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                                                                     EXHIBIT 4.5

                           U.S. PHYSICAL THERAPY, INC.
                 NONSTATUTORY INDUCEMENT STOCK OPTION AGREEMENT

          THIS AGREEMENT is made and entered effective as of November 18, 2003
between U.S. Physical Therapy, Inc., a Nevada corporation (the "Corporation"),
and GLENN MCDOWELL(the "Holder") in connection with the grant of a Nonstatutory
Option (hereinafter defined).

          W I T N E S S E T H:

          WHEREAS, the Holder is employed by the Corporation, one of its
Affiliates (hereinafter defined) or U.S. PT Management, Ltd., a Texas limited
partnership ("USPTM") and the Corporation desires to encourage him to own Stock
(hereinafter defined) and to give him added incentive to advance the interests
of the Corporation and desires to grant the Holder a Nonstatutory Inducement
Option (the "Option) to purchase shares of Stock of the Corporation under terms
and conditions hereinafter set forth.

          NOW, THEREFORE, in consideration of these premises, the parties agree
that the following shall constitute the Agreement between the Corporation and
the Holder:

1.   Definitions. For purposes of this Agreement, the following terms shall have
the meanings specified below:

1.1  "Affiliates" shall mean (a) any corporation, other than the Corporation, in
an unbroken chain of corporations ending with the Corporation if each of the
corporations, other than the Corporation, owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain and (b) any corporation, other than the Corporation,
in an unbroken chain of corporations beginning with the Corporation if each of
the corporations, other than the last corporation in the unbroken chain, owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.

1.2  "Agreement" shall mean the written agreement between the Corporation and
the Holder which is embodied herein.

1.3  "Board of Directors" shall mean the board of directors of the Corporation.

1.4  "Code" shall mean the Internal Revenue Code of 1986, as amended.

1.5  "Eligible Individual" shall mean an employee of the Corporation or of any
of its Affiliates or of USPTM.

1.6  "Nonstatutory Option" shall mean a stock option that is not intended to
satisfy the requirements of section 422 of the Code.

1.7  "Securities Act" shall mean the Securities Act of 1933, as amended.

1.12 "Stock" shall mean the Corporation's authorized common stock, $.01 par
value, together with any other securities with respect to which this Option may
become exercisable.

6. Grant of Option. Subject to the terms and conditions set forth herein, the
Corporation grants to the Holder an Option to purchase from the Corporation
during the period ending ten years from the date of said grant 5,000 shares of
Stock at a price of $14.32 per share, subject to adjustment or termination as
provided in Paragraph 12 below. This Option is exercisable with respect to the
shares of Stock indicated as follows:

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          On and After                          Number of Shares
          ------------                          ----------------

          one year after the grant date         1,000 shares of Stock

          two years after the grant date        1,000 additional shares of Stock

          three years after the grant date      1,000 additional shares of Stock

          four years after the grant date       1,000 additional shares of Stock

          five years after the grant date       1,000 additional shares of Stock

Notwithstanding the foregoing, upon the occurrence of a "Change in Control" of
the Corporation (as defined below), the Option shall become exercisable in full
without regard to the foregoing schedule, except as provided in the next
sentence. If, after reduction for any applicable federal excise tax that would
be imposed on the Holder under Section 4999 of the Code and any federal income
tax that would be imposed on the Holder by the Code, the Holder's net proceeds
from an exercise of the Option in full and immediate sale of the Stock would be
less than the amount of the Holder's net proceeds, after reduction for federal
income taxes, resulting from an exercise of the Option and immediate sale of the
Stock after acceleration of exercisability of the Option only to the extent of
the "Parachute Cap" as defined below, then the Option shall become exercisable
in the event of a Change in Control only to the extent of the Parachute Cap. For
this purpose, the "Parachute Cap" means the maximum extent to which the Option
could be made exercisable upon a Change in Control of the Corporation, taking
into account any other payments or other benefits to the Holder from the
Corporation or any Affiliate, without the Holder being deemed to have received a
"parachute payment" as defined in Code Section 280G (b) (2). In the event that
the application of the Parachute Cap would otherwise prevent the Option from
becoming exercisable in full, the Holder shall have the right, in the Holder's
discretion, to designate payments or other benefits to the Holder from the
Corporation or any Affiliate (if any) that shall be reduced or eliminated so as
to permit the Option to become exercisable to a greater extent.

          A    "Change in Control" shall mean any of the following events:

          A.   a merger or consolidation to which the Corporation is a party if
          the individuals and entities who were stockholders of the Corporation
          immediately prior to the effective date of such merger or
          consolidation have beneficial ownership (as defined in Rule 13d-3
          under the Securities Exchange Act of 1934 ("Rule 13d-3")) of less than
          50 percent of the total combined voting power for election of
          directors of the surviving corporation following the effective date of
          such merger or consolidation; or

          B.   the sale of all or substantially all of the assets of the
          Corporation to any person or entity that is not a wholly-owned
          subsidiary of the Corporation; or

          C.   the stockholders of the Corporation approve any plan or proposal
          for the liquidation of the Corporation; or

          D.   a change in the composition of the Board of Directors at any time
          during any consecutive 24-month period such that the Incumbent
          Directors cease for any reason to constitute at least a majority of
          the Board of Directors. For this purpose, the "Incumbent Directors"
          means those members of the Board of Directors who either:

               1.   were directors at the beginning of such consecutive 24-month
               period; or

               2.   were elected by, or on the nomination or recommendation of,
               a majority of the then-members of the Board of Directors.

3.   Notice of Exercise. This Option may be exercised in whole or in part, from
time to time, in accordance with Paragraph 2, by written notice to the
Corporation at the address provided in Paragraph 11, which notice shall:

          A.   specify the number of shares of Stock to be purchased and the
          exercise price to be paid therefor;

          B.   if the person exercising this Option is not the Holder, contain
          or be accompanied by evidence satisfactory to the Committee of such
          person's right to exercise this Option; and

          C.   be accompanied by payment in full of the purchase price in any
          form acceptable to the Committee in its sole discretion, which form
          may include cash, shares of Stock or a share or shares of Stock owned
          by the Holder and surrendered for actual

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'
          or deemed multiple exchanges of shares of Stock, or any combination
          thereof. The Corporation shall not in any case be required to sell,
          issue, or deliver a fractional share of Stock with respect to this
          Option.

