Exhibit 10.1

CONFIDENTIAL
SEPARATION AGREEMENT
          This Separation Agreement (this “Agreement”) is entered into on May 1,
2009 (the “Effective Date”) by and between by and between Life Time Fitness,
Inc. (the “Company”), and Michael J. Gerend (“Executive”).
Background
          A. Executive was employed by the Company as its President and Chief
Operating Officer, pursuant to an Executive Employment Agreement dated
December 29, 2008 (the “Employment Agreement”).
          B. Executive holds options to purchase an aggregate of 114,000 shares
of common stock of the Company, all of which are vested as of the Separation
Date (as defined below), and 74,811 shares of restricted stock of the Company.
          C. In his capacity as President and Chief Operating Officer of the
Company, Executive held certain reasonable expectations regarding the evolution
of his leadership role for the Company and regarding his future duties and
responsibilities, consistent with his position and experience.
          D. Executive and the Company have determined that the Company does not
anticipate fulfilling Executive’s reasonable future expectations, and that in
fact Executive has perceived a reduction in his current duties and
responsibilities.
          E. The parties have agreed that it is in their mutual interests that
Executive’s position as an employee and officer of the Company terminate
effective May 1, 2009 (the “Separation Date”) and that the parties provide for a
smooth transition in connection with Executive’s separation from the Company.
          F. Executive and the Company agree that the terms of this Agreement
have been developed as an expression of the Company’s new agreement to
compensate Executive following his separation from service from, and agreement
to provide post-separation services for, the Company, and not as an expression
of Executive’s entitlement to severance benefits under the terms of the
Employment Agreement.
          G. The Company desires to secure cooperation from Executive with the
transition of his duties, and to ensure Executive’s availability to consult with
the Company from time to time with respect to the business and operations of the
Company.
          H. The parties are concluding their relationship amicably, but
mutually recognize that such a relationship may give rise to potential claims or
liabilities. The parties desire to resolve all issues Executive may have
relating to the termination of Executive’s relationship with the Company, as set
forth in this Agreement.

 

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          NOW THEREFORE, in consideration of the mutual promises and provisions
contained in this Agreement and the Release referred to below, the parties,
intending to be legally bound, agree as follows:
Agreement

1.   Separation. Executive and the Company mutually agree that Executive’s
employment as an employee and officer of the Company and as an officer of
certain of the Company’s affiliates shall terminate effective at the close of
business on the Separation Date. Executive will sign such other documents as
deemed reasonably necessary to accurately reflect his resignation from all such
offices in the Company’s corporate records.

2.   Final Pay. Executive confirms that he has been paid in full for his base
salary, compensation, and benefits owing to him to date, with the understanding,
however, that the Company acknowledges that the Executive shall remain entitled
to those benefits provided for under any employee benefit plans sponsored by the
Company in which Executive is a participant. The Company will pay Executive’s
final base salary and earned but unpaid bonus through the Separation Date,
pursuant to the Company’s normal payroll practices. In addition, the Company
will pay Executive for his accrued and unused vacation time that he has earned
and not forfeited through the Separation Date, in accordance with the regular
payroll practices of the Company.

3.   Expense Reimbursement. The Company will reimburse Executive for his regular
and necessary business expenses incurred through the Separation Date in
accordance with the Company’s regular policies and practices. Executive will
submit all requests for reimbursement to the Company no later than thirty days
after the Separation Date.

4.   Release. At the same time that Executive executes this Agreement, he shall
execute a Release in the form attached to this Agreement as Exhibit A (the
“Release”). This Agreement will not be interpreted or construed to limit the
Release in any manner.

5.   Payments. The Company will provide the benefits set forth in Sections 5 and
6 below in lieu of any further payments or compensation that Executive would
otherwise be entitled to receive under any agreement with the Company or as an
employee or officer of the Company, with the understanding, however, that the
Company acknowledges that the Executive shall remain entitled to those benefits
provided for under any employee benefit plans sponsored by the Company in which
Executive is a participant. The Company will make such payments and provide such
consideration only if (i) Executive has signed this Agreement and the Release
and has not rescinded the Release within the rescission period set forth therein
(the “Rescission Period”), and (ii) Executive is in compliance with the terms of
this Agreement (or, in the case of Section 9(b) of this Agreement, Executive is
in compliance in all material respects with such provision) and the Release as
of the date of such payment(s). The Company shall have no obligations under
Sections 5 or 6 if Executive rescinds or attempts to rescind the Release.

