STEWART ENTERPRISES INC
STOCK OPTION PLAN
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<TYPE>EX-10.46
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<FILENAME>dplan.htm
<DESCRIPTION>STOCK OPTION PLAN
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<b>
<p ALIGN="center">STEWART ENTERPRISES, INC.<br>
2000 DIRECTORS' STOCK OPTION PLAN</p>
<p ALIGN="LEFT"></b><b>1.&nbsp;&nbsp;&nbsp;&nbsp; Purpose of the Plan.</p>
    </b>


<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The purpose of the Stewart Enterprises, Inc. 2000 Directors'
Stock Option Plan is to promote the interests of the Company and its
shareholders by strengthening the Company's ability to attract, motivate and
retain Directors of experience and ability, and to encourage the highest level
of Directors' performance by providing Directors with a proprietary interest in
the Company's financial success and growth.</p>


    <b>
    <p ALIGN="LEFT">2.&nbsp;&nbsp;&nbsp;&nbsp; Definitions.</p>
    </b>


        <p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.1&nbsp;&nbsp;&nbsp;
        "Board" means the Board of Directors of
        the Company.</p>




<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.2&nbsp;&nbsp;&nbsp;&nbsp;
"Committee" means the Compensation Committee of
the Board or a subcommittee thereof as shall be appointed by the Board from time
to time. The Committee shall consist of two or more members of the Board none of
whom shall be Employees of the Company.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.3&nbsp;&nbsp;&nbsp;
"Common Stock" means the Class A common stock of
the Company.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.4&nbsp;&nbsp;&nbsp;
"Company" means Stewart Enterprises, Inc., a
Louisiana corporation.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.5&nbsp;&nbsp;&nbsp;
"Director" means a member of the Board who is not
an Employee.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.6&nbsp;&nbsp;&nbsp;
"Employee" means any employee of the Company, or
any of its present or future parent or subsidiary corporations.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.7&nbsp;&nbsp;&nbsp;
"Fair Market Value" means (i) if the Common Stock
is listed on an established stock exchange or any automated quotation system
that provides sale quotations, the closing sale price for a share of the Common
Stock on such exchange or quotation system on the day preceding the date as of
which fair market value is to be determined, or if no sale of the Common Stock
shall have been made on that day, on the next preceding day on which there was a
sale of the Common Stock; (ii) if the Common Stock is not listed on any exchange
or quotation system, but bid and asked prices are quoted and published, the mean
between the quoted bid and asked prices on the day preceding the date as of
which fair market value is to be determined, and if bid and asked prices are not
available on such day, on the next preceding day on which such prices were
available; and (iii) if the Common Stock is not regularly quoted, the fair
market value of a share of Common Stock on the applicable date as established by
the Committee in good faith.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp; 2.8&nbsp;&nbsp;&nbsp; "Participant" means each Director.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp; 2.9&nbsp;&nbsp;&nbsp; "Option" means a stock option that does not
satisfy the requirements of Section 422 of the Internal Revenue Code of 1986, as
amended.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp; 2.10&nbsp;&nbsp;&nbsp; "Plan" means the Stewart Enterprises, Inc. 2000
Directors' Stock Option Plan as set forth herein and as amended from time to
time.</p>
<b>
<p ALIGN="LEFT">3.&nbsp;&nbsp;&nbsp;&nbsp; Shares of Common Stock Subject to the Plan.</p>
</b>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Subject to the adjustment provisions of Section 7, the aggregate
number of shares of Common Stock that may be issued pursuant to the exercise of
Options under the Plan is 350,000 shares of Common Stock. Such shares may be
either authorized but unissued shares or shares issued and thereafter acquired
by the Company. To the extent any shares of Common Stock subject to an Option
are not issued because the Option is forfeited or cancelled, such shares shall
again be available for grant pursuant to Options granted under the Plan.</p>
<b>
<p ALIGN="LEFT">4.&nbsp;&nbsp;&nbsp;&nbsp; Administration of the Plan.</p>
</b>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.1&nbsp;&nbsp;&nbsp;&nbsp;
The Plan shall be administered by the Committee, which shall
have the power to interpret the Plan and, subject to its provisions, to
prescribe, amend and rescind rules and to make all other determinations
necessary for the Plan's administration.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.2&nbsp;&nbsp;&nbsp;&nbsp;
All action taken by the Committee in the administration and
interpretation of the Plan shall be final and binding upon all parties. No
member of the Committee will be liable for any action or determination made in
good faith by the Committee with respect to the Plan or any Option.</p>
<b>
<p ALIGN="LEFT">5.&nbsp;&nbsp;&nbsp;&nbsp; Grant of Options.</p>
</b>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.1&nbsp;&nbsp;&nbsp;&nbsp;
Each Director shall automatically be granted an Option to
acquire 50,000 shares of Common Stock on the day following the 2000 annual
meeting of shareholders of the Company. Each person who becomes a Director after
the 2000 annual meeting of shareholders, but prior to the 2004 annual meeting of
shareholders, shall be granted an Option to acquire a pro rata number of shares
of Common Stock calculated as follows:</p>

