-----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, BRXfVOlVoFvbP/hd4Ea790ImcNIE8+SEHsoEWfTKkuPMRBrOT5oRQJpP9kudLWOe mfGqBNP9ORp0ZDEZm43yiA== 0000903423-03-000306.txt : 20030320 0000903423-03-000306.hdr.sgml : 20030320 20030320150521 ACCESSION NUMBER: 0000903423-03-000306 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20030320 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: 005-49952 FILM NUMBER: 03610481 BUSINESS ADDRESS: STREET 1: 8700 WEST BRYN MAWR AVENUE STREET 2: SECOND FLOOR CITY: CHICAGO STATE: IL ZIP: 60631 BUSINESS PHONE: 7733803000 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: SLS MANAGEMENT LLC CENTRAL INDEX KEY: 0001093060 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 140 WEST 57TH STREET STE 7B CITY: NEW YORK STATE: NY BUSINESS PHONE: 2125741233 MAIL ADDRESS: STREET 1: 140 WEST 57TH STREET STE 7B CITY: NEW YORK STATE: NY ZIP: 10019 SC 13D/A 1 sls-13da1_0320.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- SCHEDULE 13D (Rule 13d-101) (Amendment No. 1) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) Bally Total Fitness Holding Corporation - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $0.01 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 05873k 10 8 ----------------------------------------------------- (CUSIP Number) Steven Rohlfing SLS Management, LLC 140 West 57th Street Suite 7B, New York, New York 10019 212-537-3600 with a copy to: Daniel S. Sternberg, Esq. Cleary, Gottlieb, Steen & Hamilton One Liberty Plaza New York, New York 10006 212-225-2000 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Persons Authorized to Receive Notices and Communications) March 19, 2003 ----------------------------------------------------- (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 that is the subject of 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. [ ] The information required on this cover page shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act. (Continued on the following pages) (Page 1 of 7 Pages) CUSIP No. 05873k 10 8 13D Page 2 of 7 Pages 1 NAMES OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) SLS Management, LLC 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7 SOLE VOTING POWER 2,989,086 NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY 204,455 OWNED BY EACH REPORTING 9 SOLE DISPOSITIVE POWER PERSON 2,989,086 WITH 10 SHARED DISPOSITIVE POWER 204,455 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,193,541 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.63% 14 TYPE OF REPORTING PERSON IA, OO This Amendment No. 1 (this "Amendment") amends and supplements the Schedule 13D filed on January 14, 2003 (the "Schedule 13D") of SLS Management, LLC ("Management") with respect to the common stock, par value $0.01 per share (the "Common Stock"), of Bally Total Fitness Holding Corporation, a Delaware corporation (the "Issuer"). All capitalized terms used in this Amendment and not otherwise defined herein have the meanings ascribed to such terms in the Schedule 13D. Item 3. Source and Amount of Funds or Other Consideration. Since January 14, 2003, Management has acquired beneficial ownership of an additional 7,600 shares of the Common Stock. All of such shares were acquired by Management with funds in the aggregate amount of $68,191 (including brokerage commissions) provided from investment capital of advisory clients of Management. Item 4. Purpose of Transaction. On March 19, 2003, Management, Scott L. Swid and the Issuer entered into an agreement (the "Letter Agreement") pursuant to which the Issuer, among other things, has fixed the size of the board of directors of the Issuer (the "Board") at seven; appointed to the Board two individuals, Martin E. Franklin and Stephen C. Swid, proposed to the Issuer by Management, as well as Paul Toback, the Issuer's chief executive officer; nominated Messrs. Franklin and Toback for election to the Board at the 2003 Annual Meeting of Stockholders of the Issuer (the "2003 Annual Meeting"); and amended the By-laws of the Issuer to provide that any two directors may call a special meeting of the Board. In the Letter Agreement the Issuer has also agreed: (a) to take all steps necessary or desirable to nominate each of Messrs. Franklin and Toback (the "2003 Slate") for re-election to the Board at the 2003 Annual Meeting, to recommend to the stockholders of the Issuer that the 2003 Slate be elected to the Board and to solicit proxies in favor of the election of the 2003 Slate; (b) not to increase the size of the Board at least through the conclusion of the 2004 Annual Meeting of Stockholders of the Issuer (the "2004 Annual Meeting") unless either Martin E. Franklin or Stephen C. Swid