The board of directors for Town Sports International Holdings Inc. (TSI), New York, has approved the immediate appointment of five new board members and the resignation of four members. In addition, TSI officially terminated former CEO Robert Giardina's employment with the company. Giardina will now serve as a member of the board as a non-employee director.
Joining the board are Martin J. Annese,
The changes come as the board works with Deutsche Bank Securities to evaluate strategic alternatives, including a possible sale and move to become private. The company went public in 2006. The company has a plan to convert 84 percent of its clubs to a low-price model. The company announced earlier this month that it would spend $5 million in the first quarter to promote the low-priced clubs. In addition to this model, the company will keep about 25 of its clubs as a higher-priced passport model. Earlier this week, TSI opened its second BFX Studio, which is its luxury studio brand. TSI has said it will open two more BFX Studios this year.
The changes in the board were made in accordance with two separate agreements by the company that together involve its three largest shareholders:
Further, TSI has agreed to include Annese, Fish, McEachen, Walsh and Wells, along with incumbent directors Robert J. Giardina,
HG Vora and PW Partners collectively own approximately 26 percent of the company's common stock. In addition to the agreed appointment of McEachen, Walsh and Wells to the board, each of
Farallon Capital Management owns approximately 16 percent of TSI's common stock. At the invitation of TSI, Farallon entered into an agreement with the company pursuant to which, in addition to the agreed appointment of Annese and Fish to the board, Farallon will vote its shares for the company's slate of director nominees at the upcoming 2015 annual meeting of shareholders.
"We are pleased to have reached agreements with our largest shareholders. The board believes these agreements are in the best interest of the company and all of its shareholders," Robert Giardina, executive chairman of the board, said in a company announcement. "We welcome Martin, Jason, Mark, Patrick and Spencer to our board and believe they will enhance our board's collective experience and expertise. On behalf of the board, I'd like to thank Paul, Rice, John and Kevin for their highly valuable service and significant contributions to TSI's success over the years. They have been outstanding directors and have served with distinction."
TSI expects to file proxy materials for its 2015 annual meeting of shareholders in the near future.
Giardina's employment with the company will end on
The board also announced today that it has approved the redemption of the rights issued pursuant to a rights agreement between the company and