Document:

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                THE LOEWEN GROUP INC. CONFIRMATION INCENTIVE PLAN

1.       PURPOSE.

         The purpose of The Loewen Group Inc. Confirmation Incentive Plan (the
         "Plan") is to retain key management employees of the Company through
         the confirmation of a plan or plans of reorganization, compromise or
         arrangement (a "Plan of Reorganization") and to encourage such
         employees to achieve this goal.

2.       DEFINITIONS.

         As used throughout the Plan, the following words and phrases shall have
         the following meanings, unless otherwise clearly or necessarily
         indicated by context:

         (a)      BOARD. "Board" means the Board of Directors of the Company.

         (b)      CAUSE. "Cause" means (i) neglect of duty, dishonesty or
                  misconduct in matters involving the Employer or the
                  performance of services for the Employer, (ii) loss of
                  qualification of licensure, (iii) stealing or unlawful use of
                  Employer property or monies, (iv) continued willful
                  insubordination after reasonable warning or reprimand, (v)
                  commission of a felony or any crime requiring intent or moral
                  turpitude, (vi) a violation of the Employer's anti-harassment
                  and/or drug use policies or (vii) actively and intentionally
                  pursuing interests of a competitor to the detriment of the
                  financial interests of the Employer.

         (c)      COMMITTEE. "Committee" means the Compensation Committee of the
                  Board or such other committee of the Board authorized by the
                  Board to administer the Plan.

         (d)      COMPANY. "Company" means The Loewen Group Inc.

         (e)      CONFIRMATION DATE. "Confirmation Date" means the first to
                  occur of the effective date of the confirmed Plan of
                  Reorganization or the date of consummation of the sale of
                  substantially all of the assets of substantially all of the
                  Employers to a third party.

         (f)      CONFIRMATION INCENTIVE PAYMENT. "Confirmation Incentive
                  Payment" shall have the meaning ascribed to it in Section 4
                  hereof.

         (g)      CORPORATE STAFF. "Corporate Staff" means the group consisting
                  of those Company and LGII Vice Presidents (who are not Senior
                  Corporate Executives), Directors, Senior Managers, Managers
                  and Professional and Technical Support Personnel responsible
                  for general corporate affairs.

         (h)      EFFECTIVE DATE. "Effective Date" means, as to any individual,
                  the date on which the individual executes a Release Agreement
                  and thereby becomes an Eligible Employee.

<PAGE>

         (i)      ELIGIBLE EMPLOYEE. "Eligible Employee" means those full-time
                  employees who are Senior Corporate Executives, Corporate
                  Staff, Operations Country Management and New Hires who, in
                  each case, execute a Release Agreement.

         (j)      EMPLOYER. "Employer" means each of the Company and those of
                  its divisions, subsidiaries and operating units, as are set
                  forth on Exhibit A hereto, as such Exhibit may be amended from
                  time to time.

         (k)      LGII. "LGII" means Loewen Group International Inc.

         (l)      NEW HIRE. "New Hire" means an employee hired by an Employer
                  after the Petition Date in, or promoted after the Petition
                  Date to, one of the categories of Eligible Employees;
                  provided, however, that such employee has been in the
                  continuous employ of an Employer for at least three (3) months
                  prior to the Confirmation Date.

         (m)      OPERATIONS COUNTRY MANAGEMENT. "Operations Country Management"
                  means the Company's and LGII's Executives, Vice President and
                  Controller responsible for the oversight of the Employers'
                  operations in the United States and Canada.

         (n)      PETITION DATE. "Petition Date" means June 1, 1999.

         (o)      RELEASE AGREEMENT. "Release Agreement" means an agreement, in
                  a form that is acceptable to the Employer, under which the
                  Eligible Employee, among other things, releases and waives any
                  rights, claims or entitlements that he or she may have at law
                  or under existing employment or consulting agreements or
                  company programs.

         (p)      SALARY. "Salary" means an Eligible Employee's annualized base
                  salary as of a particular date, without regard to any bonus,
                  severance, incentive or other similar payments.

         (q)      SENIOR CORPORATE EXECUTIVES. "Senior Corporate Executives"
                  means the group consisting of the Company's and LGII's
                  Chairman of the Board; Chief Executive Officer; Executive Vice
                  President, Administration; Senior Vice President, Legal; Chief
                  Financial Officer; Chief Information Officer; Controller;
                  Treasurer; Corporate Secretary; and certain other Vice
                  Presidents and Department Heads responsible for general
                  corporate affairs.

