Document:

EX-10.3

 Exhibit 10.3 

EXECUTION VERSION 
  

 
  

SECOND AMENDED AND RESTATED PLEDGE AGREEMENT 

among 
 STONEMOR OPERATING LLC,

 VARIOUS ADDITIONAL BORROWERS, 

STONEMOR GP LLC, 
 STONEMOR
PARTNERS L.P., 
 and 
 BANK OF
AMERICA, N.A., 
 as Collateral Agent 

dated December 19, 2014 
  

 
  

					
	ARTICLE I DEFINITIONS	  	2
		
	ARTICLE II SECURITY FOR OBLIGATIONS	  	3
		
	ARTICLE III PLEDGE OF SECURITY INTEREST, ETC.	  	3
		
	 3.1 Pledge
	  	3
	 3.2 Procedures
	  	6
	 3.3 Subsequently Acquired Collateral
	  	7
	 3.4 Transfer Taxes
	  	7
	 3.5 Certain Representations and Warranties Regarding the Collateral
	  	8
		
	ARTICLE IV APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC.	  	9
		
	ARTICLE V VOTING, ETC., WHILE NO EVENT OF DEFAULT OR SPECIFIED DEFAULT	  	9
		
	ARTICLE VI DIVIDENDS AND OTHER DISTRIBUTIONS	  	9
		
	ARTICLE VII REMEDIES IN CASE OF AN EVENT OF DEFAULT	  	10
		
	ARTICLE VIII REMEDIES, ETC., CUMULATIVE	  	11
		
	ARTICLE IX APPLICATION OF PROCEEDS	  	12
		
	ARTICLE X PURCHASERS OF COLLATERAL	  	12
		
	ARTICLE XI INDEMNITY	  	12
		
	ARTICLE XII FURTHER ASSURANCES; POWER OF ATTORNEY	  	13
		
	ARTICLE XIII THE COLLATERAL AGENT AS COLLATERAL AGENT	  	13
		
	ARTICLE XIV TRANSFER BY THE PLEDGORS	  	14
		
	ARTICLE XV REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS	  	14
		
	 ARTICLE XVI LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION AND/OR A TRANSMITTING UTILITY);
JURISDICTION OF ORGANIZATION; LOCATION; ORGANIZATIONAL IDENTIFICATION NUMBERS; CHANGES THERETO; ETC.
	  	16
		
	ARTICLE XVII PLEDGORS’ OBLIGATIONS ABSOLUTE, ETC.	  	17
		
	ARTICLE XVIII PRIVATE SALES	  	17
		
	ARTICLE XIX TERMINATION; RELEASE	  	18

					
	 ARTICLE XX NOTICES, ETC.
	  	 	19	  
		
	 ARTICLE XXI COLLATERAL AGENT NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER
	  	 	19	  
		
	 ARTICLE XXII WAIVER; AMENDMENT
	  	 	20	  
		
	 ARTICLE XXIII MISCELLANEOUS
	  	 	20	  
		
	 ARTICLE XXIV GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL
	  	 	20	  
		
	 ARTICLE XXV ADDITIONAL PLEDGORS
	  	 	21	  
		
	 ARTICLE XXVI RECOURSE
	  	 	22	  
		
	 ARTICLE XXVII FRAUDULENT CONVEYANCE; ETC.
	  	 	22	  
		
	 ARTICLE XXVIII RELEASE OF PLEDGORS
	  	 	22	  
		
	 ARTICLE XXIX EFFECT ON EXISTING PLEDGE AGREEMENT
	  	 	23	  
		
	 ARTICLE XXX Controlled Non-Profits
	  	 	23	  

 ANNEXES 
  

	 	A	FORM OF AGREEMENT REGARDING UNCERTIFICATED SECURITIES, LIMITED LIABILITY COMPANY INTERESTS AND PARTNERSHIP INTEREST 

  
 - ii - 

 SECOND AMENDED AND RESTATED PLEDGE AGREEMENT 

SECOND AMENDED AND RESTATED PLEDGE AGREEMENT, dated December 19, 2014 (as amended, restated, modified and/or supplemented from time to
time, this “Agreement”), among each of the undersigned (each, a “Pledgor” and, together with each other entity which becomes a party hereto pursuant to Article XXV, collectively, the
“Pledgors”) and Bank of America, N.A., a national banking association (“Bank of America”), in its capacity as administrative and collateral agent for the benefit of the Secured Parties (together with any successor
in such capacity, the “Collateral Agent”). 
 BACKGROUND 

A. This Agreement is being delivered pursuant to that certain Fourth Amended and Restated Credit Agreement, dated December 19, 2014,
among StoneMor GP LLC, a Delaware limited liability company (the “General Partner”), StoneMor Partners L.P., a Delaware limited partnership (the “Partnership”), StoneMor Operating LLC, a Delaware limited liability
company (the “Operating Company”), the Subsidiaries of the Operating Company party thereto (together with the Operating Company, each individually a “Borrower” and collectively, the “Borrowers” and,
together with the General Partner and the Partnership, each a “Credit Party”, and collectively, the “Credit Parties”), various financial institutions from time to time party thereto (the “Lenders”),
and Bank of America, in it capacity as Collateral Agent, and as the Swing Line Lender and the L/C Issuer thereunder (as amended, restated, modified, extended, renewed, replaced, supplemented, restructured and/or refinanced from time to time, the
“Credit Agreement”). Capitalized terms used herein but not otherwise defined (either herein or by reference to the Security Agreement or the UCC) shall have the meanings given to such terms in the Credit Agreement. 

B. Pursuant to the Original Credit Agreement and the Second Credit Agreement, the Credit Parties delivered to Bank of America, in its capacity
as collateral agent for the Lenders and other secured creditors, a Pledge Agreement, dated September 20, 2004, as amended, modified and supplemented from time to time (the “Prior Pledge Agreement”). 

C. Pursuant to the Prior Credit Agreement and the Existing Credit Agreement, the Prior Pledge Agreement was amended and restated by the
Amended and Restated Pledge Agreement, dated April 29, 2011, as amended by the Confirmation and Amendment Agreement, dated January 19, 2012, and as further amended, modified and supplemented from time to time (the “Existing Pledge
Agreement”). 
 D. It is a condition precedent to the amending and restating of the Existing Credit Agreement with the Credit
Agreement, that the Credit Parties shall have executed and delivered to the Collateral Agent this Agreement. 
 E. Each Pledgor will obtain
benefits from the incurrence of Loans by, and the issuance of Letters of Credit for the account of, the Borrowers under the Credit Agreement and the entering into and maintaining of Secured Hedge Agreements and Secured Cash Management Agreement,
and, accordingly, each Pledgor desires to execute this Agreement to satisfy the condition precedent described in the preceding paragraph. 

  
 - 1 - 

 NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Existing Pledge Agreement is hereby amended and restated in its entirety as follows: 

ARTICLE I 
 DEFINITIONS 

Unless otherwise defined herein, all capitalized terms used herein and defined in (i) the Credit Agreement, (ii) the Security
Agreement (as defined in the Credit Agreement) or (iii) the UCC (as defined in the Credit Agreement) shall be used herein as therein defined. Reference to singular terms shall include the plural and vice versa. 

The following capitalized terms used herein shall have the definitions specified below: 

“Collateral” has the meaning set forth in Section 3.1 hereof. 

“Collateral Account” means any account established and maintained by the Collateral Agent in the name of any Pledgor to which
Collateral may be credited. 
 “Indemnitees” has the meaning set forth in Article XI hereof. 

“Limited Liability Company Assets” means all assets, whether tangible or intangible and whether real, personal or mixed
(including, without limitation, all limited liability company capital and interest in other limited liability companies), at any time owned by any Pledgor or represented by any Limited Liability Company Interest. 

“Limited Liability Company Interests” means the entire limited liability company membership interest at any time owned by any
Pledgor in any limited liability company. 
 “Partnership Assets” means all assets, whether tangible or intangible and
whether real, personal or mixed (including, without limitation, all partnership capital and interest in other partnerships), at any time owned or represented by any Partnership Interest. 

“Partnership Interest” means the entire general partnership interest or limited partnership interest at any time owned by any
Pledgor in any general partnership or limited partnership. 
 “Pledged Notes” means (x) all intercompany notes at any
time issued to each Pledgor and (y) all other Instruments and Promissory Notes from time to time issued to, or held by, each Pledgor. 

  
 - 2 - 

 “Securities Act” means the Securities Act of 1933, as amended, as in effect from
time to time. 
 “Stock” means all of the issued and outstanding shares of capital stock of any corporation at any time
owned by any Pledgor. 
 ARTICLE II 

SECURITY FOR OBLIGATIONS. 
 This
Agreement is made by each Pledgor for the benefit of the Secured Parties to secure the full and prompt payment when due (whether at stated maturity, by acceleration or otherwise) of any and all Secured Obligations. 

ARTICLE III 
 PLEDGE OF SECURITY
INTEREST, ETC. 
 3.1 Pledge. To secure the prompt payment and performance in full when due, whether by lapse of time, acceleration,
mandatory prepayment or otherwise, of the Secured Obligations now or hereafter owed or to be performed by such Pledgor, each Pledgor does hereby grant, pledge and assign to the Collateral Agent for the benefit of the Secured Parties, and does hereby
create a continuing security interest in favor of the Collateral Agent for the benefit of the Secured Parties in, any and all of the right, title and interest in and to the following, whether now owned or existing or hereafter from time to time
owned, acquired or arising (collectively, the “Collateral”): 
 (a) any Collateral Account, including any and all assets of
whatever type or kind deposited by such Pledgor in such Collateral Account, whether now owned or hereafter acquired, existing or arising, including, without limitation, all Financial Assets, Investment Property, moneys, checks, drafts, Instruments,
Securities or interests therein of any type or nature deposited or required by any Credit Document to be deposited in the Collateral Account, and all investments and all certificates and other Instruments (including depository receipts, if any) from
time to time representing or evidencing the same, and all dividends, interest, distributions, cash and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing; 

(b) all Securities owned or held by such Pledgor from time to time and all options and warrants owned by such Pledgor from time to time to
purchase Securities; 
 (c) all Limited Liability Company Interests owned by such Pledgor from time to time and all of its right, title and
interest in each limited liability company to which each such Limited Liability Company Interest relates, whether now existing or hereafter acquired, including, without limitation, to the fullest extent permitted under the terms and provisions of
the documents and agreements governing such Limited Liability Company Interests and applicable law: 
 (i) all its capital
therein and its interest in all profits, losses, Limited Liability Company Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Limited Liability Company Interests; 

  
 - 3 - 

 (ii) all other payments due or to become due to such Pledgor in respect of
Limited Liability Company Interests, whether under any limited liability company agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise; 

(iii) all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under
any limited liability company agreement or operating agreement, or at law or otherwise in respect of such Limited Liability Company Interests; 

(iv) all present and future claims, if any, of such Pledgor against any such limited liability company for moneys loaned or
advanced, for services rendered or otherwise; 
 (v) all of such Pledgor’s rights under any limited liability company
agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Limited Liability Company Interests, including any power to terminate, cancel or modify
any limited liability company agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of any such Pledgor in respect of such Limited Liability Company Interests and any such
limited liability company, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Limited Liability Company Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection
with any of the foregoing; and 
 (vi) all other property hereafter delivered in substitution for or in addition to any of
the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all thereof; 
 (d) all Partnership Interests of such Pledgor from time to time and all of its
right, title and interest in each partnership to which each such interest relates, whether now existing or hereafter acquired, including, without limitation: 

(i) all its capital therein and its interest in all profits, losses, Partnership Assets and other distributions to which such
Pledgor shall at any time be entitled in respect of such Partnership Interests; 

  
 - 4 - 

 (ii) all other payments due or to become due to such Pledgor in respect of
Partnership Interests, whether under any partnership agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise; 

(iii) all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under
any partnership agreement or operating agreement, or at law or otherwise in respect of such Partnership Interests; 
 (iv)
all present and future claims, if any, of such Pledgor against any such partnership for moneys loaned or advanced, for services rendered or otherwise; 

(v) all of such Pledgor’s rights under any partnership agreement or operating agreement or at law to exercise and enforce
every right, power, remedy, authority, option and privilege of such Pledgor relating to such Partnership Interests, including any power to terminate, cancel or modify any partnership agreement or operating agreement, to execute any instruments and
to take any and all other action on behalf of and in the name of any such Pledgor in respect of such Partnership Interests and any such partnership, to make determinations, to exercise any election (including, but not limited to, election of
remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Partnership Asset, to enforce or
execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing; and 

(vi) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any
or all thereof; 
 (e) all Security Entitlements of such Pledgor from time to time in any and all of the foregoing; and 

(f) all Financial Assets, Investment Property and Pledged Notes of such Pledgor from time to time. 

