Document:

exv4w4

 

Exhibit
4.4

USN CORPORATION

2006 EQUITY COMPENSATION PLAN

STOCK OPTION AGREEMENT

     STOCK OPTION AGREEMENT (this “Agreement”) dated as of ___(the “Grant
Date”), between USN CORPORATION (the “Company”), and [OPTIONEE] (the
“Optionee”). Except as otherwise defined herein, capitalized terms used herein shall have
the meanings set forth in the Plan (as defined below).

     WHEREAS, pursuant to the USN Corporation 2006 Equity Compensation Plan (the “Plan”),
the Committee designated under the Plan (or an officer of the Company to whom the authority to
grant Awards has been delegated), desires to grant to the Optionee a stock option to acquire shares
of Common Stock, par value $0.0001 per share, of the Company (“Common Stock”); and

     WHEREAS, the Optionee desires to accept such stock option subject to the terms and conditions
of this Agreement.

     NOW, THEREFORE, in consideration of the promises and of the mutual covenants and agreements
contained herein, the Company and the Optionee, intending to be legally bound, hereby agree as
follows:

1. Grant.

     (a) The Company hereby grants to the Optionee a stock option (the “Option”) to
purchase, subject to the terms and conditions set forth herein and in the Plan, all or any part of
                                shares of Common Stock (subject to adjustment as set forth in Section 4.3 of the Plan)
at a price of $                      per share (subject to adjustment as set forth in Section 4.3 of the Plan).

     (b) The Option [is] [is not] intended to qualify as an “incentive stock option” under Section
422 of the Internal Revenue Code of 1986, as amended (the “Code”).

2. Time for Exercise. Subject to Paragraph 3 below, the Option will become vested and
exercisable in 36 equal monthly installments beginning on the one-month anniversary of the Grant
Date. The Option shall be fully vested and exercisable as of the third anniversary of the Grant
Date.

3. Expiration. The Option shall expire on the tenth (10th) anniversary of the date hereof;
provided, however, that the Option may earlier terminate as provided in this Paragraph 3 and/or in
Sections 6 and 12 of the Plan.

     (a) Upon termination of the Optionee’s employment with the Company for any reason, the Option
shall expire on the earlier of the date that the Option expires in accordance with its terms, or
the expiration of the applicable time period following termination of employment in accordance with
the following:

 

 

     (i) if the Optionee’s employment with the Company is terminated due to death,
Disability or Retirement, the Option shall expire 12 months following termination of
service;

     (ii) if the Optionee’s employment with the Company is terminated without Cause, the
Option shall expire 90 days following termination of service; or

     (iii) if the Optionee’s employment with the Company is terminated for any other reason,
the Option shall expire 30 days following termination of service; provided that, in the
event of termination for Cause (as defined below), the Optionee’s right to further payments,
vesting or exercisability shall be forfeited in its entirety immediately upon termination of
service.

     (b) For purposes of this Agreement, the term “Cause” shall mean termination of
Optionee’s employment for “cause” as defined in any employment or severance agreement the Optionee
may have with the Company or a Subsidiary or, if no such agreement exists, “cause” means (a)
conviction or pleading guilty or no contest to any crime (whether or not involving the Company or
any of its Subsidiaries) constituting a felony in the jurisdiction involved; (b) engaging in any
substantiated act involving moral turpitude; (c) engaging in any act which, in each case, subjects,
or if generally known would subject, the Company or any of its Subsidiaries to public ridicule or
embarrassment; (d) material violation of the Company’s or any of its Subsidiaries’ policies,
including, without limitation, those relating to sexual harassment or the disclosure or misuse of
confidential information; (e) serious neglect or misconduct in the performance of the grantee’s
duties for the Company or any of its Subsidiaries or willful or repeated failure or refusal to
perform such duties; in each case as determined by the Committee, which determination will be
final, binding and conclusive.