 

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  a.   Cash Payments. The Company shall pay to Executive an aggregate amount
equal to $550,000. Such amount shall be paid to Executive by the Company as
follows: (i) the cash lump sum of $183,334 on the first day of the seventh (7th)
month following the Effective Date hereof (the “First Payment Date”); and
thereafter (ii) the balance of $366,666 in equal bi-weekly installments pursuant
to the normal payroll practices and procedures of the Company, beginning on the
first regular payroll date of the Company to occur after the First Payment Date
and continuing for 12 months thereafter.     b.   Benefits Continuation. The
Company will provide continuation of medical plan coverage and life insurance
coverage at the same level and in the same manner as that provided to Executive
as of the Separation Date, beginning on the Separation Date and continuing for
18 months, provided that any benefit continuation under this Section 5(b) shall
be concurrent with any coverage under the Company’s plans pursuant to COBRA or
similar laws, and continuation of medical plan coverage under this Section 5(b)
shall end when Executive is no longer entitled to COBRA continuation coverage as
a result of Executive qualifying for medical coverage in connection with any new
employment. Any dependent medical plan coverage in effect for the Executive on
the Separation Date will also be continued for such period on the same terms.
Any costs Executive was paying for such coverages, if any, as of the Separation
Date shall continue to be paid by Executive. If the terms of any benefit plan
referred to in this section do not permit continued participation by Executive,
then the Company will arrange for other insured coverage providing substantially
similar benefits at the same contribution level, if any, of Executive, and
Executive will cooperate with the Company to obtain the most favorable rate for
comparable coverage to Executive. The benefits provided to Executive under this
Section 5(b) in one calendar year may not affect the benefits provided in any
other calendar year (except that a plan providing medical or health benefits may
impose a generally applicable limit on the amount that may be reimbursed or
paid), and Executive’s right to benefits under this Section 5(b) cannot be
exchanged for cash or any other benefit.     c.   Club Membership. For a period
of six years beginning on the Separation Date, the Company will provide to
Executive membership privileges at health and fitness clubs owned and operated
by the Company. Such membership privileges shall be at the “Onyx Family” level
or such comparable level as may be in effect from time pursuant to the Company’s
normal membership policies and procedures. The benefits provided to Executive
under this Section 5(c) in one calendar year may not affect the benefits
provided in any other calendar year, and Executive’s right to benefits under
this Section 5(c) cannot be exchanged for cash or any other benefit.     d.  
Reimbursement of Legal Expenses. The Company will reimburse Executive for
reasonable attorneys’ fees incurred by him in connection with the separation of
his employment from the Company and the negotiation of this Agreement, up to a
maximum amount of $12,500. Reimbursement of eligible expenses will be made

 

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      within 45 days after receipt of appropriate documentation from Executive
or such counsel.

6.   Stock Options, Restricted Stock and other Benefit Plans.

  a.   Stock Options. Executive holds the following options to purchase shares
of common stock of the Company:

                  Grant Date   Number of Vested Shares   Exercise Price Per
Share
3/3/2003
    40,000     $ 8.00  
6/29/2004
    54,000     $ 18.50  
3/1/2005
    20,000     $ 25.47  

      By virtue of this Agreement, the Company confirms that Executive’s
outstanding stock options shall remain covered by the Amended and Restated 2004
Long-Term Incentive Plan (the “2004 LTIP”), subject to the Stock Option
Agreements, as amended, referred to below.         The Company and Executive
agree to execute an amendment to each of the stock option agreements related to
the stock options listed above (the “Stock Option Agreements”) in the form
attached hereto as Exhibit B to extend the period of exercisability of the
options that are vested as of the Separation Date such that they shall remain
exercisable for a period of 24 months following the Separation Date, at which
time they will expire if they have not been exercised.     b.   Restricted
Stock. Executive holds the following shares of restricted common stock of the
Company:

              Grant Date   Number of Restricted Shares   Vesting Schedule
11/1/2006
    5,750     2,875 shares on each of 5/1/2009 and 3/1/2010
3/14/2007
    5,000     2,500 shares on each of 3/1/2010 and 3/1/2011
3/14/2008
    8,505     2,835 shares on each of 3/1/2010, 3/1/2011 and 3/1/2012
3/13/2009
  55,556
(subject to reduction as set forth in the applicable restricted stock agreement)
  13,889 shares on each of 3/1/2010, 3/1/2011, 3/1/2012, 3/1/2013

 