(g) Notwithstanding anything to the contrary contained herein, the collateral shall at no time include any items which would at such time
constitute Excluded Collateral (as defined in the Security Agreement). 

  
 - 5 - 

 3.2 Procedures. (a) To the extent that any Pledgor at any time or from time to time
owns, acquires or obtains any right, title or interest in any Collateral, such Collateral shall automatically (and without the taking of any action by the respective Pledgor) be pledged pursuant to Section 3.1 of this Agreement and, in
addition thereto, such Pledgor shall (to the extent provided below) take the following actions as set forth below (as promptly as practicable and, in any event, within 10 days (or such longer period as may be approved by the Collateral Agent in
writing) after it obtains such Collateral) for the benefit of the Collateral Agent and the Secured Parties: 
 (i) with
respect to a Certificated Security (other than a Certificated Security credited on the books of a Clearing Corporation or Securities Intermediary), such Pledgor shall physically deliver such Certificated Security to the Collateral Agent, endorsed to
the Collateral Agent or endorsed in blank; 
 (ii) with respect to an Uncertificated Security (other than an Uncertificated
Security credited on the books of a Clearing Corporation or Securities Intermediary), such Pledgor shall cause the issuer of such Uncertificated Security to duly authorize and execute, and deliver to the Collateral Agent, an agreement for the
benefit of the Collateral Agent and the other Secured Parties substantially in the form of Annex A hereto (appropriately completed to the satisfaction of the Collateral Agent and with such modifications, if any, as shall be reasonably satisfactory
to the Collateral Agent) pursuant to which such issuer agrees to comply with any and all instructions originated by the Collateral Agent without further consent by the registered owner and not to comply with instructions regarding such
Uncertificated Security (and any Partnership Interests and Limited Liability Company Interests issued by such issuer) originated by any other Person other than a court of competent jurisdiction; 

(iii) with respect to a Certificated Security, Uncertificated Security, Partnership Interest or Limited Liability Company
Interest credited on the books of a Clearing Corporation or Securities Intermediary (including a Federal Reserve Bank or The Depository Trust Company), the respective Pledgor shall promptly notify the Collateral Agent thereof and shall promptly use
commercially reasonable efforts to take all actions (x) required (i) to comply with the applicable rules of such Clearing Corporation or Securities Intermediary and (ii) to perfect the security interest of the Collateral Agent under
applicable law (including, in any event, under Sections 9-314(a), (b), and (c), 9-106 and 8-106(d) of the UCC) and (y) as the Collateral Agent reasonably deems necessary or desirable to effect the foregoing; 

(iv) with respect to a Partnership Interest or a Limited Liability Company Interest (other than a Partnership Interest or
Limited Liability Company Interest credited on the books of a Clearing Corporation or Securities Intermediary), (A) if such Partnership Interest or Limited Liability Company Interest is represented by a certificate and is a Security for
purposes of the UCC, the procedure set forth in Section 3.2(a)(i), and (B) if such Partnership Interest or Limited Liability Company Interest is not represented by a certificate and is a Security for purposes of the UCC, the
procedure set forth in Section 3.2(a)(ii); and 

  
 - 6 - 

 (v) with respect to any Pledged Note, physical delivery of such Pledged Note to
the Collateral Agent, endorsed to the Collateral Agent or endorsed in blank. 
 (b) In addition to the actions required to be taken pursuant
to preceding Section 3.2(a), each Pledgor shall take the following additional actions with respect to the Securities and Collateral: 

(i) with respect to all Collateral of such Pledgor of which the Collateral Agent may obtain “control” thereof within
the meaning of Section 8-106 of the UCC (or under any provision of the UCC as same may be amended or supplemented from time to time, or under the laws of any relevant State (or political subdivision of the United States, including Puerto Rico)
other than the Commonwealth of Pennsylvania), the respective Pledgor shall take all actions as may be reasonably requested from time to time by the Collateral Agent so that “control” of such Collateral is obtained and at all times held by
the Collateral Agent; and 
 (ii) each Pledgor hereby authorizes Collateral Agent to cause appropriate financing statements
(on Form UCC-1 or other appropriate form) under the UCC as in effect in the various relevant States (or political subdivisions of the United States, including Puerto Rico), in form covering all Collateral hereunder (with such form to be satisfactory
to the Collateral Agent), to be filed in the relevant filing offices so that at all times the Collateral Agent has a security interest in all Investment Property and other Collateral which is perfected by the filing of such financing statements (in
each case to the maximum extent perfection by filing may be obtained under the laws of the relevant States (or political subdivisions of the United States, including Puerto Rico), including, without limitation, Section 9-312(a) of the UCC).

 3.3 Subsequently Acquired Collateral. If any Pledgor shall acquire (by purchase, stock dividend, distribution or otherwise)
any additional Collateral at any time or from time to time after the date hereof, such Collateral shall automatically (and without any further action being required to be taken) be subject to the pledge and security interests created pursuant to
Section 3.1 and, furthermore, such Pledgor will promptly thereafter take (or cause to be taken) all action with respect to such Collateral in accordance with the procedures set forth in Section 3.2, and will promptly
thereafter deliver to the Collateral Agent (a) a certificate executed by a principal executive officer of such Pledgor describing such Collateral and certifying that the same has been duly pledged in favor of the Collateral Agent (for the
benefit of the Secured Parties) hereunder and (b) supplements to Schedules 5.08(e), 5.13, 5.21(d) and 5.21(e) of the Credit Agreement as are necessary to cause such schedules to be complete and accurate at such time. 

3.4 Transfer Taxes. Each pledge of Collateral under Section 3.1 or Section 3.3 shall be accompanied by any
transfer tax stamps or similar items and all related fees or taxes required in connection with the pledge of such Collateral. 

  
 - 7 - 

 3.5 Certain Representations and Warranties Regarding the Collateral. Each Pledgor
represents and warrants that on the date hereof: 
 (a) each Subsidiary of such Pledgor, and the direct ownership thereof, is listed in
Schedule 5.13 of the Credit Agreement; 
 (b) the Stock (and any warrant or options to purchase Stock) held by such Pledgor consists of the
number and type of shares of the Stock (and any warrants or options to purchase Stock) of the corporations as described in Schedule 5.21(d) of the Credit Agreement; 

(c) such Stock referenced in clause (b) of this paragraph constitutes that percentage of the issued and outstanding capital stock of the
issuing corporation as is set forth in Schedule 5.21(d) of the Credit Agreement; 
 (d) the Pledged Notes held by such Pledgor consist of
the Instruments and Promissory Notes described in Schedule 5.21(e) of the Credit Agreement where such Pledgor is listed as the lender; 

(e) the Limited Liability Company Interests held by such Pledgor consist of the number and type of interests of the Persons described in
Schedule 5.21(d) of the Credit Agreement; 
 (f) each such Limited Liability Company Interest referenced in clause (e) of this
paragraph constitutes that percentage of the issued and outstanding equity interest of the issuing Person as set forth in Schedule 5.21(d) of the Credit Agreement; 

(g) the Partnership Interests held by such Pledgor consist of the number and type of interests of the Persons described in Schedule 5.21(d) of
the Credit Agreement; 
 (h) each such Partnership Interest referenced in clause (g) of this paragraph constitutes that percentage or
portion of the entire partnership interest of the Partnership as set forth in Schedule 5.21(d) of the Credit Agreement; 
 (i) the exact
address of each chief executive office of such Pledgor is listed on Schedule 5.13 of the Credit Agreement; 
 (j) the Pledgor has complied
with the respective procedure set forth in Section 3.2(a) with respect to each item of Collateral described in Schedules 5.21(d) and 5.21(e) of the Credit Agreement; and 

(k) such Pledgor owns no Securities, Equity Interests, Instruments, Promissory Notes, Stock, Limited Liability Company Interests or
Partnership Interests other than those described in Schedules 5.21(d) and 5.21(e) of the Credit Agreement. 

  
 - 8 - 

 ARTICLE IV 

APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. 

The Collateral Agent shall have the right to appoint one or more sub-agents for the purpose of retaining physical possession of the
Collateral, which may be held (in the discretion of the Collateral Agent) in the name of the relevant Pledgor, endorsed or assigned in blank or in favor of the Collateral Agent or any nominee or nominees of the Collateral Agent or a sub-agent
appointed by the Collateral Agent. 
 ARTICLE V 

VOTING, ETC., WHILE NO EVENT OF DEFAULT OR SPECIFIED DEFAULT 

Unless and until there shall have occurred and be continuing any Event of Default and the Collateral Agent shall have notified such Pledgor as
set forth in the next sentence, each Pledgor shall be entitled to exercise all voting rights attaching to any and all Collateral owned by it, and to give consents, waivers or ratifications in respect thereof, provided that no vote shall be
cast or any consent, waiver or ratification given or any action taken which would violate, result in breach of any covenant contained in, or be inconsistent with, any of the terms of any Credit Document, or which would have the effect of impairing
the value of the Collateral or any part thereof or the position or interests of the Collateral Agent or any other Secured Party therein. All such rights of a Pledgor to vote and to give consents, waivers and ratifications shall cease in case an
Event of Default shall occur and be continuing and Collateral Agent shall have notified such Pledgor in writing of the exercise of the Collateral Agent’s rights under this Article, and Article VII hereof shall thereafter become
applicable. 
 ARTICLE VI 

DIVIDENDS AND OTHER DISTRIBUTIONS 

Unless and until an Event of Default shall have occurred and be continuing, all cash dividends, cash distributions, cash Proceeds and other
cash amounts payable in respect of the Collateral shall be paid to the respective Pledgor. Subject to Section 3.2 hereof, the Collateral Agent shall be entitled to receive directly, and to retain as part of the Collateral: 

(i) all other or additional stock, notes, certificates, limited liability company interests, partnership interests, instruments
or other securities or property (including, but not limited to, cash dividends other than as set forth above) paid or distributed by way of dividend or otherwise in respect of the Collateral; 

(ii) all other or additional stock, notes, certificates, limited liability company interests, partnership interests,
instruments or other securities or property (including, but not limited to, cash) paid or distributed in respect of the Collateral by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar rearrangement; and 

  
 - 9 - 

 (iii) all other or additional stock, notes, certificates, limited liability
company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash) which may be paid in respect of the Collateral by reason of any consolidation, merger, exchange of stock, conveyance of
assets, liquidation or similar corporate reorganization. 
 Nothing contained in this Article shall limit or restrict in any way the
Collateral Agent’s right to receive the proceeds of the Collateral in any form in accordance with Article III of this Agreement. All dividends, distributions or other payments which are received by the respective Pledgor contrary to the
provisions of this Article or Article VII shall be received in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Pledgor and shall be forthwith paid over to the Collateral Agent as
Collateral in the same form as so received (with any necessary endorsement). 
 ARTICLE VII 

REMEDIES IN CASE OF AN EVENT OF DEFAULT 

In the event an Event of Default shall have occurred and be continuing, the Collateral Agent shall be entitled to exercise all of the rights,
powers and remedies (whether vested in it by this Agreement or by any other Credit Document or by law) for the protection and enforcement of its rights in respect of the Collateral, including, without limitation, all the rights and remedies of a
secured party upon default under the UCC and the Collateral Agent shall be entitled, without limitation, to exercise any or all of the following rights, in compliance with any mandatory requirements of applicable law, which each Pledgor hereby
agrees to be commercially reasonable: 
 (i) to receive all amounts payable in respect of the Collateral otherwise payable
under Article VI to such Pledgor; 
 (ii) to transfer all or any part of the Collateral into the Collateral
Agent’s name or the name of its nominee or nominees; 
 (iii) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other lawful action to collect upon any Pledged Note (including, without limitation, to make any demand for payment thereon); 

(iv) after written notice to a Pledgor pursuant to Article V hereof, to vote all or any part of the Collateral (whether
or not transferred into the name of the Collateral Agent) and give all consents, waivers and ratifications in respect of the Collateral and otherwise act with respect thereto as though it were the outright owner thereof (each Pledgor hereby
irrevocably constituting and appointing the Collateral Agent the proxy and attorney-in-fact of such Pledgor, with full power of substitution to do so); 