3.       COVERAGE PERIOD.

         The Plan is effective as of the Effective Date with respect to Eligible
         Employees and shall terminate when all payments earned hereunder have
         been paid to Eligible Employees.

                                       2
<PAGE>

4.       CONFIRMATION INCENTIVE PAYMENT.

         (a)      Subject to Section 4(c) hereof and the terms and conditions of
                  the Plan and provided an Eligible Employee remains in the
                  continuous, active employ of an Employer from the date on
                  which he or she signs a Release Agreement through and
                  including the Confirmation Date, an Eligible Employee shall be
                  entitled to receive a Confirmation Incentive Payment.

         (b)      Subject to Section 4(c) hereof, the Confirmation Incentive
                  Payment shall be equal to a percentage of an Eligible
                  Employee's Salary as in effect on the Confirmation Date, with
                  the percentages of Salary corresponding to all Eligible
                  Employees set forth in the table below:

<TABLE>
<CAPTION>

                 EMPLOYEE CATEGORY                                                 PERCENTAGE OF SALARY
                 -----------------                                                ----------------------
                 <S>                                                              <C>
                 Chairman of the Board                                            Determined pursuant to
                                                                                    separate agreement
                 Chief Executive Officer                                          Determined pursuant to
                                                                                    separate agreement

                 Other Senior Corporate Executives
                          Tier 1:    Administration, Finance, Legal                         50%
                          Tier 2:    Human Resources, MIS, Controller,
                                     Treasurer and Corporate Secretary                      40%
                          Tier 3:    Vice Presidents/Functional Heads                       30%
                 Corporate Staff                                                            10%
                 Operations Country Management
                          Country Executives                                                50%
                          Vice President                                                    40%
                          Group Controller                                                  30%
</TABLE>

         (c)      With respect to New Hires who have been Eligible Employees for
                  less than twelve (12) months prior to the Confirmation Date,
                  the Confirmation Incentive Payment shall be prorated based on
                  the ratio of such New Hire's number of months of service as a
                  New Hire prior to the Confirmation Date compared to 12 months.
                  Notwithstanding anything herein to the contrary, this
                  proration requirement shall not apply to the New Hires listed
                  on Exhibit B hereto and such New Hires shall receive a
                  Confirmation Incentive Payment without regard to this Section
                  4(c).

5.       FORM AND TIMING OF CONFIRMATION INCENTIVE PAYMENTS.

         (a)      Subject to the provisions of Section 4 hereof, Confirmation
                  Incentive Payments shall be paid to Eligible Employees, in the
                  sole discretion of the Committee, in a combination of cash and
                  equity interests in the Company (provided that the cash
                  portion of the Confirmation Incentive Payment generally will
                  be in an amount sufficient to satisfy the Eligible Employee's
                  income tax obligations arising as a result of the Confirmation
                  Incentive Payment) as follows: (a) one-third of the

                                       3
<PAGE>

                  Confirmation Incentive Payment will be paid within fifteen
                  (15) days of the Confirmation Date and (b) the remaining
                  two-thirds of the Confirmation Incentive Payment (the "Second
                  Installment") will be paid within fifteen (15) days after the
                  date that is six (6) months after the Confirmation Date (the
                  "Second Installment Date").

         (b)      An Eligible Employee who voluntarily terminates his or her
                  employment or is terminated for Cause after the Confirmation
                  Date but prior to the Second Installment Date shall not be
                  eligible to receive the Second Installment.

6.       ADMINISTRATION.

         (a)      PLAN ADMINISTRATION. The Committee shall administer the Plan.
                  The Committee shall keep or cause to be kept such records and
                  shall prepare or cause to be prepared such returns or reports
                  as may be required by law or necessary for the proper
                  administration of the Plan.

         (b)      POWERS AND DUTIES OF COMMITTEE. The Committee shall have the
                  full discretionary power and authority to construe and
                  interpret the Plan (including, without limitation, supplying
                  omissions from, correcting deficiencies in, or resolving
                  inconsistencies or ambiguities in, the language of the Plan);
                  to determine all questions of fact arising under the Plan,
                  including questions as to eligibility for and the amount of
                  benefits; to establish such rules and regulations (consistent
                  with the terms of the Plan) as it deems necessary or
                  appropriate for administration of the Plan; to delegate
                  responsibilities to others to assist it in administering the
                  Plan; and to perform all other acts it believes reasonable and
                  proper in connection with the administration of the Plan. The
                  Committee shall be entitled to rely on the records of the
                  Employer in determining any Eligible Employee's entitlement to
                  and the amount of benefits payable under the Plan.