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      By virtue of this Agreement, the Company confirms that Executive’s
outstanding shares of restricted stock shall remain covered by the 2004 LTIP,
subject to the 2009 Restricted Stock Grant, as amended, referred to below.      
  The shares of restricted stock granted on November 1, 2006, March 14, 2007 and
March 14, 2008 will be forfeited on the Separation Date. In addition, 27,778 of
the shares of restricted stock granted on March 13, 2009 will be forfeited on
the Separation Date. The Company and Executive agree to execute an amendment to
the restricted stock agreement related to the restricted stock granted on
March 13, 2009 (the “2009 Restricted Stock Grant”) in the form attached hereto
as Exhibit C to provide for the continued vesting of 27,778 of the shares of
restricted stock granted on March 13, 2009 on the terms set forth in such
amendment.     c.   Other Benefit Plans. The Company acknowledges that pursuant
to its outstanding benefit plans, following the Effective Date, Executive is
entitled to certain monies in connection with his participation in the following
Company benefit plans: (i) Life Time Fitness, Inc. 401(k) Plan; and, (ii) the
Executive Nonqualified Excess Plan of Life Time Fitness, Inc. and its
Affiliates.

7.   Confidential Information. Except as permitted by the Company’s Board of
Directors, Executive will not at any time divulge, furnish or make accessible to
anyone or use in any way other than in the ordinary course of the business of
the Company, any confidential, proprietary or secret knowledge or information of
the Company, whether developed by Executive or others, including but not limited
to (i) Company trade secrets, (ii) confidential and proprietary plans,
developments, research, processes, designs, methods or material (whether or not
patented or patentable), (iii) customer and supplier lists, (iv) strategic or
other business, marketing or sales plans, and (v) financial data and plans.
Executive acknowledges that the above-described knowledge and information
constitutes a unique and valuable asset of the Company and represents a
substantial investment of time and expense by the Company, and that any
disclosure or other use of such knowledge or information other than for the sole
benefit of the Company would be wrongful and would cause irreparable harm to the
Company. The foregoing obligations of confidentiality shall not apply to any
knowledge or information that (i) is now or subsequently becomes generally
publicly known for reasons other than Executive’s violation of this Agreement,
(ii) is independently made available to Executive in good faith by a third party
who has not violated a confidential relationship with the Company, or (iii) is
required to be disclosed by legal process, other than as a direct or indirect
result of the breach of this Agreement by Executive.

8.   Non-Competition; Non-Solicitation.     a. Agreement Not to Compete. For a
period of twenty-four (24) consecutive months beginning on the Separation Date,
Executive shall not, directly or indirectly, engage in any manner or capacity
(including without limitation as a proprietor, principal, agent, partner,

 

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  officer, director, employee, member of any association, consultant or
otherwise) in any “Company Business” in the “Territory.” For purposes of this
Section 8.a., “Company Business” means (i) the design, development, management
or marketing of health and fitness clubs, and/or health and fitness club
memberships and services, and/or nutritional supplements, (ii) the publication
of any health and fitness publications and/or (iii) the sale, design or
promotion of and any other product or service that grows into a core or primary
business for the Company (or is under development and is projected to grow into
a core or primary business for the Company) as of the Separation Date.
“Territory” means any of the United States or in any other country in which the
Company is doing Company Business as of the Separation Date. Ownership by
Executive, as a passive investment, of less than 2.5% of the outstanding shares
of capital stock of any corporation listed on a national securities exchange or
publicly traded in the over-the-counter market shall not constitute a breach of
this Section 8.a.     b. Agreement Not to Hire. For a period of twenty-four
(24) consecutive months beginning on the Separation Date, Executive shall not,
directly or indirectly, hire, engage or solicit any person who is then an
employee of the Company or who was an employee of the Company as of the
Separation Date, in any manner or capacity, including without limitation as a
proprietor, principal, agent, partner, officer, director, stockholder, employee,
member of any association, consultant or otherwise.     c. Agreement Not to
Solicit. For a period of twenty-four (24) consecutive months beginning on the
Separation Date, Executive shall not, directly or indirectly, solicit, request,
advise or induce any current or potential customer, supplier or other business
contact of the Company to cancel, curtail or otherwise change its relationship
with the Company, in any manner or capacity, including without limitation as a
proprietor, principal, agent, partner, officer, director, stockholder, employee,
member of any association, consultant or otherwise.     d. Blue Pencil Doctrine.
If the duration of, the scope of or any business activity covered by any
provision of this Section 8 is in excess of what is valid and enforceable under
applicable law, such provision shall be construed to cover only that duration,
scope or activity that is valid and enforceable. Executive hereby acknowledges
that this Section 8 shall be given the construction that renders its provisions
valid and enforceable to the maximum extent, not exceeding its express terms,
possible under applicable law.

