EXHIBIT 10.2
Life Time Fitness, Inc.
2004 Long-Term Incentive Plan
Restricted Stock Agreement

      Name of Employee:    
 
   
No. of Shares Covered:
  Date of Issuance:            XX, 2008    

Vesting Schedule pursuant to Section 2 (Cumulative):

          No. of Shares Which Vesting Date(s)   Become Vested as of Such Date
March 1, 2009
   
March 1, 2010
   
March 1, 2011
   
March 1, 2012
   

     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.
Recitals
     WHEREAS, the Company maintains the Life Time Fitness, Inc. 2004 Long-Term
Incentive Plan (the “Plan”);
     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

  1.   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.”

 

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(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.

  2.   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 will
be reduced pursuant to the sliding scale set forth in the immediately succeeding
sentence in the event that the following performance measure is not achieved
with respect to the Company’s financial performance for fiscal year 2008: actual
earnings before tax (EBT) equals or exceeds the Company’s consolidated EBT as
presented in its 2008 annual budget approved by the Board, excluding the impact
of extraordinary items included in actual EBT as determined by the Committee.
The number of Restricted Shares forfeited if the performance measure is not
achieved shall be as follows: (i) five percent (5%) of the Restricted Shares
shall be forfeited; and (ii) additional five percent (5%) of the Restricted
Shares shall be forfeited for each range by which the Company’s actual EBT for
2008 is less than 98.5% of the budgeted EBT for 2008, as follows: (i) 97.5% to
98.49%; (ii) 96.5% to 97.49%; (iii) 95.5% to 96.49%; (iv) 94.5% to 95.49%; and
(v) so on. Notwithstanding the foregoing, in no event will the number of
forfeited Restricted Shares exceed fifty (50%) of the original number of
Restricted Shares granted by this Agreement. By way of examples, in the event
that the Company’s actual EBT for 2008 is (i) 99% of budgeted EBT for 2008, 5%
of the originally granted Restricted Shares would be forfeited; (ii) 95% of
budgeted EBT for 2008, 25% of the originally granted Restricted Shares would be
forfeited; and, (iii) 89% of budgeted EBT for 2008, 50% [25% in the case of the
CEO] of the originally granted Restricted Shares would be forfeited. The
Committee shall determine whether the performance hurdle was achieved as
promptly as practicable following review of the Company’s audited fiscal 2008
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, (b) such reduction shall be spread equally among the shares
vesting on each date specified in the Vesting Schedule and (c) 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.     3.   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.

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  4.   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.     5.   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.     6.  
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.

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  7.   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.     8.  
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.     9.   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.     10.   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.     11.   Binding Effect. This Agreement shall be binding in all
respects on the heirs, representatives, successors and assigns of the Employee.
    12.   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 law principles).

     IN WITNESS WHEREOF, the Employee and the Company have executed this
Agreement as of the ___ day of ___, 200_.

            __________________(“Employee”)
 
       
Life Time Fitness, Inc.
      By  
         
Its           

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