UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 16, 2017

 

 

StoneMor Partners L.P.

(Exact name of Registrant as Specified in Its Charter)

 

 

 

Delaware   001-32270   80-0103159

(State or other jurisdiction

of incorporation)

 

(Commission

file number)

 

(I.R.S. Employer

Identification No.)

 

3600 Horizon Boulevard Trevose, PA   19053
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code (215) 826-2800

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Appointment of R. Paul Grady as President and Chief Executive Officer and as a Member of the Board of Directors of StoneMor GP LLC

On May 16, 2017, StoneMor Partners L.P. (the “Partnership”) announced the appointment of R. Paul Grady as President, Chief Executive Officer and a member of the Board of Directors of StoneMor GP LLC (“StoneMor GP”), the general partner of the Partnership. Mr. Grady’s appointment in such capacities was effective as of May 17, 2017 (the “Effective Date”).

Mr. Grady, age 64, was most recently Interim Chief Executive Officer of NEOgas S.A., a clean energy provider of compressed natural gas, with operations in five countries, from September 2015 to April 2016 and served as member of its board of directors until December 2016. Prior to that, Mr. Grady was Vice President and Chief Operating Officer of AmeriGas Propane, Inc., the general partner of AmeriGas Partners, L.P., a NYSE-listed limited partnership and retail propane distributor, from March 2012 to January 2015, having previously served as Vice President – Operations of AmeriGas Propane, Inc. from January 2012. Prior to that, Mr. Grady served as President (2011 to 2012) and Senior Vice President and Chief Operating Officer (2006 to 2011) of Heritage Operating, L.P., a retail marketer of propane in the United States. Mr. Grady also served as Chief Operations Officer of Titan Propane LLC, a mid-size propane marketer, from 2005 to 2006. From 2003 to 2004, Mr. Grady served as President of Juice Bowl Products, Inc., a family-owned beverage bottling & citrus processing business. Mr. Grady also served as Senior Vice President and Chief Operating Officer (2000 to 2003), Senior Vice President – Operations (1999 to 2000) and Vice President – Sales and Operations (1995 to 1999) of AmeriGas Propane, Inc. Mr. Grady served as Director of Corporate Development of UGI Corporation, a Pennsylvania utility and propane marketer, from 1990 to 1995. Mr. Grady brings to the Board of Directors of StoneMor GP (the “Board”) extensive operating and managerial expertise in the context of master limited partnerships, as well as excellent leadership skills.

In connection with Mr. Grady’s appointment as President and Chief Executive Officer, StoneMor GP and Mr. Grady entered into an employment agreement, effective as of the Effective Date (the “Grady Employment Agreement”). In connection with the Grady Employment Agreement, Mr. Grady and StoneMor GP entered into an indemnification agreement (the “Grady Indemnification Agreement”), which is also effective as of the Effective Date.

The Grady Employment Agreement provides that Mr. Grady’s employment with StoneMor GP as President and Chief Executive Officer will commence on the Effective Date and will continue unless terminated by either party. The Grady Employment Agreement also provides that Mr. Grady will have such duties and authority as are customarily associated with such positions or as otherwise determined from time to time by the Board. In addition, the Grady Employment Agreement provides that StoneMor GP will nominate and re-nominate Mr. Grady as a member of the Board during the term of his employment, with his continued service in that role being subject to the discretion of the sole member of StoneMor GP.

 

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Mr. Grady’s initial base salary under the Grady Employment Agreement is $600,000 per year, which base salary is subject to annual review by the Board. Any decrease in base salary shall be made only to the extent StoneMor GP contemporaneously and proportionately decreases the base salaries of all of its senior executives.

The Grady Employment Agreement provides that Mr. Grady is eligible to receive an annual incentive cash bonus with respect to each fiscal year of StoneMor GP, provided that he will not be eligible to receive such bonus if he is not employed on the last day of the fiscal year to which such bonus relates and, further, he will not be eligible for such bonus unless other senior executive team members have also earned a bonus for such fiscal year. The amount of the cash bonus will be within a range of 0% to 150% of his base salary with respect to the applicable fiscal year. Specifically, the Grady Employment Agreement provides that Mr. Grady will be entitled to a bonus equal to 100% of his base salary in a given fiscal year upon achievement of goals at the target level established for the cash bonus for such fiscal year. Payments of a bonus in excess of 100% of his base salary are subject to the satisfaction of additional stretch goals established with respect to his cash bonus for such fiscal year. The goals to be established with respect to his cash bonus will be determined by the Executive Committee of the Board, in consultation with the Compensation Committee of the Board, in its sole discretion. With respect to fiscal year 2017, the Grady Employment Agreement provides that Mr. Grady will be eligible for a pro-rated cash bonus based upon the time Mr. Grady is employed by StoneMor GP during fiscal year 2017. In addition, the Grady Employment Agreement provides that, to the extent that the cash bonus payable to Mr. Grady with respect to the 2017 fiscal year, if any, is determined to exceed $300,000, only the amounts in excess of $300,000 shall be payable to Mr. Grady in cash.

The Grady Employment Agreement provides that, in lieu of all or a portion of any cash bonus with respect to the 2017 fiscal year, Mr. Grady will receive a grant of restricted common units in the Partnership equal to $300,000. Such restricted common units will vest, if at all, in equal monthly installments over the two year period following the date of grant and will have rights to distributions consistent with fully vested common units in the Partnership. The grant of such restricted common units will be made as promptly as practicable after the Partnership has filed all of its required reports under the Securities Exchange Act of 1934, as amended, and will be subject to such other terms and conditions set forth in an Executive Restricted Unit Agreement to be entered into between Mr. Grady and StoneMor GP at the time of grant.

Under the Grady Employment Agreement, Mr. Grady is also entitled to participate in the Partnership’s 2014 Long-Term Incentive Plan (the “LTIP”) for the 2017 fiscal year and each fiscal year thereafter, to the extent that StoneMor GP offers the LTIP to all senior executives of StoneMor GP. Mr. Grady’s participation in the LTIP with respect to the 2017 fiscal year and in any future fiscal year, if offered by StoneMor GP, shall be in an annual amount equal to 75% of his base salary, with 50% of such annual amount vesting in equal annual installments over three years and 50% of the annual amount vesting based upon attainment of performance goals as determined by the Executive Committee of the Board, in consultation with the Compensation Committee.

The Grady Employment Agreement also provides that Mr. Grady shall be entitled to a 4% profit participation in StoneMor GP, with the terms of such profit participation (including,

 

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but not limited to, vesting terms and distribution participation rights) to be finalized within 60 days following the Effective Date upon mutual agreement of Mr. Grady and StoneMor GP, and subject to such arrangements being structured in a manner that complies with the applicable requirements of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

StoneMor GP also agreed to reimburse Mr. Grady for the cost of a supplemental directors’ and officers’ insurance policy for up to $5,000,000. Further, StoneMor GP agreed to pay up to $10,000 in attorneys’ fees incurred by Mr. Grady in connection with the review, negotiation and documentation of the Grady Employment Agreement.