 

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9.   Cooperation; Consulting Services.

  a.   Documentation. At any time upon reasonable request and notice from the
Company, Executive will, without further consideration but at no expense to
Executive, timely execute and deliver such acknowledgements, instruments,
certificates, and other ministerial documents (including without limitation,
certification as to specific actions performed by Executive in his capacity for
the Company) as may be necessary or appropriate to formalize and complete the
Company’s corporate records; provided, however, that nothing in this Section 9
will require Executive to take any action that he reasonably believes to be
unlawful or unethical or to make any inaccurate statement of actual facts.    
b.   On-going Matters. At the Company’s reasonable written request and upon at
least 48 hours’ notice, without further consideration but without expense to
Executive, Executive will (i) provide complete and truthful information to, and
otherwise cooperate fully with, the Company and any of its or their legal
counsel, agents, insurers and representatives in connection with any
investigations, litigation or other matters relating to the Company in which the
Executive had principal responsibility or relevant information not available to
other Company employees, and (ii) for a period of 24 months following the
Separation Date (the “Consulting Period”), make himself reasonably available
upon reasonable written notice upon at least 48 hours’ notice, to discuss and
consult with the Company regarding business matters with which he was directly
and substantially involved while employed by the Company, and to assist in
transitioning his duties as President and Chief Operating Officer; provided,
however, that Executive’s obligations under this Section 9(b) shall not exceed
10 hours per month on a non-cumulative basis, and provided further that such
consulting obligations shall not materially interfere with Executive’s
responsibilities in connection with new employment or other active business
ventures following the Separation Date. The Company will reimburse Executive for
reasonable out-of-pocket expenses he incurs for services requested hereunder.

10.   Claims Involving the Company. Executive will not recommend or suggest to
any potential claimants or plaintiffs or their attorneys or agents that they
initiate claims or lawsuits against the Company, any of its affiliates, or any
of its or their directors, officers, employees, or agents, nor will Executive
voluntarily aid, assist, or cooperate with any claimants or plaintiffs or their
attorneys or agents in any claims or lawsuits now pending or commenced in the
future against the Company, any of its affiliates, or any of its or their
directors, officers, employees, or agents; provided, however, that this
Section 10 will not be interpreted or construed to prevent Executive from
providing information to any governmental or law enforcement agency or from
giving testimony in response to questions asked pursuant to a legally
enforceable subpoena, deposition notice or other legal process.   11.  
Confidentiality.

 

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  a.   General Standard. It is understood and agreed that this Agreement and
summaries thereof may be disclosed in filings with the Securities and Exchange
Commission and summarized in proxy statements disseminated to shareholders of
the Company. Notwithstanding such public filings, in order to minimize
disruption and distraction from on-going business operations, it is the intent
of the parties that the terms of Executive’s separation from the Company,
including the provisions of this Agreement and the Release (collectively
“Confidential Separation Information”), will be forever treated as confidential.
Accordingly, except as provided in Section 11(b) below, Executive will not
disclose Confidential Separation Information to anyone at any time and will not
comment on Confidential Separation Information to anyone at any time.     b.  
Exceptions.

  i.   It will not be a violation of this Agreement for Executive to disclose
Confidential Separation Information in reports to governmental agencies as
required by law, including, but not limited to, any federal or state tax
authority.     ii.   It will not be a violation of this Agreement for Executive
to disclose Confidential Separation Information to his immediate family, his
attorneys, his accountants or tax advisors.     iii.   It will not be a
violation of this Agreement for Executive to disclose Confidential Separation
Information in connection with any litigation proceeding involving the parties’
rights or obligations under this Agreement or the Release.

  12.   Return of Records and Property. Executive confirms that within ten
(10) days after the Separation Date, he will deliver to the Company any and all
Company records and any and all Company property in his possession or under his
control, including without limitation manuals, books, blank forms, documents,
letters, memoranda, notes, notebooks, reports, printouts, computer disks,
computer tapes, source codes, data, tables or calculations and all copies
thereof, documents that in whole or in part contain any trade secrets or
confidential, proprietary or other secret information of the Company and all
copies thereof, and keys, access cards, access codes, passwords, credit cards,
personal computers, telephones and other electronic equipment belonging to the
Company. Executive acknowledges and represents that he has permanently deleted
all Company information contained in any personal computer or other personal
electronic storage device.     13.   Non-Disparagement. Executive will not at
any time disparage, defame or besmirch the reputation, character, image,
products or services of the Company or the reputation or character of any of its
current or former directors, officers, employees or agents. The Company will
make reasonable efforts to require that the current members of the Board

 

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      of Directors of the Company and the current officers of the Company do not
at any time disparage, defame or besmirch the reputation or character of
Executive.

