PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

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September 20, 2022

Dear Stockholder:

You are cordially invited to attend a special meeting (the “Special Meeting”) of the stockholders of StoneMor Inc. (the “Company”). The Special Meeting will be held at 4:00 p.m., Eastern time, on Tuesday, November 1, 2022. You will be able to attend the Special Meeting, vote, and submit your questions during the Special Meeting via live webcast by visiting www.virtualshareholdermeeting.com/STON2022SM. To attend the Special Meeting via live webcast, you must have your sixteen-digit control number that is shown on the proxy card accompanying the enclosed proxy statement. You will not be able to attend the Special Meeting in person. Formal notice of the Special Meeting, a proxy statement, and a proxy card and voting instruction card accompany this letter.

At the Special Meeting, holders of shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), will be asked to consider and vote upon a proposal to adopt the Agreement and Plan of Merger, dated as of May 24, 2022 (the “Merger Agreement”), by and among the Company, Axar Cemetery Parent Corp. (“Parent”), a Delaware corporation, and Axar Cemetery Merger Corp., a Delaware corporation and indirect wholly-owned subsidiary of Parent (“Merger Sub”).

Pursuant to the terms of the Merger Agreement, Merger Sub will merge with and into the Company and the Company will become a direct wholly-owned subsidiary of Parent (the “Merger”). If the Merger is completed, then each share of Common Stock (other than certain excluded shares as set forth in the Merger Agreement) will be cancelled and converted into the right to receive $3.50 in cash, without interest.

The proposed Merger is a “going private” transaction under the rules of the Securities and Exchange Commission (the “SEC”). Following the completion of the Merger, all of the remaining common stock of the Surviving Corporation will be directly owned by Parent.

Following the completion of the Merger, the Common Stock will no longer be listed on the New York Stock Exchange and the Company will no longer be required to file periodic and other reports with the SEC with respect to the Common Stock. After the completion of the Merger, you will no longer have an equity interest in the Company and will not participate in any potential future earnings of the Company.

Upon receipt of a proposal from Axar Capital Management, LP (“Axar”) on September 22, 2021 (the “2021 Letter”) in which Axar expressed interest in pursuing discussions concerning strategic alternatives that might be beneficial to the Company and its various stakeholders, the board of directors of the Company (the “Board”) authorized its standing Conflicts Committee (the “Conflicts Committee”) consisting solely of independent and disinterested directors of the Company, to engage in the discussions contemplated by the 2021 Letter, including the authority to engage in discussions concerning and to negotiate the terms and provisions of strategic alternatives. The Conflicts Committee determined that the Merger and the transactions contemplated by the Merger Agreement were fair to, and in the best interests of the Company and its stockholders (other than the holders of Axar Shares and Insider Shares, as defined below). Based in part on the unanimous recommendation of the Conflicts Committee, the Board (other than Andrew Axelrod, the Company’s chairperson, who is also the sole member of the general partner of Axar and did not attend the meeting) (a) determined that the Merger Agreement and the transactions contemplated by the Merger Agreement are fair to and in the best interests of the Company and its stockholders (other than the holders of Axar Shares and Insider Shares), (b) approved the Merger Agreement and the transactions contemplated by the Merger Agreement, and (c) recommended that the stockholders of the Company approve the Merger and the transactions contemplated thereby (the “Transactions”) and adopt the Merger Agreement.

Your vote is very important, regardless of the number of shares of Common Stock you own. The affirmative vote of the holders of a majority of the issued and outstanding shares of Common Stock is required to adopt the Merger Agreement. In addition, the Merger Agreement makes it a condition to the parties’ obligations to consummate the Merger that holders of a majority of the issued and outstanding shares of Common Stock, other than (i) shares of Common Stock held by the Parent and its wholly-owned subsidiaries or beneficially owned by any affiliate of Parent and (ii) shares of Common Stock held by members of the Board, the officers of the Company (as defined by Rule 16-1(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) and any immediate family members of a Board member or officer, vote in favor of the adoption of the Merger Agreement. If you fail to vote on the adoption of the Merger Agreement, the effect will be the same as a vote “AGAINST” the adoption of the Merger Agreement.

Pursuant to rules of the SEC, you will also be asked to vote at the Special Meeting on (i) a non-binding, advisory proposal to approve certain compensation arrangements for the Company’s named executive officers in connection with the Merger, which requires the affirmative vote of a majority of the shares of Common Stock present or represented by proxy at the Special Meeting and entitled to vote thereon and (ii) one or more proposals to adjourn the Special Meeting, if necessary or appropriate, including adjournments to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to adopt the Merger Agreement.

The Board recommends that you vote “FOR” the non-binding, advisory proposal regarding certain Merger-related executive compensation arrangements, and “FOR” the proposal to adjourn the Special Meeting, if necessary or appropriate.

If you own shares of Common Stock of record, you will find enclosed a proxy and voting instruction card and an envelope in which to return the card. Whether or not you plan to attend the Special Meeting, please sign, date and return your enclosed proxy and voting instruction card, or vote over the phone or Internet, as soon as possible so that your shares of Common Stock can be voted at the Special Meeting in accordance with your instructions. You can revoke your proxy before the Special Meeting and issue a new proxy as you deem appropriate. You will find the procedures to follow if you wish to revoke your proxy on page 75 of the enclosed proxy statement.

If you hold your shares of Common Stock in “street name” through a broker, bank or other nominee, you should follow the directions provided by your broker, bank or other nominee regarding how to instruct your broker, bank or other nominee to vote your shares of Common Stock. Without those instructions, your shares of Common Stock will not be voted, which will have the same effect as voting “AGAINST” the adoption of the Merger Agreement.

The accompanying proxy statement provides you with more detailed information about the Special Meeting and the Transactions, including the Merger. A copy of the Merger Agreement is attached as Appendix A to the accompanying proxy statement. We encourage you to carefully read the entire proxy statement and its appendices, including the Merger Agreement and the documents referred to or incorporated by reference in the accompanying proxy statement in their entirety. You may also obtain additional information about the Company from other documents filed with the SEC.

If you have any questions or need assistance voting your shares of Common Stock, please contact the Company’s proxy solicitor in connection with the Special Meeting:

MacKenzie Partners, Inc.

1407 Broadway, 27th Floor

New York, NY 10018

Telephone (toll-free): (800) 322-2885

We look forward to your attendance at the Special Meeting.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE MERGER, PASSED UPON THE MERITS OR FAIRNESS OF THE MERGER AGREEMENT OR THE TRANSACTIONS, INCLUDING THE MERGER, OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT OR THE ACCOMPANYING PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The accompanying proxy statement is dated September 20, 2022 and, together with the enclosed form of proxy, and voting instruction card, is first being mailed to stockholders of the Company on September 23, 2022.

 

If you sign, date and return your proxy and voting instruction card without indicating how you wish to vote, your proxy will be voted in favor of the Merger Proposal, in favor of the non-binding, advisory Compensation Proposal and in favor of the Adjournment Proposal. If you fail to attend the Special Meeting or submit your proxy, the effect will be that your shares of Common Stock will not be counted for purposes of determining whether a quorum is present at the Special Meeting and will have the same effect as a vote “AGAINST” the Merger Proposal. However, assuming a quorum is present, failure to attend the Special Meeting or submit your proxy will not affect the non-binding, advisory Compensation Proposal or the Adjournment Proposal.

You may revoke your proxy at any time before the vote at the Special Meeting by following the procedures outlined in the enclosed proxy statement. If you are a holder of record of Common Stock and wish to attend the Special Meeting and vote at the Special Meeting, you may revoke your proxy and vote at the Special Meeting.

The Merger is described in the accompanying proxy statement, which the Company urges you to read carefully and in its entirety. A copy of the Merger Agreement is included as Appendix A to the accompanying proxy statement.

Even if you plan to attend the Special Meeting, the Company requests that you complete, sign, date and return the enclosed proxy and thus ensure that your shares of Common Stock will be represented at the Special Meeting if you are unable to attend. You also may submit your proxy by using a toll-free telephone number or the Internet. We have provided instructions in the enclosed proxy statement and on the proxy and voting instruction card for using these convenient services.

We will be hosting the Special Meeting via live webcast on the Internet at www.virtualshareholdermeeting.com/STON2022SM. A summary of the information you need to attend the Special Meeting online is provided below:

By order of the Board

Joseph M. Redling

President and Chief Executive Officer

Bensalem, Pennsylvania

September 20, 2022

The following questions and answers address briefly some questions you may have regarding the Special Meeting, the Merger Agreement and the Merger. These questions and answers may not address all questions that may be important to you as a stockholder of the Company. Please refer to the more detailed information contained elsewhere in this Proxy Statement, the appendices to this Proxy Statement and the documents referred to or incorporated by reference in this Proxy Statement.

The Board also recommends that the stockholders of the Company vote:

You should read “Special Factors - Purpose and Reasons of the Company for the Merger; Recommendation of the Board and the Conflicts Committee; Fairness of the Merger” beginning on page 27 for a discussion of the factors that the Conflicts Committee and the Board considered in deciding to recommend and/or approve, as applicable, the Merger Proposal. See also “Special Factors - Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 50.

Following the consummation of the Merger, the registration of the Common Stock and the Company’s reporting obligations with respect to the Common Stock under the Exchange Act will be terminated upon application to the SEC. In addition, upon the consummation of the Merger, the Common Stock will no longer be listed on any stock exchange or quotation system, including the NYSE.

If you are a holder of record of Common Stock, you can ensure that your shares of Common Stock are voted at the Special Meeting by submitting your proxy via:

If you hold your shares of Common Stock in “street name” through a broker, bank or other nominee, you should follow the directions provided by it regarding how to instruct it to vote your shares of Common Stock. Without those instructions to your broker, bank or other nominee, your shares of Common Stock will not be voted, which will have the same effect as a vote “AGAINST” the Merger Proposal.

Please note that if you hold your shares of Common Stock in “street name” and you have instructed a broker, bank or other nominee to vote your shares of Common Stock, the above-described options for revoking your voting instructions do not apply, and instead you must follow the instructions received from your broker, bank or other nominee to revoke your voting instructions.

The Record Date for stockholders entitled to vote at the Special Meeting is earlier than the date on which the Merger will be consummated. So, if you transfer your shares of Common Stock after the Record Date but before the Special Meeting, you will have transferred your right to receive the Merger Consideration pursuant to the terms of the Merger Agreement, but retained the right to vote at the Special Meeting.

MacKenzie Partners, Inc.

1407 Broadway, 27th Floor

New York, NY 10018

Telephone (toll-free): (800) 322-2885

If your broker, bank or other nominee holds your shares of Common Stock, you can also call your broker, bank or other nominee for additional information.

The Merger Agreement is the result of negotiations between the Company’s Conflicts Committee (the “Conflicts Committee”), Axar, and their respective legal and financial advisors. The following is a summary description of the background, including principal meetings and deliberations, leading up to the announcement of the Merger and the Transactions, and the related “go-shop” process provided by the Merger Agreement. It does not catalogue every meeting of the Conflicts Committee or every conversation of or among the Conflicts Committee, the Company, Axar, their respective representatives or other parties.

Axar and its affiliates, together with certain of its investment funds and managed accounts (the “Axar Group”) began acquiring equity interests in the Company’s predecessor, StoneMor Partners LP (the “Partnership”), in the second quarter of 2017. On March 9, 2018, the Axar Group filed a statement on Schedule 13D reporting ownership of 17.5% of the outstanding common units representing limited partnership interests in the Partnership. This Schedule 13D statement also reported that the Axar Group intended to pursue discussions with the Partnership’s general partner regarding the potential for converting the Partnership from a master limited partnership to a corporation for U.S. Federal income tax purposes.

On July 31, 2018, Axar, StoneMor GP Holdings LLC, the parent of the general partner of the Partnership (“GP Holdings”), and Robert B. Hellman, as trustee under a voting and investment trust agreement for American Cemeteries Infrastructure Investor, LLC (“ACII”), entered into a non-binding memorandum of understanding under which Axar and ACII agreed to support a corporate reorganization to transition the Partnership to corporate form, subject to approval of a special committee of the board of directors of the general partner of the Partnership and certain other terms, including ACII having the right to appoint two directors and Axar having the right to appoint one director to the resulting corporation.

On September 27, 2018, the Partnership, its general partner, GP Holdings and a related entity entered into a Merger and Reorganization Agreement (as amended, the “Conversion Merger Agreement”). The transactions contemplated by the Conversion Merger Agreement had been reviewed and approved by a special committee of the board of directors of the general partner, consisting of Stephen J. Negrotti and Patricia D. Wellenbach, who were independent from GP Holdings and its sole member and were also independent from Axar. This special committee had engaged Raymond James as its independent financial advisor and Drinker Biddle & Reath LLP as its independent legal advisor to assist it in its evaluation of these proposed transactions. The Conversion Merger Agreement provided for a series of transactions through which, among other things: (i) the general partner of the Partnership would be converted into the Company; (ii) the Partnership would become a wholly-owned subsidiary of the Company; and (iii) the unitholders in the Partnership would become stockholders in the Company. We refer to these transactions as the “C-Corporation Conversion.” Concurrently with the execution of the Conversion Merger Agreement, the Company, Axar, and other parties entered into a Voting and Support Agreement, in which among other things Axar agreed to vote in favor of the C-Corporation Conversion at any meeting of unitholders related thereto, and the Company, the Axar Group and ACII entered into a Nomination and Director Voting Agreement, which contains standstill and other provisions (the “DVA”), including director designation rights to be effective upon consummation of the C-Corporation Conversion. Since that time, the DVA has been amended five times with the approval of committees of independent directors of the general partner of the Partnership or the Company, as applicable, including in connection with waivers to applicable standstill provisions to permit the Axar Group to increase its holdings and board representation.

Both prior to and during the pendency of the transactions contemplated by the Conversion Merger Agreement, the Partnership experienced ongoing performance challenges, including declines in comparable sales. In addition, the Partnership had experienced ongoing issues in preparing and timely filing its financial statements as required by SEC rules and its debt facilities. This resulted in a series of defaults under the Partnership’s revolving credit agreement. On February 4, 2019, the Partnership entered into an eighth amendment and waiver to its revolving credit agreement that designated the existing lending facility as Tranche A and provided for a $35.0 million last out Tranche B facility provided by the Axar Group. The amendment also precluded any new borrowings under the Tranche A facility, changed the maturity date for the Tranche A facility to no later than May 1, 2020 and increased the interest rate on the Tranche A facility. The Partnership then undertook a refinancing of the

7 7/8% Senior Notes due 2021 and repayment of the Partnership’s revolving credit facility, including the Tranche B facility, through the issuance of the Senior Secured PIK Toggle Notes due 2024 (the “PIK Toggle Noes”). Consummation of the placement of the PIK Toggle Notes was conditioned upon the Partnership concurrently issuing at least $62.5 million of equity. In addition, the 2024 Indenture required that the C Corporation Conversion be consummated on or before March 31, 2020.

On June 27, 2019, the Partnership completed (i) a private placement of $62.5 million liquidation value of preferred units of partnership interest (the “2019 Preferred Units”) for total proceeds of $57.5 million, reflecting an 8% discount to the $1.20 liquidation value per preferred unit and (ii) a concurrent private placement to various financial institutions of $385.0 million of PIK Toggle Notes. The Axar Group purchased 77.2% of the 2019 Preferred Units. The remainder of the 2019 Preferred Units were purchased by funds associated with Mangrove Partners, an investment manager, and David Miller, a director of the Company. ACII, the investment fund that controlled GP Holdings, which was the sole member of the general partner of the Partnership and then the largest unitholder of the Partnership, declined to participate in the private placement of the 2019 Preferred Units. The 2019 Preferred Units were issued at a price of $1.104 per preferred unit and were convertible into common units on a 1:1 basis at any time beginning 10 days after the completion of the Offering described below or upon consummation of the C Corporation Conversion, if not earlier redeemed with the proceeds of the 2019 Rights Offering. The closing price of the Partnership’s common units on the NYSE was $1.61 per common unit on the trading day immediately preceding the consummation of the private placements of the 2019 Preferred Units and the PIK Toggle Notes. The Partnership was obligated to use 100% of the net proceeds of the 2019 Rights Offering to redeem up to 33,487,904 of the 2019 Preferred Units at the stated liquidation value of $1.20 per preferred unit.

In connection with the issuance of the 2019 Preferred Units, the board of directors of the general partner of the Partnership was reconstituted and Axar obtained the right to designate three out of seven board members of the Partnership’s general partner. The general partner board members initially designated by Axar were Andrew Axelrod, David Miller and Spencer Goldenberg, each of whom is currently a director of the Company, and Mr. Axelrod was elected Chairman of the board of the general partner.

On October 25, 2019, the Partnership completed a rights offering (the “2019 Rights Offering” and together with the issuance of the 2019 Preferred Units and the PIK Toggle Notes, the “2019 Recapitalization Transactions”). Pursuant to the terms of the 2019 Rights Offering, the Partnership distributed to each common unit holder (other than Axar, other purchasers in the private placement of the 2019 Preferred Units and ACII), one non-transferable subscription right to purchase 1.24 common units of partnership interest for each common unit held, at a subscription price of $1.20 per common unit. A total of 3,039,380 common units were sold in connection with the 2019 Rights Offering, which reflected less than 11.0% of the total rights that had been made available to the Company’s stockholders, resulting in proceeds of $3.65 million. The Partnership incurred expenses of approximately $772,000 in connection with the 2019 Rights Offering. The gross proceeds of the 2019 Rights Offering were used to redeem 3,039,380 2019 Preferred Units, including a pro rata portion of the units held by Axar.

As a result of the 2019 Recapitalization Transactions and the C-Corporation Conversion, immediately following the effectiveness of the C-Corporation Conversion on December 31, 2019, upon which all of the remaining outstanding Preferred Units were automatically converted into common units, Axar held an aggregate of 52.4% of the Common Stock of the Company, which constituted a majority of the Company’s outstanding Common Stock.

During the fourth quarter of 2019 and early 2020, the Company continued to experience poor operating performance that was below the forecasts used in setting the financial covenants in the 2024 Indenture, resulting in a potential failure to meet certain of these covenants and the inclusion of a going concern qualification in the Company’s 2019 year-end audited financial statements. Following negotiations with the Company’s noteholders, on April 1, 2020, the Company and the Trustee, with the consent of the requisite holders of the PIK Toggle Notes, agreed to amend the 2024 Indenture. Among other things, the amendment provided the Company with relief under certain financial covenants under the 2024 Indenture, conditioned on the Company receiving an immediate equity infusion of $8.8 million. The amendment also required the Company to raise an additional $8.2 million in new equity on or before July 31, 2020.

Concurrently with the amendment to the 2024 Indenture, and with the approval of the Board based upon a recommendation from a special committee of the Board comprised of Ms. Wellenbach and Messrs. Negrotti and Goldenberg, the Company entered into a letter agreement with Axar (the “Axar Commitment”), under which Axar committed: (i) to purchase $8.8 million of non-voting, non-convertible preferred stock of the Company (the “Series A Preferred”); (ii) to exercise its basic rights in a rights offering of Common Stock to raise the required $8.2 million of new equity (the “Proposed Rights Offering “) by tendering the shares of Series A Preferred so purchased in exchange for shares of Common Stock on a dollar-for-dollar basis; and (iii) to purchase any shares offered in the Proposed Rights Offering for which other stockholders did not exercise their rights, up to a maximum of an additional $8.2 million of such shares. As contemplated in the Axar Commitment, the Proposed Rights Offering would have constituted a pro rata offering of one Common Stock purchase right for each 0.25 shares of Common Stock outstanding on a record date to be determined by the Board, with each right exercisable at a purchase price of $0.73 per share (payable in cash or by delivery of shares of Series A Preferred at stated value). On March 31, 2020, the closing price of the Common Stock on the NYSE was $1.04 per share. The rights offering price was approved by the Board on the recommendation of the special committee following consultation by the special committee with its independent financial advisor, Raymond James. Each holder that exercised its basic purchase right would have been entitled to over-subscription rights to the extent available, subject to any restrictions imposed by the NYSE. The Company agreed to use reasonable efforts to cause the rights to be admitted for trading on the NYSE during the exercise period.

The amendment to the 2024 Indenture, the Axar Commitment and the Proposed Rights Offering were announced on April 2, 2020. From April 6, 2020, through May 26, 2020, the closing price of the Common Stock ranged between $0.52 and $0.68 per share.

With the Common Stock trading below the exercise price in the Proposed Rights Offering, and in light of the less than 11% stockholder participation in the 2019 Rights Offering, the Board concluded that the Proposed Rights Offering was unlikely to produce significant net proceeds for the Company. Instead, with the approval of the special committee, the Company and the Axar Group entered into a Common Stock Purchase Agreement on May 27, 2020 providing for the direct purchase by the Axar Group, in lieu of the Proposed Rights Offering, of 23,287,672 shares of Common Stock, for aggregate consideration of $17 million ($0.73 per share), a portion of which would be paid by exchanging the Series A Preferred previously purchased by Axar. This purchase agreement, which superseded the Axar Commitment, enabled the Company to avoid the risk that the Proposed Rights Offering would be unsuccessful and the expense of proceeding with the Proposed Rights Offering, while obtaining the same per share and aggregate purchase price contemplated by the Axar Commitment.