If Mr. Grady’s employment is terminated by StoneMor GP for “Cause” or by Mr. Grady without “Good Reason” or in the event of Mr. Grady’s death or “Disability” (as such terms are defined in the Grady Employment Agreement), Mr. Grady will be entitled to receive the following (together, the “Grady Accrued Benefits”): (i) any base salary for days actually worked through the date of termination; (ii) reimbursement of all expenses for which Mr. Grady is entitled to be reimbursed pursuant to the Grady Employment Agreement, but for which he has not yet been reimbursed; (iii) any vested accrued benefits under StoneMor GP’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 StoneMor GP or the Partnership; (v) any bonus or other incentive (or portion thereof) for any preceding completed fiscal year that has been awarded by StoneMor GP to Mr. Grady, but has not been received by him prior to the date of termination; and (vi) accrued but unused vacation, to the extent Mr. Grady is eligible in accordance with StoneMor GP’s policies.

If Mr. Grady’s employment is terminated by StoneMor GP without “Cause” or by Mr. Grady for “Good Reason” (as such terms are defined in the Grady Employment Agreement), and provided that Mr. Grady enters into a release as provided for in the Grady Employment Agreement, Mr. Grady would be entitled to receive, in addition to the Grady Accrued Benefits, the following: (i) payment of his base salary for a period of 18 months following the effective date of his termination, to be paid in equal installments in accordance with the normal payroll practices of StoneMor GP, commencing within 60 days following the date of termination, with the first payment including any amounts not yet paid between the date of termination and the date of the first payment and (ii) a pro-rata cash bonus for the fiscal year in which such termination occurs, if any, determined by StoneMor GP (subject to certain the restrictions as set forth above), which shall be paid at the same time that annual incentive cash bonuses are paid to other executives of StoneMor GP, but in no event later than March 15 of the fiscal year following the fiscal year in which the date of termination occurs.

In the event of a “Change in Control” (as such term is defined in the Grady Employment Agreement) all outstanding equity interests granted to Mr. Grady that are subject to time-based vesting provisions and that are not fully vested shall become fully vested as of the date of such Change in Control.

The Grady Employment Agreement also includes customary covenants running during Mr. Grady’s employment and for 18 months thereafter prohibiting solicitation of employees,

 

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directors, officers, associates, consultants, agents or independent contractors, customers, suppliers, vendors and others having business relationships with StoneMor GP and prohibiting Mr. Grady from directly or indirectly competing with StoneMor GP. The Grady Employment Agreement also contains provisions relating to protection of StoneMor GP’s property, its confidential information and ownership of intellectual property.

The Grady Employment Agreement also includes various other covenants and provisions customary for an agreement of this nature.

As noted above, in connection with the Grady Employment Agreement, StoneMor GP and Mr. Grady entered into the Grady Indemnification Agreement, the terms of which are consistent with the terms of the indemnification provided to the other directors of StoneMor GP and by StoneMor GP’s limited liability company agreement. StoneMor GP is required to indemnify Mr. Grady to the fullest extent of the law against liabilities, costs and expenses incurred by him in his capacity as a director, officer or agent of StoneMor GP. This indemnification is required unless there has been a final and non-appealable judgment by a court of competent jurisdiction determining that Mr. Grady acted in bad faith or engaged in fraud, willful misconduct or gross negligence. StoneMor GP is also required to indemnify Mr. Grady for criminal proceedings unless he acted with knowledge that his conduct was unlawful. Any such indemnification will be only out of the assets of StoneMor GP.

The foregoing summary of the Grady Employment Agreement and Grady Indemnification Agreement is not intended to be complete and is qualified in its entirety by reference to the Grady Employment Agreement and Grady Indemnification Agreement, copies of which are attached as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.

Appointment of Mark Miller as Chief Financial Officer and Senior Vice President of StoneMor GP LLC

On May 16, 2017, the Partnership announced the appointment of Mark Miller as Chief Financial Officer and Senior Vice President of StoneMor GP, effective immediately. Mr. Miller succeeds Sean McGrath, whose previously announced resignation as Chief Financial Officer is now effective.

Mr. Miller, age 57, has served as a consultant to StoneMor GP since February 2017. From October 2016 to February 2017, Mr. Miller provided consulting services to a distributor of flooring material. Mr. Miller was on sabbatical from full-time work endeavors from July 2015 to September 2016. From July 2012 through March 2015, Mr. Miller was Chief Financial Officer and Treasurer of CrossAmerica GP, LLC, the general partner of CrossAmerica Partners LP (formerly Lehigh Gas Partners LP), a NYSE-listed limited partnership and a wholesale and retail distributor of motor fuel and a leasee and subleasee of motor fuel retail distribution stores,

 

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convenience stores and gas stations. Thereafter, he assisted CrossAmerica for a transition period from March 2015 to June 2015. Prior to his experience with Cross America, Mr. Miller was Vice President of Acquisitions at Dunne Manning Inc. (formerly Lehigh Gas Corporation), where he managed acquisitions, divestitures, acquisition financing and working capital requirements since 2004. Prior to joining Dunne Manning Inc., Mr. Miller was the Chief Financial Officer for several middle market companies in various industries. Mr. Miller also spent six years with Deloitte & Touche LLP. Mr. Miller holds a Bachelor of Science degree in Accounting from Northeastern University and is a Certified Public Accountant.

In connection with Mr. Miller’s appointment as Chief Financial Officer and Senior Vice President, StoneMor GP and Mr. Miller entered into an employment agreement, effective as of May 16, 2017 (the “Miller Employment Agreement”). In connection with the Miller Employment Agreement, Mr. Miller and StoneMor GP entered into an indemnification agreement (the “Miller Indemnification Agreement”), which is also effective as of May 16, 2017.

The Miller Employment Agreement provides that Mr. Miller’s employment with StoneMor GP as Chief Financial Officer and Senior Vice President will commence on the Effective Date and will continue unless terminated by either party. The Miller Employment Agreement also provides that Mr. Miller will have such duties and authority as are customarily associated with such positions or as otherwise determined from time to time by the Board.

Mr. Miller’s initial base salary under the Miller Employment Agreement is $450,000 per year, which base salary is subject to annual review by the Board. Any decrease in base salary shall be made only to the extent StoneMor GP contemporaneously and proportionately decreases the base salaries of all of its senior executives.

The Miller Employment Agreement provides that Mr. Miller is eligible to receive an annual incentive cash bonus with respect to each fiscal year of StoneMor GP, provided that he will not be eligible to receive such bonus if he is not employed on the last day of the fiscal year to which such bonus relates and, further, he will not be eligible for such bonus unless other senior executive team members have also earned a bonus for such fiscal year. The amount of the cash bonus will be within a range of 0% to 112.5% of his base salary with respect to the applicable fiscal year. Specifically, the Miller Employment Agreement provides that Mr. Miller will be entitled to a bonus equal to 75% of his base salary in a given fiscal year upon achievement of goals at the target level established for the cash bonus for such fiscal year. Payments of a bonus in excess of 75% of his base salary are subject to the satisfaction of additional stretch goals established with respect to his cash bonus for such fiscal year. The goals to be established with respect to his cash bonus will be determined by the Executive Committee of the Board, in consultation with the Compensation Committee of the Board, in its sole discretion. With respect to fiscal year 2017, the Miller Employment Agreement provides that Mr. Miller will be eligible for a pro-rated cash bonus based upon the time Mr. Miller is employed by StoneMor GP during fiscal year 2017. In addition, the Miller Employment Agreement provides that, to the extent that the cash bonus payable to Mr. Miller with respect to the 2017 fiscal year, if any, is determined to exceed $100,000, only the amounts in excess of $100,000 shall be payable to Mr. Miller in cash.