4.   General Restrictions. The Corporation shall not be required to sell or
issue any shares of Stock under this Option if the sale or issuance of such
shares would constitute a violation by the individual exercising this Option or
by the Corporation of any provision of any law or regulation of any governmental
authority, including without limitation any federal or state securities laws or
regulations. If at any time the Corporation shall determine, in its discretion,
that the listing, registration or qualification of any shares subject to this
Option upon any securities exchange or under any state or federal law, or the
consent or approval of any government regulatory body, is necessary or desirable
as a condition of, or in connection with, the issuance or purchase of shares,
this Option may not be exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Corporation, and any delay
caused thereby shall in no way affect the date of termination of this Option.
Specifically in connection with the Securities Act, unless a registration
statement under such Act is in effect with respect to the shares of Stock
covered by this Option, the Corporation shall not be required to sell or issue
such shares unless the Corporation has received evidence satisfactory to it that
the holder of this Option may acquire such shares pursuant to an exemption from
registration under such Act. Any determination in this connection by the
Corporation shall be final, binding, and conclusive. The Corporation may, but
shall in no event be obligated to, register any securities covered hereby
pursuant to the Securities Act. The Corporation shall not be obligated to take
any affirmative action in order to cause the exercise of this Option or the
issuance of shares pursuant thereto to comply with any law or regulation of any
governmental authority. As to any jurisdiction that expressly imposes the
requirement that this Option shall not be exercisable unless and until the
shares of Stock covered by this Option are registered or are subject to an
available exemption from registration, the exercise of this Option (under
circumstances in which the laws of such jurisdiction apply) shall be deemed
conditioned upon the effectiveness of such registration or the availability of
such an exemption. At the time of any exercise of this Option, the Corporation
may, as a condition precedent to the exercise of this Option, require from the
Holder of the Option (or in the event of his death, his legal representatives,
heirs, legatees, or distributees) such written representations, if any,
concerning his intentions with regard to the retention or disposition of the
shares being acquired by exercise of this Option and such written covenants and
agreements, if any, as to the manner of disposal of such shares as, in the
opinion of counsel to the Corporation, may be necessary to ensure that any
disposition by such Holder (or in the event of his death, his legal
representatives, heirs, legatees, or distributees), will not involve a violation
of the Securities Act or any similar or superseding statute or statutes, or any
other applicable state or federal statute or regulation, as then in effect.
Certificates for shares of Stock, when issued, may have the following or similar
legend (in the event the shares of Stock covered by this Option are not then
registered under the Securities Act and under applicable state securities laws),
or statements of other applicable restrictions, endorsed thereon, and, as
described in the preceding sentence, may not be immediately transferable:

The shares of Stock evidenced by this certificate have been issued to the
registered owner in reliance upon written representations that these shares have
been purchased for investment. These shares have not been registered under the
Securities Act of 1933, as amended or any applicable state securities laws, in
reliance upon an exception from registration. Without such registration, these
shares may not be sold, transferred, assigned or otherwise disposed of unless,
in the opinion of the Corporation and its legal counsel, such sale, transfer,
assignment or disposition will not be in violation of the Securities Act of
1933, as amended, applicable rules and regulations of the Securities and
Exchange Commission, and any applicable state securities laws.

5.   Transfer and Exercise of Option. This Option shall not be transferable
except by will or by the laws of descent and distribution. During the Holder's
lifetime this Option may be exercised only by him. No assignment or transfer of
this Option, whether voluntary or involuntary, by operation of law or otherwise,
except a transfer by will or by the laws of descent or distribution, shall vest
in the assignee or transferee any interest or right whatsoever in this Option.

6.   Status of Holder. The Holder shall not be deemed a stockholder of the
Corporation with respect to any of the shares of Stock subject to this Option,
except to the extent that such shares shall have been purchased and transferred
to him. The Corporation shall not be required to issue or transfer any
certificates for shares of Stock purchased upon exercise of this Option until
all applicable requirements of law have been complied with and, in the event
that the Stock is publicly traded, such shares shall have been duly listed on
any securities exchange on which the Stock may then be listed.

7.   No Effect on Capital Structure. This Option shall not affect the right of
the Corporation or any Affiliate thereof to reclassify, recapitalize or
otherwise change its capital or debt structure or to merge, consolidate, convey
any or all of its assets, dissolve, liquidate, windup, or otherwise reorganize.

8.   Premature Expiration of Option. If a Holder (a) voluntarily ceases to be an
Eligible Individual or (b) ceases to be an Eligible Individual by reason that
his status as such was terminated by the Corporation or one of its Affiliates
(with or without cause), this Option shall terminate thirty days after such
Holder ceases to be an Eligible Individual.

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Notwithstanding the foregoing, if a Holder ceases to be an Eligible Individual
by reason of (a) disability (as defined in Section 22(e) (3) of the Code) or (b)
death, then the Holder shall have the right for twelve months after the date of
disability or death to exercise this Option to the extent that it is exercisable
on the date of his disability.

That portion of this Option which is not exercisable on the date the Holder
ceases to be an Eligible Individual shall terminate and be forfeited to the
Corporation on the date of such cessation.

9.   Board Authority. Any question concerning the interpretation of this
Agreement, any adjustments required to be made under Paragraph12 and any
controversy which may arise under this Agreement shall be determined by the
Board of Directors in its sole discretion.

10.  Tax Withholding. This Option is not intended to qualify as an "incentive
stock option" within the meaning of section 422 of the Internal Revenue Code of
1986, as amended, and shall be so construed. The parties recognize that the
Corporation or an Affiliate may be obligated to withhold federal, state and
local income taxes and Social Security taxes to the extent that the Holder
realizes ordinary income in connection with the exercise of the Option. The
Holder agrees that the Corporation or Affiliate may withhold amounts needed to
cover such taxes from payments otherwise due and owing to the Holder, and also
agrees that upon demand the Holder will promptly pay to the Corporation or
Affiliate having such obligation any additional amounts as may be necessary to
satisfy such withholding tax obligation. Such payment shall be made in cash or
cash equivalent.

11.  Notice. Whenever any notice is required or permitted hereunder, such notice
must be in writing and personally delivered or sent by mail, courier or
facsimile machine. Any notice required or permitted to be delivered hereunder
shall be deemed to be delivered on the date which it is personally delivered,
or, whether actually received or not, on the third business day after it is
deposited in the United States mail, certified or registered, postage prepaid,
addressed to the person who is to receive it at the address which such person
has theretofore specified by written notice delivered in accordance herewith.
The Corporation or Holder may change, at any time and from time to time, by
written notice to the other, the address previously specified for receiving
notices. Until changed in accordance herewith, the Corporation and the Holder
specify their respective addresses as set forth below:

               Corporation:        U.S. Physical Therapy, Inc.  Att'n: Corporate
                                   Secretary
                                   1300 W. Sam Houston Parkway S., Suite 300
                                   Houston, Texas  77042

               Holder:             Glenn McDowell
                                   3903 Belnap Court
                                   Missouri City, TX 77459

12.  Adjustments Upon Changes in Capitalization, Merger, Etc. Notwithstanding
any other provision hereof, in the event of any change in the number of
outstanding shares of Stock

          A.   effected without receipt of consideration therefor by the
          Corporation, by reason of a stock dividend, or split, combination,
          exchange of shares or other recapitalization, merger, or otherwise, in
          which the Corporation is the surviving corporation, or

          B.   by reason of a spin-off of a part of the Corporation into a
          separate entity, or assumptions and conversions of outstanding grants
          due to an acquisition by the Corporation of a separate entity,

               1.   the number and class of shares subject to this Option and

               2.   the exercise price of this Option shall be automatically
               adjusted to accurately and equitably reflect the effect thereon
               of such change (provided, however, that any fractional share
               resulting from such adjustment may be eliminated). In the event
               of a dispute concerning such adjustment, the Board of Directors
               has full discretion to determine the resolution of the dispute.
               Such determination shall be final, binding and conclusive.