The Axar Group’s direct purchase of Common Stock was completed on June 19, 2020. After giving effect to this purchase, the Axar Group reported beneficial ownership of 61.8% of the Common Stock as of the close of business on such date.

reported closing price of the Common Stock on the immediately preceding trading day was $0.73 per share. Between July 31, 2020 and September 3, 2020, the special committee met on several occasions, including, on August 4, 2020 and September 1, 2020 with its financial advisors, Duff & Phelps, which had by then become the investment banking unit of the financial consultancy firm Kroll, LLC. On September 3, 2020, the special committee communicated to Axar that the price in the amended proposal was significantly less than any price the special committee would be willing to consider.

On September 8, 2020, the Company announced that Axar, after determining that it would not be able to reach an agreement with the special committee on terms that would be satisfactory to Axar, had withdrawn its proposal to acquire all of the outstanding shares of Common Stock of the Company not owned by the Axar Group.

In September 2020, based upon the recommendation of the Board’s Compensation, Nominating and Governance Committee (the “CNG Committee”), the Board approved a modification of the standstill provisions of the DVA requested by Axar to allow the Axar Group to acquire approximately 9.3 million shares of Common Stock from certain investment funds and to set a new standstill limit that reflected that purchase. The CNG Committee consisted of independent directors (Messrs. Miller, Goldenberg and Hellman). In November 2020, again based on the recommendation of the CNG Committee, the Board approved a modification of the prior approval to allow the Axar Group to acquire approximately 10.3 million shares of Common Stock from those investment funds and to set a new standstill limit that reflected that purchase (the “November 2020 DVA Amendment”). Pursuant to the November 2020 DVA Amendment, (i) the DVA was amended to extend the standstill period applicable to the Axar Group through December 31, 2023, and (ii) the Axar Group agreed to vote in favor of proposals to amend the supermajority voting provisions of the Company’s certificate of incorporation to increase the supermajority threshold to 75%, and until such amendments were adopted, to not vote or direct the voting of any shares in favor of any proposal to which such supermajority provisions were applicable unless such proposal had been approved by the Board, including the majority of directors then serving thereon who were not serving as Axar designated directors. After the purchase permitted by the November 2020 DVA Amendment, Axar owned approximately 70.5% of the Company’s outstanding Common Stock.

In December 2020, a special committee of the Board consisting of three independent directors (Messrs. Negrotti and Patrick and Ms. Wellenbach) approved a further amendment of the standstill provisions of the DVA requested by Axar to allow the Axar Group to acquire the 7.5 million shares of Common Stock owned by ACII and to set a new standstill limit that reflected that purchase (the “December 2020 Waiver”). The December 2020 Waiver was conditioned on the following: (i) the DVA would be amended to eliminate any ambiguity that the standstill period for the Axar Group continues through December 31, 2023; (ii) a special committee consisting only of independent directors would be delegated the authority to function as a standing committee with full authority on behalf of the Company to review, approve, negotiate or reject any subsequent proposed agreements or transactions between the Company and Axar or any of its affiliates, and Mr. Axelrod would agree to support such a procedure for so long as the Company remained public; and (iii) the Axar Group would agree to vote in favor of proposals to amend the supermajority voting provisions of the Company’s certificate of incorporation to increase the supermajority threshold to 85%, and until such amendments were adopted, to not vote or direct the voting of any shares in favor of any proposal to which such supermajority provisions were applicable unless such proposal had been approved by the Board, including the special committee. In December 2020, following an inability to reach terms on the proposed purchase with ACII, Axar withdrew its waiver request but, as described below, resubmitted it in March 2021.

In 2020 and early 2021, Mr. Axelrod, in his capacity as Chairman of the Board and of the Trust Committee, on several occasions had identified investment opportunities to Cornerstone Trust Management Services LLC (“Cornerstone”), a wholly-owned subsidiary of the Company that provides non-discretionary investment advisory services to the independent trustee for the merchandise and perpetual care trusts (the “Trusts”) that the Company maintains. In early 2021, the Company’s management recommended that Cornerstone enter into a subadvisor agreement with Axar (the “Subadvisor Agreement”). Pursuant to the charter of the Trust and Compliance Committee of the Board of Directors (the “Trust Committee”), the retention of Axar as a subadvisor and the Subadvisor Agreement in the form submitted to the Trust Committee were first reviewed and approved by the Trust Committee, which directed that these matters also be approved by a Board committee comprised

exclusively of independent directors. Given the Axar relationship, the Board appointed a special committee comprised of Ms. Wellenbach and Messrs. Negrotti and Patrick to review the retention of Axar and the Subadvisor Agreement.

Both the Trust Committee and the special committee concluded that Axar had the appropriate experience and performance record to assist Cornerstone in performing its investment advisory obligations to the trustee of the Trusts, that the retention of Axar would provide back-office operational efficiencies to Cornerstone, and that the financial terms offered by Axar were at least as favorable to Cornerstone as the terms that would be available from other unaffiliated subadvisors. The committees considered that, where Cornerstone had in place an agreement with an investment advisor subject to the Investment Advisors Act of 1940, that investment advisor “…must, at all times, serve the best interest of its client and not subordinate its client’s interest to its own,” and that “an investment advisor must eliminate or make full and fair disclosure of all conflicts of interest which might incline an investment advisor – consciously or unconsciously – to render advice which is not disinterested such that a client can provide informed consent to the conflict” (quoting from the SEC’s 2019 Interpretation Regarding Standard of Conduct for Investment Advisers). In January 2021, the Trust Committee approved the terms of the Subadvisor Agreement, subject to certain conditions including approval by the special committee. Following that approval, the special committee approved the Subadvisor Agreement with a modification that any Axar investment recommendation that would constitute a related party transaction be approved by the Trust Committee in addition to any other approval required by the Company’s governance policies. On February 1, 2021, the Trust Committee approved the terms of the Subadvisor Agreement as modified in accordance with the special committee’s recommendation, and the Subadvisor Agreement was executed effective February 1, 2021. In connection with such execution of the Subadvisor Agreement, Mr. Axelrod resigned as a member of the Trust Committee and Mr. Patrick was elected as Chairman of the Trust Committee. Under the terms of the Subadvisor Agreement, Axar agreed to provide the following services with respect to the assets held in the Trusts and in certain pooled investment vehicles administered by the trustee of the Trusts in which certain of the Trusts participate or invest (collectively, the “Investment Assets”):

On or about March 7, 2021, Mr. Axelrod resubmitted the request to waive Axar’s standstill obligations under the DVA to purchase up to 7.5 million common shares from ACII in a direct, private transaction not involving any open market purchase.

On March 2, 2021, the Board of Directors created the standing Conflicts Committee to consist of Mr. Negrotti (chair), Mr. Patrick, and Ms. Wellenbach, having determined that each member of the Conflicts Committee was independent from Axar, and on March 10, 2021, the Board approved a charter for the Conflicts Committee, in each case based upon the recommendation of the CNG Committee. The charter delegates to the Conflicts Committee the responsibility for reviewing and, as it determines appropriate, rejecting or approving or recommending to the Board that it approve (a) any transactions between a Company Entity (as defined below) and any related party, as defined in the rules of the SEC, regardless of dollar amount, (b) any transactions between a Company Entity and Axar or any affiliate of Axar that is not a Company Entity, and (c) any other transaction or matter that the Board may determine to submit to the Conflicts Committee. As used in the Conflicts Committee Charter, the term “Company Entity” includes the Company, any subsidiary of the Company and the Trusts.

On April 12, 2021, the Conflicts Committee approved the resubmitted waiver of the standstill provisions of the DVA to allow Axar to acquire the shares held by ACII, provided the purchase occurred before May 31, 2021, subject to the other conditions that were part of the December 2020 Waiver. On April 28, 2021, the Axar Group purchased 5,522,732 shares from ACII for a price of $2.20 per share. Following this purchase, the Axar Group disclosed that it owned approximately 75.1% of the Company’s outstanding Common Stock.

On September 22, 2021, Axar sent a letter to the Board in which it expressed interest in pursuing discussions concerning strategic alternatives that might be beneficial to the Company and its various stakeholders (the “2021 Letter”). The 2021 Letter stated that: “Any potential transaction involving Axar would be subject to approval of the Special Committee and the Board, the negotiation and execution of mutually satisfactory transaction agreement and customary terms. Any potential transaction structured as a take-private transaction would also be subject to a customary closing condition that the approval of the holders of a majority of the outstanding common stock not owned by Axar or its affiliates be obtained.” Axar also advised the Board that it had engaged Schulte Roth & Zabel LLP (“SRZ”) as its legal advisor and stated that it would engage a financial advisor at the appropriate time.

On September 26, 2021, the Board specifically authorized the Conflicts Committee to engage in the discussions contemplated by Axar’s 2021 Letter and to engage in discussions concerning and to negotiate and in its discretion to reject the terms of any strategic alternatives. On September 27, 2021, the Company publicly reported that it had received Axar’s 2021 Letter, noting that the Company did not undertake any obligation to provide any public updates with respect to any discussions regarding strategic alternatives, except as required by applicable law. The reported closing price of the Company’s Common Stock on the trading day before this announcement was $2.09 per share.

After interviewing other potential advisors, on November 9, 2021, the Conflicts Committee engaged Duff & Phelps to serve as an independent financial advisor to the Conflicts Committee to provide financial advisory services and investment banking services concerning the Company’s strategic alternatives. The Conflicts Committee also retained FDBR as independent legal counsel. As part of its process, the Conflicts Committee required both Duff & Phelps and FDBR to provide to the Conflicts Committee information and representations concerning their independence from the Axar Group and the Company. After some discussion, the Conflicts Committee also determined that, as had been the practice of the special committee formed to evaluate the 2020 Proposal, Mr. Negrotti would, on behalf of the Conflicts Committee, take the lead in any direct discussions with Mr. Axelrod.

On November 2, 2021, the chief executive officer of a third party (“Party A”), on behalf of Party A’s board of directors, sent a letter addressed to the Conflicts Committee in care of Mr. Redling regarding its interest in engaging in discussions with the Conflicts Committee to determine whether Party A and the Company could identify potential strategic initiatives that would deliver value to the Company’s stockholders. This letter was communicated to the Board. At the Conflicts Committee’s November 4, 2021 meeting, the Conflicts Committee discussed and agreed that the Company should engage with Party A to gauge its interest in a transaction. At the request of the Board, these discussions would include management, Mr. Negrotti and Mr. Axelrod, and this was communicated to Party A.

On November 9, 2021, a videoconference meeting was held among Mr. Negrotti, Mr. Axelrod, Mr. Redling, the Company’s President and Chief Executive Officer, and representatives of Party A. At the meeting, the representatives of Party A expressed interest in exploring a potential combination between the Company and Party A and proposed that such a transaction could provide a good result for all parties. The Chief Executive Officer of Party A stated that in his view it would be important that Axar continue to participate in the combined entity on some basis. Mr. Axelrod expressed an interest in engaging in further discussion concerning a potential transaction, and representatives from Party A noted that they would consult Party A’s board of directors and, if feedback was positive, would be in contact about entering into a mutual nondisclosure agreement to facilitate due diligence and further discussions. Mr. Negrotti then had a subsequent discussion with Mr. Axelrod and communicated to him on behalf of the Conflicts Committee that the Conflicts Committee would direct Duff & Phelps to proceed with the financial review in parallel with any Party A discussions. On November 17, 2021, the Company and Party A executed a mutual nondisclosure agreement

which included a mutual one year prohibition on soliciting or hiring certain management employees of the other and a mutual agreement not to trade in the securities of the other while in possession of material non-public information, but did not include any standstill or other provision that would have prevented Party A from submitting an alternative proposal before or after the Merger Agreement was signed.

At the Conflicts Committee’s November 22, 2021 meeting, the Conflicts Committee and its legal counsel discussed the Conflicts Committee’s authority with regard to engaging with Party A. After discussion, the Conflicts Committee agreed that Mr. Axelrod’s active involvement in the approach from Party A should be carefully monitored to avoid creating any perception that Mr. Axelrod was acting with the Conflicts Committee. The Conflicts Committee also determined to ask the Board of Directors to clarify the scope of the Conflicts Committee’s mandate relating to Party A and what role, if any, the Conflicts Committee should play in those discussions. On November 23, 2021, in anticipation of a meeting scheduled with Party A, Mr. Axelrod sent a presentation prepared by Jefferies Group to Party A that had been reviewed by Mr. Redling and that reflected that, as a result of the synergies from a combination, a stock-for-stock merger transaction with the Company would be accretive to Party A’s stockholders at a share exchange ratio that, based on Party A’s then stock price, implied a value to the Company’s stockholders of $5.50 per share. Jefferies Group had previously acted as financial advisor to the Company in connection with its notes placements. On November 27, 2021, Party A responded that it was not comfortable proceeding with discussions on the basis outlined in the presentation and cancelled the meeting.

During this time, Duff & Phelps continued to update its financial analyses and investigations regarding the Company.

During a telephone call between Mr. Axelrod and Mr. Negrotti on December 16, 2021, Mr. Axelrod indicated that Axar would like to engage in discussions regarding the financial analyses that the Conflicts Committee had authorized Duff & Phelps to undertake. In a subsequent telephone call, on December 23, 2021, Mr. Axelrod indicated that Axar intended to engage Houlihan Lokey Inc. (“Houlihan”) as its financial advisor. Mr. Axelrod acknowledged that it was important that Houlihan not have a conflict with the Conflicts Committee, and noted that based on his recollection, Houlihan had not been engaged by the Conflicts Committee previously and that the last time Houlihan had been engaged by the Company was in 2019. Mr. Axelrod also indicated that he would like the Conflicts Committee to allow Houlihan to discuss with Duff & Phelps certain topics related to its financial analysis. In a subsequent telephone call between Mr. Axelrod and Mr. Negrotti on January 4, 2022, Mr. Axelrod requested an update on the financial analyses being conducted by Duff & Phelps and on the availability of Duff & Phelps to speak with Houlihan. Mr. Negrotti responded that the Conflicts Committee was working closely with Duff & Phelps on its financial analyses, that the Conflicts Committee had agreed that there was no conflict resulting from Houlihan’s engagement by Axar, and that Duff & Phelps had agreed to provide to Houlihan the financial information that had been provided to Duff & Phelps by Company management. Mr. Negrotti noted that Duff & Phelps would not be sharing any of its own analysis or methodologies with Houlihan or Axar.

On January 10, 2022, Duff & Phelps communicated to the Conflicts Committee a preliminary draft of its financial analysis based on management inputs and Duff & Phelps’ independent evaluations, which is further discussed below on page 35. The Conflicts Committee began its review of the preliminary Duff & Phelps analysis at a meeting with FDBR held January 10, 2022. Because the January 10, 2022 analysis was preliminary and was updated with the May 21, 2022 analysis discussed below, the Conflicts Committee did not rely on the January 10, 2022 analysis in forming its opinion that the terms of the Merger and the Transactions were fair to, and in the best interests of, the Company and its stockholders (other than the holders of Axar Shares and Insider Shares).

The Conflicts Committee also discussed the range of possible strategies it had identified to consider as potential alternatives to enhance stockholder value. Those alternatives included: the payment of an extraordinary dividend; the implementation of an accelerated acquisition program; the reevaluation of asset dispositions; an equity offering and the acquisition of the Company by Axar. The Conflicts Committee concluded that, of the foregoing, Axar was likely interested primarily in the acquisition option, but that it would continue to investigate the viability of the other alternatives, as well as continuing to seek to re-engage with Party A. The Conflicts Committee discussed the potential of engaging in a pre-signing market check to evaluate interest of other potential acquirors or a post-signing “go-shop” process. Based on the Conflicts Committee's view from discussions informed by its financial and other advisors related to the limited likely universe of potential acquirors, the fact that the Company had not received any inquiries from third parties other than Party A in the

four months since the 2021 Letter had been publicly disclosed and the risk that Axar might terminate negotiations and the possibility that an unsuccessful pre-signing process would adversely affect the Conflicts Committee’s bargaining leverage, the Conflicts Committee determined that pursuing a post-signing go-shop was preferable to a pre-signing market check, and opted to negotiate for deal provisions to encourage Axar to support a superior proposal, should such an offer be made after signing a definitive agreement. Mr. Negrotti also reported that Houlihan had, with the prior consent of the Conflicts Committee, contacted Duff & Phelps to request certain diligence materials from the Company and to inquire as to Duff & Phelps’ valuation methodology. Duff & Phelps had provided Houlihan with the requested materials and confirmed that it would employ traditional valuation methods, but did not provide Houlihan with any of its analyses. On the same day, Mr. Negrotti spoke to Mr. Axelrod at Mr. Axelrod’s request and advised Mr. Axelrod that while the Conflicts Committee had been working closely with Duff & Phelps, the Conflicts Committee was not then prepared to have any specific discussion with Axar regarding the Company’s valuation for purposes of a going private transaction. In response to a question from Mr. Negrotti, Mr. Axelrod advised that, given that the Company had not received any inquiries from third parties other than Party A in the four months since the 2021 Letter had been publicly disclosed, he believed that it was time for the Conflicts Committee to focus on discussions for a going private transaction with Axar. Mr. Negrotti indicated that the Conflicts Committee would consider engaging in such discussions but that any such transaction would require the approval of a majority of the unaffiliated stockholders as well as a “go-shop” process to be defined. Mr. Axelrod agreed that these would likely be a part of any transaction. He also stated that, while he was not making an offer, and that any offer would need to be vetted first with his advisors, it was his personal opinion that a price around $3.00 per share was an appropriate value. Mr. Negrotti responded that he would communicate this information to the rest of the Conflicts Committee.

On January 13, 2022, FDBR met with members of the Company’s management team, and certain of the directors to provide an informational overview of the approach that had been adopted by the Delaware courts in reviewing going private transactions, without any reference to the Conflicts Committee's own procedures or processes.

The Conflicts Committee next met on January 14, 2022 to continue its discussion of the several potential strategic transactions it previously had identified as alternatives to a sale of the Company. The Conflicts Committee concluded at that time to focus on the going-private transaction being pursued by Axar. The Conflicts Committee then returned to its discussion of the financial analyses received from Duff & Phelps in light of the per share valuation referenced by Mr. Axelrod, the Company’s financial performance in recent years and whether the Duff & Phelps materials appropriately reflected the Company’s strategic direction and likely prospects in the current environment. The Conflicts Committee also discussed the possibility of re-engaging with Party A and Party A’s potential ability to submit a meaningful offer.

On January 15, 2022, SRZ sent FDBR a draft of the Merger Agreement, which contemplated a transaction whereby affiliates of Axar would, through a “reverse triangular merger” structure, acquire all of shares of the Company it did not own in a “take-private” transaction. The Conflicts Committee scheduled a meeting for January 20, 2022 to further discuss the Duff & Phelps financial analyses as well as to begin discussion of the draft Merger Agreement. On January 18, 2022, Mr. Negrotti received a call from Mr. Axelrod inquiring as to the status of the Conflicts Committee’s financial analysis. Mr. Negrotti indicated that the Conflicts Committee was continuing to review the analyses prepared by its financial advisor and was not prepared to discuss a share price. He also advised Mr. Axelrod that Mr. Axelrod’s view that an appropriate value approximated $3.00 per share (which Mr. Axelrod re-affirmed was not an offer) had been communicated to the Conflicts Committee, and that the Conflicts Committee was not then prepared to recommend a price or price range.

The Conflicts Committee met on January 20, 2022 and began its discussion regarding the draft Merger Agreement. The Conflicts Committee also discussed Duff & Phelps’ financial analyses and the implications of their analyses on potential share prices that might form the basis of a transaction with Axar. The Conflicts Committee discussed strategy for engaging with Mr. Axelrod regarding share price. After discussion, it was agreed that Mr. Negrotti would contact Mr. Axelrod to begin discussions around framing the value at which the Conflicts Committee might be prepared to engage in negotiations with Axar. Mr. Negrotti agreed to report back to the Conflicts Committee following such discussion. Finally, the Conflicts Committee continued its previous discussion of the possibility of re-engaging with Party A and Party A’s potential ability to submit a cash offer for the Company, without reaching any conclusion.

In a telephone call between Mr. Axelrod and Mr. Negrotti on January 21, 2022, Mr. Axelrod further discussed his view of the appropriate value of the Company’s Common Stock and also provided to Mr. Negrotti his view that the average

premium to current market price in similar transactions where the majority owner acquired minority shares was 25.1% (with a median at 18.6%). Mr. Negrotti indicated that he would discuss these topics with the Conflicts Committee. On January 28, 2022, Mr. Negrotti advised Mr. Axelrod that the Conflicts Committee wanted to reach agreement on price before it engaged in negotiations regarding the terms of the Merger Agreement.

On January 30, 2022, Axar communicated to the Conflicts Committee an offer of $3.00 per share. The reported closing price of the Company’s Common Stock on the trading day before this was $2.37 per share. At the Conflicts Committee’s January 31, 2022 meeting, the Conflicts Committee continued its analysis of the financial analyses prepared by Duff & Phelps, as well as the Company’s financial position and outlook, including information received from the Company’s management. The Conflicts Committee discussed the $3.00 offer in the context of this data and decided to reject the $3.00 per share offer. The Conflicts Committee also discussed with FDBR the principal provisions of the draft Merger Agreement and FDBR’s suggested responses to the draft.

