-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G8yrXDgbZmfCeG3Gik4MyEhmBoRDz1Hj5Eruj8Nug3QEY9vngOM0aW/IYw0f0eqm 0ADr7Lzq2qDbZYGPkk4dKg== 0000950142-05-002989.txt : 20051117 0000950142-05-002989.hdr.sgml : 20051117 20051117135156 ACCESSION NUMBER: 0000950142-05-002989 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20051117 DATE AS OF CHANGE: 20051117 GROUP MEMBERS: KARIM SAMII GROUP MEMBERS: PARDUS CAPITAL MANAGEMENT L.P. GROUP MEMBERS: PARDUS CAPITAL MANAGEMENT LLC GROUP MEMBERS: PARDUS EUROPEAN SPECIAL OPPORTUNITIES MASTER FUND L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: BALLY TOTAL FITNESS HOLDING CORP CENTRAL INDEX KEY: 0000770944 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MEMBERSHIP SPORTS & RECREATION CLUBS [7997] IRS NUMBER: 363228107 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-47769 FILM NUMBER: 051212108 BUSINESS ADDRESS: STREET 1: 8700 WEST BRYN MAWR AVENUE STREET 2: SECOND FLOOR CITY: CHICAGO STATE: IL ZIP: 60631 BUSINESS PHONE: 773-380-3000 MAIL ADDRESS: STREET 1: 8700 WEST BRYN MAWR AVENUE STREET 2: SECOND FLOOR CITY: CHICAGO STATE: IL ZIP: 60631 FORMER COMPANY: FORMER CONFORMED NAME: BALLYS HEALTH & TENNIS CORP DATE OF NAME CHANGE: 19940526 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Pardus Capital Management L.P. CENTRAL INDEX KEY: 0001337183 IRS NUMBER: 342037131 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 1001 AVENUE OF THE AMERICAS STREET 2: SUITE 1001 CITY: NEW YORK STATE: NY ZIP: 10018 BUSINESS PHONE: 212-719-7550 MAIL ADDRESS: STREET 1: 1001 AVENUE OF THE AMERICAS STREET 2: SUITE 1001 CITY: NEW YORK STATE: NY ZIP: 10018 SC 13D/A 1 sc13da9_bally.txt AMENDMENT NO. 9 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (AMENDMENT NO. 9)* BALLY TOTAL FITNESS HOLDING CORPORATION (Name of Issuer) COMMON STOCK, PAR VALUE $0.01 SHARE (Title of Class of Securities) 05873K108 (CUSIP Number) MR. JOSEPH R. THORNTON, CHIEF OPERATING OFFICER PARDUS CAPITAL MANAGEMENT L.P. 1001 AVENUE OF THE AMERICAS SUITE 1100 NEW YORK, NY 10018 (212) 719-7550 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) with a copy to JEFFREY D. MARELL, ESQ. CARL L. REISNER, ESQ. PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10019-6064 November 17, 2005 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject to this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [_]. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes.) CUSIP NO. 05873K108 PAGE 2 OF 10 SCHEDULE 13D - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Pardus European Special Opportunities Master Fund L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] Not Applicable - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OR ORGANIZATION United States - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 5,087,693* NUMBER OF ----------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY -0- OWNED BY ----------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 5,087,693* PERSON ----------------------------------- WITH 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,087,693* - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] Not Applicable - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.1%* - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN - -------------------------------------------------------------------------------- * Pardus European Special Opportunities Master Fund L.P., a limited partnership formed under the laws of the Cayman Islands (the "Fund"), is the beneficial owner of 5,087,693 shares of the common stock, par value $0.01 per share (the "Shares"), of Bally Total Fitness Holding Corporation, a Delaware corporation (the "Company"). Pardus Capital Management L.P., a Delaware limited partnership ("PCM"), serves as the investment manager of the Fund and possesses sole power to vote and direct the disposition of all Shares held by the Fund. Pardus Capital Management LLC, a Delaware limited liability company ("PCM LLC"), as the general partner of PCM, and Mr. Karim Samii, as the sole member of PCM LLC, may be deemed to be the beneficial owners of all Shares held by the Fund; however, PCM LLC and Mr. Samii disclaim beneficial ownership of all Shares held by the Fund. Based on information provided by the Company, as of September 30, 2005 there were 36,083,560 shares of the Company's common stock issued and outstanding. Thus, for the purposes of Reg. Section 240.13d-3, the Fund and PCM are deemed to beneficially own, and PCM LLC and Mr. Karim Samii may be deemed to beneficially own, 5,087,693 Shares, or 14.1% of the issued and outstanding Shares. Pursuant to Rule 13d-3(d) of the General Rules and Regulations promulgated under the Securities Exchange Act of 1934, as amended (the "Act"), and included in the 5,087,693 Shares beneficially owned by the Fund, the Fund and PCM are deemed, and PCM LLC and Mr. Samii may be deemed, to be the beneficial owner of 87,693 shares issued by the Company to the Fund as consideration that the Fund elected to receive in connection with a consent solicitation commenced by the Company on October 18, 2005. PCM LLC and Mr. Samii disclaim beneficial ownership of all Shares held by the Fund. The consent solicitation expired at 5:00 p.m. on November 1, 2005 and the Fund expects to receive the 87,693 additional shares from the Company shortly after the tenth business day following such expiration date. CUSIP NO. 05873K108 PAGE 3 OF 10 SCHEDULE 13D - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Pardus Capital Management L.P. (34-2037131) - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] Not Applicable - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OR ORGANIZATION United States - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 5,087,693* NUMBER OF ----------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY -0- OWNED BY ----------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 5,087,693* PERSON ----------------------------------- WITH 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,087,693* - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] Not Applicable - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.1%* - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IA - -------------------------------------------------------------------------------- * The Fund is the beneficial owner of 5,087,693 Shares of the Company. PCM serves as the investment manager of the Fund and possesses sole power to vote and direct the disposition of all Shares held by the Fund. PCM LLC, as the general partner of PCM, and Mr. Karim Samii, as the sole member of PCM LLC may be deemed to be the beneficial owners of all Shares held by the Fund; however, PCM LLC, and Mr. Samii disclaim beneficial ownership of all Shares held by the Fund. Based on information provided by the Company, as of September 30, 2005 there were 36,083,560 shares of the Company's common stock issued and outstanding. Thus, for the purposes of Reg. Section 240.13d-3, the Fund and PCM are deemed to beneficially own, and PCM LLC and Mr. Karim Samii may be deemed to beneficially own, 5,087,693 Shares, or 14.1% of the issued and outstanding Shares. Pursuant to Rule 13d-3(d) of the General Rules and Regulations promulgated under the Act and included in the 5,087,693 Shares beneficially owned by the Fund, the Fund and PCM are deemed, and PCM LLC and Mr. Samii may be deemed, to be the beneficial owner of 87,693 shares issued by the Company to the Fund as consideration that the Fund elected to receive in connection with a consent solicitation commenced by the Company on October 18, 2005. PCM LLC and Mr. Samii disclaim beneficial ownership of all Shares held by the Fund. The consent solicitation expired at 5:00 p.m. on November 1, 2005 and the Fund expects to receive the 87,693 additional shares from the Company shortly after the tenth business day following such expiration date. CUSIP NO. 05873K108 PAGE 4 OF 10 SCHEDULE 13D - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Pardus Capital Management LLC - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] Not Applicable - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OR ORGANIZATION United States - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 5,087,693* NUMBER OF ----------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY -0- OWNED BY ----------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 5,087,693* PERSON ----------------------------------- WITH 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,087,693* - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] Not Applicable - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.1%* - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON OO - -------------------------------------------------------------------------------- * The Fund is the beneficial owner of 5,087,693 Shares of the Company. PCM serves as the investment manager of the Fund and possesses sole power to vote and direct the disposition of all Shares held by the Fund. PCM LLC, as the general partner of PCM, and Mr. Karim Samii, as the sole member of PCM LLC, may be deemed to be the beneficial owners of all Shares held by the Fund; however, PCM LLC and Mr. Samii disclaim beneficial ownership of all Shares held by the Fund. Based on information provided by the Company, as of September 30, 2005 there were 36,083,560 shares of the Company's common stock issued and outstanding. Thus, for the purposes of Reg. Section 240.13d-3, the Fund and PCM are deemed to beneficially own, and PCM LLC and Mr. Karim Samii may be deemed to beneficially own, 5,087,693 Shares, or 14.1% of the issued and outstanding Shares. Pursuant to Rule 13d-3(d) of the General Rules and Regulations promulgated under the Act and included in the 5,087,693 Shares beneficially owned by the Fund, the Fund and PCM are deemed, and PCM LLC and Mr. Samii may be deemed, to be the beneficial owner of 87,693 shares issued by the Company to the Fund as consideration that the Fund elected to receive in connection with a consent solicitation commenced by the Company on October 18, 2005. PCM LLC and Mr. Samii disclaim beneficial ownership of all Shares held by the Fund. The consent solicitation expired at 5:00 p.m. on November 1, 2005 and the Fund expects to receive the 87,693 additional shares from the Company shortly after the tenth business day following such expiration date. CUSIP NO. 05873K108 PAGE 5 OF 10 SCHEDULE 13D - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON Mr. Karim Samii - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS WC - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [_] Not Applicable - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OR ORGANIZATION United States - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 5,087,693* NUMBER OF ----------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY -0- OWNED BY ----------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING 5,087,693* PERSON ----------------------------------- WITH 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,087,693* - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] Not Applicable - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.1%* - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - -------------------------------------------------------------------------------- * The Fund is the beneficial owner of 5,087,693 Shares of the Company. PCM serves as the investment manager of the Fund and possesses sole power to vote and direct the disposition of all Shares held by the Fund. PCM LLC, as the general partner of PCM, and Mr. Karim Samii, as the sole member of PCM LLC, may be deemed to be the beneficial owners of all Shares held by the Fund; however, PCM LLC and Mr. Samii disclaim beneficial ownership of all Shares held by the Fund. Based on information provided by the Company, as of September 30, 2005 there were 36,083,560 shares of the Company's common stock issued and outstanding. Thus, for the purposes of Reg. Section 240.13d-3, the Fund and PCM are deemed to beneficially own, and PCM LLC and Mr. Karim Samii may be deemed to beneficially own, 5,087,693 Shares, or 14.1% of the issued and outstanding Shares. Pursuant to Rule 13d-3(d) of the General Rules and Regulations promulgated under the Act and included in the 5,087,693 Shares beneficially owned by the Fund, the Fund and PCM are deemed, and PCM LLC and Mr. Samii may be deemed, to be the beneficial owner of 87,693 shares issued by the Company to the Fund as consideration that the Fund elected to receive in connection with a consent solicitation commenced by the Company on October 18, 2005. PCM LLC and Mr. Samii disclaim beneficial ownership of all Shares held by the Fund. The consent solicitation expired at 5:00 p.m. on November 1, 2005 and the Fund expects to receive the 87,693 additional shares from the Company shortly after the tenth business dayfollowing such expiration date. CUSIP NO. 05873K108 PAGE 6 OF 10 Pursuant to Rule 13d-2(a) of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the "Act"), the undersigned hereby amends the Schedule 13D Statement originally filed by Pardus Capital Management L.P., a Delaware limited partnership ("PCM"), dated September 6, 2005, as amended by Amendment No. 1, dated September 6, 2005, Amendment No. 2, dated September 6, 2005, Amendment No. 3, dated September 8, 2005, Amendment No. 4, dated September 15, 2005, Amendment No. 5, dated September 23, 2005, Amendment No. 6, dated October 6, 2005, Amendment No. 7, dated October 17, 2005, and Amendment No. 8, dated October 24, 2005 (as amended, the "Schedule 13D"), relating to the common stock, par value $0.01 per share (the "Shares"), of Bally Total Fitness Holding Corporation, a Delaware corporation (the "Company"). This Amendment No. 9 to the Schedule 13D is being filed on behalf of Pardus European Special Opportunities Master Fund L.P., a limited partnership formed under the laws of the Cayman Islands (the "Fund"), PCM, Pardus Capital Management LLC, a Delaware limited liability company ("PCM LLC"), and Mr. Karim Samii (individually, a "Reporting Person", and collectively, the "Reporting Persons"). Item 1. SECURITY AND ISSUER. No material change. Item 2. IDENTITY AND BACKGROUND. This Item 2 is hereby amended and restated in its entirety as follows: "The Reporting Persons filing this statement include the Fund, PCM, PCM LLC and Mr. Karim Samii. The business address of each Reporting Person is 1001 Avenue of the Americas, Suite 1100, New York, New York 10018. PCM serves as the investment manager of the Fund and the holder of the Shares set forth in this Schedule 13D. PCM, through one or more funds and/or accounts managed by it and/or its affiliates, is engaged in the investment in property of all kinds, including but not limited to capital stock, depository receipts, investment companies, mutual funds, subscriptions, warrants, bonds, notes, debentures, options and other securities and instruments of various kind and nature. PCM LLC, as the general partner of PCM, and Mr. Karim Samii, as the sole member of PCM LLC, may be deemed to be the beneficial owners of all Shares held by the Fund; however, PCM LLC and Mr. Samii disclaim beneficial ownership of all Shares held by the Fund. Neither the Fund, PCM, PCM LLC nor Mr. Samii has ever been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors), nor been a party to any civil proceeding commenced before a judicial or administrative body of competent jurisdiction as a result of which it or he was or is now subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws." Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. No material change Item 4. PURPOSE OF TRANSACTION. This Item 4 is hereby amended by adding the following: "The Reporting Persons have attached as Exhibit 4 to this Schedule 13D a Notice of Nomination (the "Notice") nominating three highly qualified independent candidates for election to the Company's board of directors at the upcoming annual meeting of the Company's stockholders presently scheduled for January 26, 2005 (the "Annual Meeting"), which was delivered to the Company's Secretary on or about November 17, 2005. The Fund notified the Company in the Notice of its nomination of Charles J. Burdick, Barry R. Elson and Don R. Kornstein to serve as directors in the class of directors whose term expires on the date of the Annual Meeting: Charles J. Burdick is presently a non executive director of Singer & Friedlander, a financial services group providing its clients with banking, asset finance, treasury and investment management services. From January 2005 until summer of 2005 he was the Chief Executive Officer of HIT Entertainment Plc, the leading provider of pre-school CUSIP NO. 05873K108 PAGE 7 OF 10 children's entertainment listed on the London Stock Exchange with a market capitalization of $1.0 billion. Mr. Burdick stepped down from his position as CEO of HIT Entertainment after providing transition support to the new management team following the successful sale of HIT Entertainment in May 2005. From 1996 until 2002, he was the Chief Financial Officer and then from August 2002 until July 2004 he was the Chief Executive Officer and a director of Telewest Communications, the second largest cable company in the United Kingdom. He has held a series of financial positions with Time Warner, US WEST, and MediaOne, specializing in corporate finance, mergers and acquisitions, and international treasury. He is also presently a member of the PCM Advisory Board which advises PCM and its affiliates from time to time with respect to investment strategies, assessing business viability, sourcing transactions and valuing potential investments. Mr. Burdick does not receive and is not entitled to any compensation or remuneration for serving on the PCM Advisory Board and he does not have any investment interest in the Fund or any of its affiliates. Mr. Burdick received his M.B.A. from UCLA and B.A. in Economics from UC Santa Barbara. Barry R. Elson is the Acting Chief Executive Officer and a director of Telewest Global, Inc., a provider of entertainment and communication services. Mr. Elson became Chairman and a director of Telewest in November 2003 and then in February 2004 he resigned as Chairman, although not as a director, and was appointed as the Acting Chief Executive Officer of Telewest Communications and the Acting Chief Executive Officer of Telewest Global, Inc. From July 2001 to October 2003, he was the President of Pilot Associates, a management consulting/coaching firm specializing in the broadband-telephony-video industry for Wall Street clients. From November 2000 to June 2001, he was Chief Operating Officer of Urban Media, a Silicon Valley venture capital backed building centric CLEC start-up with nationwide operations. From September 1997 to November 2000, he was President of Conectiv Enterprises and Corporate Executive Vice President of Conectiv, a diversifying $4.2 billion energy company in the middle Atlantic states. From February 1983 until September 1997, he was a senior executive with Cox Communications where he rose through a series of senior line operating positions to be Executive Vice President of Operations with company-wide $1.4 billion profit and loss responsibility. Mr. Elson earned his M.B.A. with distinction from Cornell University and earned his B.A. with honors from Dartmouth College. Don R. Kornstein has been a consultant for the past five years specializing in strategic, financial and management advisory services. Since 2002, Mr. Kornstein has been the founder and managing member of Alpine Advisors LLC which provides value enhancing strategic, management, operational and financial consulting services to a wide range of companies with varying needs. From 2000 until 2001, in his capacity as a consultant, Mr. Kornstein served as the interim Chief Operating Officer to First World Communications, Inc. where he was brought in by Texas Pacific Group to restructure and stabilize three telecom and internet businesses in anticipation of a sale, which was successfully completed within 12 months. From 1994 until 2000, Mr. Kornstein served as the Chief Executive Officer, President and a director of Jackpot Enterprises, Inc., an NYSE listed company engaged in the gaming industry through the operation of over 5000 gaming devices in a variety of retail establishments and casinos. From 1977 until 1994, Mr. Kornstein was an investment banker with Bear, Stearns & Co. Inc. At the time of his departure in 1994 from Bear, Stearns & Co., Inc., he was a Senior Managing Director, the Group Head of the Gaming & Leisure Group and a member of the Investment Banking Commitment Committee. From 2003 until 2005, Mr. Kornstein was a member of the board of directors of Shuffle Master, Inc. (NASDAQ) where he was a member of the Audit, Compensation and Governance Committees. From 1995 until 2003 he was a member of the board of directors of Varsity Brands, Inc. (AMEX) where he served as the Chairman of the Compensation Committee, past Chairman of the Audit Committee and the Chairman of the Exploratory and Negotiating Committee where he had primary responsibility for successfully reviewing, evaluating and negotiating strategic alternatives on behalf of the board. Mr. Kornstein earned his M.B.A. in finance and accounting from Columbia University Graduate School of Business, attended the Stanford Law School's Directors' College, and earned his B.A. with honors in Economics from the University of Pennsylvania. CUSIP NO. 05873K108 PAGE 8 OF 10 The Notice also advises the Company of the Fund's intent to present a stockholder proposal at the Annual Meeting. The Reporting Persons have also attached as Exhibit 5 to this Schedule 13D a letter, dated November 17, 2005, from PCM to the Company's board of directors recommending that the board consider two highly qualified individuals to fill the vacancies in the classes of directors of the Company not otherwise up for election at the Annual Meeting. Except as otherwise described in this Item 4 of this Schedule 13D, as amended, the acquisition of the Shares by the Fund is for investment purposes on behalf of the Fund." Item 5. INTEREST IN SECURITIES OF THE ISSUER. (a) and (b). The beneficial ownership and ownership percentages set forth herein are as of November 17, 2005. All ownership percentages set forth herein assume that there are 36,083,560 Shares outstanding, based on the total number of shares reported in the Current Report on Form 8-K of the Company filed with the Securities and Exchange Commission on October 18, 2005 to be issued and outstanding as of September 30, 2005. The responses to Items 7, 8, 9, 10, 11 and 13 of the inside cover pages of this Schedule 13D are hereby incorporated by reference in response to this Item 5. The Fund is the beneficial owner of 5,087,693 Shares of the Company. PCM serves as the investment manager of the Fund and possesses sole power to vote and direct the disposition of all Shares held by the Fund. PCM LLC, as the general partner of PCM, and Mr. Karim Samii, as the sole member of PCM LLC, may be deemed to be the beneficial owners of all Shares held by the Fund; however, PCM LLC and Mr. Samii disclaim beneficial ownership of all Shares held by the Fund. (c) Since the filing of Amendment 8 to the Schedule 13D on October 24, 2005, the Fund has acquired Shares from the Company as follows: -------------------------------------------------- DATE SHARES ACQUIRED -------------------------------------------------- November 1, 2005 87,693** -------------------------------------------------- ** According to publicly available information, on October 18, 2005 the Company commenced a consent solicitation of those holders of the Company's 9 7/8% Senior Subordinated Notes due 2007 (the "Notes") who were not a party to the Consent Agreements, dated August 24, 2005 (the "Consent Agreements"), pursuant to which the Company obtained a waiver extension under the Indenture governing the Notes. According to such publicly available information, the consent solicitation was conducted in accordance with such Consent Agreements in order to offer all other holders of Notes the opportunity to consent to the waiver extension and receive the same consideration paid to holders who were party to the Consent Agreements (either (x) $20.00 in cash per $1,000 principal amount of Notes or (y) 9.2308 shares of Common Stock per $1,000 principal amount of Notes). As the holder of $9,500,000 principal amount of the Notes on August 24, 2005, the record date in the consent solicitation, the Fund elected to receive 87,693 additional shares of Common Stock as consideration in the consent solicitation. Pursuant to Rule 13d-3(d) of the General Rules and Regulations under the Act, the Fund and PCM are deemed, and PCM LLC and Mr. Samii may be deemed, to be the beneficial owner of the 87,693 additional shares; however, PCM LLC and Mr. Samii disclaim beneficial ownership of all Shares held by the Fund. The consent solicitation expired at 5:00 p.m. on November 1, 2005 and the Fund expects to receive the 87,693 additional shares from the Company shortly after the tenth business day following such expiration date. (d) Not applicable. (e) Not applicable. CUSIP NO. 05873K108 PAGE 9 OF 10 Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. No material change. Item 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit 3: Joint Filing Agreement, dated November 17, 2005, among the Reporting Persons. Exhibit 4: Notice of Nomination and Intent to Bring a Stockholder Proposal, dated November 17, 2005, from the Fund to the Secretary of the Company. Exhibit 5: Letter, dated November 17, 2005, from PCM to the Board of Directors of the Company. CUSIP NO. 05873K108 PAGE 10 OF 10 SIGNATURE After reasonable inquiry and to the best of its or his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: November 17, 2005 PARDUS EUROPEAN SPECIAL OPPORTUNITIES MASTER FUND L.P. By: Pardus Capital Management L.P., its Investment Manager By: Pardus Capital Management LLC, its general partner By: /s/ Karim Samii ----------------------------------- Name: Karim Samii Title: Sole Member PARDUS CAPITAL MANAGEMENT L.P. By: Pardus Capital Management LLC, its general partner By: /s/ Karim Samii ----------------------------------- Name: Karim Samii