         (c)      ARBITRATION. Any dispute, controversy or claim arising out of
                  or relating to any Plan benefit, including, without
                  limitation, any dispute, controversy or claim as to whether
                  the decision of the Committee respecting the benefits under
                  this Plan or interpretation of this Plan is arbitrary and
                  capricious, shall be settled by final and binding arbitration
                  in accordance with the American Arbitration Association
                  Employment Dispute Resolution or the Rules of the Arbitration
                  and Mediation Institute of Canada, as appropriate. The
                  Eligible Employee must request arbitration in writing within
                  the limitations period set by applicable state, provincial or
                  federal law.

                  The arbitrator shall be selected by mutual agreement of the
                  parties, if possible. If the parties fail to reach agreement
                  upon appointment of an arbitrator within 30 days following
                  receipt by one party of the other party's notice of desire to
                  arbitrate, the arbitrator shall be selected from a panel or
                  panels of persons submitted by the American Arbitration
                  Association (the "AAA") or the Arbitration and Mediation
                  Institute of Canada ("AMI"), as applicable. The selection
                  process shall be that which is set forth in the AAA Employment
                  Dispute

                                       4
<PAGE>

                  Resolution Rules or similar process of the AMI, except
                  that, if the parties fail to select an arbitrator from one
                  or more panels, neither AAA nor AMI shall have the power to
                  make an appointment but shall continue to submit additional
                  panels until an arbitrator has been selected.

                  All fees and expenses of the arbitration, including a
                  transcript if requested, will be shared by the parties
                  equally. The arbitrator shall have no power to amend, add to
                  or subtract from this Plan. The award shall be admissible in
                  any court or agency action seeking to enforce or render
                  unenforceable this Plan or any portion thereof. Any action to
                  enforce or vacate the arbitrator's award shall be governed by
                  the Federal Arbitration Act if applicable or such other
                  legislation as may be applicable in the jurisdiction where the
                  Eligible Employee ordinarily is a resident.

         (d)      INDEMNIFICATION. Neither the Employers, the Board, the
                  Committee, nor any member of the Board or Committee, nor any
                  officer or employee of any Employer shall be personally liable
                  for any action, determination, or interpretation taken or made
                  in good faith with respect to the Plan. Any action taken or
                  omitted to be taken by any such person in good faith reliance
                  on the advice of any accountant, attorney or other advisor
                  retained by the Committee or the Employer shall be
                  conclusively presumed not to involve gross negligence or
                  willful misconduct. The members of the Board and the Committee
                  and the officers and employees of any Employer shall be
                  indemnified by the applicable Employer with respect to any
                  such liability to the fullest extent permitted by applicable
                  laws, rules and regulations.

7.       UNFUNDED OBLIGATION.

         All benefits payable under this Plan shall constitute an unfunded
         obligation of the Employer. Payments shall be made, as due, from the
         general funds of the Employer of the Eligible Employee. This Plan shall
         constitute solely an unsecured promise by each Employer to pay
         severance benefits to employees to the extent provided herein.

8.       ALIENABILITY OF BENEFITS.

         No Eligible Employee shall have the power to transfer, assign,
         anticipate, mortgage or otherwise encumber any rights or any amounts
         payable under this Plan; nor shall any such rights or amounts payable
         under this Plan be subject to seizure, attachment, execution,
         garnishment or other legal or equitable process, or for the payment of
         any debts, judgments, alimony, or separate maintenance, or be
         transferable by operation of law in the event of bankruptcy,
         insolvency, or otherwise. In the event a person who is receiving or is
         entitled to receive benefits under the Plan attempts to assign,
         transfer or dispose of such right, or if an attempt is made to subject
         such right to such process, such assignment, transfer or disposition
         shall be null and void.

                                       5
<PAGE>

9.       WITHHOLDING.

         The Employer shall have the right to withhold from any amounts payable
         under this Plan such federal, state, provincial and local taxes or any
         other amounts that may be required by law to be withheld.

