Vesting Schedule pursuant to Section 2 (Cumulative):
No. of Shares Which
Become Vested as of Such Date
February 23, 2012
February 23, 2013
February 23, 2014
February 23, 2015
This is a Restricted Stock Agreement (the “Agreement”) between Life Time Fitness,
Inc., a Minnesota corporation (the “Company”), and the employee identified above (the
“Employee”) effective as of the date of issuance specified above.
WHEREAS, the Company maintains the Life Time Fitness, Inc. 2004 Long-Term Incentive Plan (the
WHEREAS, pursuant to the Plan, the Company’s Compensation Committee (the “Committee”), a
committee of the Board of Directors (the “Board”), administers the Plan and the Committee
has the authority to grant awards under the Plan on behalf of the Company;
WHEREAS, the Committee has determined that the Employee is eligible to receive such an award
under the Plan;
NOW, THEREFORE, the Company hereby grants this award of Restricted Shares to the Employee
under the terms and conditions as follows.
Terms and Conditions
Grant of Restricted Stock.
(a) Subject to the terms and conditions of this Agreement, the Company has issued to the
Employee the number of Shares specified at the beginning of this Agreement. These Shares
are subject to the restrictions provided for in this Agreement and are referred to collectively
as the “Restricted Shares” and each as a “Restricted Share.”
(b) The Restricted Shares will be evidenced by a book entry made in the records of the
Company’s transfer agent in the name of the Employee (unless the Employee requests a
certificate evidencing the Restricted Shares). All restrictions provided for in this
Agreement will apply to each Restricted Share and to any other securities distributed with
respect to that Restricted Share. Each Restricted Share will remain restricted and subject
to forfeiture to the Company unless and until that Restricted Share has vested in the
Employee in accordance with all of the terms and conditions of this Agreement. If a
certificate evidencing any Restricted Share is requested by the Employee, the Company shall
retain custody of any such certificate throughout the period during which any restrictions
are in effect and require, as a condition to issuing any such certificate, that the Employee
tender to the Company a stock power duly executed in blank relating to such custody.
Vesting. The Restricted Shares that have not previously been forfeited will vest in
the numbers and on the dates specified in the Vesting Schedule at the beginning of this
Agreement. In addition, the Restricted Shares that have not previously vested or been
forfeited will vest immediately upon the first to occur of the following events: (i) death of
the Employee; (ii) Total Disability of the Employee; and, (iii) a Change of Control as defined
in the Plan. Notwithstanding the foregoing, the number of Restricted Shares vesting on each
date specified in the Vesting Schedule at the beginning of this Agreement may be reduced based
upon the relationship of the Company’s actual fully-diluted earnings-per-share (“EPS”) for
2011 to budgeted EPS for 2011, as specifically set forth on Exhibit A attached hereto, as such
targets may be amended from time-to-time by the Board. The Committee shall determine whether
the performance hurdle was achieved as promptly as practicable following review of the
Company’s audited fiscal 2011 financial results. In the event that a reduction is applied to
the Vesting Schedule at the beginning of this Agreement (a) such a reduction shall occur
immediately upon determination by the Committee that the performance hurdle was not achieved
and (b) if such reduction would cause the number of Restricted Shares subject to vesting on
each date specified in the Vesting Schedule to be a fraction of a share, the number of
Restricted Shares subject to vesting on each of the first two dates specified in the Vesting
Schedule shall be rounded down to the nearest whole-share while the number of Restricted
Shares subject to vesting on each of the last two dates specified in the Vesting Schedule
shall be rounded up to the nearest whole-share.
Lapse of Restrictions; Issuance of Unrestricted Shares. Upon the vesting of any
Restricted Shares, such vested Restricted Shares will no longer be subject to forfeiture as
provided in Section 4 of this Agreement. Upon the vesting of any Restricted Shares, all
restrictions on such Restricted Shares will lapse, and the Company will, subject to the
provisions of the Plan, issue to the Employee a certificate evidencing the Restricted Shares
that is free of any transfer or other restrictions arising under this Agreement.
Forfeiture. In the event that (i) the Employee’s employment is terminated for any
reason, whether by the Company, by the Employee or otherwise, voluntarily or involuntarily,
other than in the circumstances described in Section 2 of this Agreement, or (iii) the
Employee attempts to sell, assign, transfer or otherwise dispose of, or mortgage, pledge or
otherwise encumber any of the Restricted Shares or the Restricted Shares become subject to
attachment or any similar involuntary process, then any Restricted Shares that have not
previously vested shall be forfeited by the Employee to the Company, the Employee shall
thereafter have no right, title or interest whatever in such Restricted Shares, and, if the
Company does not have custody of any and all certificates
representing Restricted Shares so forfeited, the Employee shall immediately return to the
Company any and all certificates representing Restricted Shares so forfeited. Additionally,
the Employee will deliver to the Company a stock power duly executed in blank relating to
any and all certificates representing Restricted Shares forfeited to the Company in
accordance with the previous sentence or, if such stock power has
previously been tendered
to the Company, the Company will be authorized to deem such previously tendered stock power
delivered, and the Company will be authorized to cancel any and all certificates
representing Restricted Shares so forfeited and to cause a book entry to be made in the
records of the Company’s transfer agent in the name of the Employee (or a new stock
certificate to be issued, if requested by the Employee) evidencing any Shares that vested
prior to forfeiture. If the Restricted Shares are evidenced by a book entry made in the
records of the Company’s transfer agent, then the Company will be authorized to cause such
book entry to be adjusted to reflect the number of Restricted Shares so forfeited.