The Miller Employment Agreement provides that, in lieu of all or a portion of any cash bonus with respect to the 2017 fiscal year, Mr. Miller will receive a grant of restricted common units in the Partnership equal to $100,000. Such restricted common units will vest, if at all, in equal monthly installments over the two year period following the date of grant and will have rights to distributions consistent with fully vested common units in the Partnership. The grant of

 

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such restricted common units will be made as promptly as practicable after the Partnership has filed all of its required reports under the Securities Exchange Act of 1934, as amended, and will be subject to such other terms and conditions set forth in an Executive Restricted Unit Agreement to be entered into between Mr. Miller and StoneMor GP at the time of grant.

Under the Miller Employment Agreement, Mr. Miller is also entitled to participate in the LTIP for the 2017 fiscal year and each fiscal year thereafter, to the extent that StoneMor GP offers the LTIP to all senior executives of StoneMor GP. Mr. Miller’s participation in the LTIP with respect to the 2017 fiscal year and in any future fiscal year, if offered by StoneMor GP, shall be in an annual amount equal to 50% of his base salary, with 50% of such annual amount vesting in equal annual installments over three years and 50% of the annual amount vesting based upon attainment of performance goals as determined by the Executive Committee of the Board, in consultation with the Compensation Committee. To the extent Mr. Miller’s employment terminates on account of Retirement (as defined in the Miller Employment Agreement) during a performance period applicable to a particular LTIP grant, the portion of such LTIP grant that is subject to performance goals shall be earned pro-rata based on actual performance and the number of months that Mr. Miller was employed during the performance period.

The Miller Employment Agreement also provides that Mr. Miller shall be entitled to a 1% profit participation in StoneMor GP, with the terms of such profit participation (including, but not limited to, vesting terms and distribution participation rights) to be finalized within 60 days following the Effective Date upon mutual agreement of Mr. Miller and StoneMor GP, and subject to such arrangements being structured in a manner that complies with the applicable requirements of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

StoneMor GP also agreed to reimburse Mr. Miller for the cost of a supplemental directors’ and officers’ insurance policy for up to $5,000,000. Further, StoneMor GP agreed to pay up to $10,000 in attorneys’ fees incurred by Mr. Miller in connection with the review, negotiation and documentation of the Miller Employment Agreement.

If Mr. Miller’s employment is terminated by StoneMor GP for “Cause” or by Mr. Miller without “Good Reason” or in the event of Mr. Miller’s death or “Disability” (as such terms are defined in the Miller Employment Agreement), Mr. Miller will be entitled to receive the following (together, the “Miller Accrued Benefits”): (i) any base salary for days actually worked through the date of termination; (ii) reimbursement of all expenses for which Mr. Miller is entitled to be reimbursed pursuant to the Miller Employment Agreement, but for which he has not yet been reimbursed; (iii) any vested accrued benefits under StoneMor GP’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 StoneMor GP or the Partnership; (v) any bonus or other incentive (or portion thereof) for any preceding completed fiscal year that has been awarded by StoneMor GP to Mr. Miller, but has not been received by him prior to the date of termination; and (vi) accrued but unused vacation, to the extent Mr. Miller is eligible in accordance with StoneMor GP’s policies.

If Mr. Miller’s employment is terminated by StoneMor GP without “Cause” or by Mr. Miller for “Good Reason” (as such terms are defined in the Miller Employment Agreement), and provided that Mr. Miller enters into a release as provided for in the Miller Employment Agreement, Mr. Miller would be entitled to receive, in addition to the Miller Accrued Benefits, the following: (i) payment of his base salary for a period of 12 months following the effective date of his termination, to be paid in equal installments in accordance with the normal payroll practices of StoneMor GP, commencing within 60 days following the date of termination, with the first payment including any amounts not yet paid between the date of termination and the date of the first payment and (ii) a pro-rata cash bonus for the fiscal year in which such termination occurs, if any, determined by StoneMor GP (subject to certain the restrictions as set

 

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forth above), which shall be paid at the same time that annual incentive cash bonuses are paid to other executives of StoneMor GP, but in no event later than March 15 of the fiscal year following the fiscal year in which the date of termination occurs.

In the event of a “Change in Control” (as such term is defined in the Miller Employment Agreement) all outstanding equity interests granted to Mr. Miller that are subject to time-based vesting provisions and that are not fully vested shall become fully vested as of the date of such Change in Control.

The Miller Employment Agreement also includes customary covenants running during Mr. Miller’s employment and for 12 months thereafter prohibiting solicitation of employees, directors, officers, associates, consultants, agents or independent contractors, customers, suppliers, vendors and others having business relationships with StoneMor GP and prohibiting Mr. Miller from directly or indirectly competing with StoneMor GP. The Miller Employment Agreement also contains provisions relating to protection of StoneMor GP’s property, its confidential information and ownership of intellectual property.

The Miller Employment Agreement also includes various other covenants and provisions customary for an agreement of this nature.

As noted above, in connection with the Miller Employment Agreement, StoneMor GP and Mr. Miller entered into the Miller Indemnification Agreement, the terms of which are consistent with the terms of the indemnification provided by StoneMor GP’s limited liability company agreement. StoneMor GP is required to indemnify Mr. Miller to the fullest extent of the law against liabilities, costs and expenses incurred by him in his capacity as an officer or agent of StoneMor GP. This indemnification is required unless there has been a final and non-appealable judgment by a court of competent jurisdiction determining that Mr. Miller acted in bad faith or engaged in fraud, willful misconduct or gross negligence. StoneMor GP is also required to indemnify Mr. Miller for criminal proceedings unless he acted with knowledge that his conduct was unlawful. Any such indemnification will be only out of the assets of StoneMor GP.

The foregoing summary of the Miller Employment Agreement and Miller Indemnification Agreement is not intended to be complete and is qualified in its entirety by reference to the Miller Employment Agreement and Miller Indemnification Agreement, copies of which are attached as Exhibits 10.3 and 10.4, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.

Appointment of Bob Sick as a Member of the Board of Directors of StoneMor GP LLC

On May 16, 2017, the Partnership announced the appointment of Bob Sick as a member of the Board, effective at the conclusion of its meeting on May 17, 2017, to serve until the earlier of his resignation, death or removal or until his successor has been duly elected and qualified. There has not been any decision as of the date of his appointment as to whether Mr. Sick will serve on any committees of the Board.

 

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Mr. Sick, age 57, has been serving as an Operating Director at American Infrastructure MLP Funds since January 2015. Prior to that, Mr. Sick was the sole member and Managing Director of White Oak Capital, LLC, which he formed in April 2004, through which he has served as a transition chief executive officer, board member, and senior adviser to more than 30 middle market companies, helping to lead them through management transitions, significant growth initiatives and other business transformations. From December 2013 through December 2014, he served as Chief Executive Officer of AutoNet Mobile Inc., a private company that makes wireless devices for use in moving vehicles. He has also served as a director of Safe Harbor Marinas LLC (September 2016 to present), Denbeste Water Solutions LLC (2014), Arrow Holdings LLC (June 2015 to present), Jacksonville Sound & Communications, Inc. (2015 to present), and Granite Holdings LLC (2015 to present), all of which are private companies. Mr. Sick brings to the Board significant executive leadership experience and experience in driving various strategic initiatives and creating long term value.