Title: Sole Member PARDUS CAPITAL MANAGEMENT LLC By: /s/ Karim Samii ----------------------------------- Name: Karim Samii Title: Sole Member /s/ Karim Samii --------------------------------------- Karim Samii Attention: Intentional misstatements or omissions of fact constitute Federal criminal violations (See 18 U.S.C. 1001). EX-99 2 exhibit3-sc13da9.txt EXHIBIT 3 EXHIBIT 3 --------- JOINT FILING AGREEMENT Each of the undersigned hereby acknowledges and agrees, in compliance with the provisions of Rule 13d-1(k)(1) promulgated under the Securities Exchange Act of 1934, as amended, that the Schedule 13D to which this Agreement is attached as an Exhibit, and any amendments thereto, will be filed with the Securities and Exchange Commission jointly on behalf of the undersigned. This Agreement may be executed in one or more counterparts. Dated: November 17, 2005 PARDUS EUROPEAN SPECIAL OPPORTUNITIES MASTER FUND L.P. By: Pardus Capital Management L.P., its Investment Manager By: Pardus Capital Management LLC, its general partner By: /s/ Karim Samii ----------------------------------- Name: Karim Samii Title: Sole Member PARDUS CAPITAL MANAGEMENT L.P. By: Pardus Capital Management LLC, its general partner By: /s/ Karim Samii ----------------------------------- Name: Karim Samii Title: Sole Member PARDUS CAPITAL MANAGEMENT LLC By: /s/ Karim Samii ----------------------------------- Name: Karim Samii Title: Sole Member /s/ Karim Samii --------------------------------------- Karim Samii EX-99 3 exhibit4-sc13da9.txt EXHIBIT 4 EXHIBIT 4 --------- Pardus European Special Opportunities Master Fund L.P. c/o Pardus Capital Management L.P. 1001 Avenue of the Americas, Suite 1100 New York, NY 10018 November 17, 2005 BY FEDERAL EXPRESS, REGISTERED MAIL AND FACSIMILE Bally Total Fitness Holding Corporation 8700 West Bryn Mawr Chicago, IL 60631 Attention: Marc D. Bassewitz, Esq., Senior Vice President, Secretary and General Counsel BY HAND Corporate Secretary Bally Total Fitness Holding Corporation c/o The Corporation Trust Company 1209 Orange Street Wilmington, DE 19801 Re: Notice of Nomination of Candidates for Election to the Board of Directors and to Present a Stockholder Proposal at the Upcoming Annual Meeting of Bally Total Fitness Holding Corporation --------------------------------------------------- Dear Secretary: This notice (including Appendix I and Exhibit A attached hereto, the "Notice") of the decision of Pardus European Special Opportunities Master Fund L.P. (the "Fund"), the beneficial owner of 5,087,693 shares (the "Shares") of common stock, par value $0.01 ("Common Stock"), of Bally Total Fitness Holding Corporation, a Delaware corporation (the "Company"), to propose the nomination of and nominate candidates for election to the Board of Directors of the Company (the "Board") and the intention of the Fund to present a stockholder proposal at the upcoming Annual Meeting of stockholders of the Company presently scheduled for January 26, 2006, including any adjournments or postponements thereof or any special meeting that may be called in lieu thereof (the "Annual Meeting"), is being delivered in accordance with the requirements set forth under Section 1 of Article III (the "Nomination Requirements") and Section 2 of Article II (the "Proposal Requirements") of the By-laws of the Company (the "By-laws"). One thousand (1,000) of the Shares are owned of record by the Fund directly in its own name, one thousand (1,000) Shares are owned on record by the Fund in the name of Pardus Capital A/C Pardus European Special Opportunities Master Fund L.P. and 87,693 of the Shares are to be issued by the Company to the Fund as consideration that the Fund elected to receive in connection with a consent Pardus Notice of Nomination of Candidates and Stockholder Proposal Page 2 solicitation commenced by the Company on October 18, 2005 (which expired at 5:00 p.m. on November 1, 2005). Pardus Capital Management L.P., a Delaware limited partnership ("PCM"), in its capacity as the investment manager of the Fund, is the beneficial owner of the Shares held by the Fund. Pardus Capital Management LLC, a Delaware limited liability company ("PCM LLC"), as the general partner of PCM, and Mr. Karim Samii, as the sole member of PCM LLC, may be deemed to be the beneficial owners of the Shares held by the Fund; however, PCM LLC and Mr. Samii disclaim beneficial ownership of the Shares. For purposes of this Notice, "Pardus" shall include the Fund, PCM, PCM LLC and Mr. Karim Samii. Pursuant to the Nomination Requirements, this Notice sets forth with respect to each of the Pardus Nominees (as defined below): (a) the name, age, business address and residence address of such person; (b) the principal occupation or employment of such person; (c) the class and number of shares of capital stock of the Company which are beneficially owned by such person; and (d) any other information relating to such person that would be required to be disclosed in solicitations for proxies for election of directors pursuant to the Rules and Regulations of the Securities and Exchange Commission (the "SEC") under Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In addition, pursuant to the Nomination Requirements, this Notice sets forth: (1) the name and record address of the Fund; and (2) the class and number of shares of capital stock of the Company which are beneficially owned by the Fund and by Pardus (other than the Fund). Pursuant to the Nomination Requirements, this Notice also attaches as Exhibit A hereto a copy of signed consents executed by each of the Pardus Nominees to being named as nominees and to serving as directors of the Company, if elected. Pursuant to the Proposal Requirements, this Notice sets forth (a) a brief description of the business desired to be brought before the Annual Meeting and the reasons for conducting such business at the Annual Meeting; (b) any material interest of the Fund and, as a courtesy, Pardus (other than the Fund), in such business; (c) the name and record address of the Fund; and (d) the class, series and number of shares of capital stock of the Company which are beneficially owned by the Fund and, as a courtesy, by Pardus (other than the Fund). A. BACKGROUND On September 6, 2005, PCM filed an initial Schedule 13D in which PCM, in its capacity as the investment manager of the Fund, indicated that it has communicated with management of the Company, and expected to continue to communicate with management of the Company, regarding PCM's desire that the Company pursue appropriate measures to enhance shareholder value. PCM also advised in the initial Schedule 13D that it intends to, among other things, closely evaluate the performance of the Company and the value of the shares of capital stock of the Company, including, but not limited to, the continued analysis and assessment of the Company's business, assets, operations, financial condition, capital structure, management and prospects. Such Schedule 13D was Pardus Notice of Nomination of Candidates and Stockholder Proposal Page 3 thereafter amended from time to time, including for the purpose of reporting additional transactions in the Common Stock and to advise of PCM's willingness to consider participating in strategic alternatives for the Company, including, among other alternatives, a sale of the business, asset sales, equity financings and/or debt financings. Pardus has previously discussed with the Company the advisability of making changes in the Board and the nomination of director candidates suggested by Pardus. Since, as of the date hereof, the Company has not taken steps to nominate such candidates, the Fund has determined to make such nominations to ensure that the Company's stockholders have the alternative of electing stockholder-nominated candidates to the Board. B. NOTICE OF NOMINATION OF CANDIDATES FOR ELECTION TO THE BOARD Under Article SIXTH of the Company's Restated Certificate of Incorporation (the "Certificate of Incorporation"), the Company's directors are divided into three classes. In a press release dated May 17, 2005, the Company announced that the total number of directors on the Board was increased from seven to nine members. According to publicly available information and discussions with Company representatives, the Company currently has six directors serving on the Board, two of whom serve as directors whose term expires on the date of the Annual Meeting. In addition, according to publicly available information and discussions with Company representatives, the Company currently has one director vacancy in the class of directors whose term expires on the date of the Annual Meeting and one director vacancy in each of the other two classes of directors. The Fund hereby proposes the nomination of and nominates the individuals identified in the next sentence and listed under the heading "Certain Information Relating to the Pardus Nominees" in Appendix I hereto (the "Pardus Nominees") for election to the Board to (i) succeed the two current directors whose term expires at the Annual Meeting and (ii) fill the existing vacancy created by the previous resignation of one director from the class of directors whose term expires at the Annual Meeting (or any director named to fill any vacancy created by the death, retirement, resignation or removal of any such directors). The Fund hereby proposes the nomination of and nominates Charles J. Burdick, Barry R. Elson and Don R. Kornstein to serve as directors in the class of directors whose term expires on the date of the Annual Meeting. The Fund reserves the right to nominate, substitute or add additional persons (a) in the event that the Company purports to increase the number of directorships pursuant to Article SIXTH of the Certificate of Incorporation, to each additional directorship created, (b) if the Company makes or announces any changes to its By-laws or takes or announces any other action that has, or if consummated would have, the effect of disqualifying any of the Pardus Nominees or any additional nominee nominated pursuant to the preceding clause (a) and/or (c) in the event any of the Pardus Nominees named in Appendix I are unable or hereafter become unwilling for any reason to serve as a director. Additional nominations made pursuant to the preceding clauses (a) and/or (b) are without prejudice to the position of the Fund that any attempt to increase the size of Pardus Notice of Nomination of Candidates and Stockholder Proposal Page 4 the Board or disqualify any of the Pardus Nominees through By-law amendments constitutes unlawful manipulation of the Company's corporate machinery. As required by Section 1 of Article III of the By-laws, the following information constitutes all of the information relating to the Pardus Nominees that would be required to be disclosed in solicitations for proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such information includes all information required to be set forth in this Notice pursuant to the Nomination Requirements. To the extent that information set forth at any point in this Notice is responsive to a specific item below, each such item shall be deemed to incorporate such information, no matter where such information appears in this Notice. The information set forth in Appendix I is incorporated herein by reference. All information set forth herein relating to any person other than Pardus is given only to the knowledge of Pardus. Information required by Section 1 of Article III of the By-laws regarding the name, record address and beneficial holdings of the persons making the nomination is as set forth herein, including Appendix I and Exhibit A attached hereto. To the extent additional information is provided regarding the persons making the solicitation, such information is provided voluntarily for context or completeness. Item 4. Persons Making the Solicitation (b) The solicitation for election of the Pardus Nominees will be made by the Fund. By virtue of Instruction 3 of Item 4 of Schedule 14A, Pardus and the Pardus Nominees will be considered participants in the solicitation. In addition, the Pardus Nominees may make solicitations of proxies but will not receive compensation for acting as nominees as set forth herein. Proxies may be solicited by mail, facsimile, telephone, telegraph, electronic mail, in person and by advertisements. Solicitations may be made by certain directors, officers, members and employees of the Fund, PCM or PCM LLC, none of whom will receive additional compensation for such solicitation. None of the Pardus Nominees have individually retained any person to provide proxy solicitation or advisory services in connection with the solicitation. The Fund has retained D.F. King & Co., Inc. ("D.F. King") for solicitation and advisory services in connection with the solicitation, for which D.F. King has received a fee of $10,000 (creditable toward the final fee in an amount not to exceed $105,000), together with reimbursement for its reasonable out-of-pocket expenses, and will be indemnified against certain liabilities and expenses. D.F. King will solicit proxies from