have voted in favor of the resolution of the Board authorizing such increase; and (c) not to appoint any person to fill an existing vacancy in Class II of the Board, or nominate any person for election by the stockholders at the 2003 Annual Meeting to fill such vacancy, unless either Martin E. Franklin or Stephen C. Swid has voted in favor of the resolution of the Board authorizing such appointment or nomination. Management and Scott L. Swid have agreed with the Company to cause all shares of Common Stock beneficially owned by them and/or their affiliates on the record date for each of the 2003 Annual Meeting and the 2004 Annual Meeting, respectively (i) to be represented in person or by proxy at each of the 2003 Annual Meeting and the 2004 Annual Meeting, respectively, and (ii) to be voted at the 2003 Annual Meeting for the election of the 2003 Slate and at the 2004 Annual Meeting for the election of the slate of nominees selected by the Board. They have also agreed not to make, or encourage any other person to make, or in any way be a participant in, any solicitation of proxies with respect to the Common Stock in connection with the 2003 Annual Meeting or the 2004 Annual Meeting. The preceding description of the Letter Agreement, a copy of which is filed as Exhibit 1 hereto and is incorporated herein by reference, is qualified by reference to the full text of the Letter Agreement. Item 5. Interest in Securities of the Issuer. As of the date hereof, one or more of Management's advisory clients is the owner of 3,193,541 shares of Common Stock. Accordingly, Management may be deemed, for purposes of Regulation 13D-G under the Act, the beneficial owner of 3,193,541 shares of Common Stock, representing 9.63% of the outstanding Common Stock. Item 7. Material To Be Filed as Exhibits. 1. Letter Agreement, dated as of March 19, 2003, among SLS Management, LLC, Scott L. Swid and Bally Total Fitness Holding Corporation SIGNATURE After reasonable inquiry, and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: March 20, 2003 SLS MANAGEMENT, LLC By: /s/ Steven Rohlfing -------------------------- Steven Rohlfing Title: Chief Financial Officer SCHEDULE I Schedule I of the Schedule 13D is hereby amended by adding the following transactions in shares of Common Stock that have occurred since January 14, 2003: Date Number of Shares Price per Share (1) ---- ---------------- ------------------- March 14, 2003 2,000 $4.69 February 11, 2003 (8,400) $7.58 February 10, 2003 (6,500) $7.46 February 3, 2003 (100) $8.31 January 31, 2003 20,600 $8.34 (1) Price includes commission. EXHIBIT INDEX Exhibit Number Description 1 Letter Agreement, dated as of March 19, 2003, among SLS Management, LLC, Scott L. Swid and Bally Total Fitness Holding Corporation EX-1 3 sls13da1-ex1_0320.txt Exhibit 1 Bally Total Fitness Holding Corporation 8700 Bryn Mawr Avenue Chicago, Illinois 60631 March 19, 2003 Scott L. Swid SLS Management, LLC 140 West 57th Street, Suite 7B New York, NY 10019 Dear Sirs: SLS Management, LLC, a Delaware limited liability company (the "Shareholder"), its managing member, Scott L. Swid ("SLS"), and Bally Total Fitness Holding Corporation, a Delaware corporation (the "Company"), acting through its board of directors (the "Board"), have reached an understanding that it would be in the best interests of the Company and its stockholders for the Company to take certain actions described below related to the composition and operation of the Board. Section 1. Board Actions. The Company hereby agrees to take, and the Company represents and warrants to the Shareholder that the Board, at a meeting, duly called and held on March 19, 2003, by the unanimous vote of the entire Board, has duly taken, the following actions, each in accordance with the Restated Certificate of Incorporation (the "Certificate") and the Amended and Restated By-laws (the "By-laws") of the Company and in accordance with the Delaware General Corporation Law ("DGCL"): (a) accepted, with the greatest gratitude for their long and distinguished service to the Company, the resignations (the "Resignations") of George N. Aronoff and Liza M. Walsh who have tendered to the Company their written resignations from the Board in accordance with the Certificate and By-laws; (b) adopted the resolutions attached hereto as Exhibit A (i) fixing the number of directors constituting the Board at seven (7) and apportioning the vacancy thus created to Class III; (ii) in order to fill the vacancies in Class I created by the Resignations, and the vacancy in Class III created by the enlargement of the Board, appointing to the Board the following persons, each into the class of the Board set forth next to his name: Martin E. Franklin (Class I) and Paul Toback (Class I), to fill the vacancies created by the Resignations; and Stephen C. Swid (Class III); and (iii) nominating each of Martin E. Franklin and Paul Toback for re-election to the Board at the 2003 Annual Meeting of Stockholders of the Company (the "2003 Annual Meeting"). (c) adopted the resolutions attached hereto as Exhibit B amending the By-laws (the "By-law Amendment") to provide that (i) any two directors may call a special meeting of the Board and (ii) the provisions of the By-laws covered by the By-law Amendment may only be modified or amended by the stockholders of the Company and not by action of the Board. Section 2. The Company's Covenants. The Board and the Company hereby agree: (a) to take all steps necessary or desirable to nominate each of Messrs. Franklin and Toback (the "2003 Slate") for re-election to the Board at the 2003 Annual Meeting, to recommend to the stockholders of the Company that the 2003 Slate be elected to the Board and to solicit proxies in favor of the election of the 2003 Slate; (b) not to increase the size of the Board, which shall remain fixed at seven (7) directors, at least through the conclusion of the 2004 Annual Meeting of Stockholders of the Company (the "2004 Annual Meeting") unless either Martin E. Franklin or Stephen C. Swid have voted in favor of the resolution of the Board authorizing such increase; and (c) not to appoint any person to fill the existing vacancy in Class II of the Board or nominate any person for election by the shareholders at the 2003 Annual Meeting to fill such vacancy unless either Martin E. Franklin or Stephen C. Swid have voted in favor of the resolution of the Board authorizing such appointment or nomination. Section 3. The Shareholder's Covenants. (a) Each of the Shareholder and SLS shall cause all shares of common stock, par value $0.01 per share, of the Company beneficially owned by them and/or their affiliates on the record date for each of the 2003 Annual Meeting and the 2004 Annual Meeting, respectively (i) to be represented in person or by proxy at each of the 2003 Annual Meeting and the 2004 Annual Meeting, respectively, and (ii) to be voted at the 2003 Annual Meeting for the election of the 2003 Slate and at the 2004 Annual Meeting for the election of the slate of nominees selected by the Board. (b) Neither the Shareholder nor SLS shall make, or encourage any other person to make, or in any way be a "participant" in, any "solicitation" of proxies (as such terms are defined in Regulation 14A under the Securities Exchange Act of 1934, as amended) with respect to the common stock of the Company in connection with the 2003 Annual Meeting or the 2004 Annual Meeting. Section 4. Representations and Warranties. (a) The Company represents and warrants to the Shareholder and SLS that (i) its execution, delivery and performance of this Letter Agreement has been approved by the Board and does not violate the Certificate or By-laws or any agreement to which it is a party, and (ii) this Letter Agreement constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (b) Each of the Shareholder and SLS represents and warrants to the Company that (i) the execution, delivery and performance of this Letter Agreement has been approved by all necessary corporate approvals of the Shareholder and does not violate its constituent documents or any agreement to which either the Shareholder or SLS is a party, and (ii) this Letter Agreement constitutes a valid and binding obligation of each of the Shareholder and SLS, respectively, enforceable against the Shareholder and SLS, respectively, in accordance with its terms. Section 5. Miscellaneous. This Letter Agreement represents the entire understanding of the parties hereto with reference to the subject matter hereof and supersedes any and all other oral or written agreements and understandings among the parties heretofore made. This Letter Agreement may be amended only by an instrument in writing signed by or on behalf of each of the parties hereto, provided that this Letter Agreement may not be amended by or on behalf of the Company unless the amendment is approved by a vote of the majority of the board of directors other than Martin E. Franklin and Stephen C. Swid. This Letter Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware. Each of the parties hereto shall use such party's best efforts to take such actions as may be necessary or reasonably requested by the other party hereto to carry out and consummate the transactions contemplated by this Letter Agreement. No party to this Letter Agreement directly or indirectly, shall, or shall permit anyone acting on its behalf to challenge