<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
STEINER LEISURE LIMITED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[STEINER LOGO]
STEINER LEISURE LIMITED
April 25, 1997
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders of
Steiner Leisure Limited, which will be held at the Atlantis Hotel, Paradise
Island, New Providence, The Bahamas, on Friday, June 6, 1997, at 10:00 a.m.
local time.
Details of the business to be conducted at the annual meeting are given in
the attached Notice of Annual Meeting and Proxy Statement.
Whether or not you attend the annual meeting, it is important that your
shares be represented and voted at the meeting. Therefore, I urge you to sign,
date and promptly return the enclosed proxy in the enclosed postage paid
envelope. If you decide to attend the annual meeting and vote in person, you
will still, of course, have that opportunity.
Sincerely,
/s/Clive E. Warshaw
Clive E. Warshaw
Chairman of the Board and
Chief Executive Officer
<PAGE> 3
STEINER LEISURE LIMITED
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 6, 1997
---------------------
To the Shareholders:
The annual meeting of the shareholders of Steiner Leisure Limited (the
"Company") will be held at the Atlantis Hotel, Paradise Island, New Providence,
The Bahamas, on Friday, June 6, 1997, at 10:00 a.m. local time for the following
purposes:
1. To elect two Class I directors, each to serve for a term of three
years.
2. To ratify the appointment of Arthur Andersen LLP as independent
auditors for the Company for the fiscal year ending December 31, 1997.
3. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Only shareholders of record at the close of business on April 9, 1997 are
entitled to notice of, and to vote at, this meeting and any adjournment or
postponement thereof.
By Order of the Board of Directors
Carl S. St. Philip, Jr.
Secretary
April 25, 1997
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE
ENVELOPE PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND THE 1997 ANNUAL MEETING. IF
YOU ATTEND THE MEETING, YOU MAY VOTE YOUR SHARES IN PERSON IF YOU WISH, EVEN IF
YOU PREVIOUSLY RETURNED YOUR PROXY.
<PAGE> 4
STEINER LEISURE LIMITED
SUITE 104A
SAFFREY SQUARE
NASSAU, THE BAHAMAS
---------------------
PROXY STATEMENT
---------------------
This Proxy Statement and the accompanying proxy are being furnished to
shareholders of Steiner Leisure Limited, a Bahamian international business
company (the "Company"), in connection with the solicitation of proxies by the
Company's Board of Directors from holders of the Company's outstanding common
shares, (U.S.) $.01 par value per share (the "Common Shares"), for use at the
1997 annual meeting of shareholders of the Company to be held on June 6, 1997,
at the Atlantis Hotel, Paradise Island, New Providence, The Bahamas, at 10:00
a.m., local time, and at any adjournments or postponements thereof (the "Annual
Meeting"), for the purpose of considering and acting upon the matters set forth
in the accompanying Notice of Annual Meeting of Shareholders.
Only holders of record of Common Shares as of the close of business on
April 9, 1997 (the "Record Date") are entitled to notice of, and to vote at, the
Annual Meeting. At the close of business on such date, the Company had 7,200,000
Common Shares issued and outstanding. Holders of Common Shares are entitled to
one vote on each matter considered and voted upon at the Annual Meeting for each
Common Share held of record as of the Record Date. Holders of Common Shares may
not cumulate their votes for the election of directors. Common Shares
represented by a properly executed proxy, if such proxy is received in time and
not revoked, will be voted at the Annual Meeting in accordance with the
instructions indicated in such proxy. If no instructions are indicated, shares
represented by proxy will be voted "For" the election, as directors of the
Company, of the two nominees named in the proxy to serve until the 2000 annual
meeting of shareholders, "For" the ratification of the appointment of Arthur
Andersen LLP as independent auditors for the Company for fiscal year 1997 and in
the discretion of the proxy holders as to any other matter which may properly be
presented at the Annual Meeting.
This Proxy Statement and the accompanying proxy card are being mailed to
Company shareholders on or about April 25, 1997.
Any holder of Common Shares giving a proxy in the form accompanying this
Proxy Statement has the power to revoke the proxy prior to its use. A proxy can
be revoked (i) by an instrument of revocation delivered prior to the Annual
Meeting to the Secretary of the Company, (ii) by a duly executed proxy bearing a
later date than the date of the proxy being revoked or (iii) at the Annual
Meeting, if the shareholder is present and elects to vote in person. Mere
attendance at the Annual Meeting will not serve to revoke the proxy. All written
notices of revocation of proxies should be addressed as follows: Carl S. St.
Philip, Jr., Secretary, c/o CT Maritime Services, L.C., 1007 North America Way,
4th Floor, Miami, Florida 33132.
The holders of a majority of Common Shares issued and outstanding on the
Record Date, whether present in person or represented by proxy, will constitute
a quorum for the transaction of business at the Annual Meeting. The nominees
receiving a plurality of the votes will be elected as directors. Ratification of
the appointment of the Company's independent auditors and other matters properly
brought before the meeting will require the approval of a majority of the votes
cast. Only those votes cast for or against a proposal are used in determining
the results of a vote. Abstentions and broker non-votes are each included for
purposes of determining the presence or absence of a sufficient number of shares
to constitute a quorum, but are not considered as having voted for purposes of
determining the outcome of a vote.
<PAGE> 5
PROPOSAL 1 -- ELECTION OF DIRECTORS
The number of directors of the Company, as determined by the Board of
Directors pursuant to the Company's Amended and Restated Articles of Association
(the "Articles"), is seven. In accordance with the Articles, the Board of
Directors of the Company consists of three classes: Class I, Class II and Class
III, consisting of two, two and three directors, respectively. One of the three
classes is elected each year to succeed the directors whose terms are expiring.
Directors hold office until the annual meeting for the year in which their terms
expire and until their successors are elected and qualified unless, prior to
that date, they have resigned or otherwise left office. Class I directors are to
be elected at the Annual Meeting, Class II directors are to be elected at the
1998 annual meeting of shareholders and Class III directors are to be elected at
the 1999 annual meeting of shareholders.
At the Annual Meeting, two Class I directors are to be elected to the
Board, each to serve until the annual meeting of shareholders to be held in
2000. The nominees for election at the Annual Meeting are Clive E. Warshaw and
Graham M. Wallace. Both nominees presently are directors of the Company. If
either nominee is unable or unwilling to serve as a director, proxies may be
voted for a substitute nominee designated by the present Board. The Board of
Directors has no reason to believe that either such nominee will be unable or
unwilling to serve as a director.