4. Method of Exercise. The Option may be exercised in whole or in part at any time during
the term thereof by delivery to the Company, at its principal office and addressed to the corporate
secretary, a written or electronic notice of exercise specifying the number of shares being
purchased, accompanied by payment of the aggregate exercise price and applicable withholding tax in
the manner set forth as follows:

     (a) in cash or by check, bank draft or money order payable to the order of the Company;

     (b) by payment in shares of Common Stock valued at the Fair Market Value of such shares on the
date of exercise;

     (c) to the extent permitted by law, through on open-market, broker-assisted sales transaction
pursuant to which the Company is promptly delivered the amount of proceeds necessary to satisfy the
exercise price; or

     (d) by a combination of the methods described above.

5. Fractional Shares. No fractional shares may be purchased upon any exercise.

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6. Compliance With Legal Requirements.

     (a) The Option shall not be exercisable and no shares of Common Stock shall be issued or
transferred pursuant to this Agreement or the Plan unless and until all applicable legal
requirements imposed by Federal and state securities and other laws, rules and regulations by any
regulatory agencies having jurisdiction, and by any exchanges or markets upon which the Common
Stock may be listed, have been fully satisfied. The Company may require the Optionee to take any
reasonable action to meet such requirements. Such legal requirements may include, but are not
limited to, (i) registering or qualifying such Common Stock under any state or federal law or under
the rules of any stock exchange or trading system, (ii) satisfying any applicable law or rule
relating to the transfer of unregistered securities or demonstrating the availability of an
exemption from applicable laws, (iii) placing a restricted legend on the Common Stock issued
pursuant to the exercise of the Option, or (iv) obtaining the consent or approval of any
governmental regulatory body.

     (b) The Optionee shall not be entitled to the issuance of Common Stock upon exercising the
Option unless and until the Optionee pays any taxes or similar charges required by law to be
withheld, which payment shall be made on or before the date of the event resulting in taxable
income.

     (c) The Optionee understands that the Company is under no obligation to register for resale
the Common Stock issued upon exercise of the Option. The Company may impose such restrictions,
conditions or limitations as it determines appropriate as to the timing and manner of any exercise
of the Option and/or any resales by the Optionee or other subsequent transfers by the Optionee of
any Common Stock issued as a result of the exercise of the Option, including without limitation (i)
restrictions under an insider trading policy, (ii) restrictions that may be necessary in the
absence of an effective registration statement under the Securities Act of 1933, as amended,
covering the Option and/or the shares of Common Stock underlying the Option, and (iii) restrictions
as to the use of a specified brokerage firm or other agent for exercising the Option and/or for
such resales or other transfers. The sale of the shares underlying the Option must also comply
with other applicable laws and regulations governing the sale of such shares.

7. Shareholder Rights. The Optionee shall not be deemed a shareholder of the Company with
respect to any of the shares of Common Stock subject to the Option. The Optionee shall not have
any rights as a holder of Common Stock until the date the Optionee becomes the holder of record of
such Common Stock.

8. Assignment or Transfer Prohibited. The Option may not be assigned or transferred
otherwise than by will or by the laws of descent and distribution, and shall not be subject in any
manner to assignment, alienation, pledge, encumbrance or charge. During the lifetime of an
Optionee, an Option may only be exercised by the Optionee or such Optionee’s guardian or legal
representative. Neither the Option nor any right hereunder shall be subject to attachment,
execution or other similar process. In the event of any attempt by the Optionee to alienate,
assign, pledge, hypothecate or otherwise dispose of the Option or any right hereunder, except as
provided for herein, or in the event of the levy or any attachment, execution or similar process

3

 

upon the rights or interests hereby conferred, the Company may terminate the Option by notice to
the Optionee, and the Option shall thereupon become null and void.

9. Committee Authority. Any question concerning the interpretation of this Agreement or
the Plan, any adjustments required to be made under this Agreement or the Plan, and any controversy
that may arise under this Agreement or the Plan shall be determined by the Committee in its sole
and absolute discretion. All decisions by the Committee shall be final and binding.