Mr. Sick will participate in StoneMor GP’s standard independent director compensation program. Pursuant to this program, Mr. Sick will receive the following compensation in connection with his service on the Board:

 

    annual retainer of $80,000 for service as a Board member, which fee may be received in cash, restricted phantom units or a combination of cash and restricted phantom units at Mr. Sick’s election, provided that a minimum of $20,000 of such retainer be paid in restricted phantom units;

 

    a meeting fee of $2,000 for each meeting of the Board attended in person and $1,500 for each committee meeting attended in person; and

 

    a fee of $500 for participation in each telephone Board call that is greater than one hour, but less than two hours, and $1,000 for participation in each telephone Board call that is two hours or more.

In addition, Mr. Sick and StoneMor GP entered into an indemnification agreement (the “Sick Indemnification Agreement”), the terms of which are consistent with the terms of the indemnification provided to the other directors of StoneMor GP and by StoneMor GP’s limited liability company agreement. StoneMor GP is required to indemnify Mr. Sick to the fullest extent of the law against liabilities, costs and expenses incurred by him in his capacity as a director or agent of StoneMor GP. This indemnification is required unless there has been a final and non-appealable judgment by a court of competent jurisdiction determining that Mr. Sick acted in bad faith or engaged in fraud, willful misconduct or gross negligence. StoneMor GP is also required to indemnify Mr. Sick for criminal proceedings unless he acted with knowledge that his conduct was unlawful. Any such indemnification will be only out of the assets of StoneMor GP.

The foregoing summary of the Sick Indemnification Agreement is not intended to be complete and is qualified in its entirety by reference to the Sick Indemnification Agreement, a copy of which is attached as Exhibit 10.5, to this Current Report on Form 8-K and is incorporated by reference herein.

 

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Item 7.01 Regulation FD Disclosure

On May 16, 2017, the Partnership issued a press release announcing the appointments of Messrs. Grady, Miller and Sick. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Item 7.01, including Exhibit 99.1 incorporated by reference herein, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be incorporated by reference into any filing made by the Partnership pursuant to the Securities Act of 1933, as amended, or the Exchange Act, other than to the extent that such filing incorporates any or all of such information by express reference thereto.

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits.

 

Exhibit
Number

  

Description

10.1    Employment Agreement dated May 16, 2017 by and between StoneMor GP LLC and R. Paul Grady. *
10.2    Indemnification Agreement dated May 16, 2017 by and between StoneMor GP LLC and R. Paul Grady. *
10.3    Employment Agreement effective May 16, 2017 by and between StoneMor GP LLC and Mark Miller. *
10.4    Indemnification Agreement effective May 16, 2017 by and between StoneMor GP LLC and Mark Miller. *
10.5    Indemnification Agreement effective May 16, 2017 by and between StoneMor GP LLC and Bob Sick. *
99.1    Press Release dated May 16, 2017. **

 

* Filed herewith.
** Furnished herewith.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: May 22, 2017     STONEMOR PARTNERS L.P.
    By:    StoneMor GP LLC
      its general partner
    By:   

/s/ Austin K. So

      Austin K. So
      General Counsel, Chief Legal Officer & Secretary


EXHIBIT INDEX

 

Exhibit
Number

  

Description

10.1    Employment Agreement dated May 16, 2017 by and between StoneMor GP LLC and R. Paul Grady. *
10.2    Indemnification Agreement dated May 16, 2017 by and between StoneMor GP LLC and R. Paul Grady. *
10.3    Employment Agreement effective May 16, 2017 by and between StoneMor GP LLC and Mark Miller. *
10.4    Indemnification Agreement effective May 16, 2017 by and between StoneMor GP LLC and Mark Miller. *
10.5    Indemnification Agreement effective May 16, 2017 by and between StoneMor GP LLC and Bob Sick. *
99.1    Press Release dated May 16, 2017. **

 

* Filed herewith.
** Furnished herewith.

 

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Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “ Agreement ”) is entered into on May 16, 2017 and shall become effective on May 17, 2017 (the “ Effective Date ”), by and between StoneMor GP LLC, a Delaware limited liability company (the “ Company ”) and the General Partner of StoneMor Partners, L.P. (the “ Partnership ”), and R. Paul Grady (the “ Executive ”). The Company and Executive are each sometimes referred to herein as “ Party ,” and both of them, together, are sometimes referred to herein as the “ Parties .”

WHEREAS, the Company wishes to engage Executive for the position of President and Chief Executive Officer (“ CEO ”) of the Company and Executive wishes to accept such employment with the Company, on the terms and conditions set forth in this Agreement, and

WHEREAS, the Company, the Partnership and each of their parents, affiliates, subsidiaries, divisions and related companies and entities, and their respective predecessors, successors and assigns, now existing or hereafter created, are engaged in the deathcare industry and provide a broad scope of products and services through the ownership, development, and operation of cemeteries and funeral homes (the “ Business ”), and

NOW, THEREFORE , in consideration of the facts, mutual promises and covenants contained herein and for other good and valuable consideration, and intending to be legally bound hereby, the Parties agree as follows:

1.     Employment . The Executive’s employment with the Company as President and CEO shall commence on the Effective Date and shall continue unless terminated by either Party.

2.     Position .

(a)    During his employment, the Executive shall serve as the President and CEO of the Company, and shall have such duties and authority as are customarily associated with such position or as otherwise determined from time to time by the Board of Directors of the Company (the “ Board ”). The Executive has also been elected as a member of the Board effective on the Effective Date, and agrees to serve in such capacity. In addition, during Executive’s employment, the Company shall cause the Executive to be nominated and re-nominated as a member of the Board, as applicable, it being understood that the Executive’s continued service on the Board is subject to the discretion of the sole member of the Company. For the avoidance of doubt, in the event Executive’s employment terminates, for any reason and regardless of whether initiated by Executive or the Company, Executive shall cease serving as a member of the Board effective as of the last date of employment, or such other earlier date as designated by the sole member of the Company.


(b)    During his employment, the Executive will devote his full business time and best efforts to the performance of his duties hereunder and will perform such duties diligently, faithfully and to the best of his abilities and will not engage in any other business, profession, or occupation, for compensation or otherwise, which would conflict with the performance of Executive’s duties, either directly or indirectly, without the prior written consent of the Board. It shall not be deemed a violation of the foregoing for the Executive to (i) act or serve as an unpaid director, trustee or committee member of any civic or charitable organization; (ii) manage his personal, financial and legal affairs, including passive investments of not more than 5% of other public companies; or (iii) serve as a director of an organization that is not a civic or charitable organization with the prior consent of the Board, which consent shall not be unreasonably withheld, in each instance so long as such activities individually or in the aggregate do not conflict with the performance of Executive’s duties, either directly or indirectly, or create a business or fiduciary conflict or otherwise violate this Agreement. The activities on Exhibit [A] are hereby initially approved under this Section 2(b), subject to Executive’s compliance with the requirements of this Section 2(b).

