 par value 1,050,000 (1) $4.25 (2) $3,940,850 (2) $1,194.20
</TABLE>
(1) Maximum number of shares issuable under The Sports Club Company, Inc.
1994 Stock Incentive Plan (1,000,000 shares), and 1994 Stock
Compensation Plan (50,000 shares) as such amounts may be increased in
accordance with said plan in the event of a merger, consolidation,
recapitalization or similar event involving the Registrant.
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(2) Under Rule 457(h) the registration fee for securities to be issued
pursuant to an employee benefit plan may be calculated, inter alia,
based upon the price at which the options may be exercised. 1,050,000
shares are being registered hereby, of which 547,500 are under option at
a weighted average exercise price of $3.30 per share ($1,805,225 in the
aggregate). The remainder of such shares, which are not presently
subject to option (502,500 shares), are being registered based upon the
closing price of the Common Stock of the Registrant as reported on the
American Stock Exchange on April 25, 1997 of $4.25 per share ($2,135,625
in the aggregate). Therefore, the total amount of the offering being
registered herein is $3,950,850.
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EXPLANATORY NOTE
This Registration Statement contains two parts: the first part contains
a Prospectus prepared in accordance with the requirements of Part I of Form S-3
(in accordance with Section C of the General Instructions to Form S-8) which
covers re-offers and re-sales by the Selling Shareholders described in the
Prospectus of shares of Common Stock of the Registrant issued or to be issued
pursuant to the Registrant's 1994 Stock Incentive Plan and 1994 Stock
Compensation Plan.
The second part contains information required in the Registration
Statement pursuant to Form S-8.
<PAGE> 4
FORM S-3
Reoffer
Prospectus 1,050,000 Shares
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_________________________
The Sports Club Company, Inc.
_________________________
COMMON STOCK
(Par Value $0.01 Per Share)
_________________________
This Prospectus is being used in connection with the offering, from time
to time, by certain shareholders (the "Selling Shareholders") of The Sports
Club Company, Inc. (the "Company"), of up to 1,050,000 shares (the "Shares") of
common stock, par value $.01 per share (the "Common Stock"), of the Company
which have been or may be acquired pursuant to the Company's 1994 Stock
Incentive Plan (the "Incentive Plan") and 1994 Stock Compensation Plan (the
"Compensation Plan"). The Company will not receive any of the proceeds from
the sale of the Shares by the Selling Shareholders. All expenses of
registration incurred in connection with this offering are being borne by the
Company, but all selling and other expenses incurred by the Selling
Shareholders in connection with the sale of the Shares will be borne by them.
The Company is not aware of any underwriting arrangements with respect to the
sale by the Selling Shareholders of any of the Shares.
The issued and outstanding Common Stock of the Company is listed on the
American Stock Exchange ("ASE"). Shares of Common Stock which may be issued
pursuant to the Incentive Plan and the Compensation Plan (collectively, the
"Plans") will also be listed on the ASE. On April 25, 1997, the closing price
of the Common Stock on the ASE was $4.25 per Share. The Shares may be offered
by or for the account of the Selling Shareholders, from time to time, on the
ASE or on any stock exchange on which the Shares may be listed at the time of
sale, in negotiated transactions, or through a combination of such methods of
sale, at fixed prices which may be changed, at market prices prevailing at the
time of sale, at prices related to such prevailing market prices, or at
negotiated prices. The Selling Shareholders may effect such transactions by
selling Shares to or through broker-dealers who may receive compensation in the
form of discounts, concessions, or commissions from the Selling Shareholders
and/or the purchaser of Shares for whom such broker-dealers may act as agent or
to whom they sell as principal, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). Any broker-dealer
acquiring Shares from a Selling Shareholder may sell such shares in its normal
market making activities, through other brokers on a principal or agency basis,
in negotiated transactions, or through a combination of such methods. See
"Selling Shareholders" and "Plan of Distribution."
FOR INFORMATION CONCERNING THE COMPANY'S CURRENT FINANCIAL POSITION AND
OTHER IMPORTANT FACTORS, SEE "RISK FACTORS" AND "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE."
<PAGE> 5
THE PURCHASE OF SECURITIES BEING OFFERED HEREBY IS SUBJECT TO CERTAIN
MATERIAL RISKS. SEE "RISK FACTORS" AT PAGES 6 THROUGH 9 OF THIS PROSPECTUS.