(v) at any time or from time to time to sell, assign and deliver, or grant options to purchase, all or any part of the
Collateral, or any interest therein, at any public or private sale, without demand of performance, advertisement or notice of intention to sell or of the time or place of sale or adjournment thereof or to redeem or otherwise (all of which are hereby
waived by each Pledgor), for cash, on credit or for other property, for 

  
 - 10 - 

 
immediate or future delivery without any assumption of credit risk, and for such price or prices and on such terms as the Collateral Agent in its absolute discretion may determine;
provided that at least 10 days’ notice of the time and place of any such sale shall be given to such Pledgor. The Collateral Agent shall not be obligated to make such sale of Collateral regardless of whether any such notice of sale has
theretofore been given. Each purchaser at any such sale shall hold the property so sold absolutely free from any claim or right on the part of each Pledgor, and each Pledgor hereby waives and releases to the fullest extent permitted by law any right
or equity of redemption with respect to the Collateral, whether before or after sale hereunder, all rights, if any, of marshalling the Collateral and any other security for the Secured Obligations or otherwise, and all rights, if any, of stay and/or
appraisal which it now has or may at any time in the future have under rule of law or statute now existing or hereafter enacted. At any such sale, unless prohibited by applicable law, the Collateral Agent on behalf of all Secured Parties (or certain
of them) may bid for and purchase (by bidding in Secured Obligations or otherwise) all or any part of the Collateral so sold free from any such right or equity of redemption. Except as provided under applicable law, neither the Collateral Agent nor
any other Secured Party shall be liable for failure to collect or realize upon any or all of the Collateral or for any delay in so doing nor shall any of them be under any obligation to take any action whatsoever with regard thereto; and 

(vi) to set-off any and all Collateral against any and all Secured Obligations, and to withdraw any and all cash or other
Collateral from the Collateral Account and to apply such cash and other Collateral to the payment of any and all Secured Obligations. 

ARTICLE VIII 
 REMEDIES, ETC.,
CUMULATIVE 
 Each right, power and remedy of the Collateral Agent provided for in this Agreement or any other Credit Document, or now or
hereafter existing at law or in equity or by statute shall be cumulative and concurrent and shall be in addition to every other such right, power or remedy. The exercise or beginning of the exercise by the Collateral Agent or any other Secured Party
of any one or more of the rights, powers or remedies provided for in this Agreement or any other Credit Document or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by the
Collateral Agent or any other Secured Party of all such other rights, powers or remedies, and no failure or delay on the part of the Collateral Agent or any other Secured Party to exercise any such right, power or remedy shall operate as a waiver
thereof. Unless otherwise required by the applicable Credit Document, no notice to or demand on any Pledgor in any case shall entitle such Pledgor to any other or further notice or demand in similar other circumstances or constitute a waiver of any
of the rights of the Collateral Agent or any other Secured Party to any other or further action in any circumstances without demand or notice. The Secured Parties agree that this Agreement may be enforced only by the action of the Collateral Agent
(acting on its own or on the instructions of the Required Lenders) and that no other Secured Party shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being
understood and agreed that such rights and remedies may be exercised by the Collateral Agent for the benefit of the Secured Parties upon the terms of this Agreement. 

  
 - 11 - 

 ARTICLE IX 

APPLICATION OF PROCEEDS 
 All
moneys collected by the Collateral Agent upon any sale or other disposition of the Collateral pursuant to the terms of this Agreement, together with all other moneys received by the Collateral Agent hereunder, shall be applied to the payment of the
Secured Obligations in the manner provided in the Credit Agreement. 
 It is understood and agreed that the Pledgors shall remain jointly
and severally liable to the extent of any deficiency between the amount of proceeds of the Collateral hereunder and the aggregate amount of the Secured Obligations. 

ARTICLE X 
 PURCHASERS OF
COLLATERAL 
 Upon any sale of the Collateral by the Collateral Agent hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Collateral Agent or the officer making such sale of the purchase money paid as consideration pursuant to such sale shall be a sufficient discharge to the purchaser or purchasers of the
Collateral so sold, and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication or
nonapplication thereof. 
 ARTICLE XI 

INDEMNITY 
 Each Pledgor jointly
and severally agrees (i) to indemnify, reimburse and hold harmless the Collateral Agent and each other Secured Party and their respective successors, assigns, employees, agents and affiliates (individually an “Indemnitee”, and
collectively, the “Indemnitees”) from and against any and all obligations, damages, injuries, penalties, claims, demands, losses, judgments and liabilities (including, without limitation, liabilities for penalties) of whatsoever
kind or nature, and (ii) to reimburse each Indemnitee for all reasonable out-of-pocket costs, expenses and disbursements, including reasonable attorneys’ fees and expenses, in each case arising out of or resulting from this Agreement or
the exercise by any Indemnitee of any right or remedy granted to it hereunder or under any other Credit Document (but excluding any obligations, damages, injuries, penalties, claims, demands, losses, judgments and liabilities (including, without
limitation, liabilities for penalties) or expenses of whatsoever kind or nature to the extent incurred or arising by reason of gross negligence or willful misconduct of such Indemnitee (as determined by a court of competent jurisdiction in a final
and non-appealable decision)). In no event shall the Collateral Agent hereunder be liable, in the absence of gross negligence or willful misconduct on its part (as determined by a court of competent jurisdiction in a final and non-appealable
decision), for any matter or thing in connection with this Agreement other than to account for monies or other property actually received by it in 

  
 - 12 - 

 
accordance with the terms hereof. If and to the extent that the obligations of any Pledgor under this Article are unenforceable for any reason, such Pledgor hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is permissible under applicable law. The indemnity obligations of each Pledgor contained in this Article shall continue in full force and effect notwithstanding the occurrence of
the Termination Date. 
 ARTICLE XII 

FURTHER ASSURANCES; POWER OF ATTORNEY 

Each Pledgor agrees that it will join with the Collateral Agent in executing and, at such Pledgor’s own expense, file and refile under
the UCC or other applicable law such financing statements, continuation statements and other documents in such offices as the Collateral Agent (acting on its own or on the instructions of the Required Lenders) may reasonably deem necessary or
appropriate and wherever required or permitted by law in order to perfect and preserve the Collateral Agent’s security interest in the Collateral hereunder and hereby authorizes the Collateral Agent to file financing statements and amendments
thereto relative to all or any part of the Collateral (including, without limitation, financing statements which list the Collateral specifically and/or “all assets” as collateral) without the signature of such Pledgor where permitted by
law, and agrees to do such further acts and things and to execute and deliver to the Collateral Agent such additional conveyances, assignments, agreements and instruments as the Collateral Agent may reasonably require or deem advisable to carry into
effect the purposes of this Agreement or to further assure and confirm unto the Collateral Agent its rights, powers and remedies hereunder or thereunder. 

Each Pledgor hereby appoints the Collateral Agent such Pledgor’s attorney-in-fact, with full authority in the place and stead of such
Pledgor and in the name of such Pledgor or otherwise, from time to time after the occurrence and during the continuance of an Event of Default, in the Collateral Agent’s discretion to take any action and to execute any instrument which the
Collateral Agent may deem necessary or advisable to accomplish the purposes of this Agreement. 
 ARTICLE XIII 

THE COLLATERAL AGENT AS COLLATERAL AGENT 

The Collateral Agent will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is
expressly understood, acknowledged and agreed by each Secured Party that by accepting the benefits of this Agreement each such Secured Party acknowledges and agrees that the obligations of the Collateral Agent as holder of the Collateral and
interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement. The Collateral Agent shall act hereunder on the terms and conditions set forth herein and in the
Security Agreement. 

  
 - 13 - 

 ARTICLE XIV 

TRANSFER BY THE PLEDGORS 
 No
Pledgor will sell or otherwise dispose of, grant any option with respect to, or mortgage, pledge or otherwise encumber any of the Collateral or any interest therein (except in accordance with the terms of this Agreement and all other Credit
Documents). 
 ARTICLE XV 

REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS 

Each Pledgor represents warrants and covenants that: 

(a) it is the legal, beneficial and record owner of, and has good and marketable title to, all Collateral consisting of one or more Securities,
Partnership Interests and Limited Liability Company Interests and that it has sufficient interest in all Collateral in which a security interest is purported to be created hereunder for such security interest to attach (subject, in each case, to no
pledge, lien, mortgage, hypothecation, security interest, charge, option, Adverse Claim or other encumbrance whatsoever, except the liens and security interests created by this Agreement and Permitted Liens); 

(b) it has full power, authority and legal right to pledge all the Collateral pledged by it pursuant to this Agreement; 

(c) this Agreement has been duly authorized, executed and delivered by such Pledgor and constitutes a legal, valid and binding obligation of
such Pledgor enforceable against such Pledgor in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally
affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law); 
 (d)
except to the extent already obtained or made, no consent of any other party (including, without limitation, any stockholder, member, partner or creditor of such Pledgor) and no consent, license, permit, approval or authorization of, exemption by,
notice or report to, or registration, filing (other than the filing of UCC-1 Financing Statements) or declaration with, any governmental authority is required to be obtained by such Pledgor in connection with (i) the execution, delivery or
performance of this Agreement, (ii) the validity or enforceability of this Agreement (except as set forth in clause (c) above), (iii) the perfection or enforceability of the Collateral Agent’s security interest in the Collateral
or (iv) except for compliance with or as may be required by applicable securities and other laws generally applicable to the cemetery and funeral home industry consent under which cannot be obtained prior to such exercise of rights and
remedies, the exercise by such Collateral Agent of any of its rights or remedies provided herein; 

  
 - 14 - 

 (e) none of the execution, delivery or performance by such Pledgor of this Agreement, compliance
by such Pledgor with the terms and provisions hereof, or the consummation of the transactions contemplated herein, will contravene any material provision of any material applicable law, statute, rule or regulation or any order, judgment, writ,
injunction, award or decree of any court, arbitrator or governmental authority, domestic or foreign, applicable to such Pledgor, or violate any provision of the certificate of incorporation, by-laws, operating agreement, certificate of partnership,
partnership agreement, certificate of limited liability company or limited liability company agreement of such Pledgor or any of its Subsidiaries or of any securities issued by such Pledgor or any of its Subsidiaries, nor will it in any material
respect conflict or be inconsistent with or result in any breach of, any of the terms, covenants, conditions or provisions, or constitute a default under or, (other than pursuant to this Agreement) result in the creation or imposition of (or the
obligation to create or impose) any lien or encumbrance (other than the Liens created by the Collateral Documents) upon any of the property or assets of such Pledgor or any of its Subsidiaries pursuant to the terms of any mortgage, deed of trust,
indenture, lease, loan agreement, credit agreement or any other material contract, agreement, instrument or undertaking to which such Pledgor or any of its Subsidiaries is a party or by which it or any of its assets are bound or to which it may be
subject; 
 (f) all of the Collateral (consisting of Securities, Limited Liability Company Interests or Partnership Interests) has been duly
and validly issued, is fully paid and non-assessable and is subject to no options to purchase or similar rights; 
 (g) each of the Pledged
Notes constitutes, or when executed by the obligor thereof will constitute, the legal, valid and binding obligation of such obligor, enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law); 

(h) the pledge, collateral assignment and delivery to the Collateral Agent of the Collateral consisting of Certificated Securities and Pledged
Notes pursuant to this Agreement creates a valid and perfected first priority security interest in such Securities and the proceeds thereof, subject to no (i) prior Lien or encumbrance or (ii) agreement purporting to grant to any third
party a Lien or encumbrance on the property or assets of such Pledgor (other than Permitted Liens), and the Collateral Agent is entitled to all the rights, priorities and benefits afforded by the UCC or other relevant law as enacted in any relevant
jurisdiction to perfect security interests in respect of such Collateral; 
 (i) subject to Section 3.2(a) hereof,
“control” (as defined in Section 8-106 of the UCC) has been obtained by the Collateral Agent over all Collateral consisting of Securities (including Pledged Notes which are Securities) with respect to which such “control”
may be obtained pursuant to Section 8-106 of the UCC; 
 (j) it shall use its reasonable best efforts to (i) cause the issuer of
any Uncertificated Security to issue certificates representing such Security, and (ii) cause the issuer of any Limited Liability Company Interest or Partnership Interest to cause such interests to be Securities and to issue certificates
representing such interests; 

  
 - 15 - 

 (k) it will defend the Collateral Agent’s right, title and security interest in and to the
Securities and the proceeds thereof against the claims and demands of all persons whomsoever; 
 (l) it will have like title to and right to
pledge any other property at any time hereafter pledged to the Collateral Agent as Collateral hereunder and will likewise defend the right thereto and security interest therein of the Collateral Agent and the other Secured Parties; and 

(m) it will take no action which would violate any of the terms of any Credit Document. 