<pre>
                       Number of full calendar months between the date
        50,000   X     the person becomes a Director and April 30, 2004
                       ------------------------------------------------
                                             48
<font FACE="Arial" SIZE="2">&nbsp;</pre>



</font><font FACE="Times New Roman">
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.2&nbsp;&nbsp;&nbsp;&nbsp;
In the event shares remain available for issuance under
Section 3 hereof, because of cancellation or forfeiture of Options or because
all available shares have not been utilized for grants to new Directors, Options
with respect to the remaining shares may be granted to Directors in the
discretion of the Committee and shall be exercisable and shall terminate as
determined by the Committee.</p>
<p ALIGN="LEFT"><b>6.&nbsp;&nbsp;&nbsp;&nbsp; Terms and Conditions of Options.</p>
</b>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.1&nbsp;&nbsp;&nbsp;&nbsp;
Unless exercisability is accelerated as provided in Sections
6.4 and 8.2 hereof, the Options shall become exercisable in 25 percent annual
increments beginning one year following the date of grant. In the case of
Options granted to persons who become Directors after the 2000 annual meeting of
shareholders, the exercisability terms shall be such that, subject to Section
6.5 hereof, the Options shall be fully exercisable for a period of at least one
year prior to the termination date provided in Section 6.2.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.2&nbsp;&nbsp;&nbsp;&nbsp;
Unless terminated earlier as provided in Section 6.5 or 8.3,
the Options shall expire and terminate on January 31, 2005.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.3&nbsp;&nbsp;&nbsp;&nbsp;
The exercise price of the Options granted to Directors shall
be equal to the Fair Market Value, as defined herein, of a share of Common Stock
on the date of grant.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.4&nbsp;&nbsp;&nbsp;&nbsp;
The Committee may accelerate the exercisability of any
Option at any time in its discretion.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.5&nbsp;&nbsp;&nbsp;&nbsp;
In the event a Director ceases to serve on the Board of
Directors of the Company for any reason, the Options granted hereunder must be
exercised, to the extent otherwise exercisable at the time of termination of
Board service, within one year from the date of termination of Board service.
Options that are not exercisable at the time of termination of Board service
shall be forfeited.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.6&nbsp;&nbsp;&nbsp;&nbsp;
An Option may be exercised, in whole or in part, by giving
written notice to the Company, specifying the number of shares of Common Stock
to be purchased. The exercise notice shall be accompanied by the full purchase
price for such shares. The option price shall be payable in United States
dollars and may be paid (a) in cash; (b) by uncertified or certified check; (c)
by delivery of shares of Common Stock, which shares shall be valued for this
purpose at their Fair Market Value on the date such option is exercised, and,
unless otherwise determined by the Committee, shall have been held by the
Participant for at least six months; or (d) in such other manner as may be
authorized from time to time by the Committee. The Committee may also permit
Participants, either on a selective or aggregate basis, simultaneously to
exercise options and sell the shares of Common Stock acquired pursuant to a
brokerage or similar arrangement, approved in advance by the Committee, and use
the proceeds from such sale as payment of the exercise price. In the case of
delivery of an uncertified check upon exercise of a stock option, no shares
shall be issued until the check has been paid in full. Prior to the issuance of
shares of Common Stock upon the exercise of an Option, a Participant shall have
no rights as a shareholder.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.7&nbsp;&nbsp;&nbsp;&nbsp;
Except for adjustments pursuant to Section 7, the exercise
price for any outstanding Option granted under the Plan may not be decreased
after the date of grant nor may an outstanding Option granted under the Plan be
surrendered to the Company as consideration for the grant of a new Option with a
lower exercise price.</p>
<b>
<p ALIGN="LEFT">7.&nbsp;&nbsp;&nbsp;&nbsp; Adjustment Provisions.</p>
</b>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In the event of any recapitalization, stock dividend, stock
split, combination of shares or other change in the Common Stock, all
limitations on numbers of shares of Common Stock provided in the Plan, and the
number of shares subject to outstanding Options, shall be adjusted in proportion
to the change in outstanding shares of Common Stock. In the event of any such
adjustments, the purchase price of any Option shall be adjusted as and to the
extent appropriate, in the reasonable discretion of the Committee, to provide
Participants with the same relative rights before and after such adjustment.</p>
<p ALIGN="LEFT"><b>8.&nbsp;&nbsp;&nbsp;&nbsp; Change of Control.</p>
</b>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.1&nbsp;&nbsp;&nbsp;&nbsp;
A Change of Control shall mean:</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(a)&nbsp;&nbsp;&nbsp; the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934 (the "1934 Act") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the 1934 Act) of more than 30 percent of the
outstanding shares of the Common Stock; provided, however, that for purposes of
this subsection (a), the following acquisitions shall not constitute a Change of
Control:</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(i)&nbsp;&nbsp;&nbsp;&nbsp; any acquisition of Common Stock directly from the
        Company,</p>
        <p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (ii)&nbsp;&nbsp;&nbsp;&nbsp; any acquisition of Common Stock by the Company,</p>
        <p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (iii)&nbsp;&nbsp;&nbsp; any acquisition of Common Stock by any employee
        benefit plan (or related trust) sponsored or maintained by the Company
        or any corporation controlled by the Company, or</p>
        <p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (iv)&nbsp;&nbsp;&nbsp; any acquisition of Common Stock by any corporation
        pursuant to a transaction that complies with clauses (i), (ii) and (iii)
        of subsection (c) of this Section 8.1; or</p>