______________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
______________________________________________________________________________
The date of this Prospectus is April 25, 1997.
No person has been authorized to give any information or to make any
representation not contained in this Prospectus, and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities other than the Common Stock
offered by this Prospectus or an offer to sell or a solicitation of an offer to
buy such Common Stock in any jurisdiction to any person to whom it is unlawful
to make such offer or solicitation in such jurisdiction. Neither the delivery
of this Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that there has been no change in the affairs of the
Company or that the information herein is correct as of any time subsequent to
the date hereof.
TABLE OF CONTENTS
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DESCRIPTION PAGE NO.
<S> <C>
Available Information 3
Incorporation of Certain Documents by Reference 3
Recent Developments 4
The Company 5
Risk Factors 6
Use of Proceeds 10
Selling Shareholders 10
Plan of Distribution 10
Indemnification of Officers and Directors 11
Experts 12
Legal Matters 12
</TABLE>
2
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements, and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements, and other information can be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following Regional Offices: the
Northeast Regional Office, Seven World Trade Center, Suite 1300, New York, New
York 10048, and the Midwest Regional Office, Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can
also be inspected at the ASE or obtained by written request from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, or at the Company's main office at 11100 Santa Monica Boulevard, Suite
300, Los Angeles, California, 90025 and the Company's reports and proxy
statements may be inspected at such offices. The Commission also maintains a
site on the World Wide Web that contains reports, proxy and information
statements and other information regarding the Company. The address for such
site is http://www.sec.gov.
A registration statement on Form S-8, together with all amendments,
exhibits and documents incorporated therein by reference (the "Registration
Statement"), has been filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Shares offered by this Prospectus.
This Prospectus does not contain all the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. Statements in this Prospectus as
to the contents of exhibits are not necessarily complete, and each statement is
qualified in all respects by reference to the copies of documents filed or
incorporated by reference as exhibits to the Registration Statement or
otherwise filed with the Commission. See also "Incorporation of Certain
Documents by Reference."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents (or parts thereof) filed with the Commission by
the Company are incorporated by reference in this Prospectus:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996 as filed with the Commission on March 31, 1997
(Commission File No. 1-13290).
(b) The description of the Company's securities contained in the
Company's Registration Statement on Form S-1, declared effective by the
Commission on October 13, 1994 (Commission File No. 33-79552).
All documents filed by the Company pursuant to Sections 13(a), 13(c), or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
filing of a post-effective amendment indicating that all of the Shares offered
hereby have been sold, or deregistering all of the Shares that, at the time of
such post-effective amendment, remain unsold, shall be deemed
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to be incorporated by reference in this Prospectus and to be a part hereof from
the date of filing of such documents. Any statement contained herein or in any
document incorporated by reference herein which is deemed to be modified or
superseded, shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company shall furnish without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, copies of any or all of the documents
which are incorporated by reference herein (other than exhibits to such
documents, unless such exhibits are specifically incorporated by reference into
such documents). Written or telephone requests for such documents should be
directed to Investor Relations, The Sports Club Company, Inc, 11100 Santa
Monica Boulevard, Suite 300, Los Angeles, California, 90025 telephone (310)
479-5200.
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THE COMPANY
The Sports Club Company, Inc. (the "Company") which is recognized as a
leading developer and operator of sports and fitness clubs, operates sports and
fitness clubs ("Clubs") under the names the "Sports Club," and the "Spectrum
Club". The Company was incorporated in 1994 and acquired the Spectrum Clubs and
Sports Connections from a group of affiliated entities (the "Predecessors")
controlled by the Company's Chairman of the Board and largest shareholder, D.
Michael Talla. The Sports Club/LA and The Sports Club/Irvine were acquired in
October 1994. The Reebok Sports Club/NY, in which the Company currently owns a
50.1 % interest, was opened in April 1995. The Company has entered into an
agreement to acquire an additional interest in this Club. The Company owns
interests in eight Clubs, three of which are Sports Clubs, and five of which are
Spectrum Clubs. Seven of the Clubs are located in Southern California with the
remaining club, the Reebok Sports Club/NY, located in New York City. As of
February 28, 1997, there were 45,684 members of the Sports Clubs and the
Spectrum Clubs. The Company has two clubs under development in Valencia,
California and Houston, Texas.