ARTICLE XVI 
 LEGAL NAMES; TYPE OF
ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION AND/OR A TRANSMITTING UTILITY); JURISDICTION OF ORGANIZATION; LOCATION; ORGANIZATIONAL IDENTIFICATION NUMBERS; CHANGES THERETO; ETC 

The exact legal name of each Pledgor, the type of organization of such Pledgor, whether or not such Pledgor is a Registered Organization, the
jurisdiction of organization of such Pledgor, such Pledgor’s Location, and the organizational identification number (if any) of each Pledgor, is listed, for such Pledgor, on Schedule 5.13 of the Credit Agreement. No Pledgor shall change its
legal name, its type of organization, its status as a Registered Organization (in the case of a Registered Organization), its status as a Person which is not a Transmitting Utility, as the case may be, its jurisdiction of organization, its Location,
or its organizational identification number (if any), except that any such changes shall be permitted (so long as not in violation of the applicable requirements of the Credit Documents and so long as same do not involve (x) a Registered
Organization ceasing to constitute same or (y) any Pledgor changing its jurisdiction of organization or Location to a jurisdiction of organization or Location, as the case may be, outside the United States or a political subdivision thereof
(including Puerto Rico) if (i) it shall have given to the Collateral Agent not less than 30 days’ (or such shorter period as may be approved by the Collateral Agent in writing) prior written notice of each change to the information listed
on Schedule 5.13 of the Credit Agreement (as adjusted for any subsequent changes thereto previously made in accordance with this sentence), together with a supplement to Schedule 5.13 of the Credit Agreement which shall correct all information
contained therein for such Pledgor, and (ii) in connection with the respective such change or changes, it shall have taken all action reasonably requested by the Collateral Agent to maintain the security interests of the Collateral Agent in the
Collateral intended to be granted hereby at all times fully perfected and in full force and effect. In addition, to the extent that any Pledgor does not have an organizational identification number on the date hereof and later obtains one, such
Pledgor shall promptly thereafter deliver a notification to the Collateral Agent of such organizational identification number and shall take all actions reasonably satisfactory to the Collateral Agent to the extent necessary to maintain the security
interest of the Collateral Agent in the Collateral intended to be granted hereby fully perfected and in full force and effect. 

  
 - 16 - 

 ARTICLE XVII 

PLEDGORS’ OBLIGATIONS ABSOLUTE, ETC. 

The obligations of each Pledgor under this Agreement shall be absolute and unconditional and shall remain in full force and effect without
regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever (other than termination of this Agreement pursuant to Article XIX hereof), including, without
limitation: 
 (a) any renewal, extension, amendment or modification of, or addition or supplement to or deletion from any Credit Document
(other than this Agreement in accordance with its terms), or any other instrument or agreement referred to therein, or any assignment or transfer of any thereof; 

(b) any waiver, consent, extension, indulgence or other action or inaction under or in respect of any such agreement or instrument or this
Agreement (other than a waiver, consent or extension with respect to this Agreement in accordance with its terms); 
 (c) any furnishing of
any additional security to the Collateral Agent or its assignee or any acceptance thereof or any release of any security by the Collateral Agent or its assignee; 

(d) any limitation on any party’s liability or obligations under any such instrument or agreement or any invalidity or unenforceability,
in whole or in part, of any such instrument or agreement or any term thereof; or 
 any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to any Pledgor, or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding, whether or not such Pledgor shall have
notice or knowledge of any of the foregoing. 
 ARTICLE XVIII 

PRIVATE SALES 
 If at any time
when the Collateral Agent shall determine to exercise its right to sell all or any part of the Collateral consisting of Securities, Limited Liability Company Interests or Partnership Interests pursuant to Article VII, and such Collateral or
the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Securities Act, the Collateral Agent may, in its sole and absolute discretion, sell such Collateral or part thereof by private sale in such manner
and under such circumstances as the Collateral Agent may deem necessary or advisable in order that such sale may legally be effected without such registration. Without limiting the generality of the foregoing, in any such event the Collateral Agent,
in its sole and absolute discretion: (a) may proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Collateral or part thereof shall have been filed under the Securities Act;
(b) may approach and negotiate with a single possible 

  
 - 17 - 

 
purchaser to effect such sale; and (c) may restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing for its own account, for investment, and not with
a view to the distribution or sale of such Collateral or part thereof. In the event of any such sale, the Collateral Agent shall incur no responsibility or liability for selling all or any part of the Collateral at a price which the Collateral
Agent, in its sole and absolute discretion, may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might be realized if the sale were deferred until the registration as aforesaid.

 ARTICLE XIX 
 TERMINATION;
RELEASE 
 (a) On the Termination Date, this Agreement shall terminate (provided that all indemnities set forth herein including, without
limitation, in Article XI hereof shall survive any such termination) and the Collateral Agent, at the request and expense of the respective Pledgor, will execute and deliver to such Pledgor a proper instrument or instruments acknowledging the
satisfaction and termination of this Agreement (including, without limitation, UCC termination statements and instruments of satisfaction, discharge and/or reconveyance), and will duly assign, transfer and deliver to such Pledgor (without recourse
and without any representation or warranty) such of the Collateral as may be in the possession of the Collateral Agent and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement, together with any moneys at the
time held by the Collateral Agent or any of its sub-agents hereunder and, with respect to any Collateral consisting of an Uncertificated Security (other than an Uncertificated Security credited on the books of a Clearing Corporation), a Partnership
Interest or a Limited Liability Company Interest, a termination of the agreement relating thereto executed and delivered by the issuer of such Uncertificated Security pursuant to Section 3.2(a)(ii) or by the respective partnership or
limited liability company pursuant to Section 3.2(a)(iv). 
 (b) In the event that any part of the Collateral is sold or
otherwise disposed of (to a Person other than a Credit Party) at any time prior to the Termination Date, in connection with a sale or disposition permitted by the Credit Documents or is otherwise released at the direction of the Required Lenders and
the proceeds of such sale or disposition (or from such release) are applied in accordance with the terms of the Credit Documents, as the case may be, to the extent required to be so applied, the Collateral Agent, at the request and expense of such
Pledgor, will duly assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral as is then being (or has been) so sold or released and as may be in possession of the Collateral
Agent and has not theretofore been released pursuant to this Agreement and to the extent requested by such Pledgor, deliver UCC termination statements and instruments of satisfaction, discharge and/or reconveyance. 

At any time that any Pledgor desires that Collateral be released as provided in the foregoing paragraph (a) or (b), it
shall deliver to the Collateral Agent a certificate signed by a principal executive officer of such Pledgor stating that the release of the respective Collateral is permitted pursuant to paragraph (a) or (b) of this
Article XIX. The Collateral Agent shall have no liability whatsoever to any Secured Party as the result of any release of Collateral by it as permitted by this Article. 

  
 - 18 - 

 ARTICLE XX 

NOTICES, ETC. 
 All notices and
other communications hereunder shall be in writing and shall be delivered at such address and in such manner as shall have been specified pursuant to the Credit Agreement. 

ARTICLE XXI 
 COLLATERAL AGENT NOT
A PARTNER OR LIMITED LIABILITY COMPANY MEMBER 
 (a) Nothing herein shall be construed to make the Collateral Agent or any other Secured
Party liable as a member of any limited liability company or partnership and neither the Collateral Agent nor any other Secured Party by virtue of this Agreement or otherwise (except as referred to in the following sentence) shall have any of the
duties, obligations or liabilities of a member of any limited liability company or partnership. The parties hereto expressly agree that, unless the Collateral Agent shall become the absolute owner of Collateral consisting of a Limited Liability
Company Interest or Partnership Interest pursuant hereto, this Agreement shall not be construed as creating a partnership or joint venture among the Collateral Agent, any other Secured Party and/or any Pledgor. 

(b) Except as provided in the last sentence of paragraph (a) of this Article XXI, the Collateral Agent, by accepting this
Agreement, did not intend to become a member of any limited liability company or partnership or otherwise be deemed to be a co-venturer with respect to any Pledgor or any limited liability company or partnership either before or after an Event of
Default shall have occurred. The Collateral Agent shall have only those powers set forth herein and the Secured Parties shall assume none of the duties, obligations or liabilities of a member of any limited liability company or partnership or any
Pledgor except as provided in the last sentence of paragraph (a) of this Article. 
 (c) The Collateral Agent and the other Secured
Parties shall not be obligated to perform or discharge any obligation of any Pledgor as a result of the pledge hereby effected. 
 Except as
provided under applicable law, the acceptance by the Collateral Agent of this Agreement, with all the rights, powers, privileges and authority so created, shall not at any time or in any event obligate the Collateral Agent or any other Secured Party
to appear in or defend any action or proceeding relating to the Collateral to which it is not a party, or to take any action hereunder or thereunder, or to expend any money or incur any expenses or perform or discharge any obligation, duty or
liability under the Collateral. 

  
 - 19 - 

 ARTICLE XXII 

WAIVER; AMENDMENT 
 Except as
contemplated in Article XXVIII hereof, none of the terms and conditions of this Agreement may be changed, waived, discharged or terminated in any manner whatsoever unless such change, waiver, discharge or termination is in writing duly signed
by each Pledgor and the Collateral Agent. 
 ARTICLE XXIII 

MISCELLANEOUS 
 This Agreement
shall create a continuing security interest in the Collateral and shall (a) remain in full force and effect, subject to release and/or termination as set forth in Article XIX, (b) be binding upon each Pledgor, its successors and
assigns; provided, however, that no Pledgor shall assign any of its rights or obligations hereunder without the prior written consent of the Collateral Agent (with the prior written consent of the Required Lenders), and (c) inure,
together with the rights and remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent, the other Secured Parties and their respective successors, transferees and assigns. The headings of the several sections and subsections
in this Agreement are for purposes of reference only and shall not limit or define the meaning hereof. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one
instrument. In the event that any provision of this Agreement shall prove to be invalid or unenforceable, such provision shall be deemed to be severable from the other provisions of this Agreement which shall remain binding on all parties hereto.
All agreements, statements, representations and warranties made by each Pledgor herein or in any certificate or other instrument delivered by such Pledgor or on its behalf under this Agreement shall be considered to have been relied upon by the
Secured Parties and shall survive the execution and delivery of this Agreement and the other Credit Documents regardless of any investigation made by the Secured Parties or on their behalf. 

ARTICLE XXIV 
 GOVERNING LAW;
SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. 
 (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE COMMONWEALTH OF PENNSYLVANIA. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
PENNSYLVANIA OR OF THE UNITED STATES FOR THE EASTERN DISTRICT OF PENNSYLVANIA, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF PHILADELPHIA, AND, BY EXECUTION AND DELIVERY OF THIS 

  
 - 20 - 

 
AGREEMENT, EACH PLEDGOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH PLEDGOR
HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH PLEDGOR, AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN
ANY OF THE AFORESAID COURTS THAT ANY SUCH COURT LACKS PERSONAL JURISDICTION OVER SUCH PLEDGOR. EACH PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY SUCH PLEDGOR AT ITS ADDRESS FOR NOTICES AS PROVIDED IN ARTICLE XX ABOVE, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH PLEDGOR HEREBY
IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY
WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT UNDER THIS AGREEMENT, OR ANY SECURED PARTY, TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
ANY PLEDGOR IN ANY OTHER JURISDICTION. 
 (b) EACH PLEDGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND
AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. 