<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;&nbsp;&nbsp;&nbsp; individuals who, as of the date the Plan was adopted by the
Board of Directors (the "Approval Date"), constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the Approval Date whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered a member of the Incumbent Board, unless such individual's initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a person other
than the Incumbent Board; or</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(c)&nbsp;&nbsp;&nbsp;&nbsp; consummation of a reorganization, merger or consolidation
(including a merger or consolidation of the Company or any direct or indirect
subsidiary of the Company), or sale or other disposition of all or substantially
all of the assets of the Company (a "Business Combination"), in each
case, unless, following such Business Combination,</p>




        <p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (i)&nbsp;&nbsp;&nbsp;&nbsp; all or substantially all of the individuals and
        entities who were the beneficial owners of the Company's outstanding
        common stock and the Company's voting securities entitled to vote
        generally in the election of directors immediately prior to such
        Business Combination have direct or indirect beneficial ownership,
        respectively, of more than 50 percent of the then outstanding shares of
        common stock, and more than 50 percent of the combined voting power of
        the then outstanding voting securities entitled to vote generally in the
        election of directors, of the corporation resulting from such Business
        Combination (which, for purposes of this paragraph (i) and paragraphs
        (ii) and (iii), shall include a corporation which as a result of such
        transaction owns the Company or all or substantially all of the
        Company's assets either directly or through one or more subsidiaries),
        and</p>
        <p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (ii)&nbsp;&nbsp;&nbsp;&nbsp; except to the extent that such ownership existed
        prior to the Business Combination, no person (excluding any corporation
        resulting from such Business Combination or any employee benefit plan or
        related trust of the Company or such corporation resulting from such
        Business Combination) beneficially owns, directly or indirectly, 20
        percent or more of the then outstanding shares of common stock of the
        corporation resulting from such Business Combination or 20 percent or
        more of the combined voting power of the then outstanding voting
        securities of such corporation, and</p>
        <p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        (iii)&nbsp;&nbsp;&nbsp;&nbsp; at least a majority of the members of the board of
        directors of the corporation resulting from such Business Combination
        were members of the Incumbent Board at the time of the execution of the
        initial agreement, or of the action of the Board, providing for such
        Business Combination; or</p>