Following these discussions, on February 1, 2022, the Conflicts Committee rejected Axar’s offer of $3.00 per share and counteroffered at $3.86 per share. In a follow-up conversation between Mr. Axelrod and Mr. Negrotti on February 2, 2022, Axar communicated an offer of $3.20 per share. The reported closing price of the Company’s Common Stock on the trading day before this offer was $2.43 per share. During this conversation with Mr. Negrotti, Mr. Axelrod indicated that he did not have the ability to increase his price meaningfully beyond that level, but that he possibly could increase his offer depending on the other terms of the Merger Agreement. Mr. Negrotti told Mr. Axelrod that he would discuss the offer with the Conflicts Committee. The Conflicts Committee discussed the $3.20 per share offer at a meeting on February 3, 2022 and determined to reject the offer. The Conflicts Committee discussed the share price at which the Conflicts Committee might be prepared to continue negotiations with Axar regarding a potential “take-private” transaction. After discussion, the Conflicts Committee decided to communicate to Axar that $3.70 per share would be a sufficient share price to continue negotiations. Mr. Negrotti agreed to communicate to Mr. Axelrod the Conflicts Committee’s rejection of the $3.20 per share offer and its counteroffer of $3.70 per share and to report back to the Conflicts Committee.

In a follow-up conversation between Mr. Axelrod and Mr. Negrotti on February 4, 2022, Mr. Negrotti indicated that the Conflicts Committee had met to discuss, and had considered, Axar’s offer of $3.20 per share. Mr. Negrotti indicated that the Conflicts Committee believed that $3.20 per share was too low. He also communicated, per the Conflicts Committee’s direction, the Conflicts Committee’s counteroffer of $3.70 per share. Mr. Axelrod indicated that he would consider the $3.70 per share counteroffer. In addition, Mr. Negrotti indicated that if Axar and the Conflicts Committee could agree on a price range at which they both would be prepared to continue negotiations, they could then seek to resolve a number of legal and non-economic issues that remained unresolved in the Merger Agreement, including the terms and duration of any “go-shop” period and the amount of any termination fee. He also indicated that no agreement on a potential “take-private” transaction could be formally reached unless both the price per share and other important items had been identified and negotiated.

In a subsequent telephone call between Mr. Axelrod and Mr. Negrotti on February 8, 2022, Mr. Axelrod proposed that Axar and the Conflicts Committee pause their negotiations regarding price but agree on a potential range of $3.30 per share to $3.50 per share. Mr. Axelrod indicated that this price per share range could change based on the result of negotiations regarding the substantive terms of the draft Merger Agreement, and requested that all parties continue to work to identify and resolve all other significant matters before finalizing price per share. In response, Mr. Negrotti indicated that he would discuss Axar’s proposal with the Conflicts Committee. Subsequently, during a telephone call between Mr. Axelrod and Mr. Negrotti on February 9, 2022, Mr. Negrotti indicated that the Conflicts Committee had discussed Axar’s proposal and that the Conflicts Committee believed that the price per share range should be between $3.40 per share to $3.60 per share. He indicated that at this price per share range, the Conflicts Committee would work with its advisors to seek to resolve the other substantive terms of the draft Merger Agreement. Mr. Axelrod and Mr. Negrotti agreed to direct their respective counsel to do so. On February 10, 2020, Axar sent to the Conflicts Committee a transaction premium analysis for going private transactions prepared by Houlihan.

At this point, the Conflicts Committee learned that certain transactions that had been recommended by Axar to Cornerstone had involved potential conflicts of interest, as further discussed below, and substantive negotiations between the Conflicts Committee and Axar were halted by the Conflicts Committee. However, some work on the Merger Agreement continued through legal counsel. The Conflicts Committee met on February 11, 2022 with representatives of Duff & Phelps and FDBR to review the draft Merger Agreement, as well as a summary of the

principal issues that FDBR had previously provided to the Conflicts Committee. In particular, the Conflicts Committee focused on the provisions related to the go-shop process (the “Go-Shop Process”), the Board’s ability to terminate the Merger Agreement in light of a superior offer or on account of an intervening event, and the definitions of these terms as well as the restrictions on such rights. Discussions of the key non-financial terms of the Merger Agreement were held by SRZ and FDBR later on February 11, 2020.

In mid-February 2022, Mr. Negrotti was informed by Mr. Redling that he had learned through an intermediary that the Chief Executive Officer of Party A had requested a meeting with Mr. Redling during an industry conference that both had planned to attend, which Mr. Redling believed might indicate that Party A was prepared to re-engage in negotiations regarding a negotiated transaction with the Company. Mr. Negrotti asked FDBR to communicate with Axar’s counsel at SRZ to inform them of potential interest from a third-party bidder, that the Conflicts Committee would be investigating this possibility and that Axar should not be involved at this stage in any discussion. This communication took place on February 17, 2022.

The Conflicts Committee then met on February 18, 2022 to further discuss the Merger Agreement, including the Go-Shop Process and the Board’s ability to terminate the Merger Agreement under certain circumstances. The Committee also discussed including in the Merger Agreement a purchaser covenant to continue to provide employees with their current level of compensation and benefits for a period of time following the closing of the transaction. After discussion, it was agreed to include such a covenant. The Committee also discussed the information that Mr. Redling had provided to Mr. Negrotti regarding Party A. After the Conflicts Committee discussed the advantages and disadvantages of engaging with Party A, the Conflicts Committee asked Mr. Negrotti to direct Duff & Phelps to contact Party A on behalf of the Conflicts Committee to discuss potential future negotiations. Duff & Phelps subsequently reported to the Committee that Party A did not intend at this time to re-engage in discussion regarding a transaction with the Company. Mr. Redling ultimately did not attend the conference and did not meet with the Chief Executive Officer of Party A.

FDBR provided a revised draft of the Merger Agreement to SRZ on February 20, 2022, reflecting the Committee’s directions as well as comments from Duane Morris LLP (“Duane Morris”), counsel to the Company, as to certain matters pertaining to the Company. The proposed changes included revisions to: (a) the termination provisions, including the right for the Company to terminate the Merger Agreement in connection with the receipt of a Superior Proposal (as defined in the Merger Agreement); (b) the termination fee structure, including the payment of a fee to Axar in connection with the acceptance of a Superior Proposal that Axar has agreed to support and the payment of no fee in connection with the receipt of a Superior Proposal that Axar has not agreed to support; (c) the manner of calculating the majority-of-the-minority stockholder vote condition; (d) the representations and warranties of the Company and covenants related to its business operations between the effectiveness of the Merger Agreement and the Merger (or the Merger Agreement’s termination) and (e) the covenant to continue to provide employees with their current level of compensation and benefits for a period of time following the closing under the agreement.

On February 25, 2022, representatives of FDBR and SRZ met telephonically to discuss the substantive terms of the draft Merger Agreement. The FDBR representatives subsequently reported to the Conflicts Committee regarding the substance of the discussion, and SRZ representatives subsequently reported to Mr. Axelrod regarding the substance of these discussions.

The Conflicts Committee met again with representatives of FDBR on February 28, 2022 to review the status of negotiations between FDBR and SRZ on various terms of the Merger Agreement.

On March 2, 2022, SRZ sent to FDBR a revised draft of the Merger Agreement. The revised draft contained changes including: the requirement that a Superior Proposal could not be subject to financing conditions; the requirement that an Intervening Event (as defined in the Merger Agreement) could not be “reasonably foreseeable” at the time of signing; and that, regarding Company equity awards, employee options would be assumed by the parent entity of the surviving company at the closing of the transaction and converted into options to purchase common stock of such parent entity, while all director options, restricted shares and phantom units would be cashed out at the Closing.

On March 11, 2022, the Conflicts Committee met to discuss the draft Merger Agreement with FDBR. Among other things, the Conflicts Committee discussed the provisions of the draft Merger Agreement relating to the circumstances under which the Company would be permitted to change its recommendation to the stockholders regarding approval of the Merger Agreement, and associated termination rights. The Conflicts Committee noted

that under the Merger Agreement, the definition of a “Superior Proposal” was not limited to cash offers, and that the Conflicts Committee’s determination of what constitutes a Superior Proposal included, among other factors, the Conflicts Committee’s good faith judgment after its consultation with financial advisors and outside counsel, and determined to accept SRZ’s proposed definitions of Superior Proposal and Intervening Event (with some modifications). Following such discussions, FDBR sent SRZ a revised draft Merger Agreement on March 13, 2022 reflecting the Conflicts Committee’s proposals as well as changes proposed by Duane Morris as to certain matters pertaining to the Company. FDBR and SRZ subsequently engaged in telephonic discussions regarding the revised draft agreement, including provisions regarding the termination fee, the scope and terms of the “go-shop” provisions and treatment of management equity awards.

On March 16, 2022, SRZ and FDBR held a call to discuss the remaining open issues in the Merger Agreement, and later that day SRZ sent FDBR a revised draft Merger Agreement. The revised draft, among other things, contained changes including a requirement that to qualify as a Superior Proposal, the Conflicts Committee must reasonably believe that the Competing Transaction (as defined in the Merger Agreement) (i) be fully financed or supported by financing commitments that, if executed in connection with definitive documentation for a transaction, would be sufficient to fully finance the Competing Proposal (including, in each case, financing sufficient to refinance the Indebtedness under the Indenture dated May 11, 2021, by and among the Company, the guarantors named therein and Wilmington Trust, National Association, as trustee, with respect to the Company’s 8.500% Senior Secured Notes due 2029 (the “2029 Indenture”)), and (ii) not be subject to a financing condition; and added financing provisions that permitted up to $10 million of Company cash to be used to pay the Merger Consideration. Following receipt of this draft, substantive discussions regarding the Merger Agreement did not resume until early May 2022.

In February 2022, in connection with the preparation of the Company’s consolidated financial statements for the fiscal year ended December 31, 2021, the Company’s management became aware that certain investments recommended by Axar to Cornerstone pursuant to the Subadvisor Agreement involved potential conflicts of interest involving Axar that had not been disclosed to any of the committees of the Board, including the Conflicts Committee. Upon management becoming aware of this development, management reported this information to the chairs of the Conflicts Committee and the Trust Committee. On February 8, 2022, the Conflicts Committee notified Axar that further negotiations concerning any strategic transactions would be tabled while the Conflicts Committee undertook an independent review of all Axar’s investment recommendations to Cornerstone, including those Trusts investments that involved a potential related party transaction with Axar. In early March 2022, the Trust Committee and Axar agreed that Axar would suspend providing any further investment recommendations to Cornerstone under the Subadvisor Agreement other than one recommendation which the Trust Committee agreed it would review and which it subsequently declined to pursue. At Mr. Axelrod’s request, on March 8, 2022, Mr. Axelrod addressed the Board regarding the related party transactions and his perspective on Axar’s failure to seek Conflicts Committee or Trust Committee approval of them.

The Conflicts Committee met on March 8, 2022 with other members of the Board of Directors, management of the Company, counsel from Duane Morris, representatives of Axar (including Mr. Axelrod), and representatives from Axar’s counsel at SRZ, to discuss Axar’s investment recommendations to Cornerstone. Thereafter, the Conflicts Committee met with its counsel at FDBR to discuss FDBR’s review of the Axar’s investment recommendations. The Conflicts Committee also held five additional meetings for this purpose during the months of March and April. For more information, see “Company Transactions with the Axar Filing Persons — Subadvisor Agreement with Cornerstone Trust Management Services LLC” beginning on page 70.

Following termination on April 19, 2022 of the Subadvisor Agreement with Axar at the request of the Trust Committee, on May 2, 2022, Mr. Axelrod, in a telephone call with Mr. Negrotti, requested that the Conflicts Committee re-engage in substantive negotiations regarding the “take-private” transaction. Following this conversation, the Conflicts Committee met on May 2, 2022, and determined that the Conflicts Committee was willing to re-engage in discussions with Axar. Mr. Negrotti communicated this to Mr. Axelrod on May 3, 2022.

In a follow-up phone call between Mr. Axelrod and Mr. Negrotti on May 5, 2022, Mr. Axelrod indicated that he would like to speak with the full Conflicts Committee on May 9, 2022, while both he and the Conflicts Committee members were in the Company’s headquarters in Bensalem, Pennsylvania for a regularly scheduled quarterly Board meeting.

On May 6, 2022 representatives of FDBR and SRZ held a call to discuss the Merger Agreement. The issues discussed included the financing requirements for an offer to qualify as a Superior Proposal, the treatment of the Company’s stock options in the Merger and the definition of Company Material Adverse Effect.

On May 8, 2022, FDBR sent SRZ a revised draft Merger Agreement and a draft disclosure letter. The revised draft contained proposed changes that had been recommended by the Conflicts Committee to the March 16, 2022 draft from SRZ, including: the definitions of what would constitute a Superior Proposal; that a third-party bidder could also utilize up to $10 million of the Company’s cash in a Competing Transaction; the ability to “cash out” management stock options; and certain changes to the representations and warranties of the parties.

On May 9, 2022, during a break from the regularly scheduled quarterly meeting of the Board, Mr. Axelrod met with the Conflicts Committee and proposed a price of $3.50 per share, subject to the remaining issues in the Merger Agreement being resolved in a way satisfactory to Axar, including that 50% of the management stock options would be rolled over into the private company. The Conflicts Committee did not accept or reject this proposal at the meeting. The reported closing price of the Company’s Common Stock on May 6, 2022, the last trading day before the meeting, was $2.40 per share.

At the Conflicts Committee’s May 10, 2022 meeting, the Conflicts Committee discussed open issues in the Merger Agreement.

On May 12, 2022, SRZ sent FDBR a revised draft Merger Agreement. Among other things, the revised draft clarified the basis on which options to purchase shares of Common Stock to be assumed by Parent at the closing of the proposed transaction would be exercisable following such closing. FDBR provided a revised draft to SRZ on May 17, 2022 and between that date and May 24, 2022, counsel to Axar and the Conflicts Committee exchanged multiple drafts as they focused on resolving the remaining outstanding issues.

On May 21, 2022, the Conflicts Committee held a meeting at which representatives from FDBR and Duff & Phelps were present. At this meeting, the Conflicts Committee discussed two remaining open issues relating to the draft Merger Agreement. First, the Conflicts Committee discussed the proposed equity term sheet, which was attached to the Merger Agreement as Exhibit B, and which contemplated a stockholders agreement among the holders of Parent equity following the Closing and addressed the treatment of the management stock options and other equity awards in the proposed transaction with Axar. In particular, the Conflicts Committee discussed the proposal to “cash-out” the phantom and restricted stock and 50% of the management stock options, but to require that 50% of each stock option be rolled over into options to acquire stock of the Parent. The Conflicts Committee discussed Axar’s explanation for this treatment and potential alternative structures for the equity awards. The Conflicts Committee directed FDBR to seek to obtain increased liquidity for the rollover equity in certain circumstances as well as “tag-along rights.” Additionally, the Conflicts Committee discussed deal certainty issues, including Axar’s proposal that the Axar entities that owned Company stock contribute those shares to a guarantor of the Parent’s obligations under the Merger Agreement. The Conflicts Committee directed counsel to seek to resolve this issue and decided to move forward on the assumption that it would be resolved in a fashion that the Conflicts Committee would approve.

Next FDBR provided an overview of the other terms and conditions of the Merger Agreement, including the provisions regarding the “go-shop” right, the conditions to the closing of the Merger, and the representations made by Axar in the Merger Agreement.

Following this, counsel from FDBR reviewed the relevant Delaware case law and the requirements for a transaction with a controlling stockholder such as Axar to be reviewed by a Delaware court under the standard of Kahn v. Worldwide, including that:

FDBR then discussed with the Conflicts Committee the applicability of these factors to the Conflicts Committee and the process that the Conflicts Committee had undertaken since receiving the 2021 Letter. The Conflicts Committee informed counsel that between September 22, 2021 and May 24, 2022, the Conflicts Committee held 30 meetings. The Conflicts Committee chair, as well as the other members, also engaged in numerous discussions with Axar, Company management, FDBR and Duff & Phelps.

FDBR reviewed with the Conflicts Committee the history of Axar’s relationship with the Company, including the circumstances through which Axar had acquired a controlling ownership in the Company and prior proposals from Axar to acquire the outstanding Company shares it did not already own. This review included a discussion of the Conflicts Committee’s process since September 2021 in evaluating the proposed transaction, the appointment of Axar as a subadvisor to Cornerstone, the investment recommendations that had been made by Axar to Cornerstone, including those in which there were undisclosed related party transactions, and the subsequent termination of that appointment.

The Conflicts Committee also specifically considered whether there were any factors that could give the appearance of affecting its independence, including the possible impact that consummating a going private transaction would have on the existing litigation in the Chancery Court of the State of Delaware and on any possible litigation arising out of Axar’s failure to disclose potential conflicts of interest related to certain investments recommended by Axar in its role as a subadvisor to Cornerstone. Following this discussion, the Conflicts Committee concluded that the members of the Conflicts Committee were able independently to consider and act on the proposed transaction with Axar.

Next, Duff & Phelps presented the draft fairness opinion and the update of its valuation analysis, drafts of which it had provided to the Conflicts Committee on May 20, 2022. Duff & Phelps described the extensive due diligence process it had conducted in its evaluation of the Company, with a focus on the Company’s financial performance over the past four years, industry data, economic outlook, industry outlook, stock performance of competitors and management projections for the Company’s financial performance over the upcoming years.

Following the presentation, Duff & Phelps responded to a series of questions from the Conflicts Committee regarding the valuation, including questions related to the performance of the Trust assets, EBITDA projections and the discount rates applied in the valuation, and confirmed that, given the absence of a meaningful history of successful acquisition activity by the Company, the management projections and consequently the valuation process did not attempt to incorporate the impact, whether positive or negative, of any future acquisitions by the Company. Following further discussion, Duff & Phelps provided its oral opinion that the Merger Consideration was fair, from a financial point of view, to the stockholders of the Company (other than the holders of Axar Shares and Insider Shares (as such terms are defined in the Merger Agreement)). Duff & Phelps stated that it would provide promptly its formal written opinion to the Conflicts Committee.

Following this, the Conflicts Committee reviewed the experience and familiarity of the members of the Conflicts Committee with respect to the Company’s financial position, its strategic plan and prospects. In this evaluation, the Conflicts Committee relied on that familiarity and on the Duff & Phelps May 21, 2022 analysis and opinion and adopted such analysis in reaching its conclusion that the Merger Consideration is more favorable to the stockholders of the Company (other than the holders of Axar Shares and Insider Shares) than the potential value that could reasonably be expected to be generated by the Company for such stockholders if it continued as a public company. The Conflicts Committee also considered:

The Conflicts Committee, after considering the factors above, and subject to favorable resolution of the deal certainty issue discussed above, unanimously: (a) determined that the terms of the Merger and the Transactions were fair to, and in the best interests of, the Company and its stockholders (other than the holders of Axar Shares and Insider Shares); (b) determined that the Merger and the Transactions were in the best interests of the Company and its stockholders (other than the holders of Axar Shares and Insider Shares); and (c) declared it advisable for the Company to enter into the Merger Agreement. The Conflicts Committee also resolved to recommend that: (i) the Board approve the Merger Agreement, the Merger and the Transactions; (ii) the CNG Committee take such actions as are necessary or appropriate to effect the Transactions; and (iii) the Board of Directors submit the Merger Agreement to a vote of the Company’s stockholders with a recommendation of the Board of Directors that the stockholders approve the Merger and the Transactions and adopt the Merger Agreement.

On May 22, 2022, the Conflicts Committee met with representatives of FDBR to discuss updates to the negotiation of the substantive terms of the Merger and the Transactions, including the terms of a limited guarantee to be provided by the Axar Vehicles concurrently with the execution and delivery of the Merger Agreement, which Axar had proposed that morning in order to address the deal certainty issues discussed above. FDBR explained that, under the terms of this guarantee, the Axar Vehicles, which reported ownership of an aggregate of 88.6 million Company shares, would guarantee the payment of damages owed by Parent and Merger Sub to the Company arising as a result of any breach by them of the terms of the Merger Agreement up to $100 million (pro rata based on the Axar Vehicles’ respective ownership of Company shares) (as such terms are defined in the Merger Agreement). Among other things, the guarantee includes a representation and warranty by each of the guarantors that it has, and will have for so long as the guarantee remains in effect, the financial capacity to pay and perform its obligations thereunder. The Conflicts Committee unanimously approved this resolution of the issue. The Conflicts Committee next discussed the recommendations that would be submitted to the CNG Committee and to the full Board of Directors and reaffirmed its support of the Merger Agreement.

On May 23, 2022, the CNG Committee held a meeting which was attended by the Company’s general counsel and a representative of Duane Morris to discuss the treatment of awards under the Company Equity Plan in the Merger. The CNG Committee considered the treatment of stock options and the proposed terms of the stockholders agreement among the holders of Parent equity following the Closing. After the meeting, at the CNG Committee’s direction, Duane Morris discussed with FDBR the CNG Committee’s concerns regarding the proposed trigger dates for determining when Parent would be obligated to make certain payments to holders of Parent equity in cash. On May 24, 2022, the CNG Committee reviewed the revised terms of the proposed stockholders agreement and approved the amendments to the outstanding awards under the Company Equity Plan to give effect to the treatment of such awards under the Merger Agreement, subject to and conditioned upon the Board approving the Merger Agreement.

On May 24, 2022, the Board held a meeting which was attended by representatives of Duane Morris, Duff & Phelps, and FDBR. Mr. Axelrod did not attend the May 24, 2022 meeting. Following the Conflicts Committee’s unanimous recommendation, and review of a report given by Duff & Phelps as to the fairness of the consideration from a financial point of view to the stockholders of the Company (other than the holders of Axar Shares and Insider Shares), the Board (by unanimous vote of the directors present) approved the Merger Agreement and recommended that the Company’s stockholders adopt and approve the Merger Agreement and the Merger. Prior to the Board vote, representatives of Duane Morris led a comprehensive discussion of the fiduciary obligations of the Board and the Conflicts Committee, respectively, in this situation.