10.      AMENDMENT OR TERMINATION.

         The Company reserves the right to amend or terminate the Plan at any
         time without prior notice to or the consent of an employee. However, no
         amendment or termination shall adversely affect the rights of any
         Eligible Employee whose employment terminates prior to such amendment
         or termination. In addition, the Plan may not be amended so as to
         reduce benefits payable, or terminated, prior to the date when all
         amounts payable hereunder have been paid to Eligible Employees.
         However, any employee whose employment continues after amendment of the
         Plan shall be governed by the terms of the Plan as so amended. Any
         employee whose employment continues after termination of the Plan shall
         have no right to a benefit under the Plan.

11.      BREACH.

         In the event that an Eligible Employee breaches any of his or her
         obligations under the Plan or any other documents or instruments
         executed herewith (including, without limitation, the Release
         Agreement), the Company shall have the right to demand the repayment of
         all or a portion of any amounts paid to the Eligible Employee under the
         Plan and, in addition, (a) the Company shall have no further obligation
         to that Eligible Employee pursuant to the Plan and (b) that Eligible
         Employee shall pay any expenses or damages incurred by the Company or
         the applicable Employer as a result of said breach, including all costs
         incurred by the Company or the applicable Employer, including
         reasonable attorneys' fees, in defending against any claims related to
         or arising from said breach.

12.      PLAN NOT A CONTRACT OF EMPLOYMENT; EMPLOYER'S POLICIES CONTROL.

         Nothing contained in this Plan shall give an Eligible Employee the
         right to be retained in the employment of an Employer. This Plan is not
         a contract of employment between the Employer and any Eligible
         Employee.

         Any dispute involving issues of employment other than claims for
         benefits under this Plan shall be governed by the appropriate
         employment dispute resolution policies and procedures of the Employer.

13.      ACTION BY AN EMPLOYER.

         Unless expressly indicated to the contrary herein, any action required
         to be taken by the Employer may be taken by action of its board of
         directors or by any appropriate officer or officers traditionally
         responsible for such determination or actions, or such other individual
         or individuals as may be designated by the board of directors or any
         such officer.

                                       6
<PAGE>

14.      GOVERNING LAW.

         The Plan shall be governed by and construed in accordance with the laws
         of the jurisdiction in which the Eligible Employee ordinarily is a
         resident.

15.      SEVERABILITY.

         If any provision of this Plan shall be held illegal or invalid for any
         reason, said illegality or invalidity shall not affect the remaining
         parts of this Plan, but this Plan shall be construed and enforced as if
         said illegal or invalid provision had never been included herein.

16.      SUCCESSORS.

         The Company will require any successor (whether direct or indirect, by
         purchase, merger, consolidation or otherwise) to all or substantially
         all of the business and/or assets of the Company to assume and agree
         expressly to perform this Plan in the same manner and to the same
         extent that the Company would be required to perform it if no such
         succession had taken place.

         IN WITNESS WHEREOF, the Company has caused this Plan to be adopted as
         of the _________ day of October, 1999.

                                                        THE LOEWEN GROUP INC.

                                                        By:  __________________

                                       7
<PAGE>

                                                                     EXHIBIT A

                             PARTICIPATING EMPLOYERS

                                       8
<PAGE>

                                                                     EXHIBIT B

                                EXEMPT NEW HIRES

                               Michael Cornelissen

                                       9<PAGE>

                 THE LOEWEN GROUP INC. RETENTION INCENTIVE PLAN

1.       PURPOSE.

         The purpose of The Loewen Group Inc. Retention Incentive Plan (the
         "Plan") is to retain key management employees of the Company through
         the 1999 calendar year.

2.       DEFINITIONS.

         As used throughout the Plan, the following words and phrases shall have
         the following meanings, unless otherwise clearly or necessarily
         indicated by context:

         (a)      BOARD. "Board" means the Board of Directors of the Company.

         (b)      CAUSE. "Cause" means (i) neglect of duty, dishonesty or
                  misconduct in matters involving the Employer or the
                  performance of services for the Employer, (ii) loss of
                  qualification of licensure, (iii) stealing or unlawful use of
                  Employer property or monies, (iv) continued willful
                  insubordination after reasonable warning or reprimand, (v)
                  commission of a felony or any crime requiring intent or moral
                  turpitude, (vi) a violation of the Employer's anti-harassment
                  and/or drug use policies or (vii) actively and intentionally
                  pursuing interests of a competitor to the detriment of the
                  financial interests of the Employer.

