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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 200549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) FEBRUARY 18, 1999
THE SPORTS CLUB COMPANY, INC.
Delaware 1-13290 95-4479735
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification No.)
11100 Santa Monica Boulevard, Suite 300
Los Angeles, California 90025
(address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (310) 479-5200
(Former name or former address, if changed since last report.) Not applicable
Page 1 of 3
Index of Exhibits on Page 3.
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ITEM 5. OTHER EVENTS.
On February 18, 1999, the Company's Board of Directors approved an
amendment to the Company's Stockholder Rights Plan adopted on September 29,
1998. The Amendment provides that (a) the Rights will not be triggered as a
result of the acquisition by Millennium Entertainment Partners L.P. and its
affiliates ("Millennium") of up to 2,000,000 shares of the Company's Common
Stock from the Company's Chief Executive Officer, D. Michael Talla, (b) each of
Millennium and Mr. Talla will be allowed to acquire up to 250,000 more shares
than previously allowed under the Rights Agreement without triggering the
Rights, and (c) in calculating the number of shares owned by Mr. Talla, certain
shares which Mr. Talla does not own but which are subject to a voting agreement
to which he is a party will not be included.
On March 15, 1999, the Company announced that it is privately offering
$100,000,000 of senior secured notes. The proceeds of the offering would be used
to repay existing indebtedness and develop new sports and fitness clubs. The
offering would not be registered under the Securities Act of 1933 or applicable
state securities laws and the notes could not be offered or sold in the United
States absent registration or an exemption from applicable registration
requirements. There can be no assurance that the Company will be able to
successfully complete the offering.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit No. Exhibit
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4.1 First Amendment to Rights Agreement between The
Sports Club Company, Inc. and American Stock
Transfer & Trust Company dated
February 18, 1999.
99.1 Press Release dated February 18, 1999.
99.2 Press Release dated March 15, 1999.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed by the undersigned hereunto
duly authorized.
THE SPORTS CLUB COMPANY, INC.
By: /s/ Timothy O'Brien
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Timothy O'Brien
Chief Financial Officer
March 15, 1999
Page 2 of 3
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EXHIBIT INDEX
ITEM DESCRIPTION
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4.1 First Amendment to Rights Agreement between The Sports Club
Company, Inc. and American Stock Transfer & Trust Company
dated February 18, 1999.
99.1 Press Release dated February 18, 1999.
99.2 Press Release dated March 15, 1999.
Page 3 of 3.
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EXHIBIT 4.1
FIRST AMENDMENT TO RIGHTS AGREEMENT
This First Amendment to Rights Agreement is made and entered into as of
the 18th day of February, 1999, and amends that certain agreement (the "Rights
Agreement") entered into by and between The Sports Club Company, Inc., a
Delaware corporation (the "Company"), and American Stock Transfer & Company, a
New York corporation (the "Rights Agent") dated October 6, 1998. Capitalized
terms used but not defined herein shall have the meanings ascribed to such terms
in the Rights Agreement.
R E C I T A L S
WHEREAS, the Board of Directors of the Company (the "Board") on
September 29, 1998 (the "Declaration Date") authorized and declared a dividend
of one preferred share purchase right for each Common Share of the Company
outstanding on October 6, 1998, each Right representing the right to purchase
one five-hundredth of a Preferred Share upon the terms and subject to the
conditions set forth herein, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date or the Expiration Date;
WHEREAS, the Company and the Rights Agent entered into the Rights
Agreement as of October 6, 1998;
WHEREAS, certain stockholders of the Company requested that the Company
amend the Rights Agreement as set forth herein;
WHEREAS, the Board has determined that it is in the best interests of
the Company and its stockholders to amend the Rights Plan as set forth herein;
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties hereto hereby agree as follows:
1. There is hereby added to the definitions set forth in Section 1
of the Rights Agreement the following defined terms:
"Excluded Shares" shall mean the following Voting Shares: (a)
with respect to all Stockholders, Common Shares acquired: (i) by a bona
fide gift; (ii) as the result of the death of a Person, pursuant to a
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will or the laws of descent; or (iii) upon the exercise of any stock
option granted by the Company to an employee, officer or director, (b)
with respect to Millennium, Common Shares subject to the Pledge
Agreement, and (c) with respect to each of Talla and Millennium, up to
250,000 Common Shares provided that such Person first offer the Company
in writing the opportunity to acquire any such Common Shares to be
acquired after the date hereof.
"Millennium" shall mean Millennium Development Partners, L.P.,
Millennium Entertainment Partners, L.P., Millennium Partners LLC and
their associates and affiliates.
"Pledge Agreements" shall mean (a) that certain Pledge Agreement
dated December 30, 1997, by and between Millennium and Talla, pursuant
to which Talla has pledged to Millennium one million Common Shares, and
(b) any bona fide pledge agreement or pledge agreements entered into by
and between the same parties after the date hereof providing for the
pledge by Talla to Millennium of up to one million additional Common
Shares.
"Talla" shall mean D. Michael Talla.