The following table sets forth the names and ages (as of the date of the
Annual Meeting) of the directors, the class (and year that class stands for
election) to which each director has been nominated for election or elected, the
positions and offices, if any, held by each director with the Company and the
year during which each became a director of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITIONS WITH THE COMPANY DIRECTOR SINCE
---- --- -------------------------- --------------
<S> <C> <C> <C>
CLASS I
NOMINEES FOR DIRECTORS TO
HOLD OFFICE UNTIL 2000
Clive E. Warshaw................................ 55 Chairman of the Board and 1995
Chief Executive Officer
Graham M. Wallace............................... 49 Director 1997
CLASS II
DIRECTORS HOLDING OFFICE UNTIL 1998
Charles D. Finkelstein.......................... 45 Director 1997
Jonathan D. Mariner............................. 42 Director 1997
CLASS III
DIRECTORS HOLDING OFFICE UNTIL 1999
Leonard I. Fluxman.............................. 39 Chief Operating Officer, 1995
Chief Financial Officer
and Director
Michele Steiner Warshaw......................... 51 Executive Vice President and 1995
Director
Steven J. Preston............................... 45 Director 1997
</TABLE>
Clive E. Warshaw has served as Chairman of the Board, Chief Executive
Officer and a director of the Company since November 1995. Mr. Warshaw joined
Steiner Group Limited ("Steiner Group"), the Company's predecessor, in 1982 and
was involved in both the land-based operations and cruise line related
operations (the "Maritime Division") of Steiner Group. Mr. Warshaw served as the
senior officer of the Maritime Division of Steiner Group from 1987 until
November 1995. Mr. Warshaw resides in the Bahamas. Mr. Warshaw is the husband of
Michele Steiner Warshaw.
Graham M. Wallace has served as a director of the Company since February
1997. Since February 1997, Mr. Wallace has served as Chief Executive of Cable &
Wireless Communications plc, a United Kingdom-based company involved in
telecommunications and cable television operations. From October 1995 until
2
<PAGE> 6
January 1997, Mr. Wallace served as Chief Executive of the Restaurant and
Services Division of Granada Group plc ("Granada"), a diversified United Kingdom
company involved in, among other things, television broadcasting and
programming; the operation of hotels, highway service areas, restaurants, theme
parks and travel companies; sales and rentals of consumer electronic equipment
and providing support services to businesses. From October 1992 until October
1995, Mr. Wallace served as Chief Executive of the U.K. Rental Division of
Granada and as Chairman of the Board of Granada's Computer Services and
International Rental Division. Mr. Wallace served as Finance Director of Granada
from 1989 until October 1992 and served as a member of Granada's Board of
Directors from 1989 until January 1997. Mr. Wallace resides in the United
Kingdom.
Charles D. Finkelstein has served as a director of the Company since
February 1997. Since 1985, he has served as General Counsel, Secretary and a
director of Faber Coe & Gregg, Inc., which operates shops offering gifts,
sundries and newspapers and other publications in airports, train stations,
hotels and other venues in various parts of the United States.
Jonathan D. Mariner has served as a director of the Company since February
1997. Since February 1992, he has served as the Chief Financial Officer of the
Florida Marlins Major League Baseball Club. From February 1989 until February
1992, Mr. Mariner served as Vice President, Finance and Administration, for the
Greater Miami Convention and Visitors Bureau.
Leonard I. Fluxman has served as Chief Operating Officer, Chief Financial
Officer and a director of the Company since November 1995. Mr. Fluxman joined
the Company in June 1994, in connection with the Company's acquisition of
Coiffeur Transocean (Overseas), Inc. ("CTO"). Mr. Fluxman served as CTO's Vice
President -- Finance from January 1990 until June 1994 and as its Chief
Operating Officer from June 1994 until November 1996. Mr. Fluxman, a certified
public accountant, was employed by Laventhal and Horwath from 1986 to 1989,
during a portion of which period he served as a manager.
Michele Steiner Warshaw has served as a director of the Company since
November 1995 and served as its Senior Vice President -- Development from
January 1996 until March 1997, when she was named Executive Vice President of
the Company. Ms. Warshaw held a variety of positions with Steiner Group from
1967 until November 1995, including assisting in the design and development of
shipboard facilities and services. From 1990 until November 1995, Ms. Warshaw
was involved exclusively in the Maritime Division of Steiner Group. Ms. Warshaw
resides in The Bahamas.
Steven J. Preston has served as a director of the Company since April 1997.
Since March 1997, Mr. Preston has served as the Chairman of the Board of The 203
Group, L.C., a newly formed entity engaged in marketing and advertising
services, and as an independent tax consultant. From 1974 through February 1997,
Mr. Preston was with Arthur Andersen LLP ("Arthur Andersen"), including, from
September 1985, as a tax partner. Since 1995, Arthur Andersen has provided tax
advice to the Company and has served as the Company's independent auditors. Mr.
Preston was the partner in charge of Arthur Andersen's engagement to provide tax
advice to the Company prior to his departure from that firm.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
ELECTION OF CLIVE E. WARSHAW AND GRAHAM M. WALLACE AS CLASS I DIRECTORS.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board met six times in 1996. Each director listed above who was then
serving attended all of such meetings.
The Company's Board of Directors has an Audit Committee and a Compensation
Committee, each of which was created in February 1997. The Board of Directors
does not have a nominating committee or any committee performing similar
functions. The full Board of Directors is involved in the consideration and
nomination of candidates to serve on the Board. Both the Audit Committee and the
Compensation
3
<PAGE> 7
Committee consist of Messrs. Finkelstein, Mariner (each of whom joined the
committees in February 1997) and Preston (who joined the committees in April
1997). Mr. Preston serves as Chairman of each committee.
The Audit Committee is responsible for reviewing internal accounting
controls and accounting, auditing and financial reporting matters, including the
engagement of independent auditors.
The Compensation Committee is responsible for reviewing and recommending
the compensation arrangements for executive officers, and certain other officers
of the Company and is responsible for administering the Company's 1996 Share
Option and Incentive Plan (the "Option and Incentive Plan").