(c)    The Executive shall be principally based in the Company’s Trevose, Pennsylvania office. The Executive acknowledges and agrees that the Executive’s duties hereunder from time to time will include, without limitation, reasonable travel, including travel to locations within and outside of the United States, to attend meetings and other functions as the performance of the Executive’s duties hereunder may require.

(d)    To the extent Executive is appointed to any officer or board position of the Company or of any related or affiliated entity, Executive agrees that upon termination of Executive’s employment with the Company, regardless of the reason, Executive will immediately resign such position(s) if the Board requests that he do so.

(e)    Executive affirms that he has disclosed to the Company any agreement he has signed with any current and/or any prior employer which contains any post-termination restrictions of any kind and understands that he must comply with any such restrictions. . Further, Executive is not subject to any agreement with his current and/or any prior employer which would interfere with his ability to perform the duties under this Agreement. Executive affirms that he will not disclose to or use for the benefit of the Company any confidential and/or proprietary information which he acquired in the course of his employment with his current or any prior employer, regardless of whether there is an agreement with his current or any prior employer protecting such confidential and/or proprietary information.


3.     Compensation .

(a)     Base Salary . The Company shall pay the Executive base salary, subject to annual review by the Board (such base salary, as so adjusted in accordance with the normal annual review practices for senior executives of the Company, the “Base Salary”), at the annual rate of Six Hundred Thousand Dollars ($600,000), less applicable taxes and required withholdings, payable in accordance with the Company’s usual payroll practices. Any decrease in the Executive’s Base Salary shall be made only if the Company contemporaneously and proportionately decreases the base salaries of all senior executives of the Company.

(b)     Bonus .

(i)    The Executive shall be eligible to receive an annual incentive cash bonus for each Fiscal Year (“ FY ”) of the Company (the “ Bonus ”). The Bonus for each FY shall be within a range of zero percent (0%) to one hundred fifty percent (150%) of the Executive’s Base Salary during the applicable FY (but prorated for the 2017 FY based on the number of calendar days between the Effective Date and December 31, 2017), and shall be based on specific, individual and company goals set by the Executive Committee of the Board, in consultation with the Compensation Committee, in its sole discretion and communicated to the Executive no later than January 31st of each FY; however, with respect to the 2017 FY Bonus, the individual and company goals shall be communicated to the Executive promptly following the Effective Date. The Executive shall be entitled to a Bonus equal to one hundred percent (100%) of Base Salary in a given FY upon achievement of the goals at target established for the Executive’s Bonus for such FY. Payments of a Bonus in excess of 100% of the Executive’s Base Salary shall be subject to the satisfaction of additional stretch goals established for the Executive’s Bonus for such FY, as determined by the Executive Committee of the Board, in consultation with the Compensation Committee, in its sole discretion. Notwithstanding the foregoing and except as provided in Section 6(c) below, Executive shall not be eligible for any Bonus if (a) he is not employed on the last day of the FY to which the Bonus relates and (b) Executive shall not be eligible for such Bonus unless other senior executive team members have also earned a bonus for such FY.

(ii)    In lieu of all or a portion of any cash Bonus for the 2017 FY under Section 3(b)(i), the Executive shall receive, a grant of restricted common LP units in the Partnership equal to Three Hundred Thousand Dollars ($300,000) (“ Restricted Units ”), which shall vest in equal monthly installment over the two year period following the grant and have rights to distributions consistent with fully vested common LP units in the Partnership and be subject to such other terms and conditions set forth in the grant agreement attached hereto as Exhibit [B] . The grant of Restricted Units under this Section 3(b)(ii) will be made as promptly as practicable after the Partnership has filed all of its required reports under the Securities Exchange Act of 1934. To the extent that the Bonus payable to the Executive for the 2017 FY under Section 3(b)(i) above, if any, is determined to exceed $300,000, only the amounts in excess of $300,000 shall be payable to the Executive in cash in accordance with the terms of Section 3(b)(i).


(iii)    Any Bonus amounts payable under this Agreement shall be paid no later than March 15th of the year following the year with respect to which the Bonus was earned and shall be less any taxes and other applicable withholdings.

(c)     Long Term Incentive Plan . The Executive shall be entitled to participate in the Partnership’s long-term incentive plan (the “ LTIP ”) for the 2017 FY and each FY thereafter, to the extent that the Company offers the LTIP to all senior executives of the Company. The Executive’s participation in the LTIP in 2017 FY and in any future FYs, if offered by the Company, shall be in an annual amount equal to seventy-five percent (75%) of the Executive’s Base Salary, with 50% of such annual amount vesting in equal annual installments over three years and 50% of the annual amount vesting based upon attainment of performance goals as determined by Executive Committee of the Board, in consultation with the Compensation Committee.

(d)     Profit Participation . The Executive shall be entitled to a four percent (4%) profit participation in the “General Partner”, with the terms of such profit participation (including, but not limited to, vesting terms and distribution participation rights) to be finalized within sixty (60) days following the Effective Date upon mutual agreement of the Parties, and subject to such arrangements being structured in a manner that complies with the applicable requirements of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder (the “Code”).

(e)     Change in Control . In the event of a Change in Control (as defined below), all outstanding equity interests granted to the Executive by the Company that are subject to time-based vesting provisions and that are not fully vested (including, but not limited to, the Restricted Units and LTIP set forth above) shall become fully vested as of the date of such Change in Control. For purposes of this Section 3(e), “ Change in Control ” means, and shall be deemed to have occurred upon one or more of the following events:

(i)    the members of the Company approve, in one or more related transactions, a plan of complete liquidation of the Company; or

(ii)    the sale or other disposition by either the Company or the Partnership of all or substantially all of its assets.

For the avoidance of doubt, the parties specifically agree that there shall be no acceleration in a dilution change of control.

4.     Benefits . The Executive shall be entitled to participate in the Company’s health, life insurance, disability, dental, retirement, savings, flexible spending accounts and other employee benefit and fringe benefit plans, programs and arrangements, if any, on the same basis as benefits are generally made available to other senior executives of the Company. The Executive shall be entitled to four (4) week’s paid vacation per calendar year in accordance with the Company’s policy, pro-rated for the first calendar year.


5.     Business Expenses . Executive shall be eligible to be reimbursed for reasonable and documented business expenses incurred by the Executive in the performance of his duties hereunder in accordance with Company policies on expense reimbursement in effect from time to time.

6.     Post-Termination Payments and Benefits .

(a)    Either Party can terminate this Agreement and the employment relationship between the Parties at any time and for any or no reason. The Company may terminate this Agreement and the Executive’s employment without “Cause,” (as defined below) upon thirty (30) days’ written notice, which the Company may waive, in its sole discretion, by paying Executive his Base Salary for such notice period and the Company may accelerate the effective date of Executive’s termination; provided, however, the Company may terminate Executive’s employment immediately without any prior notice in the event of “Cause” or Executive’s death. The Executive may terminate this Agreement and the Executive’s employment with “Good Reason” (as defined below) within the timeframes set forth in the definition of Good Reason below, or without Good Reason upon thirty (30) days’ written notice, which the Company may waive, in its sole discretion, by paying Executive his Base Salary for such thirty (30) day notice period and the Company may accelerate the effective date of Executive’s termination.