2. The definition of "15% Stockholder" set forth in Section 1 of
the Rights Agreement is hereby amended to read in full as follows:
"15% Stockholder" shall mean any Person that Beneficially Owns
15% or more of the Voting Shares then outstanding; provided, however,
that the term "15% Stockholder" shall not include:
(i) an Exempt Person;
(ii) any Person that would not otherwise Beneficially Own 15%
or more of the Voting Shares then outstanding but for a reduction in the number
of outstanding Voting Shares resulting from an acquisition or retirement of
Voting Shares by the Company commenced on or after the date hereof; provided,
however, that the term "15% Stockholder" shall include such Person from and
after the first date upon which (A) such Person, since the date of the
acquisition or retirement of Voting Shares which results in such Person
Beneficially Owning 15% or more of the outstanding Voting Shares then
outstanding, shall have acquired Beneficial Ownership of one or more additional
Voting Shares, other than the Excluded Shares, and (B) such Person, together
with all affiliates and associates of such Person, shall Beneficially Own 15% or
more of the Voting Shares of the Company then outstanding;
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(iii) any person that would not otherwise be a 15% Stockholder
but for its ownership of the Rights;
(iv) Any Person that is the Beneficial Owner of 15% or more
of the outstanding Common Shares as of the Declaration Date unless or until such
Person shall acquire, without the prior approval of the Board of Directors,
Beneficial Ownership of additional Voting Shares, other than the Excluded
Shares, equal to 2% or more of the Voting Shares of the Company then
outstanding.
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In calculating the percentage of the outstanding Voting Shares that are
Beneficially Owned by a Person for purposes of this definition, Voting Shares
that are Beneficially Owned by such Person shall be deemed outstanding, and
Voting Shares that are not Beneficially Owned by such Person and that are
subject to issuance upon the exercise or conversion of outstanding conversion
rights, exchange rights, rights, warrants or options shall not be deemed
outstanding. Any determination made by the Board of Directors of the Company as
to whether any Person is or is not a 15% Stockholder shall be conclusive and
binding upon all holders of Rights.
3. There is hereby added to the definition of "Beneficial Owner"
set forth in Section 1 of the Rights Agreement the following paragraphs:
Notwithstanding anything to the contrary in this Section, no
Person shall be deemed to be the Beneficial Owner of, or to Beneficially
Own, any Common Shares which such Person Beneficially Owns solely as a
result of being a party to the Voting Agreement dated September 14,
1994, by and between Talla and certain other shareholders of the
Company, as amended from time to time, provided that the total number of
Common Shares subject to such agreement (other than Common Shares
Beneficially Owned by Talla) does not exceed one million shares.
4. Except as amended hereby, the Rights Agreement remains in full
force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
THE SPORTS CLUB COMPANY, INC.
Attest:
By /s/ Lois J. Barberio By /s/ John M. Gibbons
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Name: Lois J. Barberio Name: John M. Gibbons
Title: Secretary Title: President
AMERICAN STOCK TRANSFER & TRUST COMPANY
Attest:
By /s/ Susan Silber By /s/ Herbert J. Lemmer
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Name: Susan Silber Name: Herbert J. Lemmer
Title: Assistant Secretary Title: Vice President
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EXHIBIT 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
CONTACT: John M. Gibbons
PRESIDENT AND CHIEF
OPERATING OFFICER
THE SPORTS CLUB COMPANY, INC.
(310) 479-5200
THE SPORTS CLUB COMPANY, INC.
AMENDS STOCKHOLDER RIGHTS PLAN
LOS ANGELES, CA (February 18, 1999) - The Sports Club Company, Inc. (AMEX: SCY)
today announced that its Board of Directors has approved an amendment to the
Company's Stockholder Rights Plan adopted on September 29, 1998. The amendment
allows two stockholders, D. Michael Talla and Millennium Entertainment Partners,
each to buy 250,000 shares of Common Stock, more than previously allowed by the
Rights Plan.
The Sports Club Company, Inc. operates upscale health and fitness clubs under
the Sports Club and Spectrum Club names.
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EXHIBIT 99.2
NEWS RELEASE
FOR IMMEDIATE RELEASE CONTACT: JOHN M. GIBBONS
PRESIDENT AND
CHIEF OPERATING OFFICER
THE SPORTS CLUB COMPANY, INC.
(310) 479-5200
THE SPORTS CLUB COMPANY ANNOUNCES IT IS PRIVATELY OFFERING $100,000,000 OF
SENIOR SECURED NOTES
LOS ANGELES, CA (March 15, 1999) -- The Sports Club Company, Inc. (AMEX:SCY)
today announced that it is privately offering $100,000,000 of senior secured
notes. The proceeds of the offering would be used to repay existing indebtedness
and develop new sports and fitness clubs. The offering would not be registered
under the Securities Act of 1933 or applicable state securities laws and the
notes could not be offered or sold in the United States absent registration or
an exemption from applicable registration requirements. There can be no
assurance that the Company will be able to successfully complete the offering.
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