10. Application of the Plan. The terms of this Agreement are governed by the terms of the
Plan, as it exists on the date hereof and as the Plan is amended from time to time. In the event
of any conflict between the provisions of this Agreement and the provisions of the Plan, the terms
of the Plan shall control, except as expressly stated otherwise herein. As used herein, the term
“Section” generally refers to provisions within the Plan, and the term “Paragraph” refers to
provisions of this Agreement.

11. No Right to Continued Employment. Nothing in the Plan, in this Agreement or any other
instrument executed pursuant thereto or hereto shall confer upon the Optionee any right to
continued employment with the Company or any of its subsidiaries or affiliates, or interfere in any
way with the right of the Company or any of its subsidiaries to terminate the Optionee’s employment
or other service relationship for any reason at any time.

12. Further Assurances. Each party hereto shall cooperate with each other party, shall do
and perform or cause to be done and performed all further acts and things, and shall execute and
deliver all other agreements, certificates, instruments, and documents as any other party hereto
reasonably may request in order to carry out the intent and accomplish the purposes of this
Agreement and the Plan.

13. Entire Agreement. This Agreement and the Plan together set forth the entire agreement
and understanding between the parties as to the subject matter hereof and supersede all prior oral
and written and all contemporaneous or subsequent oral discussions, agreements and understandings
of any kind or nature.

14. Binding on Transferees. The provisions of the Plan and this Agreement will inure to
the benefit of, and be binding on, the Company and its transferees and assigns and the Optionee and
Optionee’s executor, administrator and permitted transferees and beneficiaries, whether or not any
such person will have become a party to this Agreement and agreed in writing to join herein and be
bound by the terms and conditions hereof.

4

 

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

	 	 	 	 	 	 	 
	 	 	USN CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	[OPTIONEE]

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

5exv10w1

 

Exhibit 10.1

RETIREMENT AGREEMENT

     This Retirement Agreement (the “Agreement”) is made and entered into this 5th
day of June, 2006, by and between Stewart Enterprises, Inc., a Louisiana corporation (the
“Company”) and Kenneth C. Budde (“Employee”).

     WHEREAS, the Company entered into an Employment Agreement with Employee effective as of
November 1, 2004, (the “Employment Agreement”);

     WHEREAS, the Company entered into a Change of Control Agreement with Employee effective as of
November 1, 2004 (the “Change of Control Agreement”);

     WHEREAS, the Employee and the Company have agreed that Employee will retire from his
employment with the Company and that Employee will assist the Company with an orderly transition,
as provided herein; and

     WHEREAS, Employee and the Company wish to confirm their mutual understanding regarding the
benefits payable to Employee as a result of his retirement and have agreed in certain cases on
benefits that vary from those that might otherwise be provided under the Employment Agreement or
under other existing agreements or plans relating to Employee’s employment.

     NOW THEREFORE, in consideration of the mutual promises herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending
to be legally bound hereby, the parties hereto agree as follows:

     1. Employment. Employee shall continue to be employed by the Company on a full-time
basis, and shall continue to hold the title of President and Chief Executive Officer, through
midnight on June 30, 2006 (the “Retirement Date”). Thereafter, commencing at 12:01 a.m. on July 1,
2006, Employee shall be fully retired. More specifically, effective at midnight on the Retirement
Date, Employee hereby resigns and retires from all positions with the Company and its subsidiaries,
and from the Board of Directors of the Company and all committees thereof. Up to and including the
Retirement Date, Employee’s duties shall be to assist the Company in effecting an orderly
transition and to perform such other duties as may be reasonably requested by the Company’s Board
of Directors.