In addition to the foregoing, in the event of:

          A.   dissolution or liquidation of the Corporation,

          B.   a merger or consolidation (other than a merger effecting a
          reincorporation of the Corporation in another state or any other
          merger or a consolidation in which the stockholders of the surviving
          corporation and their proportionate interests therein immediately
          after the merger or consolidation are substantially identical to the
          stockholders of the Corporation and their proportionate interests
          therein immediately prior to the merger or consolidation) in which the
          Corporation is not the surviving corporation (or survives only as a
          subsidiary of another corporation in a transaction in which the
          stockholders of the parent of the Corporation and their

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          proportionate interests therein immediately after the transaction are
          not substantially identical to the stockholders of the Corporation and
          their proportionate interests therein immediately prior to the
          transaction; provided, however, that the Board of Directors may at any
          time prior to such a merger or consolidation provide by resolution
          that the foregoing provisions of this parenthetical shall not apply if
          a majority of the board of directors of such parent immediately after
          the transaction consists of individuals who constituted a majority of
          the Board of Directors immediately prior to the transaction), or

          C.   a transaction in which any person becomes the owner of 50% or
          more of the total combined voting power of all classes of stock of the
          Corporation (provided, however, that the Board of Directors may at any
          time prior to such transaction provide by resolution that this
          subparagraph (c) shall not apply if such acquiring person is a
          corporation and a majority of the board of directors of the acquiring
          corporation immediately after the transaction consists of individuals
          who constituted a majority of the Board of Directors immediately prior
          to the acquisition of such 50% or more total combined voting power)

This Option shall terminate, except to the extent provision is made in writing
in connection with such transaction for the assumption of this Option, or for
the substitution for this Option of a new option covering the stock of a
successor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and exercise price, in which
event this Option shall continue in the manner and under the terms so provided.
In the event of any such termination of this Option, the Holder shall have the
right (subject to the general limitations on exercise set forth in Paragraph 8
above), immediately prior to the occurrence of such termination and during such
period occurring prior to such termination as the Board of Directors in its sole
discretion shall determine and designate, to exercise this Option in whole or in
part, whether or not this Option was otherwise exercisable at the time such
termination occurs. The Board shall send written notice of an event that will
result in such a termination to the Holder not later than the time at which the
Corporation gives notice thereof to its stockholders.

13.  Rights as a Stockholder. The Holder shall have no right as a stockholder
with respect to any shares covered by this Option until a certificate
representing such shares is issued to him. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash or other property) or
distributions or other rights for which the record date is prior to the date
such certificate is issued, except as provided in Paragraph 12 hereof.

14.  Furnish Information. The Holder shall furnish to the Corporation all
information requested by the Corporation to enable it to comply with any
reporting or other requirement imposed upon the Corporation by or under any
applicable statute or regulation.

15.  Termination of Employment. In the event of the Holder's termination of
employment with the Corporation or an Affiliate or USPTM, the unexercised
portion of this Option granted hereunder shall terminate in accordance with
Paragraph 8 hereof.

16.  Right of the Corporation, Affiliates Thereof and USPTM to Terminate
Holder's Employment. Nothing contained in this Agreement shall confer upon the
Holder the right to continue in the employ of the Corporation, any of its
Affiliates or USPTM, or interfere in any way with the rights of the Corporation,
any of its Affiliates or USPTM to terminate his employment at any time.

17.  No Liability for Good Faith Determinations. The members of the Board of
Directors shall not be liable for any act, omission, or determination taken or
made in good faith with respect to this Agreement, and members of the Board of
Directors shall be entitled to indemnification and reimbursement by the
Corporation in respect of any claim, loss, damage, or expense (including
attorneys' fees, the costs of settling any suit, provided such settlement is
approved by independent legal counsel selected by the Corporation, and amounts
paid in satisfaction of a judgment, except a judgment based on a finding of bad
faith) arising there from to the full extent permitted by law and under any
directors and officers liability or similar insurance coverage that may from
time to time be in effect.

18.  Execution of Receipts and Releases. Any payment of cash or any issuance or
transfer of shares of Stock to the Holder, or to his legal representative, heir,
legatee, or distributee, in accordance with the provisions hereof, shall, to the
extent thereof, be in full satisfaction of all claims of such persons hereunder.
The Board of Directors may require any Holder, legal representative, heir,
legatee, or distributee, as a condition precedent to such payment, to execute a
release and receipt therefor in such form as it shall determine.

19.  No Guarantee of Interests. Neither the Board of Directors nor the
Corporation guarantees the Stock of the Corporation from loss or depreciation.

20.  Corporation Records. Records of the Corporation or its Affiliates
(including USPTM) regarding the Holder's period of employment, termination of
employment and the reason therefor, leaves of absence, re-employment, and other
matters shall be conclusive for all purposes hereunder, unless determined by the
Board of Directors to be incorrect.

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21.  No Liability of Corporation. The Corporation assumes no obligation or
responsibility to the Holder or his legal representatives, heirs, legatees, or
distributees for any act of, or failure to act on the part of, the Board of
Directors.

22.  Corporation Act. Any action required of the Corporation shall be by
resolution of its Board of Directors, by a person authorized to act by
resolution of the Board of Directors, or by a person authorized to act by the
bylaws of the Corporation.

23.  Severability. If any provision of this Agreement is held to be illegal or
invalid for any reason, the illegality or invalidity shall not affect the
remaining provisions hereof, but such provision shall be fully severable and
this Agreement shall be construed and enforced as if the illegal or invalid
provision had never been included herein.

24.  Entire Agreement. This Agreement constitutes the entire agreement and
supersedes all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof. Neither this Agreement
nor any term hereof may be amended, waived, discharged or terminated except by a
written instrument signed by the Corporation and the Holder; provided, however,
that the Corporation unilaterally may waive any provision hereof in writing to
the extent that such waiver does not adversely affect the interests of the
Holder hereunder, but no such waiver shall operate as or be construed to be a
subsequent waiver of the same provision or a waiver of any other provision
hereof.

25.  Successors. This Agreement shall be binding upon the Holder, his legal
representatives, heirs, legatees and distributees, and upon the Corporation and
its successors and assigns.

26.  Headings. The titles and headings of Paragraphs are included for
convenience of reference only and are not to be considered in construction of
the provisions hereof.

27.  Governing Law. All questions arising with respect to the provisions of this
Agreement shall be determined by application of the laws of the State of Nevada
except to the extent Nevada law is preempted by federal law. Questions arising
with respect to the provisions of this Agreement that are matters of contract
law shall be governed by the contract law of the State of Texas, except to the
extent preempted by federal law and except to the extent that Nevada corporate
law conflicts with the contract law of such state, in which event Nevada
corporate law shall govern. The obligation of the Corporation to sell and
deliver Stock hereunder is subject to applicable laws and to the approval of any
governmental authority required in connection with the authorization, issuance,
sale, or delivery of such Stock.

32.  Word Usage. Words used in the masculine shall apply to the feminine where
applicable, and wherever the context of this Agreement dictates, the plural
shall be read as the singular and the singular as the plural.

IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed and
the Holder has hereunto set his hand effective as of the day and year first
above written.

                                  U.S. PHYSICAL THERAPY, INC.

                                  By: /s/ Roy Spradlin
                                      ------------------------------------------
                                      Name: Roy Spradlin
                                      Title: President & Chief Executive Officer
                                      Date of Execution:  November 18, 2003

                                  HOLDER

                                      /s/ Glenn McDowell
                                      ------------------------------------------
                                      Name: Glenn McDowell
                                      Date of Execution: November 18, 2003

                                      -37-<PAGE>

                                                                    EXHIBIT 10.8

                     EMPLOYMENT AND NONCOMPETITION AGREEMENT

         THIS AGREEMENT is made and effective this 1st day of January, 2004
between SCI Executive Services, Inc., a Delaware corporation (the "Company"),
and B. D. Hunter (the "Employee"):

                                    ARTICLE I
                                   EMPLOYMENT

         1.1 Employment Term. The Company agrees to employ the Employee and the
Employee agrees to accept such employment, in accordance with the terms and
conditions of this Agreement, for the period beginning on the date of this
Agreement and ending as of the close of business on December 31, 2004 (such
period together with all extensions thereof are referred to hereinafter as the
"Employment Term"); provided, however, that commencing on January 1, 2005, and
on each January 1 thereafter (each such date shall be hereinafter referred to as
a "Renewal Date"), the Employment Term shall be extended so as to terminate one
year from such Renewal Date if (i) the Company notifies the Employee in writing
of such extension at least thirty days prior to such Renewal Date and (ii) the
Employee has not previously given the Company written notice that the Employment
Term shall not be so extended. In the event that the Company gives the Employee
written notice at any time of its intention not to renew the Employment Term,
then the Employment Term shall terminate on December 31 of the year in which
such notice of non-renewal is given and shall not thereafter be further
extended. If the Company fails to notify the Employee at least thirty days prior
to a Renewal Date either of its intention to extend the Employment Term as
provided above or its intention not to so extend the Employment Term, then the
Employment Term shall not be extended and shall terminate as of the day prior to
such Renewal Date.

         1.2 Duties. The Employee shall serve the Company in an executive or
managerial capacity and shall hold such title as may be authorized from time to
time by the Board of Directors of Service Corporation International ("SCI"). The
Employee shall have the duties, powers and authority consistent therewith and
such other powers as are delegated to him in writing from time to time by the
Board of Directors of SCI. If the Employee is elected to any office or other
position with the Company during the term of this Agreement, the Employee will
serve in such capacity or capacities without further compensation unless the
Compensation Committee (the "Compensation Committee") of the Board of Directors
of SCI authorizes additional compensation. The Employee's title and duties may
be changed from time to time at the discretion of the Company. The Employee also
agrees to perform, without additional compensation, such other services for the
Company and for any subsidiary or affiliated corporations of the Company or for
any partnerships in which the Company has an interest, as the Company shall from
time to time specify. The term "Company" as used hereinafter shall be deemed to
include and refer to subsidiaries and affiliated corporations and partnerships.
Employee agrees and acknowledges that he owes, and will comply with, a fiduciary
duty of loyalty, fidelity and allegiance to act at all times in the best
interests of the Company and to take no action or fail to take action if such
action or failure to act would injure the Company's business, its interests or
its reputation.

<PAGE>

         1.3 Extent of Service. During the Employment Term, the Employee shall
devote his full time, attention and energy to the business of the Company, and,
except as may be specifically permitted by the Company, shall not be engaged in
any other business activity during the term of this Agreement. The foregoing
shall not be construed as preventing the Employee from making passive
investments in other businesses or enterprises, provided, however, that such
investments will not: (1) require services on the part of the Employee which
would in any way impair the performance of his duties under this Agreement, or
(2) in any manner significantly interfere with Employee's responsibilities as an
Employee of the Company in accordance with this Agreement.

         1.4 Compensation

                  (a) Salary. The Company shall pay to the Employee a salary at
the rate in effect for Employee at the date of this Agreement. Such salary is to
be payable in installments in accordance with the payroll policies of the
Company in effect from time to time during the term of this Agreement. The
Company may (but is not required to) make such upward adjustments to the
Employee's salary as it deems appropriate from time to time.

                  (b) Incentive Compensation. In addition to the above salary,
the Employee shall be eligible annually for incentive compensation at the
discretion of the Compensation Committee.

                  (c) Other Benefits. The Employee shall be reimbursed in
accordance with the Company's normal expense reimbursement policy for all of the
actual and reasonable costs and expenses accrued by Employee in the performance
of his or her services and duties hereunder, including but not limited to,
travel and entertainment expenses. The Employee shall be entitled to participate
in all insurance, stock options, retirement plans and other benefit plans or
programs as may be from time to time specifically adopted and approved by the
Company for its employees, in accordance with the eligibility requirements and
any other terms and conditions of such plans. It is understood and agreed
between the parties hereto that the Company reserves the right, at its sole
discretion, to modify, amend or terminate such plans, programs or benefits at
any time.

         1.5 Termination

                  (a) Death. If the Employee dies during the term of this
Agreement and while in the employ of the Company, this Agreement shall
automatically terminate and the Company shall have no further obligation to the
Employee or his estate except that (i) the Company shall continue to pay the
Employee's estate the Employee's salary in installments through the end of the
Employment Term which was in effect immediately prior to Employee's death, and
(ii) the Company shall pay the Employee's estate any applicable Pro Rated Bonus
(defined hereinbelow).

                  (b) Disability. If during the term of this Agreement, the
Employee shall be prevented from performing his duties hereunder by reason of
disability, then the Company, on 30 days' prior notice to the Employee, may
terminate Employee's employment under this Agreement. For purposes of this
Agreement, the Employee shall be deemed to have become disabled when the
Company, upon the advice of a qualified physician, shall have determined that
the Employee has

                                       2
<PAGE>

become physically or mentally incapable (excluding infrequent and temporary
absences due to ordinary illness) of performing his duties under this Agreement.
In the event of a termination pursuant to this paragraph 1.5(b), the Company
shall be relieved of all of its obligations under this Agreement, except that
the Company shall pay to the Employee (or his estate, in the event of his
subsequent death), (i) the Employee's salary in installments through the end of
the Employment Term which was in effect immediately prior to Employee's
disability, and (ii) any applicable Pro Rated Bonus. Before making any
termination decision pursuant to this Section 1.5(b), the Company shall
determine whether there is any reasonable accommodation (within the meaning of
the Americans With Disabilities Act) which would enable the Employee to perform
the essential functions of the Employee's position under this Agreement despite
the existence of any such disability. If such a reasonable accommodation is
possible, the Company shall make that accommodation and shall not terminate the
Employee's employment hereunder during the Employment Term based on such
disability.

