STEINER LEISURE LIMITED - Steiner Leisure Ltd.

prior agreement, as amended. Under the prior agreement, most of the benefits and restrictions described above asapplicable to the current employment agreements with the four named executives were applicable to Mr. Boehm.The agreement also provides for a grant on the date thereof of 10,000 restricted shares pursuant to theEquity Plan, which vest equally on the first three anniversaries of the date of the grant (subject to acceleration incertain events), and the right to be granted equity awards, as part of the Company's annual grant of awards toofficers and other employees.2004 Equity Incentive PlanUnder the Equity Plan, directors, officers and certain other employees of, and consultants to, the Companymay be granted a variety of long-term incentives, including non-qualified share options, incentive share options,restricted and unrestricted shares, share appreciation rights, exercise payment rights and performance share awards.The Equity Plan is administered by the Compensation Committee of the board of directors. Under the Equity Plan,the Compensation Committee determines, in its discretion, among other things, who will receive awards, when theawards will be granted, the number of shares or cash (no cash awards have been granted to date) involved in eachaward, the time or times when any options will become exercisable or restrictions on shares will lapse, anyperformance targets applicable to awards and, subject to certain conditions, the price and duration of options.Equity awards granted under the Equity Plan may vest in specified installments. The term of any optionmay not exceed ten years from the date of grant. Payment of the exercise price of options may be made by certifiedor bank cashier's check, by tender of Common Shares having a fair market value equal to the option exercise priceor by any other means acceptable to the Compensation Committee.The Equity Plan provides that in the event of a change in control of the Company, all share options grantedunder the Equity Plan will automatically become fully exercisable.In December 2007, an annual grant of restricted shares and/or, as the case may be, performance shares wasmade to the named executives and certain other employees of the Company. The restricted shares and performanceshares vest equally over a three-year period, but the performance shares vest only if certain specified Companyperformance targets are attained. Holders of those performance shares and restricted shares do not have voting,dividend or other rights of shareholders until the restrictions lapse with respect to those shares.The Non-Employee Directors, Ms. Warshaw and Mr. Warshaw, received annual grants of restricted sharesin 2007 under the Equity Plan.A total of 1,500,000 Common Shares have been reserved for issuance under the Equity Plan, although thatnumber is subject to adjustment for share dividends, share splits, recapitalizations and certain other events. Theexpiration date of the Equity Plan, after which awards may not be made thereunder, is June 16, 2014. Except as maybe required under any applicable regulatory rules, the board of directors may amend or discontinue the Equity Planwithout the consent of participants or the Company's shareholders, provided that no such action may adverselyaffect awards previously granted without each recipient's consent.Bowne ID # g12968-5.pdf 26 May 2, 2008 12:16:3022