Lifetime Fitness 2010 Annual Report Download - page 76

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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)
70
9. Related Party Transactions
In October 2003, we leased a center located within a shopping center that is owned by a general partnership in which
our chairman of the board of directors and chief executive officer has a 50% interest. In December 2003, we and the
general partnership executed an addendum to this lease whereby we leased an additional 5,000 square feet of office
space on a month-to-month basis within the shopping center, which we terminated effective January 1, 2007. We
paid rent pursuant to this lease of $0.5 million, $0.7 million and $0.7 million for the years ended December 31,
2010, 2009 and 2008, respectively.
In May 2008, we hired a construction company to complete an excavation project on the remodel of one of our
centers. Our chairman of the board of directors and chief executive officer owns 100% of the interests in such
construction company. The total cost of the project was $0.7 million, of which $0.3 million was paid by us to the
construction company in 2008, and $0.4 million was paid in 2009. No amounts were paid in 2010.
10. Executive Nonqualified Plan
During fiscal 2006, we implemented the Executive Nonqualified Excess Plan of Life Time Fitness, a non-qualified
deferred compensation plan. This plan was established for the benefit of our highly compensated employees, which
our plan defines as our employees whose projected compensation for the upcoming plan year would meet or exceed
the IRS limit for determining highly compensated employees. This unfunded, non-qualified deferred compensation
plan allows participants the ability to defer and grow income for retirement and significant expenses in addition to
contributions made to our 401(k) Plan.
All highly compensated employees eligible to participate in the Executive Nonqualified Excess Plan of Life Time
Fitness, including but not limited to our executives, may elect to defer up to 50% of their annual base salary and/or
annual bonus earnings to be paid in any coming year. The investment choices available to participants under the
non-qualified deferred compensation plan are of the same type and risk categories as those offered under our 401(k)
Plan and may be modified or changed by the participant or us at any time. Distributions can be paid out as in-service
payments or at retirement. Retirement benefits can be paid out as a lump sum or in annual installments over a term
of up to 10 years. We may, but do not currently plan to, make matching contributions and/or discretionary
contributions to this plan. If we did make contributions to this plan, the contributions would vest to each participant
according to their years of service with us. At December 31, 2010, $2.7 million had been deferred and is being held
on behalf of the employees. This amount is reflected as an other liability on the balance sheet.