The two types of Clubs operated by the Company are differentiated
primarily by the level of amenities and services provided, diversity of
facilities available and fees charged for services. The Sports Clubs have been
developed as "urban country clubs" offering a full range of services and
amenities, and are marketed primarily to affluent, health conscious
individuals. The Spectrum Clubs are designed as smaller-scale Sports Clubs. The
marketing focus of the Spectrum Clubs is directed primarily to professionals
and the range of services and fitness options offered at these Clubs is more
limited than at the Sports Clubs.
The Company's strategy is to respond to the public's demand for
facilities offering a wide variety of sports, fitness and social activities.
The Company's primary objectives are to develop and acquire multi-amenity
facilities complementary to the existing Clubs and to develop and implement new
programs at existing Clubs to maintain and expand membership. The Company
believes that the sports and fitness club industry is highly fragmented, with a
predominance of smaller owner/operators at the lower end of the market, and
that significant opportunities exist for the Company to acquire and operate
multi-amenity sports and fitness clubs under both The Sports Club and the
Spectrum Club name and concept.
The Company intends to expand further The Sports Club name and concept
through the development of new facilities or the acquisition and conversion of
existing facilities in selected metropolitan areas where a sufficient potential
membership base exists to support a 100,000 square foot or larger facility. To
expand further the Spectrum Club name and concept, the Company expects to
develop and acquire suitable facilities located in or adjacent to metropolitan
areas either near a Sports Club or in areas where the potential membership base
is significant but will not support a Sports Club facility. The Company
intends to develop and acquire clubs in locations which are in or adjacent to
large metropolitan areas both within and outside of California.
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The Company was organized in Delaware in January 1994. Its executive
officers are located at 11100 Santa Monica Boulevard, Suite 300, Los Angeles,
California 90025, and its telephone number is 310-479-5200.
6
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RISK FACTORS
Prospective investors should consider, among other things, the following
factors in connection with a decision to purchase the Common Stock offered
hereby.
ATTRACTION AND RETENTION OF MEMBERS
The profitability of the Club is dependent on the Company's ability to
attract and maintain its membership levels at these Clubs, and there can be no
assurance that it will be successful in these efforts, or that the membership
levels at one or more of its Clubs will not decline. There are numerous
factors that could lead to a decline in membership levels or that could prevent
the Company from increasing its membership at newer Clubs (at which membership
is generally not yet at a mature level), including the public image of the
Clubs, the ability of the Clubs to deliver quality service at a competitive
cost, the presence of direct and indirect competition in the areas in which the
Clubs are located, the public's interest in sports and fitness clubs and
general economic conditions. As a result of these factors, there can be no
assurance that the Clubs' membership levels will be adequate to maintain or
permit the expansion of their operations.
DEVELOPMENT AND ACQUISITION OF ADDITIONAL CLUBS; RISKS OF CONSTRUCTION DELAYS
The Company intends to develop, own and operate additional clubs under
both the Spectrum Club and The Sports Club names in selected locations in and
adjacent to large metropolitan areas both within and outside the state of
California. In addition, the Company intends to acquire existing facilities
and convert them to clubs operating under The Sports Club and the Spectrum Club
names in order to expand operations. A primary component of the Company's
strategy is to expand Club operations to other geographical locations outside
of Southern California. The successful development and acquisition of new
Clubs will depend on various factors, including the availability of suitable
sites for Clubs, the ability of the Company to successfully negotiate lease and
other contracts for new Clubs and to meet construction schedules and budgets,
the degree to which potential members outside of Southern California are
receptive to The Sports Club and the Spectrum Club concepts, and the extent to
which new Clubs otherwise perform in accordance with expectations. As a result
of the foregoing, there can be no assurance that the Company will be able to
develop or otherwise acquire sports and fitness facilities in areas into which
it wishes to expand, or that, even if such expansion should occur, it will be
profitable for the Company.
NEED FOR ADDITIONAL FINANCING
Expansion of the Company's sports and fitness club operations will
require substantial amounts of capital. The availability of additional
financing may affect the Company's ability to develop or acquire new Clubs.