On May 24, 2022, the Company, Parent, and Merger Sub executed the Merger Agreement and the Company and Axar executed a confidentiality agreement which contained customary restrictions on the use and disclosure by Axar and its affiliates of confidential material relating to the Company. On May 25, 2022, the Company issued a press release announcing the execution of the Merger Agreement.

In its May 27, 2022 meeting, the Conflicts Committee discussed potentially engaging Duff & Phelps as financial advisor for the go-shop period (the “Go-Shop Period”). The Conflicts Committee discussed the advantages and disadvantages of engaging Duff & Phelps, noting that the Conflicts Committee had contacted and solicited proposals from other financial advisory firms in addition to Duff & Phelps as part of its process in deciding to engage Duff & Phelps as financial advisor in the fall of 2021. The Conflicts Committee considered Duff & Phelps’ proposed fees for the potential Go-Shop Period engagement, noting Duff & Phelps’ familiarity with the Company and its peers due to its work on the fairness opinion. After discussion, the Conflicts Committee agreed to engage Duff & Phelps to assist with this process subject to receiving updated representations from Duff & Phelps regarding the absence of conflicts. The Company agreed to pay Duff & Phelps a fee of $100,000 for the Go-Shop Process, plus the Company agreed to pay Duff & Phelps’ reasonable out-of-pocket expenses.

On June 2, 2022, the Conflicts Committee convened with representatives of Duff & Phelps to discuss the materials that Duff & Phelps had prepared regarding the Go-Shop Process and which Duff & Phelps had provided to the Conflicts Committee in advance of the meeting. Prior to the meeting, the Conflicts Committee had previously reviewed and discussed with FDBR Duff & Phelps’ proposed fee and draft engagement letter, the form and substance of which had been agreed prior to the meeting. At the meeting, Duff & Phelps described the considerations in preparing its list of potential buyers to contact as part of the Go-Shop Process and those parties’ potential interest in a transaction. First, Duff & Phelps noted that its list of potential strategic buyers included a number of participants in the death care industry, including each of the Company’s leading competitors. Duff & Phelps noted that there are several factors that may attract a potential strategic buyer to pay a price in excess of the price under the Merger Agreement, including: potential enterprise synergies between companies in the death-care industry; cost savings resulting from the transition from a public to a private company; and an ability to achieve a higher return on the Trusts’ assets than the return projected by the Company. Duff & Phelps also noted that prior interactions with Party A indicated that Axar might be willing to be a seller, including in a transaction that includes equity-based consideration. Duff & Phelps next discussed the qualifications it had considered in determining its list of potential financial buyers to contact as part of the Go-Shop Process, including: an interest in the death care industry or related verticals; the financial resources (including equity commitments) to engage in a transaction; and experience with public company transactions. Duff & Phelps discussed various elements of the Go-Shop Process, including the outreach materials it would prepare, which would be subject to review and approval by the Conflicts Committee, as well as the diligence process, and noted that it would like to begin outreach to the potential bidders beginning June 6, 2022. Following

the presentation, Duff & Phelps responded to a series of questions from the Conflicts Committee and FDBR regarding the proposed list of parties to be contacted, including the breadth of Duff & Phelps’ outreach.

After discussion, it was agreed that Duff & Phelps would revise its materials for the outreach process in certain respects. It was also agreed that Mr. Negrotti would coordinate the execution and delivery of the engagement letter between the Company and Duff & Phelps. On June 2, 2022, the Conflicts Committee entered into an addendum to its engagement letter with Duff & Phelps to serve as the Conflicts Committee’s financial advisor during the Go-Shop Period. On June 3, 2022, the Company issued a press release announcing the engagement of Duff & Phelps and the commencement of the Go-Shop Process. Duff & Phelps, acting on behalf of the Conflicts Committee, commenced the Go-Shop Process by soliciting alternative acquisition proposals.

On June 23, 2022, July 1, 13 and 25, 2022, the Conflicts Committee held meetings, together with representatives from Duff & Phelps and FDBR. During these meetings the representatives from Duff & Phelps provided a detailed report on the status of the Go-Shop Process. The Go-Shop Period expired on July 23, 2022. During the Go-Shop Period, Duff & Phelps contacted five potential strategic buyers and 32 potential financial buyers that the Conflicts Committee and Duff & Phelps believed could have an interest in reviewing the opportunity and had the financial ability to pursue a potential strategic transaction with the Company, including Party A. On July 9, 2022, following a direct inquiry from Duff & Phelps, Party A declined to participate in the Go-Shop Process. None of the parties contacted entered into a confidentiality agreement with the Company or otherwise pursued a transaction that would be an alternative to the Merger.

Based in part on the unanimous recommendation of the Conflicts Committee, the Board (other than Andrew Axelrod, who did not attend the meeting) (a) determined that the Merger Agreement and the Transactions were fair to and in the best interests of the Company and its stockholders (other than the holders of Axar Shares and Insider Shares), (b) approved the Merger Agreement and the transactions contemplated by the Merger Agreement, and (c) recommended that the stockholders of the Company approve the Merger and the Transactions and adopt the Merger Agreement. In making its determination regarding the fairness of the Merger Agreement and the Transactions, the Board adopted the fairness analysis and conclusions of the Conflicts Committee.

As described in the section entitled “Background of the Merger,” the Board established the Conflicts Committee in March 2021 and delegated to it the power and authority, among other things, to review and, as it determines appropriate, reject or approve or recommend to the Board that the Board approve any transactions between a Company Entity and Axar or any affiliate of Axar that is not a Company Entity. Axar’s 2021 Letter had provided that any transaction involving Axar arising from the discussions referred to in that letter would be conditioned upon, among other things, approval of the Conflicts Committee and the Board and on September 26, 2021, the Board specifically authorized the Conflicts Committee to engage in the discussions with Axar contemplated by Axar’s 2021 Letter and to negotiate or reject the terms of any strategic alternatives with Axar.

The Conflicts Committee, acting with the advice and assistance of its independent legal and financial advisors, evaluated and negotiated the Merger Agreement and the Transactions, including the Merger, and after careful consideration, at a meeting held on May 21, 2022, among other things, (a) determined that the terms of the Merger and the Transactions were fair to, and in the best interests of, the Company and its stockholders (other than the holders of the Axar Shares and the Insider Shares); (b) determined that the Merger and the Transactions were in the best interests of the Company and its stockholders (other than the holders of the Axar Shares and the Insider Shares); and (c) declared it advisable for the Company to enter into the Merger Agreement. The Conflicts Committee also resolved to recommend that (i) the Board approve the Merger Agreement, the Merger and the Transactions; (ii) the CNG Committee take such actions as were necessary or appropriate to effect the Transactions; and (iii) the Board submit the Merger Agreement to a vote of the Company’s stockholders with a recommendation of the Board that the stockholders (other than the holders of the Axar Shares and Insider Shares) approve the Merger and the Transactions and adopt the Merger Agreement. The Conflicts Committee unanimously reaffirmed its support of the Merger and the Merger Agreement at a meeting held on May 22, 2022.

In considering the recommendations of the Conflicts Committee and of the Board with respect to the Merger, you should be aware that, aside from their interests as stockholders of the Company, the Company’s directors

and executive officers may have interests in the Merger that are different from, or in addition to, those of other stockholders of the Company generally. These interests are discussed in more detail in the section entitled “Special Factors — Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 50 of this Proxy Statement. The Conflicts Committee and the Board were aware of the different or additional interests described herein and considered those interests along with other matters in recommending and/or approving, as applicable, the Merger Agreement and Transactions, including the Merger.

The Conflicts Committee engaged its own independent legal (FDBR), and financial (Duff & Phelps) advisors, and received advice throughout the negotiations from its advisors. As the members of the Conflicts Committee are disinterested with respect to the transactions contemplated by the Merger Agreement, and are independent of, and not affiliated with, any Axar Vehicle, the Conflicts Committee believed that it could effectively represent the interests of the Company’s stockholders (other than the holders of Axar Shares and Insider Shares) in negotiating the terms of the Merger Agreement and the transactions contemplated thereby, including the Merger, and in making its decision whether to reject or recommend that the Board approve and declare advisable the Merger Agreement and the transactions contemplated by the Merger Agreement.

In evaluating the Merger Agreement and the transactions contemplated by the Merger Agreement, and making the decisions, determinations and recommendations described above, the Conflicts Committee and the Board (other than Andrew Axelrod) considered, among other things, the following potentially positive factors, which are not intended to be exhaustive and are not presented in any relative order of importance:

provided, in each case, that the Company has complied with its obligations under the Go-Shop Process and its no-solicitation covenant;

In evaluating the Merger Agreement and the transactions contemplated by the Merger Agreement, and making the decisions, determinations and recommendations described above, the Conflicts Committee and the Board (other than Andrew Axelrod) considered, among other things, a number of procedural safeguards that they believed were and are present to ensure the fairness of the Merger Agreement and the transactions contemplated by the Merger Agreement, and to permit the Conflicts Committee to represent effectively the interests of the Company’s stockholders (other than the holders of Axar Shares and Insider Shares). These procedural safeguards include, among other things, the following, which are not intended to be exhaustive and are not presented in any relative order of importance:

provided, in each case, that the Company has complied with its obligations under the Go-Shop Process and its no-solicitation covenant; and

In evaluating the Merger Agreement and the transactions contemplated by the Merger Agreement, and making the decisions, determinations and recommendations described above, the Conflicts Committee and the Board (other than Andrew Axelrod) also considered, among other things, certain countervailing factors, including the following uncertainties, risks and other potentially negative factors, which are not intended to be exhaustive and are not presented in any relative order of importance:

The Conflicts Committee and the Board (other than Andrew Axelrod, who did not attend the meeting) concluded that, overall, the potentially positive factors outweighed the uncertainties, risks and potentially negative factors relevant to the Merger Agreement and the Transactions, including the Merger. Accordingly, the Conflicts Committee and the Board (other than Andrew Axelrod) determined that the Merger Agreement and the Transactions, including the Merger, were advisable, fair to, and in the best interests of, the Company and the holders of the Common Stock (other than the Axar Shares or the Insider Shares).

In the course of evaluating the Merger Agreement and the Transactions, and making the decisions, determinations and recommendations described above, the Conflicts Committee and the Board (other than Andrew Axelrod) did not consider the liquidation value of the Company because (1) they considered the Company to be a viable, going concern, (2) they believed that liquidation sales generally result in proceeds substantially less than sales of going concerns, (3) they considered determining a liquidation value to be impracticable given the significant execution risk involved in any breakup of the Company and (4) the Company will continue to operate its business following the Merger. For the foregoing reasons, the Conflicts Committee and the Board (other than Andrew Axelrod) did not consider liquidation value to be a relevant methodology. Further, the Conflicts Committee and the Board (other than Andrew Axelrod) did not consider net book value, which is an accounting concept, as a factor because they believe that net book value is not a material indicator of the value of the Company as a going concern but rather is indicative of historical costs and because net book value does not take into account the prospects of the Company, market conditions, trends in the Company’s industry or the business risks inherent in that industry.

The Conflicts Committee and the Board (other than Andrew Axelrod) believed that the trading price of the shares of Common Stock at any given time represents the best available indicator of the Company’s going concern value at that time so long as the trading price at that time is not impacted by speculation regarding the likelihood of a potential transaction.

The foregoing discussion is not exhaustive, but is intended to summarize the material information and factors considered by the Conflicts Committee and the Board (other than Andrew Axelrod) in their consideration of the Merger Agreement and the Transactions, including the Merger. The Conflicts Committee and the Board (other than Andrew Axelrod) reached the decision to approve the entry into the Merger Agreement and recommend its adoption by the Company’s stockholders in light of the factors described above and other factors that the Conflicts Committee and the Board (other than Andrew Axelrod) believed were appropriate. The Conflicts Committee and the Board (other than Andrew Axelrod) conducted an overall review of the factors described above, including through discussions with the Company’s management and their respective legal advisors and, in the case of the Conflicts Committee, its financial advisor, and considered the factors overall to be favorable to,

and to support, their decisions, determinations and recommendations. It should be noted that this explanation of the reasoning of the Conflicts Committee and the Board (other than Andrew Axelrod) and certain information presented in this section is forward-looking in nature and should be read in light of the factors set forth in the section entitled “Cautionary Statement Concerning Forward-Looking Information” beginning on page 61 of this Proxy Statement.

The forecasts include non-GAAP financial measures, and they were presented because management believed they could be useful indicators of the Company’s projected future operating performance. The Company prepared the forecasts on a non-GAAP basis. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by the Company may not be comparable to similarly titled amounts used by other companies. As used herein, “GAAP” means generally accepted accounting principles.

All financial forecasts are forward looking statements. These and other forward looking statements are expressly qualified in their entirety by the risks and uncertainties identified above and the cautionary statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, and subsequent quarterly and current reports on Form 10-Q and 8-K. Please consider carefully the discussion entitled “Cautionary Statement Concerning Forward Looking Information” elsewhere in the Proxy Statement.

Management of the Company delivered initial prospective financial information to the Conflicts Committee and Duff & Phelps on January 7, 2022, which included a balance sheet, statement of operations and statement of cash flows, each prepared in accordance with GAAP, and a statement of operations that included non-GAAP financial metrics, as of and for each year ending December 31, 2022 through December 31, 2036. Subsequently, the Company’s management updated the prospective financial information to take into account actual results through December 31, 2021 and for the three months ended March 31, 2022, and provided such updated prospective financial information to the Conflicts Committee and Duff & Phelps on May 12, 2022.

In preparing the prospective financial information for all periods after 2022, management made a substantial number of assumptions regarding the Company’s financial condition and results of operations. Many of these assumptions were related to historical metrics applied on a mathematically consistent basis, while others reflected what management believed to be reasonable estimates of year-over-year changes in particular line items included in the forecasts.

On November 9, 2021, the Company and the Conflicts Committee engaged Kroll, LLC, operating through Duff & Phelps to serve as an independent financial advisor to the Conflicts Committee (solely in its capacity as the Conflicts Committee) to provide an opinion as to the fairness, from a financial point of view, to the Public Stockholders of the consideration to be received by such Public Stockholders in the Transactions (without giving effect to any impact of the Transactions on any particular stockholder other than in its capacity as a stockholder).

As described above in ‘‘—Background of the Merger,” Duff & Phelps met with the Conflicts Committee on January 10, 2022 to discuss its preliminary analysis of the Company’s value, which it had prepared based on management inputs and Duff & Phelps’ independent evaluation. The January 10, 2022 presentation summarized the then-material analyses performed, and valuation considerations and methodology employed, by Duff & Phelps in connection with its engagement as an independent financial advisor to the Conflicts Committee. As noted on page 34, the Company’s management subsequently updated the prospective financial information to take into account actual results through December 31, 2021 and for the three months ended March 31, 2022. The analyses and methodology Duff & Phelps employed in the January 10, 2022 presentation were materially consistent with the analyses performed in connection with its Opinion, a detailed description of which is discussed below.

In this preliminary analysis, the range of indicated enterprise values for the Company derived from the discounted cash flow analysis was approximately $644.8 million to approximately $767.5 million. Based on the preliminary indicated enterprise value range, Duff & Phelps arrived at a preliminary enterprise value of approximately $665.9 million to approximately $789.2 million by adjusting the indicated enterprise value as follows:

Based on the preliminary enterprise value range, Duff & Phelps estimated the range of common equity value of the Company to be approximately $339.5 million to approximately $458.6 million by adjusting the enterprise value as follows:

Based on the foregoing preliminary analysis and the number of outstanding common shares on a fully diluted basis, as provided by the Company’s management, Duff & Phelps estimated the preliminary implied value of each share of common stock to range from approximately $2.85 to approximately $3.85.

In May 2022, the Company’s management updated the prospective financial information to take into account actual results through December 31, 2021 and for the three months ended March 31, 2022. On May 21, 2022, representatives of Duff & Phelps reviewed with the Conflicts Committee its updated financial analysis of the consideration, including the differences between its updated analysis compared to its January 10, 2022 analysis (as described on page 40 below), responded to questions from the Conflicts Committee and then delivered its opinion (the “Opinion”) to the Conflicts Committee that, as of May 21, 2022 and based upon and subject to the assumptions, qualifications and limiting conditions contained in the Opinion and discussed with the Conflicts Committee, the consideration to be received by the Public Stockholders of the Company in the Transactions was fair from a financial point of view to the Public Stockholders (without giving effect to any impact of the Transactions on any particular stockholder other than in its capacity as a stockholder).

The full text of the Opinion is attached as Appendix B to this Proxy Statement and is incorporated herein by reference. The full text of the Opinion sets forth a description of the assumptions made, procedures followed, matters considered and qualifications and limitations undertaken in connection with rendering the Opinion. A number of these are set forth below, however, the Company encourages you to read the Opinion carefully and in its entirety.

In connection with the Opinion, Duff & Phelps made such reviews, analyses and inquiries as it deemed necessary and appropriate under the circumstances. Duff & Phelps also took into account its assessment of general economic, market and financial conditions, as well as its experience in securities and business valuation, in general, and with respect to similar transactions, in particular. Duff & Phelps’ procedures, investigations, and financial analysis with respect to the preparation of the Opinion included, but were not limited to, the items summarized below:

In performing its analyses and rendering the Opinion with respect to the Transactions, Duff & Phelps, with the Company’s and the Conflicts Committee’s consent and without independent verification:

To the extent that any of the foregoing assumptions or any of the facts on which the Opinion was based prove to be untrue in any material respect, the Opinion cannot and should not be relied upon. Furthermore, in Duff & Phelps’ analysis and in connection with the preparation of the Opinion, Duff & Phelps made numerous assumptions with respect to industry performance, general business, market and economic conditions and other matters, many of which are beyond the control of any party involved in the Transactions.

Duff & Phelps delivered the Opinion to the Conflicts Committee on May 21, 2022. The Opinion was necessarily based upon market, economic, financial and other conditions as they existed and could be evaluated as of such date, and Duff & Phelps disclaimed any undertaking or obligation to advise any person of any change in any fact or matter affecting the Opinion which may come or be brought to the attention of Duff & Phelps after May 21, 2022. Duff & Phelps noted that the credit, financial and stock markets have been experiencing unusual volatility, and that they were not opining or expressing any view as to any potential effects of such volatility on the Company or the Transactions.

Duff & Phelps did not evaluate the Company’s solvency or conduct an independent appraisal or physical inspection of any specific assets or liabilities (contingent or otherwise). Except as indicated below in the Section titled, “Miscellaneous,” Duff & Phelps was not requested to, and did not, (i) initiate any discussions with, or solicit any indications of interest from, third parties with respect to the Transactions, the assets, businesses or operations of the Company or any alternatives to the Transactions, (ii) negotiate the terms of the Transactions, and therefore, Duff & Phelps assumed that such terms were the most beneficial terms, from the Company’s perspective, that could, under the circumstances, be negotiated among the parties to the Agreement and the Transactions, or (iii) advise the Conflicts Committee or any other party with respect to alternatives to the Transactions.

Duff & Phelps did not express any opinion as to the market price or value of the Common Stock (or anything else) after the announcement or the consummation of the Transactions. The Opinion should not be construed as a valuation opinion, credit rating, solvency opinion, an analysis of the Company’s credit worthiness, tax advice or accounting advice. Duff & Phelps did not make, and assumed no responsibility to make, any representation, or render any opinion, as to any legal matter.

In rendering the Opinion, Duff & Phelps did not express any opinion with respect to the amount or nature of any compensation to any of the Company’s officers, directors or employees, or any class of such persons, relative to the consideration to be received by the Public Stockholders in the Transactions, or with respect to the fairness of any such compensation.

Duff & Phelps provided the Opinion solely for the use and benefit of the Conflicts Committee and the Board in connection with their respective consideration of the Transactions, and the Opinion is not intended to confer any rights or remedies on any other person, and may not be used by any other person for any other purpose. The Opinion (i) did not address the merits of the underlying business decision to enter into the Transactions versus any alternative strategy or transaction; (ii) did not address any transaction related to the Transactions; (iii) was not a recommendation as to how the Conflicts Committee or any stockholder should vote or act with respect to any matters relating to the Transactions, or whether to proceed with the Transactions or any related transaction, and (iv) did not indicate that the consideration received is the best possibly attainable under any circumstances. Instead, the Opinion states whether the consideration in the Transactions is within a range of values that would be viewed as fair, as suggested by certain financial analyses. The decision as to whether to proceed with the Transactions or any related transaction may depend on an assessment of factors unrelated to the financial analysis on which the Opinion is based. The Opinion should not be construed as creating any fiduciary duty on the part of Duff & Phelps to any party.