individuals, brokers, banks, bank nominees and other institutional holders. The Fund will request banks, brokerage houses and other custodians, nominees and fiduciaries to forward all solicitation materials to the beneficial owners of the shares of Common Stock they hold of record. The Fund will reimburse these record holders for their reasonable out-of-pocket expenses in so doing. It is anticipated that D.F. King will employ approximately 50 persons to solicit the Company's stockholders for the Annual Meeting. Pardus Notice of Nomination of Candidates and Stockholder Proposal Page 5 The entire expense of soliciting proxies is being borne by the Fund. The Fund does not currently intend to seek reimbursement of the costs of this solicitation from the Company. The costs of this solicitation of proxies, and other costs specifically related to this solicitation, are currently estimated to be approximately $300,000. The Fund estimates that through the date hereof, its total expenditures to date in connection with this solicitation are approximately $75,000. Item 5. Interest of Certain Persons in Matters to be Acted Upon (b)(1) Information as to any substantial interest, direct or indirect, by security holdings or otherwise, in any matter to be acted upon at the Annual Meeting with respect to Pardus and each of the Pardus Nominees is set forth herein. Except as set forth herein, the Pardus Nominees do not beneficially own any securities of the Company and the Pardus Nominees do not have any personal ownership interest, direct or indirect, in any securities of the Company. Mr. Burdick currently serves on the PCM Advisory Board which advises PCM and its affiliates from time to time with respect to investment strategies, assessing business viability, sourcing transactions and valuing potential investments. The PCM Advisory Board members do not have any oversight responsibility or discretion over the investments made by or on behalf of PCM and its affiliates and the PCM Advisory Board members do not (except to the extent publicly disclosed by the Fund) have any knowledge of the investments held by PCM and its affiliates from time to time. Mr. Burdick does not receive and is not entitled to any compensation or remuneration for serving on the PCM Advisory Board from the Fund or any of its affiliates. The PCM Advisory Board members have the ability to invest up to an aggregate of $10,000,000 in the Fund and certain of its affiliates. Presently Mr. Burdick does not have any investment interest in the Fund or any of its affiliates. The direct and indirect security holdings of Pardus are as follows: The Fund is the direct beneficial owner of the Shares (including 1,000 shares of Common Stock owned of record by the Fund directly in its own name and 1,000 Shares of Common Stock owned of record by the Fund in the name of Pardus Capital A/C Pardus European Special Opportunities Master Fund L.P.) and $10,500,000 principal amount (the "Debt") of the Company's 9 7/8% Senior Subordinated Notes due 2007 (the "Notes"); PCM, in its capacity as investment manager of the Fund, has sole voting and dispositive power with respect to all of the Shares and the Debt; PCM LLC, as the general partner of PCM, and Mr. Karim Samii, as the sole member of PCM LLC, may be deemed to be the beneficial owners of the Shares and the Debt held by the Fund; however, PCM LLC and Mr. Samii disclaim beneficial ownership of the Shares and the Debt. PCM LLC, and in turn Mr. Samii, may earn fees and incentive allocations on account of the Fund's investment in the Shares and the Debt. Except as set forth in this Item 5(b)(1) or in Appendix I hereto, which is incorporated herein by reference, no other person or entity of Pardus owns of record any securities of the Company. According to publicly available information, on October 18, 2005 the Company commenced a consent solicitation of those holders of the Notes who were not a party to the Consent Agreements, dated August 24, 2005 (the "Consent Pardus Notice of Nomination of Candidates and Stockholder Proposal Page 6 Agreements"), pursuant to which the Company obtained a waiver extension under the Indenture governing the Notes. According to such publicly available information, the consent solicitation was conducted in accordance with such Consent Agreements in order to offer all other holders of Notes the opportunity to consent to the waiver extension and receive the same consideration paid to holders who were party to the Consent Agreements (either (x) $20.00 in cash per $1,000 principal amount of Notes or (y) 9.2308 shares of Common Stock per $1,000 principal amount of Notes). As the holder of $9,500,000 principal amount of the Notes on August 24, 2005, the record date in the consent solicitation, the Fund elected to receive 87,693 additional shares of Common Stock as consideration in the consent solicitation. The consent solicitation expired at 5:00 p.m. on November 1, 2005 and the Fund expects to receive the 87,693 additional shares from the Company shortly after the tenth business day following such expiration date. The Pardus Nominees may be deemed to have an interest in their nominations for election to the Board by virtue of compensation the Pardus Nominees will receive from the Company as a director, if elected to the Board. (i) Set forth in Appendix I attached hereto, which is incorporated herein by reference, are the names and business addresses of each of the Fund, PCM, PCM LLC, Karim Samii and the Pardus Nominees. The record address for the Fund, in its capacity as a stockholder of record of the Company in its own name and in the name of Pardus Capital A/C Pardus European Special Opportunities Master Fund L.P., is 1001 Avenue of the Americas, Suite 1100, New York, NY 10018. (ii) Set forth in Appendix I attached hereto, which is incorporated herein by reference, is (a) the principal occupation or employment of each member of Pardus and (b) the present principal occupation or employment for the Pardus Nominees, and the name, principal business and address of any corporation or other organization in which such employment is carried on. (iii) During the past ten years, neither any member of Pardus nor any Pardus Nominee has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (iv), (v), (vi), (vii) and (x) Except as set forth in this Item 5(b)(1) or in Appendix I hereto, which is incorporated herein by reference, neither any member of Pardus nor any Pardus Nominee owns beneficially, directly or indirectly, or of record but not beneficially, any securities of the Company, or any parent or subsidiary of the Company, nor has Pardus or any Pardus Nominee purchased or sold any securities of the Company within the last two years. Set forth in Appendix I hereto are transactions in the Company's securities effected by members of Pardus and the Pardus Nominees within the past two years. The Fund used its own assets to purchase the Shares and Debt owned by it. Such Shares and Debt were purchased through and are held in brokerage custodian accounts which, from time to time in the ordinary course, may utilize margin borrowing in connection with purchasing, borrowing or holding of securities, and such Shares Pardus Notice of Nomination of Candidates and Stockholder Proposal Page 7 and Debt may thereby be, or in the future become, subject to the terms and conditions of such margin debt and terms, together with all other securities held therein. As of the date hereof, no part of the purchase price or market value of any of the Shares or Debt is represented by funds borrowed or otherwise obtained for the purpose of acquiring or holding such Shares or Debt. (viii) Neither any member of Pardus nor any Pardus Nominee is, or has been within the past year, a party to any contract, arrangement or understanding with any person with respect to any securities of the Company, including, but not limited to, joint ventures, loan or option arrangements, puts or calls, guarantees against loss or guarantees of profit, division of losses or profit, or the giving or withholding of proxies. (ix) Except as set forth in Appendix I hereto, no associate of Pardus or of any Pardus Nominee owns beneficially, directly or indirectly, any securities of the Company. Other than as set forth above, the Pardus Nominees do not possess beneficial ownership of any securities of the Company directly or indirectly. (xi) Item 5(b)(xi) cross references the information required by Item 404(a) of Regulation S-K of the Exchange Act with respect to each participant in the solicitation or any associates of such participant. Item 404(a) of Regulation S-K. Other than as set forth herein, none of Pardus, any Pardus Nominee or any of their respective associates or immediate family members have had or will have a direct or indirect material interest in any transaction or series of similar transactions since the beginning of the Company's last fiscal year or any currently proposed transactions, or series of similar transactions, to which the Company or any of its subsidiaries was or is to be a party in which the amount involved exceeds $60,000. (xii)(A) and (B) According to the Company's public filings, if elected as a director of the Company, each of the Pardus Nominees would receive an annual retainer of $30,000 for Board membership and an additional stipend for service on committees of the Board of $1,000 per year for committee members, as well as fees of $2,000 per Board meeting and $1,000 for attendance at any committee meeting. The chairman of a committee receives an additional annual stipend of $1,000. In addition, pursuant to the Company's 1996 Non-Employee Directors' Stock Option Plan (the "Directors' Plan"), each non-employee director of the Company is granted an option to purchase 5,000 shares of Common Stock upon the commencement of service on the Board, with another option to purchase 5,000 shares of Common Stock granted on the second anniversary thereof. Additional grants of options may be made from time to time pursuant to the Directors' Plan. Options under the Directors' Plan are generally granted with an exercise price equal to the fair market value of the Common Stock at the date of grant. Option grants under the Directors' Plan become exercisable in three equal annual installments commencing one year from the date of grant and have a 10-year term. The Pardus Nominees, if elected, will be indemnified for service Pardus Notice of Nomination of Candidates and Stockholder Proposal Page 8 as directors of the Company to the same extent indemnification is provided to the current directors of the Company under the Certificate of Incorporation and the By-laws. In addition, the Fund believes that upon election, the Pardus Nominees will be covered by the Company's officer and director liability insurance. Pardus disclaims any responsibility for the accuracy of the foregoing information extracted from the Company's public filings. The Pardus Nominees will not receive any compensation from the Fund to serve as a nominee for election or as a director, if elected, of the Company. The Fund has agreed to indemnify the Pardus Nominees against losses incurred in connection with their service as nominees for election as directors of the Company, in connection with the solicitation of proxies in respect thereof and in connection with their service as directors of the Company to the extent that indemnification is not available under the Company's Certificate of Incorporation and By-laws. The Fund has also agreed to reimburse the Pardus Nominees for out-of-pocket expenses incurred in their capacity as nominees, including, without limitation, reimbursement for reasonable travel expenses. Each Pardus Nominee has executed a written consent agreeing to be a nominee for election as a director of the Company and to serve as a director if so elected, which consents are attached hereto as Exhibit A. Other than as set forth herein (including in Appendix I hereto), none of Pardus, the Pardus Nominees or any of their respective associates, has any arrangements or understandings with any person or persons with respect to any future employment by the Company or its affiliates or with respect to any future transactions to which the Company or any of its affiliates will or may be a party. (2) The information required to be disclosed in this item with respect to Pardus and the Pardus Nominees is disclosed in response to Item 5(b)(1) above. Item 7. Directors and Executive Officers (a) Item 7(a) cross references the information required by instruction 4 to Item 103 of Regulation S-K of the Exchange Act with respect to nominees of the persons making the solicitation. Such information is set forth below: Instruction 4 of Item 103 to Regulation S-K. There are no material proceedings in which the Pardus Nominees or any of their associates is a party adverse to the Company or any of its subsidiaries, or material proceedings in which such nominee or any such associate has a material interest adverse to the Company or any of its subsidiaries. (b) Item 7(b) cross references the information required by Item 401, Items 404(a) and (c) and Item 