COMPENSATION OF DIRECTORS
Messrs. Warshaw and Fluxman and Ms. Warshaw receive no compensation for
serving on the Board except for reimbursement of reasonable expenses incurred in
connection with their attendance at Board meetings. Under the Company's
Non-Employee Directors' Share Option Plan (the "Directors' Plan"), as amended in
February 1997, each director who is not an employee of the Company or any
subsidiary of the Company is automatically granted, upon election to the Board
at an annual meeting of shareholders, a ten year option to purchase 1,250 Common
Shares at an exercise price equal to the closing price of the Common Shares on
the date of grant. Directors joining the Board other than pursuant to election
at an annual meeting of shareholders receive options with the term and exercise
price as described above, but in an amount equal to a pro rata portion of 1,250
based on the amount of time between the date such director joins the Board and
the date of the next scheduled annual meeting of shareholders. Options granted
under the Directors' Plan become exercisable commencing on the first anniversary
of the date of grant, except that in the event of a change in control of the
Company, the options are immediately exercisable. The Directors' Plan defines a
"change in control" as including, among other things, (i) the acquisition by a
person or group of more than 20% of the Company's outstanding voting securities
without the prior approval of the Company's Board of Directors and (ii) during
any period of 24 consecutive months, individuals who, at the beginning of such
period, were directors of the Company, or individuals whose nomination or
election was approved by a vote of 66 2/3% of such directors or directors
previously so elected or nominated, ceasing for any reason to constitute a
majority of the Board. The option exercise price is payable either in cash
(including certified check, bank draft or money order) or by surrender of Common
Shares having a fair market value equal to the option exercise price. A total of
82,500 shares have been reserved for issuance pursuant to the Directors' Plan.
Upon joining the Board, Messrs. Finkelstein, Mariner and Wallace each were
granted an option to purchase 397 Common Shares at an exercise price of $19.625
per share and Mr. Preston was granted an option to purchase 226 Common Shares at
an exercise price of $23.875 per share. The Directors' Plan may be amended by
the Board of Directors. Non-employee directors also are eligible to receive
awards under the Company's 1996 Share Option and Incentive Plan, described
below, and are reimbursed for reasonable expenses in connection with their
attendance at meetings of the Board or committees thereof.
4
<PAGE> 8
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning compensation for
services in all capacities paid to, or earned by the Company's executive
officers with respect to the fiscal years ended December 31, 1996 and 1995.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION(1) ------------
--------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION(2) OPTIONS(#) COMPENSATION
--------------------------- ---- --------- -------- --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Clive E. Warshaw................ 1996 $325,000 $325,000 $ -- 144,000 $ --
Chairman of the Board and 1995 235,769 156,302 48,700(3) -- --
Chief Executive Officer
Leonard I. Fluxman.............. 1996 175,000 175,000(4) -- 72,000 716(5)
Chief Operating Officer and 1995 114,231 56,077 -- --
Chief Financial Officer
Michele Steiner Warshaw......... 1996 125,000 40,000 -- 36,000 --
Executive Vice President 1995 66,950 -- 13,149(6) --
Amanda Jane Francis............. 1996 115,000 85,000 -- 28,750 --
Senior Vice President -- 1995 23,355 26,753 5,500(7) --
Operations of Steiner
Transocean Limited
Sean C. Harrington(8)........... 1996 122,926(9) 26,414 -- 6,304 4,257(10)
Managing Director of Elemis
Limited
</TABLE>
- ---------------
(1) Certain of the Company's executive officers' compensation during the years
in question was paid, in total or in part, in British pounds. All such
amounts are presented in U.S. dollars based on the average exchange rate
for the year in question. The Company commenced operations in November
1995. For the first ten months of 1995, compensation was paid to the
indicated persons by the Maritime Division of Steiner Group, the Company's
predecessor.
(2) Where no amount is indicated, the aggregate values of the perquisites and
other personal benefits received by the executive officer for the indicated
years were below the required threshold for disclosure (the lesser of
$50,000 or 10% of the total annual salary and bonus for such executive
officer).
(3) Includes approximately $20,580 representing payments relating to an
apartment used by Mr. Warshaw (and Ms. Warshaw).
(4) Includes $30,000 deferred pursuant to a deferred compensation agreement
between Mr. Fluxman and the Company.
(5) Represents the Company's contribution to Mr. Fluxman's account under the
Company's 401(k) plan.
(6) Includes approximately $12,320 representing payments with respect to an
automobile allowance.
(7) Includes $4,741 representing payments with respect to an automobile
allowance.
(8) Mr. Harrington joined the Company effective January 1, 1996, upon the
Company's acquisition of Elemis Limited.
(9) Includes approximately $44,606, which is designated as a bonus, but the
payment of which is guaranteed under Mr. Harrington's employment agreement.
(10) Consists of Company contributions to a private pension arrangement
maintained on behalf of Mr. Harrington.
5
<PAGE> 9
OPTION GRANTS IN 1996
The following table sets forth information regarding grants of options to
purchase Common Shares made by the Company during fiscal year 1996 to each of
the executive officers of the Company. No share appreciation rights were granted
during 1996.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS(1)
---------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES PRICE EXPIRATION GRANT DATE
NAME GRANTED(#) IN 1996 ($/SHARE) DATE PRESENT VALUE(2)
- ---- ---------- ------------- --------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Clive E. Warshaw..................... 144,000 45.56% $13.00 11/09/06 $650,213
Leonard I. Fluxman................... 72,000 22.78 13.00 11/09/06 325,106
Michele Steiner Warshaw.............. 36,000 11.39 13.00 11/09/06 162,553
Amanda Jane Francis.................. 28,750 9.10 13.00 11/09/06 129,817
Sean C. Harrington................... 6,304 2.00 13.00 11/09/06 28,465
</TABLE>
- ---------------
(1) All options were granted pursuant to the Company's 1996 Share Option and
Incentive Plan shortly before the Company's initial public offering of
Common Shares in November 1996. The exercise price is equal to the initial
public offering price for the Common Shares. The options vest in equal
amounts over three years and have terms of ten years.
(2) Based on the Black-Scholes option pricing model adapted for use in valuing
executive stock options using the following assumptions: (a) expected
volatility of 25%, (b) risk-free rate of return of 6.0%, (c) dividend yield
of 0.0 and (d) exercise term of 5 years. The actual value, if any, an
executive officer may realize will depend on the excess of the share price
over the exercise price on the date the option is exercised, so there is no
assurance the value realized by an executive will be at or near the value
estimated by the Black-Scholes model.