<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(d)&nbsp;&nbsp;&nbsp;&nbsp; approval by the shareholders of the Company of a plan of
complete liquidation or dissolution of the Company.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.2&nbsp;&nbsp;&nbsp;&nbsp;
Upon a Change of Control, or immediately prior to the
closing of a transaction that will result in a Change of Control if consummated,
all outstanding Options granted pursuant to the Plan shall automatically become
fully exercisable.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.3&nbsp;&nbsp;&nbsp;&nbsp;
No later than 30 days after the approval by the Board of a
Change of Control of the types described in Sections 8.1(c) or (d) and no later
than 30 days after a Change of Control of the types described in Sections 8.1(a)
or (b), the Committee (as the Committee was composed immediately prior to such
Change of Control and notwithstanding any removal or attempted removal of some
or all of the members thereof as directors or Committee members), acting in its
sole discretion without the consent or approval of any Participant may act to
effect one or more of the alternatives listed below, and such act by the
Committee may not be revoked or rescinded by persons not members of the
Committee immediately prior to the Change of Control:</p>


    <p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (a)&nbsp;&nbsp;&nbsp;&nbsp; require that all outstanding Options be exercised on or
    before a specified date (before or after such Change of Control) fixed by
    the Committee, after which specified date any unexercised portion of the
    Option shall terminate,</p>
    <p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (b)&nbsp;&nbsp;&nbsp;&nbsp; make such equitable adjustments to the Options then
    outstanding as the Committee deems appropriate to reflect such Change of
    Control (provided, however, that the Committee may determine in its sole
    discretion that no adjustment is necessary), or</p>
    <p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (c)&nbsp;&nbsp;&nbsp;&nbsp; provide for mandatory conversion of some or all of the
    outstanding Options held by some or all Participants as of a date before or
    after such Change of Control, in which event such Options shall be deemed
    automatically cancelled and the Company shall pay, or cause to be paid, to
    each such participant an amount in cash equal to the excess, if any, of the
    Change of Control Value of the shares subject to such Options, as defined
    and calculated below, over the exercise price of such Options, or, in lieu
    of such cash payment, the issuance of Common Stock or securities of an
    acquiring entity having a Fair Market Value equal to such excess,</p>
    <p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (d)&nbsp;&nbsp;&nbsp;&nbsp; provide that thereafter, upon any exercise of all or
    part of an Option, the Participant shall be entitled to purchase under the
    Option, in lieu of the number of shares of Common Stock then covered by the
    Option, the number and class of shares of stock or other securities or
    property (including, without limitation, cash) to which the Participant
    would have been entitled pursuant to the terms of the agreement providing
    for the reorganization, merger, consolidation or asset sale, if, immediately
    prior to such Change of Control, the Participant had been the holder of
    record of the number of shares of Common Stock then covered by the Option.</p>


<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8.4&nbsp;&nbsp;&nbsp;&nbsp;
For the purposes of paragraph (c) of Section 8.3
"Change of Control Value" shall be the amount determined by whichever
of the following items is applicable:</p>


    <p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (a)&nbsp;&nbsp;&nbsp;&nbsp; the per share price to be paid to stockholders of
    Stewart in any such merger, consolidation or other reorganization,</p>
    <p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (b)&nbsp;&nbsp;&nbsp;&nbsp; the price per share offered to stockholders of Stewart
    in any tender offer or exchange offer whereby a Change of Control takes
    place, or</p>
    <p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (c)&nbsp;&nbsp;&nbsp;&nbsp; in all other events, the Fair Market Value per share of
    Common Stock into which such Options being converted are exercisable, as
    determined by the Committee as of the date determined by the Committee to be
    the date of conversion of the Options.</p>




    <p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (d)&nbsp;&nbsp;&nbsp;&nbsp; In the event that the consideration offered to
    stockholders of Stewart in any transaction described in this Section 8.4
    consists of anything other than cash, the Committee shall determine the fair
    cash equivalent of the portion of the consideration offered that is other
    than cash.</p>