405 of Regulation S-K of the Exchange Act with respect to nominees of the person making the solicitation. Such information is set forth below: Item 401 of Regulation S-K (a) and (e). Each Pardus Nominee has executed a consent to being named as a Pardus Nominee and to serving as a director of the Company, if so Pardus Notice of Nomination of Candidates and Stockholder Proposal Page 9 elected. The initial term of each Pardus Nominee, if elected, would be for a period of three years. Copies of such consents are attached hereto as Exhibit A. The following information is set forth in Appendix I attached hereto with respect to each Pardus Nominee: name, age, any position and office with the Company held by each such nominee and the term thereof, business experience during the past five years (including principal occupation and employment during the past five years and the name and principal business of any corporation or other organization in which such occupation or employment was carried on) and any directorships held by such person in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940, as amended. No occupation or employment is or was, during such period, carried on by any Pardus Nominee with the Company or any corporation or organization which is or was a parent, subsidiary or other affiliate of the Company, and none of the Pardus Nominees has ever served on the Board. Other than as disclosed in the response to Item 5(b) above, there are no arrangements or understandings between the Pardus Nominees and any other party pursuant to which any such nominee was or is to be selected as a director or nominee. (b), (c), (g), (h), (i) and (j) These provisions of Item 401 of Regulation S-K are not applicable to the Pardus Nominees. (d) There exist no family relationships between any Pardus Nominee and any director or executive officer of the Company. (f) During the last five years, the Pardus Nominees were not involved in any of the events described in Item 401(f) of Regulation S-K and that are material to an evaluation of the ability or integrity of any such nominee to become a director of the Company. Item 404(a) of Regulation S-K. The response to Item 5(b)(1)(xi) above is incorporated herein by reference. Item 404(c) of Regulation S-K. None of the Pardus Nominees, their immediate family members, any corporation or organization of which the Pardus Nominee is an executive officer or partner or is, directly or indirectly, the beneficial owner of ten percent or more of any class of equity securities, or any trust or other estate in which any Pardus Nominee has a substantial beneficial interest or serves as a trustee or in a similar capacity, has been indebted to the Company or its subsidiaries, at any time since the beginning of the Company's last fiscal year, in an amount in excess of $60,000 (other than any amounts that may be excluded pursuant to the instructions to Item 404(c) of Regulation S-K). Pardus Notice of Nomination of Candidates and Stockholder Proposal Page 10 Item 405 of Regulation S-K. This provision is not applicable to the Pardus Nominees because the Pardus Nominees are not directors, officers or ten percent holders of the Company. (c) None of the relationships regarding the Pardus Nominees described under Item 404(b) of Regulation S-K exists or has existed during the Company's last fiscal year. Item 8. Compensation of Directors and Executive Officers Item 8 cross references the information required by Item 402 of Regulation S-K of the Exchange Act with respect to each nominee of the person making the solicitation and associates of such nominee. Such information is set forth below: Item 402 of Regulation S-K (a), (b), (c), (d), (e), (f), (h), (i) Neither the Pardus Nominees nor any of their associates has received any cash compensation, cash bonuses, deferred compensation, compensation pursuant to plans, or other compensation, from, or in respect of, services rendered on behalf of the Company that is required to be disclosed under, or is subject to any arrangement described in, these paragraphs of Item 402 of Regulation S-K. (g) The response to Item 5(b)(1)(xii)(A) and (B) above is incorporated herein by reference. Other than as set forth herein, Pardus is not aware of any other arrangements pursuant to which any director of the Company was to be compensated for services during the Company's last fiscal year. (j) There are no relationships involving the Pardus Nominees, or any of the Pardus Nominees' associates, that would have required disclosure under this paragraph of Item 402 of Regulation S-K had the Pardus Nominees been directors of the Company. (k), (l) These items do not apply because they do not relate to the Pardus Nominees. C. NOTICE OF INTENTION TO PRESENT A STOCKHOLDER PROPOSAL The Fund hereby notifies the Company that it intends to bring the following business and proposal (the "Proposal") before the Annual Meeting for consideration and action by the Company's stockholders before any other business is conducted at the Annual Meeting: Proposal: The Fund hereby notifies the Company of its intent to present the following resolution for adoption by the stockholders of the Company at the Annual Meeting: Pardus Notice of Nomination of Candidates and Stockholder Proposal Page 11 "RESOLVED, that each provision or amendment of the By-laws of Bally Total Fitness Holding Corporation (the "Company") adopted by the Board of Directors of the Company without the approval of the Company's stockholders subsequent to May 25, 2005 (purportedly the last date of reported changes) and prior to the approval of this resolution be, and they hereby are, repealed, effective as of the time this resolution is approved by the Company's stockholders." The Proposal is being brought before the Annual Meeting pursuant to Section 109 of the Delaware General Corporation law, which empowers stockholders to repeal bylaws. The Proposal is intended to deter the current members of the Board from amending the Company's By-laws in a manner that would create obstacles to the election of the Pardus Nominees. The Fund and the other members of Pardus may be deemed to have an interest in the Proposal insofar as adoption of the Proposal may facilitate the election of the Pardus Nominees. In addition, the Fund is the direct beneficial owner of the Shares (including 1,000 shares of Common Stock owned of record by the Fund directly in its own name and 1,000 Shares of Common Stock owned of record by the Fund in the name of Pardus Capital A/C Pardus European Special Opportunities Master Fund L.P.) and the Debt; PCM, in its capacity as investment manager of the Fund, has sole voting and dispositive power with respect to all the Shares owned by the Fund and the Debt; PCM LLC, as the general partner of PCM, and Mr. Karim Samii, as the sole member of PCM LLC, may be deemed to be the beneficial owners of the Shares and the Debt held by the Fund; however, PCM LLC and Mr. Samii disclaim beneficial ownership of the Shares and the Debt. PCM LLC, and in turn Mr. Samii, may earn fees and incentive allocations on account of the Fund's investment in the Shares. Except as set forth in this Notice or in Appendix I hereto, which is incorporated herein by reference, no other person or entity of Pardus owns of record any securities of the Company. According to publicly available information, on October 18, 2005 the Company commenced a consent solicitation of those holders of the Notes who were not a party to the Consent Agreements, pursuant to which the Company obtained a waiver extension under the Indenture governing the Notes. According to such publicly available information, the consent solicitation was conducted in accordance with such Consent Agreements in order to offer all other holders of Notes the opportunity to consent to the waiver extension and receive the same consideration paid to holders who were party to the Consent Agreements (either (x) $20.00 in cash per $1,000 principal amount of Notes or (y) 9.2308 shares of Common Stock per $1,000 principal amount of Notes). As the holder of $9,500,000 principal amount of the Notes on August 24, 2005, the record date in the consent solicitation, the Fund elected to receive 87,693 additional shares of Common Stock as consideration in the consent solicitation. The consent solicitation expired at 5:00 p.m. on November 1, 2005 and the Fund expects to receive the 87,693 additional shares from the Company shortly after the tenth business day following such expiration date. Pardus Notice of Nomination of Candidates and Stockholder Proposal Page 12 The record name and address of the Fund in its capacity as a stockholder of the Company is set forth in Appendix I hereto. Other than as set forth in this Notice, there are no arrangements or understandings between any member of Pardus and any other person or persons in connection with the Proposal. * * * The information included herein represents the Fund's best knowledge as of the date hereof. The Fund reserves the right, in the event such information shall be or become inaccurate, to provide corrective information to the Company as soon as reasonably practicable, although the Fund does not commit to update any information which may change from and after the date hereof. If this Notice shall be deemed for any reason by a court of competent jurisdiction to be ineffective with respect to the nomination of the Pardus Nominees at the Annual Meeting, or if any individual nominee shall be unable to serve for any reason, this Notice shall continue to be effective with respect to any replacement nominees selected by the Fund. The Fund reserves the right to give further notice of additional nominations or business to be made or conducted at the Annual Meeting or any other meeting of the Company's stockholders. Please direct any questions regarding the information contained in this Notice to Jeffrey D. Marell, Esq. and Carl L. Reisner, Esq., Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, New York 10019-6064, (212) 373-3000 (Phone), (212) 757-3990 (Facsimile). [Remainder of Page Intentionally Left Blank] IN WITNESS WHEREOF, the parties hereto have caused this Notice to be duly executed on the date first above written. PARDUS EUROPEAN SPECIAL OPPORTUNITIES MASTER FUND L.P. By: Pardus Capital Management L.P., its Investment Manager By: Pardus Capital Management LLC, its general partner By: /s/ Karim Samii ----------------------------------- Name: Karim Samii Title: Sole Member PARDUS CAPITAL A/C PARDUS EUROPEAN SPECIAL OPPORTUNITIES MASTER FUND L.P. By: /s/ Karim Samii ----------------------------------- Name: Karim Samii Title: Authorized Signatory PARDUS CAPITAL MANAGEMENT L.P. By: Pardus Capital Management LLC, its general partner By: /s/ Karim Samii ----------------------------------- Name: Karim Samii Title: Sole Member PARDUS CAPITAL MANAGEMENT LLC By: /s/ Karim Samii ----------------------------------- Name: Karim Samii Title: Sole Member /s/ Karim Samii --------------------------------------- Karim Samii APPENDIX I ---------- CERTAIN INFORMATION RELATING TO PARDUS Pardus Capital Management L.P., a Delaware limited partnership, is principally engaged in the business of providing investment management services to investment funds, including Pardus European Special Opportunities Master Fund L.P., a limited partnership formed under the laws of the Cayman Islands. Pardus Capital Management L.P., through one or more funds and/or accounts managed by it and/or its affiliates, is engaged in the investment in property of all kinds, including but not limited to capital stock, depository receipts, investment companies, mutual funds, subscriptions, warrants, bonds, notes, debentures, options and other securities and instruments of various kind and nature. Pardus Capital Management LLC, a Delaware limited liability company, is the general partner of Pardus Capital Management L.P. Mr. Karim Samii is the sole member of Pardus Capital Management LLC and in such capacity acts as a portfolio manager of Pardus European Special Opportunities Master Fund L.P. The principal executive office of Pardus Capital Management L.P., Pardus Capital Management LLC and Mr. Samii is 1001 Avenue of the Americas, Suite 1100 New York, NY 10018. The principal executive offices of Pardus European Special Opportunities Master Fund L.P. is P.O. Box 908GT, Mary Tow, George Town, Grand Cayman, Cayman Islands. The record address of Pardus European Special Opportunities Master Fund L.P., in its capacity as a stockholder of record of the Company in its own name and in the name of Pardus Capital A/C Pardus European Special Opportunities Master Fund L.P., is 1001 Avenue of the Americas, Suite 1100, New York, NY 10018. Pardus Notice of Nomination of Candidates and Stockholder Proposal Appendix I Page 2 CERTAIN INFORMATION RELATING TO THE PARDUS NOMINEES The following table sets forth the name, age, present principal occupation, business and residential address and business experience for the past five years and certain other information, with respect to the Pardus Nominees. This information has been furnished to Pardus by the Pardus Nominees.
