Document:

EMPLOYMENT AGREEMENT

     This  Employment  Agreement ("Agreement") between Stewart Enterprises,
Inc., a Louisiana corporation (the "Company"), and G. Kenneth Stephens, Jr.
(the "Employee") is dated as of January 31, 2000 (the "Agreement Date").

                           W I T N E S S E T H:

     WHEREAS, Employee currently is employed by the Company;

     WHEREAS, the Company  desires  to  retain  the  services  of  Employee
pursuant  to  the terms of this Agreement, subject to Employee's acceptance
of the conditions stated herein;

     WHEREAS, during  the  course  of  his  employment  with  the  Company,
Employee has or will have received extensive and unique knowledge, training
and  education  in,  and  access  to  resources  involving,  the Death Care
Business  (as  defined  below) at a substantial cost to the Company,  which
Employee acknowledges has enhanced or substantially will enhance Employee's
skills and knowledge in such business;

     WHEREAS,  during the  course  of  his  employment  with  the  Company,
Employee has had  and will continue to have access to certain valuable oral
and written information,  knowledge  and  data relating to the business and
operations  of  the  Company  and  its  subsidiaries  that  is  non-public,
confidential or proprietary in nature and  is  particularly  useful  in the
Death Care Business; and

     WHEREAS,  in view of the training provided by the Company to Employee,
its cost to the  Company,  the need for the Company to be protected against
disclosures  by  Employee of the  Company's  and  its  subsidiaries'  trade
secrets and other  non-public, confidential or proprietary information, the
Company and Employee  desire, among other things, to prohibit Employee from
disclosing or utilizing,  outside the scope and term of his employment, any
non-public, confidential or  proprietary  information,  knowledge  and data
relating  to the business and operations of the Company or its subsidiaries
received by  Employee  during the course of his employment, and to restrict
the ability of Employee to compete with the Company or its subsidiaries for
a limited period of time.

     NOW, THEREFORE, for  and  in consideration of the continued employment
of Employee by the Company and the  payment  of  wages,  salary  and  other
compensation  to  Employee  by  the  Company,  the  parties hereto agree as
follows:

                                 ARTICLE I
                       EMPLOYMENT CAPACITY AND TERM

     1.   CAPACITY AND DUTIES OF EMPLOYEE.  The Employee is employed by the
Company  to  render  services  on  behalf  of  the Company as  Senior  Vice
President and President - Eastern Division.  As  the  Senior Vice President
and President - Eastern Division, the Employee shall perform such duties as
are assigned to the individual holding such title by the  Company's  Bylaws
and such other duties, consistent with the Employee's job title, as may  be
prescribed  from time to time by the Board of Directors of the Company (the
"Board") and/or the Company's Chief Executive Officer.

     2.   EMPLOYMENT  TERM.   The  term  of this Agreement (the "Employment
Term")  shall commence on the Agreement Date  and  shall  continue  through
October 31,  2000,  subject to any earlier termination of Employee's status
as an employee pursuant to this Agreement.

     3.   DEVOTION TO RESPONSIBILITIES.

          During the  Employment Term, the Employee shall devote all of his
business time to the business of the Company, shall use his reasonable best
efforts  to  perform faithfully  and  efficiently  his  duties  under  this
Agreement, and  shall  not  engage in or be employed by any other business;
provided,  however,  that  nothing  contained  herein  shall  prohibit  the
Employee from (a) serving as  a  member of the board of directors, board of
trustees or the like of any for-profit  or  non-profit entity that does not
compete with the Company, or performing services  of any type for any civic
or  community  entity,  whether  or not the Employee receives  compensation
therefor, (b) investing his assets  in such form or manner as shall require
no more than nominal services on the  part of the Employee in the operation
of the business of the entity in which  such  investment  is  made,  or (c)
serving in various capacities with, and attending meetings of, industry  or
trade  groups  and  associations, as long as the Employee's engaging in any
activities permitted  by  virtue of clauses (a), (b) and (c) above does not
materially and unreasonably  interfere  with the ability of the Employee to
perform  the services and discharge the responsibilities  required  of  him
under  this  Agreement.   Notwithstanding  clause  (b)  above,  during  the
Employment  Term, the Employee may not beneficially own more than 2% of the
equity interests  of  a  business  organization  required  to file periodic
reports  with  the Securities and Exchange Commission under the  Securities
Exchange Act of 1934 (the "Exchange Act") and may not beneficially own more
than 2% of the equity  interests  of  a business organization that competes
with the Company.  For purposes of this paragraph, "beneficially own" shall
have  the  same meaning ascribed to that  term  in  Rule  13d-3  under  the
Exchange Act.

                                ARTICLE II
                         COMPENSATION AND BENEFITS

     During  the  Employment  Term,  the Company shall provide the Employee
with the compensation and benefits described below:

     1.   SALARY.  Effective January 31,  2000, a salary ("Base Salary") at
the  rate  of  $225,000  per fiscal year of the  Company  ("Fiscal  Year"),
payable to the Employee at  such  intervals  as other salaried employees of
the Company are paid.

     2.   BONUS.  (a)  For the fiscal year beginning  November 1, 1999, the
Employee  shall  be  eligible  to  receive an annual incentive  bonus  (the
"Bonus") of up to $200,000 per Fiscal  Year.   The  Bonus  will  be awarded
based  upon  factors to be established annually and set forth in an  annual
supplement to this Agreement.

     (b)  The  Bonus shall be paid in cash not later than 30 days following
the filing of the  Company's annual report on Form 10-K for the Fiscal Year
in which the Bonus has been earned.

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

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

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

          (c)  First class air travel;

          (d)  Fully-paid  insurance  benefit  package   available  to  all
employees; and

          (e)  All other benefit programs similar to those  provided  other
employees of the Company.

     4.   1995 INCENTIVE COMPENSATION PLAN.  The Employee shall be eligible
to receive awards under the Company's 1995 Incentive Compensation Plan (the
"1995 Plan").

     5.   EXPENSES.   The  Employee shall be reimbursed for reasonable out-
of-pocket expenses incurred  from  time to time on behalf of the Company or
any subsidiary in the performance of  his duties under this Agreement, upon
the presentation of such supporting invoices,  documents  and  forms as the
Company reasonably requests.

                                ARTICLE III
                         TERMINATION OF EMPLOYMENT

     1.   DEATH.   The  Employee's  status  as  an employee shall terminate
immediately  and  automatically  upon  the  Employee's   death  during  the
Employment Term.

     2.   DISABILITY.   The  Employee's  status  as  an  employee   may  be
terminated for "Disability" as follows:

          (a)  The Employee's status as an employee shall terminate if  the
Employee  has a disability that would entitle him to receive benefits under
the Company's  long-term  disability insurance policy in effect at the time
either because he is Totally  Disabled or Partially Disabled, as such terms
are defined in the Company's policy  in  effect as of the Agreement Date or
as similar terms are defined in any successor policy.  Any such termination
shall become effective on the first day on  which  the Employee is eligible
to receive payments under such policy (or on the first day that he would be
so eligible, if he had applied timely for such payments).

          (b)  If the Company has no long-term disability  plan  in effect,
if  (i)  the  Employee  is rendered incapable because of physical or mental
illness of satisfactorily discharging his duties and responsibilities under
this  Agreement for a period  of  90  consecutive  days  and  (ii)  a  duly
qualified physician chosen by the Company and acceptable to the Employee or
his legal representatives so certifies in writing, the Board shall have the
power to  determine  that  the  Employee has become disabled.  If the Board
makes such a determination, the Company shall have the continuing right and
option, during the period that such  disability  continues,  and  by notice
given in the manner provided in this Agreement, to terminate the status  of
Employee  as  an  employee.  Any such termination shall become effective 30
days after such notice  of  termination is given, unless within such 30-day
period, the Employee becomes capable of rendering services of the character
contemplated hereby (and a physician  chosen  by the Company and acceptable
to the Employee or his legal representatives so  certifies  in writing) and
the Employee in fact resumes such services.