                  (c) Certain Discharges. Prior to the end of the Employment
Term, the Company may discharge the Employee for Cause and terminate Employee's
employment hereunder without notice and without any further liability hereunder
to Employee or his estate. For purposes of this Agreement, "Cause" shall mean a
determination by the Company that Employee: (i) has been convicted of a crime
involving moral turpitude; (ii) has regularly failed or refused to follow
policies or directives established by the Company or the Board of Directors of
SCI; (iii) has willfully and persistently failed to attend to his duties; (iv)
has committed acts amounting to gross negligence or willful misconduct to the
detriment of the Company or its affiliates; (v) has violated any of his
obligations under Articles II or III of this Agreement; or (vi) has otherwise
breached any of the terms or provisions of this Agreement.

                  (d) Without Cause. Prior to the end of the Employment Term,
the employment of the Employee with the Company may be terminated by the Company
other than for Cause, death or disability. If such event occurs prior to a
Change of Control (defined hereinbelow), the Company shall have no further
obligation to Employee or his estate except that the Company shall pay or
provide to the Employee (or his estate, in the event of his subsequent death),
(i) the Employee's salary as in effect immediately prior to Employee's
termination in installments for a period ending two years from such date of
termination, provided that the Company at its sole option may prepay all or any
portion of such payments at any time, (ii) any applicable Pro Rated Bonus and
(iii) continuation of Employee's Group Health and Dental coverage and
Exec-U-Care program (including pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1986 ("Cobra") to the extent applicable) for a period of
twenty four months beginning the month following such date of termination, with
Employee paying such amount of premiums as would have been applicable if
Employee had remained an employee of the Company.

                  (e) Voluntary Termination by Employee. If during the term of
this Agreement, the Employee voluntarily terminates his employment with the
Company prior to any Change of Control, the Company shall be relieved of all of
its obligations under this Agreement, except that the Company shall pay the
Employee (or his estate, in the event of his subsequent death) (i) the
Employee's salary through the date of Employee's termination, and (ii) any
incentive compensation under Section 1.4(b) determined by the Compensation
Committee for any fiscal period ended prior

                                       3
<PAGE>

to the date of Employee's termination which had not been paid at the time of his
termination. All such payments to the Employee or his estate shall be made in
the same manner and at the same times as the Employee's salary or incentive
compensation would have been paid to the Employee had he not terminated his
employment.

                  (f) Change of Control. If (i) a Change of Control occurs
during the Employment Term and (ii) within twenty four months after such Change
of Control the Employee's employment is (x) terminated by the Company other than
for Cause, death or disability, or (y) terminated by Employee after an
occurrence of any Good Reason (except under circumstances which would be grounds
for termination of Employee by the Company for Cause), then the Company shall be
relieved of all of its obligations under this Agreement, except that the Company
shall pay or provide the Employee (or his estate, in the event of his subsequent
death) the following amounts:

         (1)      Three, multiplied by the sum of Employee's most recently set
                  Target Bonus plus his annual salary in effect immediately
                  prior to the Change of Control, which amount will be paid in a
                  lump sum in cash within 30 days after the Employee's date of
                  termination; and

         (2)      Partial Bonus, to be paid within 30 days after the Employee's
                  date of termination; and

         (3)      Continuation of Employee's Group Health and Dental coverage
                  and Exec-U-Care program (including pursuant to COBRA to the
                  extent applicable) for a period of thirty six months beginning
                  the month following such date of termination, with Employee
                  paying such amount of premiums as would have been applicable
                  if Employee had remained an employee of the Company.

         In addition, Company shall pay to Employee an amount that, on an
after-tax basis (including federal income, employment, excise and social
security taxes, state and local income and employment taxes, and any other
applicable taxes), equals any excise tax that is determined to be payable by
Employee pursuant to Section 4999 (or any successor provision) of the Internal
Revenue Code of 1986, as amended (and any interest or penalties related to the
imposition of such excise tax) at any time, by reason of both entitlements under
this Agreement (including any and all payments under this Section 1.5(f)) and
entitlements outside of this Agreement that are described in Section
280G(b)(2)(A)(i) of the Code (or any successor provision) with reference to
Company. For purposes of this paragraph, Employee shall be deemed to pay
federal, state and local income taxes at the highest marginal rate of taxation.
Such amount will be made payable by Company or its successor within thirty (30)
days after Employee delivers a written request for reimbursement accompanied by
a statement from a nationally recognized legal, consulting or accounting firm as
may be agreed to by the parties setting forth the amount owed pursuant to this
paragraph. Company shall pay all fees and costs incurred by Employee related to
the preparation, delivery and resolution of such written request for
reimbursement.

         The obligations of the Company under this Section 1.5(f) shall remain
in effect for twenty

                                       4
<PAGE>

four months after any Change of Control that occurs during the Employment Term
notwithstanding the fact that such twenty four month period may extend beyond
the expiration of the Employment Term.

         (g) Post Employment Term Matters. In the event the Employment Term
terminates because it is not extended or renewed pursuant to Section 1.1, then
the Company shall be relieved of all of its obligations under this Agreement and
Employee will thereafter be an employee "at will" of the Company.

                                   ARTICLE II
                                   INFORMATION

                  2.1 Nondisclosure of Information. The Employee acknowledges
that in the course of his employment by the Company he will receive certain
trade secrets, which may include, but are not limited to, programs, lists of
acquisition or disposition prospects and knowledge of acquisition strategy,
financial information and reports, lists of customers or potential customers and
other confidential information and knowledge concerning the business of the
Company (hereinafter collectively referred to as "Information") which the
Company desires to protect. The Employee understands that the Information is
confidential and agrees not to reveal the Information to anyone outside the
Company so long as the confidential or secret nature of the Information shall
continue, unless compelled to do so by any federal or state regulatory agency or
by a court order. If Employee becomes aware that disclosure of any Information
is being sought by such an agency or through a court order, Employee will
immediately notify the Company. The Employee further agrees that he will at no
time use the Information in competing with the Company. Upon termination of
Employee's employment with the Company, the Employee shall surrender to the
Company all papers, documents, writings and other property produced by him or
coming into his possession by or through his employment or relating to the
Information, and the Employee agrees that all such materials are and will at all
times remain the property of the Company and to the extent the Employee has any
rights therein, he hereby irrevocably assigns such rights to the Company.

         2.2 Disclosure of Information, Ideas, Concepts, Improvements,
Discoveries and Inventions. As part of the Employee's fiduciary duties to the
Company, Employee agrees that during his employment by the Company, and for a
period of six months after the termination of the employment relationship for
any reason, Employee shall promptly disclose in writing to the Company all
information, ideas, concepts, improvements, discoveries and inventions, whether
patentable or not, and whether or not reduced to practice, which are conceived,
developed, made or acquired by Employee, either individually or jointly with
others, and which relate to the business, products or services of the Company or
any of its subsidiaries or affiliates, irrespective of whether Employee utilized
the Company's time or facilities and irrespective of whether such information,
idea, concept, improvement, discovery or invention was conceived, developed,
discovered or acquired by the Employee on the job, at home, or elsewhere. This
obligation extends to all types of information, ideas and concepts, including
information, ideas and concepts relating to new types of services, corporate
opportunities, acquisition prospects, the identity of key representatives within
acquisition prospect organizations, prospective names or service marks for the
Company's business

                                       5
<PAGE>

activities, and the like.