- ----------------------------------------------------------------------------------------------------------------- PRINCIPAL OCCUPATION OR EMPLOYMENT DURING THE NAME, AGE AND BUSINESS AND RESIDENTIAL ADDRESS LAST FIVE YEARS; PUBLIC COMPANY DIRECTORSHIPS - ----------------------------------------------------------------------------------------------------------------- Charles J. Burdick (Age 54) Charles J. Burdick is presently a member of the PCM Advisory Board and a non executive director Business Address: of Singer & Friedlander, a financial services group providing its clients with banking, asset Singer & Friedlander finance, treasury and investment management 21 New Street services. From January 2005 until summer of 2005 London EC2M 4HR he was the Chief Executive Officer of HIT United Kingdom Entertainment Plc, the leading provider of pre-school children's entertainment listed on the Residential Address: London Stock Exchange with a market capitalization of $1.0 billion. Mr. Burdick stepped down from his 27 Princes Gate Court position as CEO of HIT Entertainment after providing London SW7 2QJ transition support to the new management team following United Kingdom the successful sale of HIT Entertainment in May 2005. From 1996 until 2002, he was the Chief Financial Officer and then from August 2002 until July 2004 he was the Chief Executive Officer and a director of Telewest Communications, the second largest cable company in the United Kingdom. He has held a series of financial positions with Time Warner, US WEST, and MediaOne, specializing in corporate finance, mergers and acquisitions, and international treasury. Mr. Burdick received his M.B.A. from UCLA and B.A. in Economics from UC Santa Barbara. Barry R. Elson (Age 64) Barry R. Elson is the Acting Chief Executive Officer and a director of Telewest Global, Inc., a provider of Business Address: entertainment and communication services. Mr. Elson became Chairman and a director of Telewest in November c/o Telewest Global 2003 and then in February 2004 he resigned as Chairman, 160 Great Portland Street although not as a director, and was appointed as the London W1 W5 QA Acting Chief Executive Officer of Telewest United Kingdom Communications and the Acting Chief Executive Officer of Telewest Global, Inc. From July 2001 to October Residential Address: 2003, he was the President of Pilot Associates, a management consulting/coaching firm specializing in the 4245 Merriweather Woods broadband-telephony-video industry for Wall Street Alpharetta, GA 30022 clients. From November 2000 to June 2001, he was Chief Operating Officer of Urban Media, a Silicon Valley venture capital backed building centric CLEC start-up
Pardus Notice of Nomination of Candidates and Stockholder Proposal Appendix I Page 3
- ----------------------------------------------------------------------------------------------------------------- PRINCIPAL OCCUPATION OR EMPLOYMENT DURING THE NAME, AGE AND BUSINESS AND RESIDENTIAL ADDRESS LAST FIVE YEARS; PUBLIC COMPANY DIRECTORSHIPS - ----------------------------------------------------------------------------------------------------------------- with nationwide operations. From September 1997 to November 2000, he was President of Conectiv Enterprises and Corporate Executive Vice President of Conectiv, a diversifying $4.2 billion energy company in the middle Atlantic states. From February 1983 until September 1997, he was a senior executive with Cox Communications where he rose through a series of senior line operating positions to be Executive Vice President of Operations with company-wide $1.4 billion profit and loss responsibility. Mr. Elson earned his M.B.A. with distinction from Cornell University and earned his B.A. with honors from Dartmouth College. Don R. Kornstein (Age 53) Don R. Kornstein has been a consultant for the past five years specializing in strategic, financial and Business Address: management advisory services. Since 2002, Mr. Kornstein has been the founder and managing member of Alpine Alpine Advisors LLC Advisors LLC which provides value enhancing strategic, 825 Lakeshore Blvd. management, operational and financial consulting Incline Village, NV 89451 services to a wide range of companies with varying needs. From 2000 until 2001, in his capacity as a Residential Address: consultant, Mr. Kornstein served as the interim Chief Operating Officer to First World Communications, Inc. 825 Lakeshore Blvd. where he was brought in by Texas Pacific Group to Incline Village, NV 89451 restructure and stabilize three telecom and internet businesses in anticipation of a sale, which was successfully completed within 12 months. From 1994 until 2000, Mr. Kornstein served as the Chief Executive Officer, President and a director of Jackpot Enterprises, Inc., an NYSE listed company engaged in the gaming industry through the operation of over 5000 gaming devices in a variety of retail establishments and casinos. From 1977 until 1994, Mr. Kornstein was an investment banker with Bear, Stearns & Co. Inc. At the time of his departure in 1994 from Bear, Stearns & Co., Inc., he was a Senior Managing Director, the Group Head of the Gaming & Leisure Group and a member of the
Pardus Notice of Nomination of Candidates and Stockholder Proposal Appendix I Page 4
- ----------------------------------------------------------------------------------------------------------------- PRINCIPAL OCCUPATION OR EMPLOYMENT DURING THE NAME, AGE AND BUSINESS AND RESIDENTIAL ADDRESS LAST FIVE YEARS; PUBLIC COMPANY DIRECTORSHIPS - ----------------------------------------------------------------------------------------------------------------- Investment Banking Commitment Committee. From 2003 until 2005, Mr. Kornstein was a member of the board of directors of Shuffle Master, Inc. (NASDAQ) where he was a member of the Audit, Compensation and Governance Committees. From 1995 until 2003 he was a member of the board of directors of Varsity Brands, Inc. (AMEX) where he served as the Chairman of the Compensation Committee, past Chairman of the Audit Committee and the Chairman of the Exploratory and Negotiating Committee where he had primary responsibility for successfully reviewing, evaluating and negotiating strategic alternatives on behalf of the board. Mr. Kornstein earned his M.B.A. in finance and accounting from Columbia University Graduate School of Business, attended the Stanford Law School's Directors' College, and earned his B.A. with honors in Economics from the University of Pennsylvania.
Pardus Notice of Nomination of Candidates and Stockholder Proposal Appendix I Page 5 OWNERSHIP OF AND TRANSACTIONS IN THE SECURITIES OF THE COMPANY Except as set forth in this Appendix I or in the Notice, the Pardus Nominees do not beneficially own any securities of the Company and the Pardus Nominees do not have any personal ownership interest, direct or indirect, in any securities of the Company. Mr. Burdick currently serves on the PCM Advisory Board which advises PCM and its affiliates from time to time with respect to investment strategies, assessing business viability, sourcing transactions and valuing potential investments. The PCM Advisory Board members do not have any oversight responsibility or discretion over the investments made by or on behalf of PCM and its affiliates and the PCM Advisory Board members do not (except to the extent publicly disclosed by the Fund) have any knowledge of the investments held by PCM and its affiliates from time to time. Mr. Burdick does not receive and is not entitled to any compensation or remuneration for serving on the PCM Advisory Board from the Fund or any of its affiliates. The PCM Advisory Board members have the ability to invest up to an aggregate of $10,000,000 in the Fund and certain of its affiliates. Presently Mr. Burdick does not have any investment interest in the Fund or any of its affiliates. The direct and indirect security holdings of Pardus are as follows: The Fund is the direct beneficial owner of the Shares (including 1,000 shares of Common Stock owned of record by the Fund directly in its own name and 1,000 Shares of Common Stock owned of record by the Fund in the name of Pardus Capital A/C Pardus European Special Opportunities Master Fund L.P.) and the Debt; PCM, in its capacity as investment manager of the Fund, has sole voting and dispositive power with respect to all of the Shares and the Debt; PCM LLC, as the general partner of PCM, and Mr. Karim Samii, as the sole member of PCM LLC, may be deemed to be the beneficial owners of the Shares and the Debt held by the Fund; however, PCM LLC and Mr. Samii disclaim beneficial ownership of the Shares and the Debt. PCM LLC, and in turn Mr. Samii, may earn fees and incentive allocations on account of the Fund's investment in the Shares. Except as set forth in this Appendix I or in the Notice, no other person or entity of Pardus owns of record any securities of the Company. According to publicly available information, on October 18, 2005 the Company commenced a consent solicitation of those holders of the Notes who were not a party to the Consent Agreements, pursuant to which the Company obtained a waiver extension under the Indenture governing the Notes. According to such publicly available information, the consent solicitation was conducted in accordance with such Consent Agreements in order to offer all other holders of Notes the opportunity to consent to the waiver extension and receive the same consideration paid to holders who were party to the Consent Agreements (either (x) $20.00 in cash per $1,000 principal amount of Notes or (y) 9.2308 shares of Common Stock per $1,000 principal amount of Notes). As the holder of $9,500,000 principal amount of the Notes on August 24, 2005, the record date in the consent solicitation, the Fund elected to receive 87,693 additional shares of Common Stock as consideration in the consent solicitation. The consent solicitation expired at 5:00 p.m. on November 1, 2005 and the Fund expects to receive the Pardus Notice of Nomination of Candidates and Stockholder Proposal Appendix I Page 6 87,693 additional shares from the Company shortly after the tenth business day following such expiration date. On November 3, 2005, PCM caused 1,000 of the Shares owned by the Fund to be registered in the name of Pardus Capital A/C Pardus European Special Opportunities Master Fund L.P. as the record owner. On November 14, 2005, PCM caused 1,000 Shares owned by the Fund to be registered in the name of the Fund as the record owner. The remainder of such Shares are held in street name. Other than as set forth above and in the Notice, neither Pardus nor any Pardus Nominee is the record or beneficial owner of any securities of the Company, or any parent or subsidiary of the Company. Other than as set forth below, neither Pardus nor any Pardus Nominee has effected any transactions in any securities of the Company in the last two years.