          (c)  The "Disability Effective Date" shall mean the date on which
termination of employment becomes effective due to Disability.

     3.   CAUSE.   The  Company may terminate the Employee's status  as  an
employee for Cause.  As used  herein,  termination  by  the  Company of the
Employee's  status as an employee for "Cause" shall mean termination  as  a
result of (a)  the  Employee's breach of this Agreement, or (b) the willful
engaging by the Employee  in  gross  misconduct  injurious  to the Company,
which  in  either  case  is  not remedied within 10 days after the  Company
provides  written  notice  to  the  Employee  of  such  breach  or  willful
misconduct.

     4.   GOOD  REASON.   The Employee  may  terminate  his  status  as  an
employee for Good Reason. As  used  herein,  the  term  "Good Reason" shall
mean:

          (a)  The occurrence of any of the following during the Employment
Term:

               (i)  the  assignment  by  the Board to the Employee  of  any
duties  or  responsibilities  that  are inconsistent  with  the  Employee's
status, title and position as Senior Vice President;

               (ii) any removal of the  Employee  from,  or  any failure to
reappoint or reelect the Employee to, the position of Senior Vice President
of  the  Company,  except  in  connection  with a termination of Employee's
status as an employee as permitted by this Agreement;

               (iii)  the Company's requiring  the  Employee  to  be  based
anywhere other than in  the  Washington, D.C. metropolitan area, except for
required travel in the ordinary course of the Company's business;

          (b)  any breach of this  Agreement  by the Company that continues
for  a  period  of 10 days after written notice thereof  is  given  by  the
Employee to the Company;

          (c)  the  failure  by the Company to obtain the assumption of its
obligations under this Agreement by any successor or assign as contemplated
in this Agreement; or

          (d)  any purported termination  by  the Company of the Employee's
status as an employee for Cause that is not effected  pursuant  to a Notice
of Termination satisfying the requirements of this Agreement.

     5.   VOLUNTARY TERMINATION BY THE COMPANY.  The Company may  terminate
the  Employee's  status  as  employee  for other than death, Disability  or
Cause.

     6.   VOLUNTARY  TERMINATION  BY  THE  EMPLOYEE.    The   Employee  may
terminate the Employee's status as employee for other than Good Reason.

     7.   NOTICE  OF  TERMINATION.   Any  termination  by  the Company  for
Disability  or  Cause,  or  by  the  Employee  for  Good  Reason, shall  be
communicated  by Notice of Termination to the other party hereto  given  in
accordance with  Article  VI  Section 2 of this Agreement.  For purposes of
this Agreement, a "Notice of Termination"  means  a written notice that (a)
indicates the specific termination provision in this  Agreement relied upon
(b) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination  of the Employee's
employment  under  the  provisions  so  indicated  and (c) if the  Date  of
Termination (as defined below) is other than the date  of  receipt  of such
notice,  specifies the termination date (which date shall be not more  than
30 days after  the  giving of such notice).  The failure by the Employee or
the  Company  to set forth  in  the  Notice  of  Termination  any  fact  or
circumstance that  contributes  to  a showing of Good Reason, Disability or
Cause shall not negate the effect of  the notice nor waive any right of the
Employee or the Company, respectively,  hereunder  or preclude the Employee
or the Company, respectively, from asserting such fact  or  circumstance in
enforcing the Employee's or the Company's rights hereunder.

     8.   DATE  OF  TERMINATION.   "Date  of  Termination"  means  (a)   if
Employee's  employment  is terminated by reason of his death or Disability,
the Date of Termination shall  be  the  date  of  death  of Employee or the
Disability Effective Date, as the case may be, (b) if Employee's employment
is terminated by the Company for Cause, or by Employee for Good Reason, the
date of delivery of the Notice of Termination or any later  date  specified
therein,  (which  date  shall not be more than 30 days after the giving  of
such notice) as the case  may  be,  (c)  if  the  Employee's  employment is
terminated  by  the  Company  for  reasons other than death, Disability  or
Cause, the Date of Termination shall  be  the  date  on  which  the Company
notifies  the  Employee  of  such  termination,  and  (d) if the Employee's
employment  is  terminated  by  the  Employee for reasons other  than  Good
Reason, the Date of Termination shall  be  the  date  on which the Employee
notifies the Company of such termination.

                                ARTICLE IV
                       OBLIGATIONS UPON TERMINATION

     1.   DEATH.  If the Employee's status as an employee  is terminated by
reason  of  the  Employee's  death, this Agreement shall terminate  without
further  obligations to the Employee's  legal  representatives  under  this
Agreement,  other  than the obligation to make any payments due pursuant to
employee benefit plans maintained by the Company or its subsidiaries.

     2.   DISABILITY.  If Employee's status as an employee is terminated by
reason of Employee's  Disability,  this  Agreement  shall terminate without
further obligation to the Employee, other than the obligation  to  make any
payments  due  pursuant to employee benefit plans maintained by the Company
or its subsidiaries.

     3.   TERMINATION  BY  COMPANY FOR REASONS OTHER THAN DEATH, DISABILITY
OR  CAUSE;  TERMINATION  BY EMPLOYEE  FOR  GOOD  REASON.   If  the  Company
terminates the Employee's  status  as  an  employee  for reasons other than
death, Disability or Cause, or the Employee terminates  his  employment for
Good Reason, then

          (a)  the Company shall pay to the Employee an amount equal to two
times  the  amount  of  Base  Salary  in effect at the Date of Termination,
payable in equal installments over a two-year  period  at such intervals as
other salaried employees of the Company are paid; and

          (b)  with respect to all performance-based options granted to the
Employee pursuant to the 1995 Plan,

               (i) if the performance goals have been met as of the Date of
          Termination, then such options shall become exercisable as of the
          Date of Termination (if not already exercisable) and shall expire
          on the date that is the later of:

                    (A) 30 days after the Date of Termination or

                    (B) 30 days after the first date on  which the exercise
               of  the  options and sale of the underlying securities  will
               not (1) be  matched with purchases or sales of the Company's
               common stock  prior  to  such Date of Termination such as to
               cause the Employee to incur a liability to the Company under
               Section 16 of the Exchange  Act  and (2) destroy the Section
               16 exemption for the grant of the options.

               (ii) if the performance goals have  not  been  met as of the
          Date of Termination, then

                    (A) if the performance goals are not met by  the  close
               of  business  on  the day that is 180 days after the Date of
               Termination, then the options shall expire on such day; and

                    (B) if the performance  goals  are  met by the close of
               business  on  the  day that is 180 days after  the  Date  of
               Termination, then the options shall become exercisable as of
               the date such performance goals are met (the "Vesting Date")
               and shall expire on the date that is the later of:

                         (1) 30 days after the Vesting Date or

                         (2) 30 days  after  the  first  date  on which the
                    exercise  of  the  options  and  sale of the underlying
                    securities will not (I) be matched  with  purchases  or
                    sales  of the Company's common stock prior to such Date
                    of Termination such as to cause the Employee to incur a
                    liability  to  the  Company  under  Section  16  of the
                    Exchange  Act and (II) destroy the Section 16 exemption
                    for the grant of the options.

     4.   CAUSE.  If the Employee's  status as an employee is terminated by
the  Company  for Cause, this Agreement  shall  terminate  without  further
obligation to the  Employee  other  than for obligations imposed by law and
obligations imposed pursuant to any employee benefit plan maintained by the
Company or its subsidiaries.

