Document:

exv10w2

Exhibit 10.2

Famous Dave’s of America, Inc.

Restricted Stock Agreement

     This Restricted Stock Agreement (the “Agreement”) is made effective as of May 5, 2009
by and between Famous Dave’s of America, Inc., a Minnesota corporation (the “Company”), and Lisa A.
Kro (“Director”).

Background

     A. Director is serving as a member of the Board of Directors of the Company (the “Board”) and
is not an employee of the Company or any of its subsidiaries (a “Non-Employee Director”) and the
Company desires to award Director for his or her services to the Company; and

     B. The Company has adopted the Famous Dave’s of America, Inc. 2005 Stock Incentive Plan (the
“Plan”) pursuant to which shares of common stock, $.01 par value, of the Company have been reserved
for issuance.

     Now, Therefore, in consideration of the premises and the mutual covenants herein
contained, the parties hereto agree as follows:

     1. Grant of Stock. Subject to the terms and provisions of this Agreement and the
Plan, the Company hereby grants to Director Twenty-five Thousand (25,000) shares of Common Stock,
par value $0.01 per share, of the Company (the “Shares”) (such shares are referred to hereinafter
as the “Shares”). The Stock shall be issued of record in the name of Director in “book-entry” form,
without stock certificates, and shall be registered on the books of the Company maintained by the
Company’s transfer agent.

     2. Rights of Director. Upon the execution of this Agreement and issuance of the
Shares, Director shall become a shareholder with respect to the Shares and shall have all of the
rights of a shareholder with respect to the Shares, including the right to vote the Shares and to
receive all dividends and other distributions paid with respect to the Shares; provided, however,
that the Shares shall be subject to the restrictions set forth in paragraph 3 of this Agreement.

     Notwithstanding the preceding paragraph, the Board or a compensation committee thereof may, in
its discretion, instruct the Company to withhold any stock dividends or stock splits issued on or
with respect to Shares that are subject to the restrictions provided for in paragraph 3 of this
Agreement, which stock dividends or splits shall also be subject to the restrictions provided for
in paragraph 3 of this Agreement.

     3. Restrictions. Director agrees that, in addition to the restrictions set forth in
the Plan, at all times prior to the lapse of such restrictions pursuant to paragraph 4 hereof:

     (a) Director shall not sell, transfer, pledge, hypothecate or otherwise encumber the
Shares; and

 

 

     (b) In the event that Director ceases to be either a member of the Board (for any
reason or no reason, and regardless of whether ceasing to be a member of the Board is
voluntary or involuntary on the part of Director) or employed by or engaged as a consultant
to
the Company, then, subject to paragraphs 4 and 5 hereof, Director shall, for no
consideration, forfeit and transfer to the Company all of the Shares that remain subject to
the restrictions set forth in this paragraph 3.

     Subject to the lapse of the restrictions set forth in this paragraph 3, the Stock registered
on the books of the Company maintained by the Company’s transfer agent shall bear such restrictive
notations and be subject to such stop transfer instructions as the Company shall deem necessary or
appropriate in light of such restrictions.

     4. Lapse of Restrictions. Subject to Section 10.12 of the Plan, the restrictions set
forth in paragraph 3 shall lapse over a period of approximately five (5) years in equal annual
installments, beginning on March 11, 2010 and continuing until the restrictions have lapsed with
respect to all of the Shares, as set forth in the following schedule:

	 	 	 
	No. of Shares	 	Date of Lapse
	5,000

	 	March 11, 2010
	5,000

	 	March 11, 2011
	5,000

	 	March 11, 2012
	5,000

	 	March 11, 2013
	5,000

	 	March 11, 2014

Upon request of Director at any time after the restrictions set forth in paragraph 3 have lapsed
with respect to the Shares, except as provided in Section 10.5 of the Plan, the Company shall
instruct its transfer agent to remove any restrictive notations and stop transfer instructions
placed on the Stock register in connection with such restrictions.

     5. Copy of the Plan. By the execution of this Agreement, Director acknowledges
receipt of a copy of the Plan, the terms of which are hereby incorporated herein by reference and
made a part hereof by reference as if set forth in full.

     6. Continuation of Service as Director. Nothing contained in this Agreement shall be
deemed to grant Director any right to continue to serve as a member of the Board for any period of
time, nor shall this Agreement be construed as giving Director, Director’s beneficiaries or any
other person any equity or interests of any kind in the assets of the Company or creating a trust
of any kind or a fiduciary relationship of any kind between the Company and any such person.

     7. Withholding of Tax. To the extent that the receipt of the Shares or the lapse of
any restrictions thereon results in income to Director for federal or state income tax purposes,
Director shall deliver to the Company at the time of such receipt or lapse, as the case may be,
such amount of money as the Company may require to meet its withholding obligation under applicable
tax laws or regulations, and, if Director fails to do so, the Company is authorized to withhold
from any cash or stock remuneration then or thereafter payable to Director any tax required to be
withheld by reason of such resulting compensation income.

     8. Section 83(b) Election. Director understands that Director shall be responsible
for his or her own federal, state, local or foreign tax liability and any of his other tax
consequences that may arise as a result of transactions in the Shares. Director shall rely solely
on the determinations of Director’s tax advisors or Director’s own determinations, and not on any
statements or representations by the Company or any of its agents, with regard to all such tax
matters. Director understands that Section 83 of the Internal Revenue Code of 1986, as amended,
(the “Code”) taxes as ordinary income

2

 

the difference between the amount paid for the Shares and the
fair market value of the Shares as of the date any restrictions on the Shares lapse. Director
understands that Director may elect to be taxed at the time the Shares are received rather than
when and as the restrictions on the Shares lapse or expire
by filing an election under Section 83(b) of the Code with the Internal Revenue Service within
30 days from the date of the acquisition. In the event Director files an election under Section
83(b) of the Code, such election shall contain all information required under the applicable
treasury regulation(s) and Director shall deliver a copy of such election to the Company
contemporaneously with filing such election with the Internal Revenue Service. DIRECTOR
ACKNOWLEDGES THAT IT IS DIRECTOR’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY THE
ELECTION UNDER SECTION 83(B) OF THE CODE, EVEN IF DIRECTOR REQUESTS THAT THE COMPANY OR ITS
REPRESENTATIVES MAKE THIS FILING ON DIRECTOR’S BEHALF.

     9. General.

     (a) This Agreement may be amended only by a written agreement executed by the Company
and Director.

     (b) This Agreement and the Plan embody the entire agreement made between the parties
hereto with respect to matters covered herein and shall not be modified except in accordance
with paragraph 9(a) of this Agreement.

     (c) Nothing herein expressed or implied is intended or shall be construed as conferring
upon or giving to any person, firm, or corporation other than the parties hereto, any rights
or benefits under or by reason of this Agreement.

     (d) Each party hereto agrees to execute such further documents as may be necessary or
desirable to effect the purposes of this Agreement.

     (d) This Agreement may be executed in any number of counterparts, each of which shall
be deemed an original, but all of which shall constitute one and the same agreement.

     (e) This Agreement, in its interpretation and effect, shall be governed by the laws of
the State of Minnesota applicable to contracts executed and to be performed therein.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed as of the
date first written above.

	 	 	 	 	 
	 	Famous Dave’s of America, Inc.

 	 
	 	By:  	/s/
Christopher O’Donnell	 
	 	 	Name:  	Christopher O’Donnell	 
	 	 	Title:  	President
and Chief Executive Officer	 
	 
	 	 	 
	 	 	/s/ Lisa A. Kro	 
	 	 	Lisa A. Kro 	 
	 	 	 
	 

651792

3EX-10.1

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.

 

 

          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.

 

 

	 	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

 

 

	 	 	 	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

 

 

	 	 	 	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,

 

 

		 	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.

 

 

	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.

 

 

	 	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

 

 

	 	 	 	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

 

 

	 	 	 	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

 

 

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

 

 

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
	 	 

 

 

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

 

 

	 	 	 	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

 

 

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
	 	 

 

 

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	 	 
	 

	 	               

	 	 

 

 

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.”

 

 

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

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