AGGREGATE OPTION EXERCISES IN 1996 AND YEAR-END 1996 VALUES
The following table sets forth information regarding the number and
year-end value of unexercised share options held at December 31, 1996 by each of
the Company's executive officers. No share options were exercised by the
executive officers during fiscal year 1996.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED FY-END(#) FY-END($)(1)
ON VALUE ---------------- ----------------
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE(2) UNEXERCISABLE(2)
- ---- --------- -------- ---------------- ----------------
<S> <C> <C> <C> <C>
Clive E. Warshaw................................ -- -- 144,000 $1,026,000
Leonard I. Fluxman.............................. -- -- 72,000 513,000
Michele Steiner Warshaw......................... -- -- 36,000 256,500
Amanda Jane Francis............................. -- -- 28,750 204,844
Sean C. Harrington.............................. -- -- 6,304 44,916
</TABLE>
- ---------------
(1) The amounts set forth represent the difference between the $20.125 closing
price of the Common Shares issuable upon exercise of the options at December
31, 1996 and the exercise price of the options, multiplied by the applicable
number of shares issuable upon exercise of the options.
(2) None of the options was exercisable at December 31, 1996.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with its executive
officers, as described below. All of those agreements provide for, among other
things: (i) the termination of the employee by the Company
6
<PAGE> 10
solely upon the occurrence of specified events relating to the employee's
conduct; (ii) an agreement from the employee not to compete with the Company,
not to disclose certain confidential information of the Company and not to
solicit employees of the Company to leave the Company's employ; and (iii) the
continuation of compensation payments to a disabled executive officer until the
officer has been unable to perform the services required of him or her for an
aggregate of six months in any 12 month period. Each agreement also provides for
an automobile allowance and health insurance.
The Company has entered into six-year employment agreements, effective as
of January 1, 1996, with Clive E. Warshaw, Chairman of the Board and Chief
Executive Officer, and Leonard I. Fluxman, Chief Operating Officer and Chief
Financial Officer. The agreements, as amended in March 1997, provide for annual
base salaries of not less than $341,250 and $183,750, respectively, plus
quarterly incentive bonuses based on the Company's attainment of certain
targeted earnings levels in amounts up to the base salaries. Those earnings
levels are required to be approved for such purpose by the Compensation
Committee. The agreements also provide for payments to be used for the purchase
of disability insurance policies. Under the Agreements, if, after a change in
control of the Company, the employment of Mr. Warshaw or Mr. Fluxman is
terminated, including by either of such persons as a result of a reduction in
salary or other benefits, certain relocations or a determination by such person
that his employment changed materially adversely, he would be entitled to
receive an amount equal to 2.99 times his then base salary plus any bonus then
due him, and all of his share options then not yet vested would become
immediately exercisable. For such purposes, a "change in control" means (i) a
change in control that would be required to be reported on Form 8-K under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), other than a
transaction arranged or approved by the Board of Directors of the Company, (ii)
any person or group, with certain exceptions, becoming the beneficial owner of
25% or more of the voting power of the then outstanding securities of the
Company otherwise than through a transaction arranged or approved by the Board
of Directors of the Company, (iii) 25% or more of the assets of the Company
being sold otherwise than through a transaction approved by the Board of
Directors of the Company or (iv) during a 12-month period, any three
individuals, each of whom is at the beginning of such period a member of the
Company's Board of Directors and an officer of the Company or an entity
controlled by the Company, ceasing to serve in such positions other than through
voluntary resignation.
The Company has also entered into a deferred compensation agreement with
Mr. Fluxman, effective December 1996, pursuant to which Mr. Fluxman may elect to
defer a designated portion of his cash compensation. Such designated amounts are
held in an account maintained by the Company, which would include earnings, if
any, realized with respect to the funds in such account. All amounts in such
account are the property of the Company until distributed to Mr. Fluxman upon
his termination of employment. Under an agreement between Mr. Fluxman and the
Company, effective March 1997, such amounts are invested pursuant to a life
insurance policy for the benefit of Mr. Fluxman under which the Company pays the
premiums and is entitled to receive an amount equal to the total of such
premiums paid from Mr. Fluxman or out of the insurance policy's death benefit
proceeds.
The Company has entered into six-year employment agreements, effective
January 1, 1996, with Michele Steiner Warshaw, Executive Vice President, and
Amanda Jane Francis, Senior Vice President -- Operations of Steiner Transocean
Limited, a Bahamian subsidiary of the Company that conducts its shipboard
operations ("Steiner Transocean"). Those agreements, as amended in March 1997,
provide for the payment of annual base salaries of not less than $140,000 and
$120,000, respectively, plus bonuses. Commencing in 1997, the bonus payable to
Ms. Warshaw will be as determined by the Compensation Committee of the Board of
Directors and Ms. Francis will be eligible for quarterly bonuses based on the
attainment of targeted quarterly revenues by Steiner Transocean, which revenues
are required to be approved for such purpose by the Compensation Committee.
During 1996, their Employment Agreements provided that any bonuses for Ms.
Warshaw and Ms. Francis were payable at the discretion of the Board of
Directors.
The Company has entered into a five-year employment agreement, effective
January 1, 1996, with Sean C. Harrington, the Managing Director of Elemis
Limited, a United Kingdom subsidiary of the Company which arranges for the
production, packaging and supplying of the Company's products ("Elemis"). That
agreement, as amended in March 1997, provides for an annual base salary and
guaranteed bonus totaling
7
<PAGE> 11
approximately $131,831, plus a bonus up to a total of approximately $39,109
based on the attainment by Elemis of certain targeted sales, which targeted
sales are required to be approved for such purpose by the Compensation
Committee. Those amounts are based on the British pound to U.S. dollar exchange
rate on April 11, 1997. In addition, the agreement provides that the Company
will pay annually into a pension plan maintained on behalf of Mr. Harrington an
amount equal to five percent of his base salary.
1996 SHARE OPTION AND INCENTIVE PLAN
Under the Company's 1996 Share Option and Incentive Plan (the "Option and
Incentive Plan"), directors and officers and certain other employees of, and
consultants to, the Company can be granted a variety of long term incentives,
including non-qualified share options, incentive share options, grants of
restricted and unrestricted shares, performance share awards, share appreciation
rights and exercise payment rights. The Option and Incentive Plan is
administered by the Compensation Committee of the Board of Directors. Under the
Option and Incentive Plan, the Compensation Committee will determine, in its
discretion, among other things, which officers, employees, consultants and
directors will receive awards, when the awards will be granted, the type of
awards to be granted, the number of shares or cash involved in each award, the
time or times when any options granted will become exercisable and, subject to
certain conditions, the price and duration of such options. Except as may be
required under any applicable regulatory rules, the Board of Directors has the
right at any time to amend or discontinue the Option and Incentive Plan without
the consent of participants or the Company's shareholders, provided that no such
action may adversely affect awards previously granted without the recipient's
consent.