     5.   TERMINATION BY EMPLOYEE FOR  REASONS  OTHER THAN GOOD REASON.  If
the  Employee's status as an employee is terminated  by  the  Employee  for
reasons  other than Good Reason, then the Company shall pay to the Employee
an amount  equal  to  a  single year's Base Salary in effect at the Date of
Termination, payable in equal  installments  over a two-year period at such
intervals as other salaried employees of the Company are paid.

     6.   RESIGNATION.  If Employee is a director  of  the  Company and his
employment  is  terminated  for  any reason other than death, the  Employee
shall, if requested by the Company, immediately resign as a director of the
Company.   If  such resignation is not  received  when  so  requested,  the
Employee shall forfeit  any  right to receive any payments pursuant to this
Agreement.

                                 ARTICLE V
           NONDISCLOSURE, NONCOMPETITION AND PROPRIETARY RIGHTS

     1.   CERTAIN  DEFINITIONS.    For  purposes  of  this  Agreement,  the
following terms shall have the following meanings:

          (a)  "Confidential Information"  means any information, knowledge
or  data  of  any  nature and in any form (including  information  that  is
electronically transmitted  or stored on any form of magnetic or electronic
storage media) relating to the  past,  current  or  prospective business or
operations of the Company and its subsidiaries, that  at  the time or times
concerned  is not generally known to persons engaged in businesses  similar
to those conducted  or  contemplated  by  the  Company and its subsidiaries
(other than information known by such persons through  a  violation  of  an
obligation  of  confidentiality  to  the  Company), whether produced by the
Company  and  its  subsidiaries  or  any of their  consultants,  agents  or
independent  contractors  or  by  Employee,   and  whether  or  not  marked
confidential,  including  without limitation information  relating  to  the
Company's  or its subsidiaries'  products  and  services,  business  plans,
business  acquisitions,   processes,   product   or  service  research  and
development methods or techniques, training methods  and  other operational
methods or techniques, quality assurance procedures or standards, operating
procedures,  files,  plans,  specifications,  proposals, drawings,  charts,
graphs, support data, trade secrets, supplier lists,  supplier information,
purchasing  methods  or  practices,  distribution  and selling  activities,
consultants' reports, marketing and engineering or other technical studies,
maintenance   records,  employment  or  personnel  data,  marketing   data,
strategies or techniques,  financial  reports,  budgets,  projections, cost
analyses,  price  lists,  formulae  and analyses, employee lists,  customer
records,  customer  lists,  customer  source  lists,  proprietary  computer
software,  and  internal  notes  and  memoranda  relating  to  any  of  the
foregoing.

          (b)  "Death Care Business" means  (i) the owning and operating of
funeral homes and cemeteries, including combined  funeral home and cemetery
facilities, (ii) the offering of a complete range of  services and products
to   meet   families'  funeral  needs,  including  prearrangement,   family
consultation, the sale of caskets and related funeral and cemetery products
and merchandise,  the  removal,  preparation and transportation of remains,
cremation, the use of funeral home  facilities  for visitation and worship,
and  related  transportation  services,  (iii) the marketing  and  sale  of
funeral services and cemetery property on  an at-need or prearranged basis,
(iv)   providing,   managing   and  administering  financing   arrangements
(including trust funds, escrow accounts,  insurance  and  installment sales
contracts)  for  prearranged  funeral  plans  and  cemetery  property   and
merchandise,  (v)  providing interment services, the sale (on an at-need or
prearranged basis) of cemetery property including lots, lawn crypts, family
and community mausoleums and related cemetery merchandise

such as monuments, memorials  and  burial  vaults,  (vi) the maintenance of
cemetery grounds pursuant to perpetual care contracts  and  laws  or  on  a
voluntary  basis,  and  (vii)  offering  mausoleum design, construction and
sales services.

     2.   NONDISCLOSURE OF CONFIDENTIAL INFORMATION.  During the Employment
Term, Employee shall hold in a fiduciary capacity  for  the  benefit of the
Company  all  Confidential  Information  which shall have been obtained  by
Employee  during  Employee's employment (whether  prior  to  or  after  the
Agreement Date) and  shall  use such Confidential Information solely within
the scope of his employment with  and  for  the  exclusive  benefit  of the
Company.   For a period of five years after the Employment Term, commencing
with the Date  of  Termination,  Employee  agrees  (a)  not to communicate,
divulge or make available to any person or entity (other  than the Company)
any   such   Confidential   Information,  except  upon  the  prior  written
authorization of the Company or as may be required by law or legal process,
and (b) to deliver promptly to  the Company any Confidential Information in
his possession, including any duplicates  thereof  and  any  notes or other
records Employee has prepared with respect thereto.  In the event  that the
provisions  of  any  applicable law or the order of any court would require
Employee  to  disclose  or   otherwise   make  available  any  Confidential
Information, Employee shall give the Company prompt prior written notice of
such required disclosure and an opportunity  to  contest the requirement of
such  disclosure  or  apply  for a protective order with  respect  to  such
Confidential Information by appropriate proceedings.

     3.   LIMITED COVENANT NOT  TO COMPETE.  During the Employment Term and
for  a  period  of  two  years thereafter,  commencing  with  the  Date  of
Termination, Employee agrees that, with respect to each State of the United
States or other jurisdiction,  or  specified portions thereof, in which the
Employee regularly (a) makes contact  with  customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities  of  other  employees  of the
Company  or any of its subsidiaries, as identified in Appendix "A" attached
hereto and  forming  a  part of this Agreement, and in which the Company or
any of its subsidiaries engages  in  the Death Care Business on the Date of
Termination (collectively, the "Subject Areas"), Employee will restrict his
activities within the Subject Areas as follows:

          (a)  Employee will not, directly  or  indirectly,  for himself or
others,  own,  manage,  operate,  control,  be  employed  in  an executive,
managerial  or  supervisory capacity by, or otherwise engage or participate
in or allow his skill,  knowledge,  experience  or reputation to be used in
connection with, the ownership, management, operation  or  control  of, any
company  or  other  business  enterprise engaged in the Death Care Business
within any of the Subject Areas;  provided, however, that nothing contained
herein shall prohibit Employee from  making  passive investments as long as
Employee does not beneficially own more than 2%  of the equity interests of
a business enterprise engaged in the Death Care Business  within any of the
Subject  Areas.  For purposes of this paragraph, "beneficially  own"  shall
have the same  meaning  ascribed  to  that  term  in  Rule  13d-3 under the
Exchange Act.

          (b)  Employee will not call upon any customer of the  Company  or
its  subsidiaries for the purpose of soliciting, diverting or enticing away
the business  of  such  person  or  entity,  or  otherwise  disrupting  any
previously  established relationship existing between such person or entity
and the Company or its subsidiaries;

          (c)  Employee  will  not solicit, induce, influence or attempt to
influence any supplier, lessor,  licensor,  potential acquiree or any other
person  who  has  a  business  relationship  with  the   Company   or   its
subsidiaries,  or  who on the Date of Termination is engaged in discussions
or negotiations to enter  into  a business relationship with the Company or
its subsidiaries, to discontinue  or reduce the extent of such relationship
with the Company or its subsidiaries; and

          (d)  Employee will not make  contact with any of the employees of
the Company or its subsidiaries with whom  he had contact during the course
of  his  employment  with the Company for the purpose  of  soliciting  such
employee for hire, whether  as  an  employee  or independent contractor, or
otherwise disrupting such employee's relationship  with  the Company or its
subsidiaries.

          (e)  Employee further agrees that, for a period  of one year from
and  after  the Date of Termination, Employee will not hire, on  behalf  of
himself or any  company  engaged  in  the  Death  Care  Business with which
Employee is associated, any employee of the Company or its  subsidiaries as
an  employee  or independent contractor, whether or not such engagement  is
solicited by Employee; provided, however, that the restriction contained in
this subsection  (e) shall not apply to Company employees who reside in, or
are hired by Employee  to perform work in, any of the Subject Areas located
within the States of Virginia, Arkansas or Georgia.

