Lifetime Fitness 2011 Annual Report Download - page 75

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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)
69
been achieved for fiscal 2011, 100% of the restricted shares would have vested. Since the grant was not fully vested
after fiscal 2011, 50% of the shares will vest if a specified EPS target is achieved for fiscal 2012. In the event that
we do not achieve the specified EPS target for fiscal 2012, the remaining restricted stock will be forfeited. A
maximum of $18.9 million (pretax) could be recognized as compensation expense under this grant if all EPS targets
are met.
In fourth quarter 2010, we determined that achieving the 2011 diluted EPS targets required for vesting of 50% of the
restricted shares (representing 453,500 shares of restricted stock) was probable. As a result, we recognized a
cumulative, non-cash performance share-based compensation expense of $5.6 million in fourth quarter 2010 and
$3.9 million in 2011. If we had determined that all of the targets had become probable on December 31, 2011, we
would have recognized an additional $9.5 million cumulative compensation adjustment on that date. These 453,500
shares will vest upon publication of our audited financial statements for fiscal 2011.
In fourth quarter 2011, we determined that achieving the 2012 diluted EPS targets required for vesting of the final
50% of the restricted shares (representing 453,500 shares of restricted stock) was probable. As a result, we
recognized a cumulative, non-cash performance share-based compensation expense of $6.8 million in fourth quarter
2011. We anticipate recognizing the remaining portion of performance share-based compensation expense of
approximately $2.7 million (pretax) ratably in 2012. The probability of reaching the targets is evaluated each
reporting period. If we later determine that it is not probable that the minimum diluted EPS performance threshold
for 2012 will be met, no further compensation cost will be recognized and any recognized compensation cost
relating to the shares that have not vested will be reversed. In accordance with the related accounting guidance, none
of these shares were included in our total diluted share count at December 31, 2011 or 2010.
Summary of Stock Option Activity
Outstanding at December 31, 2008
Exercised
Canceled
Outstanding at December 31, 2009
Exercised
Canceled
Outstanding at December 31, 2010
Exercised
Canceled
Outstanding at December 31, 2011
Vested at December 31, 2011
Shares
980,929
(166,950)
(3,401)
810,578
(245,864)
(12,089)
552,625
(142,384)
(3,041)
407,200
407,200
Weighted
Average
Exercise
Price
$21.65
$14.80
$29.64
$22.93
$20.91
$46.97
$23.30
$22.21
$31.40
$23.62
$23.62
Weighted
Average
Remaining
Contractual
Term
(Years)
5.6
4.8
3.8
2.9
2.9
Aggregate
Intrinsic
Value
$—
$3,669
$10,009
$9,429
$9,429
No stock options have been granted since 2007. As of December 31, 2011, there was no unrecognized compensation
expense related to stock options, and all outstanding stock options were vested.