         2.3 Ownership of Information, Ideas, Concepts, Improvements,
Discoveries and Inventions and All Original Works of Authorship.

                  (a) All information, ideas, concepts, improvements,
discoveries and inventions, whether patentable or not, which are conceived,
made, developed or acquired by Employee or which are disclosed or made known to
Employee, individually or in conjunction with others, during Employee's
employment by the Company and which relate to the Company's business, products
or services (including but not limited to all such information relating to
corporate opportunities, research, financial and sales data, pricing and trading
terms, evaluations, opinions, interpretations, acquisition prospects, the
identity of customers or their requirements, the identity of key contacts within
the customer's organization or within the organization of acquisition prospects,
or marketing and merchandising techniques, prospective names and marks), are and
shall be the sole and exclusive property of the Company. Moreover, all drawings,
memoranda, notes, records, files, correspondence, manuals, models,
specifications, computer programs, maps and all other writings or materials of
any type embodying any of such information, ideas, concepts, improvements,
discoveries and inventions are and shall be the sole and exclusive property of
the Company.

                  (b) In particular, Employee hereby specifically sells, assigns
and transfers to the Company all of his worldwide right, title and interest in
and to all such information, ideas, concepts, improvements, discoveries or
inventions described in Section 2.3 (a) above, and any United States or foreign
applications for patents, inventor's certificates or other industrial rights
that may be filed thereon, including divisions, continuations,
continuations-in-part, reissues and/or extensions thereof, and applications for
registration of such names and marks. Both during the period of Employee's
employment by the Company and thereafter, Employee shall assist the Company and
its nominees at all times in the protection of such information, ideas,
concepts, improvements, discoveries or inventions both in the United States and
all foreign countries, including but not limited to the execution of all lawful
oaths and all assignment documents requested by the Company or its nominee in
connection with the preparation, prosecution, issuance or enforcement of any
applications for United States or foreign letters patent, including divisions,
continuations, continuations-in-part, reissues, and/or extensions thereof, and
any application for the registration of such names and marks.

                  (c) Moreover, if during Employee's employment by the Company,
Employee creates any original work of authorship fixed in any tangible medium of
expression which is the subject matter of copyright (such as videotapes, written
presentations on acquisitions, computer programs, drawing, maps, architectural
renditions, models, manuals, brochures or the like) relating to the Company's
business, products, or services, whether such work is created solely by Employee
or jointly with others, the Company shall be deemed the author of such work if
the work is prepared by Employee in the scope of his or her employment; or, if
the work is not prepared by Employee within the scope of his or her employment
but is specially ordered by Company as a contribution to a collective work, as a
part of a motion picture or other audiovisual work, as a translation, as a
supplementary work, as a compilation or as an instructional text, then the work
shall be considered

                                       6
<PAGE>

to be work made for hire and the Company shall be considered the author of the
work. In the event such work is neither prepared by the Employee within the
scope of his or her employment or is not a work specially ordered and deemed to
be a work made for hire, then Employee hereby agrees to assign, and by these
presents, does assign, to the Company all of Employee's worldwide right, title
and interest in and to the work and all rights of copyright therein. Both during
the period of Employee's employment by the Company and thereafter, Employee
agrees to assist the Company and its nominee, at any time, in protection of the
Company's worldwide right, title and interest in and to the work and all rights
of copyright therein, including but not limited to, the execution of all formal
assignment documents requested by the Company or its nominees and the execution
of all lawful oaths and applications for registration of copyright in the United
States and foreign countries.

                                   ARTICLE III
                                 NONCOMPETITION

         3.1 Noncompetition. During the Employment Term (and for a period of one
or two years thereafter if the Company exercises its options under Section 3.2
hereof), Employee shall not, acting alone or in conjunction with others,
directly or indirectly, in any market in which the Company or any of its
affiliated companies conducts business, work for or engage in any business in
competition with the business conducted by the Company or any of its affiliated
companies, whether for his own account or by soliciting, canvassing or accepting
any business or transaction for or from any other company or business in
competition with such business of the Company or any of its affiliated
companies. In the event that a court should determine that any restriction
herein is unenforceable, the parties hereto agree that the obligations under
this paragraph shall be enforceable for the maximum term and maximum
geographical area allowable by law.

         3.2 Extension. The Company shall have the option to extend Employee's
obligations under Section 3.1 for one additional year (the "First Extension
Term") beyond the end of the Employment Term. If the Company exercises such
option, it shall be required to pay Employee an amount equal to one year's
salary, based on Employee's salary rate as of the date his employment with the
Company ceased (the "Noncompetition Payment"). Such Noncompetition Payment shall
be made in 12 equal monthly installments (each installment being an amount equal
to 1/12th of such annual salary) commencing on the date which is thirty (30)
days after the last day of the Employment Term. Subsequent payments shall be
made on the same day of each succeeding month until 12 payments have been made.
If the Employee breaches his noncompetition obligations, the Company shall be
entitled to cease making such monthly payments. The purpose of this paragraph is
to make the noncompetition obligation of the Employee more reasonable from the
Employee's point of view. The amounts to be paid by the Company are not intended
to be liquidated damages or an estimate of the actual damages that would be
sustained by the Company if the Employee breaches his post-employment
noncompetition obligation. If the Employee breaches his post-employment
noncompetition obligation, the Company shall be entitled to all of its remedies
at law or in equity for damages and injunctive relief. The Company may exercise
the option conferred by this paragraph at any time within 30 days after the last
day of the Employment Term by mailing written notice of such exercise to
Employee.

                                       7
<PAGE>

         If the Company exercises its option to extend Employee's obligations as
set forth in the preceding paragraph, then the Company shall have the option to
extend Employee's obligations under Section 3.1 for one additional year (the
"Second Extension Term") beyond the end of the First Extension Term. If the
Company exercises its option to extend Employee's obligations for the Second
Extension Term, the rights and obligations of the parties set forth in the
preceding paragraph shall be applicable during the Second Extension Term. The
Company may exercise the option conferred by this paragraph at any time within
30 days after the last day of the First Extension Term by mailing written notice
of such exercise to Employee.

         3.3 Termination For Cause or Termination By Employee. Notwithstanding
anything to the contrary in this Agreement, in the event that Employee's
employment hereunder is terminated for Cause pursuant to Section 1.5 (c) hereof,
or in the event Employee voluntarily terminates the employment relationship for
any reason other than a material breach of this Agreement by the Company, the
noncompetition obligations of Employee described in Section 3.1 above shall
automatically continue for a period of two years from the date the employment
relationship ceases, and the Company shall not be required to (i) make any
payments to Employee in consideration for such obligations, or (ii) provide any
notice to Employee. Notwithstanding the foregoing this Section 3.3 shall not be
applicable in the event Employee voluntarily terminates the employment
relationship for Good Reason within twenty four months after a Change of Control
that occurs during the Employment Term; provided however, the first clause of
this sentence shall be null and void if such termination referenced therein
occurs under circumstances which would be grounds for termination of Employee by
the Company for Cause.