     2. Pre-Retirement Compensation and Benefits. Employee’s compensation and benefits
shall remain unchanged through the Retirement Date, except that Employee shall not be eligible to
receive any bonus for the fiscal year ending October 31, 2006. In particular, Employee shall
continue to receive the base salary provided for in the Employment Agreement through the Retirement
Date and shall be paid for his accrued and unused vacation time, up to a maximum of 240 hours (or
six weeks), pursuant to the Company’s vacation policy.

     3. Post-Retirement Payments. In accordance with the terms of the Employment Agreement
applicable to a termination of employment by Employee for “Good Reason,” the Company shall pay to
Employee an amount equal to a single year’s Base Salary (as defined in the Employment Agreement) in
effect on the Retirement Date, which amount is agreed to be $550,000. Such amount shall be payable
in equal installments over a two-year period beginning on the first regular payroll date of the
Company that is at least six months after the Retirement Date, and continuing thereafter at such
intervals as other salaried employees of the Company are paid.

     4. Post-Retirement Health Insurance. Subject to the conditions described in this
paragraph 4, Employee shall be entitled to continue to participate through October 31, 2007 in the
Company’s group health insurance program on the same terms as are applicable to the Company’s
executive officers. Employee shall be offered COBRA continuation coverage with the COBRA
continuation coverage period beginning on November 1, 2007. The Company’s obligation to provide
continued health insurance coverage described herein is subject to consent of the applicable
re-insurance provider. The Company agrees to use its best efforts to obtain such consent. In the
event the Company is unable to obtain such consent, the Company shall self-insure or shall fund the
cost of substantially comparable insurance issued directly to Employee.

 

 

     5. Options and Restricted Stock. Employee’s stock options shall remain in effect in
accordance with their terms, it being acknowledged that those options not vested on or before the
Retirement Date shall be forfeited. All of Employee’s options that are vested as of the close of
business on the Retirement Date shall be exercisable for a period of one year thereafter, as
Employee has completed 15 or more years of service with the Company.

     All shares of restricted stock previously awarded to Employee that would not otherwise have
been vested on or before the Retirement Date shall automatically and fully vest on the Retirement
Date, notwithstanding any existing agreement to the contrary.

     6. Post-Employment Benefits. Upon his retirement on the Retirement Date, Employee
shall be entitled to the benefits under other Company benefit plans in which he is a participant
that are applicable to a voluntary termination of his employment on such date in accordance with
the terms and conditions of such plans, including such benefits as he may be entitled to receive
under the Company’s Supplemental Executive Retirement Plan (the “SERP”), Supplemental Retirement
and Deferred Compensation Plan (the “Deferred Compensation Plan”) and 401(k) plan, except that in
order that Employee may avoid the imposition of interest and additional tax under Section 409A of
the Internal Revenue Code of 1986, as amended, no payments shall be made to Employee under the SERP
or the Deferred Compensation Plan until the Company’s first regular payroll date that is at least
six months after the Retirement Date, but the first payment made to the Employee under each such
plan shall be equal to the total payments that Employee would have been entitled to receive under
the terms of such plans, if payments had been made on each of the Company’s regular payroll dates
from the Retirement Date through the first regular payroll date that is at least six months after
the Retirement Date.

     7. Other Benefits. All compensation, fringe benefits, perquisites and participation
in any bonus or incentive plan shall cease as of the close of business on the Retirement Date,
unless otherwise specifically provided herein.

     8. Outplacement Consulting. Upon Employee’s written request supported by invoices or
other appropriate documentation, the Company shall reimburse Employee for expenses incurred by him,
not exceeding $3,000 in the aggregate, for out-placement consulting services provided to him by a
recognized consulting firm.

     9. Nondisclosure, Noncompetition and Proprietary Rights. The provisions of Article V
(Nondisclosure, Noncompetition and Proprietary Rights) of the Employment Agreement and the related
Appendix B thereto shall remain in full force and effect, and Employee hereby agrees to such
provisions as of the date hereof, as if they were set forth in this Agreement in their entirety,
except that Employment Term shall mean the term of Employee’s employment hereunder and Date of
Termination shall mean the Retirement Date hereunder. The remedies provided for in such Article V
shall apply to the payments provided for in paragraph 3 hereof to the same extent as such remedies
would apply to a payment under Article IV, Section 3 of the Employment Agreement.