(b)    Executive (or his estate) shall not be eligible for any severance, payments or benefits from the Company subsequent to the termination of his employment if Executive voluntarily resigns other than for Good Reason, dies, is terminated by the Company for Cause or incurs a Disability (as defined below) other than (i) any Base Salary for days actually worked through the date of termination; (ii) reimbursement of all expenses for which the Executive is entitled to be reimbursed pursuant to Section 5 above, but for which he has not yet been reimbursed; (iii) any vested accrued benefits under the Company’s employee benefit plans 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 or the Partnership, including, but not limited to, the Restricted Units and any LTIP participation, (v) any bonus or other incentive (or portion thereof) for any preceding completed FY that has been awarded by the company to the Executive, but has not been received prior to the date of termination and (vi) accrued but unused vacation, to the extent Executive is eligible in accordance with Company policy (together, the “Accrued Obligations”). The Accrued Obligations shall be paid as soon as practicable after the date of termination.

(c)    In addition to the Accrued Obligations, if the Executive’s employment is terminated by the Company without “Cause” or by the Executive for Good Reason, and provided that Executive complies with Section 6(g) below (Release), Executive shall be entitled to Severance Benefits, which shall consist of: (A) payment of Executive’s Base Salary for a period of eighteen (18) months (“ Severance Period ”) following the effective date of Executive’s termination (“ Severance Pay ”), to be paid in


equal installments in accordance with the normal payroll practices of the Company, commencing within sixty (60) days following the date of termination and the first payment will include any amounts not yet paid between the date of termination and the date of the first payment and (B) a pro-rata Bonus for the FY of the Company in which such termination occurs, if any, determined by the Company and subject to the restrictions as set forth in Section 3(b)(i), which shall 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 of the FY following the FY in which the date of termination occurs.

(d)    For purposes of this Section 6, “ Cause ,” shall mean the Company’s determination that Executive engaged in one or more of the following:

(i)    Executive’s willful misconduct or gross negligence in the performance of his duties which materially adversely affects the reputation or business activities of the Company or the Partnership; provided that the Company shall give the Executive notice of any such commission describing in reasonable detail the circumstances constituting Cause and the Executive shall have thirty (30) days following such notice to cure any commission (if susceptible to cure) to the reasonable satisfaction of the Board;.

(ii)    Executive’s conviction of a felony (other than traffic offenses) or conviction of any crime involving fraud, embezzlement, theft, or moral turpitude, that, in the reasonable opinion of the Board, renders the Executive’s continued employment damaging or detrimental to the Company and/or Partnership or potentially damaging or detrimental to the Company and/or Partnership; or

(iii)    Executive’s willful and repeated failure to perform lawful directives of the Board; provided that the Company shall give the Executive notice of any such failure describing in reasonable detail the circumstances constituting Cause and the Executive shall have thirty (30) days following such notice to cure any failure.

(e)    For purposes of this Agreement, “Good Reason” means the occurrence of one or more of the following without the Executive’s consent, other than on account of the Executive’s Disability:

(i)    Executive is removed from the Board;

(ii)    A material change in the geographic location at which Executive must perform services under this Agreement (which, for purposes of this Agreement, means relocation of the headquarters of the Company at which Executive is principally employed to a location that increases the Executive’s commute to work by more than fifty (50) miles); or

(iii)    A material diminution in the Executive’s Base Salary (other than an across the board reduction in accordance with Section 3(a)).


The Executive must provide written notice of termination for Good Reason to the Company within ninety (90) days after the event constituting Good Reason. The Company shall have a period of thirty (30) days in which it may correct the act or failure to act that constitutes the grounds for Good Reason as set forth in the Executive’s notice of termination. If the Company does not correct the act or failure to act, the Executive will have sixty (60) days to terminate employment for Good Reason.

(f)    For purposes of this Agreement, “ Disability ” shall mean that the Executive becomes eligible for benefits under the Company’s disability plan or is determined by the Company, in good faith, to be unable to perform the essential functions of his position, regardless of the reason, with or without a reasonable accommodation, for a total (whether consecutive or cumulative) of twenty-six (26) weeks in any rolling fifty-two (52) week period by reason of an illness or injury, or in the event that the Company receives a medical or other certification that the Executive will not be able to perform the essential functions of his position permanently or for the indefinite future.

(g)     Release .

(i)    Executive’s entitlement to Severance Benefits in accordance with Section 6(c) above is contingent upon Executive signing, without properly revoking, a Severance Agreement and General Release and Waiver of Claims upon the termination of Executive’s employment, substantially in the form attached hereto as Exhibit [C], with such changes that are reasonably recommended by Company’s legal counsel to comply with applicable law. For the avoidance of doubt, the Executive is entitled to the Accrued Obligations, regardless of whether Executive signs or revokes the Severance Agreement and General Release and Waiver of Claims.

(ii)    The Severance Benefits described in Section 6(c) are subject to deductions and withholdings required by applicable law.

(iii)    The Severance Benefits described in Section 6(c) are also contingent upon Executive complying with and continuing to comply with Executive’s obligations set forth in Sections 7, 8, 9 and 10 of this Agreement.

7.     Company Property . Executive agrees that all documents, information and equipment of any kind furnished to Executive by the Company, or developed by Executive on behalf of the Company, or at the Company’s direction or for the Company’s use or otherwise in connection with Executive’s employment hereunder, are and shall remain the sole property of the Company, including but not limited to, data, reports, proposals, lists, specifications, drawings, blueprints, sketches, material, computer programs, software, customer information and records, business records, price lists or information, samples, or any other materials or electronic data. Upon termination of employment (or earlier, upon request of the Company), and as a condition precedent to Executive receipt of Severance Benefits under this Agreement, Executive shall return all such Company property to the Company, retaining no copies.


8.     Confidential Information .

(a)    Without the prior written consent of the Board, except as shall be necessary in the performance of Executive’s assigned duties, Executive shall not disclose the Company’s Confidential Information (as hereinafter defined) to any third party or use the Company’s Confidential Information for Executive’s direct or indirect benefit or the direct or indirect benefit of any third party, and Executive shall maintain in strict confidence, both during and after Executive’s employment, the confidentiality of any and all Company Confidential Information.

(b)    For purposes of this Agreement, the Company’s “ Confidential Information ” means any information (written, oral or stored in any information storage and/or retrieval medium or device) that the Company treats as confidential or proprietary, including, but not limited to, all of the Company’s know how, trade secrets, technical processes, designs and design projects, inventions and research projects, pricing and business strategies and policies, operational methods, marketing and/or strategic plans, business studies; business development plans, financial information (including but not limited to regarding the budget, compensation strategy, forecasts, analyses, operating budget and indebtedness), information with respect to Company’s employees and independent contractors, including, but not limited to, their skills, abilities, assignments, performance, compensation, and benefits, as well as the nature and other terms and conditions of their relationship with the Company, customer lists, price lists, contract terms, vendor contract terms, investigations, documents and/or records protected by federal, state and/or local law and other trade secrets, proprietary data or information or confidential data or information not generally known by or readily accessible to the public. Executive’s obligations under this section apply during and after Executive’s employment with the Company and survive the termination of Executive’s employment.