The Company may use credit facilities and/or equipment financing obtained from
a lending institution or other means of financing. Moreover, the Company may
consider entering into joint venture and partnership agreements for the purpose
of developing new clubs. There can be no assurance that funds for such
expansion, whether from equity or debt financings or other sources, will be
available or, if available, will be on
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terms satisfactory to the Company. The Company's future growth may be limited
if it is unable to complete either the development or acquisition of new clubs
due to a lack of available funds.
DEPENDENCE ON SINGLE GEOGRAPHIC AREA; ECONOMIC DIFFICULTIES IN SOUTHERN
CALIFORNIA; RISK OF UNINSURED LOSS
Although the Company is in the process of developing a Sports Club in
Houston, Texas, currently all operating Clubs other than the Reebok/Sports
Club/NY are located in Southern California and thus the performance of the
Company will be particularly influenced by developments in this market area.
Further, the Northridge earthquake in January 1994, which caused extensive
damage to The Sports Club/LA, underscores the risks associated with such
locations. Although The Sports Clubs are insured against such losses, there
can be no assurance that such insurance proceeds will adequately compensate for
all economic consequences of an earthquake. The Clubs are covered by
comprehensive casualty and liability insurance and, with respect to certain
Clubs, earthquake and business interruption insurance. The Company believes
that the specifications and limits of its insurance policies are in accordance
with industry standards. There are, however, certain types of losses which may
be either uninsurable or not economically insurable. Should an uninsured loss
occur, the Company could lose both its invested capital in a particular Club or
Clubs and its anticipated profits from such Club or Clubs. Such events thus
could materially adversely affect the Company and its operations.
RISKS INVOLVED IN DEVELOPMENT ACTIVITIES THROUGH PARTNERSHIPS AND JOINT
VENTURES
The Company owns interests in the Spectrum Club/Manhattan Beach and the
Reebok-Sports Club/NY in partnership with unaffiliated investors, and may enter
into similar partnership or joint venture arrangements in the future.
Partnership and joint venture developments may, under certain circumstances,
present certain risks to the Company, including the possibility that the
Company's partners or co-venturers might become bankrupt, that such partners or
co-venturers might have economic or other business interests or goals that are
inconsistent with the interests or goals of the Company, and that such partners
or co-venturers may be in a position to take actions contrary to the
instructions or requests of the Company or contrary to the Company's policies
or objectives. Such developments have the risk of delay or impasse on
decisions regarding the jointly held business, which may prevent the Company
from making business decisions that would be in its best interest. These risks
are heightened in situations (such as the Spectrum Club/Manhattan Beach and the
Reebok Sports Club/NY) where the Company's partners may, under certain
circumstances, have the right to assert control over the day-to-day operations
of the Clubs.
COMPETITION; LIMITATIONS ON DEVELOPMENT OF CERTAIN CLUBS
The sports and fitness industry is highly competitive at the lower end
of the market and less competitive at the higher levels that cater to a more
sophisticated and affluent membership base. Although still a fragmented
industry, certain of the Company's competitors are significantly larger and
have greater financial and operating resources than the Company. In addition,
a number of individual and regional operators compete with the Company
throughout the Company's existing and targeted markets. Many of these clubs
attract the same types of
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members that the Spectrum Clubs and The Sports Clubs are targeting. The
Company also competes with recreational facilities established by governments
and businesses, the YMCA and YWCA, country clubs and weight-reducing salons, as
well as products and services that can be used in the home. As the general
public becomes increasingly aware of the benefits of regular exercise, it is
anticipated that additional sports and fitness businesses will emerge to
compete with established operators like the Company, some of which may be
larger and have greater financial and operating resources than the Company.
ABSENCE OF DIVIDENDS
The Company does not anticipate paying any cash dividends on its capital
stock in the foreseeable future.
DEPENDENCE UPON KEY PERSONNEL AND EXPERIENCED MANAGEMENT
The Company is dependent upon the efforts and skills of D. Michael Talla
and Nanette Pattee Francini and its other executive officers, who have
substantial experience in the sports and fitness club industry. The loss of
one or more officers could have a material adverse impact on the Company's
operations. In addition, the development and expansion of the Company's
business will require additional experienced management and operations
personnel. While the Company believes that it will be able to attract
qualified employees to manage and operate the Company's current and prospective
Clubs, no assurance can be given that such employees will be available to, or
can be retained by, the Company.