     Employee agrees that  he  will  from  time  to time upon the Company's
request promptly execute any supplement, amendment,  restatement  or  other
modification  of  Appendix  "A"  as  may  be  necessary  or  appropriate to
correctly   reflect   the   jurisdictions   which,  at  the  time  of  such
modification, should be covered by Appendix "A"  and this Article V Section
3.  Furthermore, Employee agrees that all references  to  Appendix  "A"  in
this Agreement shall be deemed to refer to Appendix "A" as so supplemented,
amended, restated or otherwise modified from time to time.

     4.   INJUNCTIVE  RELIEF; OTHER REMEDIES.  Employee acknowledges that a
breach by Employee of Section  2  or  3  of  this  Article  V  would  cause
immediate  and  irreparable  harm  to  the  Company  for  which an adequate
monetary remedy does not exist; hence, Employee agrees that,  in  the event
of a breach or threatened breach by Employee of the provisions of Section 2
or  3  of  this  Article V during or after the Employment Term, the Company
shall be entitled  to  injunctive  relief  restraining  Employee  from such
violation without the necessity of proof of actual damage or the posting of
any  bond,  except  as  required  by non-waivable, applicable law.  Nothing
herein,  however,  shall  be construed  as  prohibiting  the  Company  from
pursuing any other remedy at  law  or in equity to which the Company may be
entitled under applicable law in the event of a breach or threatened breach
of this Agreement by Employee, including without limitation the recovery of
damages  and/or costs and expenses, such  as  reasonable  attorneys'  fees,
incurred by the Company as a result of any such breach.  In addition to the
exercise of  the  foregoing remedies, the Company shall have the right upon
the occurrence of any  such  breach  to  cancel  any  unpaid salary, bonus,
commissions  or  reimbursements  otherwise  outstanding  at   the  Date  of
Termination.   In  particular,  Employee  acknowledges  that  the  payments
provided  under  Article  IV Sections 3 and 5 are conditioned upon Employee
fulfilling any noncompetition  and  nondisclosure  agreements  contained in
this Article V.  In the event Employee shall at any time materially  breach
any noncompetition or nondisclosure agreements contained in this Article V,
the  Company may suspend or eliminate payments under Article IV during  the
period  of  such breach.  Employee acknowledges that any such suspension or
elimination of  payments  would  be  an  exercise of the Company's right to
suspend or terminate its performance hereunder  upon  Employee's  breach of
this  Agreement;  such  suspension  or  elimination  of  payments would not
constitute,  and  should  not  be  characterized  as,  the  imposition   of
liquidated damages.

     5.   REQUESTS  FOR  WAIVER  IN  CASES OF UNDUE HARDSHIP.  In the event
that Employee should find any of the limitations  of  Article  V  Section 3
(including without limitation the geographic restrictions of Appendix  "A")
to  impose  a  severe  hardship  on  Employee's  ability  to  secure  other
employment, Employee may make a request to the Company for a waiver of  the
designated  limitations before accepting employment that otherwise would be
a breach of Employee's promises and obligations under this Agreement.  Such
request must  be  in  writing and clearly set forth the name and address of
the organization with that  employment is sought and the location, position
and duties that Employee will be performing.  The Company will consider the
request and, in its sole discretion,  decide whether and on what conditions
to grant such waiver.

     6.   GOVERNING LAW OF THIS ARTICLE  V;  CONSENT  TO JURISDICTION.  Any
dispute  regarding the reasonableness of the covenants and  agreements  set
forth in this  Article  V, or the territorial scope or duration thereof, or
the remedies available to the Company upon any breach of such covenants and
agreements, shall be governed  by  and  interpreted  in accordance with the
laws of the State of the United States or other jurisdiction  in  which the
alleged  prohibited  competing  activity  or  disclosure  occurs, and, with
respect  to  each  such  dispute,  the  Company  and  Employee each  hereby
irrevocably consent to the exclusive jurisdiction of the  state and federal
courts  sitting in the relevant State (or, in the case of any  jurisdiction
outside the  United  States,  the relevant courts of such jurisdiction) for
resolution of such dispute, and  agree  to  be  irrevocably  bound  by  any
judgment  rendered  thereby  in  connection  with such dispute, and further
agree that service of process may be made upon  him  or  it  in  any  legal
proceeding  relating  to  this  Article  V and/or Appendix "A" by any means
allowed under the laws of such jurisdiction.  Each party irrevocably waives
any objection he or it may have as to the venue of any such suit, action or
proceeding brought in such a court or that  such a court is an inconvenient
forum.

     7.   EMPLOYEE'S  UNDERSTANDING  OF  THIS  ARTICLE.    Employee  hereby
represents to the Company that he has read and understands,  and  agrees to
be  bound  by,  the terms of this Article.  Employee acknowledges that  the
geographic scope  and  duration  of  the  covenants  contained in Article V
Section  3  are  the  result of arm's-length bargaining and  are  fair  and
reasonable in light of  (i)  the  importance  of the functions performed by
Employee and the length of time it would take the Company to find and train
a suitable replacement, (ii) the nature and wide  geographic  scope  of the
operations  of the Company and its subsidiaries, (iii) Employee's level  of
control over  and  contact  with the business and operations of the Company
and its subsidiaries in a significant  number  of  jurisdictions where same
are conducted and (iv) the fact that all facets of the  Death Care Business
are conducted by the Company and its subsidiaries throughout the geographic
area where competition is restricted by this Agreement.   It  is the desire
and intent of the parties that the provisions of this Agreement be enforced
to  the  fullest  extent  permitted  under  applicable law, whether now  or
hereafter in effect and, therefore, to the extent  permitted  by applicable
law,  the  parties hereto waive any provision of applicable law that  would
render any provision of this Article V invalid or unenforceable.

                                ARTICLE VI
                               MISCELLANEOUS

     1.   BINDING EFFECT.

          (a)  This  Agreement  shall  be  binding  upon  and  inure to the
benefit of the Company and any of its successors or assigns.

          (b)  This Agreement is personal to the Employee and shall  not be
assignable  by the Employee without the consent of the Company (there being
no obligation  to  give such consent) other than such rights or benefits as
are transferred by will or the laws of descent and distribution.

          (c)  The Company  shall  require  any successor to or assignee of
(whether  direct  or  indirect,  by  purchase,  merger,   consolidation  or
otherwise)  all  or  substantially all of the assets or businesses  of  the
Company (i) to assume unconditionally and expressly this Agreement and (ii)
to agree to perform all of the obligations under this Agreement in the same
manner and to the same  extent  as  would have been required of the Company
had no assignment or succession occurred,  such  assumption to be set forth
in a writing reasonably satisfactory to the Employee.   In the event of any
such assignment or succession, the term "Company" as used in this Agreement
shall refer also to such successor or assign.

     2.   NOTICES.  All notices hereunder must be in writing  and  shall be
deemed  to  have  given  upon receipt of delivery by:  (a) hand (against  a
receipt  therefor), (b) certified  or  registered  mail,  postage  prepaid,
return receipt  requested,  (c)  a  nationally recognized overnight courier
service (against a receipt therefor)  or  (d)  telecopy  transmission  with
confirmation of receipt.  All such notices must be addressed as follows:

     If to the Company, to:

     Stewart Enterprises, Inc.
     110 Veterans Memorial Boulevard
     Metairie, Louisiana  70005
     Attn:  Chief Executive Officer

     If to the Employee, to:

     G. Kenneth Stephens, Jr.
     6707 Democracy Blvd, Suite 920
     Bethesda, Maryland  20817

or  such  other  address as to which any party hereto may have notified the
other in writing.