         (c)      CEMETERY REGIONAL OPERATIONS MANAGEMENT. "Cemetery Regional
                  Operations Management" means Vice Presidents, Controllers and
                  Managers responsible for the oversight of the Employers'
                  cemetery operations in particular geographic regions of the
                  United States and Canada.

         (d)      COMMITTEE. "Committee" means the Compensation Committee of the
                  Board or such other committee of the Board authorized by the
                  Board to administer the Plan.

         (e)      COMPANY. "Company" means The Loewen Group Inc.

         (f)      CORPORATE STAFF. "Corporate Staff" means the group consisting
                  of those Company and LGII Vice Presidents (who are not Senior
                  Corporate Executives), Directors, Senior Managers, Managers
                  and Professional and Technical Support Personnel responsible
                  for general corporate affairs, but excluding the Select
                  Corporate Staff.

         (g)      EFFECTIVE DATE. "Effective Date" means, as to any individual,
                  the date on which the individual executes a Release Agreement
                  and thereby becomes an Eligible Employee.

         (h)      ELIGIBLE EMPLOYEE. "Eligible Employee" means those full-time
                  employees who are Senior Corporate Executives, Corporate
                  Staff, Select Corporate Staff, Operations Country Management,
                  Cemetery Regional Operations Management and Funeral Home
                  Regional Operations Management and New Hires, in each case,
                  who execute a Release Agreement.

<PAGE>

         (i)      EMPLOYER. "Employer" means each of the Company and those of
                  its divisions, subsidiaries and operating units, as are set
                  forth on Exhibit A hereto, as such Exhibit may be amended from
                  time to time.

         (j)      FUNERAL HOME REGIONAL OPERATIONS MANAGEMENT. "Funeral Home
                  Regional Operations Management" means Vice Presidents,
                  Controllers and Managers responsible for the oversight of the
                  Employers' funeral home operations in particular geographic
                  regions of the United States and Canada.

         (k)      LGII. "LGII" means Loewen Group International Inc.

         (l)      NEW HIRE. "New Hire" means an employee hired by an Employer
                  after the Petition Date in, or promoted after the Petition
                  Date to, one of the categories of Eligible Employees;
                  provided, however that such hiring or promotion occurs on or
                  before October 1, 1999.

         (m)      OPERATIONS COUNTRY MANAGEMENT. "Operations Country Management"
                  means the Company's and LGII's Executives, Vice President and
                  Controller responsible for the oversight of the Employers'
                  operations in the United States and Canada.

         (n)      PETITION DATE. "Petition Date" means June 1, 1999.

         (o)      RELEASE AGREEMENT. "Release Agreement" means an agreement, in
                  a form that is acceptable to the Employer, under which the
                  Eligible Employee, among other things, releases and waives any
                  rights, claims or entitlements that he or she may have at law
                  or under existing employment or consulting agreements or
                  company programs.

         (p)      RETENTION INCENTIVE PAYMENT. "Retention Incentive Payment"
                  shall have the meaning ascribed to it in Section 4 hereof.

         (q)      SALARY. "Salary" means an Eligible Employee's annualized base
                  salary as of a particular date, without regard to any bonus,
                  severance, incentive or other similar payments.

         (r)      SELECT CORPORATE STAFF. "Select Corporate Staff" means the
                  seven members of the Corporate Staff listed on Exhibit B
                  hereto.

         (s)      SENIOR CORPORATE EXECUTIVES. "Senior Corporate Executives"
                  means the group consisting of the Company's and LGII's
                  Chairman of the Board; Chief Executive Officer; Executive Vice
                  President, Administration; Senior Vice President, Legal; Chief
                  Financial Officer; Senior Vice President, Legal; Chief
                  Information Officer; Controller; Treasurer; Corporate
                  Secretary; and certain other Vice Presidents and Department
                  Heads responsible for general corporate affairs.

         (t)      VESTING DATE. "Vesting Date" means, with respect to Eligible
                  Employees other than New Hires, (i) September 30, 1999 and
                  (ii) December 31, 1999, and with respect to New Hires,
                  December 31, 1999.

                                      2

<PAGE>

3.       COVERAGE PERIOD.

         The Plan is effective as of the Effective Date with respect to Eligible
         Employees and shall terminate when all payments earned hereunder have
         been paid to Eligible Employees.

