Lifetime Fitness 2009 Annual Report Download - page 69

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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Plan (the 2004 Plan), as discussed below, our Board of Directors approved a resolution to cease making additional
grants under the 1996 Plan.
The LIFE TIME FITNESS, Inc. 1998 Stock Option Plan (the 1998 Plan), reserved up to 1,600,000 shares of our
common stock for issuance. Under the 1998 Plan, the Board of Directors had the authority to grant incentive and
nonqualified options to purchase shares of our common stock to eligible employees, directors and contractors at a
price of not less than 100% of the fair market value at the time of the grant. Incentive stock options expire no later
than 10 years from the date of grant, and nonqualified stock options expire no later than 15 years from the date of
grant. The 1998 Plan was amended in December 2003 by our Board of Directors and shareholders to reserve an
additional 1,500,000 shares of our common stock for issuance. As of December 31, 2009, we had granted a total of
1,957,500 options to purchase common stock under the 1998 Plan, of which 147,825 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 originally reserved 3,500,000 shares of our common stock for issuance. In 2009, our shareholders
authorized an additional 1,750,000 shares, for a new total of 5,250,000 shares. 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 applicable accounting guidance 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 2009, we issued 1,698,194 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 $9.72 to $24.95 during 2009.
The restricted stock generally vests over periods ranging from one to four years. As of December 31, 2009, we had
granted a total of 1,929,665 options to purchase common stock under the 2004 Plan, of which options to purchase
662,753 shares were outstanding, and a total of 2,538,202 restricted shares under the 2004 Plan, of which 1,966,672
restricted shares were unvested. As of December 31, 2009, 1,150,954 shares remain available for grant under the
2004 Plan.
Total share-based compensation expense, which includes stock option expense and restricted stock expense,
included in our consolidated statements of operations for the years ended December 31, 2009 and 2008, was as
follows:
For the Year Ended December 31,
2009 2008 2007
Share based compensation expense related to stock options ..................... $797 $2,536 $3,206
Share based compensation expense related to restricted shares ................. 7,191 4,796 4,410
Share based compensation expense related to employee stock purchase
program (“ESPP”) ................................................................................ 94 124 130
Total share based compensation expense .................................................. $8,082 $7,456 $7,746