(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 
 ARTICLE XXV

 ADDITIONAL PLEDGORS 
 It is
understood and agreed that any additional Pledgors that are required to become a party to this Agreement after the date hereof pursuant to the requirements of the Credit Agreement or any other Credit Document shall automatically become a Pledgor
hereunder by (a)

  
 - 21 - 

 
executing a joinder to the Credit Agreement and a counterpart hereof and/or an assumption agreement, in each case in form and substance satisfactory to the Collateral Agent, (b) delivering
supplements to Schedules 5.08(e), 5.13, 5.21(d) and 5.21(e) of the Credit Agreement as are necessary to cause such schedules to be complete and accurate with respect to such additional Pledgor on such date and (c) taking all actions as
specified in Article III of this Agreement as would have been taken by such Pledgor had it been an original party to this Agreement, in each case with all documents required above to be delivered to the Collateral Agent and with all documents
and actions required to be taken above to be taken to the reasonable satisfaction of the Collateral Agent. 
 ARTICLE XXVI 

RECOURSE 
 This Agreement is made
with full recourse to the Pledgors and pursuant to and upon all the representations, warranties, covenants and agreements on the part of the Pledgors contained herein and in the other Credit Documents and otherwise in writing in connection herewith
or therewith. 
 ARTICLE XXVII 

FRAUDULENT CONVEYANCE; ETC. 
 It
is the desire and intent of each Pledgor and the Secured Parties that this Agreement shall be enforced against each Pledgor to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is
sought. Notwithstanding anything to the contrary contained herein, in furtherance of the foregoing, it is noted that the obligations of each Borrower constituting a Pledgor are limited as, and to the extent, provided in Section 10.10 of the
Credit Agreement. 
 ARTICLE XXVIII 

RELEASE OF PLEDGORS 
 If at any
time all of the Equity Interests of any Pledgor owned by any Credit Party are sold (to any Person other than a Credit Party) in a transaction permitted pursuant to the Credit Agreement (and which does not violate the terms of any other Credit
Document then in effect), then, such Pledgor shall be released as a Pledgor and Credit Party pursuant to the Credit Documents without any further action hereunder (it being understood that the sale of all of the Equity Interests in any Person that
owns, directly or indirectly, all of the Equity Interests in any Pledgor shall be deemed to be a sale of all of the Equity Interests in such Pledgor for purposes of this Article), and the Collateral Agent is authorized and directed to execute and
deliver such instruments of release as are reasonably satisfactory to it, all at the expense of the Credit Parties. At any time that the Partnership desires that a Pledgor be released from this Agreement as provided in this Article XXVIII,
the Partnership shall deliver to the Collateral Agent a certificate 

  
 - 22 - 

 
signed by a Senior Manager stating that the release of such Pledgor is permitted pursuant to this Article. The Collateral Agent shall have no liability whatsoever to any other Secured Party as a
result of the release of any Pledgor by it in accordance with, or which it believes to be in accordance with, this Article. 
 ARTICLE XXIX

 EFFECT ON EXISTING PLEDGE AGREEMENT 

Notwithstanding that this Agreement is amending and restating the Existing Pledge Agreement as of the Closing Date, nothing contained herein
shall be deemed to cause a novation of any transfers, conveyances or transactions which were effected under the Existing Pledge Agreement or of any Obligations, including, without limitation, the security interests granted pursuant thereto. 

ARTICLE XXX 
 Controlled
Non-Profits 
 Section 10.10(e) of the Credit Agreement is incorporated herein by this reference as if more fully set forth herein.

  
 - 23 - 

 IN WITNESS WHEREOF, each Pledgor and the Collateral Agent have caused this Second Amended and
Restated Pledge Agreement to be executed by their elected officers duly authorized as of the date first above written. 
  

			
	 General Partner:
  

STONEMOR GP LLC

		
	By:	 	/s/ Timothy K. Yost
	Name:	 	Timothy K. Yost
	Title:	 	Chief Financial Officer
	
	 Partnership:
  

STONEMOR PARTNERS L.P.
 By: STONEMOR GP LLC

its General Partner

		
	By:	 	/s/ Timothy K. Yost
	Name:	 	Timothy K. Yost
	Title:	 	Chief Financial Officer
	
	 Operating Company:
  

STONEMOR OPERATING LLC

		
	By:	 	/s/ Timothy K. Yost
	Name:	 	Timothy K. Yost
	Title:	 	Chief Financial Officer

  

					
		  	S-1	  	Second Amended and Restated Pledge Agreement
		  		  	Pledgors Signature Page

 Additional Pledgors 

 

					
	 Alleghany Memorial Park Subsidiary, Inc.

Altavista Memorial Park Subsidiary, Inc.
 Arlington Development
Company
 Augusta Memorial Park Perpetual Care Company

Birchlawn Burial Park Subsidiary, Inc.
 Bronswood Cemetery,
Inc.
 Cedar Hill Funeral Home, Inc.
 Cemetery Investments
Subsidiary, Inc.
 Chapel Hill Associates, Inc.
 Chapel Hill
Funeral Home, Inc.
 Columbia Memorial Park Subsidiary, Inc.

Cornerstone Family Insurance Services, Inc.
 Cornerstone Family
Services of New Jersey, Inc.
 Cornerstone Family Services of West Virginia Subsidiary, Inc.

Covenant Acquisition Subsidiary, Inc.
 Covington Memorial Funeral
Home, Inc.
 Covington Memorial Gardens, Inc.
 Crown Hill
Cemetery Association
 Eloise B. Kyper Funeral Home, Inc.

Forest Lawn Gardens, Inc. Forest Lawn Memorial Chapel, Inc.

Forest Lawn Memory Gardens, Inc.
 Glen Haven Memorial Park
Subsidiary, Inc.
 Henry Memorial Park Subsidiary, Inc.

Highland Memorial Park, Inc.
 Hillside Memorial Park Association,
Inc.
 Kingwood Memorial Park Association
 KIRIS Subsidiary,
Inc.
 Kirk & Nice, Inc.
 Kirk & Nice Suburban
Chapel, Inc.
 Lakewood/Hamilton Cemetery Subsidiary, Inc.

Lakewood Memory Gardens South Subsidiary, Inc.
 Laurel Hill
Memorial Park Subsidiary, Inc.
 Laurelwood Holding Company

Legacy Estates, Inc.
 Loewen [Virginia] Subsidiary, Inc.

Lorraine Park Cemetery Subsidiary, Inc.

			
	By:	 	 /s/ Frank Milles
	 	
		 	Frank Milles, as Vice President of each of the above-named Pledgors

  

					
		  	S-2	  	Second Amended and Restated Pledge Agreement
		  		  	Pledgors Signature Page

					
	 Modern Park Development Subsidiary, Inc.

Northlawn Memorial Gardens
 Oak Hill Cemetery Subsidiary, Inc.

Ohio Cemetery Holdings, Inc.
 Osiris Holding Finance Company

Osiris Holding of Maryland Subsidiary, Inc.
 Osiris Holding of
Rhode Island Subsidiary, Inc.
 Osiris Management, Inc.
 Osiris
Telemarketing Corp.
 Perpetual Gardens.Com, Inc.
 Prince George
Cemetery Corporation
 PVD Acquisitions Subsidiary, Inc.

Rockbridge Memorial Gardens Subsidiary Company
 Rose Lawn
Cemeteries Subsidiary, Incorporated
 Roselawn Development Subsidiary Corporation

Russell Memorial Cemetery Subsidiary, Inc.
 Shenandoah Memorial
Park Subsidiary, Inc.
 Sierra View Memorial Park
 Southern
Memorial Sales Subsidiary, Inc.
 Springhill Memory Gardens Subsidiary, Inc.

Star City Memorial Sales Subsidiary, Inc.
 Stephen R. Haky Funeral
Home, Inc.
 Stitham Subsidiary, Incorporated
 StoneMor Alabama
Subsidiary, Inc.
 StoneMor California, Inc.
 StoneMor
California Subsidiary, Inc.
 StoneMor Georgia Subsidiary, Inc.

StoneMor Hawaii Subsidiary, Inc.
 StoneMor North Carolina Funeral
Services, Inc.
 StoneMor Ohio Subsidiary, Inc.
 StoneMor Puerto
Rico Cemetery And Funeral, Inc.
 StoneMor Tennessee Subsidiary, Inc.

StoneMor Washington, Inc.
 Sunset Memorial Gardens Subsidiary,
Inc.
 Sunset Memorial Park Subsidiary, Inc.
 Temple Hill
Subsidiary Corporation
 The Valhalla Cemetery Subsidiary Corporation

Virginia Memorial Service Subsidiary Corporation
 W N C
Subsidiary, Inc.
 Wicomico Memorial Parks Subsidiary, Inc.

Willowbrook Management Corp.

			
	By:	 	 /s/ Frank Milles
	 	
		 	Frank Milles, as Vice President of each of the above-named Pledgors

  

					
		  	S-3	  	Second Amended and Restated Pledge Agreement
		  		  	Pledgors Signature Page

					
	 Alleghany Memorial Park LLC

Altavista Memorial Park LLC
 Birchlawn Burial Park LLC

Cemetery Investments LLC
 Cemetery Management Services, L.L.C.

Cemetery Management Services of Ohio, L.L.C.
 CMS West LLC

CMS West Subsidiary LLC
 Columbia Memorial Park LLC

Cornerstone Family Services of West Virginia LLC
 Cornerstone
Funeral and Cremation Services LLC
 Cornerstone Trust Management Services LLC

Covenant Acquisition LLC
 Glen Haven Memorial Park LLC

Henlopen Memorial Park LLC
 Henlopen Memorial Park Subsidiary
LLC
 Henry Memorial Park LLC
 Juniata Memorial Park LLC

KIRIS LLC
 Lakewood/Hamilton Cemetery LLC

Lakewood Memory Gardens South LLC
 Laurel Hill Memorial Park
LLC
 Loewen [Virginia] LLC
 Lorraine Park Cemetery LLC

Modern Park Development LLC
 Oak Hill Cemetery LLC

Osiris Holding of Maryland LLC
 Osiris Holding of Pennsylvania
LLC
 Osiris Holding of Rhode Island LLC
 Plymouth Warehouse
Facilities LLC
 PVD Acquisitions LLC
 Rockbridge Memorial
Gardens LLC
 Rolling Green Memorial Park LLC
 Rose Lawn
Cemeteries LLC
 Roselawn Development LLC
 Russell Memorial
Cemetery LLC
 Shenandoah Memorial Park LLC
 Southern Memorial
Sales LLC
 Springhill Memory Gardens LLC
 Star City Memorial
Sales LLC
 Stitham LLC

			
	By:	 	 /s/ Frank Milles
	 	
		 	Frank Milles, as Vice President of each of the above-named Pledgors

  

					
		  	S-4	  	Second Amended and Restated Pledge Agreement
		  		  	Pledgors Signature Page

					
	 StoneMor Alabama LLC
 StoneMor
Arkansas Subsidiary LLC
 StoneMor Cemetery Products LLC StoneMor Colorado LLC

StoneMor Colorado Subsidiary LLC
 StoneMor Florida LLC

StoneMor Florida Subsidiary LLC
 StoneMor Georgia LLC

StoneMor Hawaii LLC
 StoneMor Hawaiian Joint Venture Group LLC

StoneMor Holding of Pennsylvania LLC
 StoneMor Illinois LLC

StoneMor Illinois Subsidiary LLC
 StoneMor Indiana LLC

StoneMor Indiana Subsidiary LLC
 StoneMor Iowa LLC

StoneMor Iowa Subsidiary LLC
 StoneMor Kansas LLC

StoneMor Kansas Subsidiary LLC
 StoneMor Kentucky LLC

StoneMor Kentucky Subsidiary LLC
 StoneMor Michigan LLC

StoneMor Michigan Subsidiary LLC
 StoneMor Mississippi LLC
StoneMor Mississippi Subsidiary LLC
 StoneMor Missouri LLC

StoneMor Missouri Subsidiary LLC
 StoneMor North Carolina LLC

StoneMor North Carolina Subsidiary LLC
 StoneMor Ohio LLC

StoneMor Oklahoma LLC StoneMor Oklahoma Subsidiary LLC
 StoneMor
Oregon LLC
 StoneMor Oregon Subsidiary LLC
 StoneMor
Pennsylvania LLC
 StoneMor Pennsylvania Subsidiary LLC

StoneMor Puerto Rico LLC
 StoneMor Puerto Rico Subsidiary LLC

StoneMor South Carolina LLC
 StoneMor South Carolina Subsidiary
LLC
 StoneMor Washington Subsidiary LLC

			
	By:	 	 /s/ Frank Milles
	 	
		 	Frank Milles, as Vice President of each of the above-named Pledgors

  

					
		  	S-5	  	Second Amended and Restated Pledge Agreement
		  		  	Debtors Signature Page

					
	 Sunset Memorial Gardens LLC
 Sunset
Memorial Park LLC
 Temple Hill LLC
 The Valhalla Cemetery
Company LLC
 Tioga County Memorial Gardens LLC
 Virginia
Memorial Service LLC
 WNCI LLC
 Wicomico Memorial Parks LLC

Woodlawn Memorial Park Subsidiary LLC

			
	By:	 	 /s/ Frank Milles
	 	
		 	Frank Milles, as Vice President of each of the above-named Pledgors
	
	 Beth Israel Cemetery Association of Woodbridge, New Jersey

Bethel Cemetery Association
 Clover Leaf Park Cemetery
Association
 Locustwood Cemetery Association

			
	By:	 	 /s/ Frank Milles
	 	
		 	Frank Milles, as President of each of the above-named Pledgors

  

					
		  	S-6	  	Second Amended and Restated Pledge Agreement
		  		  	Debtors Signature Page

			
	 Accepted and Agreed to
  

BANK OF AMERICA, N.A., as Collateral Agent

		
	By	 	/s/ Sandra Guerrieri
	Name:	 	Sandra Guerrieri
	Title:	 	Vice President

  

					
		  	S-7	  	Second Amended and Restated Pledge Agreement
		  		  	Agent Signature Page

 ANNEX A 

TO 
 PLEDGE AGREEMENT

 Form of Agreement Regarding Uncertificated Securities, Limited Liability 

Company Interests and Partnership Interests 

AGREEMENT (as amended, modified or supplemented from time to time, this “Agreement”), dated as of
            ,             , among each of the undersigned pledgors (each a “Pledgor” and,
collectively, the “Pledgors”),             , not in its individual capacity but solely as collateral agent for the Secured Parties (the “Pledgee”),
and             , as the issuer of the Uncertificated Securities, Limited Liability Company Interests and/or Partnership Interests (each as defined below) (the “Issuer”).