     3.   GOVERNING LAW.  This Agreement shall be construed and enforced in
accordance with and governed by the internal laws of the State of Louisiana
without regard to  principles  of  conflict  of  laws,  except as expressly
provided  in  Article V Section 6 above with respect to the  resolution  of
disputes arising  under, or the Company's enforcement of, Article V of this
Agreement.

     4.   WITHHOLDING.   The 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.

     5.   SEVERABILITY.   If  any  term  or  provision  of  this  Agreement
(including  without  limitation  those  contained in Appendix "A"), or  the
application thereof to any person or circumstance,  shall at any time or to
any extent be invalid, illegal or unenforceable in any  respect as written,
Employee and the Company intend for any court construing  this Agreement to
modify or limit such provision temporally, spatially or otherwise  so as to
render it valid and enforceable to the fullest extent allowed by law.   Any
such provision that is not susceptible of such reformation shall be ignored
so  as  to not affect any other term or provision hereof, and the remainder
of this Agreement,  or the application of such term or provision to persons
or circumstances other  than  those as to which it is held invalid, illegal
or unenforceable, shall not be affected thereby and each term and provision
of  this  Agreement shall be valid  and  enforced  to  the  fullest  extent
permitted by law.

     6.   WAIVER  OF BREACH.  The waiver by either party of a breach of any
provision of this Agreement  shall  not operate or be construed as a waiver
of any subsequent breach thereof.

     7.   REMEDIES NOT EXCLUSIVE.  No  remedy  specified  herein  shall  be
deemed to be such party's exclusive remedy, and accordingly, in addition to
all  of the rights and remedies provided for in this Agreement, the parties
shall  have  all  other  rights and remedies provided to them by applicable
law, rule or regulation.

     8.   COMPANY'S  RESERVATION  OF  RIGHTS.   Employee  acknowledges  and
understands that the Employee  serves at the pleasure of the Board and that
the Company has the right at any  time to terminate Employee's status as an
employee of the Company, or to change  or  diminish  his  status during the
Employment  Term,  subject  to  the  rights  of  the Employee to claim  the
benefits conferred by this Agreement.

     9.   JURY TRIAL WAIVER.  THE PARIES HEREBY WAIVE  TRIAL BY JURY IN ANY
JUDICIAL  PROCEEDING  TO  WHICH  THEY  ARE PARTIES INVOLVING,  DIRECTLY  OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING  OUT OF, RELATED TO, OR CONNECTED
WITH THIS AGREEMENT.

     10.  SURVIVAL.  The rights and obligations of the Company and Employee
contained in Article V of this Agreement shall  survive  the termination of
the  Agreement.  Following the Date of Termination, each party  shall  have
the right  to enforce all rights, and shall be bound by all obligations, of
such party that are continuing rights and obligations under this Agreement.

     11.  COUNTERPARTS.   This  Agreement  may  be  executed in one or more
counterparts, each of which shall be deemed to be an  original  but  all of
which together shall constitute one and the same instrument.

     IN  WITNESS  WHEREOF,  the  Company  and the Employee have caused this
Agreement to be executed as of the Agreement Date.

                              STEWART ENTERPRISES, INC.

                              By:/s/ James W. McFarland
                                 ----------------------------------
                                         James W. McFarland
                                   Compensation Committee Chairman

                              EMPLOYEE:

                                      /s/ G. Kenneth Stephens, Jr.
                                 ----------------------------------
                                      G. Kenneth Stephens, Jr.CHANGE OF CONTROL AGREEMENT

     This   Change  of  Control  Agreement  ("Agreement")  between  Stewart
Enterprises,  Inc., a Louisiana corporation (the "Company"), and G. Kenneth
Stephens, Jr. (the "Employee") is dated as of January 31, 2000 (the "Change
of Control Agreement Date").

                                 ARTICLE I
                                DEFINITIONS

     1.1  EMPLOYMENT AGREEMENT.  After a Change of Control (defined below),
this Agreement  supersedes the Employment Agreement dated as of January 31,
2000 between Employee  and  the Company (the "Employment Agreement") except
to  the extent that certain provisions  of  the  Employment  Agreement  are
expressly  incorporated  by  reference  herein.   After a Change of Control
(defined below), the definitions in this Agreement supersede definitions in
the  Employment  Agreement,  but  capitalized  terms not  defined  in  this
Agreement have the meanings given to them in the Employment Agreement.

     1.2  DEFINITION  OF "COMPANY".  As used in this  Agreement,  "Company"
shall mean the Company as defined above and any successor to or assignee of
(whether  direct  or  indirect,   by  purchase,  merger,  consolidation  or
otherwise) all or substantially all  of  the  assets  or  business  of  the
Company.

     1.3  CHANGE OF CONTROL DEFINED.  "Change of Control" shall mean:

          (a)  the  acquisition  by any individual, entity or group (within
     the meaning of Section 13(d)(3)  or  14(d)(2)  of the Exchange Act) of
     beneficial  ownership  (within the meaning of Rule  13d-3  promulgated
     under the Exchange Act)  of more than 30% of the outstanding shares of
     the Company's Class A Common  Stock,  no  par  value  per  share  (the
     "Common   Stock");  provided,  however,  that  for  purposes  of  this
     subsection  (a),  the  following  acquisitions  shall not constitute a
     Change of Control:

               (i)  any  acquisition  of  Common  Stock directly  from  the
          Company,

               (ii) any acquisition of Common Stock by the Company,

               (iii)  any  acquisition  of  Common Stock  by  any  employee
          benefit plan (or related trust) sponsored  or  maintained  by the
          Company or any corporation controlled by the Company, or

               (iv)  any  acquisition  of  Common  Stock by any corporation
          pursuant to a transaction that complies with  clauses  (i),  (ii)
          and (iii) of subsection (c) of this Section 1.3; or

          (b)  individuals who, as of the Change of Control Agreement Date,
     constitute  the  Board (the "Incumbent Board") cease for any reason to
     constitute at least  a  majority of the Board; provided, however, that
     any individual becoming a director subsequent to the Change of Control
     Agreement Date whose election,  or  nomination  for  election  by  the
     Company's  shareholders, was approved by a vote of at least a majority
     of  the  directors  then  comprising  the  Incumbent  Board  shall  be
     considered  a  member of the Incumbent Board, unless such individual's
     initial assumption  of  office  occurs  as  a  result  of an actual or
     threatened election contest with respect to the election or removal of
     directors  or  other actual or threatened solicitation of  proxies  or
     consents by or on  behalf  of a person other than the Incumbent Board;
     or

          (c) consummation of a reorganization, merger or consolidation, or
     sale or other disposition of all of substantially all of the assets of
     the  Company  (a  "Business  Combination"),   in  each  case,  unless,
     following such Business Combination,

               (i) all or substantially all of the individuals and entities
          who  were  the  beneficial  owners  of the Company's  outstanding
          common stock and the Company's voting securities entitled to vote
          generally in the election of directors  immediately prior to such
          Business   Combination   have   direct  or  indirect   beneficial
          ownership, respectively, of more than 50% of the then outstanding
          shares of common stock, and more  than 50% of the combined voting
          power of the then outstanding voting  securities entitled to vote
          generally  in  the  election  of directors,  of  the  corporation
          resulting from such Business Combination  (which, for purposes of
          this paragraph (i) and paragraphs (ii) and (iii), shall include a
          corporation  which as a result of such transaction  controls  the
          Company or all  or  substantially  all  of  the  Company's assets
          either directly or through one or more subsidiaries), and

               (ii) except to the extent that such ownership  existed prior
          to the Business Combination, no person (excluding any corporation
          resulting from such Business Combination or any employee  benefit
          plan  or  related  trust  of  the  Company  or  such  corporation
          resulting  from  such  Business  Combination) beneficially  owns,
          directly  or  indirectly, 20% or more  of  the  then  outstanding
          shares of common  stock  of  the  corporation resulting from such
          Business Combination or 20% or more  of the combined voting power
          of the then outstanding voting securities  of  such  corporation,
          and

               (iii)  at  least  a majority of the members of the board  of
          directors  of  the  corporation   resulting  from  such  Business
          Combination were members of the Incumbent  Board  at  the time of
          the execution of the initial agreement, or of the action  of  the
          Board, providing for such Business Combination; or

          (d)  approval  by  the  shareholders of the Company of a complete
     liquidation or dissolution of the Company.