         3.4 Obligations to Refrain From Competing Unfairly. In addition to the
other obligations agreed to by Employee in this Agreement, Employee agrees that
during the Employment Term and for five (5) year(s) thereafter, he shall not at
any time, directly or indirectly for the benefit or any other party than the
Company or any of its affiliated companies, (a) induce, entice, or solicit any
employee of the Company or any of its affiliated companies to leave his
employment, or (b) contact, communicate or solicit any customer of the Company
or any of its affiliated companies derived from any customer list, customer
lead, mail, printed matter or other information secured from the Company or any
of its affiliated companies or their present or past employees, or (c) in any
other manner use any customer lists or customer leads, mail, telephone numbers,
printed material or material of the Company or any of its affiliated companies
relating thereto.

         3.5 Acknowledgement. Employee acknowledges that Employee's compliance
with the provisions of this Article III is necessary to protect the existing
goodwill and other proprietary rights of the Company, as well as all goodwill
and relationships that may be acquired or enhanced during the course of
Employee's employment with the Company, and all confidential information which
may come into existence or to which Employee may have access during his
employment with the Company. Employee further acknowledges that Employee will
become familiar with certain of the Company's affairs, operations, customers and
confidential information and data by means of his employment with the Company,
and that failure to comply with the provisions of this Article III will result
in irreparable and continuing damage to the Company for which there will be

                                       8
<PAGE>

no adequate remedy at law. The Company shall be entitled to all of its remedies
at law or in equity for damages and injunctive relief in the event of any
violation of this Article III by Employee.

                                   ARTICLE IV
                                  MISCELLANEOUS

         4.1 Notices. All notices, requests, consents and other communications
under this Agreement shall be in writing and shall be deemed to have been
delivered on the date personally delivered or on the date mailed, postage
prepaid, by certified mail, return receipt requested, or telegraphed and
confirmed if addressed to the respective parties as follows:

                                If to the Employee:

                                -------------------
                                -------------------
                                -------------------

                                If to the Company:

                                General Counsel
                                c/o SCI Executive Services, Inc.
                                1929 Allen Parkway
                                Houston, Texas 77019
                                Attention: Legal Department

         Either party hereto may designate a different address by providing
written notice of such new address to the other party hereto.

         4.2 Entire Agreement. This Agreement replaces and merges all previous
agreements and discussions relating to the same or similar subject matters
between Employee and the Company (or any of its affiliates) and constitutes the
entire agreement between the Employee and the Company (and any of its
affiliates) with respect to the subject matter of this Agreement. Any existing
employment agreement between the Employee and the Company (or any of its
affiliates) is hereby terminated, effective immediately. This Agreement may not
be modified in any respect by any verbal statement, representation or agreement
made by an employee, officer, or representative of the Company or by any written
agreement unless signed by an officer of the Company who is expressly authorized
by the Company to execute such document.

         4.3 Specific Performance. The Employee acknowledges that a remedy at
law for any breach of Article II or III of this Agreement will be inadequate,
agrees that the Company shall be entitled to specific performance and injunctive
and other equitable relief in case of any such breach or attempted breach, and
further agrees to waive any requirement for the securing or posting of any

                                       9
<PAGE>

bond in connection with the obtaining of any such injunctive or any other
equitable relief.

         4.4 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid or unenforceable under applicable law, such provision shall be
ineffective to the extent of such prohibition, invalidity or unenforceability
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.

         4.5 Assignment. This Agreement may not be assigned by the Employee.
Neither the Employee, his spouse, nor his estate shall have any right to
commute, encumber or dispose of any right to receive payments hereunder, it
being understood that such payments and the right thereto are nonassignable and
nontransferable. This Agreement may be assigned by the Company.

         4.6 Binding Effect. Subject to the provisions of Section 4.5 of this
Agreement, this Agreement shall be binding upon and inure to the benefit of the
parties hereto, the Employee's heirs and personal representatives, and the
successors and assigns of the Company.

         4.7 Captions. The section and paragraph headings in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

         4.8 Governing Law. This Agreement shall be construed and enforced in
accordance with, and governed by, the laws of Texas.

         4.9 Counterparts. This Agreement may be executed in multiple original
counterparts, each of which shall be deemed an original, but all of which
together shall constitute the same instrument.

         4.10 Survival of Certain Obligations. Employee's obligations under
Articles II and III hereof shall survive any termination of Employee's
employment hereunder.

         4.11 Waiver. The waiver by either party of any right hereunder or of
any breach of this Agreement shall not operate as or be construed to be an
amendment of this Agreement or a waiver of any future right or breach.

         4.12 Gender. All references to the masculine pronoun herein are used
for convenience and ease of reading only and are intended and apply to the
feminine gender as well.

         4.13 Dispute Resolution.

         (a) Employee and the Company agree that, except for the matters
identified in Section 4.13(b) below, all disputes relating to any aspects of
Employee's employment with the Company shall be resolved by binding arbitration.
This includes, but is not limited to, any claims against the Company, its
affiliates or their officers, directors, employees, or agents for breach of
contract, wrongful discharge, discrimination, harassment, defamation,
misrepresentation, and emotional distress, as well as any disputes pertaining to
the meaning or effect of this Agreement.

                                       10
<PAGE>

         (b) It is expressly agreed that this Section 4.13 shall not govern
claims for workers' compensation or unemployment benefits, or any claim by the
Company against Employee which is based on fraud, theft or other dishonest
conduct of Employee.

         (c) Any claim which either party has against the other must be
presented in writing by the claiming party to the other within one year of the
date the claiming party knew or should have known of the facts giving rise to
the claim. Otherwise, the claim shall be deemed waived and forever barred even
if there is a federal or state statute of limitations which would have given
more time to pursue the claim.

         (d) Each party may retain legal counsel and shall pay its own costs and
attorneys' fees, regardless of the outcome of the arbitration. Each party shall
pay one-half of the compensation to be paid to the arbitrators, as well as
one-half of any other costs relating to the administration of the arbitration
proceeding (for example, room rental, court reporter, etc.).

         (e) An arbitrator shall be selected by mutual agreement of the parties.
If the parties are unable to agree on a single arbitrator, each party shall
select one arbitrator, and the two arbitrators so selected shall select a third
arbitrator. The three arbitrators so selected will then hear and decide the
matter. All arbitrators must be attorneys, judges or retired judges who are
licensed to practice law in the state where the Employee is or most recently was
employed by the Company. The arbitration proceedings shall be conducted within
the county in which Employee is or most recently was employed by the Company or
at another mutually agreeable location.

         (f) Except as otherwise provided herein, the arbitration proceedings
shall be conducted in accordance with the statutes, rules or regulations
governing arbitration in the state in which Employee is or most recently was
employed by the Company. In the absence of such statutes, rules or regulations,
the arbitration proceedings shall be conducted in accordance with the employment
arbitration rules of the American Arbitration Association ("AAA"); provided
however, that the foregoing reference to the AAA rules shall not be deemed to
require any filing with that organization, nor any direct involvement of that
organization. In the event of any inconsistency between this Agreement and the
statutes, rules or regulations to be applied pursuant to this paragraph, the
terms of this Agreement shall apply.