Set forth below is a summary of the material analyses performed by Duff & Phelps in connection with the delivery of the Opinion to the Conflicts Committee, as described above. This summary is qualified in its entirety by reference to the full text of the Opinion, attached hereto as Appendix B. While this summary describes the analyses and factors that Duff & Phelps deemed material in its presentation to the Conflicts Committee, it is not a comprehensive description of all analyses and factors considered by Duff & Phelps. The preparation of a fairness opinion is a complex process that involves various determinations as to appropriate and relevant methods of financial analyses and the application of these methods to the particular circumstances. Therefore, neither the Opinion nor Duff & Phelps’ underlying analysis is susceptible to partial analysis or summary description. In arriving at its Opinion, Duff & Phelps did not attribute any particular weight to any analysis or factor considered by it, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, Duff & Phelps’ analyses must be considered as a whole and selecting portions of its analyses and

individual factors considered by it in rendering the Opinion, without considering all analyses and factors, could create a misleading or incomplete view of the evaluation process underlying the Opinion. The conclusion reached by Duff & Phelps was based on all analyses and factors taken as a whole, and also on the application of Duff & Phelps’ own experience and judgment.

The financial analyses summarized below include information presented in tabular format. In order for Duff & Phelps’ financial analyses to be fully understood, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses undertaken by Duff & Phelps. Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Duff & Phelps’ financial analyses.

As part of its analyses, Duff & Phelps performed an enterprise valuation analysis of the Company using generally accepted valuation methodologies. Duff & Phelps considered a selected public companies analysis and a selected merger and acquisition transactions analysis but did not rely on them due primarily to lack of comparability resulting from differences in business mix, as the Company’s operations are skewed more heavily towards cemetery operations‎, which has implications for revenue recognition that further limit comparability, as compared to the operations of the selected public companies that skewed more heavily toward funeral home operations. Therefore, the discounted cash flow analysis was used as the primary valuation methodology.

Duff & Phelps performed a discounted cash flow analysis of the projected unlevered free cash flows of the Company for the fiscal years ending December 31, 2022 through December 31, 2036. Duff & Phelps defined “free cash flow” as cash that is available to distribute to all security holders of the Company or to reinvest in the Company’s businesses, as specifically calculated using the formula set forth below. The discounted cash flow analysis was used to determine the net present value of projected unlevered free cash flows utilizing an appropriate cost of capital for the discount rate, which reflects the relative risk associated with these cash flows as well as the rates of return that investors could expect to realize on alternative investment opportunities with similar risk profiles to the Company.

Duff & Phelps calculated the Company’s projected unlevered free cash flows by taking its projected earnings before interest and taxes, subtracting taxes based on an assumed rate of 25.8% as provided by management of the Company (which represented an estimated blended U.S. federal and state corporate income tax rate), adding back tax depreciation and amortization of cemetery property, subtracting capital expenditures and taking into account any increase or decrease in net operating assets and liabilities. Duff & Phelps calculated the terminal value in 2036 using a perpetuity growth formula by capitalizing the normalized fiscal year ending 2036 free cash flow using a 3.0% terminal growth rate, which gave consideration to estimated long-term economic growth, long-term inflation and Duff & Phelps’ professional judgment.

The table below summarizes Duff & Phelps’ calculation of free cash flow:

For purposes of its discounted cash flow analysis, Duff & Phelps utilized and relied upon the Management Projections, which provided a financial forecast for the fiscal years ending December 31, 2022 through December 31, 2036. For further information regarding the Management Projections, see “Special Factors — Certain Unaudited Prospective Financial Information” beginning on page 34.

Duff & Phelps discounted the Company’s projected unlevered free cash flows to present value based on a bifurcation of cash flows that were deemed to be attributable to either the deferred revenue backlog or to projected future sales. The cash flows attributable to the deferred revenue backlog, including the trust income earned on the backlog, were discounted to present value at a discount rate of 3.50%. This rate was estimated using a normalized risk-free rate applied to the deferred revenue backlog and the Company’s projected annualized investment return on its trusts applied to the trust income earned on the backlog and was utilized to discount to present value the cash flows attributable to the deferred revenue backlog, including the trust income earned on the backlog. In Duff & Phelps’ professional judgment, the risks associated with executing on the forecasted sales to future customers warranted an application of a higher discount rate than the cash flows associated with the run-off of the deferred revenue.

The cash flows attributable to projected future sales and an estimated terminal value were discounted to present value using a range of the Company’s weighted average cost of capital from 9.00% to 10.00%, which was calculated utilizing the Capital Asset Pricing Model, a generally accepted method used to calculate the cost of capital, and based on inputs derived from the selected public companies, such as beta and capital structure. Other key inputs were risk-free rate, the equity risk premium and size premium. The implied weighted discount rate range, based on discounting the sales attributable to backlog at a lower rate than expected future sales, was 8.90% to 9.85%. This represented an implied range based on applying the weighted average cost of capital range to 9.00% to 10.00% to the projected future sales and an estimated terminal value, and applying the discount rate of 3.50% to the cash flows attributable to the deferred revenue backlog, including the trust income earned on the backlog. Duff & Phelps estimated the terminal value using a terminal growth rate of 3.0%, as discussed above. The present value of the estimated terminal value accounts for approximately 43% to 49% of the indicated estimated enterprise value for the Company based on the discounted cash flow analysis.

Based on these assumptions, the discounted cash flow analysis indicated an estimated enterprise value for the Company of approximately $593.0 million to approximately $695.3 million. As noted on page 35 above, the May 21, 2022 analysis utilized updated prospective financial information provided by management in May 2022 from that which Duff & Phelps used in preparing its preliminary analysis on January 10, 2022. The difference between the conclusions in the preliminary valuation in January 2022 and the updated May 2022 analysis regarding the implied value of each share of common stock was primarily attributable to the difference in the Company’s weighted average cost of capital used in the discounted cash flow analysis. The January 10, 2022 analysis utilized a weighted average cost of capital range of 8.50% to 9.50%, as compared to a range of 9.00% to 10.00% in the May 21, 2022 analysis, as the higher interest rate environment increased the cost of equity and debt capital.

Duff & Phelps compared certain financial performance metrics of the Company to corresponding data and ratios from six publicly traded companies in the deathcare industry (collectively, the “selected public companies”). The selected public companies reviewed were:

Although none of these selected public companies is directly comparable to the Company ‎due to the fact that their businesses skew more heavily towards funeral home operations than to cemetery operations, Duff & Phelps reviewed these companies based on their relative similarity to the Company. For purposes of its analysis, Duff & Phelps used certain publicly available historical financial data and consensus equity analyst estimates for the selected public companies.

The table below summarizes certain observed trading multiples and historical and projected financial performance of the selected public companies as of May 18, 2022.

For each of the selected transactions, Duff & Phelps calculated the enterprise value of the target company implied by each such transaction by the target company’s last twelve months (“LTM”) earnings before interest, taxes, depreciation and amortization (“EBITDA”) and LTM Revenue.

This analysis indicated (i) enterprise value to LTM EBITDA multiples ranging from 5.2x to 15.1x, with a median of 6.9x and a mean of 7.6x, and (ii) enterprise value to LTM revenue multiples ranging from 0.75x to 5.27x, with a median of 2.35x and a mean of 2.46x.

Duff & Phelps noted that the deathcare industry has a limited number of publicly traded companies which operate funeral homes and cemeteries, and limited availability of merger and acquisition transactions with publicly reported financial information. The Company’s cemetery operations accounted for approximately 86% and 85% of its revenues in 2021 and 2020, respectively, with the balance from its funeral home operations; by contrast, the other selected public companies derive a majority of their revenues from funeral home operations. Products and services in cemetery operations are sold both at the time of death (“at-need”), and prior to the time of death (“pre-need”). Revenue on the majority of pre-need sales is not recognized on a GAAP basis at the time of sale, and the backlog of unfulfilled pre-need performance obligations is recorded in deferred revenues. Contracts for funeral home services are typically sold on an “at-need” basis, in which case GAAP revenues are recognized within a relatively shorter period of time after the sale of the funeral home contract. The difference in the timing of the recognition of GAAP revenues between the Company and the selected public companies limits their comparability, making the application of a market multiple approach less meaningful as an indication of value for the Company. For this reason, the selected public companies analysis and selected mergers and

acquisitions transactions analysis were not regarded as significant in the Duff & Phelps analysis, except that they provided information with respect to the Capital Asset Pricing Model and the weighted average cost of capital to use in the discounted cash flow analysis described elsewhere.

None of the selected public companies or the target companies in the selected mergers and acquisitions transactions analysis is identical to the Company, and Duff & Phelps does not have access to non-public information regarding those companies. Accordingly, a complete financial analysis cannot be limited to a quantitative review of the selected public companies or the companies that were acquired in the selected mergers and acquisitions transactions analysis because such analysis involves complex considerations and judgments concerning differences in financial and operating characteristics of such companies and targets, as well as other factors that could affect their value relative to the Company.

The Company has generated net operating losses that could be used to offset future taxable income. These tax benefits have incremental value to the Company and were included in Duff & Phelps’ analysis. Because the Company expects to generate taxable income in the projection period based on the Management Projections, the effective federal and state net operating loss carryforward use was projected by the Company’s management. The federal and state tax savings associated with this tax shield were discounted at the Company’s estimated levered cost of equity, which was 11.00%, as calculated using the Capital Asset Pricing Model and based on inputs from the selected public companies.

The range of indicated enterprise values for the Company derived from the discounted cash flow analysis was approximately $593.0 million to approximately $695.3 million. Duff & Phelps’ concluded enterprise value does not include the selected public companies analysis or the selected mergers and acquisitions transactions analysis, as described above.

Based on the indicated enterprise value range, Duff & Phelps arrived at a concluded enterprise value of approximately $632.4 million to approximately $735.2 million by adjusting the indicated enterprise value as follows:

Based on the concluded enterprise value range, Duff & Phelps estimated the range of common equity value of the Company to be approximately $283.0 million to approximately $382.4 million by adjusting the enterprise value as follows:

Based on the foregoing analyses and the 119,273,757 outstanding common shares on a fully diluted basis as of May 21, 2022, as provided by the Company’s management, Duff & Phelps estimated the implied value of

each share of common stock to range from approximately $2.37 to approximately $3.21. Duff & Phelps noted that the consideration of $3.50 per share of common stock was above the range of the per share values indicated by its analysis.

The Opinion and financial analyses were only one of the many factors considered by the Conflicts Committee in its evaluation of the Transactions and should not be viewed as determinative of the views of the Conflicts Committee or the Board.

The issuance of the Opinion was approved by Duff & Phelps’ opinion review committee.

Duff & Phelps is a premier global valuation and corporate finance advisor that is regularly engaged to provide financial advisory services, including fairness opinions, in connection with mergers and acquisitions, leveraged buyouts, going-private transactions and recapitalization transactions. Since 2005, Duff & Phelps has rendered over 1,133 fairness opinions in transactions aggregating more than $570 billion and is regularly engaged in the valuation of businesses and securities in the preparation of fairness opinions in connection with mergers, acquisitions and other strategic transactions.

For Duff & Phelps’ services in connection with the delivery of the Opinion to the Conflicts Committee, the Company agreed to pay Duff & Phelps a fee (the “Fairness Opinion Fee”) in the amount of $225,000, half of which became payable upon the request in writing of the Conflicts Committee for Duff & Phelps to render and deliver the Opinion, and the balance of which became payable when Duff & Phelps informed the Conflicts Committee that it was prepared to render and deliver the Opinion. For Duff & Phelps’ valuation advisory services to the Conflicts Committee, the Company agreed to pay Duff & Phelps a fee of $75,000. The terms of the fee arrangements with Duff & Phelps, which the Company believes are customary in transactions of this nature, were negotiated at arm’s length, and the Conflicts Committee was aware of these fee arrangements. No portion of the Fairness Opinion Fee was contingent upon either the conclusion expressed in the Opinion or whether or not the Transactions are successfully consummated. The Company has also agreed to pay Duff & Phelps’ reasonable out-of-pocket expenses and to provide customary indemnification.

During the two years preceding the date of the Opinion, Duff & Phelps was not engaged by the Company, other than its engagement in July 2020 to provide valuation advisory services to an independent committee of the Board in connection with the 2020 Proposal, as described in the Section titled, “Background of the Merger − Axar's 2020 Proposal” beginning on page 14. No transaction was consummated in connection with the 2020 Proposal and Duff & Phelps did not render a fairness opinion. For these services, Duff & Phelps received a fee of $150,000 and customary expense reimbursement and indemnification and would be entitled to additional incentive compensation if the Company completed an alternative transaction which resulted in consideration to the Public Stockholders in excess of the Merger Consideration.

With regard to the Transactions, the engagement letter provided that an affiliate of Duff & Phelps will, at the request of ‎the Conflicts ‎Committee, provide investment banking services to the Conflicts Committee including, if requested, pursuing alternatives to the ‎Transactions as permitted under ‎the Agreement. If an affiliate of Duff & Phelps provides such ‎services, the engagement letter provided for it to receive ‎reasonable and customary fees for ‎such services to be negotiated. Although Duff & Phelps had not yet been engaged to provide such services when it delivered the Opinion, Duff & Phelps, with the consent of the Conflicts Committee, had limited communications with one party regarding interest in a possible alternative transaction. On June 3, 2022, the Company announced that the Conflicts Committee had retained Kroll, LLC’s investment banking unit, Duff & Phelps Securities, LLC to provide investment banking services to the Conflicts Committee and assist it in its Go-Shop Process. For these services, Duff & Phelps received a fee of $100,000 and customary expense reimbursement and indemnification.

Under the SEC rules governing “going-private” transactions, the members of the Axar Group are affiliates of the Company and, therefore, are required to express their purposes and reasons for the Merger to the Company’s “unaffiliated security holders” as defined under Rule 13e-3 of the Exchange Act. The members of the Axar

Group are making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. The views of the members of the Axar Group should not be construed as a recommendation to any Company stockholder as to how that stockholder should vote on the Merger.

The primary purpose of the Merger is to enable the Axar Group to acquire, through Parent, all of the Shares not already owned by them so that the Company can be operated as a privately-owned company. The members of the Axar Group believe that the Company can be operated more effectively and have greater operating flexibility as a privately-owned company for the following reasons, among others:

The members of the Axar Group also believe that the Merger will enable the Company’s stockholders (other than the holders of Axar Shares and Insider Shares) to immediately realize the value of their investment in the Company through their receipt of the Merger Consideration of $3.50 per share in cash, without interest, less any applicable withholding taxes. The Merger Consideration represents a premium of approximately 54.2% to the Company’s closing share price on May 24, 2022, the last trading day prior to the announcement of the execution of the Merger Agreement. Although the members of the Axar Group believe that there may be significant opportunities associated with their investment in the Company, they also realize that there are substantial risks and that such opportunities may not ever be fully realized.

If the Merger is completed, the Company will become a direct wholly-owned subsidiary of Parent and the Shares will cease to be traded on the NYSE. The members of the Axar Group believe that structuring the transaction in such manner is preferable to other alternative transaction structures because it (i) will enable Parent to directly acquire all of the Company’s outstanding Common Stock at the same time, (ii) will allow the Company to cease to be an SEC reporting company and (iii) represents an opportunity for the Company’s stockholders (other than the holders of Axar Shares and Insider Shares) to immediately realize the value of their investment in the Company, particularly in light of the historic limited trading volume of the Shares on the NYSE.

Under the SEC rules governing “going private” transactions, the members of the Axar Group are affiliates of the Company and, therefore, are required to express their belief as to the fairness of the Merger to the Company’s “unaffiliated security holders” as defined under Rule 13e-3 of the Exchange Act. The members of the Axar Group are making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. The views of the members of the Axar Group should not be construed as a recommendation to any Company stockholder as to how that stockholder should vote on the Merger.

The Public Stockholders were represented by the Conflicts Committee, which reviewed, evaluated, considered and negotiated the Merger and the Merger Agreement, with the assistance of the Conflicts Committee’s independent legal and financial advisors. None of the members of the Axar Group or any of their affiliates participated in the deliberations of the Conflicts Committee or the Board regarding, or received advice from the Company’s legal advisor or the Conflicts Committee’s legal or financial advisors as to, the substantive or procedural fairness of the Merger to the Public Stockholders. In addition, none of the members of the Axar

Group or any of their affiliates performed, or engaged a financial advisor to perform, any valuation or other analysis for the purpose of assessing the fairness of the Merger to the Public Stockholders. The members of the Axar Group believe, however, that the Merger is substantively and procedurally fair to the Company’s stockholders (other than the holders of Axar Shares and Insider Shares) based on the following factors, among others:

The Board (other than Mr. Axelrod, who did not attend the meeting), acting upon the unanimous recommendation of the Conflicts Committee, unanimously (a) determined that the Merger Agreement and the transactions contemplated by the Merger Agreement were fair to and in the best interests of the Company and its stockholders (other than the holders of the Axar Shares and the Insider Shares), (b) approved the Merger Agreement and the Transactions, and (c) recommended that the stockholders of the Company approve the Merger and the Transactions and adopt the Merger Agreement.

A primary benefit of the Merger to the Company’s stockholders (other than the holders of Axar Shares) will be the right of such stockholders to receive the Merger Consideration as described above. Additionally, such stockholders will avoid the risk associated with the Company's continuing turnaround efforts, including any possible decrease in the Company’s future earnings, growth or value.

The primary detriment of the Merger to such Company stockholders is that such Company stockholders will not participate in the future earnings, growth or value (if any) of the Company, including from any improvements in its operating performance from its turnaround efforts or any acquisitions that Parent or the Surviving Company may pursue following the Merger. Additionally, the receipt of cash in exchange for Shares pursuant to the Merger will generally be a taxable sale transaction for U.S. federal income tax purposes.

In connection with the Merger, the Axar Group members may receive benefits and be subject to obligations that are different from, or in addition to, the benefits received by the Company’s other stockholders generally. The primary benefits of the Merger to the members of the Axar Group include their interest in the Company’s potential future earnings and growth which, if they successfully execute their business strategies, could be substantial. Additionally, following the Merger, the Company will be a private company, and as such will be relieved of the burdens imposed on companies with publicly traded shares, including the requirements and restrictions on trading that the Company’s directors, officers and beneficial owners of more than 10% of the outstanding shares of Common Stock face as a result of the provisions of Section 16 of the Exchange Act. Members of the Axar Group estimate that the Company will save approximately $5 million per year as a result of no longer being a public company.

The primary detriment of the Merger to the members of the Axar Group is the fact that all of the risk of any possible decrease in the Company’s earnings, growth or value will be borne by such holders. Additionally, the investment by the members of the Axar Group in the Company will not be liquid, with no public trading market for the Common Stock.

The foregoing discussion of the factors considered and given weight by the members of the Axar Group in connection with the fairness of the Merger is not intended to be exhaustive but includes all material factors considered by such persons. For these reasons, the members of the Axar Group believe that private ownership is in the best interest of the Company and that the Merger is in the best interests of, and is substantively and procedurally fair to, the Company’s stockholders (other than the holders of Axar Shares).

After the Effective Time of the Merger, Parent anticipates that the Company, as a wholly-owned subsidiary of Parent, will implement operating efficiencies, including those associated with ceasing to be a publicly traded company. In addition, Parent intends to continue the Company’s strategy of pursuing bolt-on acquisitions and may opportunistically pursue larger acquisitions depending on capital availability. Parent also intends to enhance Cornerstone’s investment advisory capabilities for the Trusts by, among other things, hiring an independent, fully dedicated investment professional for Cornerstone. Parent expects that the Company’s operations will be otherwise conducted substantially as they are currently being conducted.

If the Merger Agreement is approved by the required vote of the Company’s stockholders and the other conditions to the closing of the Merger are either satisfied or waived, Merger Sub will be merged with and into the Company, the separate corporate existence of Merger Sub will cease and the Company will continue its corporate existence under Delaware law as the surviving corporation in the Merger, with all of the property, rights, privileges, powers and franchises of each of the Company and Merger Sub vesting in the Surviving Corporation, and all debts, liabilities and duties of each of the Company and Merger Sub becoming the debts, liabilities and duties of the Surviving Corporation.

At the Effective Time:

Following the Effective Time, all equity in the Surviving Corporation will be directly owned by Parent. If the Merger is completed, Parent will be the sole beneficiary of the Company’s future earnings and growth, if any, and will be entitled to vote on corporate matters affecting the Company following the Merger. Similarly, Parent will also bear the risks of ongoing operations, including the risks of any decrease in the Company’s value after the Merger.

In connection with the Merger, certain of the Company’s directors and executive officers will receive benefits and be subject to obligations that are different from, or in addition to, the benefits and obligations of the Company’s stockholders generally, as described in more detail under “Special Factors — Interests of the Company’s Directors and Executive Officers in the Merger” beginning on page 50. Those incremental benefits are expected to include, among others, certain executive officers continuing as executive officers of the Surviving Corporation.

The shares of Common Stock are currently registered under the Exchange Act and are listed on the NYSE under the symbol “STON.” If the Merger is completed, the Company will be a privately held corporation and the shares of Common Stock will no longer be publicly traded and will be delisted from the NYSE. In addition, registration of the Common Stock under the Exchange Act will be terminated and the Company will no longer be required to file periodic reports with the SEC with respect to the Common Stock.

The table below sets forth the direct and indirect interests in the Company’s net book value and net earnings of the holders of Axar Shares prior to and immediately after the Merger, based upon the net book value of the Company at June 30, 2022, and the net income of the Company for the six-month period ended June 30, 2022.