     1.4  AFFILIATE.  "Affiliate" or  "affiliated companies" shall mean any
company  controlled by, controlling, or  under  common  control  with,  the
Company.

     1.5  CAUSE.  "Cause" shall mean:

               (a)  the  willful  and  continued failure of the Employee to
          perform substantially the Employee's  duties  with the Company or
          its  affiliates  (other  than  any  such  failure resulting  from
          incapacity due to physical or mental illness),  after  a  written
          demand  for  substantial performance is delivered to the Employee
          by the Board of  the  Company  which  specifically identifies the
          manner  in which the Board believes that  the  Employee  has  not
          substantially performed the Employee's duties, or

               (b)  the willful engaging by the Employee in illegal conduct
          or  gross  misconduct   which   is  materially  and  demonstrably
          injurious to the Company or its affiliates.

For purposes of this provision, no act or failure  to  act,  on the part of
the Employee, shall be considered "willful" unless it is done,  or  omitted
to be done, by the Employee in bad faith or without reasonable belief  that
the  Employee's action or omission was in the best interests of the Company
or its  affiliates.  Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions
of a senior  officer of the Company or based upon the advice of counsel for
the Company or its affiliates shall be conclusively presumed to be done, or
omitted to be done, by the Employee in good faith and in the best interests
of the Company  or  its  affiliates.   The  cessation  of employment of the
Employee shall not be deemed to be for Cause unless and  until  there shall
have been delivered to the Employee a copy of a resolution duly adopted  by
the  affirmative  vote  of  not  less  than  three-quarters  of  the entire
membership of the Board at a meeting of the Board called and held  for such
purpose  (after  reasonable  notice  is  provided  to  the Employee and the
Employee is given an opportunity, together with counsel, to be heard before
the  Board),  finding  that,  in the good faith opinion of the  Board,  the
Employee is guilty of the conduct  described  in  subparagraph  (a)  or (b)
above, and specifying the particulars thereof in detail.

     1.6  GOOD REASON.  "Good Reason" shall mean:

          (a)  Any failure of the Company or its affiliates to provide  the
     Employee with  the position, authority, duties and responsibilities at
     least commensurate  in all material respects with the most significant
     of those held, exercised  and  assigned at any time during the 120-day
     period  immediately  preceding  the  Change  of  Control.   Employee's
     position, authority, duties and responsibilities  after  a  Change  of
     Control  shall not be considered commensurate in all material respects
     with Employee's position, authority, duties and responsibilities prior
     to a Change  of  Control  unless  after the Change of Control Employee
     holds  (i) an equivalent position in  the  Company  or,  (ii)  if  the
     Company  is  controlled or will after the transaction be controlled by
     another company  (directly  or  indirectly), an equivalent position in
     the ultimate parent company.

          (b) The assignment to the Employee  of any duties inconsistent in
     any  material  respect  with  Employee's position  (including  status,
     offices,  titles  and reporting requirements),  authority,  duties  or
     responsibilities as  contemplated by Section 2.1(b) of this Agreement,
     or any other action that  results  in  a  diminution in such position,
     authority, duties or responsibilities, excluding  for  this purpose an
     isolated, insubstantial and inadvertent action not taken  in bad faith
     that  is  remedied  within  10  days  after  receipt of written notice
     thereof from the Employee to the Company;

          (c) Any failure by the Company or its affiliates  to  comply with
     any  of  the  provisions  of  this  Agreement, other than an isolated,
     insubstantial and inadvertent failure  not occurring in bad faith that
     is remedied within 10 days after receipt  of  written  notice  thereof
     from the Employee to the Company;

          (d)  The  Company or its affiliates requiring the Employee to  be
     based at any office  or  location  other  than  as provided in Section
     2.1(b)(ii) hereof or requiring the Employee to travel on business to a
     substantially greater extent than required immediately  prior  to  the
     Change of Control;

          (e)  Any  purported  termination  of  the  Employee's  employment
     otherwise than as expressly permitted by this Agreement; or

          (f)  Any  failure  by  the  Company  to  comply  with and satisfy
     Sections 3.1(c) and (d) of this Agreement.

For  purposes  of this Section 1.6, any good faith determination  of  "Good
Reason" made by  the  Employee  shall  be  conclusive.   Anything  in  this
Agreement  to  the  contrary notwithstanding, a termination by the Employee
for any reason during  the  30-day  period  immediately following the first
anniversary of the Change of Control shall be  deemed  to  be a termination
for Good Reason.

                                ARTICLE II
                         CHANGE OF CONTROL BENEFIT

     2.1   EMPLOYMENT TERM AND CAPACITY AFTER CHANGE OF CONTROL.   (a) If a
Change of Control occurs on or before October 31, 2000, then the Employee's
employment term (the "Employment Term") shall continue through the later of
(a)  the  second  anniversary  of  the Change of Control or (b) October 31,
2000,  subject  to  any earlier termination  of  Employee's  status  as  an
employee pursuant to this Agreement.

     (b)  After a Change of Control and during the Employment Term, (i) the
Employee's  position  (including  status,  offices,  titles  and  reporting
requirements), authority,  duties  and  responsibilities  shall be at least
commensurate  in all material respects with the most significant  of  those
held, exercised  and  assigned  at  any  time  during  the  120-day  period
immediately preceding the Change of Control and (ii) the Employee's service
shall  be  performed  at  the  location  where  the  Employee  was employed
immediately preceding the Change of Control or any office or location  less
than  35  miles from such location.  Employee's position, authority, duties
and responsibilities  after  a  Change  of  Control shall not be considered
commensurate in all material respects with Employee's  position, authority,
duties and responsibilities prior to a Change of Control  unless  after the
Change of Control Employee holds (x) an equivalent position in the  Company
or,  (y)  if  the  Company  is  controlled or will after the transaction be
controlled  by  another company (directly  or  indirectly),  an  equivalent
position in the ultimate  parent company.  Employee shall devote himself to
his employment responsibilities  with  the  Company (or, if applicable, the
ultimate  parent  entity)  as  provided  in Article  I  Section  3  of  the
Employment Agreement.

     2.2  COMPENSATION AND BENEFITS.  During  the Employment Term, Employee
shall be entitled to the following compensation and benefits:

          (a) SALARY.  A salary ("Base Salary") at the rate of $225,000 per
     year, payable to the Employee at such intervals  no less frequent than
     the most frequent intervals in effect at any time  during  the 120-day
     period  immediately  preceding  the  Change  of  Control  or,  if more
     favorable  to  the Employee, the intervals in effect at any time after
     the Change of Control  for other peer employees of the Company and its
     affiliated companies.

          (b) BONUS.  An annual  incentive  bonus (the "Bonus") of $200,000
     shall be paid in cash (1) no later than  November  30,  2000 or (2) if
     the Employee so elects, between January 1 and January 15 of 2001.

          (c)  FRINGE BENEFITS.  The Employee shall be entitled  to  fringe
     benefits  (including,   but  not  limited  to,  automobile  allowance,
     reimbursement for membership  dues,  and  first  class  air travel) in
     accordance  with  the  most  favorable  agreements,  plans, practices,
     programs and policies of the Company and its affiliated  companies  in
     effect  for  the  Employee  at  any  time  during  the  120-day period
     immediately  preceding the Change of Control or, if more favorable  to
     the Employee,  as  in  effect  generally  at  any time thereafter with
     respect  to  other peer employees of the Company  and  its  affiliated
     companies.