     10. Cooperation and Nondisparagement. During and after his employment by the Company
hereunder, the Employee agrees to assist the Company and its subsidiaries from time to time with
respect to litigation involving the Company and/or its subsidiaries as may be reasonably requested
by the Company; provided, that the Company shall reimburse the Employee (i) at the rate of $265 per
hour for his actual time spent in preparing for and giving testimony in such litigation or
providing other assistance specifically requested by the Company, and (ii) his travel and other
out-of-pocket expenses reasonably incurred in providing such cooperation and assistance, in each
case upon prompt submission of appropriate documentation evidencing such activities and expenses.
During and after his employment by the Company hereunder, the Employee agrees to refrain from
making any statements and from taking any actions that disparage or could reasonably be expected to
harm the reputation of the Company and its subsidiaries or any of their directors, officers or
employees, and agrees that he will not voluntarily assist or otherwise participate in any action or
proceeding undertaken by any other person that disparages or could reasonably be expected to
materially harm the reputation of the Company and its subsidiaries or any of their directors,
officers or employees. Similarly, the Company agrees that its directors and officers shall refrain
from making any statements and from taking any actions that disparage or could reasonably be
expected to harm the reputation of the Employee and agrees that its directors and officers will not
voluntarily assist or otherwise participate in any action or proceeding undertaken by any other
person that disparages or could reasonably be expected to materially harm the reputation of the
Employee. Should the Employee materially breach this paragraph 10 during or after his
employment, he shall, among other remedies available to the Company, forfeit the right to any
further payments pursuant to paragraph 3.

 

 

     11. Press Release. The Company shall afford the Employee the opportunity to review
and comment on the press release to be issued by the Company regarding the matters addressed in
this Agreement.

     12. Release. The Employee hereby and forever, irrevocably and unconditionally, waives
and releases any and all rights, claims and causes of action against the Company and its
subsidiaries of whatever kind or nature, known or unknown, asserted or unasserted, that may have
arisen prior to or that may exist as of the date of the Employee’s execution and delivery of this
Agreement. It is understood and agreed that the parties covered by the Employee’s release include
the Company’s and its subsidiaries’ present and former shareholders, officers, directors,
employees, agents, insurers, assigns, predecessors and successors, and that any reference to the
Company and its subsidiaries in this paragraph is understood to include all of the foregoing
persons or entities. Finally, it is understood and agreed that this release covers only claims
existing or arising out of events, actions or circumstances occurring prior to and as of the time
of the Employee’s execution of this Agreement.

     13. Indemnity Agreement. The Indemnity Agreement dated as of December 23, 2004 by and
between the Company and Employee shall survive this Agreement and remain in full force and effect
in accordance with its terms.

     14. Effect on Employment Agreement and Change of Control Agreement. Except as
modified hereby, the Employment Agreement, including without limitation, the nondisclosure,
noncompetition and proprietary rights covenants contained therein, shall remain in full force and
effect. The Change of Control Agreement shall terminate effective as of the close of business on
the Retirement Date.

     15. Withholding. Employee agrees that the Company has the right to withhold from the
amounts payable pursuant to this Agreement all amounts required to be withheld under applicable
income and/or employment tax laws, or as otherwise stated in documents granting rights that are
affected by this Agreement.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate
original as of the day and year first above written.

	 	 	 	 	 
	 	STEWART ENTERPRISES, INC.

 	 
	 	By:  	 	 
	 	 	Thomas M. Kitchen 	 
	 	 	Director 	 
	 
	 	EMPLOYEE:

 	 
	 	  	 	 
	 	 	Kenneth C. Budde

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