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INITIAL DIRECTORS OF REORGANIZED BALLY TOTAL FITNESS HOLDING CORPORATION

1. Gene Davis, Chairman of the Board. Mr. Davis was appointed Chairman of the Board prior to Bally’s bankruptcy filing. Pursuant to the Plan, Mr. Davis will continue as Chairman of the Board of Reorganized Bally. Mr. Davis is Chairman and CEO of PIRINATE Consulting Group, LLC, which provides consultancy services to public and private businesses that are undergoing transition. Services include crisis and turn-around management; merger and acquisition consulting; hostile and friendly takeovers; proxy contests; and strategic planning advisory services.

2. Michael Sheehan. Mr. Sheehan has served as Chief Executive Officer of the Company since July 2008. Prior to joining Bally, Mr. Sheehan served as the Chief Operating Officer of 24 Hour Fitness since 2005. Before serving as Chief Operating Officer, Mr. Sheehan served as Executive Vice President, Operations of 24 Hour Fitness. In addition to his comprehensive experience in the fitness industry, Mr. Sheehan has played key operational, finance and sales roles with multi-unit consumer retailers, including management roles with Pepsico, Nestle and Yum Brands, a food service holding company with well-known brands including Taco Bell, Kentucky Fried Chicken and Pizza Hut.

3. Kevin Corgan. Mr. Corgan is a Managing Director at JPMorgan Chase & Co. and is currently the head of North American Distressed and High Yield Credit Trading, a position he has held since 2006. Mr. Corgan’s business unit trades and makes proprietary investments in high yield and distressed securities, bank loans and credit derivatives. Mr. Corgan previously served in a similar roll at Morgan Stanley from 2003 to 2006. Prior to his role at Morgan Stanley, Mr. Corgan worked at Goldman Sachs as a trader in the High Yield and High Grade bond division. He graduated from MIT with a BS in economics.

4. Michael Kerrane. Mr. Kerrane is an Executive Director at JPMorgan Chase & Co. where he has worked since 2000 as a financial analyst, specializing in High Yield and Distressed investments. Prior to joining JPMorgan, Mr. Kerrane was an investment analyst at Lehman Brothers, specializing in the retail industry. He previously served in a similar role at Standard & Poor’s. Mr. Kerrane is a Chartered Financial Analyst and member of the New York Society of Security Analysts. He earned an MBA from Cornell University, and graduated from UCLA with a BA in economics.

5. Daniel Allen. Mr. Allen is a Partner and Senior Portfolio Manager at Anchorage Advisors L.L.C., a New York-based registered investment adviser. Prior to joining Anchorage in 2008, Mr. Allen spent the previous six years with Morgan Stanley and in his most recent role was responsible for North American Credit Trading with a primary focus on bank debt, high yield bonds and distressed securities. Earlier in his career at Morgan Stanley, he oversaw the par loan and distressed loan trading desks and later managed the leveraged credit trading and high yield operations. Prior to joining Morgan Stanley in 2002, Mr. Allen was a Loan Trader at Goldman Sachs and a Corporate Bond Trader at Fidelity Investments. Mr. Allen received his B.S. from Skidmore College and his M.B.A. from Duke University's Fuqua School of Business.

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SUMMARY OF MANAGEMENT INCENTIVE PLANOF

BALLY TOTAL FITNESS HOLDING CORPORATION

The Management Incentive Program of Bally Total Fitness Corporation (the “Company”) consists of two programs: (1) the Short-Term Management Incentive Plan and (2) the Long-Term Management Incentive Plan. The two programs are summarized below:

1. Short-Term Management Incentive Plan (the “ST Plan”)

Type of Awards: The ST Plan provides for cash bonuses (“Restructuring Bonuses”) to be paid to selected senior executives who have made direct and substantial contributions to the Company’s restructuring.

Purpose: The purpose of the ST Plan is to provide key personnel with appropriate incentives to timely implement the Company’s initiatives and facilitate the Company’s restructuring.

Bonus Pool: The maximum aggregate amount available for the payment of Restructuring Bonuses under the ST Plan (the “Bonus Pool”) is $965,000.