  14.   Full Compensation. Executive understands that the payments made and
other consideration provided by the Company under this Agreement will fully
compensate Executive for and extinguish any and all of the potential claims
Executive is releasing in the Release, including without limitation, his claims
for attorneys’ fees and costs and any and all claims for any type of legal or
equitable relief.     15.   Offsets. The Company shall not have any right to
offset against payments due to Executive under this Agreement, or the continued
vesting or ownership of any stock options or restricted shares by Executive
under this Agreement, as a result of any claim by the Company against Executive,
other than a claim by the Company against Executive related to Executive’s
failure to comply with any provision of this Agreement (or, in the case of
Section 9(b) of this Agreement only, Executive’s failure to comply in all
material respects).     16.   Withholding of Taxes. The Company may withhold
from amounts payable under this Agreement such federal, state and local income
and employment taxes as the Company shall determine are required to be withheld
pursuant to any applicable law or regulation. Executive shall be solely
responsible for the payment of all taxes due and owing with respect to wages,
benefits and other compensation provided to Executive hereunder.     17.  
Section 409A. This Agreement is intended to satisfy the requirements of sections
409A(a)(2), (3) and (4) of the Internal Revenue Code, including current and
future guidance and regulations interpreting such provisions, and should be
interpreted accordingly.     18.   No Admission of Wrongdoing. Executive
understands that this Agreement does not constitute an admission that the
Company or any of its directors, officers, employees, or agents has violated any
local ordinance, state or federal statute, or principle of common law, or that
the Company or any of its directors, officers, employees, or agents has engaged
in any unlawful or improper conduct toward Executive. Executive will not
characterize this Agreement or the payment of any money or other consideration
in accordance with this Agreement as an admission that the Company has engaged
in any unlawful or improper conduct toward him or treated him unfairly.     19.
  Authority. Executive represents and warrants that he has the authority to
enter into this Agreement and the Release, and that no causes of action, claims,
or demands released pursuant to this Agreement and the Release have been
assigned to any person or entity not a party to this Agreement and the Release.
    20.   Indemnification. Notwithstanding Executive’s separation from the
Company, the Company agrees that it shall continue to indemnify and hold
Executive harmless, and advance expenses and provide defense on behalf of
Executive, in the manner and to the fullest extent provided for in the Company’s
charter documents, including the Company’s

 

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      Bylaws,, as in effect on the date hereof, the terms of which shall survive
this Agreement. Executive will also be entitled, as a former employee or officer
of the Company, to legal defense to the extent provided from time to time to
current officers by any applicable general liability and/or directors’ and
officers’ liability insurance policies maintained by the Company.     21.  
Legal Representation. Executive acknowledges that he has been advised by the
Company to consult with his own attorney before executing this Agreement and the
Release, that he has had a full opportunity to consider this Agreement and the
Release, including any tax consequences related thereto applicable to Executive,
that he has had a full opportunity to ask any questions that he may have
concerning this Agreement, the Release, or the settlement of his potential
claims against the Company and others, and that he has not relied upon any
statements or representations made by the Company, its affiliates or its or
their attorneys, written or oral, other than the statements and representations
that are explicitly set forth in this Agreement, the Release, and any qualified
employee benefit plans sponsored by the Company in which Executive is a
participant.     22.   Assignment. This Agreement shall not be assignable, in
whole or in part, by Executive without the prior written consent of the Company.
The Company may, without the consent of Executive, assign its rights and
obligations under this Agreement.     23.   Entire Agreement. This Agreement,
the Release, any employee benefit plans sponsored by the Company in which
Executive is a participant, the Stock Option Agreements, as amended, and the
2009 Restricted Stock Grant, as amended, are intended to define the full extent
of the legally enforceable undertakings of the parties, and no promises or
representations, written or oral, that are not set forth explicitly in this
Agreement, the Release, and any employee benefit plans sponsored by the Company
in which Executive is a participant, the Stock Option Agreements, as amended,
and the 2009 Restricted Stock Grant, as amended, are intended by either party to
be legally binding. All other agreements and understandings between Executive
and the Company, including without limitation the Employment Agreement, are
hereby cancelled, terminated, and superseded. Executive acknowledges and agrees
that he is not now and will not become entitled to any severance benefits under
the Employment Agreement.     24.   Headings. The descriptive headings of the
paragraphs and subparagraphs of this Agreement are inserted for convenience only
and do not constitute a part of this Agreement.     25.   Counterparts. This
Agreement may be executed simultaneously in two or more counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument.     26.   Governing Law. This Agreement and the Release
will be interpreted and construed in accordance with, and any dispute or
controversy arising from any breach or asserted