PARDUS EUROPEAN SPECIAL OPPORTUNITIES MASTER FUND L.P. - ----------------------------------------------------------------------------------------------------------- CAPITAL STOCK TRADE DATE BUY/SELL AMOUNT PRICE - ----------------------------------------------------------------------------------------------------------- Common Stock 07/11/05 Buy 10,000 $3.20 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/12/05 Buy 3,800 $3.29 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/12/05 Buy 15,100 $3.28 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/12/05 Buy 12,200 $3.27 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/12/05 Buy 7,100 $3.26 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/12/05 Buy 39,500 $3.25 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/12/05 Buy 11,700 $3.24 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/12/05 Buy 600 $3.23 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/13/05 Buy 1,600 $3.26 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/13/05 Buy 5,000 $3.25 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/13/05 Buy 100 $3.24 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/13/05 Buy 800 $3.22 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/13/05 Buy 600 $3.21 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/13/05 Buy 1,700 $3.20 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/13/05 Buy 200 $3.19 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/14/05 Buy 2,100 $3.25 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/14/05 Buy 1,400 $3.24 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/14/05 Buy 5,000 $3.22 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/14/05 Buy 6,500 $3.21 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/14/05 Buy 13,000 $3.20 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/14/05 Buy 200 $3.19 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/14/05 Buy 1,000 $3.18 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/14/05 Buy 800 $3.16 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/19/05 Buy 2,600 $3.28 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/19/05 Buy 17,000 $3.27 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/19/05 Buy 300 $3.26 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/19/05 Buy 100 $3.25 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/25/05 Buy 100 $3.55 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/25/05 Buy 300 $3.52 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/25/05 Buy 19,300 $3.50 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/25/05 Buy 800 $3.48 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/25/05 Buy 3,500 $3.47 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/25/05 Buy 700 $3.46 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/25/05 Buy 1,300 $3.45 - -----------------------------------------------------------------------------------------------------------
Pardus Notice of Nomination of Candidates and Stockholder Proposal Appendix I Page 7
PARDUS EUROPEAN SPECIAL OPPORTUNITIES MASTER FUND L.P. - ----------------------------------------------------------------------------------------------------------- CAPITAL STOCK TRADE DATE BUY/SELL AMOUNT PRICE - ----------------------------------------------------------------------------------------------------------- Common Stock 07/25/05 Buy 100 $3.44 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/25/05 Buy 10,200 $3.43 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/25/05 Buy 38,900 $3.42 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/25/05 Buy 8,000 $3.41 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/25/05 Buy 4,200 $3.40 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/25/05 Buy 1,700 $3.39 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/25/05 Buy 700 $3.38 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/25/05 Buy 5,800 $3.37 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/25/05 Buy 1,800 $3.36 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/25/05 Buy 500 $3.35 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/25/05 Buy 800 $3.34 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/25/05 Buy 1,300 $3.33 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/26/05 Buy 200 $3.62 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/26/05 Buy 2,800 $3.61 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/26/05 Buy 2,800 $3.60 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/26/05 Buy 8,700 $3.59 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/26/05 Buy 2,200 $3.58 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/26/05 Buy 2,000 $3.57 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/26/05 Buy 3,900 $3.56 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/26/05 Buy 5,000 $3.55 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/26/05 Buy 3,800 $3.54 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/26/05 Buy 3,000 $3.53 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/26/05 Buy 100 $3.52 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/26/05 Buy 1,000 $3.51 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/26/05 Buy 4,400 $3.50 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/26/05 Buy 100 $3.49 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/27/05 Buy 800 $3.69 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/27/05 Buy 700 $3.67 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/27/05 Buy 1,000 $3.66 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/27/05 Buy 700 $3.65 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/27/05 Buy 100 $3.63 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/27/05 Buy 100 $3.62 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/27/05 Buy 100 $3.61 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/27/05 Buy 100 $3.60 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/27/05 Buy 6,400 $3.58 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/27/05 Buy 2,400 $3.57 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/27/05 Buy 2,100 $3.56 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/27/05 Buy 500 $3.55 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/29/05 Buy 1,200 $3.74 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/29/05 Buy 3,400 $3.73 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/29/05 Buy 2,900 $3.72 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/29/05 Buy 5,200 $3.71 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/29/05 Buy 1,400 $3.70 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/29/05 Buy 2,700 $3.69 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/29/05 Buy 1,700 $3.67 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/29/05 Buy 2,600 $3.62 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/29/05 Buy 9,500 $3.60 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/29/05 Buy 4,200 $3.59 - ----------------------------------------------------------------------------------------------------------- Common Stock 07/29/05 Buy 200 $3.58 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/02/05 Buy 1,100 $3.70 - -----------------------------------------------------------------------------------------------------------
Pardus Notice of Nomination of Candidates and Stockholder Proposal Appendix I Page 8
PARDUS EUROPEAN SPECIAL OPPORTUNITIES MASTER FUND L.P. - ----------------------------------------------------------------------------------------------------------- CAPITAL STOCK TRADE DATE BUY/SELL AMOUNT PRICE - ----------------------------------------------------------------------------------------------------------- Common Stock 08/02/05 Buy 1,600 $3.68 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/02/05 Buy 22,000 $3.67 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/02/05 Buy 11,400 $3.66 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/02/05 Buy 29,200 $3.65 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/02/05 Buy 10,300 $3.64 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/02/05 Buy 2,900 $3.63 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/02/05 Buy 1,200 $3.62 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/02/05 Buy 300 $3.61 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/03/05 Buy 28,300 $3.66 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/03/05 Buy 2,700 $3.65 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/04/05 Buy 1,300 $3.61 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/04/05 Buy 21,500 $3.60 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/04/05 Buy 1,600 $3.59 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/04/05 Buy 2,200 $3.58 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/04/05 Buy 8,700 $3.57 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/04/05 Buy 3,500 $3.56 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/04/05 Buy 100 $3.54 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/04/05 Buy 100 $3.50 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/05/05 Buy 7,000 $3.73 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/05/05 Buy 5,000 $3.72 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/05/05 Buy 2,700 $3.71 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/05/05 Buy 1,900 $3.70 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/05/05 Buy 13,300 $3.69 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/05/05 Buy 8,700 $3.68 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/05/05 Buy 19,900 $3.67 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/05/05 Buy 7,900 $3.66 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/05/05 Buy 14,100 $3.65 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/05/05 Buy 1,300 $3.64 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/05/05 Buy 1,300 $3.63 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/05/05 Buy 2,800 $3.62 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/05/05 Buy 1,400 $3.61 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/05/05 Buy 200 $3.57 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/05/05 Buy 100 $3.56 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/05/05 Buy 400 $3.55 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/05/05 Buy 700 $3.54 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 4,900 $3.40 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 300 $3.39 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 10,100 $3.38 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 1,000 $3.36 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 1,100 $3.34 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 600 $3.32 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 4,800 $3.30 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 1,900 $3.29 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 500 $3.28 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 2,800 $3.27 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 1,000 $3.26 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 4,600 $3.25 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 2,600 $3.24 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 1,000 $3.23 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 3,300 $3.22 - -----------------------------------------------------------------------------------------------------------
Pardus Notice of Nomination of Candidates and Stockholder Proposal Appendix I Page 9
PARDUS EUROPEAN SPECIAL OPPORTUNITIES MASTER FUND L.P. - ----------------------------------------------------------------------------------------------------------- CAPITAL STOCK TRADE DATE BUY/SELL AMOUNT PRICE - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 7,000 $3.20 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 2,000 $3.18 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 900 $3.15 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 10,500 $3.14 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 1,000 $3.12 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 2,400 $3.00 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 1,100 $2.96 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 11,700 $2.95 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 2,500 $2.94 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/08/05 Buy 1,700 $2.90 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/09/05 Buy 4,000 $3.00 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/09/05 Buy 2,200 $2.99 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/09/05 Buy 2,300 $2.99 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/09/05 Buy 3,900 $2.97 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/09/05 Buy 300 $2.96 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/09/05 Buy 4,500 $2.95 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/09/05 Buy 1,100 $2.92 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/11/05 Buy 37,000 $3.15 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/11/05 Buy 98,300 $3.14 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/11/05 Buy 13,700 $3.06 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/11/05 Buy 1,000 $3.04 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/12/05 Buy 400 $3.27 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/12/05 Buy 7,000 $3.26 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/12/05 Buy 13,500 $3.25 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/12/05 Buy 30,700 $3.24 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/12/05 Buy 14,700 $3.23 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/12/05 Buy 1,600 $3.19 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/12/05 Buy 200 $3.18 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/12/05 Buy 2,000 $3.17 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/12/05 Buy 9,600 $3.15 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/12/05 Buy 1,600 $3.14 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/15/05 Buy 2,800 $3.31 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/15/05 Buy 28,200 $3.30 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/15/05 Buy 40,000 $3.29 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/15/05 Buy 91,700 $3.28 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/15/05 Buy 7,900 $3.27 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/15/05 Buy 300 $3.25 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/16/05 Buy 39,900 $3.23 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/16/05 Buy 2,800 $3.22 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/16/05 Buy 48,500 $3.21 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/16/05 Buy 14,500 $3.20 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/16/05 Buy 1,200 $3.19 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/16/05 Buy 800 $3.18 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/16/05 Buy 200 $3.17 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/16/05 Buy 1,600 $3.14 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/17/05 Buy 1,500 $3.32 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/17/05 Buy 200 $3.27 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/17/05 Buy 3,100 $3.25 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/17/05 Buy 200 $3.24 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/18/05 Buy 600 $3.27 - -----------------------------------------------------------------------------------------------------------
Pardus Notice of Nomination of Candidates and Stockholder Proposal Appendix I Page 10