          (d) EXPENSES.   The  Employee shall be entitled to receive prompt
     reimbursement for all reasonable  expenses incurred by the Employee in
     accordance with the most favorable agreements, policies, practices and
     procedures of the Company and its affiliated  companies  in effect for
     the  Employee  at  any  time  during  the  120-day  period immediately
     preceding the Change of Control or, if more favorable to the Employee,
     as  in effect generally at any time thereafter with respect  to  other
     peer employees of the Company and its affiliated companies.

          (e)  INCENTIVE, SAVINGS AND RETIREMENT PLANS.  The Employee shall
     be entitled  to  participate  in all incentive, savings and retirement
     plans, practices, policies and  programs applicable generally to other
     peer employees of the Company and  its affiliated companies, but in no
     event shall such plans, practices, policies  and  programs provide the
     Employee with incentive opportunities (measured with  respect  to both
     regular  and  special  incentive opportunities, to the extent, if any,
     that  such  distinction  is  applicable),  savings  opportunities  and
     retirement benefit opportunities,  in  each  case, less favorable than
     the most favorable of those provided by the Company and its affiliated
     companies  for  the Employee under any agreements,  plans,  practices,
     policies and programs  as  in  effect  at  any time during the 120-day
     period  immediately  preceding  the  Change  of Control  or,  if  more
     favorable to the Employee, those provided generally  at any time after
     the Change of Control to other peer employees of the Company  and  its
     affiliated companies.

          (f)  WELFARE  BENEFIT  PLANS.  The Employee and/or the Employee's
     family, as the case may be, shall be eligible for participation in and
     shall receive all benefits under  welfare  benefit  plans,  practices,
     policies  and  programs  provided  by  the  Company and its affiliated
     companies  (including,  without  limitation,  medical,   prescription,
     dental,  disability, employee life, group life, accidental  death  and
     travel accident insurance plans and programs) to the extent applicable
     generally  to  other  peer employees of the Company and its affiliated
     companies, but in no event  shall  such plans, practices, policies and
     programs  provide  the  Employee with benefits,  in  each  case,  less
     favorable than the most favorable of any agreements, plans, practices,
     policies and programs in  effect  for  the Employee at any time during
     the 120-day period immediately preceding  the Change of Control or, if
     more favorable to the Employee, those provided  generally  at any time
     after the Change of Control to other peer employees of the Company and
     its affiliated companies.

          (g) OFFICE AND SUPPORT STAFF.  The Employee shall be entitled  to
     an  office  or  offices  of  a  size  and  with  furnishings and other
     appointments,  and  to  exclusive  personal  secretarial   and   other
     assistance,  at  least  equal  to  the most favorable of the foregoing
     provided to the Employee by the Company  and  its affiliated companies
     at any time during the 120-day period immediately preceding the Change
     of  Control  or,  if  more  favorable  to  the Employee,  as  provided
     generally at any time thereafter with respect  to other peer employees
     of the Company and its affiliated companies.

          (h) VACATION.  The Employee shall be entitled to paid vacation in
     accordance  with  the  most  favorable  agreements,  plans,  policies,
     programs and practices of the Company and its affiliated  companies as
     in  effect  for  the  Employee  at  any time during the 120-day period
     immediately preceding the Change of Control  or,  if more favorable to
     the  Employee,  as  in  effect  generally at any time thereafter  with
     respect to other peer employees of  the  Company  and  its  affiliated
     companies.

     2.3  TERMINATION  OF  EMPLOYMENT  AFTER A CHANGE OF CONTROL.  After  a
Change of Control and during the Employment  Term, the Employee's status as
an  employee  shall terminate or may be terminated  by  the  Employee,  the
Company (or, if  applicable,  the  ultimate parent company), as provided in
Article  III  of  the Employment Agreement  (provided,  however,  that  the
definitions of "Cause"  and "Good Reason" in this Agreement shall supersede
those definitions in the Employment Agreement).

     2.4  OBLIGATIONS UPON TERMINATION AFTER A CHANGE OF CONTROL.

          (a)  TERMINATION   BY  COMPANY  FOR  REASONS  OTHER  THAN  DEATH,
     DISABILITY OR CAUSE; BY EMPLOYEE  FOR GOOD REASON.  If, after a Change
     of  Control  and  during the Employment  Term,  the  Company  (or,  if
     applicable the ultimate  parent  company),  terminates  the Employee's
     employment other than for Cause, death or Disability, or  the Employee
     terminates  employment for Good Reason, the Company shall pay  to  the
     Employee in a  lump  sum  in  cash  within  30  days  of  the  Date of
     Termination  an  amount equal to three times the sum of (i) the amount
     of Base Salary in  effect  at  the  Date of Termination, plus (ii) the
     maximum Bonus for which the Employee  is  eligible  for  the  12-month
     period in which the Date of Termination occurs.

          (b)  DEATH.   If,  after  a  Change  of  Control  and  during the
     Employment Term, the Employee's status as an employee is terminated by
     reason of the Employee's death, this Agreement shall terminate without
     further obligation to the Employee's legal representatives (other than
     those  already accrued to the Employee), other than the obligation  to
     make any payments due pursuant to employee benefit plans maintained by
     the Company or its affiliated companies.

          (c)  DISABILITY.   If,  after  a Change of Control and during the
     Employment Term, Employee's status as  an  employee  is  terminated by
     reason   of  Employee's  Disability  (as  defined  in  the  Employment
     Agreement),  this Agreement shall terminate without further obligation
     to the Employee  (other  than  those already accrued to the Employee),
     other  than  the  obligation to make  any  payments  due  pursuant  to
     employee benefit plans  maintained  by  the  Company or its affiliated
     companies.

          (d)  CAUSE.   If,  after  a  Change  of Control  and  during  the
     Employment Term, the Employee's status as an employee is terminated by
     the Company (or, if applicable, the ultimate parent entity) for Cause,
     this  Agreement  shall  terminate without further  obligation  to  the
     Employee other than for obligations  imposed  by  law  and obligations
     imposed  pursuant  to  any  employee  benefit plan maintained  by  the
     Company or its affiliated companies.

          (e) TERMINATION BY EMPLOYEE FOR REASONS  OTHER  THAN GOOD REASON.
     If,  after  a  Change of Control and during the Employment  Term,  the
     Employee's status  as  an  employee  is terminated by the Employee for
     reasons other than Good Reason, then the  Company  shall  pay  to  the
     Employee  an  amount equal to a single year's Base Salary in effect at
     the Date of Termination, payable in equal installments over a two-year
     period at such  intervals  as  other salaried employees of the Company
     are paid.

          (f) NONDISCLOSURE, NONCOMPETITION  AND  PROPRIETARY  RIGHTS.  The
     rights  and  obligations  of  the  Company  and Employee contained  in
     Article V ("Nondisclosure, Noncompetition and  Proprietary Rights") of
     the Employment Agreement shall continue to apply  after  a  Change  of
     Control, except as provided in Section 2.10 of this Agreement.

     2.5  ACCRUED  OBLIGATIONS AND OTHER BENEFITS.  It is the intent of the
Employment Agreement and this Agreement that upon termination of employment
for  any reason the Employee  be  entitled  to  receive  promptly,  and  in
addition  to  any  other benefits specifically provided, (a) the Employee's
Base Salary through  the  Date of Termination to the extent not theretofore
paid, (b) any accrued vacation pay, to the extent not theretofore paid, and
(c) any other amounts or benefits  required to be paid or provided or which
the  Employee  is  entitled to receive  under  any  plan,  program,  policy
practice or agreement of the Company.

     2.6  STOCK OPTIONS.   The  foregoing  benefits  are  intended to be in
addition to the value of any options to acquire Common Stock of the Company
the  exercisability of which is accelerated pursuant to the  terms  of  any
stock  option,  incentive  or  other  similar  plan heretofore or hereafter
adopted by the Company.