Options granted under the Option and Incentive Plan may be made exercisable
in specified installments. The term of any option may not exceed ten years from
the date of grant. Payment of the option price may be made by certified or bank
cashier's check, by tender of Common Shares having a fair market value equal to
the option exercise price or by any other means acceptable to the Compensation
Committee.
The Option and Incentive Plan provides that in the event of a change in
control (which has the same meaning as under the Director's Plan) of the
Company, all share options granted under the Option and Incentive Plan will
automatically become fully exercisable. In addition, at any time, the
Compensation Committee may accelerate awards and waive conditions and
restrictions on any awards under the Option and Incentive Plan to the extent it
may deem appropriate.
A total of 720,000 Common Shares have been reserved for issuance under the
Option and Incentive Plan, although that number is subject to adjustment for
share dividends, share splits, recapitalizations and certain other events. The
expiration date of the Option and Incentive Plan, after which awards may not be
made thereunder, is August 15, 2006.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1996, the Board of Directors did not have a compensation committee
(or other Board committee performing equivalent functions). Decisions with
respect to compensation of executive officers of the Company and its
subsidiaries were made by the Board of Directors and all members of the Board
participated in deliberations concerning such decisions. During 1996, the Board
of Directors consisted of Clive E. Warshaw, the Chairman of the Board and Chief
Executive Officer of the Company, Leonard I. Fluxman, the Chief Operating
Officer and Chief Financial Officer of the Company, and Michele Steiner Warshaw,
then the Senior Vice President -- Development of the Company.
COMPENSATION OF CERTAIN OFFICERS
Victoria Schaverien, the Managing Director of Steiner Training Limited, a
United Kingdom subsidiary of the Company responsible for the training of
shipboard employees ("Training"), and the daughter of Mr. Warshaw and Ms.
Warshaw, received compensation of approximately $84,600 and other benefits with
an aggregate value of approximately $12,800 in 1996. In November 1996, Ms.
Schaverien was granted an option to purchase 11,250 of the Company's Common
Shares at an exercise price of $13.00 per share (the price per share in the
Company's initial public offering), pursuant to the Option and Incentive Plan.
For 1997,
8
<PAGE> 12
Ms. Schaverien will receive a salary of approximately $65,120 plus a car
allowance and certain other benefits. In addition, she will be entitled to
receive a bonus of up to $16,280 if all of the budgeted targets of Training and
the budgeted revenues of Steiner Transocean are met. In March 1997, Ms.
Schaverien was granted an option to purchase 2,800 of the Common Shares at an
exercise price of $23.75 per share pursuant to the Option and Incentive Plan.
Robert Schaverien, the Sales Manager of Elemis since May 1996 and the husband of
Victoria Schaverien, received compensation of approximately $48,700 and other
benefits with an aggregate value of approximately $6,250 in 1996. For 1997, Mr.
Schaverien will receive a salary of $48,840 plus a car allowance and certain
other benefits. In addition, he will be entitled to receive a bonus of up to
$32,560 if certain Elemis sales targets are met and up to five percent of the
amount by which Elemis sales for the year exceed the targeted amount, up to
$16,280. In March 1997, Mr. Schaverien was granted an option to purchase 300 of
the Common Shares at an exercise price of $23.75 per share pursuant to the
Option and Incentive Plan. The above compensation amounts for 1996 are based on
the average British pound to U.S. dollar exchange rate for 1996. The
compensation amounts for 1997 are based on the British pound to U.S. dollar
exchange rate on April 11, 1997. Commencing in 1997, the compensation payable to
Ms. Schaverien and Mr. Schaverien (including the targets upon which their
bonuses are based) is required to be approved by the Compensation Committee.
REPORT OF THE BOARD OF DIRECTORS AND COMPENSATION COMMITTEE ON EXECUTIVE
COMPENSATION
During 1996, the Company did not have a Compensation Committee or other
Board committee performing equivalent functions. Decisions with respect to
compensation of executive officers of the Company were made by the Board of
Directors, which included no non-employee directors. On February 10, 1997, the
Board appointed a Compensation Committee with Messrs. Finkelstein and Mariner,
both non-employee directors, as its initial members. Mr. Preston, also a
nonemployee director, was appointed to the Compensation Committee as its
Chairman effective April 1, 1997. The Compensation Committee's only deliberation
and action with respect to 1996 executive officer compensation took place prior
to Mr. Preston's joining the Committee and related to its approval of the (i)
bonuses paid to Ms. Warshaw and Ms. Francis and (ii) Mr. Fluxman's deferred
compensation arrangements, which are described above.
COMPENSATION PHILOSOPHY
The Board of Directors and the Compensation Committee believe that the
Company's goal of maximizing shareholder value is furthered by aligning the
interests of its executive officers with the interests of its shareholders. In
the opinion of the Board and the Compensation Committee, the compensation
arrangements for the Company's executive officers promote such an alignment of
interests by offering (i) compensation in the form of bonuses tied to specified
Company performance criteria or to be awarded based on other measures of
individual or Company performance and (ii) the opportunity to receive Common
Shares, or options to purchase Common Shares of the Company under the Option and
Incentive Plan.
COMPONENTS OF COMPENSATION
The Company's compensation program for its executive officers is designed
to attract, motivate, reward and retain personnel capable of making significant
contributions to the long-term success of the Company. The program consists of
four components -- salary, bonuses, awards under the Option and Incentive Plan
and various employee benefits (including automobile allowances as well as
medical and life insurance and, for Mr. Fluxman and Ms. Francis, who are based
in the United States, 401(k) plan benefits generally available to the employees
of the Company). The program places a significant percentage of the Company's
most senior executive officers' compensation at risk, rewarding the executives
if the performance of the Company warrants and, accordingly, encouraging the
building of shareholder value.
The compensation payable to the executive officers of the Company is based
on the Company's employment agreements with each executive officer (the
"Employment Agreements"), which are described above under "Executive
Compensation -- Employment Agreements." The Employment Agreements were initially
entered into prior to the Company's initial public offering in November 1996 and
prior to the formation of the Compensation Committee, and were amended in March
1997.