Eligibility: Senior executives will be eligible for Restructuring Bonuses under the ST Plan.

Determination of Individual Restructuring Bonuses:

The amount of each individual’s Restructuring Bonus is to be determined by the Company’s CEO based on parameters previously approved by the Compensation Committee of the Company’s Board of Directors.

The Restructuring Bonus for the CEO cannot exceed 46% of the Bonus Pool. The Restructuring Bonus for any other individual cannot exceed 20% of the Bonus Pool.

Time of Restructuring Bonus Payments:

Payment of Restructuring Bonuses is to be made upon the earlier of the effective date of (i) a plan of reorganization or (ii) the closing of a sale of the Company’s assets pursuant to Section 363 of the

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Bankruptcy Code (the “Effective Date”).

Termination of Employment: Generally, an executive will not be eligible for payment under the ST Plan if the executive’s employment is terminated prior to the Effective Date. If the executive’s employment is terminated by the Company without “cause” or as a result of death or disability, the executive would remain eligible for payment under the ST Plan.

2. Long-Term Management Incentive Plan (the “LT Plan”)

Official Name of Plan 2009 Equity Incentive Plan of Bally Fitness Holding Corporation

Type of Awards: The LT Plan provides for the grant of restricted stock units (“RSUs”), incentive stock options and/or non-qualified stock options to selected senior executives.

Purpose: The purpose of the LT Plan is to attract and retain key executives and provide additional incentives to such executives.

Administrator: The LT Plan will be administered by the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”).

Eligibility: Selected senior executives of the Company will be eligible for grants of RSUs and options.

Maximum Shares Subject to LT Plan:

The maximum number of shares of the Company’s common stock (“Common Stock”) available for grants (including shares subject to grants of options) under the LT Plan is 1,215,332. If any RSUs or options are for any reason forfeited, canceled or otherwise terminated, the shares subject to such RSUs or options are to be available again under the LT Plan (“Subsequent Available Shares”).

RSU Grants: RSUs with respect to 300,000 shares of Common Stock will be granted on the effective date of the plan of reorganization (the “Effective Date”).

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Vesting of RSUs: RSUs will vest monthly over 36 months. All RSUs will immediately vest upon a Change in Control of the Company as determined pursuant to the terms of the LT Plan.

Distributions with respect to RSUs:

A share of Common Stock (each an “RSU Share”) will be delivered to the holder of a vested RSU (a “Holder”) on the Holder’s RSU Distribution Date.The “RSU Distribution Date” means with respect to a Holder the earlier of (i) the date on which the Holder’s employment with the Company is terminated or (ii) the occurrence of an event qualifying as a change in ownership or effective control of the Company or a change in ownership of a substantial portion of the assets of the Company, in each case within the meaning of Treasury Regulation Section 1.409A-3(i)(5). (For purposes of determining whether an event qualifying as a change in effective control of the Company has occurred, 50% (rather than 30%) shall the applicable threshold percentage of stock necessary to be acquired.)

The payment of any required tax withholdings may be satisfied by the withholding of RSU Shares on the RSU Distribution Date.

Put Option: If, at the time of a Holder’s RSU Distribution Date, there is not a readily available buyer willing to purchase RSU Shares at fair market value from the Holder, the Holder shall have the have the right to “put” the Tax Shares to the Company for an amount equal to the fair market value of such shares. “Tax Shares” mean the number of RSU Shares having an aggregate fair market value equal to the excess of the Holder’s taxes incurred (based on a calculation using the highest marginal rates) as a result to the delivery of the RSU Shares, minus the amount of taxes withheld (through withholding of RSU Shares) by the Company with respect to such shares.

Termination of Employment: Unless otherwise provided in the applicable RSU agreement:

(i) If the termination of the employment of a Holder is by the Company for “cause”, all outstanding RSUs (both vested and unvested) held

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by the Holder under the Plan will be immediately forfeited.