the validity or enforceability of any provision of this Letter Agreement or the matters contemplated hereby. The parties hereto agree that irreparable damage may occur in the event that any provision of this Letter Agreement is not performed in accordance with the terms hereof and that the non-breaching party will be entitled (in addition to any other remedy at law or equity) to an injunction or injunctions to prevent breaches of the provisions of this Letter Agreement and to enforce the terms and provisions of this Letter Agreement by a decree of specific performance in any action instituted in any court of the United States or any state thereof having jurisdiction without the necessity of proving the inadequacy of a remedy of money damages. If any term or other provision of this Letter Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Letter Agreement shall nevertheless remain in full force and effect. If the terms of this Letter Agreement are in accordance with your understandings and agreements with us, please sign and return the enclosed duplicate of this letter, whereupon this Letter Agreement shall constitute a binding agreement between us. Very truly yours, BALLY TOTAL FITNESS HOLDING CORPORATION By: /s/ Paul Toback ------------------------- Name: Paul Toback Title: President and Chief Executive Officer Accepted and agreed to as of the date first above written: SLS MANAGEMENT, LLC By: /s/ Scott L. Swid --------------------- Name: Scott L. Swid Title: Managing Member /s/ Scott L. Swid - ------------------------- Scott L. Swid EXHIBIT A Board Resolutions RESOLVED, that the Board of Directors hereby accepts, with the greatest gratitude for their long and distinguished service to the Company, the resignations of George N. Aronoff and Liza M. Walsh who had tendered to the Company their written resignations from the Board in accordance with the Certificate and By-laws pursuant to Article Sixth of the Restated Certificate of Incorporation of the Company. RESOLVED, that pursuant to Article Sixth of the Restated Certificate of Incorporation of the Company, (a) the number of directors constituting the Board of Directors shall be increased by one and is hereby fixed at seven (7), (b) the vacancy created by such increase in the number of directors is hereby apportioned to Class III and (c) the following individuals are hereby appointed as directors of the Company to fill the following existing vacancies on the Board of Directors, each to serve as a director in the class of the Board set forth next to his name: Martin E. Franklin (Class I), to fill the vacancy in such class created by the resignation of Liza M. Walsh; Paul Toback (Class I), to fill the vacancy in such class created by the resignation of George N. Aronoff; and Stephen C. Swid (Class III), to fill the vacancy created by the increase to the size of the Board. RESOLVED, that pursuant to Article III, Section 1 of the By-laws of the Company, each of Martin E. Franklin and Paul Toback are hereby nominated by the Board of Directors for re-election to the Board at the 2003 Annual Meeting of Stockholders of the Company. EXHIBIT B By-law Amendment Resolutions (New Matter is underlined) RESOLVED, that Section 2 to Article III of the By-laws of the Company be, and is hereby amended and restated in its entirety to read as follows: "SECTION 2. Meetings. The Board of Directors may hold meetings, both regular and special, either within or without the State of Delaware. Regular meetings of the Board of Directors may be held without notice at such time and at such place as may from time to time be determined by the Board of Directors. Special Meetings of the Board of Directors may be called by the Chairman of the Board, the President or a majority of the entire Board of Directors or any two (2) members of the Board of Directors. Notice thereof stating the place, date and hour of the meeting shall be given to each director either by mail not less than forty-eight (48) hours before the date of the meeting, by telephone, telegram or facsimile transmission on twenty-four (24) hours notice, or on such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances, provided that not less than one hundred and twenty (120) hours notice shall be given of any such meeting called by only two members of the Board of Directors." RESOLVED, that Article VII of the By-laws of the Company be, and is hereby amended and supplemented to add a new Section 5 as follows: "SECTION 5. Amendment of Bylaws. Section 1 of Article III and this Section 5 of Article VII of these Bylaws may only be altered, amended, changed or repealed by action of the shareholders of the Corporation." -----END PRIVACY-ENHANCED MESSAGE-----