9
<PAGE> 13
Annual Base Salary. The Employment Agreements, which were effective
January 1, 1996, reflect significant increases from prior years in base salary
and potential bonus payments. At the time that the Board approved the Employment
Agreements, the Board believed that the base salaries for the Company's
executive officers reflected therein were appropriate based on the increased
scope of the respective executive officers' responsibilities due to the growth
of the Company, and the performance of the Company during 1995 and 1996, prior
to the execution of the Employment Agreements. The base salaries set forth in
each Employment Agreement may not be reduced by the Compensation Committee. If
the Chief Executive Officer of the Company deems it appropriate, he may
recommend increases in base salary for one or more of the Company's executive
officers. The Compensation Committee would review any such proposed increase
and, based on such review, make an appropriate recommendation to the Board. In
addition, the Compensation Committee may initiate its own recommendation to the
Board regarding increases in base salary based on Company or individual
performance or other criteria deemed appropriate by the Compensation Committee.
Annual Bonuses. The Employment Agreements for Clive E. Warshaw, Chairman
of the Board and Chief Executive Officer, and Leonard I. Fluxman, Chief
Operating Officer and Chief Financial Officer, provide for incentive bonuses
directly tied to the performance of the Company. Those bonuses, which, in the
aggregate, may not exceed the respective base salaries of Messrs. Warshaw and
Fluxman for the year, are payable quarterly if the Company attains targeted
levels of earnings (before taxes, depreciation and amortization) through the end
of each quarter, which earnings levels were required to be approved by the Board
of Directors. The bonuses may not exceed five percent (with respect to Mr.
Warshaw) and two and one-half percent (with respect to Mr. Fluxman) of such
targeted earnings. For 1996, the targeted earnings represented an increase in
earnings for the Company's services and product sales from the prior year. The
Company exceeded the targeted earnings in each of the four quarters of 1996 and
Messrs. Warshaw and Fluxman each received the maximum bonus payable under his
Employment Agreement. The targeted earnings on which the bonuses are based are
required to be approved by the Compensation Committee for such purpose
commencing in 1997.
For 1996, under their Employment Agreements, Michele Steiner Warshaw, then
Senior Vice President -- Development, and Amanda Jane Francis, Senior Vice
President -- Operations, were entitled to such bonuses as the Board of Directors
determined. For 1996, Ms. Warshaw received a bonus of $40,000 and Ms. Francis
received total bonuses of $85,000. In March 1997, those bonuses were approved by
the Compensation Committee and by the Board of Directors. In approving those
bonuses, the Board and the Compensation Committee considered, primarily, the
growth of the Company's revenues and earnings during 1996 and those officers'
respective performances. Commencing in 1997, Ms. Warshaw's bonus will be as
determined by the Compensation Committee and Ms. Francis will be eligible for
quarterly bonuses based on the attainment of targeted quarterly revenues of
Steiner Transocean, which revenues are required to be approved for such purpose
by the Compensation Committee.
The bonus for Sean C. Harrington, Managing Director of Elemis, was based on
the attainment by Elemis of targeted sales, which were required to be approved
in advance by the Company's Chief Executive Officer. The targeted sales for 1996
represented an increase in such sales from the prior year. For 1996, Mr.
Harrington received a bonus representing approximately 78% of the maximum bonus
for which he was eligible. Beginning in 1997, the sales targets upon which Mr.
Harrington's bonus will be based are required to be approved by the Compensation
Committee for such purpose.
Long-Term Incentive Compensation. The Option and Incentive Plan was
adopted in November 1996, shortly before the Company's initial public offering.
At the time the Plan was adopted, the executive officers received the share
options described above under "Executive Compensation -- Option Grants in 1996."
Those grants were made by the Board of Directors in amounts based on the
relative responsibilities of the executive officers and with the intention of
providing additional incentives directly linked to the performance of the
Company. As described above under "Executive Compensation -- 1996 Share Option
and Incentive Plan," under the Option and Incentive Plan, the Compensation
Committee may award to executive officers and other employees of the Company
share options and other forms of long-term incentives upon such terms and
conditions as the Committee may determine. It is anticipated that the Chief
Executive Officer of the Company will, from time to time, make recommendations
to the Compensation Committee regarding awards
10
<PAGE> 14
to be made under the Option and Incentive Plan. The Compensation Committee will
evaluate the performance of the executive officers and others that may be
considered for awards and the Company and establish any criteria the
Compensation Committee deems appropriate in determining whether to make awards
under the Option and Incentive Plan, either pursuant to any such recommendation
or otherwise.
MEMBERS OF THE BOARD OF DIRECTORS PRIOR TO APPOINTMENT OF COMPENSATION
COMMITTEE:
Clive E. Warshaw
Leonard I. Fluxman
Michele Steiner Warshaw
MEMBERS OF THE COMPENSATION COMMITTEE:
Charles D. Finkelstein
Jonathan D. Mariner
Steven J. Preston
PERFORMANCE GRAPH
The following graph compares the change in the cumulative total shareholder
return on the Company's Common Shares against the cumulative total return
(assuming reinvestment of dividends) of the Nasdaq Stock Market (U.S. and
foreign) Index and the Dow Jones Industry Group REQ (other recreational products
and services) for the period beginning November 13, 1996 (the commencement date
of the Company's initial public offering) and ending December 31, 1996. The
Company has not paid dividends on its Common Shares. The graph assumes that
$100.00 was invested on November 13, 1996 in the Common Shares at a per share
price of $13.00, the initial public offering price, and in each of the
comparative indices. The share price performance on the following graph is not
necessarily indicative of future share price performance.
COMPARISON OF CUMULATIVE RETURN
<TABLE>
<CAPTION>
MEASUREMENT PERIOD STEINER LEISURE NASDAQ STOCK DOW JONES
(FISCAL YEAR COVERED) LIMITED MARKET (U.S. AND INDUSTRY GROUP
FOREIGN) INDEX REQ
<S> <C> <C> <C>
11/13/96 100 100 100
12/31/96 155 103 98
</TABLE>
11
<PAGE> 15
CERTAIN TRANSACTIONS
ELEMIS LIMITED
Effective January 1, 1996, the Company purchased all of the outstanding
shares of Elemis for non-interest bearing promissory notes in the aggregate
principal amount of $543,000 (based on an exchange rate of approximately $1.53
U.S. dollars to the British pound), which was the book value of Elemis at the
time the shares were purchased. The notes are payable in monthly installments
commencing August 1, 1996. As of April 1, 1997, the Company had paid a total of
approximately $489,000 under the notes. The shares of Elemis were owned 95% and
5% by Nicolas D. Steiner and Clive E. Warshaw, respectively. Mr. Steiner and Mr.
Warshaw owned 67% and 33%, respectively, of a company (the "Former Parent")
that, until October 31, 1996, owned all of the shares of the Company. Mr.