(ii) If the termination of the employment of a Holder is by the Company not for “cause” or by the Holder for any reason (including death and disability), all outstanding unvested RSUs held by the Holder at the time of termination will be immediately forfeited. Distributions with respect to vested RSUs held by the Holder the time of termination will occur on the Holder’s RSU.

In accordance with the terms of the LT Plan and an applicable RSU agreement, the Company may have a right to purchase, upon a Holder’s termination of employment with the Company, all or a portion of the Holder’s RSU Shares.

Tag-Along Rights: The Holder of RSUs (or of the Common Stock received with respect to RSUs) will have certain tag-along rights (i.e., the right, but not the obligation to participate proportionately) with respect to certain stock transfers by shareholders of the Company (a “Tag-Along Sale”).

Vested and unvested RSU Shares may be sold in a Tag-Along Sale, but the cash or property received in the exchange will not be distributed until (and only to the extent vested) the Holder’s RSU Distribution Date.

Drag-Along Rights: The Holder of RSUs (and of the Common Stock received with respect to RSUs) will be subject to certain drag-along provisions (i.e., the obligation to sell the RSUs and Common Stock) with respect to certain stock transfers by shareholders (a “Drag-Along Sale”).

Vested and unvested RSU Shares may be sold in a Drag-Along Sale, but the cash or property received in the exchange will not be distributed until (and only to the extent vested) the Holder’s RSU Distribution Date.

Option Grants: Options to acquire a certain number of shares of Common Stock will be granted on the Effective

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Date.

Option Exercise Price: Options granted with respect to 457,666 shares of Common Stock (“Class A Options”) will have a per share exercise price equal to $18.21.

Options granted with respect to 228,833 shares of Common Stock (“Class B Options”) will have a per share exercise price equal to $26.76.

Options granted with respect to 228,833 shares of Common Stock (“Class C Options”) will have a per share exercise price equal to $34.96.

Notwithstanding the foregoing, the per share exercise price of an option may not be less than the fair market value of a share of Common Stock on the date of the option grant.

Shares subject to the foregoing option grants that become Subsequent Available Shares because an option is forfeited, canceled or otherwise terminated may be subject to future grants of options. However, any such future option will have an exercise price equal to the greater of (i) the exercise price of the forfeited, canceled or otherwise terminated option that resulted in the availability of such Subsequent Available Shares, or (ii) the fair market value of the Subsequent Available Shares as of the date the subsequent option is granted.

The payment of the exercise price of an option and any required tax withholdings may be satisfied by the withholding of shares upon exercise of the option.

Future Grants: Options not granted on the Effective Date will be granted at such later dates as may be decided by the Compensation Committee.

Vesting of Options: Unless otherwise provided in the applicable option agreement, an option will vest as follows:

% Vesting Vesting Date

33 % 2nd anniversary of grant date

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33 % 3rd anniversary of grant date

33 % 4th anniversary of grant date

All outstanding unvested options will immediately vest upon a Change in Control of the Company as determined pursuant to the terms of the LT Plan.

Termination of Employment: Unless otherwise provided in the applicable option agreement:

(i) If the termination of the employment of an optionee is by the Company for “cause”, all outstanding options held by the optionee under the Plan will be immediately forfeited.

(ii) If the termination of the employment of an optionee is by the Company not for “cause” or by the optionee for any reason (including death and disability), all outstanding unvested options held by the optionee at the time of termination will be immediately forfeited. Options held by the optionee that are vested at the time of termination will remain exercisable for 3 months.

In accordance with the terms of the LT Plan and an applicable option agreement, the Company may have a right to purchase, upon an optionee’s termination of employment with the Company, all or a portion of the Common Stock received upon exercise of the optionee’s options.

Tag-Along Rights: The holder of options (or of the Common Stock received upon exercise of options) will have certain tag-along rights (i.e., the right, but not the obligation to participate proportionately) with respect to certain stock transfers by shareholders of the Company.

Drag-Along Rights: The holder of options (and of the Common Stock received upon exercise of options) will be subject to certain drag-along provisions (i.e., the obligation to sell the options and Common Stock) with respect to certain stock transfers by shareholders.