PARDUS EUROPEAN SPECIAL OPPORTUNITIES MASTER FUND L.P. - ----------------------------------------------------------------------------------------------------------- CAPITAL STOCK TRADE DATE BUY/SELL AMOUNT PRICE - ----------------------------------------------------------------------------------------------------------- Common Stock 08/18/05 Buy 1,600 $3.25 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/18/05 Buy 1,300 $3.23 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/18/05 Buy 5,900 $3.22 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/18/05 Buy 600 $3.21 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/19/05 Buy 2,000 $3.48 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/19/05 Buy 500 $3.47 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/19/05 Buy 800 $3.45 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/19/05 Buy 600 $3.39 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/19/05 Buy 8,200 $3.35 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/19/05 Buy 21,100 $3.34 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/19/05 Buy 2,400 $3.33 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/19/05 Buy 1,600 $3.31 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/19/05 Buy 400 $3.28 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/19/05 Buy 2,400 $3.25 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/23/05 Buy 37,400 $3.25 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/23/05 Buy 4,300 $3.24 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/23/05 Buy 100 $3.23 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/23/05 Buy 14,400 $3.22 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/23/05 Buy 300 $3.21 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/24/05 Buy 6,700 $3.26 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/24/05 Buy 25,100 $3.25 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/24/05 Buy 4,400 $3.24 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/24/05 Buy 177,100 $3.28 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/25/05 Buy 200,000 $3.38 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/25/05 Buy 15,000 $3.37 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/25/05 Buy 28,400 $3.35 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/25/05 Buy 150,000 $3.33 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/25/05 Buy 175,000 $3.23 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/25/05 Buy 125,000 $3.22 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/25/05 Buy 15,000 $3.37 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/25/05 Buy 28,400 $3.35 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/25/05 Buy 150,000 $3.33 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/25/05 Buy 175,000 $3.23 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/25/05 Buy 125,000 $3.22 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/26/05 Buy 163,700 $3.36 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/26/05 Buy 5,500 $3.35 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/26/05 Buy 56,800 $3.34 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/29/05 Buy 1,500 $3.33 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/29/05 Buy 25,200 $3.32 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/30/05 Buy 88,700 $3.34 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/30/05 Buy 48,800 $3.33 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/31/05 Buy 15,300 $3.54 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/31/05 Buy 53,600 $3.53 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/31/05 Buy 10,000 $3.44 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/31/05 Buy 3,600 $3.38 - ----------------------------------------------------------------------------------------------------------- Common Stock 08/31/05 Buy 3,500 $3.33 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/01/05 Buy 180,700 $3.83 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/01/05 Buy 12,800 $3.81 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/01/05 Buy 6,600 $3.80 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/01/05 Buy 16,600 $3.79 - -----------------------------------------------------------------------------------------------------------
Pardus Notice of Nomination of Candidates and Stockholder Proposal Appendix I Page 11
PARDUS EUROPEAN SPECIAL OPPORTUNITIES MASTER FUND L.P. - ----------------------------------------------------------------------------------------------------------- CAPITAL STOCK TRADE DATE BUY/SELL AMOUNT PRICE - ----------------------------------------------------------------------------------------------------------- Common Stock 09/01/05 Buy 12,700 $3.78 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/01/05 Buy 7,400 $3.77 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/01/05 Buy 22,300 $3.76 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/01/05 Buy 900 $3.73 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/01/05 Buy 7,100 $3.72 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/01/05 Buy 5,500 $3.71 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/02/05 Buy 14,200 $3.88 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/02/05 Buy 3,500 $3.86 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/06/05 Buy 108,300 $3.83 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/06/05 Buy 1,075,000 $3.93 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/14/05 Buy 200,000 $4.61 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/14/05 Buy 10,000 $4.62 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/14/05 Buy 80,000 $4.63 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/14/05 Buy 20,000 $4.59 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/14/05 Buy 8,000 $4.68 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/14/05 Buy 8,000 $4.69 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/14/05 Buy 24,000 $4.73 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/20/05 Buy 25,000 $4.48 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/20/05 Buy 50,000 $4.51 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/20/05 Buy 155,000 $4.53 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/21/05 Buy 50,000 $4.43 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/22/05 Buy 68,800 $4.33 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/22/05 Buy 100,000 $4.28 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/22/05 Buy 25,000 $4.27 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/22/05 Buy 2,000 $4.30 - ----------------------------------------------------------------------------------------------------------- Common Stock 09/22/05 Buy 6,200 $4.29 - -----------------------------------------------------------------------------------------------------------
Pardus Notice of Nomination of Candidates and Stockholder Proposal Appendix I Page 12
- ----------------------------------------------------------------------------------------------------------- DEBT TRADE DATE BUY/SELL AMOUNT PRICE - ----------------------------------------------------------------------------------------------------------- 9 7/8% Senior 07/12/05 Buy 500,000 $89.50 Subordinated Notes due 2007 - ----------------------------------------------------------------------------------------------------------- 9 7/8% Senior 07/14/05 Buy 500,000 $88.50 Subordinated Notes due 2007 - ----------------------------------------------------------------------------------------------------------- 9 7/8% Senior 07/19/05 Buy 1,000,000 $89.25 Subordinated Notes due 2007 - ----------------------------------------------------------------------------------------------------------- 9 7/8% Senior 07/27/05 Buy 1,000,000 $88.75 Subordinated Notes due 2007 - ----------------------------------------------------------------------------------------------------------- 9 7/8% Senior 08/08/05 Buy 1,000,000 $87.25 Subordinated Notes due 2007 - ----------------------------------------------------------------------------------------------------------- 9 7/8% Senior 08/09/05 Buy 750,000 $87.25 Subordinated Notes due 2007 - ----------------------------------------------------------------------------------------------------------- 9 7/8% Senior 08/11/05 Buy 500,000 $87.75 Subordinated Notes due 2007 - ----------------------------------------------------------------------------------------------------------- 9 7/8% Senior 08/18/05 Buy 4,250,000 $89.50 Subordinated Notes due 2007 - ----------------------------------------------------------------------------------------------------------- 9 7/8% Senior 09/30/05 Buy 1,000,000 $90.75 Subordinated Notes due 2007 - -----------------------------------------------------------------------------------------------------------
Exhibit A --------- Consents to Being Named as Nominees and to Serve as Directors of Bally Total Fitness Holding Corporation [Attached] CONSENT TO BEING NAMED AS A NOMINEE AND TO SERVE AS DIRECTOR OF BALLY TOTAL FITNESS HOLDING CORPORATION To: Secretary of Bally Total Fitness Holding Corporation The undersigned hereby consents (x) to being named as a nominee for election to the Board of Directors of Bally Total Fitness Holding Corporation, a Delaware corporation ("Bally"), (y) to be named in the proxy soliciting materials as such and (z) if duly elected by the stockholders of Bally, to serve as a director of the Company. Dated: October 26, 2005. /s/ Charles J. Burdick ----------------------------- Name: Charles J. Burdick CONSENT TO BEING NAMED AS A NOMINEE AND TO SERVE AS DIRECTOR OF BALLY TOTAL FITNESS HOLDING CORPORATION To: Secretary of Bally Total Fitness Holding Corporation The undersigned hereby consents (x) to being named as a nominee for election to the Board of Directors of Bally Total Fitness Holding Corporation, a Delaware corporation ("Bally"), (y) to be named in the proxy soliciting materials as such and (z) if duly elected by the stockholders of Bally, to serve as a director of the Company. Dated: October 27, 2005. /s/ Barry R. Elson ----------------------------- Name: Barry R. Elson CONSENT TO BEING NAMED AS A NOMINEE AND TO SERVE AS DIRECTOR OF BALLY TOTAL FITNESS HOLDING CORPORATION To: Secretary of Bally Total Fitness Holding Corporation The undersigned hereby consents (x) to being named as a nominee for election to the Board of Directors of Bally Total Fitness Holding Corporation, a Delaware corporation ("Bally"), (y) to be named in the proxy soliciting materials as such and (z) if duly elected by the stockholders of Bally, to serve as a director of the Company. Dated: October 26, 2005. /s/ Don R. Kornstein ----------------------------- Name: Don R. Kornstein EX-99 4 exhibit5-sc13da9.txt EXHIBIT 5 EXHIBIT 5 --------- Pardus Capital Management L.P. 1001 Avenue of the Americas, Suite 1100 New York, NY 10018 November 17, 2005 Bally Total Fitness Holding Corporation 8700 West Bryn Mawr Chicago, IL 60631 Attn: Board of Directors Gentlemen: Pardus Capital Management L.P. ("PCM"), in its capacity as the investment manager of Pardus European Special Opportunities Master Fund L.P. ("Pardus"), is the beneficial owner of 5,087,693 shares (the "Shares") of common stock, par value $0.01 per share, of Bally Total Fitness Holding Corporation (the "Company"). Pardus is the record owner of 1,000 of such Shares directly in its own name and the record owner of 1,000 of such Shares in the name of Pardus Capital A/C Pardus European Special Opportunities Master Fund L.P. As you are aware, we have formally submitted our nomination of Charles J. Burdick, Barry R. Elson and Don R. Kornstein, three highly qualified independent candidates, for election to the Company's board of directors in the class of directors that is up for election at the upcoming annual meeting of stockholders presently scheduled for January 26, 2006 (the "Annual Meeting"). We understand that the nominating committee and certain members of management of the Company have had the opportunity to meet with and interview Messrs. Burdick, Elson and Kornstein as well as two additional highly qualified individuals we proposed for consideration, Mr. David R. Van Valkenburg and Mr. Thomas J. Albani, and we are hopeful that the nominating committee will recommend that the full board support all of these distinguished and experienced candidates for service on the Company's board. In light of publicly available information and statements made by Company representatives, we understand that there are two existing vacancies on the Company's board of directors in the classes of directors not otherwise up for election at the Annual Meeting; one in each of the two classes of directors whose terms expire at the annual meetings of stockholders in 2006 and 2007. Delaware law permits Pardus to nominate individuals to fill these vacancies as well, but Pardus has chosen for now to formally nominate only Messrs. Burdick, Elson and Kornstein and not Messrs. Van Valkenburg and Albani. Our decision to nominate only three candidates and not five is driven by our sensitivity to the fact that, in light of the current composition of the board, the election of four or more stockholder nominees may result in a "change of control" of the Company under its 10 1/2% senior notes and 9 7/8% senior subordinated notes, and the election of five stockholder nominees may further result in a "change of control event" under the Company's credit agreement, thereby potentially requiring the Company to refinance its outstanding indebtedness. We are also aware that the election of four stockholder Bally Total Fitness Holding Corporation Page 2 nominees may affect the Company's executive compensation arrangements, including accelerated vesting of options and the elimination of limitations on restricted stock awards. Given our sensitivity to the implications that such a "change of control" of the Company could have as a result of its impact on the Company's debt securities, we have decided at this time not to formally nominate Messrs. Van Valkenburg and Albani to fill the two vacancies in the classes of directors not otherwise up for election at the Annual Meeting. However, in light of their impeccable credentials as highlighted herein and as we believe was clearly demonstrated to the nominating committee and management in their meetings with each of them, we strongly encourage the board to consider Messrs. Van Valkenburg and Albani to fill the two existing vacancies on the board in the classes of directors whose terms expire in 2006 and 2007. Mr. David R. Van Valkenburg currently serves as Chairman and President of Zero Point Corporation, a computer network engineering company, as Chairman of Balfour Associates, Inc., an international consulting firm, and as a member of the PCM Advisory Board. Mr. Van Valkenburg provides advice and counsel to chief executive officers, boards of directors, senior lenders and private equity funds in the United States and other regions. He has broad experience serving on the boards of a number of companies and in July 2002 he was appointed by the bankruptcy court to serve as an independent advisor in the Adelphia bankruptcy case. Mr. Van Valkenburg earned his M.B.A. from Harvard University, his M.S. in Radiation Biophysics at the University of Kansas and his B.S. in Science Composite from Malone College. Mr. Thomas J. Albani currently serves as a director of Select Comfort Corporation, a manufacturer, retailer and direct marketer of adjustable firmness beds, and a director of Igloo Products Corporation, a leading manufacturer and marketer of portable coolers. From 1991 to 1998, Mr. Albani served as the Chief Executive Officer of Electrolux Corporation where he was brought in by the company's creditors following an unsuccessful LBO to restore the company to profitability. He has held a series of senior management and operational positions with Allegheny International, Inc., Sunbeam Corporation, General Electric Corporation and McKinsey & Company, and has served on the boards of directors of a number of other companies. Mr. Albani earned his M.B.A. in Marketing from the Wharton Graduate School of Business at the University of Pennsylvania, and his B.A. in Political Science from Amherst College. As a stockholder in the Company, our objective is to ensure that the Company's board of directors is comprised of highly qualified representatives who will take appropriate measures to enhance stockholder value and restore public confidence and support in the Company. While we strongly encourage the board to consider and support the three nominees for election at the Annual Meeting proposed in our formal notice of Bally Total Fitness Holding Corporation Page 3 nomination, we also hope that the board will recognize Messrs. Van Valkenburg and Albani as highly qualified independent individuals with broad, relevant turnaround and restructuring experience. We firmly believe that, if appointed to the board, Messrs. Burdick, Elson, Kornstein, Van Valkenburg and Albani would provide immediate contributions and help lead the Company back to a position of strength and prosperity. As we noted in our previous correspondence with you, it is with reluctance that we have begun to spend our money and time pursuing a proxy contest; it would be an utter waste of stockholder money and management time for the Company to object to qualified candidates, especially when broad, existing stockholder sentiment against the Company's management team makes the outcome of an election contest a foregone conclusion. Despite our formal nomination of Messrs. Burdick, Elson and Kornstein, and our recommendation that the board consider Messrs. Van Valkenburg and Albani to fill the existing vacancies on the board, we remain willing to pursue a path that does not involve a proxy contest if the end result is the establishment of a board comprised of qualified independent representatives with the skill sets necessary to regain stockholder confidence and support in the Company and board and who will represent the best interests of all of the Company's stockholders going forward. Separately, we are still very concerned about management's ongoing pursuit of any number of strategic transactions that are designed to entrench current management and that would not be in the best interests of the Company's stockholders, particularly when stockholders lack confidence in management and the board. As we have previously expressed, we urge the Company in the strongest terms to refrain from any dispositions, financings, stock issuances, change of control transactions or entering into any agreement with a third party that might result in the payment of commitment, break-up or other fees or the incurrence of due diligence expenses until the Company's restated financial statements are publicly available and a stockholders meeting for the election of directors has been held. Any such transaction should only be considered and approved by a board of directors that has broad stockholder support and part of a fair and open process that will maximize stockholder value and as to which stockholders are fully informed. This letter is written without prejudice to Pardus' rights to nominate additional candidates for election to the board of directors of the Company at the Annual Meeting, none of which are waived, and each of which is expressly reserved. [SIGNATURE PAGE FOLLOWS] Sincerely, PARDUS CAPITAL MANAGEMENT L.P. By: Pardus Capital Management LLC, its general partner By: /s/ Karim Samii ----------------------------------- Name: Karim Samii Title: Sole Member cc: Jeffrey D. Marell, Esq., Paul, Weiss, Rifkind, Wharton & Garrison LLP Carl L. Reisner, Esq., Paul, Weiss, Rifkind, Wharton & Garrison LLP -----END PRIVACY-ENHANCED MESSAGE-----