Steiner is the brother of Michele Steiner Warshaw, the Executive Vice President
and a director of the Company, and directed the land-based activities of Steiner
Group (the Maritime Division of which was the Company's predecessor) until
December 1995. During 1996, the Company repaid non-interest bearing loans in the
aggregate amount of $153,000 to a subsidiary of Elemis, which loans were
initiated in 1995.
STEINER GROUP
During 1996, the Company paid approximately $400,000 to, or on behalf of
Steiner Group, representing a portion of the obligations incurred by the
Maritime Division of Steiner Group and the Company to Steiner Group during 1994
and 1995 for services in connection with the recruiting and training of certain
employees and certain management services and the net amount owed to Steiner
Group in connection with intercompany transfers between the Maritime Division
and the non-maritime operations of Steiner Group. During those years, Steiner
Group was owned beneficially principally by Nicholas D. Steiner, Francis D.
Steiner, a director of a subsidiary of the Company and the brother of Nicholas
D. Steiner and Michele Steiner Warshaw, and Clive E. Warshaw.
LOANS TO SHAREHOLDERS
During 1996, the Company made non-interest bearing loans in the aggregate
amount of approximately $3.1 million to Nicholas D. Steiner and Mr. Warshaw,
almost all of which were made to the Former Parent, and Francis D. Steiner.
These loans were repaid in November 1996.
SHARING OF EXPENSES
Approximately 83.8% of the shares offered in the Company's November 1996
initial public offering (the "Offering") were sold by a trust, one of the
trustees of which was Nicholas D. Steiner and the beneficiaries of which were
Mr. Steiner, Francis D. Steiner, the son of Mr. and Mrs. Warshaw and the son of
Nicholas D. Steiner (the "Steiner Trust").
During 1996, the Steiner Trust reimbursed the Company in the aggregate
amount of approximately $1.5 million, representing its proportionate share of
the expenses in connection with the Offering. In addition, during 1996, the
Steiner Trust reimbursed the Company in the amount of approximately $367,000,
representing a portion of the expenses incurred by the Company in connection
with the Company's acquisition of its cruise line related business from Steiner
Group in November 1995 and certain related matters.
REPAYMENT OF LOANS
Approximately $3.4 million of the net proceeds to the Company from the
Offering were used to pay the outstanding amount of indebtedness assumed by the
Company from Steiner Group in connection with the Company's acquisition of its
cruise line related business. The original amount of that indebtedness was $5.7
million, approximately $1.9 million of which was repaid during 1996 through the
closing of the Offering.
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<PAGE> 16
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information, as of April 10, 1997,
regarding the beneficial ownership of the Company's Common Shares of (a) each
person known by the Company to be the beneficial owner of more than five percent
of the outstanding Common Shares, (b) each director and each executive officer
of the Company and (c) directors and executive officers of the Company as a
group. The address for Messrs. Warshaw and Preston is the address of the
Company, Suite 104A, Saffrey Square, Nassau, The Bahamas. Unless otherwise
indicated, the beneficial owner had sole voting and dispositive power with
respect to the shares.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES OWNED PERCENTAGE
- ------------------------------------ ---------------------- ----------
<S> <C> <C>
Clive E. Warshaw(1)......................................... 2,102,760 29.21%
Steven J. Preston(2)........................................ 100 *
Lutheran Brotherhood........................................ 546,900(3) 7.60%
625 Fourth Avenue South
Minneapolis, MN 55415
WHRS Investment Management, Inc............................. 486,425(4) 6.76%
4440 PGA Blvd., #308
Palm Beach Gardens, FL 33410
J.P. Morgan & Co. Incorporated.............................. 473,900(5) 6.58%
60 Wall Street
New York, New York 10260
American Express Financial Corporation...................... 375,000(6) 5.21%
IDS Tower 10
Minneapolis, MN 55440
Directors and executive officers as a group (9 persons)..... 2,102,860 29.21%
</TABLE>
- ---------------
* Less than one percent
(1) Chairman of the Board and Chief Executive Officer of the Company.
(2) Director of the Company.
(3) Lutheran Brotherhood, a fraternal benefit society, has informed the Company
that, as of April 10, 1997, 70,900 of the shares were owned by Lutheran
Brotherhood directly and 476,000 of the shares were owned by mutual funds
for which Lutheran Brotherhood or a wholly-owned indirect subsidiary thereof
served as investment adviser. As of such date, Lutheran Brotherhood or such
indirect subsidiary had sole voting and dispositive power over the shares.
(4) According to a Schedule 13G dated January 13, 1997, as of December 31, 1996,
WHRS Investment, Management, Inc., a registered investment adviser, had sole
dispositive power, but no voting power with respect to the shares.
(5) According to a Schedule 13G dated December 31, 1996, J.P. Morgan & Co.
Incorporated, a parent holding company, filed the Schedule 13G on behalf of
its subsidiaries, Morgan Guaranty Trust Company of New York, a bank, and
J.P. Morgan Investment Management, Inc. and J.P. Morgan Florida Federal
Savings Bank, both investment advisers, which entities, in the aggregate,
had, as of such date, sole dispositive power over all of the shares, and
sole voting power over 351,200 shares.
(6) According to a Schedule 13G dated December 31, 1996, as of that date,
American Express Financial Corporation ("AEFC"), a registered investment
adviser, shared dispositive power over the shares, but had no voting power
with respect thereto. American Express Company, the parent holding company
of AEFC and a joint filer of the Schedule 13G, disclaimed beneficial
ownership of the shares.
CHANGE IN CONTROL
Prior to October 31, 1996, all of the Common Shares of the Company were
owned by the Former Parent, which was owned 67% by Nicolas D. Steiner and 33% by
Clive E. Warshaw, the Chairman of the Board and
13
<PAGE> 17
Chief Executive Officer of the Company. On October 31, 1996, the Common Shares
were distributed in the aforementioned percentages to Mr. Steiner, who then
contributed the shares he received to the Steiner Trust, and Mr. Warshaw,
respectively. As a result of such distribution, Mr. Warshaw is the owner of
approximately 29.2% of the outstanding Common Shares of the Company. All of the
Common Shares of the Company owned by the Steiner Trust were sold in the
Company's initial public offering, including shares sold pursuant to the
over-allotment option granted by the Steiner Trust to the underwriters.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the directors and certain
officers of the Company, and persons who own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership and changes of
ownership with the Securities and Exchange Commission. Such persons are required
to furnish the Company with copies of all Section 16(a) reports they file.