CONCENTRATION OF OWNERSHIP
D. Michael Talla owns and/or has voting control over approximately 42.4%
of the Company's Common Stock. See "Selling Stockholders." As a result, Mr.
Talla will likely be in a position to select all of the members of the
Company's Board of Directors, to increase the Company's authorized capital
stock, to cause the dissolution of the Company or the merger of the Company
with another entity, and to control the outcome of all other matters requiring
stockholder approval, including significant corporate transactions. The
exercise of such control could delay or preclude the possibility of a takeover
of, or a change of control involving, the Company, which could adversely affect
the market price of the Company's Common Stock.
CERTAIN ANTI-TAKEOVER CHARTER PROVISIONS AND EFFECTS OF DELAWARE LAW
The Company is subject to the anti-takeover provisions of Section 203 of
the Delaware General Corporation Law, which may have the effect of deterring
hostile takeovers or delaying changes in control of the Company. In addition,
the Board of Directors has authority to issue up to 1,000,000 shares of
Preferred Stock and to fix the rights, preferences, privileges and
restrictions, including voting rights, of these shares without any further vote
or action by the stockholders. The rights of the holders of Common Stock will
be subject to, and may be adversely affected by, the rights of the holders of
any Preferred Stock that may be issued in the future. The issuance of
Preferred Stock, while providing desirable flexibility in connection with
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possible acquisitions and other corporate purposes, could have the effect of
making it more difficult for a third party to acquire a majority of the
outstanding voting stock of the Company, thereby delaying, deferring or
preventing a change in control of the Company. Furthermore, such Preferred
Stock may have other rights, including economic rights, senior to the Common
Stock, and as a result, the issuance thereof could have a material adverse
effect on the market value of the Common Stock. Furthermore, certain
provisions of Delaware law could delay or make more difficult a merger, tender
offer or proxy contest involving the Company.
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USE OF PROCEEDS
The Shares which may be sold under this Prospectus will be sold for the
respective accounts of each of the Selling Shareholders. Accordingly, the
Company will not realize any proceeds from the sale of the Shares. The
Company, however, will receive proceeds (in an amount that cannot be determined
at this time) from the sale of Shares pursuant to the Incentive Plan. Such
proceeds will be available to the Company for working capital and general
corporate purposes. No assurance can be given, however, as to when or if any
or all of such Shares will be sold. See "Selling Shareholders" and "Plan of
Distribution."
SELLING SHAREHOLDERS
Shares to be sold pursuant to this Prospectus shall be Shares acquired
under the Plans by officers, directors and other affiliates of the Company. The
following table sets forth (i) the name of each Selling Shareholder, (ii) the
nature of any position, office, or other material relationship which each such
Selling Shareholder has had with the Company or any of its affiliates within
the last three (3) years, (iii) the number of Shares and the percentage owned
by each such Selling Shareholder, (iv) the number of Shares offered for each
Selling Shareholder's account, and (v) the number of Shares and the percentage
owned by each such Selling Shareholder after completion of the offering,
assuming that all Shares offered pursuant to this Prospectus are sold.
<TABLE>
<CAPTION>
Number and Number and
Percentage Percentage of
of Shares Number of Shares Shares Owned
Selling Relationship to Owned Prior Offered for Selling Giving Effect
Shareholder the Company to Offering Shareholder's Account to Offering
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<S> <C> <C> <C> <C>
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[TO BE COMPLETED PURSUANT TO RULE 424(B)]
PLAN OF DISTRIBUTION
The sales of the Shares by the Selling Shareholders may be effected,
from time to time, on the ASE or on any stock exchange on which the Shares may
be listed at the time of sale, in negotiated transactions, or through a
combination of such methods of sale, at fixed prices which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices. The Selling Shareholders
may effect such transactions by selling Shares to or through broker-dealers,
and such broker-dealers may receive compensation in the form of discounts,
concessions, or commissions from the Selling Shareholders and/or the purchasers
of Shares for whom such broker-dealers may act as agent or to whom they sell as
principal, or both (which compensation as to a particular broker-dealer might
be in excess of customary commissions).