 

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      breach of this Agreement or the Release will be governed by, the laws of
the State of Minnesota.

 

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IN WITNESS WHEREOF, Executive and the Company have executed this Agreement as of
the date set forth in the first paragraph.

         
 
  Life Time Fitness, Inc.    
 
         
 
 
 
   
 
       
 
  By    
 
 
 
   
 
       
 
  Its    
 
 
 
   
 
       
 
 
 
Michael J. Gerend    

 

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EXHIBIT A

CONFIDENTIAL
RELEASE BY MICHAEL J. GEREND
Definitions. I intend all words used in this Release to have their plain
meanings in ordinary English. Specific terms that I use in this Release have the
following meanings:

  A.   I, me, and my include both me and anyone who has or obtains any legal
rights or claims through me.     B.   Life Time means Life Time Fitness, Inc.,
any company related to Life Time Fitness, Inc. in the present or past (including
without limitation, its predecessors, parents, subsidiaries, affiliates, and
divisions), and any successors of Life Time Fitness, Inc.     C.   Company means
Life Time; the present and past officers, directors, committees, shareholders,
and employees of Life Time; any company providing insurance to Life Time in the
present or past; the present and past employee benefit plans sponsored or
maintained by Life Time (other than multiemployer plans) and the present and
past fiduciaries of such plans; the attorneys for Life Time; and anyone who
acted on behalf of Life Time or on instructions from Life Time.     D.  
Agreement means the Separation Agreement between Life Time and me that I am
executing on the same date on which I execute this Release, including all of the
documents attached to the Agreement.     E.   My Claims means all of my rights
that I now have to any relief of any kind from the Company, including without
limitation:

  1.   all claims arising out of or relating to my employment with Life Time or
the termination of that employment;     2.   all claims arising out of or
relating to the statements, actions, or omissions of the Company;     3.   all
claims for any alleged unlawful discrimination, harassment, retaliation or
reprisal, or other alleged unlawful practices arising under the laws of the
United States or any other country or of any state, province, municipality, or
other unit of government, including without limitation, claims under Title VII
of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Americans with Disabilities Act, the Family and Medical Leave Act, 42 U.S.C. §
1981, the Employee Retirement Income Security Act, the Equal Pay Act, the Worker
Adjustment and Retraining Notification Act, the Sarbanes-Oxley Act, the
Minnesota Human Rights Act, the Fair Credit Reporting

 

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      Act, and workers’ compensation non-interference or non-retaliation
statutes (such as Minn. Stat. § 176.82);     4.   all claims for alleged
wrongful discharge; breach of contract; breach of implied contract; failure to
keep any promise; breach of a covenant of good faith and fair dealing; breach of
fiduciary duty; estoppel; my activities, if any, as a “whistleblower”;
defamation; infliction of emotional distress; fraud; misrepresentation;
negligence; harassment; retaliation or reprisal; constructive discharge;
assault; battery; false imprisonment; invasion of privacy; interference with
contractual or business relationships; any other wrongful employment practices;
and violation of any other principle of common law;     5.   all claims for
compensation of any kind, including without limitation, bonuses, commissions,
stock-based compensation or stock options, vacation pay, perquisites, relocation
expenses, and expense reimbursements;     6.   all claims for back pay, front
pay, reinstatement, other equitable relief, compensatory damages, damages for
alleged personal injury, liquidated damages, and punitive damages; and     7.  
all claims for attorneys’ fees, costs, and interest.

      However, My Claims does not include any claims that the law does not allow
to be waived; any claims that may arise after the date on which I sign this
Release; any claims for benefits under the Life Time Fitness, Inc. 401(k) Plan
or the Executive Nonqualified Excess Plan of Life Time Fitness, Inc. and its
Affiliates , any rights that I may have to indemnification from Life Time as a
current or former officer, director, or employee of Life Time, including without
limitation indemnification rights under applicable laws, the charter documents
of Life Time, or any liability insurance policy maintained by Life Time; or any
claims for breach of the Agreement.