Based upon a review of such forms furnished to the Company and upon written
representations from certain persons subject to the reporting requirements of
Section 16(a), the Company is not aware of any person who has not timely filed
reports required by Section 16(a) of the Exchange Act during 1996.
PROPOSAL 2 -- RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
The Board of Directors, upon the recommendation of the Audit Committee, has
selected Arthur Andersen as independent auditors of the Company for the fiscal
year ending December 31, 1997, subject to ratification by the shareholders.
Arthur Andersen served as the Company's independent auditors for the four fiscal
years ended December 31, 1996 and has provided tax advice to the Company since
1995. Steven J. Preston, who became a director of the Company on April 1, 1997,
was a tax partner of Arthur Andersen through February 28, 1997 and, prior to his
departure, was the partner in charge of Arthur Andersen's engagement to provide
tax advice to the Company.
Although ratification by the shareholders of the appointment of independent
auditors is not legally required, the Board of Directors believes that such
action is desirable. If the appointment of Arthur Andersen is not ratified, the
Board will seek other independent auditors. However, due to the difficulty and
expense of making any change of auditors so long after the beginning of the
current fiscal year, it is likely that the appointment would stand for 1997
unless the Audit Committee and the Board found other good reason for making a
change.
Ratification of the selection of Arthur Andersen as the Company's
independent auditors requires the affirmative vote of a majority of votes cast
by holders of the Common Shares voting in person or by proxy at the Annual
Meeting.
A representative of Arthur Andersen will be present at the Annual Meeting
and will have an opportunity to make a statement if he or she desires to do so,
and is expected to be available to respond to appropriate questions which the
shareholders might have.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
RATIFICATION OF THE SELECTION OF ARTHUR ANDERSEN LLP AS INDEPENDENT AUDITORS OF
THE COMPANY FOR THE 1997 FISCAL YEAR.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of no
other matters which will be brought before the Annual Meeting. In the event that
any other business is properly presented at the Annual Meeting, it is intended
that the persons named in the enclosed proxy will have authority to vote such
proxy in accordance with their judgment on such business.
14
<PAGE> 18
EXPENSE OF SOLICITATION OF PROXIES
The cost of soliciting proxies will be borne by the Company. In addition to
solicitation by mail, solicitations may also be made by telephone, telegram,
facsimile or in person by directors, officers or employees of the Company, who
will receive no additional compensation for such services. In addition, the
Company will reimburse brokers and other shareholders of record for their
expenses in forwarding proxy material to beneficial owners.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Proposals which shareholders wish to have considered for inclusion in the
proxy statement for the 1998 annual meeting of shareholders must be received by
the Company's principal executive offices on or before December 26, 1997.
Proposals should be directed to the Corporate Secretary, c/o CT Maritime
Service, L.C., 1007 North American Way, 4th Floor, Miami, Florida 33132.
The Company's Articles provide that for business to be properly brought
before future annual meetings by a shareholder, in addition to other applicable
requirements, the shareholder must be present at the meeting and written notice
thereof must be received by the Company's Secretary not less than 75 days nor
more than 120 days prior to the anniversary date of the immediately preceding
annual meeting (the "Anniversary Date"). If the annual meeting is to be held
more than 30 days before, or more than 60 days after the Anniversary Date, such
notice must be received not later than the later of the 75th day prior to the
annual meeting or the 10th day following the day on which the public
announcement of the annual meeting date is first made by the Company. The
shareholder's notice to the Company must include a description of the proposal
and certain information regarding the shareholder.
15
<PAGE> 19
ANNUAL REPORT
A copy of the Company's 1996 Annual Report to Shareholders (consisting
primarily of the Company's annual report on Form 10-K, without exhibits, for
fiscal year 1996) is being mailed with this Proxy Statement to each shareholder
entitled to vote at the Annual Meeting. Additional copies of the Annual Report
or Form 10-K may be obtained, without charge, by any shareholder by writing or
calling Carl S. St. Philip, Jr., Secretary, c/o CT Maritime Services, L.C. 1007
North America Way, 4th Floor, Miami, Florida 33132, telephone (305) 358-9002.
By Order of the Board of Directors
Carl S. St. Philip, Jr.
Secretary
April 25, 1997
16
<PAGE> 20
STEINER LEISURE LIMITED
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING
OF SHAREHOLDERS TO BE HELD JUNE 6, 1997
The undersigned hereby appoints Clive E. Warshaw and Leonard I. Fluxman and
each of them, with power of substitution, proxies for the undersigned and
authorizes them to represent and vote, as designated, all of the common shares
of Steiner Leisure Limited held of record by the undersigned on April 9, 1997,
at the Annual Meeting of Shareholders to be held on June 6, 1997, and at any
adjournments or postponements thereof for the purposes identified on the reverse
side of this proxy and with discretionary authority as to any other matters that
may properly come before the Annual Meeting, including substitute nominees, if
any of the named nominees for director should be unavailable to serve for
election, in accordance with, and as described in the Notice of Annual Meeting
of Shareholders and Proxy Statement.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If the proxy is returned without
direction being given, this proxy will be voted FOR the election of the nominees
for directors set forth in proposal 1 and FOR proposal 2.
/SEE REVERSE SIDE/
(IMPORTANT -- TO BE SIGNED AND DATED ON REVERSE SIDE)
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
STEINER LEISURE LIMITED
June 6, 1997
<TABLE>
<CAPTION>
A /X/ Please mark your
votes as in the
example
Withhold
Authority to
For vote for The Board of Directors recommends a vote FOR the election of the
nominees nominees nominees listed below and FOR proposal 2.
listed listed at
at Right Right FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C> <C>
1. Election of / / / / Nominees: Clive E. Warshaw 2. Ratification of the appointment / / / / / /
Class I Graham M. Wallace appointment of Arthur Andersen
Directors LLP as independent auditors for
the 1997 fiscal year.
For nominees except as noted below 3. In their discretion, the proxies
are authorized to vote upon such
- -------------------------------------------------------- other business that may properly
come before the meeting.
The signer hereby revokes all proxies heretofore given by the
signer to vote at said meeting or any adjournment or
postponement thereof. The signer hereby acknowledges the
receipt of the Notice of Annual Meeting and Proxy Statement.
I will / / I will not / /
attend the attend the
meeting meeting
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
_______________________________________ Date ________________ ________________________________________ Date ____________________
Signature Signature, if held jointly
Note: Please sign exactly as your name appears. If acting as attorney, executor, trustee or in other representative capacity, sign
name and title. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person. If held jointly, both parties must sign and date.
</TABLE>