4.       RETENTION INCENTIVE PAYMENT.

         (a)      Provided an Eligible Employee remains in the continuous,
                  active employ of an Employer from the Effective Date through
                  and including an applicable Vesting Date and subject to the
                  terms and conditions of the Plan, an Eligible Employee shall
                  be entitled to receive a Retention Incentive Payment.

         (b)      Subject to Section 4(c) hereof, the Retention Incentive
                  Payment shall be equal to a percentage of an Eligible
                  Employee's Salary as of an applicable Vesting Date, with the
                  percentages of Salary corresponding with each Vesting Date for
                  all Eligible Employees set forth in the table below:
<TABLE>
<CAPTION>

      EMPLOYEE CATEGORY                                                 SEPTEMBER 30,                DECEMBER 31,
                                                                             1999                       1999
      <S>                                                               <C>                          <C>
      Senior Corporate Executives
               Chief Executive Officer                                        0%                         25%
               Tier 1:  Administration, Finance,                              0%                         25%
                        Legal
               Tier 2:  Human Resources, MIS,   Controller,                   0%                         20%
                        Treasurer and Corporate Secretary
               Tier 3:  Vice Presidents/Functional                            0%                         15%
                        Head
      Corporate Staff                                                         0%                         10%
      Select Corporate Staff                                                 25%                         10%
      Operations Country Management
               Country Executives                                             0%                         25%
               Vice President                                                 0%                         20%
               Group Controller                                               0%                         15%
      Cemetery Regional Operations Management
               Regional Vice Presidents                                       5%                         15%
               Vice Presidents                                                5%                         10%
               Controllers                                                    5%                         10%
               Regional Managers-Cemetery                                     5%                         15%
               Regional Managers-Adv Plann                                    5%                         10%
      Funeral Home Regional Operations Management                             5%                         0%
</TABLE>

         (c)      With respect to New Hires, the Retention Incentive Payment
                  shall be prorated based on the ratio of such New Hire's number
                  of months of service as a New Hire prior to the Vesting Date
                  compared to 12 months. Notwithstanding anything herein to the
                  contrary, this proration requirement shall not apply to the
                  New Hires

                                      3

<PAGE>

                  listed on Exhibit C hereto; such New Hires shall
                  receive a Retention Incentive Payment without regard to this
                  Section 4(c). No Retention Incentive Payments will be payable
                  to New Hires in the employee categories eligible for such
                  payments on September 30, 1999.

         (d)      Notwithstanding anything herein to the contrary:

                  (i)      Subject to Section 4(d)(ii) hereof, an Eligible
                           Employee shall not be entitled to a Retention
                           Incentive Payment with respect to a particular
                           Vesting Date if such Eligible Employee's employment
                           with his or her Employer is terminated for any
                           reason, including, without limitation, death,
                           disability, retirement or a termination for Cause
                           prior to such Vesting Date.

                  (ii)     Notwithstanding the provisions of Section 4(d)(i)
                           hereof, if an Eligible Employee's employment with his
                           or her Employer is terminated prior to a Vesting Date
                           by his or her Employer without Cause, such Eligible
                           Employee shall be entitled to receive all Retention
                           Incentive Payments that the Eligible Employee would
                           have been entitled to receive under the Plan had such
                           termination not occurred and the Eligible Employee
                           had remained in the continuous employ of his or her
                           Employer from the Effective Date through and
                           including the last Vesting Date. Such payment shall
                           be paid to the Eligible Employee in a lump sum cash
                           payment within fifteen (15) days of such termination
                           without Cause.

                  A transfer of employment from one Employer to another Employer
                  (or to another affiliate of the Company) shall not be
                  considered a termination of employment hereunder.

         (e)      In addition to the payments described above, the Employers
                  have established a reserve of $500,000 to be available to
                  provide, if the Committee so decides, Retention Incentive
                  Payments hereunder, on a case-by-case basis, to employees of
                  the Employers under circumstances that may arise and that are
                  not otherwise addressed herein. Such payments shall be in the
                  sole discretion of the Committee.

5.       FORM AND TIMING OF RETENTION INCENTIVE PAYMENTS.

         Subject to the provisions of Section 4 hereof, Retention Incentive
         Payments shall be paid to Eligible Employees in a lump sum cash payment
         within fifteen (15) days of the applicable Vesting Date.

