<PAGE>


                               THIRD SUPPLEMENT TO
                       APPENDIX A TO EMPLOYMENT AGREEMENT
                        BETWEEN STEWART ENTERPRISES, INC.
                                       AND
                              RANDALL L. STRICKLIN

                  BASE SALARY, BONUS COMPENSATION AND BENEFITS

      Appendix A is hereby modified to read in its entirety as follows:

1.    Effective April 28, 2003, Employee's title(s) shall be Senior Vice
      President and President - Western Division, Employee's Base Salary shall
      be $300,000, and Employee's principal work location shall be the Los
      Angeles, California metropolitan area.

2.    For Fiscal Year 2004 ("FY 2004"), the Employee shall be eligible to
      receive a maximum Bonus of up to $300,000.

      (a)   The Bonus available, and the portion thereof paid for FY 2004
            performance will be determined as follows:

<TABLE>
<CAPTION>
            FY 2004 Reported EPS                         Bonus Available
<S>                                <C>                   <C>
            Less than              $.37                  $             0

            Equals or exceeds       .37                          300,000
</TABLE>


            (1)   25% of the Bonus available for FY 2004 will be determined
                  based on the achievement of the following diluted reported EPS
                  levels (i.e., that EPS level, rounded to the nearest whole
                  cent, reported in the Company's year-end earnings release,
                  adjusted as appropriate pursuant to 2(b) hereof):

<TABLE>
<CAPTION>
                                            % of 25% of        Bonus Earned
            FY 2004 Diluted Reported EPS   Bonus Potential     Based on EPS
<S>                                <C>    <C>                  <C>
            Equals or exceeds      $.37         20.0%           $  15,000
            Equals or exceeds       .38         27.5%              20,625
            Equals or exceeds       .39         35.0%              26,250
            Equals or exceeds       .40         42.5%              31,875
            Equals or exceeds       .41         50.0%              37,500
            Equals or exceeds       .42         62.5%              46,875
            Equals or exceeds       .43         75.0%              56,250
            Equals or exceeds       .44         87.5%              65,625
            Equals or exceeds       .45        100.0%              75,000
</TABLE>
<PAGE>
            (2)   50% of the Bonus available will be awarded based on
                  Quantitative Criteria specific to the Employee's area of
                  responsibility based on criteria similar to those used in
                  prior years which will be established by the Chief Executive
                  Officer.

            (3)   25% of the Bonus available will be discretionary, based on
                  Qualitative Criteria determined by the Chief Executive
                  Officer.

      (b)   Cumulative effects of changes in accounting methods, stock option
            charges, separation pay charges and other items approved for
            exclusion by the Compensation Committee shall be excluded from
            diluted earnings per share for purposes of this calculation. Diluted
            earnings per share shall be calculated by the Company's Chief
            Financial Officer and shall be binding on all Employees absent
            manifest error.

3.    The Company shall provide the Employee with the following fringe benefits
      and perquisites:

      (a)   an automobile allowance of $720 per month. In addition, the Company
            will reimburse the Employee for all gasoline, maintenance, repairs
            and insurance for Employee's personal car, as if it were a
            Company-owned vehicle;

      (b)   reimbursement for membership dues, including assessments and similar
            charges, in one or more clubs deemed useful for business purposes in
            an amount not to exceed $8,000 or such additional amounts as may be
            approved by the Chief Executive Officer; and

      (c)   first class air travel while on Company business.

                                            Agreed to and accepted:

                                            STEWART ENTERPRISES, INC.


Date: April 21, 2004                        By:      /s/JAMES W. MCFARLAND
                                                -------------------------------
                                                        James W. McFarland
                                                Compensation Committee Chairman

                                            EMPLOYEE


Date: April 21, 2004                                 /s/RANDALL L. STRICKLIN
                                            -----------------------------------
                                                        Randall L. Stricklin