Lifetime Fitness 2007 Annual Report Download - page 64

LIFE TIME FITNESS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Table amounts in thousands, except share and per share data)
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additional 1,500,000 shares of our common stock for issuance. As of December 31, 2007, we had granted a total of
1,957,500 options to purchase common stock under the 1998 Plan, of which 304,905 were outstanding. In
connection with approval of the 2004 Plan, as discussed below, our Board of Directors approved a resolution to
cease making additional grants under the 1998 Plan.
The 2004 Plan reserved up to 3,500,000 shares of our common stock for issuance. Under the 2004 Plan, the
Compensation Committee of our Board of Directors administers the 2004 Plan and has the power to select the
persons to receive awards and determine the type, size and terms of awards and establish objectives and conditions
for earning awards. The types of awards that may be granted under the 2004 Plan include incentive and non-
qualified options to purchase shares of common stock, stock appreciation rights, restricted shares, restricted share
units, performance awards and other types of stock-based awards. We use the term “restricted shares” to define
nonvested shares granted to employees, whereas SFAS 123(R) reserves that term for fully vested and outstanding
shares whose sale is contractually or governmentally prohibited for a specified period of time. Eligible participants
under the 2004 Plan include our officers, employees, non-employee directors and consultants. Each award
agreement will specify the number and type of award, together with any other terms and conditions as determined by
the Compensation Committee of the Board of Directors or its designees. In connection with approval of the 2004
Plan, our Board of Directors approved a resolution to cease making additional grants under the 1996 Plan and 1998
Plan. During 2007, we issued 162,393 shares of restricted stock. The value of the restricted shares was based upon
the closing price of our stock on the dates of issue which ranged from $49.06 to $53.95 during 2007. The restricted
stock generally vests over periods ranging from one to five years. As of December 31, 2007, we had granted a total
of 1,929,665 options to purchase common stock under the 2004 Plan, of which options to purchase 891,362 shares
were outstanding, and a total of 405,828 restricted shares under the 2004 Plan, of which 302,345 restricted shares
were unvested. As of December 31, 2007, 1,276,686 shares remain available for grant under the 2004 Plan.
Total share-based compensation expense, which includes stock option expense from the adoption of SFAS 123(R)
and restricted stock expense, included in our consolidated statements of operations for the years ended December
31, 2007 and 2006, was as follows:
For the Year Ended December 31,
2007 2006
Share-based compensation expense related to stock options......................... $ 3,206 $ 5,671
Share-based compensation expense related to restricted shares ................... 4,410 1,833
Share-based compensation expense related to employee stock purchase
program (“ESPP”) .......................................................................................... 130 52
Total share-based compensation expense......................................................... $ 7,746 $ 7,556
A summary of restricted stock activity follows:
Restricted
Shares
Outstanding
Range of
Market Price
Per Share on
Grant Date
Balance — December 31, 2005.................................................................. 83,634 $24.75-33.14
Granted................................................................................................. 156,164 42.72-50.82
Canceled............................................................................................... (320) 46.51
Vested .................................................................................................. (28,584) 24.75-42.72
Balance — December 31, 2006.................................................................. 210,894 24.75-50.82
Granted................................................................................................. 162,393 49.06-53.95
Canceled............................................................................................... (3,720) 46.51-53.95
Vested................................................................................................... (67,222) 24.75-50.85
Balance — December 31, 2007.................................................................. 302,345 $24.75-53.95