Shareholder Rights. As of the date of issuance specified at the beginning of this
Agreement, the Employee shall have all of the rights of a shareholder of the Company with
respect to the Restricted Shares (including voting rights and the right to receive dividends
and other distributions), except as otherwise specifically provided in this Agreement.
Restrictive Legends and Stop-Transfer Orders.
(a) The book entry or certificate representing the Restricted Shares may, at the Committee’s
discretion, contain a notation or bear the following legend (as well as any notations or
legends required by applicable state and federal corporate and securities laws) noting the
existence of the restrictions and the Company’s rights to reacquire the Restricted Shares
set forth in this Agreement:
“THE SHARES REPRESENTED BY THIS [BOOK ENTRY] [CERTIFICATE] MAY BE TRANSFERRED ONLY
IN ACCORDANCE WITH THE TERMS OF A RESTRICTED STOCK AGREEMENT BETWEEN THE COMPANY AND
THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.”
(b) The Employee agrees that, in order to ensure compliance with the restrictions referred
to herein, the Company may issue appropriate “stop transfer” instructions to its transfer
agent, if any, and that, if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.
(c) The Company shall not be required (i) to transfer on its books any Restricted Shares
that have been sold or otherwise transferred in violation of any of the provisions of this
Agreement or (ii) to treat as owner of the Restricted Shares or to accord the right to vote
or pay dividends to any purchaser or other transferee to whom the Restricted Shares shall
have been so transferred.
Tax Consequences and Withholdings. The Employee understands that unless a proper and
timely Section 83(b) election has been made as further described below, generally under
Section 83 of the Code, at the time the Restricted Shares vest, the Employee will be obligated
to recognize ordinary income and be taxed in an amount equal to the Fair Market Value as of
the date of vesting for the Restricted Shares then vesting. The Employee shall be solely
responsible for any tax obligations that may arise as a result of the Restricted Shares.
Section 83(b) Election. The Employee has been informed that, with respect to the
grant of Restricted Shares, an election may be filed by the Employee with the Internal Revenue
Service, within 30 days of the date of issuance, electing pursuant to Section 83(b) of the
Code to be taxed currently on the Fair Market Value of the Restricted Shares on the date of
issuance. The Employee acknowledges that it is the Employee’s sole responsibility to timely
file the election under Section 83(b) of the Code.
If the Employee makes such election, the Employee shall promptly provide the Company a copy
and the Company may require at the time of such election an additional payment for
withholding tax purposes based on the Fair Market Value of the Restricted Shares as of the
date of issuance.
Interpretation of This Agreement. All decisions and interpretations made by the
Committee with regard to any question arising hereunder or under the Plan shall be binding and
conclusive upon the Company and the Employee. If there is any inconsistency between the
provisions of this Agreement and the Plan, the provisions of the Plan shall govern.
Award Subject to Plan, Articles of Incorporation and By-Laws. The Employee
acknowledges that the Restricted Shares are subject to the Plan, the Articles of
Incorporation, as amended from time to time, and the By-Laws, as amended from time to time, of
the Company, and any applicable federal or state laws, rules or regulations.
Binding Effect. This Agreement shall be binding in all respects on the heirs,
representatives, successors and assigns of the Employee.
Choice of Law. This Agreement is entered into under the laws of the State of
Minnesota and shall be construed and interpreted thereunder (without regard to its conflict of
IN WITNESS WHEREOF, the Employee and the Company have executed this Agreement as of the
23rd day of February, 2011.
Life Time Fitness, Inc.
Eric J. Buss
Its Executive Vice President
Percentage of Original Restricted Shares
Actual EPS for 2011 as a Percentage of 2011 Budgeted EPS
Granted to be Forfeited
100% or Above
99% to 100%
98% to 99%
97% to 98%
96% to 97%
95% to 96%
94% to 95%
93% to 94%
92% to 93%
91% to 92%
90% to 91%
89% to 90%
88% to 89%
87% to 88%
86% to 87%
85% to 86%
84% to 85%
83% to 84%
83% or Less
In the event that the Company’s Net Income for 2011 is less than $0, the entire amount of
restricted shares granted pursuant to this Restricted Stock Agreement shall be forfeited in full.
Actual EPS for 2011 shall not include any share-based compensation expense recognized by the
Company, if any, in connection with the 996,000 “performance based” restricted shares that the
Company granted on June 11, 2009, or the dilutive impact of any such shares being included in the
calculation of EPS for 2011.