SENIOR OFFICER PERFORMANCE SHARE UNIT AWARD AGREEMENT

 

 

This Performance Share Unit Award Agreement (this “Agreement”) is made ______________, by and between Steiner Leisure Limited, a Bahamas international business company (the “Company”) and the undersigned employee (the “Employee”).

 

1.	Grant of Performance Share Units.

 

 

2.	Period of Restriction and Vesting of the Performance Share Units.

 

 

(b)  Vesting.  Subject to Section 3 hereof, the restrictions on the Performance Share Units shall lapse and the Performance Share Units shall vest on the following dates (collectively, the “Vesting Period”):

 

Date	Annual Amount Vested	Cumulative Amount
February 22, 2016	one-third1	one-third
December 3, 2016	one-third2	two-thirds
December 3, 2017	one-third2	all

 

The Performance Share Units shall vest only if the performance criteria identified on Exhibit “A” attached hereto (the “Performance Criteria”) are achieved.  The number of the Performance Share Units granted, as indicated above, (the “Share Number”), shall be increased from the Share Number to the extent that 100% of the Performance Criteria is exceeded, at the rate of two percent of the Share Number for each percent of such excess over 100% of such Performance Criteria up to 150% of the Share Number (the “Excess Grant Formula”).  If the Performance Criteria has multiple components, the Excess Grant Formula shall apply on a pro rata basis to each of the Performance Criteria.

3.	Accelerated Vesting.

 

Notwithstanding the foregoing, the restrictions applicable to the Performance Share Units shall lapse and the Performance Share Units shall vest and become Vested Shares upon the occurrence of any of the following events:

 

 

4.	Transferability of Performance Share Units.

 

The Performance Share Units may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated until they have become Vested Shares.

 

5.	Termination of Employment.

 

Except as provided above and in the immediately following sentence, upon the termination of the employment of the Employee or other service of Employee with the Company or a Subsidiary for any reason, all Performance Share Units shall be forfeited immediately.  Notwithstanding anything in this Agreement to the contrary, if Employee voluntarily terminates employment with the Company and, at the effective date of such termination (the “Effective Date”), (i) Employee has worked full time for the Company for no less than ten years, (ii) Employee is at least 65 years of age and (iii) the Performance Criteria for the vesting of the Performance Share Units in question have been confirmed by the compensation committee of the board of directors of the Company to have been achieved, then, commencing on the Effective Date, unless Employee is then, or at any time thereafter during the Vesting Period for a tranche of Performance Share Units in breach of any of Employee’s obligations under an applicable Employment Agreement, if any (in which case, all unvested tranches of Performance Share Units will be forfeited), then, notwithstanding such termination by Employee, the Performance Share Units shall continue to vest pursuant to the vesting schedule described in Section 2(b), above, and the other terms hereof shall continue to be in effect provided that the requirement of the first sentence of the last paragraph of Section 2, above, is met.

 

6.	Use of Broker.

 

In order to assure compliance with any applicable tax withholding requirements, Vested Shares may only be sold through a securities broker selected by the Company, currently the Coral Gables office of Merrill Lynch.

 

7.	Certain Tax Actions.

 

Depending on the jurisdiction where the Employee pays taxes, there may (or may not) be certain actions that the Employee can take in connection with this grant of Performance Share Units that could, under certain circumstances, affect the amount of tax that the Employee pays in connection with this grant of Performance Share Units.  Accordingly, the Employee should contact promptly the Employee’s tax advisor to determine whether there is any tax-related action the Employee should take in connection with this grant of Performance Share Units and as to any other tax aspects of this grant of Performance Share Units.  The Employee must notify the Company with respect to any tax-related elections or other actions made or taken by the Employee within two (2) business days after taking such action.  The Employee hereby indemnifies and holds harmless the Company and its affiliates and the directors, officers, agents and representatives of the Company and its affiliates, respectively, for any tax, penalty or interest imposed on the Company or such other parties in connection with the grant or vesting of Performance Share Units resulting from the Employee’s failure to provide notice to the Company in accordance with this Section 7.