If the holders of the Common Stock do not adopt the Merger Proposal or if the Merger is not completed for any other reason, the holders of the Common Stock will not receive any payment for their shares of Common Stock. Instead, the Company will remain a public company, the Common Stock will continue to be listed and traded on the NYSE, and the Company’s stockholders will continue to be subject to similar risks and opportunities as they currently are experiencing with respect to their ownership of Common Stock. If the Merger is not completed, there is no assurance as to the effect of these risks and opportunities on the future value of the Common Stock, including the risk that the market price of the Common Stock may decline to the extent that the current market price of the Common Stock reflects a market assumption that the Merger will be completed. If the Company’s stockholders do not adopt the Merger Proposal or if the Merger is not completed for any other reason, there is no assurance that any other transaction acceptable to the Company will be offered or that the business, prospects or

results of operations of the Company will not be adversely impacted, including as a result of the significant costs and expenses incurred by the Company in connection with the Merger.

Under certain circumstances, if the Merger is not completed, the Company may be required to pay Parent a Termination Fee, as described in more detail in the section entitled “The Merger Agreement – Termination Fees and Expenses” beginning on page 90.

In considering the recommendation of the Board that you vote in favor of the Merger Proposal, you should be aware that aside from their interests as stockholders of the Company, the Company’s directors and executive officers have interests in the Merger that are different from, or in addition to, those of other stockholders of the Company generally. The members of the Conflicts Committee were aware of and considered these interests, among other matters, in evaluating and negotiating the Merger Agreement and Transactions, including the Merger, and in making it recommendations to the Board, which was also aware of and took into account these interests, among other matters, when making its recommendation that the stockholders of the Company vote in favor of the Merger Proposal. See “Special Factors — Background of the Merger” beginning on page 12, and “Special Factors — Purpose and Reasons of the Company for the Merger; Recommendation of the Board and the Conflicts Committee; Fairness of the Merger” beginning on page 27.

The Company’s stockholders should take these interests into account in deciding whether to vote “FOR” the Merger Proposal. These interests are described in more detail below, and certain of them are quantified in the narrative and the table below. Prior to execution and delivery of the Merger Agreement, neither the Company nor the Conflicts Committee had any discussions with any directors or executive officers of the Company regarding employment by or compensation from the Surviving Corporation in connection with the Merger, and Parent has advised the Company that, except as described below, it has not had any such discussions with any directors or executive officers of the Company.

The Conflicts Committee consists of three independent members of the Board, Stephen J. Negrotti, Kevin Patrick and Patricia D. Wellenbach. On September 26, 2021, the Board, other than Mr. Axelrod, adopted resolutions providing that each member of the Conflicts Committee would receive the following compensation for their efforts engaging in discussions concerning and negotiating the terms and provisions of a potential strategic transaction involving the Company: (i) an initial installment of $25,000, (ii) a second installment of $25,000 payable two months thereafter and (iii) a third and final installment of $25,000 payable two months following the second installment. These fees are not dependent on the closing of the Merger or on the Conflicts Committee’s or the Board’s approval of, or recommendations with respect to, the Merger.

In recommending and approving the compensation to be paid to members of the Conflicts Committee, the Board considered, among other things, the recommendations of the members of the Compensation, Nominating and Governance Committee, historical compensation of special committees of the Company, the amount of work expected to be required and the level of risk exposure of Conflicts Committee members. The Board also considered the advantages and disadvantages of alternative arrangements, including retainers and payment per meeting, and determined that the fee structure chosen was appropriate in light of the potential range of strategic alternatives that could be discussed in response to the Proposal and the commitment likely to be required from members of the Conflicts Committee.

On September 7, 2022, the Compensation, Nominating and Governance Committee approved a $50,000 increase in the fee payable to each member of the Conflicts Committee, payable in a lump sum promptly following such approval. The Compensation, Nominating and Governance Committee concluded that such an increase was appropriate in light of both (a) the extensive work undertaken by the Conflicts Committee in its deliberations at more than 30 meetings over nine months to consider the Merger and the Transactions and (b) the independent review undertaken by the Conflicts Committee of all Axar’s investment recommendations to Cornerstone, including those Trusts investments that involved a potential related party transaction with Axar, as discussed above on page 22.

The certificate of incorporation of the Company (as amended, the “Certificate of Incorporation”) contains certain provisions permitted under the DGCL relating to the liability of the Company’s directors. These provisions

eliminate a director’s personal liability for monetary damages resulting from a breach of fiduciary duty, except in certain circumstances involving wrongful acts, including:

These provisions do not limit or eliminate the Company’s rights or those of any stockholder to seek non-monetary relief, such as an injunction or rescission, in the event of a breach of a director’s fiduciary duty. These provisions will not alter a director’s liability under federal securities laws.

The bylaws of the Company (the “Bylaws”) provide that the Company will indemnify the Company’s directors and officers to the fullest extent permitted by the DGCL, as it now exists or may in the future be amended, against all expenses and liabilities actually and reasonably incurred by reason of the fact that such director or officer is or was a director or officer of the Company or while such director or officer of the Company is or was serving at the request of the Company as a director, officer, employee, agent or trustee of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan or by reason of anything done or not done by such director or office in any such capacity. The Bylaws provide that the Company will advance the expenses incurred by a director or officer in advance of the final disposition of an action or proceeding; provided that such advances will be repaid to the extent that it is ultimately determined that the director or officer is not entitled to be so indemnified. The Bylaws, together with the Certificate of Incorporation, also authorize the Company to indemnify, on a case-by-case basis, any employees or agents of the Company and permit the Company to secure insurance on behalf of any officer, director, employee or agent for any liability arising out of his or her action in that capacity.

Each director of the Company other than Mr. Redling is party to individual indemnification agreements which contain indemnification, exculpation and the advancement of expenses provisions that are in addition to what is provided in the Bylaws and the Certificate of Incorporation.

The certificate of incorporation and bylaws of the Surviving Corporation will contain provisions regarding the exculpation, advancement of expenses and indemnification no less favorable than those set forth in the certificate of incorporation and bylaws of the Company in effect as of the date of the Merger Agreement, which provisions will not be amended, repealed or otherwise modified for a period of six years from the Effective Time in any manner that would adversely affect the rights thereunder of individuals who, at or prior to the Effective Time, were former or present directors or officers of the Company, unless such modification is required by applicable laws.

From and after the Effective Time, the Surviving Corporation will indemnify and hold harmless, and provide advancement of expenses to, the present and former officers and directors of the Company and its subsidiaries (each of whom the Company refers to as an “indemnified party”) in respect of acts or omissions in their capacity as an officer or director of the Company or any of its subsidiaries or any of their respective predecessors or as an officer, director, employee, fiduciary or agent of another agent if the indemnified party was serving in such capacity at the request of the Company or any of its subsidiaries, to the fullest extent permitted by the DGCL or provided under the certificate of incorporation, bylaws and any indemnification agreements and any other governing documents of the Company and its subsidiaries in effect on the date of the Merger Agreement.

During the period from the Effective Time until six years from the Effective Time, Parent or the Surviving Corporation will obtain and maintain directors’ and officers’ liability insurance with the same coverage, scope, amounts and terms of the current directors’ and officers’ liability insurance maintained by the Company as are in effect as of the date of the Merger Agreement (subject to a maximum aggregate premium of 300% of the cost of the current directors’ and officers’ liability insurance). Alternatively, the Surviving Corporation may purchase a six-year “tail” prepaid policy on terms and subject to conditions no less advantageous to the indemnified parties than the directors’ and officers’ liability insurance maintained by the Company as of the date of the Merger Agreement.

At the Effective Time, each Stock Option, restricted share of Common Stock and phantom unit will be cancelled and converted into the right to receive Converted Options or cash payments based upon the Merger Consideration as described below. As of July 25, 2022, the Company’s directors and executive officers held 3,821,334 Stock Options, 342,002 restricted shares of Common Stock and 240,669.881 shares underlying Phantom Units.

Stock Options: With respect to each award of options to purchase shares of Common Stock under the Company Equity Plan:

Phantom Units: At the Effective Time, each outstanding award of phantom units, whether vested or unvested, will be cancelled and converted into the right to receive an amount in cash, without interest, equal to the product of (i) $3.50 and (ii) the number of shares of Common Stock subject to such award of phantom units.

Restricted Shares: At the Effective Time, each restricted share that is subject to an award under the Company Equity Plan will vest in full and become free of restrictions and shall be converted into the right to receive $3.50 in cash without interest.

The following table shows, for each member of the Board and for each executive officer of the Company, as applicable: (1) the number of shares of Common Stock underlying outstanding restricted shares and phantom units, (2) the number of Stock Options held by such member of the Board, and (3) the value of such awards. The values in the table below have been determined using the Merger Consideration of $3.50 per share of Common Stock, and are based on applicable holdings as of September 20, 2022, which date is the assumed date of the Effective Time solely for purposes of this compensation-related disclosure.

The members of the Board and the executive officers of the Company that own Common Stock will receive the same Merger Consideration of $3.50 per share of Common Stock, on the same terms and conditions as other holders of the Common Stock (other than holders of the Axar Shares).

The following table shows, for each member of the Board and for each executive officer of the Company, as applicable: (1) the number of shares of Common Stock held by such individual, and (2) the value of such Common Stock. The values in the table below have been determined using the Merger Consideration of $3.50 per share of Common Stock, and are based on applicable holdings as of September 20, 2022, which date is the assumed date of the Effective Time solely for purposes of this compensation-related disclosure.

In accordance with Item 402(t) of Regulation S-K, the table below sets forth the compensation that is based on or otherwise relates to the Merger that may become payable to each of the Company’s named executive officers in connection with the Merger. The amounts indicated in the table below are estimates of the amounts that would be payable assuming, solely for purposes of this table, that the Merger was consummated on September 20, 2022, and that the employment of each of the named executive officers was immediately terminated other than for cause on such date. In addition to the assumptions regarding the consummation date of the Merger and the termination of employment, these estimates are based on certain other assumptions that are described in the footnotes accompanying the table below. Accordingly, the actual values to be received by a named executive officer in connection with the Merger may differ from the amounts set forth below.

The Company is party to the employment agreement with Joseph M. Redling, the Company’s Chief Executive Officer, dated as of June 29, 2018 (the “Redling Employment Agreement”). Under the Redling Employment Agreement, if Mr. Redling’s employment with the Company were to cease under certain circumstances, Mr. Redling would be entitled to a payment of an amount equal to 1.5 times Mr. Redling’s base salary as of the date of his termination of employment, to be paid over a period of twelve months following the date of termination in equal installments in accordance with the normal payroll practices of the Company, with payments commencing on the 60^th day following the date of termination (such payments, the “Redling Severance Benefit”).

The circumstances under which the Redling Severance Benefit would be paid are: (i) Mr. Redling’s employment being terminated by the Company without “Cause” and not for death or disability or (ii) Mr. Redling terminating his employment for “Good Reason”. Examples of “Cause” as set forth in the Redling Employment Agreement include, but are not limited to, Mr. Redling’s willful misconduct or gross negligence in the performance of his duties; his performance of any material act of fraud, theft, professional misconduct, dishonesty or breach of trust; any breach of fiduciary duty owed by Mr. Redling to the Company; and Mr. Redling’s indictment for, conviction of or please of guilty to a felony (other than traffic offenses) or of any crime involving fraud, embezzlement, theft or moral turpitude. Examples of “Good Reason” set forth in the Redling Employment Agreement include, but are not limited to, any material diminution of Mr. Redling’s duties, responsibilities or authorities; any change in the Company’s reporting structure such that Mr. Redling is required to report to any person other than the Board and its Chairman; and any relocation of Mr. Redling’s principal office or place of employment to a location more than 50 miles from Trevose, Pennsylvania.

Mr. Redling’s entitlement to the Redling Severance Benefit is conditioned upon Mr. Redling signing (after the date of his termination) and not revoking a Severance Agreement and General Release and Waiver of Claims upon the termination of his employment with the Company.

In addition, on any termination of Mr. Redling’s employment under the Redling Employment Agreement, Mr. Redling will be entitled to receive the following: (i) any base salary for days actually worked but not yet paid through the date of termination; (ii) reimbursement of all expenses for which Mr. Redling is entitled to be reimbursed pursuant to the Redling Employment Agreement, but for which he has not yet been reimbursed;

(iii) any vested accrued benefits under the Company’s employee benefit plans and programs in accordance with the terms of such plans and programs, as accrued through the date of termination; (iv) vested but unissued equity in the Company; (v) any bonus or other incentive (or portion thereof) for any preceding completed calendar year that has been awarded by the Company to Mr. Redling, but has not been received by him prior to the date of termination; (vi) accrued but unused vacation, to the extent Mr. Redling is eligible in accordance with the Company’s policies and (vii) any other payment or benefit (other than Redling Severance Benefit) to which Mr. Redling may be entitled under the applicable terms of any written plan, program, policy, agreement, or corporate governance document of the Company or any of their successors or assigns.

The Company is party to the employment agreement with Jeffrey DiGiovanni, the Company’s Chief Financial Officer, dated as of September 19, 2019 (the “DiGiovanni Employment Agreement”). Under the DiGiovanni Employment Agreement, if Mr. DiGiovanni’s employment with the Company were to cease under certain circumstances, Mr. DiGiovanni would be entitled to severance benefits (the “DiGiovanni Severance Benefits”) consisting of (i) payment of his base salary for a period of 12 months following the date of his termination of employment, to be paid in equal installments in accordance with the normal payroll practices of the Company, and (ii) a pro-rata bonus for the fiscal year of the Company in which Mr. DiGiovanni’s termination occurs, if any, determined by the Company and subject to certain restrictions set forth in the DiGiovanni Employment Agreement, which will be paid at the same time that annual incentive cash bonuses are paid to other executives of the Company, but in no event later than March 15^th of the fiscal year following the fiscal year in which the date of termination occurs.

The circumstances under which the DiGiovanni Severance Benefits would be paid are: (i) Mr. DiGiovanni’s employment being terminated by the Company without “Cause” and not for death or disability and (ii) Mr. DiGiovanni terminating his employment for “Good Reason.” Examples of “Cause” as set forth in the DiGiovanni Employment Agreement include, but are not limited to, Mr. DiGiovanni’s uncured or uncurable willful misconduct or gross negligence in the performance of his duties; his performance of any material act of fraud, theft, professional misconduct, dishonesty or breach of trust; Mr. DiGiovanni’s willful and repeated failure to perform lawful directives of the Board that is not cured following the Company providing Mr. DiGiovanni with notice of such failure; and Mr. DiGiovanni’s indictment for, conviction of or please of guilty to a felony (other than traffic offenses) or of any crime involving fraud, embezzlement, theft or moral turpitude, that, in the reasonable opinion of the Board, renders Mr. DiGiovanni’s continued employment damaging or detrimental to the Company or potentially damaging or detrimental to the Company. Examples of “Good Reason” set forth in the DiGiovanni Employment Agreement include, but are not limited to, (i) any material diminution in Mr. DiGiovanni’s base salary which is greater than 10% of his base salary based on the effective date of the DiGiovanni Employment Agreement or (ii) a material change in the geographic location at which Mr. DiGiovanni must perform services under the DiGiovanni Employment Agreement.

Mr. DiGiovanni’s entitlement to the DiGiovanni Severance Benefits is conditioned upon Mr. DiGiovanni signing (after the date of his termination) and not revoking a Severance Agreement and General Release and Waiver of Claims upon the termination of his employment with the Company.

In addition, if Mr. DiGiovanni’s employment is terminated for any reason, Mr. DiGiovanni will be entitled to receive the following: (i) any base salary for days actually worked through the date of termination; (ii) reimbursement of all expenses for which Mr. DiGiovanni is entitled to be reimbursed pursuant to the DiGiovanni Employment Agreement, but for which he has not yet been reimbursed; (iii) any vested accrued benefits under the Company’s employee benefit plans and programs in accordance with the terms of such plans and programs, as accrued through the date of termination; (iv) vested but unissued equity in the Company; (v) any bonus or other incentive (or portion thereof) for any preceding completed fiscal year that has been awarded by the Company to Mr. DiGiovanni, but has not been received by him prior to the date of termination; and (vi) accrued but unused vacation, to the extent Mr. DiGiovanni is eligible in accordance with the Company’s policies.

The Company’s directors and executive officers have informed the Company that, as of the date of this Proxy Statement, they intend to vote all of the shares of Common Stock owned directly by them in favor of the Merger Proposal. As of September 15, 2022 the Company’s directors and executive officers beneficially owned, in the

aggregate, 93,764,714 shares of Common Stock entitled to vote at the Special Meeting, or approximately 77.4% of the outstanding shares of Common Stock entitled to vote at the Special Meeting.

Parent intends that, in addition to Andrew Axelrod, each of Spencer E. Goldenberg and David Miller will become directors of the Surviving Company in connection with the closing of the Merger.

The Merger will be accounted for in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company does not believe the Merger will have a material impact on the accounting for the Company.

The following discussion is a summary of material U.S. federal income tax consequences of the Merger to U.S. Holders (as defined below) of the shares of Common Stock. This summary is general in nature and does not discuss all aspects of U.S. federal income taxation that may be relevant to a holder of shares of Common Stock in light of their particular circumstances. This discussion is based on the Code, the Treasury Regulations promulgated under the Code, judicial authority, published administrative positions of the Internal Revenue Service (the “IRS”), and other applicable authorities, all as in effect as of the date of this Proxy Statement, and all of which are subject to change or differing interpretations at any time, with possible retroactive effect. We have not sought, and do not intend to seek, any ruling from the IRS with respect to the statements made and the conclusions reached in the following discussion, and no assurance can be given that the IRS will agree with the views expressed herein, or that a court will not sustain any challenge by the IRS in the event of litigation. This discussion does not describe any tax consequences arising under the laws of any state, local or non-U.S. jurisdiction and does not consider any aspects of U.S. federal tax law other than income taxation, nor does it address any aspects of the unearned income Medicare contribution tax. In addition, this discussion only applies to the shares of Common Stock that are held as a capital asset (generally, property held for investment) within the meaning of Section 1221 of the Code and does not address tax considerations applicable to any holder of the shares of Common Stock that may be subject to special treatment under U.S. federal income tax law, including:

If a partnership (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of Common Stock, the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities of the partner and the partnership. Any such partnership (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes), and any partners thereof, that hold the shares of Common Stock should consult their own tax advisors regarding the tax consequences of exchanging the shares of Common Stock pursuant to the terms of the Merger Agreement. In addition, holders of shares of Common Stock who are not U.S. Holders may be subject to different tax consequences than those described below and are urged to consult their tax advisors regarding their tax treatment under U.S. and non-U.S. tax laws.

The following summary is for general informational purposes only and is not a substitute for careful tax planning and advice. Holders of shares of Common Stock are urged to consult their own tax advisor with respect to the specific tax consequences to them of the Merger in light of their own particular circumstances, including U.S. federal estate, gift and other non-income tax consequences, and tax consequences under state, local and non-U.S. tax laws.

The following is a summary of the material U.S. federal income tax consequences of the Merger that will apply to U.S. Holders. For purposes of this discussion, the term “U.S. Holder” refers to a beneficial owner of the shares of Common Stock that is, for U.S. federal income tax purposes:

The exchange of the shares of Common Stock by a U.S. Holder for Merger Consideration pursuant to the terms of the Merger Agreement will generally be a taxable transaction for U.S. federal income tax purposes. A U.S. Holder will generally recognize gain or loss equal to the difference, if any, between the amount of the Merger Consideration received in the Merger and the U.S. Holder’s adjusted tax basis in the shares of Common Stock exchanged therefor. Gain or loss will generally be determined separately for each block of the shares of Common Stock (generally, the shares of Common Stock acquired at the same cost in a single transaction) held by such U.S. Holder. Such gain or loss will generally be capital gain or loss, and will be long-term capital gain or loss if such U.S. Holder’s holding period for the shares of Common Stock is more than one year at the time of the exchange. Long-term capital gains recognized by a non-corporate U.S. Holder are generally eligible for reduced rates of taxation. The deductibility of capital losses is subject to certain limitations.

For purposes of this discussion, a “Non-U.S. Holder” is a beneficial owner of shares of Common Stock that is neither a U.S. Holder nor an entity or arrangement classified as a partnership for U.S. federal income tax purposes.

A Non-U.S. Holder generally will not be subject to U.S. federal income tax on any gain realized on the receipt of the Merger Consideration pursuant to the terms of the Merger Agreement, unless:

Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at generally applicable U.S. federal income tax rates in the same manner as if such Non-U.S. Holder were a U.S. Holder. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30%, or lower rate specified in an applicable income tax treaty, on such effectively connected gain, as adjusted for certain items.

Gain described in the second bullet point above generally will be subject to U.S. federal income tax at a rate of 30% (or such lower rate as may be specified under an applicable income tax treaty), which may be offset by U.S.-source capital losses of the Non-U.S. Holder (even though the individual is not considered a resident of the United States), provided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses.

Gain described in the third bullet point above generally will be subject to U.S. federal income tax on a net income basis at generally applicable U.S. federal income tax rates in the same manner as if such Non-U.S. Holder were a U.S. Holder. In addition, the Company may be required to withhold U.S. federal income tax at a rate of 15% of the amount realized upon such disposition. We will be classified as a United States real property holding corporation if the fair market value of the Company’s “United States real property interests” equals or exceeds 50% of the sum of the fair market value of the Company’s worldwide real property interests plus the Company’s other assets used or held for use in a trade or business, as determined for U.S. federal income tax purposes. The Company can give no assurance that the foregoing rules governing United States real property holding corporations will not be relevant for Non-U.S. Holders. Non-U.S. Holders are urged to consult their tax advisors regarding the tax consequences to them if the Company is or has been a “United States real property holding corporation.”