The Selling Shareholders and any broker-dealers that act in connection
with the sale of the Shares hereunder might be deemed to be "Underwriters"
within the meaning of Section 2(11) of the Securities Act; any commissions
received by them and any profit realized on the resale
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of Shares as principals might be deemed to be underwriting compensation under
the Securities Act.
Any broker-dealer acquiring Shares from a Selling Shareholder may sell
the Shares either directly, in its normal market-making activities, through or
to other brokers on a principal or agency basis, or to its customers. Any such
sales may be at prices then prevailing on the ASE, at prices related to such
prevailing market prices, at negotiated prices, or at prices reflecting the
application of a combination of such methods.
The Company has advised the Selling Shareholders that anti-manipulative
rules contained in Regulation M promulgated under the Exchange Act may apply to
their sales in the market. The Company has furnished the Selling Shareholders
with copies of these rules, and has informed the Selling Shareholders of the
possible need for them to deliver copies of this Prospectus in connection with
their resales of the Shares. The Selling Shareholders may indemnify any
broker-dealer that participates in transactions involving sale of the Shares
against certain liabilities, including liabilities arising under the Securities
Act. Any commissions paid or any discounts or concessions allowed to any such
broker-dealers, and, if any such broker-dealer purchases shares as a principal,
any profits received on the resale of such Shares may be deemed to be
underwriting discounts and commissions under the Securities Act.
Upon the Company's being notified by any Selling Shareholders that any
material arrangement has been entered into with a broker-dealer for the sale of
Shares through a cross or block trade, a supplemental prospectus will be filed
under Rule 424(c) under the Securities Act, setting forth the name of the
participating broker-dealer(s), the number of shares involved, the price at
which such Shares were sold by the Selling Shareholder, the commissions paid or
discounts or concessions allowed by the Selling Shareholder to such
broker-dealer(s), and where applicable, that such broker-dealer(s), did not
conduct any investigation to verify the information set out in this Prospectus.
Any Shares which qualify for resale pursuant to Rule 144 promulgated
under the Securities Act may be sold under that Rule rather than pursuant to
this Prospectus.
There can be no assurance that the Selling Shareholders will sell all
or even any of the Shares which may be offered by them or any of them
hereunder.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Company's Certificate of Incorporation and Bylaws and Delaware law
provide for the indemnification of the Company's officers and directors in
certain circumstances.
Insofar as indemnification for liabilities arising under the Securities
Act of 1993, as amended, may be permitted to directors, officers, or persons
controlling the Company, pursuant to the foregoing provisions, the Company has
been informed 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.
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EXPERTS
The consolidated financial statements of the Company as of December 31,
1996 and 1995, and for each of the years in the three-year period ended
December 31, 1996, have been incorporated by reference herein and in the
Registration Statement in reliance upon the report of KMPG Peat Marwick LLP.,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for
the Company by Kinsella, Boesch, Fujikawa & Towle, 1901 Avenue of the Stars,
7th Floor, Los Angeles, California.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION*
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION*
*Documents containing the information required by Part I of this
Registration Statement will be sent or given to each optionee in accordance
with Rule 428(b)(1). In accordance with the Note to Part I of Form S-8, such
documents are not filed with the Securities and Exchange Commission (the
"Commission") either as part of this Registration Statement or as prospectuses
or prospectus supplements.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Sports Club Company, Inc. (the "Registrant") is subject to the
informational requirements of the Securities Exchange Act of 1934 (the "1934
Act") and, accordingly, files periodic reports and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information concerning the Registrant filed with the
Commission may be inspected and copies may be obtained (at prescribed rates) at
the Commission's Public Reference Section, Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549.
The following documents are incorporated by reference in this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996 as filed with the Commission on March 31, 1997
(Commission File No. 1-13290).
(b) The description of the Registrant's securities contained in
the Registrant's Registration Statement on Form S-1, declared effective by the
Commission on October 13, 1994 (Commission File No. 33-79552).
