Lifetime Fitness 2013 Annual Report Download - page 75

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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and interest of $0.1 million. During 2011, we accrued penalties and interest of $0.1 million and in total, as of
December 31, 2011, had recognized a liability for penalties and interest of $0.1 million.
We do not anticipate that the total amounts of unrecognized tax benefits will significantly increase or decrease in the
next 12 months.
We are subject to taxation in the U.S., Canada and various states. Our tax years 2010, 2011 and 2012 are subject to
examination by the tax authorities. With few exceptions, we are no longer subject to U.S. federal, state or local
examinations by tax authorities for years before 2010.
We have an income tax net operating loss carryforward related to our Canada operations of approximately $4.2
million, which expires in 19 years.
We consider the undistributed earnings of our foreign subsidiaries as of December 31, 2013 to be indefinitely
reinvested and, accordingly, no U.S. income taxes have been provided thereon. As of December 31, 2013, the
amount of cash associated with indefinitely reinvested foreign earnings was approximately $1.4 million. We have
not, nor do we anticipate the need to, repatriate funds to the U.S. to satisfy domestic liquidity needs arising in the
ordinary course of business, including liquidity needs associated with our domestic debt service requirements.
7. Share-Based Compensation
Stock Option and Incentive Plans
The 2004 Long-Term Incentive 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. The
restricted shares generally vest over periods ranging from one to four years. As of December 31, 2013, we had
granted a total of 1,929,665 options to purchase common stock under the 2004 Plan, of which options to purchase
215,668 shares were outstanding. We also granted a total of 3,294,359 restricted shares under the 2004 Plan, of
which 219,099 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. The restricted shares generally vest over periods ranging from one to four years. During
the year ended December 31, 2013, we granted 363,106 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 $41.80 to
$49.90 during 2013. As of December 31, 2013, we had granted a total of 1,446,212 restricted shares under the 2011
Plan, of which 1,210,632 restricted shares were unvested. As of December 31, 2013, 1,234,537 shares remain
available for grant under the 2011 Plan.