    <p ALIGN="LEFT"><b>9.&nbsp;&nbsp;&nbsp;&nbsp; General Provisions.</p>
</b>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.1&nbsp;&nbsp;&nbsp;&nbsp;
Nothing in the Plan or in any instrument executed pursuant
to the Plan will confer upon any Participant any right to continue as a Director
or affect the right of the Company to terminate the services of any Participant.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.2&nbsp;&nbsp;&nbsp;&nbsp;
No shares of Common Stock will be issued or transferred
pursuant to an Option unless and until all then-applicable requirements imposed
by federal and state securities and other laws, rules and regulations and by any
regulatory agencies having jurisdiction, and by any stock exchanges upon which
the Common Stock may be listed, have been fully met. As a condition precedent to
the issuance of shares pursuant to the exercise of an Option, the Company may
require the Participant to take any reasonable action to meet such requirements.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.3&nbsp;&nbsp;&nbsp;&nbsp;
No Participant and no beneficiary or other person claiming
under or through such Participant will have any right, title or interest in or
to any shares of Common Stock allocated or reserved under the Plan or subject to
any Option except as to such shares of Common Stock, if any, that have been
issued or transferred to such Participant.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.4&nbsp;&nbsp;&nbsp;&nbsp;
No Options granted hereunder may be transferred, pledged,
assigned or otherwise encumbered by an optionee except:</p>


    <p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (a)&nbsp;&nbsp;&nbsp;&nbsp; by will;</p>
    <p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (b)&nbsp;&nbsp;&nbsp;&nbsp; by the laws of descent and distribution; or</p>
    <p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (c)&nbsp;&nbsp;&nbsp;&nbsp; if permitted by the Committee and so provided in the
    Option or an amendment thereto, (i) pursuant to a domestic relations order,
    as defined in the Code, (ii) to Immediate Family Members, (iii) to a
    partnership in which Immediate Family Members, or entities in which
    Immediate Family Members are the owners, members or beneficiaries, as
    appropriate, are the sole partners, (iv) to a limited liability company in
    which Immediate Family Members, or entities in which Immediate Family
    Members are the owners, members or beneficiaries, as appropriate, are the
    sole members, or (v) to a trust for the benefit solely of Immediate Family
    Members. "Immediate Family Members" shall be defined as the spouse
    and natural or adopted children or grandchildren of the optionee and their
    spouses.</p>


<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any attempted assignment, transfer, pledge, hypothecation or
other disposition of an Option or levy of attachment, or similar process upon an
Option not specifically permitted herein, shall be null and void and without
effect.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9.5&nbsp;&nbsp;&nbsp;&nbsp;
Each Option shall be evidenced by a written instrument,
including terms and conditions consistent with the Plan, as the Committee may
determine.</p>
<p ALIGN="LEFT"><b>10.&nbsp;</b></font><b>&nbsp;&nbsp;&nbsp;<font face="Times New Roman">
</font>Amendment or Discontinuance of the Plan</b>.</p>
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Board may amend or discontinue the Plan at any time;
provided, however, that no such amendment may</p>
<blockquote>
<p ALIGN="LEFT"><font FACE="Times New Roman">(a)&nbsp;&nbsp;&nbsp;&nbsp; </font>without the approval of the shareholders, (i)
    increase, subject to adjustments permitted herein, the maximum number of
    shares of Common Stock that may be issued through the Plan, (ii) materially
    increase the benefits accruing to participants under the Plan or (iii)
    materially expand the classes of persons eligible to participant in the
    Plan, or (iv) amend Section 6.7 to permit repricing of Options, or</p>
    <font FACE="Times New Roman">
    <p ALIGN="LEFT">(b)&nbsp;&nbsp;&nbsp;&nbsp; </font>materially impair, without the consent of the
    recipient, an Option previously granted, except that the Company retains all
    rights under Section 8. hereof.</p>
</blockquote>
    <p ALIGN="LEFT"><b><font FACE="Times New Roman">11.&nbsp;&nbsp;&nbsp;&nbsp; Effective Date of Plan and Duration of Plan.</p>
</font></b><font FACE="Times New Roman">
<p ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; This Plan shall become effective upon adoption by the Board,
subject to approval by the holders of a majority of the shares of Common Stock
represented in person or by proxy and entitled to vote on the subject at the
2000 annual meeting of shareholders of the Company.</p>
</font>

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