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), or 15(d) of the Exchange Act after the date of this Prospectus and prior
to the filing of a post-effective amendment indicating that all of the Shares
offered hereby have been sold, or deregistering all of the Shares that, at the
time of such post-effective amendment, remain unsold, shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in any
document incorporated by
14
<PAGE> 18
reference herein which is deemed to be modified or superseded, shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable, as the Common Stock is registered under Section 12 of
the Securities Exchange Act of 1934.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Certificate of Incorporation includes provisions which
limit the liability of its directors. As permitted by applicable provisions of
the Delaware General Corporation Law (the "Delaware Law"), directors will not
be liable to the Registrant for monetary damages arising from a breach of their
fiduciary duty as directors in certain circumstances. This limitation does not
affect liability for any breach of a director's duty to the Registrant or its
stockholders (i) with respect to approval by the director of any transaction
from which he or she derives an improper personal benefit, (ii) with respect to
acts or omissions involving an absence of good faith, that the director
believes to be contrary to the best interests of the Registrant or its
stockholders, that involve intentional misconduct or a knowing and culpable
violation of law, that constitute an unexcused pattern or inattention that
amounts to an abdication of his or her duty to the Registrant or its
stockholders, or that show a reckless disregard for duty to the Registrant or
its stockholders in circumstances in which he or she was, or should have been
aware, in the ordinary course of performing his or her duties, of a risk of
serious injury to the Registrant or its stockholders, or (iii) based on
transactions between the Registrant and its directors or another corporation
with interrelated directors or on improper distributions, loans or guarantees
under applicable sections of Delaware Law. This limitation of directors'
liability also does not affect the availability of equitable remedies, such as
injunctive relief or rescission.
The Registrant's Bylaws authorize the Registrant to indemnify its
directors and officers to the full extent permitted by Delaware Law, including
circumstances in which indemnification is otherwise discretionary under
Delaware Law, and the Registrant anticipates entering into indemnification
agreements (the "Indemnification Agreements") with its directors providing such
indemnity. The Indemnification Agreements will constitute binding agreements
between the Registrant and each of the other parties thereto, and thus will
prevent the Registrant from modifying its indemnification policy in a way that
is adverse to any person who is a party to an Indemnification Agreement.
15
<PAGE> 19
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Prior to the date of filing of this Registration Statement, the
Registrant issued 8,000 shares to its directors as compensation for their
service on the Board of Directors of the Registrant, pursuant to the 1994 Stock
Compensation Plan. These shares were issued in reliance on the exemption
provided by Section 4(1) of the Securities Act of 1933.
ITEM 8. EXHIBITS
For a list of all exhibits filed or included as part of this
Registration Statement, see "Index to Exhibits" at the end of this Registration
Statement.
ITEM 9. UNDERTAKINGS
1. The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement.
(b) That, for the purpose of determining any liability
under the Securities Act of 1934, to treat each post-effective amendment as a
new registration statement relating to the securities offered, and the offering
of the securities at that time to be the initial bona fide offering.
(c) 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.
2. 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.
3. The undersigned Registrant hereby undertakes to deliver or
cause to be delivered with the prospectus, to each person to whom the
prospectus is sent or given, the latest annual report to security holders that
is incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required to be
presented by Article 3 of Regulation S-X are not set forth in the prospectus,
to deliver, or cause to be delivered to each person to whom the prospectus is
sent or given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial information.
16
<PAGE> 20
4. 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 the 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.
17
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 Los Angeles, State of California, on April 25,
1997.
THE SPORTS CLUB COMPANY, INC.
By: /s/ D. Michael Talla
-----------------------------------
D. Michael Talla
Chairman of the Board
Chief Executive Officer
(Duly Authorized Representative)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ D. Michael Talla Chairman of the Board April 25, 1997
- ------------------------------- Chief Executive
D. Michael Talla (Principal Executive Officer)
/s/ John M. Gibbons President, Chief Operating Officer April 25, 1997
- ------------------------------- and a Director
John M. Gibbons
/s/ Nanette Pattee Francini Executive Vice President, April 25, 1997
- ------------------------------- Secretary and a Director
Nanette Pattee Francini
/s/ Timothy M. O'Brien Chief Financial Officer April 25, 1997
- ------------------------------- (Principal Financial and Accounting
Timothy M. O'Brien Officer)
/s/ Rex A Licklider Vice Chairman of the Board April 25, 1997
- -------------------------------
Rex A. Licklider
/s/ Andrew L. Turner Director April 25, 1997
- -------------------------------
Andrew L. Turner
/s/ Dennison Veru Director April 25, 1997
- -------------------------------
Dennison Veru
</TABLE>
18
<PAGE> 22
POWER OF ATTORNEY
The undersigned director, officer and/or selling stockholder of THE
SPORTS CLUB COMPANY (the "Company"), does hereby constitute and appoint D.