         (g) The arbitrator shall issue a written award, which shall contain, at
a minimum, the names of the parties, a summary of the issues in controversy, and
a description of the award issued. Upon motion to a court of competent
jurisdiction, either party may obtain a judgment or decree in conformity with
the arbitration award, and said award shall be enforced as any other judgment or
decree.

         (h) In resolving claims governed by this Section 4.13, the arbitrator
shall apply the laws of the state in which Employee is or most recently was
employed by the Company, and/or federal law, if applicable.

                                       11
<PAGE>

         (i) Employee and the Company agree and acknowledge that any arbitration
proceedings between them, and the outcome of such proceedings, shall be kept
strictly confidential; provided however, that the Company may disclose such
information to the extent required by law and to its employees, agents and
professional advisors who have a legitimate need to know such information, and
the Employee may disclose such information (1) to the extent required by law,
(2) to the extent that the Employee is required to disclose same to professional
persons assisting Employee in preparing tax returns; and (3) to Employee's legal
counsel.

         4.14 Certain Definitions. The following defined terms used in this
Agreement shall have the meanings indicated:

         Change of Control. "Change of Control" means the happening of any of
the following events:

         (a) 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,
as amended (the "Exchange Act")) (a "Person"), of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (A) the then outstanding shares of Common Stock of SCI (the "Outstanding
SCI Common Stock") or (B) the combined voting power of the then outstanding
voting securities of SCI entitled to vote generally in the election of directors
(the "Outstanding SCI Voting Securities"); provided, however, that the following
acquisitions shall not constitute a Change of Control under this subsection (a):
(i) any acquisition directly from SCI (excluding an acquisition by virtue of the
exercise of a conversion privilege), (ii) any acquisition by SCI, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by SCI or any corporation controlled by SCI, or (iv) any acquisition
by any corporation pursuant to a reorganization, merger or consolidation, if,
following such reorganization, merger or consolidation, the conditions described
in clauses (A), (B) and (C) of subsection (c) of this definition of "Change of
Control" are satisfied; or

         (b) Individuals who, as of the effective date hereof, constitute the
Board of Directors of SCI (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board of Directors of SCI; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by SCI's shareholders, was approved
by (A) a vote of at least a majority of the directors then comprising the
Incumbent Board, or (B) a vote of at least a majority of the directors then
comprising the Executive Committee of the Board of Directors of SCI at a time
when such committee was comprised of at least five members and all members of
such committee were either members of the Incumbent Board or considered as being
members of the Incumbent Board pursuant to clause (A) of this subsection (b),
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board of
Directors of SCI; or

                                       12
<PAGE>

         (c) Approval by the shareholders of SCI of a reorganization, merger or
consolidation, in each case, unless, following such reorganization, merger or
consolidation, (A) more than 60% of, respectively, the then outstanding shares
of common stock of the corporation resulting from such reorganization, merger or
consolidation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding SCI Common Stock and Outstanding SCI
Voting Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
Outstanding SCI Common Stock and Outstanding SCI Voting Securities, as the case
may be, (B) no Person (excluding SCI, any employee benefit plan (or related
trust) of SCI or such corporation resulting from such reorganization, merger or
consolidation, and any Person beneficially owning, immediately prior to such
reorganization, merger or consolidation, directly or indirectly, 20% or more of
the Outstanding SCI Common Stock or Outstanding SCI Voting Securities, as the
case may be) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation or the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors and (C) at least a
majority of the members of the board of directors of the corporation resulting
from such reorganization, merger or consolidation were members of the Incumbent
Board at the time of the execution of the initial agreement providing for such
reorganization, merger or consolidation; or

         (d) Approval by the shareholders of SCI of (A) a complete liquidation
or dissolution of SCI or (B) the sale or other disposition of all or
substantially all of the assets of SCI other than to a corporation, with respect
to which following such sale or other disposition, (i) more than 60% of,
respectively, the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is the
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding SCI Common Stock and Outstanding SCI Voting Securities immediately
prior to such sale or other disposition in substantially the same proportion as
their ownership, immediately prior to such sale or other disposition, of the
Outstanding SCI Common Stock and Outstanding SCI Voting Securities, as the case
may be, (ii) no Person (excluding SCI and any employee benefit plan (or related
trust) of SCI or such corporation, and any Person beneficially owning,
immediately prior to such sale or other disposition, directly or indirectly, 20%
or more of the Outstanding SCI Common Stock or Outstanding SCI Voting
Securities, as the case may be) beneficially owns, directly or indirectly, 20%
or more of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors and (iii) at least a majority of the members of the board of directors
of such corporation were members of the Incumbent Board at the time of the
execution of the initial agreement or action of the Board of Directors of SCI
providing for such sale or other disposition of assets of SCI.

                                       13
<PAGE>

         Good Reason. "Good Reason" shall mean the occurrence of any of the
following after a Change of Control:

         (a) The Company requires the Employee to be relocated to such an extent
that the Internal Revenue Service requirements for a deductible relocation
(currently 50 miles) are satisfied;

         (b) The Company materially reduces the responsibilities, authority or
accountability of Employee from the same in effect immediately prior to the
Change of Control;

         (c) The Company reduces the base salary, Target Bonus or other
compensation program participation of Employee; or

         (d) The Company materially reduces the aggregate benefits of Employee.

         Partial Bonus. "Partial Bonus" shall mean a bonus equal to the product
of (i) Employee's most recently set Target Bonus, and (ii) a fraction, the
denominator of which is 365 and the numerator of which is the number of days in
the fiscal year being considered through the date of the termination of
Employee's employment.

         Pro Rated Bonus. "Pro Rated Bonus" shall mean, a bonus equal to the
product of (i) the bonus Employee did not receive but would have received under
Section 1.4(b) if he had remained an employee through the end of the Employment
Term, it being understood that the amount of such bonus Employee would have
received shall be determined by reference to the average amount of bonus
actually awarded to other officers who were at the same or comparable level of
responsibility as Employee immediately prior to his termination, and (ii) a
fraction, the denominator of which is 365 and the numerator of which is the
number of days in the fiscal year being considered through the date of death,
determination of disability or notice of termination of employment, whichever is
applicable. In the event that a majority of SCI officers do not receive a bonus
for the fiscal year being considered, then the Pro Rated Bonus shall not be
applicable and Employee shall not be entitled to a Pro Rated Bonus. The Pro
Rated Bonus, if any, payable to Employee shall be paid within 90 days after the
date that bonuses, if any, are awarded for a majority of SCI officers for the
year being considered.

         Target Bonus. "Target Bonus" shall mean the percentage of salary or
level of bonus for Employee which is set by the Compensation Committee at the
beginning of each year as an incentive goal to be achieved (it being understood
that the actual bonus eventually earned could be lesser or greater than the
Target Bonus).

                                       14
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.

                                             "COMPANY"

                                             SCI Executive Services, Inc.

                                             By: ______________________________
                                                  Curtis G. Briggs
                                                  Vice President

                                             "EMPLOYEE"

                                                  /s/ B. D. Hunter
                                             ----------------------------------

                                       15

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