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LIFE TIME FITNESS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands, except share and per share data)
65
Summary of Restricted Stock Activity
Performance
Based Shares
Service Based
Shares Total Shares
Weighted
Average Grant
Date Fair Value
Outstanding at December 31, 2007 ......... 46,500 255,845 302,345 $48.05
Granted .............................................. 126,462 307,718 434,180 $26.62
Canceled ............................................ (126,462) (18,343) (144,805) $29.02
Vested ................................................ (11,625) (92,892) (104,517) $45.20
Outstanding at December 31, 2008 ......... 34,875 452,328 487,203 $35.22
Granted .............................................. 1,148,821 549,373 1,698,194 $16.26
Canceled ............................................ (9,200) (58,352) (67,552) $22.61
Vested ................................................ (11,000) (140,173) (151,173) $37.33
Outstanding at December 31, 2009 ......... 1,163,496 803,176 1,966,672 $19.12
Granted .............................................. 87,802 331,354 419,156 $31.09
Canceled ............................................ (111,380) (39,022) (150,402) $19.12
Vested ................................................ (47,654) (269,899) (317,553) $22.43
Outstanding at December 31, 2010 ......... 1,092,264 825,609 1,917,873 $21.19
During the years ended December 31, 2010 and 2009, we issued 419,156 and 1,698,194 shares of restricted stock,
respectively, with an aggregate fair value of $13.0 million and $27.6 million, respectively. The fair market value of
restricted shares that became vested during the year ended December 31, 2010 was $7.1 million. The total value of
each restricted stock grant, based on the fair market value of the stock on the date of grant, is amortized to
compensation expense on a straight-line basis over the related vesting period. As of December 31, 2010, there was
$19.4 million of unrecognized compensation expense related to restricted stock that is expected to be recognized
over a weighted average period of 1.9 years.
Special 2009 Restricted Stock Grant
In June 2009, the Compensation Committee of our Board of Directors approved the grant of 996,000 shares of long-
term performance-based restricted stock to serve as an incentive to our senior management team to achieve certain
diluted earnings per share (“EPS”) targets in 2011 and 2012. In August 2010, an additional 20,000 shares of long-
term performance-based restricted stock were granted to a new member of senior management using the same
diluted EPS targets and vesting schedule. As of December 31, 2010, 907,000 of these shares were still outstanding.
If a specified EPS target is achieved for fiscal 2011, 50% of the restricted shares will vest. If a higher EPS target is
achieved for fiscal 2011, 100% of the restricted shares will vest. If the grant has not fully vested after fiscal 2011,
50% of the shares will vest if a specified EPS target is achieved for fiscal 2012. If none of the shares vested after
fiscal 2011, 100% of the shares will vest if a higher EPS target is achieved for fiscal 2012. In the event that we do
not achieve the required EPS targets, the restricted stock will be forfeited. A maximum of $18.9 million (pretax)
could be recognized as compensation expense under this grant if all EPS targets are met.
In fourth quarter 2010, we determined that achieving the 2011 diluted earnings per share performance criteria
required for vesting of 50% of the stock (representing approximately 450,000 shares of restricted stock) was
probable. As a result, we recognized a cumulative, non-cash performance share-based compensation expense of $5.6
million (pretax) in 2010. We anticipate recognizing the remaining portion of performance share-based compensation
expense of approximately $4.0 million (pretax) ratably in 2011. We believe the higher EPS targets, inclusive of
compensation expense under this grant, to be aggressive goals in excess of our current baseline expectations. The
probability of reaching the targets is evaluated each reporting period. If it becomes probable that certain of the
remaining target performance levels will be achieved, a cumulative adjustment will be recorded and future