(c)    Subject to subsection (d) below, in the event Executive receives a request or demand, orally, in writing, electronically or otherwise, for the disclosure or production of confidential and/or proprietary information which Executive acquired in the course of Executive’s employment (regardless of whether Executive believes the information is Confidential Information as described above), Executive must notify immediately, in writing, the Company. Any and all documents relating to the request or demand shall be included with the notification. Executive shall wait a minimum of ten (10) days (or the maximum time permitted by such legal process, if less) after sending the letter before making a disclosure or production to give the Company time to determine whether the disclosure or production involves confidential and/or proprietary information, in which event the Company may seek to prohibit and/or restrict the production and/or disclosure and/or to obtain a protective order with regard thereto. If the request or demand is in conjunction with judicial, administrative, arbitration or other adversarial proceedings, copies of all correspondence regarding the request or demand shall be included with the information sent to the Company in accordance with this section.


(d)    Nothing in this Agreement is intended to or shall be interpreted: (i) to restrict or otherwise interfere with Executive’s obligation to testify truthfully in any forum; (ii) to restrict or otherwise interfere with Executive’s right and/or obligation to contact, cooperate with, provide information in confidence to, report possible violations of federal, state or local law, ordinance or regulation--or testify or otherwise participate in any action, investigation or proceeding of--any government agency, entity or commission (including but not limited to the EEOC, the Department of Justice, the Securities and Exchange Commission, the Congress and any Agency Inspector General ) or otherwise taking action or making disclosures that are protected under the whistleblower provisions of any federal, state or local law, ordinance or regulation, including, but not limited to, Rule 21F-17 promulgated under the Securities Exchange Act of 1934, as amended. Executive is entitled to make reports and disclosures or otherwise take action under this section without prior authorization from or subsequent notification to the Company; or (iii) to disclose any information or produce any documents as is required by law or legal process.

(e)    In addition, the Defend Trade Secrets Act of 2016 (the “ Act ”) provides that: (1) An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that – (A) is made – (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. The Act further provides that: (2) An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual – (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.

9.     Restrictive Covenants .

(a)     Non-Solicitation . Executive agrees that, during Executive’s employment and for a period of eighteen (18) months after the termination of Executive’s employment with the Company, regardless of the reason and whether initiated by Executive or the Company. Executive shall not, for Executive’s own benefit or for the benefit of any third-party, directly or indirectly, in any capacity (as an employee, independent contractor, owner, partner or otherwise) participate in any of the following:

(i)    Solicit, induce, or encourage any prospective employee, director, officer, associate, consultant, agent or independent contractor of the Company not to establish an employment, contractual or other relationship with the Company or any current employee, director officer, associate, consultant, agent or independent contractor of the Company to terminate such person’s employment, contractual or other relationship with the Company.


(ii)    Employ or establish a business relationship with or encourage or assist any person or entity to employ or establish a business relationship with, any person who is employed by or has a business relationship with the Company or who was employed by or had a business relationship with the Company at any time during Executive’s employment and/or during the eighteen (18) month period immediately following Executive’s termination of employment.

(iii)    Direct or do any act or thing which may interfere with or adversely affect the relationship (contractual or otherwise) of the Company with any Customer, vendor, investor, or supplier of the Company, or otherwise induce or attempt to induce any such Customer, vendor, investor or supplier not to do business with, cease doing business with, reduce or otherwise limit its business with the Company. For purposes of this provision, the term “ Customer ” means any person or entity for whom the Company is providing any goods or services or has provided goods or services during the twelve (12) month period immediately preceding Executive’s termination of employment, and any person or entity with whom the Company was communicating, at any point during the twelve (12) month period immediately preceding Executive’s termination of employment, to provide goods or services, in any state or marketing area in which the Company is doing business or is qualified to do business.

(b)     Non-Compete . Executive agrees that, during Executive’s employment with the Company and for a period of eighteen (18) months after the termination of Executive’s employment with the Company, regardless of the reason and whether initiated by Executive or the Company, Executive shall not, for Executive’s own benefit or for the benefit of any third-party, directly or indirectly, in any capacity (as an employee, independent contractor, owner, partner or otherwise) engage in any business activity, be employed by or otherwise be associated with (as an employee, independent contractor, owner, partner or otherwise) any person or entity which, at the time of Executive’s termination, Competes (as defined below) in any way with the business activities of the Company. The term “ Competes ” as used in this Section 9(b) shall mean any person or entity that engages in, directly or indirectly, any Business of the type or character engaged in or competitive with that conducted by the Company in any state or marketing area in which the Company is doing business or is qualified to do business at the time of the termination of Executive’s employment or at any time during the twenty-four (24) month period prior to the termination of Executive’s employment. Executive acknowledges that these restrictions on competition are fair because, in the position of President and Chief Executive Officer, Executive will have knowledge of and access to all business practices and information, without limitation to a specific geography, department or customer. However, this Section 9(b) shall not preclude Executive from owning up to 5% of a publicly traded company.


10.     Intellectual Property .

(a)    Any and all work, writings, inventions, improvements, concepts, ideas, modifications, methods, discoveries, formula, trade secrets, trademarks, domain names, copyright, know-how, processes, procedures, techniques and the like (all of the above collectively referred to herein as the “ Intellectual Property ”), whether or not suitable for patent, trademark or copyright, which Executive has made, created, conceived, discovered, enhanced, developed or reduced to practice, either solely or jointly with others, at any time during Executive’s employment with the Company, whether or not during working hours, and whether or not at the request or upon the suggestion of the Company, and which (i) relate to the business, work or activities of the Company and/or its affiliates, or (ii) result from or are suggested by the carrying out of Executive’s duties relating to Executive’s employment with the Company or from or by any information that Executive may receive as an employee of the Company shall be the sole and exclusive property of the Company. Executive shall not be entitled to any additional or special compensation or reimbursement regarding any and all Intellectual Property or intellectual property rights. Nothing herein shall be construed as a license to Executive by the Company to use any materials protected by copyright, trademark or other intellectual property rights.

(b)    With respect to all work or Intellectual Property which qualify as “work(s) made for hire” under 17 U.S.C. §101, Executive and the Company agree by this written instrument that, for the purposes of Title 17 of the United States Code, the Company shall be the “person for whom the work is prepared,” and that, any other written agreement between the Parties notwithstanding, the Company shall be considered the sole author of, and shall own all right, title in and to the copyrights in, such works. In this respect, all work or Intellectual Property created by Executive within the scope of this Agreement shall be considered a “work made for hire” under the United States copyright law (17 U.S.C. §101 et seq.) and any other laws of the United States or Foreign Countries and made under the course of this Agreement. Even if any Intellectual Property, work or other intellectual property rights, by operation of law or otherwise, may not be considered a “work made for hire,” Executive agrees to irrevocably assign, and hereby does irrevocably assign to the Company, all right, title and interest in and to any Intellectual Property or work, including all intellectual property rights or proprietary rights arising under any United States or International laws.