Proceeds from the exchange of the shares of Common Stock for cash pursuant to the Merger generally will be subject to information reporting. In addition, backup withholding tax at the applicable rate (currently 24%) generally will apply unless the applicable U.S. Holder or other payee provides a valid taxpayer identification number and complies with certain certification procedures (generally, by providing a properly completed IRS Form W-9) or otherwise establishes an exemption from backup withholding tax. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding tax rules from a payment to a U.S. Holder will be allowed as a credit against that holder’s U.S. federal income tax liability and may entitle the holder to a

refund, provided, that, the required information is timely furnished to the IRS. Each U.S. Holder should duly complete, sign and deliver to the paying agent an appropriate IRS Form W-9 to provide the information and certification necessary to avoid backup withholding tax, unless an exemption applies and is established in a manner satisfactory to the paying agent.

A Non-U.S. Holder generally certifies its status as such by providing a properly completed and signed IRS Form W-8BEN or W-BEN-E. A Non-U.S. Holder that does not provide such form generally will be presumed to be a U.S. Holder, subject to backup withholding tax as described above.

In connection with the Merger, the Company is required to make certain filings with, and comply with certain laws of, various federal and state governmental agencies, including filing the Certificate of Merger with the Secretary of State of the State of Delaware in accordance with the DGCL at the closing of the Merger and complying with U.S. federal securities laws.

If the Merger is completed, shares of the Common Stock will no longer be publicly traded and will be delisted from the NYSE. Additionally, the Common Stock will be deregistered under the Exchange Act, and the Company will no longer be required to file periodic reports with the SEC with respect to the Common Stock.

The Merger will become effective when the Certificate of Merger has been duly filed with and accepted by the Secretary of State of the State of Delaware or at such other subsequent date or time as Parent and the Company may agree and specify in the Certificate of Merger in accordance with the DGCL.

At or prior to the Effective Time, Parent and the Company will deposit or cause to be deposited in trust for the benefit of holders of the Common Stock (other than Excluded Shares), with a paying agent designated by Parent, and reasonably acceptable to the Company (via the Conflicts Committee), sufficient funds for payment of the aggregate Merger Consideration. The paying agent will deliver the Merger Consideration according to the procedure summarized below.

As soon as reasonably practicable, but in no event more than five business days after the Effective Time, the Surviving Corporation will cause the paying agent to mail to each person who was, at the Effective Time, a stockholder of record of the Company entitled to receive the Merger Consideration, (1) a customary letter of transmittal and (2) instructions for use in effecting the surrender of any stock certificates (or effective affidavits of loss in lieu thereof) and/or such other documents as may be required in exchange for the Merger Consideration. Upon surrender of a stock certificate (or effective affidavits of loss in lieu thereof) and/or such other documents as may be reasonably required by the paying agent in accordance with the terms of the letter of transmittal, each stockholder of the Company holding shares of Common Stock represented by such stock certificate shall be entitled to receive in exchange for such stock certificate an amount (after giving effect to any required tax withholdings) equal to (1) the number of shares of Common Stock represented by such stock certificate multiplied by (2) $3.50, and the surrendered stock certificate will be cancelled.

As promptly as practicable after the Effective Time, the paying agent will issue and deliver to each holder of shares of Common Stock represented by book-entry interests the amount that such holder is entitled to receive pursuant to the terms of the Merger Agreement without such holder being required to deliver a stock certificate to the paying agent, provided that an “agent’s message” has been previously delivered to the paying agent regarding such shares of Common Stock represented by book-entry interests and such shares shall then cease to represent any right to receive Merger Consideration.

At the Effective Time, each share of Common Stock issued and outstanding immediately prior to the Effective Time will be cancelled and converted into the right to receive the Merger Consideration, without interest and less any applicable withholding taxes. This does not apply to the Excluded Shares.

Each restricted share that is subject to an award under the Company Equity Plan will vest and become free of restrictions and will be converted into the right to receive the Merger Consideration. The Merger consideration

will be paid to holders of such right in the same manner and under the same terms and conditions as apply to the receipt of the Merger Consideration by holders of shares of Common Stock as described above.

Parent will cause the Surviving Corporation to pay to each prior holder of phantom units the cash amounts described in this Proxy Statement under “The Merger Agreement — Treatment of Company Equity Awards” at or reasonably promptly after the Effective Time, but in no event later than seven business days after the Effective Time.

The Surviving Corporation will pay to each holder of Stock Options the cash amounts described in this Proxy Statement under “The Merger Agreement — Treatment of Company Equity Awards” through the payroll system of the Surviving Corporation or its applicable subsidiaries, less applicable withholding taxes and other deductions.

The paying agent will return to the Surviving Corporation all funds in its possession 12 months after the Effective Time, and the paying agent’s duties will terminate. After that time, if you have not received payment of the Merger Consideration, you may look only to the Surviving Corporation payment of the Merger Consideration, without interest, subject to applicable abandoned property, escheat and similar laws.

In connection with the proposed Merger, five similar stockholder actions (the “Stockholder Actions”) were filed in federal courts against the Company and its directors between August 12, 2022 and August 26, 2022. Three were filed in the United States District Court for the Southern District of New York: Stein v. StoneMor Inc., et al., 1:22-cv-6885; Redfield v. StoneMor Inc., et al., 1:22-cv-7237; and Whitfield v. StoneMor Inc., et al., 1:22-cv-7286. The other two were filed in the United States District Court for the Eastern District of Pennsylvania (Gomez v. StoneMor, Inc., et al., 2-22-cv-3210) and the United States District Court for the District of New Jersey (Bushansky v. StoneMor, Inc., et al., 1-22-cv-5235).

The Stockholder Actions generally allege that the preliminary proxy statement filed by the Company with the SEC on August 5, 2022 contained materially incomplete and misleading disclosures in violation of Section 14(a) and Section 20(a) of the Exchange Act. The plaintiffs seek various remedies, including an injunction against the Merger and/or the stockholder vote, rescission of the Merger Agreement, declaratory relief with respect to the alleged violations of the Exchange Act, corrective disclosure and monetary damages including attorneys' and experts' fees and expenses.

All defendants deny wrongdoing in connection with the foregoing allegations and intend to vigorously defend against all pending claims.

StoneMor Inc., headquartered in Bensalem, Pennsylvania, is an owner and operator of cemeteries and funeral homes in the United States, with 304 cemeteries and 73 funeral homes in 24 states and Puerto Rico as of September 1, 2022. StoneMor cemetery products and services, which are sold on both a pre-need (before death) and at-need (at death) basis, include: burial lots, lawn and mausoleum crypts, burial vaults, caskets, memorials, and all services which provide for the installation of this merchandise.

Axar Cemetery Parent Corp. is a newly formed Delaware corporation. Parent was formed by Axar solely for the purpose of engaging in the transactions contemplated by the Merger Agreement. Parent has not engaged in any business activities other than in connection with the transactions contemplated by the Merger Agreement. Upon completion of the Merger, the Surviving Corporation will be a direct wholly-owned subsidiary of Parent.

Parent’s address is c/o Axar Capital Management, LP, 402 W 13^th Street, New York, NY 10014 and its telephone number is (212) 356-6130.

Axar Cemetery Merger Corp. is a newly formed Delaware corporation. Merger Sub is a wholly-owned subsidiary of Parent and was formed solely for the purpose of engaging in the Merger and other related transactions. Merger Sub has not engaged in any business other than in connection with the Merger and other related transactions.

Merger Sub’s address is c/o Axar Capital Management, LP, 402 W 13^th Street, New York, NY 10014 and its telephone number is (212) 356-6130.

A biography for each of the Company’s current directors and executive officers is set forth below. Each of the Company’s directors and executive officers listed below is a United States citizen. None of the Company nor any of the Company’s directors or executive officers listed below has been (a) convicted in a criminal proceeding during the past five years (excluding traffic violations or similar misdemeanors) or (b) a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining that person from future violations of, or prohibiting future activities subject to, federal or state securities laws or a finding of any violation of federal or state securities laws. The business address of each of the Company’s executive officers and directors is c/o StoneMor Inc., 3331 Street Road, Suite 200, Bensalem, PA 19020, and their business telephone number is (215) 826-2800.

Joseph M. Redling has served as the Company’s President and Chief Executive Officer since July 18, 2018. Prior to his appointment, Mr. Redling served as the Chief Operating Officer of Vonage Holdings, Inc., a billion-dollar communications company headquartered in Holmdel Township, New Jersey, where he managed the day to day operations of the company’s consumer and B2B businesses. Prior to the Chief Operating Officer position, he was President of Consumer Services for Vonage overseeing its large consumer business unit. Prior to that, Mr. Redling was President and Chief Executive Officer of Nutrisystem, Inc., a leader in the weight-loss industry. His experience also includes over a decade with Time Warner and AOL where he held a number of senior executive level roles including Chief Marketing Officer, President of Paid Services and Customer Management, President of the AOL Access Business and CEO of AOL International. He earned his B.S. in Business Management from St. Peter’s University.

Jeffrey DiGiovanni was appointed Senior Vice President and Chief Financial Officer of the Company in September 2019 and had previously served as its Chief Accounting Officer since September 2018. From January 2012 until joining the Company in September 2018 as its Chief Accounting Officer, he was Managing Director at Pine Hill Group, a leading accounting and transaction advisory firm with offices in Philadelphia, New York City and Princeton, New Jersey, where he worked with clients to deliver services including readiness for initial public offerings, financial reporting including reporting to the SEC and technical accounting assistance on complex transactions. Mr. DiGiovanni holds a B.S. in Accounting and an M.S. in Financial Services from Saint Joseph’s University and is a Certified Public Accountant.

Thomas A. Connolly was appointed Senior Vice President of Business Planning and Operations of the Company in September 2019. Prior to joining the Company, he served as Vice President, Business Operations for Brookstone, an omni channel business with mall, airport, ecommerce and wholesale divisions headquartered in Merrimack, New Hampshire. Previously, Mr. Connolly worked for Vestis Retail Group (Bob’s Stores, Eastern Mountain Sports and Sport Chalet) and EMS. Mr. Connolly possesses a broad range of professional competencies, including: finance, strategic planning, analytics, marketing, ecommerce, wholesale, airport retail, merchandise planning, operations, real estate, store operations, organizational design and human resources. He earned a B.A. in Political Science from Haverford University.

Lindsay R. Granson was appointed Senior Vice President of Sales & Marketing of the Company in January 2021. Prior to her current role, Ms. Granson was the National Vice President of Sales and Marketing beginning in June of 2018 after initially joining the Company as Vice President of Marketing in March of 2017. Prior to joining the Company, Ms. Granson was Vice President of Sales for Watercrest Senior Living Group, from 2016 to March 2017, and prior to that Ms. Granson spent her career in the Senior Living space in various leadership roles in both private and public sectors. She spent the majority of her Senior Living career working for Brookdale Senior Living and holds a B.A. in Elementary Education from Wright State University.

Sahal Laher was appointed Senior Vice President and Chief Information/Digital Officer of the Company in April 2022. Prior to joining the Company, Mr. Laher served as Retail & Consumer Industries Leader at Capgemini Invent, a division of Capgemini SE, an information technology services and consulting company headquartered in Paris, France, from September 2021 to April 2022. Previously, Mr. Laher served as Head of Global Digital, MarTech and Analytics at The Estee Lauder Companies, Inc., a cosmetics company based in New York City, New York, from July 2018 to September 2021. Mr. Laher holds a B.S. in Electrical Engineering and International Studies from Worcester Polytechnic Institute.

Robert Page was appointed Senior Vice President of Funeral Homes and Special Projects of the Company in January of 2021. Prior to his current role, Mr. Page joined the Company in July of 2018 as the President of the Western Division. Prior to joining the Company, Mr. Page was Vice President, Operations Integration for Foundation Partners Group, a deathcare company headquartered in Orlando, Florida, from 2016 to July 2018, and prior to that Mr. Page worked for several public and private deathcare consolidators in a variety of areas including acquisitions, financial systems, technology, sales, operations, process improvement, treasury, operational/financial reporting, and budgeting. Mr. Page holds a B.S. in Biology from Point Loma Nazarene College and an M.B.A. from the University of Redlands.

Keith Trost was appointed Senior Vice President of Corporate Development in May 2022 and served as the Company’s Vice President of Financial Planning and Analysis from July 2019 to May 2022. Prior to joining the Company, Mr. Trost served as a real estate developer at the Streamline Group, LLC, a Philadelphia, Pennsylvania-based real estate development company. Mr. Trost holds a B.B.A. in Accountancy from the University of Notre Dame and an M.B.A. from Villanova University.

Under the SEC rules governing “going-private” transactions, the Axar Filing Persons are affiliates of the Company and, therefore, are required to provide certain information in respect of agreements, arrangements and understandings with respect to securities of the Company. The Axar Filing Persons are making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act.

See “The Merger Agreement” on page 76.

In January 2020, certain of the Trusts completed the purchase of a $30 million participation in a new $70 million debt facility issued by a discount shoe retailer (the “Shoe Retailer”). Funds and accounts affiliated with Axar also invested $20 million in this facility. The investment was initially proposed by the Chairman of the Board, Andrew Axelrod. The investment was reviewed and approved in December 2019 in accordance with the Company’s governance policies in place at that time. At the time of the investment, the funds and accounts affiliated with Axar owned approximately 30% of the equity of the Shoe Retailer, and Mr. Axelrod served on the Shoe Retailer’s board of directors. The amount of the investment represented approximately 4% of the total fair market value of the Investment Assets when it was made.

On March 9, 2021, the Trusts purchased an aggregate of 43,681,528 shares (the “Nevada Company Shares”) of common stock of a Nevada company whose primary assets now consist of cash and tax-related assets (the “Nevada Company”), representing approximately 27% of the outstanding common stock of the Nevada Company, from three private investment funds (the “Nevada Company Sellers”) for an aggregate cash purchase price of $18 million. Axar had originally agreed to acquire the Nevada Company Shares pursuant to a Securities Purchase Agreement dated December 31, 2020, among the Nevada Company Sellers and Axar (the “Nevada Company Purchase Agreement”). On February 1, 2021, pursuant to the Subadvisor Agreement described below,

Axar recommended to Cornerstone that the Trusts purchase the Nevada Company Shares. Pursuant to that recommendation, on February 4, 2021, Axar and the Trusts entered into an Assignment and Assumption Agreement (the “Nevada Company Assignment Agreement”), pursuant to which Axar agreed to assign its rights under the Nevada Company Purchase Agreement to the Trusts and the Trusts agreed to assume Axar’s obligations thereunder. Axar did not receive any additional consideration from the Trusts for this assignment and has represented to the Company that it did not receive any consideration for this assignment from any other person.

The Nevada Company Sellers and Axar entered into the Nevada Company Purchase Agreement while the Subadvisor Agreement was being finalized. Axar informed the Company that it entered into the Nevada Company Purchase Agreement with the intention that the Trusts would purchase the Nevada Company Shares directly from the Nevada Company Sellers. Axar has represented to Cornerstone, a wholly-owned subsidiary of the Company, that it is not, and at the time it entered into the Nevada Company Purchase Agreement was not, affiliated with any of the Nevada Company Sellers and did not control and was not an affiliate of Nevada Company at the time it executed the Nevada Company Purchase Agreement or when the Trusts purchased the Nevada Company Shares. Axar has represented to the Company that, at the time the Nevada Company Purchase Agreement was signed and at all times thereafter until the Trusts completed their purchase of the Nevada Company Shares, funds and accounts affiliated with Axar owned approximately 13.8% of Nevada Company’s outstanding common stock, and that Andrew Axelrod was elected to the board of directors of the Nevada Company on December 31, 2020.

On May 15, 2021, the Trusts entered into a Participation Agreement with a real estate investment trust (the “REIT”) relating to a $52 million loan made by the REIT to certain real estate developers, which is secured by real property and bore interest at a rate of 15%. The Trusts’ participation was a $26 million investment (the “Real Estate Loan Participation”).

A fund affiliated with Axar formerly controlled the management company of the REIT, the Cornerstone funds’ co-investor in this transaction, but the fund sold its interest in the management company on March 31, 2021, prior to the Trusts entering into the Real Estate Loan Participation transaction. Axar has represented to the Company that Mr. Axelrod served on the REIT’s board, including as chairman of that board, from 2018 through November 2021, at which time he resigned from the REIT’s board. Axar has represented to the Company that Axar retained a 4.7% interest in the management company that manages the REIT and is entitled to 8.75% of any returns after a 6% return to other investors in the management company. Axar has advised the Company that, in connection with the sale of Axar’s interest in the management company, Axar is also entitled to a deferred payout of $300,000 per annum in the form of a consulting fee from the management company for capital markets and other strategic advice.

The loan made by the REIT, including the Real Estate Loan Participation, was repaid in full on December 16, 2021, and the Trusts received cash interest payments with respect to the Real Estate Loan Participation in the aggregate amount of $2.4 million, representing all interest payable to the Trusts under the Real Estate Loan Participation. The Trusts have no ongoing interest in this investment.

On May 17, 2021, the Trusts entered into a Loan Agreement with a hotel investor and developer and certain of its subsidiaries (collectively, the “Hotel Fund”), which was amended and restated on October 12, 2021 (such agreement, as so amended and restated, the “Hotel Fund Loan Agreement”) and subsequently amended on December 13, 2021, March 7, 2022 and April 19, 2022. Pursuant to the Hotel Fund Loan Agreement, the Trusts provided a $33.2 million mezzanine loan to the Hotel Fund on May 19, 2021 as part of a $162.2 million loan facility originated by an unaffiliated loan fund. The participation by the Trusts was based on the recommendation of Axar under the Subadvisor Agreement. As part of the same transaction, funds and other accounts affiliated with or managed by Axar loaned $10.0 million to the Hotel Fund on the same terms as the trusts’ loans, representing the balance of the $43.2 million mezzanine loan, and the Trusts and funds and accounts affiliated with Axar each received an origination fee equal to 4% of their respective loan amounts. Axar does not own, directly or indirectly, any equity or debt securities of the Hotel Fund other than through its participation in the mezzanine loan. The principal amount of these loans is payable on October 12, 2023, subject to acceleration

under the circumstances described in the Hotel Fund Loan Agreement, and bear interest at an adjustable rate equal to one-month LIBOR plus a spread. On February 15, 2022, the administrative agent for the lenders under the Hotel Fund Loan Agreement delivered a reservation of rights letter to the Hotel Fund with respect to the Hotel Fund’s apparent failure to comply with several covenants in the Hotel Fund Loan Agreement, none of which related to payment of amounts due to the lenders. As of June 30, 2022, the interest rate was 19.07%. In April 2022 in connection with an amendment of the Hotel Fund Loan Agreement pursuant to which Axar agreed to provide an additional $4.5 million loan discretionary subfacility to the Hotel Fund (the Trusts did not participate in this subfacility), Axar and the Trusts agreed to have the interest payable on the mezzanine loan in April, May and June 2022 paid in kind. The terms of the subfacility are generally the same as the existing loan and are secured pari passu by the same collateral. An additional amendment, to extend the capitalization period through September 2022, is currently being negotiated. The prior amendments have also provided for the Hotel Fund's cooperation in a sale process of its real estate properties, the appointment of a chief administrative officer and the appointment of an independent financial advisor. Through June 30, 2022, the Trusts have received cash interest in the aggregate amount of $7.7 million on this loan from an interest and expense reserve account established for that purpose, and additional interest in the form of an additional $1.6 million in principal of the loan, collectively representing all interest payable to the Trusts under the Hotel Fund Loan Agreement. The Hotel Fund owns its properties in subsidiaries, certain of which are subject to underlying financing arrangements. One of these financing arrangements is currently in default. The Hotel Fund is currently in the process of having its properties marketed for sale, either through brokers or through auction process, or is considering such steps or alternative steps (such as a refinancing in certain cases).

On September 27, 2021, the Trusts entered into an Assignment and Acceptance Agreement (the “Holdco Loan Assignment”) with an insurance holding company (“Holdco”) and Holdco’s then current lender (the “Initial Lender”) pursuant to which the Initial Lender agreed to assign to the Trusts all of its rights, duties and obligations under a Loan Agreement dated as of July 9, 2019 between the Initial Lender and Holdco (the “Holdco Loan Agreement”). The Initial Lender had previously declared Holdco in default under the terms of the Holdco Loan Agreement. At the closing of the transactions contemplated by the Holdco Loan Assignment on October 6, 2021, the Trusts paid the Initial Lender $28.7 million in cash, which equaled the then outstanding principal balance of the loan under the Holdco Loan Agreement (the “Holdco Loan”). The Company was not affiliated with either Holdco or the Initial Lender and Axar has represented to Cornerstone that it did not control and was not an affiliate of either Holdco or the Initial Lender. Also on September 27, 2021, the Trusts and Holdco entered into the First Amendment to Loan Agreement (the “Amended Holdco Loan Agreement”) pursuant to which, among other changes, the defaults asserted by the Initial Lender were waived and the interest rate on the Holdco Loan was increased from 10%, all of which had been payable in kind by increasing the principal balance of the loan, to 15%, of which 10% continued to be payable in kind and 5% was payable in cash. In addition, the Amended Holdco Loan Agreement accelerated the maturity of the Holdco Loan to the earliest of the first anniversary of the closing (subject to a six month extension at the request of Holdco with the consent of the Trusts (as defined below)) and the occurrence of certain other events described further below. As of June 30, 2022, the interest rate on the Holdco Loan remained at 15%. Through June 30, 2022, Trusts had received cash interest in the aggregate amount of $1.6 million on the Holdco Loan and additional interest in the form of an increase in the principal balance of the Holdco Loan in the amount of $2.2 million, representing all interest payable to the Trusts under the Amended Loan Agreement.