 

8.	Shareholder Rights.

 

The Employee shall have no rights as a shareholder of the Company with respect to the Performance Share Units until the expiration of the Period of Restriction.  Among other things, during the Period of Restriction, the Employee shall have no voting rights or rights to dividends or other distributions (if any) with respect to the Performance Share Units.  Upon the expiration of the Period of Restriction, the Employee shall have all rights of a shareholder of the Company with respect to the Vested Shares.

 

9.	Adjustments Upon Changes in Capitalization, Etc.

 

In the event of any change in the outstanding Shares of the Company by reason of any Share split, Share dividend, recapitalization, merger, consolidation, combination or exchange of Shares or other similar corporate change or in the event of any special distribution to the shareholders, the Committee shall make such equitable adjustments in the number of Performance Share Units as the Committee determines are necessary and appropriate.  Any such adjustment shall be conclusive and binding for all purposes of the Plan.

 

10.	Tax Withholding.

 

In order to enable the Company or a Subsidiary to meet any applicable withholding tax requirements arising as a result of the grant or vesting of the Performance Share Units, unless the Company or a Subsidiary receives from the Employee, no later than six (6) business days before the date that the Performance Share Units vest (or, if withholding is required earlier than the vesting date due to a tax election by the Employee or otherwise, within five (5) business days before the date required by such tax election or other event), or as otherwise may be indicated in a letter provided to the Employee by the Company prior to the applicable vesting date, a check in an amount equal to the amount required to be withheld for tax purposes in connection with such vesting or other event, the Company shall withhold such amount of Performance Share Units that otherwise would have vested or been delivered to the Employee as necessary to pay the required tax withholding.  The value of any Performance Share Units to be withheld by the Company shall be the Fair Market Value on the date to be used to determine the amount of tax to be withheld.

 

11.	Performance Share Units Subject to Plan.

 

The Performance Share Units awarded pursuant to the Plan are subject to all of the terms and conditions of the Plan, the terms of which are hereby expressly incorporated and made a part hereof.  Any conflict between this Agreement and the Plan shall be controlled by, and settled in accordance with, the terms of the Plan.  The Employee acknowledges that the Employee has received, read and understood the provisions of the Employee Plan and agrees to be bound by its terms and conditions.

 

12.	Compliance with Insider Trading Policy.

 

Employee acknowledges and confirms that all transactions in the Shares and any derivative securities related to the Shares shall be in compliance with the Company’s Policy Statement on the Prevention of Insider Trading.

 

13.	Interpretation.

 

Any dispute regarding the interpretation of this Agreement shall be submitted by the Employee or by the Company forthwith to the Committee, which shall review such dispute at its next regular meeting.  The resolution of such a dispute by the Committee shall be final and binding on the Company and on the Employee.

 

14.	Not a Contract of Employment.

 

This Agreement shall not be deemed to constitute an employment contract between the Company or a Subsidiary and the Employee or to be a consideration or an inducement for the employment of the Employee.

 

15.

Notices.

 

Any notice required or permitted hereunder shall be given in writing and deemed delivered when (i) personally delivered, (ii) sent by facsimile transmission and a confirmation of the transmission is received by the sender, or (iii) three (3) days after being deposited for delivery with a recognized overnight courier, such as Federal Express or UPS, and addressed or sent, as the case may be, to the address or facsimile number set forth below or to such other address or facsimile number as such party may in writing designate.

 

16.	Further Instruments.

 

The parties agree to execute such further instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement.

 

17.	Entire Agreement; Governing Law; Severability; Etc.

 

The Plan is incorporated herein by reference.  This Agreement and the Plan constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and the Employee with respect to the subject matter hereof and thereof, and shall be interpreted in accordance with, and shall be governed by, the laws of The Bahamas, subject to any applicable United States federal or state securities laws.  Should any provision of this Agreement be determined by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable.  This Agreement may be executed in two counterparts, each of which shall be deemed to be an original, and both of which, together, shall constitute the same agreement.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

 

EMPLOYEE			STEINER LEISURE LIMITED
			By:
[NAME OF EMPLOYEE]				Stephen Lazarus
				Executive Vice President and
				Chief Financial Officer
Address and Facsimile Number:			Address and Facsimile Number:
			c/o Steiner Management Services, LLC
			770 South Dixie Hwy., Suite 200
Fax No.:			Coral Gables, Florida 33146
			Facsimile: (305) 358 - 7704

 

 

 

Exhibit “A”