     2.7  PROTECTION OF BENEFITS.  To the extent  permitted  by  applicable
law,  the  Company  shall  take  all  reasonable  steps  to ensure that the
Employee is not, by reason of a Change of Control, deprived of the economic
value   (including   any  value  attributable  to  the  Change  of  Control
transaction) of (a) any  options  to acquire Common Stock of the Company or
(b) any Common Stock of the Company beneficially owned by the Employee.

     2.8  CERTAIN  ADDITIONAL PAYMENTS.   If  after  a  Change  of  Control
Employee is subjected to an excise tax as a result of the "excess parachute
payment" provisions  of  section 4999 of the Internal Revenue Code of 1986,
as amended, whether by virtue  of  the  benefits  of  this  Agreement or by
virtue  of  any  other benefits provided to Employee in connection  with  a
Change  of Control  pursuant  to  Company  plans,  policies  or  agreements
(including  the value of any options to acquire Common Stock of the Company
the exercisability  of  which  is  accelerated pursuant to the terms of any
stock option, incentive or similar plan  heretofore or hereafter adopted by
the  Company),  the  Company  shall pay to Employee  (whether  or  not  his
employment has terminated) such  amounts as are necessary to place Employee
in the same position after payment of federal income and excise taxes as he
would have been if such provisions had not been applicable to him.

     2.9  LEGAL FEES.  The Company  agrees  to pay as incurred, to the full
extent permitted by law, all legal fees and expenses which the Employee may
reasonably  incur  as a result of any contest (regardless  of  the  outcome
thereof)  by the Company,  the  Employee  or  others  of  the  validity  or
enforceability  of,  or  liability  under,  any provision of this Agreement
(including as a result of any contest by the  Employee  about the amount or
timing of any payment pursuant to this Agreement.)

     2.10 SET-OFF;  MITIGATION.  After a Change of Control,  the  Company's
and its affiliates' obligations  to  make the payments provided for in this
Agreement and otherwise to perform its  obligations  hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense  or other claim,
right  or action which the Company or its affiliates may have  against  the
Employee  or  others.   After a Change of Control, an asserted violation of
the provisions of Article V ("Nondisclosure, Noncompetition and Proprietary
Rights") of the Employment  Agreement  shall  not  constitute  a  basis for
deferring  or  withholding  any  amounts otherwise payable to the Employee;
specifically, the third through sixth  sentences  of  Article  V  Section 4
shall  not  apply  after  a  Change  of  Control.   It is the intent of the
Employment Agreement and this Agreement that in no event shall the Employee
be obligated to seek other employment or take any other  action  by  way of
mitigation  of  the  amounts  payable  to  the  Employee  under  any of the
provisions of this Agreement or the Employment Agreement.

                                ARTICLE III
                               MISCELLANEOUS

     3.1  BINDING EFFECT; SUCCESSORS.

          (a)  This  Agreement  shall  be  binding  upon  and  inure to the
benefit of the Company and any of its successors or assigns.

          (b)  This Agreement is personal to the Employee and shall  not be
assignable  by the Employee without the consent of the Company (there being
no obligation  to  give such consent) other than such rights or benefits as
are transferred by will or the laws of descent and distribution.

          (c)  The Company  shall  require  any successor to or assignee of
(whether  direct  or  indirect,  by  purchase,  merger,   consolidation  or
otherwise)  all  or  substantially all of the assets or businesses  of  the
Company (i) to assume unconditionally and expressly this Agreement and (ii)
to agree to perform or  to  cause  to  be  performed all of the obligations
under this Agreement in the same manner and  to  the  same  extent as would
have been required of the Company had no assignment or succession occurred,
such assumption to be set forth in a writing reasonably satisfactory to the
Employee.

          (d)  The Company shall also require all entities that  control or
that  after  the  transaction  will  control  (directly  or indirectly) the
Company or any such successor or assignee to agree to cause to be performed
all of the obligations under this Agreement, such agreement to be set forth
in a writing reasonably satisfactory to the Employee.

     3.2  NOTICES.  All notices hereunder must be in writing  and  shall be
deemed  to  have  given  upon  receipt of delivery by: (a) hand (against  a
receipt  therefor), (b) certified  or  registered  mail,  postage  prepaid,
return receipt  requested,  (c)  a  nationally recognized overnight courier
service (against a receipt therefor)  or  (d)  telecopy  transmission  with
confirmation of receipt.  All such notices must be addressed as follows:

     If to the Company, to:

     Stewart Enterprises, Inc.
     110 Veterans Memorial Boulevard
     Metairie, Louisiana  70005
     Attn:  Chief Executive Officer

     If to the Employee, to:

     G. Kenneth Stephens, Jr.
     6707 Democracy Blvd, Suite 920
     Bethesda, Maryland  20817

or  such  other  address as to which any party hereto may have notified the
other in writing.

     3.3  GOVERNING LAW.  This Agreement shall be construed and enforced in
accordance with and governed by the internal laws of the State of Louisiana
without regard to  principles  of  conflict  of  laws,  except as expressly
provided in Article V Section 6 of the Employment Agreement with respect to
the resolution of disputes arising under, or the Company's  enforcement of,
such Article V.

     3.4  WITHHOLDING.  The 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.

     3.5  AMENDMENT,  WAIVER.   No  provision  of  this  Agreement  may  be
modified,  amended  or  waived except by an instrument in writing signed by
both parties.

     3.6  SEVERABILITY.  If any term or provision of this Agreement, or the
application thereof to any  person or circumstance, shall at any time or to
any extent be invalid, illegal  or unenforceable in any respect as written,
Employee and the Company intend for  any court construing this Agreement to
modify or limit such provision so as to  render it valid and enforceable to
the  fullest  extent  allowed  by  law.  Any such  provision  that  is  not
susceptible of such reformation shall  be  ignored  so as to not affect any
other term or provision hereof, and the remainder of this Agreement, or the
application  of  such  term or provision to persons or circumstances  other
than those as to which it  is held invalid, illegal or unenforceable, shall
not be affected thereby and each term and provision of this Agreement shall
be valid and enforced to the fullest extent permitted by law.

     3.7  WAIVER OF BREACH.   The waiver by either party of a breach of any
provision of this Agreement shall  not  operate or be construed as a waiver
of any subsequent breach thereof.

     3.8  REMEDIES  NOT EXCLUSIVE.  No remedy  specified  herein  shall  be
deemed to be such party's exclusive remedy, and accordingly, in addition to
all of the rights and  remedies provided for in this Agreement, the parties
shall have all other rights  and  remedies  provided  to them by applicable
law, rule or regulation.

     3.9  COMPANY'S  RESERVATION  OF  RIGHTS.   Employee  acknowledges  and
understands that the Employee serves at the pleasure of the  Board and that
the Company has the right at any time to terminate Employee's  status as an
employee  of  the  Company, or to change or diminish his status during  the
Employment Term, subject  to  the  rights  of  the  Employee  to  claim the
benefits conferred by this Agreement.

     3.10 COUNTERPARTS.   This  Agreement  may  be  executed in one or more
counterparts, each of which shall be deemed to be an  original  but  all of
which together shall constitute one and the same instrument.

     IN  WITNESS  WHEREOF,  the  Company  and the Employee have caused this
Agreement to be executed as of the Change of Control Agreement Date.

                              STEWART ENTERPRISES, INC.

                              By: /S/ JAMES W. MCFARLAND
                                 ---------------------------------
                                         James W. McFarland
                                   Compensation Committee Chairman

                              EMPLOYEE:

                                  /S/ G. KENNETH STEPHENS, JR.
                                 ---------------------------------
                                      G. Kenneth Stephens, Jr.

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