Agreement to Release My Claims. I will receive consideration from Life Time as
set forth in the Agreement if I sign and do not rescind this Release as provided
below. I understand and acknowledge that that consideration is in addition to
anything of value that I would be entitled to receive from Life Time if I did
not sign this Release or if I rescinded this Release. In exchange for that
consideration I give up and release all of My Claims. I will not make any
demands or claims against the Company for compensation or damages relating to My
Claims. The consideration that I am receiving is a fair compromise for the
release of My Claims.
Additional Agreements and Understandings. Even though Life Time will provide
consideration for me to settle and release My Claims, the Company does not admit
that it is

 

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responsible or legally obligated to me. In fact, the Company denies that it is
responsible or legally obligated to me for My Claims, denies that it engaged in
any unlawful or improper conduct toward me, and denies that it treated me
unfairly.
Confidentiality. I understand that the terms of this Release are confidential
and that I may not disclose those terms to any person except under the
circumstances described in the Agreement.
Advice to Consult with an Attorney. I understand and acknowledge that I am
hereby being advised by the Company to consult with an attorney prior to signing
this Release and I have done so. My decision whether to sign this Release is my
own voluntary decision made with full knowledge that the Company has advised me
to consult with an attorney.
Period to Consider the Release. I understand that I have 21 days from the day
that I receive this Release, not counting the day upon which I receive it, to
consider whether I wish to sign this Release. If I sign this Release before the
end of the 21-day period, it will be my voluntary decision to do so because I
have decided that I do not need any additional time to decide whether to sign
this Release.
My Right to Rescind this Release. I understand that I may rescind this Release
at any time within 15 days after I sign it, not counting the day upon which I
sign it. This Release will not become effective or enforceable unless and until
the 15-day rescission period has expired without my rescinding it.
Procedure for Accepting or Rescinding the Release. To accept the terms of this
Release, I must deliver the Release, after I have signed and dated it, to Life
Time by hand or by mail within the 21-day period that I have to consider this
Release. To rescind my acceptance, I must deliver a written, signed statement
that I rescind my acceptance to Life Time by hand or by mail within the 15-day
rescission period. All deliveries must be made to Life Time at the following
address:
Life Time Fitness, Inc.
2902 Corporate Place
Chanhassen, MN 55317
Attention: General Counsel
If I choose to deliver my acceptance or the rescission of my acceptance by mail,
it must be:
     (1) postmarked within the period stated above; and
     (2) properly addressed to Life Time at the address stated above.
Interpretation of the Release. This Release should be interpreted as broadly as
possible to achieve my intention to resolve all of My Claims against the
Company. If this Release is

 

--------------------------------------------------------------------------------

 

held by a court to be inadequate to release a particular claim encompassed
within My Claims, this Release will remain in full force and effect with respect
to all the rest of My Claims.
My Representations. I am legally able and entitled to receive the consideration
being provided to me in settlement of My Claims. I have not been involved in any
personal bankruptcy or other insolvency proceedings at any time since I began my
employment with Life Time. No child support orders, garnishment orders, or other
orders requiring that money owed to me by Life Time be paid to any other person
are now in effect.
I have read this Release carefully. I understand all of its terms. In signing
this Release, I have not relied on any statements or explanations made by the
Company except as specifically set forth in the Agreement. I am voluntarily
releasing My Claims against the Company. I intend this Release and the Agreement
to be legally binding.

           
Dated:
 
   

 
Michael J. Gerend    

 

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EXHIBIT B

CONFIDENTIAL
Life Time Fitness, Inc.
2004 Long-Term Incentive Plan
Amendment to
Stock Option Agreement
          This is an Amendment to a Stock Option Agreement (the “Amendment”)
between Life Time Fitness, Inc., a Minnesota corporation (the “Company”), and
Michael J. Gerend (the “Employee”) entered into on May 1, 2009.
Recitals
          WHEREAS, the Company and the Employee are parties to an Incentive
Stock Option Agreement dated June 29, 2004 (the “Agreement”);
          WHEREAS, in connection with the termination of the Employee’s
employment effective May 1, 2009, 54,000 of the Shares subject to the Agreement
will have vested; and
          WHEREAS, capitalized terms used but not defined herein shall have the
meanings given to them in the Agreement or the Plan (as defined in the
Agreement).
          NOW, THEREFORE, the following amendment shall be effective as of the
date set forth above.
1. Amendment of Section 7 of the Agreement. Section 7 of the Agreement is hereby
amended to read in its entirety as follows:
“This Option may be exercised following the Optionee’s termination of employment
pursuant to the terms of the Separation Agreement between the Company and the
Optionee entered into on May 1, 2009, but only to the extent that it was
exercisable immediately prior to such termination of employment, at any time
prior to May 1, 2011.”
2. Amendment Limited. Except as expressly amended hereby, the Agreement shall
remain in full force and effect.
3. Amendment Effective Date. This Amendment shall be effective when Employee has
signed the Separation Agreement between the Company and the Employee (the
“Separation Agreement”) and signed and not rescinded the Release within the
Rescission Period (as such terms are defined in the Separation Agreement).
          IN WITNESS WHEREOF, the Employee and the Company have executed this
Amendment as of the 1st day of May, 2009.

         
 
  Michael J. Gerend (“Employee”)      
 
       
 
 
 
   
 
       
 
  Life Time Fitness, Inc.    
 
       
 
  By    
 
        
 
   
 
        
 
   
 
         Its    
 
                
 
   

 

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EXHIBIT C

CONFIDENTIAL
Life Time Fitness, Inc.
2004 Long-Term Incentive Plan
Amendment to
2009 Restricted Stock Agreement
          This is an Amendment to the Restricted Stock Agreement (the
“Amendment”) between Life Time Fitness, Inc., a Minnesota corporation (the
“Company”), and Michael J. Gerend (the “Employee”) entered into on May 1, 2009.
Recitals
          WHEREAS, the Company and the Employee are parties to a Restricted
Stock Agreement dated March 13, 2009 related to 55,556 shares of restricted
stock (the “Agreement”);
          WHEREAS, in connection with the termination of the Employee’s
employment effective May 1, 2009, (i) 27,778 of such shares of restricted stock
shall be forfeited and (ii) the Committee has waived the forfeiture event that
would otherwise occur upon termination of Employee’s employment with respect to
27,778 of such shares of restricted stock as set forth in this Amendment; and
          WHEREAS, capitalized terms used but not defined herein shall have the
meanings given to them in the Agreement or the Plan (as defined in the
Agreement).
          NOW, THEREFORE, the following waiver and amendments shall be effective
as of the date set forth above.
1. Waiver of Forfeiture. The Committee hereby waives the forfeiture of 27,778 of
the Restricted Shares that would otherwise occur upon termination of the
Employee’s employment on May 1, 2009 pursuant to the terms of Section 4 of each
Agreement.
2. Amendment of Section 2 of the Agreement. Section 2 of the Agreement is hereby
amended to read in its entirety as follows:
“Vesting. Of the 27,778 Restricted Shares subject to this Agreement, 13,889
Restricted Shares that have not previously been forfeited will vest on March 1,
2010 and 13,889 Restricted Shares that have not previously been forfeited will
vest on March 1, 2011. 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 (ii) a Change of Control as defined in the Plan.
Notwithstanding the foregoing, the number of Restricted Shares vesting on each
of March 1, 2010 and March 1, 2011 may be reduced based upon the relationship of
the Company’s actual fully-diluted earnings-per-share (“EPS”) for 2009 to
budgeted EPS for 2009, 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 2009 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 March 1, 2010 shall
be rounded down to the nearest whole-share while the number of Restricted Shares
subject to vesting on March 1, 2011 shall be rounded up to the nearest
whole-share.”

 

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3. Amendment of Section 4 of the Agreements. The first sentence of Section 4 of
the Agreement is hereby amended to read in its entirety as follows:
“In the event that (i) the Employee fails to comply with any provision of the
Separation Agreement between the Company and the Employee (or, in the case of
Section 9(b) only, Executive fails to comply in all material respects with such
provision) or (ii) 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.”
4. Amendment Limited. Except as expressly amended hereby, the Agreement shall
remain in full force and effect.
5. Amendment Effective Date. This Amendment shall be effective when Employee has
signed the Separation Agreement between the Company and the Employee (the
“Separation Agreement”) and signed and not rescinded the Release within the
Rescission Period (as such terms are defined in the Separation Agreement).
          IN WITNESS WHEREOF, the Employee and the Company have executed this
Amendment as of the 1st day of May, 2009.

         
 
  Michael J. Gerend (“Employee”)      
 
       
 
 
 
   
 
       
 
  Life Time Fitness, Inc.    
 
       
 
  By    
 
        
 
   
 
        
 
   
 
         Its