Lifetime Fitness 2008 Annual Report Download - page 70

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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)
64
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 2008, we issued 434,180 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 $14.31 to $35.77 during 2008. The restricted
stock generally vests over periods ranging from one to four years. As of December 31, 2008, we had granted a total
of 1,929,665 options to purchase common stock under the 2004 Plan, of which options to purchase 760,304 shares
were outstanding, and a total of 840,008 restricted shares under the 2004 Plan, of which 487,203 restricted shares
were unvested. As of December 31, 2008, 1,024,297 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, 2008 and 2007, was as follows:
For the Year Ended December 31,
2008 2007 2006
Share-based compensation expense related to stock
o
p
tions ................................................................................. $2,536 $3,206 $5,671
Share-based compensation expense related to restricted
shares ................................................................................... 4,796 4,410 1,833
Share-based compensation expenses related to employee
stock
p
urchase
p
ro
g
ram
(
“ESPP”
)
....................................... 124 130 52
Total share-based compensation expense ............................ $7,456 $7,746 $7,556
A summary of restricted stock activity follows:
During the years ended December 31, 2008 and 2007, we issued 434,180 and 162,393 shares of restricted stock,
respectively, with an aggregate fair value of $11.6 million and $8.0 million, respectively. The fair market value of
restricted shares that became vested during the year ended December 31, 2008 was $4.7 million. The total value of
Restricted
Shares
Outstanding
Range of
Market Price
Per Share on
Grant Date
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
Granted ................................................................................................. 434,180 14.31-35.77
Canceled ............................................................................................... (144,805) 26.46-51.15
Vested ................................................................................................... (104,517) 24.75-53.95
Balance — December 31, 2008 .................................................................. 487,203 $14.31-53.95