 W I T N E S S E T H : 

WHEREAS, each Pledgor and the Pledgee are entering into a Second Amended and Restated Pledge Agreement, dated December 19, 2014 (as
amended, amended and restated, modified or supplemented from time to time, the “Pledge Agreement”), under which, among other things, in order to secure the payment of the Secured Obligations (as defined in the Pledge Agreement),
each Pledgor will pledge to the Pledgee for the benefit of the Secured Parties (as defined in the Pledge Agreement), and grant a security interest in favor of the Pledgee for the benefit of the Secured Parties in, all of the right, title and
interest of such Pledgor in and to any and all (1) “uncertificated securities” (as defined in Section 8-102(a)(18) of the UCC, as adopted in the Commonwealth of Pennsylvania) (“Uncertificated Securities”),
(2) Partnership Interests (as defined in the Pledge Agreement) and (3) Limited Liability Company Interests (as defined in the Pledge Agreement), in each case issued from time to time by the Issuer, whether now existing or hereafter from
time to time acquired by such Pledgor (with all of such Uncertificated Securities, Partnership Interests and Limited Liability Company Interests being herein collectively called the “Issuer Pledged Interests”); and 

WHEREAS, each Pledgor desires the Issuer to enter into this Agreement in order to perfect the security interest of the Pledgee under the
Pledge Agreement in the Issuer Pledged Interests, to vest in the Pledgee control of the Issuer Pledge Interests and to provide for the rights of the parties under this Agreement; 

NOW THEREFORE, in consideration of the premises and the mutual promises and agreements contained herein, and for other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 
 1. Each Pledgor hereby
irrevocably authorizes and directs the Issuer, and the Issuer hereby agrees, to comply with any and all instructions and orders originated by the Pledgee (and its successors and assigns) regarding any and all of the Issuer Pledged Interests without
the further consent by the registered owner (including the respective Pledgor), and not to comply with any instructions or orders regarding any or all of the Issuer Pledged Interests originated by any person or entity other than the Pledgee (and its
successors and assigns) or a court of competent jurisdiction. 

 ANNEX A 

Page 2 
  

 2. The Issuer hereby certifies that (i) no notice of any security interest, lien or
other encumbrance or claim affecting the Issuer Pledged Interests (other than the security interest of the Pledgee) has been received by it, and (ii) the security interest of the Pledgee in the Issuer Pledged Interests has been registered in
the books and records of the Issuer. 
 3. The Issuer hereby represents and warrants that (i) the pledge by the Pledgors of, and the
granting by the Pledgors of a security interest in, the Issuer Pledged Interests to the Pledgee, for the benefit of the Secured Parties, does not violate the charter, by-laws, partnership agreement, membership agreement or any other agreement
governing the Issuer or the Issuer Pledged Interests, and (ii) the Issuer Pledged Interests are fully paid and nonassessable. 
 4. All
notices, statements of accounts, reports, prospectuses, financial statements and other communications to be sent to any Pledgor by the Issuer in respect of the Issuer will also be sent to the Pledgee at the following address: 

Bank of America, N.A. 

4 Penn Center 

Suite 1100 

PA7-188-11-01 

1600 J.F.K. Boulevard 

Philadelphia, PA 19103 

Attention: Kenneth G. Wood 

Facsimile No.: (212) 548-8941 

5. Until the Pledgee shall have delivered written notice to the Issuer that all of the Secured Obligations have been paid in full in cash and
this Agreement is terminated, the Issuer will send any and all redemptions, distributions, interest or other payments in respect of the Issuer Pledged Interests from the Issuer for the account of the Pledgor only by wire transfers to the following
address: 
  
  

 
  

 
  

 
  

[Account Information] 

ABA No.:
                                         
             
 Account in the Name of:
                               

Account No.:
                                         
        

 ANNEX A 

Page 3 
  

 6. Except as expressly provided otherwise in Sections 4 and 5, all notices, instructions,
orders and communications hereunder shall be sent or delivered by mail, telex, telecopy or overnight courier service and all such notices and communications shall, when mailed, telexed, telecopied or sent by overnight courier, be effective when
deposited in the mails or delivered to the overnight courier, prepaid and properly addressed for delivery on such or the next Business Day, or sent by telex or telecopier, except that notices and communications to the Pledgee shall not be effective
until received by the Pledgee. All notices and other communications shall be in writing and addressed as follows: 
  

	 	(a)	if to any Pledgor, at: 

  

	 	(b)	if to the Pledgee, at the address given in Section 4 hereof: 

  

	 	(c)	if to the Issuer, at: 

  

 
  

 
  

 
  

 

Attention:
                                     

Telephone
No.:                             

Telecopier
No.:                             

or at such other address as shall have been furnished in writing by any Person described above to the party required to give notice hereunder. As used in this
Section 6, “Business Day” means any day other than a Saturday, Sunday, or other day in which banks in Philadelphia, Pennsylvania, are authorized to remain closed. 

7. This Agreement shall be binding upon the successors and assigns of each Pledgor and the Issuer and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one instrument. In the event that any provision of this
Agreement shall prove to be invalid or unenforceable, such provision shall be deemed to be severable from the other provisions of this Agreement which shall remain binding on all parties hereto. None of the terms and conditions of this Agreement may
be changed, waived, modified or varied in any manner whatsoever except in writing signed by the Pledgee, the Issuer and any Pledgor which at such time owns any Issuer Pledged Interests. 

8. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to its
principles of conflict of laws. 

 ANNEX A 

Page 4 
  

 IN WITNESS WHEREOF, each Pledgor, the Pledgee and the Issuer have caused this Agreement to be
executed by their duly elected officers duly authorized as of the date first above written. 
  

			
	
[                          
                                      ],

as Pledgor

		
	By	 	 
		 	Name:
		 	Title:
	
	 BANK OF AMERICA, N.A.,

not in its individual capacity but solely as Pledgee

		
	By	 	 
		 	Name:
		 	Title:
	
	
[                          
                                      ],

as the Issuer

		
	By	 	 
		 	Name:
		 	Title:Exhibit 10.1 Performance Shares Agreement (TSR)

 

NEW JERSEY RESOURCES CORPORATION
2007 Stock Award and Incentive Plan 
Performance Shares Agreement - TSR

This Performance Shares Agreement (the “Agreement”), which includes the attached “Terms and Conditions of Performance Shares” (the “Terms and Conditions”) and the attached Exhibit A captioned “Performance Goal and Earning of Performance Shares”, confirms the grant on ________, ____ (the “Grant Date”) by NEW JERSEY RESOURCES CORPORATION, a New Jersey corporation (the “Company”), to _____________ (“Employee”), under Sections 6(e), 6(i) and 7 of the 2007 Stock Award and Incentive Plan (the “Plan”), of Performance Shares (the “Performance Shares”), including rights to Dividend Equivalents as specified herein, as follows:

Target Number Granted:          _______ Performance Shares (“Target Number”)

How Performance Shares are Earned and Vest: The Performance Shares, if not previously forfeited, (i) will be earned, if and to the extent that the Performance Goal defined on Exhibit A to this Agreement is achieved, with the corresponding number of Performance Shares earned (ranging from 0% to 150% of the Target Number) as specified on Exhibit A, on the date set forth on Exhibit A (the “Earning Date”) and (ii) will vest as to the number of Performance Shares earned if Employee remains employed by the Company or a Subsidiary from the Grant Date through the Earning Date (the “Stated Vesting Date”).  To the extent vested, all earned Performance Shares shall be settled within 60 days of the Stated Vesting Date.  In addition, if not previously forfeited or payable, upon a Change in Control, the Performance Shares (i) will be earned in an amount equal to (A) the Target Number of the Performance Shares if the Change in Control occurs within the first 12 months of the 36-month earning period specified on Exhibit A or (B) the number of Performance Shares that would have been earned based upon the actual level of achievement if the performance period had ended at the date of the Change in Control if the Change in Control occurs within the last 24 months of the 36-month earning period specified on Exhibit A and (ii) will (A) immediately vest on the Change in Control with respect to such earned Performance Shares and will be settled within 60 days thereafter, if Employee remains employed by the Company or a Subsidiary from the Grant Date through the Change in Control and no provision is made for the continuance, assumption or substitution of the Performance Shares by the Company or its successor in connection with the Change in Control, or (B) vest on the Stated Vesting Date with respect to such earned Performance Shares and will be settled within 60 days thereafter, if Employee remains employed by the Company or a Subsidiary from the Grant Date through the Stated Vesting Date and provision is made for the continuance, assumption or substitution of the Performance Shares by the Company or its successor in connection with the Change in Control.  In addition, if not previously forfeited or payable, the Performance Shares will become earned and/or vested upon the occurrence of certain events relating to Retirement and/or Termination of Employment to the extent provided in Section 4 of the attached Terms and Conditions. The terms “vest” and “vesting” mean that the Performance Shares have become non-forfeitable in relation to Employee’s employment but may continue to be subject to a substantial risk of forfeiture based on the Performance Goal to the extent provided in Section 4 of the attached Terms and Conditions.  If the Performance Goal is not met (or not fully met) to the extent provided in Section 4 of the attached Terms and Conditions, the Performance Shares (or the unearned portion of the Performance Shares) will be immediately forfeited (whether vested or not).  If Employee has a Termination of Employment prior to a Stated Vesting Date and the Performance

NJR FY 2015 Performance Share Agreement (TSR) Final:74331_3 

 

Shares are not otherwise vested by that date, the Performance Shares will be immediately forfeited except as otherwise provided in Section 4 of the attached Terms and Conditions. Forfeited Performance Shares cease to be outstanding and in no event will thereafter result in any delivery of shares of Stock to Employee.

Performance Goal and Earning Date: The Performance Goal and Earning Date, and the number of Performance Shares earned for specified levels of performance at the Earning Date, shall be as specified in Exhibit A hereto.

Settlement: Performance Shares that are to be settled hereunder, including Performance Shares credited as a result of Dividend Equivalents, will be settled by delivery of one share of Stock, for each Performance Share being settled. Settlement shall occur at the time specified above and in Section 6 of the attached Terms and Conditions.

The Performance Shares are subject to the terms and conditions of the Plan and this Agreement, including the Terms and Conditions of Performance Shares attached hereto and deemed a part hereof. The number of Performance Shares and the kind of shares deliverable in settlement and other terms and conditions of the Performance Shares are subject to adjustment in accordance with Section 5 of the attached Terms and Conditions and Section 11(c) of the Plan.

Employee acknowledges and agrees that (i) the Performance Shares are nontransferable, except as provided in Section 3 of the attached Terms and Conditions and Section 11(b) of the Plan, (ii) the Performance Shares are subject to forfeiture in the event of Employee’s Termination of Employment in certain circumstances prior to vesting, as specified in Section 4 of the attached Terms and Conditions, and (iii) sales of shares of Stock delivered upon settlement of the Performance Shares will be subject to any Company policy regulating trading by employees.