6.       ADMINISTRATION.

         (a)      PLAN ADMINISTRATION. The Committee shall administer the Plan.
                  The Committee shall keep or cause to be kept such records and
                  shall prepare or cause to be prepared such returns or reports
                  as may be required by law or necessary for the proper
                  administration of the Plan.

                                      4

<PAGE>

         (b)      POWERS AND DUTIES OF COMMITTEE. The Committee shall have the
                  full discretionary power and authority to construe and
                  interpret the Plan (including, without limitation, supplying
                  omissions from, correcting deficiencies in, or resolving
                  inconsistencies or ambiguities in, the language of the Plan);
                  to determine all questions of fact arising under the Plan,
                  including questions as to eligibility for and the amount of
                  benefits; to establish such rules and regulations (consistent
                  with the terms of the Plan) as it deems necessary or
                  appropriate for administration of the Plan; to delegate
                  responsibilities to others to assist it in administering the
                  Plan; and to perform all other acts it believes reasonable and
                  proper in connection with the administration of the Plan. The
                  Committee shall be entitled to rely on the records of the
                  Employer in determining any Eligible Employee's entitlement to
                  and the amount of benefits payable under the Plan.

         (c)      ARBITRATION. Any dispute, controversy or claim arising out of
                  or relating to any Plan benefit, including, without
                  limitation, any dispute, controversy or claim as to whether
                  the decision of the Committee respecting the benefits under
                  this Plan or interpretation of this Plan is arbitrary and
                  capricious, shall be settled by final and binding arbitration
                  in accordance with the American Arbitration Association
                  Employment Dispute Resolution or the Rules of the Arbitration
                  and Mediation Institute of Canada, as appropriate. The
                  Eligible Employee must request arbitration in writing within
                  the limitations period set by applicable state, provincial or
                  federal law.

                  The arbitrator shall be selected by mutual agreement of the
                  parties, if possible. If the parties fail to reach agreement
                  upon appointment of an arbitrator within 30 days following
                  receipt by one party of the other party's notice of desire to
                  arbitrate, the arbitrator shall be selected from a panel or
                  panels of persons submitted by the American Arbitration
                  Association (the "AAA") or the Arbitration and Mediation
                  Institute of Canada ("AMI"), as applicable. The selection
                  process shall be that which is set forth in the AAA Employment
                  Dispute Resolution Rules or similar process of the AMI, except
                  that, if the parties fail to select an arbitrator from one or
                  more panels, neither AAA nor AMI shall have the power to make
                  an appointment but shall continue to submit additional panels
                  until an arbitrator has been selected.

                  All fees and expenses of the arbitration, including a
                  transcript if requested, will be shared by the parties
                  equally. The arbitrator shall have no power to amend, add to
                  or subtract from this Plan. The award shall be admissible in
                  any court or agency action seeking to enforce or render
                  unenforceable this Plan or any portion thereof. Any action to
                  enforce or vacate the arbitrator's award shall be governed by
                  the Federal Arbitration Act if applicable or such other
                  legislation as may be applicable in the jurisdiction where the
                  Eligible Employee ordinarily is a resident.

         (d)      INDEMNIFICATION. Neither the Employers, the Board, the
                  Committee, nor any member of the Board or Committee, nor any
                  officer or employee of any Employer shall be personally liable
                  for any action, determination, or interpretation taken or made
                  in good faith with respect to the Plan. Any action taken or
                  omitted to be taken by any such person in good faith reliance
                  on the advice of any accountant,

                                      5

<PAGE>

                  attorney or other advisor retained by the Committee or the
                  Employer shall be conclusively presumed not to involve gross
                  negligence or willful misconduct. The members of the Board and
                  the Committee and the officers and employees of any Employer
                  shall be indemnified by the applicable Employer with respect
                  to any such liability to the fullest extent permitted by
                  applicable laws, rules and regulations.

7.       UNFUNDED OBLIGATION.

         All benefits payable under this Plan shall constitute an unfunded
         obligation of the Employer. Payments shall be made, as due, from the
         general funds of the Employer of the Eligible Employee. This Plan shall
         constitute solely an unsecured promise by each Employer to pay
         severance benefits to employees to the extent provided herein.