Michael Talla, John M. Gibbons and Timothy M. O'Brien, and each of them, with
full power of substitution and resubstitution, as his true and lawful
attorney(s) to do any and all things, and to execute any and all instruments,
which said attorney(s) and agent(s) may deem necessary or advisable to enable
the Company to comply with the Securities Act of 1933, as amended, and any
rules, regulations and requirements of the Securities and Exchange Commission
in respect thereof, in connection with the registration under the Securities
Act of 1933, as amended, of shares of Common Stock of the Company, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign the name of the undersigned in the capacities indicated
below to the Registration Statement on Form S-8 to be filed for such
registration, and any and all amendments (including post-effective amendments)
thereto whenever filed.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ D. Michael Talla Chairman of the Board April 25, 1997
- ------------------------------- Chief Executive
D. Michael Talla (Principal Executive Officer)
/s/ John M. Gibbons President, Chief Operating Officer April 25, 1997
- ------------------------------- and a Director
John M. Gibbons
/s/ Nanette Pattee Francini Executive Vice President, April 25, 1997
- ------------------------------- Secretary and a Director
Nanette Pattee Francini
/s/ Timothy M. O'Brien Chief Financial Officer April 25, 1997
- ------------------------------- (Principal Financial and Accounting
Timothy M. O'Brien Officer)
/s/ Rex A Licklider Vice Chairman of the Board April 25, 1997
- -------------------------------
Rex A. Licklider
/s/ Andrew L. Turner Director April 25, 1997
- -------------------------------
Andrew L. Turner
/s/ Dennison Veru Director April 25, 1997
- -------------------------------
Dennison Veru
</TABLE>
19
<PAGE> 23
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequential
Exhibit Description Page Number
- ------- ----------- -----------
<S> <C>
5 Opinion of Kinsella, Boesch, Fujikawa & Towle LLP as to the
validity of the Common Stock being registered
23.1 Consent of Kinsella, Boesch, Fujikawa & Towle LLP (appears in
their opinion filed as Exhibit 5)
23.2 Consent of Independent Certified Public Accountants
24.1 Power of Attorney (appears on Page 19)
</TABLE>
<PAGE> 1
EXHIBIT 5
April 25, 1997
Board of Directors
The Sports Club Company, Inc.
11100 Santa Monica Blvd., Suite 300
Los Angeles, CA 90025
Re: The Sports Club Company, Inc. 1994
-- Stock Incentive Plan Registration Statement on Form S-8
Dear Board Members:
We have acted as counsel to The Sports Club Company, Inc., a Delaware
Corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form S-8 filed with the Securities and Exchange
Commission (the "Registration Statement") under the Securities Act of 1933, as
amended, relating to shares of common stock, par value $.01 per share (the
"Common Stock") of the Company which may be issued or have been issued pursuant
to The Sports Club Company, Inc. 1994 Stock Incentive Plan (the "Plan"), all as
more fully described in the Registration Statement. You have requested the
opinion of this firm with respect to certain legal aspects of the proposed
offering.
We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion and based thereon, we are of the
opinion that the Common Stock to be originally issued pursuant to and in
accordance with the terms of the Plan or the Agreements, when issued pursuant
thereto and in accordance therewith, hereafter originally issued will be duly
and validly issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8 and to references to our firm included under
the caption "Legal Opinion" in the Prospectus which is part of the Registration
Statement.
Very truly yours,
KINSELLA, BOESCH, FUJIKAWA & TOWLE, LLP
By: /s/ Joseph P. Bartlett
-------------------------------
JOSEPH P. BARTLETT
<PAGE> 1
EXHIBIT 23.2
Board of Directors
The Sports Club Company, Inc.
Los Angeles, California
We consent to the use of our reports incorporated by reference and to the
reference to our firm under the heading "Experts" in The Sports Club Company,
Inc.'s Prospectus and related Registration Statement on Form S-8.
/s/ KPMG Peat Marwick LLP
Los Angeles, California
April 25, 1997