Capitalized terms used in this Agreement but not defined herein shall have the same meanings as in the Plan.

IN WITNESS WHEREOF, NEW JERSEY RESOURCES CORPORATION has caused this Agreement to be executed by its officer thereunto duly authorized.

NEW JERSEY RESOURCES CORPORATION

By:_____________________
     [NAME] 
     [Title] 

EMPLOYEE 

____________________
[NAME] 
[Title]

NJR FY 2015 Performance Share Agreement (TSR) Final:74331_3 

 

TERMS AND CONDITIONS OF PERFORMANCE SHARES

The following Terms and Conditions apply to the Performance Shares granted to Employee by NEW JERSEY RESOURCES CORPORATION (the “Company”) and Performance Shares resulting from Dividend Equivalents (as defined below), if any, as specified in the Performance Shares Agreement (of which these Terms and Conditions form a part). Certain terms of the Performance Shares, including the number of Performance Shares granted, vesting date(s) and settlement date, are set forth on the cover page hereto and Exhibit A, which are an integral part of this Agreement.

1. General.  The Performance Shares are granted to Employee under the Company’s 2007 Stock Award and Incentive Plan (the “Plan”), which has been previously delivered to Employee and/or is available upon request to the Corporate Benefits Department. All of the applicable terms, conditions and other provisions of the Plan are incorporated by reference herein. Capitalized terms used in this Agreement but not defined herein shall have the same meanings as in the Plan. If there is any conflict between the provisions of this document and mandatory provisions of the Plan, the provisions of the Plan govern. By accepting the grant of the Performance Shares, Employee agrees to be bound by all of the terms and provisions of the Plan (as presently in effect or later amended), the rules and regulations under the Plan adopted from time to time, and the decisions and determinations relating to the Plan and grants thereunder of the Leadership Development and Compensation Committee of the Company’s Board of Directors (the “Committee”) made from time to time.

2.  Account for Employee. The Company shall maintain a bookkeeping account for Employee (the “Account”) reflecting the number of Performance Shares then credited to Employee hereunder as a result of such grant of Performance Shares and any crediting of additional Performance Shares to Employee pursuant to dividends paid on shares of Stock under Section 5 hereof (“Dividend Equivalents”).

3.  Nontransferability. Until Performance Shares are settled by delivery of shares of Stock in accordance with the terms of this Agreement, Employee may not transfer Performance Shares or any rights hereunder to any third party other than by will or the laws of descent and distribution, except for transfers to a Beneficiary or as otherwise permitted and subject to the conditions under Section 11(b) of the Plan.

4.  Termination Provisions. The following provisions will govern the earning, vesting and forfeiture of the Performance Shares that are outstanding at the time of Employee’s Termination of Employment (as defined below) (i) by the Company without Cause (as defined below) or by the Employee for Good Reason (as defined below), in either case during the CIC Protection Period (as defined below), or (ii) due to death or Disability (as defined below) or (iii) when Employee is or becomes eligible to terminate employment due to Retirement (as defined below), unless otherwise determined by the Committee (subject to Section 8(a) hereof):

(a) Death. In the event of Employee’s Termination of Employment due to death, the Performance Shares, to the extent not earned previously, will be earned at the date of Employee's Termination of Employment in an amount equal to (i) the Target Number of Performance Shares if the date of Employee's Termination of Employment due to death occurs within the first 12 months of the 36-month earning period specified on Exhibit A or (ii) the number of Performance Shares that would have been earned based upon the actual level of achievement if the performance period had ended at the date of Employee’s Termination of Employment due to death if the date of Employee's Termination of Employment due to death occurs in the last 24 months of the 36-month earning period specified on Exhibit A.  A Pro Rata Portion (as defined below) of the Performance Shares earned on or before the Employee’s Termination of Employment due to death (whether in connection with the Employee's Termination of Employment due to death, upon an earlier Change in Control where provision is made for the continuance, assumption or substitution of the Performance Shares by the Company or its successor in connection with the Change in Control or otherwise), to the extent not vested previously, will vest at the date of the Employee’s Termination of Employment due to death, and

NJR FY 2015 Performance Share Agreement (TSR) Final:74331_3 

 

 such earned and vested Performance Shares will be settled in accordance with Section 6(a) hereof.  Any portion of the then-outstanding Performance Shares not earned and vested at or before the date of Employee’s Termination of Employment due to death will be forfeited.

(b) Termination by the Company or by the Employee.  In the event of Employee’s Termination of Employment by the Company without Cause within the CIC Protection Period and other than for Disability, or by Employee for Good Reason within the CIC Protection Period, a Pro Rata Portion of the Performance Shares to the extent earned previously (upon an earlier Change in Control where provision is made for the continuance, assumption or substitution of the Performance Shares by the Company or its successor in connection with the Change in Control or otherwise), to the extent not vested previously, will vest at the time of Employee’s Termination of Employment, and such earned and vested Performance Shares will be settled in accordance with Section 6(a) hereof.  In the event of Employee’s Termination of Employment (i) by the Company for Cause and other than for Disability, (ii) by the Company for any reason other than Disability prior to or after the CIC Protection Period, (iii) by Employee (other than for Good Reason or upon a Retirement), or (iv) by Employee (other than upon a Retirement) before or after the CIC Protection Period, the portion of the then-outstanding Performance Shares not earned and vested at the date of such Termination of Employment will be forfeited.

(c) Retirement or Disability. In the event of Employee’s Termination of Employment by the Company for Disability, a Pro Rata Portion (as defined below) of the Performance Shares, to the extent not earned previously, that may become earned on the Earning Date, to the extent not previously vested, will vest at the time of Employee’s Termination of Employment, and such vested Performance Shares will continue to be subject to the Performance Goal and will be eligible to be earned and settled in accordance with Section 6(a) hereof.  In the event of Employee’s Termination of Employment by the Company for Disability, a Pro Rata Portion of the Performance Shares to the extent earned previously (upon an earlier Change in Control where provision is made for the continuance, assumption or substitution of the Performance Shares by the Company or its successor in connection with the Change in Control or otherwise), to the extent not vested previously, will vest at the time of Employee’s Termination of Employment, and such earned and vested Performance Shares will be settled in accordance with Section 6(a) hereof.  In the event the Employee is or becomes eligible to terminate employment due to Retirement, a Pro Rata Portion of the Performance Shares, to the extent not earned previously, and to the extent not previously vested, will vest (i) at the time the Employee first becomes eligible to terminate employment due to Retirement (if after the Grant Date) and (ii) at the end of each calendar month (after the Grant Date) following the time the Employee is or becomes eligible to terminate employment due to Retirement and preceding the Employee's Termination of Employment, and such vested Performance Shares will continue to be subject to the Performance Goal and will be eligible to be earned and settled in accordance with Section 6(a) hereof.  In the event Employee is or first becomes eligible to terminate employment due to Retirement, a Pro Rata Portion of the Performance Shares to the extent earned previously (upon a Change in Control where provision is made for the continuance assumption or substitution of the Performance Shares by the Company or its successor in connection with the Change in Control or otherwise), to the extent not vested previously, will vest (i) at the time the Employee first becomes eligible to terminate employment due to Retirement (if after the Grant Date) and (ii) at the end of each calendar month (after the Grant Date) following the time the Employee is or first becomes eligible to terminate employment due to Retirement and preceding the Employee's Termination of Employment.  Any portion of the then-outstanding Performance Shares not vested at or before the date of Employee's Termination of Employment will be forfeited.

(d) Certain Definitions. The following definitions apply for purposes of this Agreement:

(i) “Cause” has the same definition as under any employment or similar agreement between the Company and Employee or, if no such agreement exists or if such agreement does not contain any such definition, Cause means (i) Employee’s conviction of a felony or the entering by Employee of a plea of nolo contendere to a felony charge, (ii) Employee’s gross neglect, willful malfeasance or willful gross misconduct in connection with his or her employment which has had a significant adverse effect on the business of the Company and its subsidiaries, unless Employee reasonably believed in good faith that such act or non-act was in or not opposed to the

NJR FY 2015 Performance Share Agreement (TSR) Final:74331_3 

 

best interest of the Company, or (iii) repeated material violations by Employee of the duties and obligations of Employee’s position with the Company which have continued after written notice thereof from the Company, which violations are demonstrably willful and deliberate on Employee’s part and which result in material damage to the Company’s business or reputation.

(ii) “CIC Protection Period” means the two-year period beginning on the date of a Change in Control and ending on the day before the second annual anniversary of the date of the Change in Control.

(iii) “Disability” means Employee has been incapable of substantially fulfilling the positions, duties, responsibilities and obligations of his employment because of physical, mental or emotional incapacity resulting from injury, sickness or disease for a period of at least six consecutive months. The Company and Employee shall agree on the identity of a physician to resolve any question as to Employee’s disability. If the Company and Employee cannot agree on the physician to make such determination, then the Company and Employee shall each select a physician and those physicians shall jointly select a third physician, who shall make the determination. The determination of any such physician shall be final and conclusive for all purposes of this Agreement.  Only the Company can initiate a Termination of Employment due to Disability.

(iv) “Good Reason” has the same definition as under any employment or similar agreement between the Company and Employee; but, if no such agreement exists or if any such agreement does not contain or reference any such definition, Good Reason shall not apply to the Employee for purposes of this Agreement.

(v) “Pro Rata Portion” means (A) for Performance Shares that may become earned on the Earning Date after the Employee's Termination of Employment by the Company for Disability or in the event of Employee’s Termination of Employment due to death or by the Company for Disability, by the Company without Cause within the CIC Protection Period and other than for Disability, or by Employee for Good Reason within the CIC Protection Period, a fraction the numerator of which is the number of days from the first day of the 36-month earning period specified on Exhibit A to the date of Employee’s Termination of Employment due to death or by the Company for Disability, by the Company without Cause within the CIC Protection Period and other than for Disability, or by Employee for Good Reason within the CIC Protection Period,  and the denominator of which is the number of days from the first day of such 36-month earning period to the Earning Date, (B) (x) for Performance Shares that will vest in connection with the time the Employee first becomes eligible to terminate employment due to Retirement (if after the Grant Date), a fraction the numerator of which is the number of days that have elapsed from the first day of the 36-month earning period specified on Exhibit A to the end of the calendar month (after the Grant Date) coinciding with or immediately preceding the time the Employee first becomes eligible to terminate employment due to Retirement and the denominator of which is the number of days from the first day of such 36-month earning period to the Earning Date, and (y) for Performance Shares that will vest after the time the Employee is or first becomes eligible to terminate employment due to Retirement, a fraction the numerator of which is the number of days from the end of the immediately preceding calendar month with respect to which a Pro Rata Portion of the Performance Shares vested (or, if none, the first day of the 36-month earning period specified on Exhibit A) to the end of the calendar month (after the Grant Date) with respect to which another Pro Rata Portion of the Performance Shares is to vest and the denominator of which is the number of days from the first day of such 36-month earning period to the Earning Date.

(vi) “Retirement” means the Employee has attained age 65, or age 55 with 20 or more years of service.

(vii) “Subsidiary” means any subsidiary corporation of the Company within the meaning of Section 424(f) of the Code (“Section 424(f) Corporation”) and any partnership, limited liability company or joint venture in which either the Company or Section 424(f) Corporation is at least a fifty percent (50%) equity participant.

NJR FY 2015 Performance Share Agreement (TSR) Final:74331_3 

 

(viii)  “Termination of Employment” and “Termination” means the earliest time at which Employee is not employed by the Company or a Subsidiary of the Company.

(e) Termination by the Company for Cause.  In the event of Employee’s Termination of Employment by the Company for Cause, the portion of the then-outstanding Performance Shares not earned and vested prior to such time will be forfeited immediately upon notice to Employee that the Company is terminating the Employee’s employment for Cause.

5.  Dividend Equivalents and Adjustments.

(a) Dividend Equivalents. Dividend Equivalents will be credited on Performance Shares (other than Performance Shares that, at the relevant record date, previously have been settled or forfeited) and deemed converted into additional Performance Shares.  Dividend Equivalents will be credited as follows, except that the Company may vary the manner of crediting (for example, by crediting cash dividend equivalents rather than additional Performance Shares) for administrative convenience:

(i) Cash Dividends. If the Company declares and pays a dividend or distribution on shares of Stock in the form of cash, then additional Performance Shares shall be credited to Employee’s Account in lieu of payment or crediting of cash dividend equivalents equal to the number of Performance Shares credited to the Account as of the relevant record date multiplied by the amount of cash paid per share of Stock in such dividend or distribution divided by the Fair Market Value of a share of Stock at the payment date for such dividend or distribution.