8.       INALIENABILITY OF BENEFITS.

         No Eligible Employee shall have the power to transfer, assign,
         anticipate, mortgage or otherwise encumber any rights or any amounts
         payable under this Plan; nor shall any such rights or amounts payable
         under this Plan be subject to seizure, attachment, execution,
         garnishment or other legal or equitable process, or for the payment of
         any debts, judgments, alimony, or separate maintenance, or be
         transferable by operation of law in the event of bankruptcy,
         insolvency, or otherwise. In the event a person who is receiving or is
         entitled to receive benefits under the Plan attempts to assign,
         transfer or dispose of such right, or if an attempt is made to subject
         such right to such process, such assignment, transfer or disposition
         shall be null and void.

9.       WITHHOLDING.

         The Employer shall have the right to withhold from any amounts payable
         under this Plan such federal, state, provincial and local taxes or any
         other amounts that may be required by law to be withheld.

10.      AMENDMENT OR TERMINATION.

         The Company reserves the right to amend or terminate the Plan at any
         time without prior notice to or the consent of an employee. However, no
         amendment or termination shall adversely affect the rights of any
         Eligible Employee whose employment terminates prior to such amendment
         or termination. In addition, the Plan may not be amended so as to
         reduce benefits payable, or terminated, prior to the date when all
         amounts payable hereunder have been paid to Eligible Employees.
         However, any employee whose employment continues after amendment of the
         Plan shall be governed by the terms of the Plan as so amended. Any
         employee whose employment continues after termination of the Plan shall
         have no right to a benefit under the Plan.

11.      BREACH.

         In the event that an Eligible Employee breaches any of his or her
         obligations under the Plan or any other documents or instruments
         executed herewith (including, without

                                      6

<PAGE>

         limitation, the Release Agreement), the Company shall have the right to
         demand the repayment ofall or a portion of any amounts paid to the
         Eligible Employee under the Plan and, in addition, (a) the Company
         shall have no further obligation to that Eligible Employee pursuant
         to the Plan and (b) that Eligible Employee shall pay any expenses or
         damages incurred by the Company or the applicable Employer
         as a result of said breach, including all costs incurred by the Company
         or the applicable Employer, including reasonable attorneys' fees,
         in defending against any claims related to or arising from said breach.

12.      PLAN NOT A CONTRACT OF EMPLOYMENT; EMPLOYER'S POLICIES CONTROL.

         Nothing contained in this Plan shall give an Eligible Employee the
         right to be retained in the employment of an Employer. This Plan is not
         a contract of employment between the Employer and any Eligible
         Employee.

         Any dispute involving issues of employment other than claims for
         benefits under this Plan shall be governed by the appropriate
         employment dispute resolution policies and procedures of the Employer.

13.      ACTION BY AN EMPLOYER.

         Unless expressly indicated to the contrary herein, any action required
         to be taken by the Employer may be taken by action of its board of
         directors or by any appropriate officer or officers traditionally
         responsible for such determination or actions, or such other individual
         or individuals as may be designated by the board of directors or any
         such officer.

14.      GOVERNING LAW.

         The Plan shall be governed by and construed in accordance with the laws
         of the jurisdiction in which the Eligible Employee ordinarily is a
         resident.

15.      SEVERABILITY.

         If any provision of this Plan shall be held illegal or invalid for any
         reason, said illegality or invalidity shall not affect the remaining
         parts of this Plan, but this Plan shall be construed and enforced as if
         said illegal or invalid provision had never been included herein.

16.      SUCCESSORS.

         The Company will require any successor (whether direct or indirect, by
         purchase, merger, consolidation or otherwise) to all or substantially
         all of the business and/or assets of the Company to assume and agree
         expressly to perform this Plan in the same manner and to the same
         extent that the Company would be required to perform it if no such
         succession had taken place.

                                      7

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Plan to be adopted as
         of the _________ day of October, 1999.

                                                    THE LOEWEN GROUP INC.

                                                    By:  _____________________

                                       8
<PAGE>

                                                                       EXHIBIT A

                             PARTICIPATING EMPLOYERS

                                       9

<PAGE>

                                                                       EXHIBIT B

                             SELECT CORPORATE STAFF

                                 Ronald Costigan
                                 Charles Kizina
                                  Drew Gauntley
                                  Doug Routley
                                  Martin Carsky
                                  Jocelyn Chang
                                  Dave Senklar

                                       10

<PAGE>

                                                                       EXHIBIT C

                                EXEMPT NEW HIRES

                               Michael Cornelissen

                                       11

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