Lifetime Fitness 2011 Annual Report Download - page 73

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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6. Share-Based Compensation
Stock Option and Incentive Plans
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. 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, 2011, we had granted a total of 1,957,500
options to purchase common stock under the 1998 Plan, of which 63,900 were outstanding. In connection with
approval of the 2004 Long-Term Incentive Plan (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. The types of awards that could be granted under the 2004 Plan included
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. In connection with approval of the 2004 Plan, our Board of Directors approved a resolution to cease
making additional grants under prior stock option and incentive plans. During 2011, we issued 337,001 restricted
shares under the 2004 Plan. The value of the restricted shares was based upon the closing price of our stock on the
dates of issue which ranged from $36.23 to $38.48 during 2011. The restricted shares generally vest over periods
ranging from one to four years. As of December 31, 2011, we had granted a total of 1,929,665 options to purchase
common stock under the 2004 Plan, of which options to purchase 343,300 shares were outstanding, and we had
granted a total of 3,294,359 restricted shares under the 2004 Plan, of which 1,872,269 restricted shares were
unvested. In connection with approval of the 2011 Long-Term Incentive Plan (the 2011 Plan), as discussed below,
our Board of Directors approved a resolution to cease making additional grants under the 2004 Plan.
The 2011 Plan reserved 2,500,000 shares of our common stock for issuance. Under the 2011 Plan, the Compensation
Committee of our Board of Directors administers the 2011 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 2011 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. Eligible participants under the 2011 Plan included our officers,
employees, non-employee directors and consultants. Each award agreement specifies 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 2011 Plan, our Board of Directors approved a
resolution to cease making additional grants under the 2004 Plan. During 2011, we granted 30,639 restricted shares
under the 2011 Plan. The value of the restricted shares was based upon the closing price of our stock on the dates of
issue which ranged from $37.57 to $41.64 during 2011. The restricted shares generally vest over periods ranging
from one to four years. As of December 31, 2011, we had granted a total of 30,639 restricted shares under the 2011
Plan, of which 29,814 restricted shares were unvested. As of December 31, 2011, 2,477,922 shares remain available
for grant under the 2011 Plan.