(ii) Non-Share Dividends. If the Company declares and pays a dividend or distribution on shares of Stock in the form of property other than shares of Stock, then a number of additional Performance Shares shall be credited to Employee’s Account as of the payment date for such dividend or distribution equal to the number of Performance Shares credited to the Account as of the record date for such dividend or distribution multiplied by the fair market value of such property actually paid as a dividend or distribution on each outstanding share of Stock at such payment date, divided by the Fair Market Value of a share of Stock at such payment date.

(iii) Share Dividends and Splits. If the Company declares and pays a dividend or distribution on shares of Stock in the form of additional shares of Stock, or there occurs a forward split of shares of Stock, then a number of additional Performance Shares shall be credited to Employee’s Account as of the payment date for such dividend or distribution or forward split equal to the number of Performance Shares credited to the Account as of the record date for such dividend or distribution or split multiplied by the number of additional shares of Stock actually paid as a dividend or distribution or issued in such split in respect of each outstanding share of Stock.

(b) Adjustments. The number of Performance Shares credited to Employee’s Account shall be appropriately adjusted in order to prevent dilution or enlargement of Employee’s rights with respect to Performance Shares or to reflect any changes in the number of outstanding shares of Stock resulting from any event referred to in Section 11(c) of the Plan, taking into account any Performance Shares credited to Employee in connection with such event under Section 5(a) hereof. In furtherance of the foregoing, in the event of an equity restructuring, as defined in ASC Topic 718, which affects the shares of Stock, Employee shall have a legal right to an adjustment to Employee’s Performance Shares which shall preserve without enlarging the value of the Performance Shares, with the manner of such adjustment to be determined by the Committee in its discretion.  All adjustments will be made in a manner as to maintain the Performance Share’s exemption from Code Section 409A or, to the extent Code Section 409A applies, to comply with Code Section 409A.  Any adjustments shall be subject to the requirements and restrictions set forth in Section 11(c) of the Plan.

(c) Risk of Forfeiture and Settlement of Performance Shares Resulting from Dividend Equivalents and Adjustments. Performance Shares which directly or indirectly result from Dividend Equivalents on or adjustments to a Performance Share granted hereunder shall be subject to the same risk of forfeiture and other conditions as apply to the granted Performance 

NJR FY 2015 Performance Share Agreement (TSR) Final:74331_3 

 

Shares with respect to which the Dividend Equivalents related and will be settled at the same time as such related Performance Shares.

6.  Settlement and Deferral.

(a) Settlement Date. Performance Shares granted hereunder that have become earned and vested, together with Performance Shares credited as a result of Dividend Equivalents with respect thereto, shall be settled by delivery of one share of Stock for each Performance Share being settled. Settlement of a vested Performance Share granted hereunder shall occur at the Earning Date (with shares to be delivered within 60 days after the Earning Date); provided, however, that settlement of earned Performance Shares shall occur earlier (i) within 60 days after the date of death of Employee, (ii) if no provision is made for the continuance, assumption or substitution of the Performance Shares by the Company or its successor in connection with a Change in Control within 60 days after the Change in Control, or (iii) within 60 days after the time the earned Performance Shares become vested in connection with the Employee's Termination of Employment or the Employee is or becomes eligible to terminate employment due to Retirement; and provided further, that settlement shall be deferred if so elected by Employee in accordance with Section 6(b) hereof subject to Section 6(c) hereof.  Settlement of Performance Shares which directly or indirectly result from Dividend Equivalents on Performance Shares granted hereunder shall occur at the time of settlement of the related Performance Share.

(b) Elective Deferral. The Committee may determine to permit Employee to elect to defer settlement (or redefer) if such election would be permissible under Section 11(k) of the Plan and Code Section 409A.  In addition to any applicable requirements under Code Section 409A, any such deferral election shall be made only while Employee remains employed and at a time permitted under Code Section 409A.  The form under which an election is made shall set forth the time and form of payment of such amount deferred.  Any amount deferred shall be subject to a 6 month delay upon payment if required under Section 11(k)(i)(F) of the Plan.  Any elective deferral will be subject to such additional terms and conditions as the Vice President - Corporate Services, or the officer designated by the Company as responsible for administration of the Agreement, may reasonably impose.

(c) Compliance with Code Section 409A. Other provisions of this Agreement notwithstanding, if Performance Shares constitute a "deferral of compensation" under Section 409A of the Code (“Code Section 409A”) as presently in effect or hereafter amended (i.e., the Performance Shares are not excluded or exempted under Code Section 409A or a regulation or other official governmental guidance thereunder; Note: an elective deferral under Section 6(b) would cause the Performance Shares, if not already, to be a deferral of compensation subject to Code Section 409A after the deferral), such Performance Shares shall be subject to the additional requirements set forth in Section 11(k) of the Plan.

7.  Employee Representations and Warranties Upon Settlement. As a condition to the settlement of the Performance Shares, the Company may require Employee to make any representation or warranty to the Company as may be required under any applicable law or regulation.

8.  Miscellaneous.

(a) Binding Agreement; Written Amendments. This Agreement shall be binding upon the heirs, executors, administrators and successors of the parties. This Agreement constitutes the entire agreement between the parties with respect to the Performance Shares, and supersedes any prior agreements or documents with respect to the Performance Shares. No amendment or alteration of this Agreement which may impose any additional obligation upon the Company shall be valid unless expressed in a written instrument duly executed in the name of the Company, and no amendment, alteration, suspension or termination of this Agreement which may materially impair the rights of Employee with respect to the Performance Shares shall be valid unless expressed in a written instrument executed by Employee.

NJR FY 2015 Performance Share Agreement (TSR) Final:74331_3 

 

(b) No Promise of Employment. The Performance Shares and the granting thereof shall not constitute or be evidence of any agreement or understanding, express or implied, that Employee has a right to continue as an officer or employee of the Company for any period of time, or at any particular rate of compensation.

(c) Governing Law. The validity, construction, and effect of this Agreement shall be determined in accordance with the laws (including those governing contracts) of the state of New Jersey, without giving effect to principles of conflicts of laws, and applicable federal law.

(d) Fractional Performance Shares and Shares. The number of Performance Shares credited to Employee’s Account shall include fractional Performance Shares calculated to at least three decimal places, unless otherwise determined by the Committee. Unless settlement is effected through a third-party broker or agent that can accommodate fractional shares (without requiring issuance of a fractional Share by the Company), upon settlement of the Performance Shares Employee shall be paid, in cash, an amount equal to the value of any fractional Share that would have otherwise been deliverable in settlement of such Performance Shares.

(e) Mandatory Tax Withholding. Unless otherwise determined by the Committee, at the time of vesting and/or settlement the Company will withhold from any shares of Stock deliverable in settlement of the Performance Shares, in accordance with Section 11(d)(i) of the Plan, the number of shares of Stock having a value nearest to, but not exceeding, the minimum amount of income and employment taxes required to be withheld under applicable laws and regulations, and pay the amount of such withholding taxes in cash to the appropriate taxing authorities. Employee will be responsible for any withholding taxes not satisfied by means of such mandatory withholding and for all taxes in excess of such minimum withholding taxes that may be due upon vesting or settlement of Performance Shares.

(f) Statements. An individual statement of each Employee’s Account will be issued to Employee at such times as may be determined by the Company. Such a statement shall reflect the number of Performance Shares credited to Employee’s Account, transactions therein during the period covered by the statement, and other information deemed relevant by the Company. Such a statement may be combined with or include information regarding other plans and compensatory arrangements. Employee’s statements shall be deemed a part of this Agreement, and shall evidence the Company’s obligations in respect of Performance Shares, including the number of Performance Shares credited as a result of Dividend Equivalents (if any). Any statement containing an error shall not, however, represent a binding obligation to the extent of such error, notwithstanding the inclusion of such statement as part of this Agreement.

(g) Unfunded Obligations. The grant of the Performance Shares and any provision for distribution in settlement of Employee’s Account hereunder shall be by means of bookkeeping entries on the books of the Company and shall not create in Employee any right to, or claim against any, specific assets of the Company, nor result in the creation of any trust or escrow account for Employee. With respect to Employee’s entitlement to any distribution hereunder, Employee shall be a general creditor of the Company.

(h) Notices. Any notice to be given the Company under this Agreement shall be addressed to the Company at its principal executive offices, in care of the Vice President - Corporate Services, or the officer designated by the Company as responsible for administration of the Agreement, and any notice to Employee shall be addressed to Employee at Employee’s address as then appearing in the records of the Company.

(i) Shareholder Rights. Employee and any Beneficiary shall not have any rights with respect to shares of Stock (including voting rights) covered by this Agreement prior to the settlement and distribution of the shares of Stock as specified herein.  Specifically, Performance Shares represent a contractual right to receive shares of Stock in the future, subject to the terms and conditions of this Agreement and the Plan, and do not represent ownership of shares of Stock at any time before the settlement of this Award and actual issuance of the shares of Stock.

NJR FY 2015 Performance Share Agreement (TSR) Final:74331_3 

 

Exhibit A
NEW JERSEY RESOURCES CORPORATION
2007 Stock Award and Incentive Plan
Performance Goal and Earning of Performance Shares

The number of Performance Shares earned by Participant shall be determined as of September 30, ____ (the “Earning Date”), based on the Company’s “Total Shareholder Return Performance” in the 36-month period ending at the Earning Date as compared against an established group of comparable companies (the “Comparison Group”) selected by the Committee and shown below. The number of Performance Shares earned will be determined based on the following grid:

	
					
	Total Shareholder Return

	Company Total
	 
	 
	 

	Shareholder Return
	Performance Shares Earned as

	Performance-
	Percentage of

	Percentile Achieved
	Target Performance Shares

	Less than 25th
	 
	 
	0
	%

	25th (threshold) 
	 
	 
	40
	%

	33rd 
	 
	 
	55
	%

	41st 
	 
	 
	75
	%

	50th
	 
	 
	90
	%

	58th 
	 
	 
	100
	%

	66th 
	 
	 
	115
	%

	75th 
	 
	 
	130
	%

	83rd  and above
	 
	 
	150
	%

Total Shareholder Return (or “TSR”) shall be computed as follows:

TSR = (Priceend − Pricebegin + Dividends) / Pricebegin 

Pricebegin = closing share price of Stock at September 30, ____
Priceend = closing share price of Stock at end on September 30, _____
Dividends = dividends paid to shareholders of Stock during 36-month period

Upon achievement of Total Shareholder Return at a percentile between any two specified percentiles, the Performance Shares earned will be mathematically interpolated on a straight-line basis.

Determinations of the Committee regarding Total Shareholder Return performance, such performance as a percentile within the Comparison Group, the resulting Performance Shares earned and vested and related matters will be final and binding on Participant.  The Committee shall determine a reasonable methodology for dealing with companies in the Comparison Group that cease to be publicly traded companies engaged in a business comparable to that of the Company, subject to compliance with Treasury Regulation § 1.162-27(e)(2).  Additionally, companies that are no longer publicly traded will be excluded from the calculation and bankrupt companies will be treated as having a negative 100% TSR.  Total Shareholder Return shall be calculated in a manner that reflects the economic return to shareholders, such that any equity restructuring of the Company or any company in the Comparison Group shall not have the effect of enlarging or reducing the rights of Employee except to the extent of its effects on the real economic return of a shareholder.

Determinations of the Committee regarding Total Shareholder Return performance, in the case of a Change in Control or Employee’s Termination due to death prior to the Earning Date, shall be made as if the performance period had ended at the date of the Change in Control or Termination of Employment due to death, as applicable.

NJR FY 2015 Performance Share Agreement (TSR) Final:74331_3 

 

The Comparison Group 

AGL Resources Inc.
Atmos Energy Corporation
The Laclede Group, Inc.
ONE Gas, Inc.
Northwest Natural Gas Company
Piedmont Natural Gas Company
Questar Corporation
South Jersey Industries, Inc.
Southwest Gas Corporation
UIL Holdings Corporation
Vectren Corporation
WGL Holdings, Inc.

NJR FY 2015 Performance Share Agreement (TSR) Final:74331_3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00238-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00238-of-00352.parquet"}]]