Also on September 27, 2021, Axar entered into a letter agreement with Holdco (the “Transaction Letter Agreement”) pursuant to which Holdco agreed, in order to induce Axar to enter into the Amended Holdco Loan Agreement, that it would, if requested by Axar, enter into an agreed-upon form of purchase agreement for the sale of the outstanding capital stock of its wholly-owned insurance company subsidiary (the “Holdco Subsidiary”) to Axar for a purchase price of $100 million, subject to certain conditions including completion by Axar of a customary due diligence investigation and regulatory approval of the transaction by the state insurance regulator. Axar advised the Company that the state insurance regulators had advised Axar that regulatory approval of the transaction on the proposed terms between Axar and Holdco would not be granted because the contemplated purchase price included a $40 million note to be issued to Holdco, and, as a result, after further negotiations, that Holdco and Axar entered into a purchase agreement dated January 20, 2022, which provided for a cash purchase price of $75 million, less the outstanding amounts owed to the Trusts under the Amended Holdco Loan Agreement and a fee that remained payable to the Initial Lender. Axar has advised the Company

that the sale to Axar under the purchase agreement was completed on September 15, 2022. In connection with the sale, the Trusts received cash payments of $31.7 million in principal and $0.3 million in accrued and unpaid interest, representing all amounts outstanding under the Holdco Loan.

Also on September 27, 2021, (i) the Trusts and Holdco entered into a letter agreement pursuant to which Holdco has paid the Trusts a fee of $500,000 (the “StoneMor Trusts Fee Letter Agreement”) and (ii) Axar and Holdco entered into an Expense Fee Letter pursuant to which Holdco agreed to pay Axar’s due diligence expenses of up to $630,000 (the “Expense Fee Letter Agreement”). Entrance of Holdco into both the Expense Fee Letter Agreement and the StoneMor Trusts Fee Letter Agreement were conditions to the effectiveness of the Amended Holdco Loan Agreement.

On April 1, 2020, the Company entered into the Axar Commitment with Axar pursuant to which Axar committed to (a) purchase shares of Series A Preferred with an aggregate purchase price of $8.8 million on April 3, 2020, (b) exercise its basic rights in the 2020 Rights Offering by tendering the shares of Series A Preferred so purchased for shares of Common Stock and (c) purchase any shares offered in the 2020 Rights Offering for which other stockholders of the Company do not exercise their rights, up to a maximum of an additional $8.2 million of such shares. The Company did not pay Axar any commitment, backstop or other fees in connection with the Axar Commitment.

On April 3, 2020, as contemplated by the Axar Commitment, the Company and Axar CL SPV LLC, Star V Partners LLC and Blackwell Partners LLC –Series E. (the “2020 Purchasers”) entered into a Series A Preferred Stock Purchase Agreement pursuant to which the Company sold 176 shares of its Series A Preferred for a cash price of $50,000 per share, an aggregate of $8.8 million. The 2020 Purchasers are funds or accounts managed by Axar.

On May 27, 2020, the Company entered into a Common Stock Purchase Agreement (the “Common Stock Purchase Agreement”) with Axar, the accounts managed by Axar set forth on Schedule B thereto and one or more accounts managed by Axar to be designated by it (collectively, the “Purchasers”) pursuant to which the Company agreed to sell an aggregate of 23,287,672 shares of Common Stock to the Purchasers at a price of $0.73 per share for aggregate gross proceeds of $17.0 million. Because the Company’s Common Stock had been trading at a price less than the $0.73 subscription price for the rights offering described above and that under similar circumstances the Company’s previous rights offering received only 10% participation, the Board determined and Axar agreed in the Common Stock Purchase Agreement to amend the Axar Commitment to provide for a direct purchase of the 23,287,672 shares of Common Stock and avoid the expense of proceeding with the rights offering while obtaining the same per share and aggregate purchase price contemplated by the Axar Commitment.

On June 19, 2020, the Company completed the sale of the aggregate of 23,287,672 shares of Common Stock (the “New Common Shares”) as contemplated by the Common Stock Purchase Agreement. The Company issued and sold to the Purchasers, and the Purchasers acquired and purchased from the Company, (a) 12,054,795 New Common Shares in exchange for the surrender of the 176 shares of Preferred Shares purchased on April 3, 2020, with a stated value of $8.8 million (an exchange ratio of 68,493.15 New Common Shares for each share of Series A Preferred surrendered), and (b) 11,232,877 New Common Shares for a cash purchase price of $0.73 per share, for aggregate gross proceeds of $8.2 million.

On May 27, 2020, the Company announced that it received the 2020 Proposal, dated May 24, 2020, from Axar proposing to acquire all of the Company’s outstanding shares of Common Stock not owned by Axar or its affiliates for $0.67 per share in cash, subject to certain conditions. For further discussion of the 2020 Proposal, see “Special Factors — Background of the Merger — Axar’s 2020 Proposal.”

On February 1, 2021, Cornerstone entered into the Subadvisor Agreement with Axar. The sole member of Axar’s general partner is Andrew Axelrod, who serves as the Company’s Chairman of the Board. In connection with the execution of the Subadvisor Agreement, Mr. Axelrod resigned as a member of the Trust Committee of the Board.

Pursuant to the charter of the Trust Committee, the retention of Axar as a subadvisor and the Subadvisor Agreement were first reviewed and approved by the Trust Committee, subject to the condition that the retention of Axar and the Subadvisor Agreement also be approved by a Board committee comprised exclusively of

independent directors. Given the relationship between the Company and Axar, the Board appointed a special committee to review the retention of Axar and the Subadvisor Agreement, which subsequently also approved the retention of Axar and the terms of the Subadvisor Agreement. Both the Trust Committee and the special committee concluded that Axar had the appropriate experience and performance record that would assist Cornerstone in performing its investment advisory obligations for the Company, that the retention of Axar would provide back-office operational efficiencies to Cornerstone and that the financial terms were at least as favorable to Cornerstone as the terms that would be available from other unaffiliated subadvisors.

Under the terms of the Subadvisor Agreement, Axar agreed to provide the following services with respect to the Investment Assets:

Under the Subadvisor Agreement, Axar was entitled to a quarterly fee equal to 0.0125% of the value of the Investment Assets through December 31, 2021 and, thereafter, a quarterly fee equal to 0.025% of the value of the Investment Assets. In each case, the value of the Investment Assets was determined by the trustee of the Trusts. The Subadvisor Agreement also included customary confidentiality and indemnification provisions. Mr. Axelrod also serves at the discretion of the Trusts as a director of a children’s retailer in which such trusts hold an equity interest, for which he receives annual director fees from that company of $80,000. Mr. Axelrod also serves as director of a Nevada company in which the Trusts hold an equity interest, for which he receives annual director fees from that company of $75,000. In addition, he and an additional Axar employee serve as directors of the Shoe Retailer, for which each of them receives annual director fees from the Shoe Retailer of $100,000.

On April 19, 2022, Axar, at the request of the Company’s Trust Committee, agreed to terminate the Subadvisor Agreement, effective on that date. In connection with the termination, Axar also agreed to waive all fees payable to Axar under the Subadvisor Agreement for the period from January 1, 2022 through April 19, 2022, which would have been $219,000. During 2021, Axar received fees of $384,000 under the Subadvisor Agreement.

The Company is a party to the DVA with the Axar Group, GP Holdings, and Robert B. Hellman, Jr., as trustee under the Voting and Investment Trust Agreement for the benefit of ACII (collectively with GP Holdings, the “ACII Entities”). Under the DVA, and subject to certain conditions and exceptions, the Axar Group is prohibited from acquiring additional shares of the Company’s Common Stock. On April 13, 2021, the Axar Group, the ACII Entities and the Company entered into a letter agreement (the “Waiver”) pursuant to which the Axar Group was permitted to acquire some or all of the shares of the Company’s Common Stock held by ACII and its affiliates in a single privately negotiated transaction and not in the open market. The terms of the Waiver were approved by the Conflicts Committee of the Company’s Board. The waiver was subject to the following conditions:

As contemplated by the Waiver, on April 13, 2021, the Company, the Axar Group and the ACII Entities also entered into the Fifth Amendment to the DVA pursuant to which the parties clarified that the standstill period applicable to the Axar Group thereunder would expire on December 31, 2023.

In December 2021, pursuant to the provisions of the Company’s Bylaws, the Company reimbursed $0.2 million on behalf of Andrew Axelrod for certain expenses incurred by Mr. Axelrod in responding to a document production request in connection with certain claims asserted against Mr. Axelrod relating to his service as a director of the Company.

This Proxy Statement is being furnished to the stockholders of the Company as part of the solicitation of proxies by the Board for use at the Special Meeting to be held on Tuesday, November 1, 2022, starting at 4:00 p.m., Eastern time, via live webcast on the Internet at www.virtualshareholdermeeting.com/STON2022SM, or at any adjournment or postponement thereof.

The purpose of the Special Meeting is for the stockholders of the Company to consider and vote on the Merger Proposal. The Requisite Company Vote must be obtained for the Merger to occur. A copy of the Merger Agreement is attached to this Proxy Statement as Appendix A. This Proxy Statement and the enclosed form of proxy and voting instruction card are first being mailed to the stockholders of the Company on September 23, 2022.

In addition, in accordance with Section 14A of the Exchange Act, the Company is providing its stockholders with the opportunity to cast a non-binding, advisory vote on the Compensation Proposal, the value of which is disclosed in the table in the section of this Proxy Statement entitled “Advisory Vote on Golden Parachute Compensation” beginning on page 93. The vote on the Compensation Proposal is a vote separate and apart from the vote on the Merger Proposal. Accordingly, a stockholder may vote to approve the Compensation Proposal and vote against the Merger Proposal, or vice versa. Because the vote on the Compensation Proposal is advisory in nature only, it will not be binding on either the Company or Parent. Accordingly, because the Company is contractually obligated to pay the compensation if the Merger is approved, the compensation will become payable if the Merger closes, subject only to the conditions applicable thereto, regardless of the outcome of the advisory vote. Further, the holders of the Common Stock will consider and vote on the Adjournment Proposal, from time to time, if necessary or appropriate (as determined in good faith by the Company), to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to obtain the Requisite Company Vote.

The holders of record of Common Stock as of the close of business on September 15, 2022, the “Record Date” for the determination of stockholders entitled to notice of and to vote at the Special Meeting, are entitled to receive notice of and to vote at the Special Meeting. On the Record Date, 118,752,924 shares of Common Stock were issued and outstanding.

The presence at the Special Meeting via live webcast on the internet or by proxy, of the holders of a majority of the issued and outstanding shares of Common Stock entitled to vote on the Record Date will constitute a quorum, permitting the Company to conduct its business at the Special Meeting. Proxies received but marked as abstentions will be included in the calculation of the number of shares of Common Stock considered to be present at the Special Meeting. Broker non-votes, as described below under “The Special Meeting — Required Vote — Broker Non-Votes,” will not be considered to be present for purposes of determining whether a quorum exists.

The Merger cannot be completed unless both (i) the holders of at least a majority of the issued and outstanding shares of Common Stock and (ii) the holders of at least a majority of the issued and outstanding shares of Common Stock other than the Axar Shares and the Insider Shares vote in favor of the Merger Proposal. If you abstain from voting on, or fail to vote on the Merger Proposal (including the failure of a Company stockholder who holds their shares of Common Stock in “street name” through a bank, broker or other nominee to give voting instructions to such bank, broker or other nominee with respect to the Merger Proposal), the effect will be the same as a vote “AGAINST” the Merger Proposal. Under the Merger Agreement, Parent has agreed to cause all Axar Shares to be present at the Special Meeting and voted in favor of the approval and adoption of the Merger Proposal.

The Compensation Proposal and the Adjournment Proposal require the affirmative vote of the majority of the shares of Common Stock present or represented by proxy at the Special Meeting and entitled to vote thereon.

In accordance with the rules of the NYSE, banks, brokers and other nominees who hold Common Stock in “street name” for their customers do not have discretionary authority to vote those shares of Common Stock

with respect to the Merger Proposal, the Compensation Proposal or the Adjournment Proposal. Accordingly, if banks, brokers or other nominees do not receive specific voting instructions from the beneficial owners of those shares of Common Stock, they are not permitted to vote those shares of Common Stock with respect to any of the proposals to be presented at the Special Meeting. A “broker non-vote” occurs on an item when (1) a bank, broker or other nominee has discretionary authority to vote on one or more proposals to be voted on at a meeting of stockholders, but is not permitted to vote on other proposals without instructions from the beneficial owner of the shares of Common Stock and (2) the beneficial owner fails to provide the bank, broker or other nominee with such instructions. Because all of the proposals currently expected to be voted on at the Special Meeting are non-routine matters under NYSE rules for which brokers do not have discretionary authority to vote, the Company does not expect there to be any broker non-votes at the Special Meeting.

Proxies received but marked as abstentions will be included in the calculation of the number of shares of Common Stock represented at the Special Meeting for purposes of determining whether a quorum is present. Such proxies will have the same effect as a vote “AGAINST” the Merger Proposal, the Compensation Proposal and the Adjournment Proposal.

All holders of the Common Stock as of the close of business on September 15, 2022, the Record Date, including stockholders of record and beneficial owners of Common Stock registered in the “street name” of a bank, broker or other nominee, are invited to attend the Special Meeting. If you are a stockholder of record, please be prepared to provide proper identification, such as a driver’s license. If you hold your shares of Common Stock in “street name,” you will need to provide proof of ownership, such as a recent account statement or letter from your bank, broker or other nominee, along with proper identification.

Stockholders of the Company of record will be able to vote via live webcast on the internet at the Special Meeting. If you are not a stockholder of record, but instead hold your shares of Common Stock in “street name” through a bank, broker or other nominee, you must provide a proxy executed in your favor from your bank, broker or other nominee in order to be able to vote via live webcast on the internet at the Special Meeting.

To ensure that your shares of Common Stock are represented at the Special Meeting, the Company recommends that you provide voting instructions promptly by proxy, even if you plan to attend the Special Meeting.

If you are a stockholder of record, you may provide voting instructions by proxy using one of the methods described below.

Submit a Proxy by Telephone or via the Internet. This Proxy Statement is accompanied by a proxy and voting instruction card with instructions for submitting voting instructions. You may vote by telephone by calling the toll-free number or via live webcast on the Internet by visiting www.virtualshareholdermeeting.com/STON2022SM as specified on the enclosed proxy and voting instruction card by the deadlines set forth on the card. Your shares of Common Stock will be voted as you direct in the same manner as if you had completed, signed, dated and returned your proxy and voting instruction card, as described below.

Submit a Proxy and Voting Instruction Card. If you complete, sign, date and return the enclosed proxy and voting instruction card by mail so that it is received before the Special Meeting, your shares of Common Stock will be voted in the manner directed by you on your proxy and voting instruction card.

If you sign, date and return your proxy and voting instruction card without indicating how you wish to vote, your proxy will be voted “FOR” the Merger Proposal, the Compensation Proposal and the Adjournment

Proposal. If you fail to return your proxy and voting instruction card, the effect will be that your shares of Common Stock will not be counted for purposes of determining whether a quorum is present at the Special Meeting (unless you are a record holder as of the Record Date and attend the Special Meeting) and will have the same effect as a vote “AGAINST” the Merger Proposal, the Compensation Proposal and the Adjournment Proposal.

If your shares of Common Stock are held by a bank, broker or other nominee on your behalf in “street name,” your bank, broker or other nominee will send you instructions as to how to provide voting instructions for your shares of Common Stock by proxy. Many banks and brokerage firms have a process for their customers to provide voting instructions by telephone or via the Internet, in addition to providing voting instructions by proxy card.

Your proxy is revocable. If you are a stockholder of record, you may revoke your proxy at any time before the vote is taken at the Special Meeting by:

Attending the Special Meeting without taking one of the actions described above will not revoke your proxy. Please note that if you want to revoke your proxy by mailing a new proxy and voting instruction card to the Company or by sending a written notice of revocation to the Company, you should ensure that you send your new proxy and voting instruction card or written notice of revocation in sufficient time for it to be received by the Company before the day of the Special Meeting.

If you hold your shares of Common Stock in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by it in order to revoke your proxy or submit new voting instructions.

The Special Meeting may be adjourned or postponed from time to time, including for the purpose of soliciting additional proxies if there are insufficient votes at the time of the Special Meeting to obtain the Requisite Company Vote. If there is present or represented by proxy at the Special Meeting, sufficient favorable votes to approve the Merger Proposal, the Company does not anticipate that it will adjourn or postpone the Special Meeting. Any signed proxies received by the Company in which no voting instructions are provided on the Adjournment Proposal will be voted “FOR” the Adjournment Proposal, if the proposal is introduced.

The Company will bear the cost of the solicitation of proxies. This includes the charges and expenses of brokerage firms and others for forwarding solicitation material to beneficial owners of the Company’s outstanding Common Stock. The Company may solicit proxies by mail, personal interview, email, telephone, or via the Internet. The Company has retained MacKenzie Partners, Inc. (“MacKenzie”), a proxy solicitation firm, to assist it in the solicitation of proxies for the Special Meeting and will pay MacKenzie a fee not expected to exceed $40,000, plus reimbursement of out-of-pocket expenses. In addition, the Company has agreed to indemnify MacKenzie against certain liabilities, including liabilities arising under the federal securities laws. Brokerage houses, nominees, fiduciaries and other custodians will be requested to forward soliciting materials to beneficial owners and will be reimbursed for their reasonable out-of-pocket expenses incurred in sending proxy materials to beneficial owners.

The following is a summary of the material provisions of the Merger Agreement, a copy of which is attached to this Proxy Statement as Appendix A, and which the Company incorporates by reference into this Proxy Statement. The provisions of the Merger Agreement are extensive and not easily summarized. The Company encourages you to read carefully the Merger Agreement in its entirety, as the rights and obligations of the parties to the Merger Agreement are governed by the express terms of the Merger Agreement and not by this summary or any other information contained in this Proxy Statement.

The Merger Agreement and this summary of its terms have been included to provide you with information regarding the terms of the Merger Agreement. Factual disclosures about the Company contained in this Proxy Statement or in the Company’s public reports filed with the SEC may supplement, update or modify the factual disclosures about the Company contained in the Merger Agreement and described in this summary. The representations, warranties and covenants made in the Merger Agreement by the Company, Parent and Merger Sub were qualified and subject to important limitations agreed to by the Company, Parent and Merger Sub in connection with negotiating the terms of the Merger Agreement. In particular, in your review of the representations and warranties contained in the Merger Agreement and described in this summary, it is important to bear in mind that the representations and warranties were negotiated with the principal purposes of establishing the circumstances in which a party to the Merger Agreement may have the right not to close the Merger if the representations and warranties of the other party prove to be untrue, due to a change in circumstance or otherwise, and allocating risk between the parties to the Merger Agreement, rather than establishing matters as facts. The representations and warranties may also be subject to a contractual standard of materiality that is different from those generally applicable to stockholders and reports and documents filed with the SEC, and in some cases were qualified by disclosures that were made by each party to the Merger Agreement to the other, which disclosures are not reflected in the Merger Agreement. Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this Proxy Statement, may have changed since the date of the Merger Agreement, May 24, 2022. Additional information about the Company may be found elsewhere in this Proxy Statement and in the Company’s other public filings with the SEC. See “Where Stockholders Can Find Additional Information” beginning on page 110.

At the Effective Time, Merger Sub will merge with and into the Company and the separate corporate existence of Merger Sub will cease. The Company will be the surviving corporation in the Merger and will continue to be a Delaware corporation after the Merger. At the Effective Time, the certificate of incorporation of the Company, as amended and restated to read identically to the certificate of incorporation of the Merger Sub as in effect immediately prior to the Effective Time, will be the certificate of incorporation of the Surviving Corporation; provided that it will be amended so that the name of the Surviving Corporation is “StoneMor Inc.” At the Effective Time, the bylaws of Merger Sub as in effect immediately prior to the Effective Time will be the bylaws of the Surviving Corporation.

The directors of Merger Sub immediately prior to the Effective Time will be the initial directors of the Surviving Corporation and will serve until the earlier of their death, resignation or removal in accordance with the Restated Certificate of Incorporation and the Restated Bylaws of the Surviving Corporation. Parent intends that, in addition to Andrew Axelrod, each of Spencer E. Goldenberg and David Miller will become directors of the Surviving Company in connection with the closing of the Merger. Unless otherwise determined by Parent, the officers of the Company immediately prior to the Effective Time will be the initial officers of the Surviving Corporation and will serve until their successors are duly elected or appointed and qualified or until the earlier of their death, resignation or removal in accordance with the Restated Certificate of Incorporation and the Restated Bylaws of the Surviving Corporation.

The closing of the Merger will take place electronically by the mutual exchange of signatures as promptly as practicable and no later than the second business day after the satisfaction or waiver of the conditions to closing provided for in the Merger Agreement (other than any condition that by its nature can only be satisfied by action taken at or immediately prior to the closing of the Merger, but subject to satisfaction of any such condition). The

Merger will become effective at the date and time when the Certificate of Merger is duly filed with and accepted by the Secretary of State of the State of Delaware or at such later date and time as may be agreed by the parties to the Merger Agreement in writing and specified in the Certificate of Merger in accordance with the relevant provisions of the DGCL.

At the Effective Time: