8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) May 1, 2006

Life Time Fitness, Inc.

(Exact name of Registrant as specified in its charter)

Minnesota	001-32230	41-1689746
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

6442 City West Parkway Eden Prairie, Minnesota	55344
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (952) 947-0000  

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

     o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

2006 Key Executive Incentive Compensation Plan

On May 1, 2006, the Compensation Committee of the Board of Directors of Life Time Fitness, Inc. (the “Company”) approved the 2006 Key Executive Incentive Compensation Plan (the “Incentive Plan”) for the Company’s executive officers. The form of Incentive Plan award is attached hereto as Exhibit 10.1 and incorporated herein by reference. The Incentive Plan provides for monthly payouts based on the Company’s earnings before taxes (EBT) for the year-to-date period (YTD) as compared against the Company’s 2006 financial plan. In addition, the Incentive Plan provides for an additional year-end payment based on the Company’s capital expenditures (CapEx) as compared to the Company’s 2006 financial plan. The payout formulas are described in more detail in the form of Incentive Plan award filed as an exhibit. The Incentive Plan award for each executive officer specifies the Guaranteed Pay (salary) and Target Pay (salary plus incentive amount) for that executive officer, which are listed below:

Executive Officer	Guaranteed Pay		Target Pay
Bahram Akradi Chairman of the Board of Directors, President and Chief Executive Officer	$	870,000	$	1,275,000
Michael J. Gerend Executive Vice President and Chief Operating Officer	$	300,000	$	450,000
Michael R. Robinson Executive Vice President and Chief Financial Officer	$	280,000	$	420,000
Mark L. Zaebst Executive Vice President, Real Estate and Development	$	240,000	$	360,000
Eric J. Buss Executive Vice President, General Counsel and Secretary	$	200,000	$	300,000

Item 9.01. Financial Statements and Exhibits.

     The following Exhibit is being filed herewith:

     10.1 Form of 2006 Key Executive Incentive Compensation Plan.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	LIFE TIME FITNESS, INC.
Date: May 5, 2006	By:	/s/ Eric J. Buss
		Eric J. Buss
		Executive Vice President, General Counsel and Secretary

EX-10.1

EXHIBIT 10.1

2006 Key Executive
Incentive Compensation Plan

Name:
Title:
Effective Date:	January 1, 2006

Plan Description

Plan Objective:      To provide key executives with incentives and rewards for achieving and exceeding 2006 LTF business goals.

Performance	• Earnings Before Taxes (EBT)
Measure:	• Capital Expenditure (CapEx)

Cash — Annualized
Target Pay: $                    
Guaranteed Pay: $                    

Incentive Details

• Performance is based on LTF 2006 Fiscal Year, 1/1/06 — 12/31/06

• Monthly payout opportunity

• Based on Year-To-Date EBT Actual vs. Plan as of Month-End

• Year end opportunity if CapEx is below budget

2006 Key Executive
Incentive Compensation Plan

Monthly Incentive Formula

(Actual YTD EBT / Plan YTD EBT times YTD Target Pay) minus YTD Guaranteed Pay = Incentive Payout

Year-End Incentive Formula

[(Actual CapEx / Plan CapEx) minus 1] times Annual Target Pay

Examples

Compensation Data

• Annual Target Pay: $120,000

• Annual Guaranteed Pay: $100,000

• Monthly Target Pay: $10,000

• Monthly Guaranteed Pay: $8,333

Example #1

• YTD EBT Plan: $1,000,000

• YTD EBT Actual: $1,100,000

• Percent of Plan Attained: $1,100,000 / $1,000,000 = 110%

• Incentive Payout: (110% x $10,000) — $8,333 = $2,667

Example #2

• YTD EBT Plan: $1,000,000

• YTD EBT Actual: $900,000

• Percent of Plan Attained: $900,000 / $1,000,000 = 90%

• Incentive Payout: (90% x $10,000) — $8,333 = $667

Example #3 (CapEx)

• Annual Target Pay: $120,000

• CapEx Plan: $25,000,000

• CapEx Actual: $24,752,475

• Percent of Plan Attained: $25,000,000 / $24,752,475 = 1.01 (or 101%)

• Favorable to Plan: 1.01 — 1.00 = .01 (or 1%)

• Incentive Payout: 1% x $120,000 = $1,200

Administration

CapEx / EBT Performance

• If CapEx Actual vs. Plan is unfavorable during the year, the company may withhold payout on the EBT component to offset the future negative variance.

Payout Timing

• All payouts for the monthly incentive will be made via the payroll run which follows the month-end close (24^th of the following month). The incentive amount reflects the previous month’s YTD performance.

• Any year-end CapEx incentive will be made via the payroll run which follows the December month-end close, typically January 24^th of the following year.

Plan Eligibility

• Eligibility for a payout is cancelled when a plan participant voluntarily or involuntarily terminates employment before the payout date.

• If the plan participant moves to a new position during the period, which has a different target pay opportunity, any incentive payments will be prorated for time in the respective positions.

• Newly hired or promoted plan participants are eligible for plan participation beginning with the first day of the month following their hire date.

• A pro-rated payment of the earned monthly incentive payout will be made if plan participant dies or becomes disabled during the eligibility period.

Approvals

• All payouts must to be approved by the Performance Pay Committee of Life Time Fitness, Inc.

• The Performance Pay Committee of Life Time Fitness, Inc. must approve any and all exceptions to this plan in advance of any incentive payout.

IMPORTANT NOTE:

The plan, and any terms contained in the plan does not represent an employment agreement and does not assure or give evidence of continued employment or claim to continued employment of any plan participant for any time or period or position at any specified pay level.

This plan may be amended or terminated at any time by the Performance Pay Committee of Life Time Fitness, Inc. The plan, as described above, supersedes any and all plans, or earlier descriptions of the plan.

With respect to plans for members of the senior management team, all references to the Performance Pay Committee will instead be references to the Compensation Committee of the Board of Directors.