(c)    Executive hereby assigns, transfers and conveys to the Company all of Executive’s right, title and interest in and to any and all such Intellectual Property, and agrees to take all such actions as may be requested by the Company at any time and with respect to any such Intellectual Property, to confirm or evidence such assignment, transfer and conveyance. Furthermore, at any time and from time to time, upon the request of the Company, Executive shall execute and deliver to the Company any and all instruments, documents and papers, give evidence and do any and all other acts that, in the opinion of counsel for the Company, are or may be necessary or desirable to document such assignment, transfer and conveyance or to enable the Company to file and prosecute applications for and to acquire, maintain and enforce any and all patents, trademark registrations or copyrights under United States or foreign law with respect to any such


Intellectual Property, or to obtain any extension, validation, reissue, continuance or renewal of any such patent, trademark or copyright. The Company shall be responsible for the preparation of any such instruments, documents and papers and for the prosecution of any such proceedings and shall reimburse Executive for all reasonable expenses incurred by Executive in compliance with the provisions of this section.

11.     Equitable Relief

(a)    The Executive acknowledges and agrees that he will, in his role of President and Chief Executive Officer, have access to, receive, learn, develop and/or conceive information that is confidential and/or proprietary to the Company and/or related to all aspects of its Business, including but not limited to financials, customers and contracts and will be required to develop, maintain, and/or supervise technology, products and customer relationships and intellectual property that is valuable to the Company and which must be kept in strict confidence to protect the Business and the Company’s and the Partnership’s competitive position in the marketplace and that such information would be useful to the Company and the Partnership’s competitors for indefinite periods of time. Executive further acknowledges and agrees that the Company and the Partnership would be irreparably harmed by Executive’s subsequent work with, for, or as a competitor of the Company or the Partnership due to the possibility that there would be inadvertent or other disclosures of the confidential and/or proprietary information or that there would be improper interference with its valuable customer relationships and goodwill. Executive acknowledges and agrees that the provisions of Sections 8, 9 and 10, including the subject matter and temporal and/or geographic scope, are reasonable and necessary to protect the interests of the Company. If the Executive breaches any of the provision of Sections 8, 9 and 10, the Company shall have the right and remedy, without regard to any other available remedy, to (i) have the provisions specifically enforced by any court of competent jurisdiction, and (ii) have issued an injunction or other equitable relief, including restraining any such breach of the provisions, without posting of a bond (unless a bond is required by law and in which case the Parties shall jointly request a nominal bond); it being agreed that any breach of any of the Confidentiality or Restrictive Covenants provisions would cause irreparable and material harm, loss, and damage to the Company, the amount of which cannot not be readily determined and as to which the Company will not have an adequate remedy at law or in damages.

(b)    If any court determines that any of the Restrictive Covenants, or any one of them or any parts thereof, is invalid or unenforceable, then the court making such determination shall have the authority to narrow the provision or part of the provision as necessary to make it enforceable and the provision or part of the provision shall then be enforceable in its/their narrowed form. In the event that any provision or part of any provision is determined to be legally invalid or unenforceable by any court and cannot be modified to be enforceable, the affected provision or part of such provision shall be stricken, and the remaining provisions or parts of such provisions and its enforceability shall remain unaffected thereby.


(c)    Executive agrees and acknowledges that the Confidentiality and Restrictive Covenants provisions contained in Sections 8, 9 and 10 do not preclude the Executive from earning a livelihood, nor do they unreasonably impose limitations on the Executive’s ability to earn a living. In the event that Executive violates any of the covenants in Section 9 and the Company commences legal action for injunctive or other equitable relief, the Company shall have the benefit of the full period of the Restrictive Covenant such that the restriction shall have the duration of eighteen (18) months computed from the date the Executive ceased violation of the covenants, either by order of the court or otherwise

(d)    For all purposes of Sections 7, 8, 9, 10 and 11, the “Company” shall be construed to include the Company, the Partnership and each of their respective parents, affiliates, subsidiaries, divisions and related companies and entities, and their respective predecessors, successors and assigns, now existing or hereafter created. The provisions of Sections 7, 8, 9, 10 and 11 shall survive the termination of Executive’s employment, without regard to the reasons therefore and whether initiated by the Company or by Executive.

12.     Arbitration . All disputes, claims, or controversies arising out of or in connection with Executive’s business relationship with the Company, the Partnership and each of their parents, affiliates, subsidiaries, divisions and related companies and entities, and their respective predecessors, successors and assigns, now existing or hereafter created, including but not limited to under this Agreement (except claims by Executive or the Company with respect to Sections 8, 9 and 10 herein, including for injunctive relief or declaratory judgment) and including but not limited to those concerning workplace discrimination and all other statutory claims, shall be finally settled by arbitration before a single arbitrator who shall be a member of and recognized by the American Arbitration Association (the “ AAA ”) in accordance with the AAA National Rules for the Resolution of Employment Disputes then in effect. Any arbitration commenced by either Party shall be held in Trevose, Pennsylvania. The requirement to arbitrate does not apply to the filing of an employment related claim, dispute or controversy with a federal, state or local administrative agency, including the EEOC and the Securities and Exchange Commission. However, Executive understands that by entering into this Agreement, Executive is waiving Executive’s right to have a court and a jury determine Executive’s rights, including under federal, state and local statutes prohibiting employment discrimination, including sexual harassment and discrimination on the basis of age, sex, race, color, religion, national origin, disability, veteran status or any other factor prohibited by governing law. The decision of the arbitrator shall contain findings of fact and conclusions of law, shall be final and binding, and shall not be appealable upon any grounds other than as permitted pursuant to the Federal Arbitration Act. The award, in the arbitrator’s discretion, may include reasonable attorney’s fees and costs. Judgment on the award may be entered, confirmed and enforced in any court of competent jurisdiction. There shall be no right or authority for any disputes, claims or controversies to be arbitrated on a class action or collective action basis or together with the claim of any other person. The Parties


acknowledge and agree that in connection with any such arbitration, the AAA filing fee, arbitrator’s costs and administrative expenses shall be borne by the Company (unless Executive initiates the arbitration, in which case his portion of the AAA filing fee shall be $200).

13.     Code Section 409A .

(a)    The intent of the Parties is that payments and benefits under this Agreement comply with, or be exempt from, Section 409A of the Code (“ Section 409A ”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. Severance benefits under the Agreement are intended to be exempt from Section 409A under the “short-term deferral” exception, to the maximum extent applicable, and then under the “separation pay” exception, to the maximum extent applicable. In no event shall the Company be liable for any additional tax, interest or penalty that may be imposed on Executive under Section 409A or damages for failing to comply with Section 409A; provided that amounts are paid in accordance with the terms set forth herein.

(b)    A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”

(c)    If the Executive is a Specified Employee, within the meaning of Section 409A, on the date of his “separation from service,” as defined in Treasury Regulation Section 1.409A-1(h), any amounts payable on account of such separation from service that constitute “deferred compensation” within the meaning of Section 409A shall be paid on the date that is six (6) months following such separation from service, or the date of Executive’s death, if earlier, but only to the extent necessary to avoid the imposition of additional taxes under Section 409A.

(d)    To the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Section 409A, (i) all such expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by Executive, (ii) any such right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (iii) no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.


(e)    For purposes of Section 409A, Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.

(f)    Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes “nonqualified deferred compensation” for purposes of Section 409A be subject to offset by any other amount unless otherwise permitted by Section 409A.

14.     Miscellaneous .

(a)     Indemnification . To the fullest extent permitted by law and the Company’s operating agreement, the Company shall promptly indemnify Executive for all amounts (including, without limitation, judgments, fines, settlement payments, losses, damages, costs and expenses (including reasonable attorneys’ fees)) incurred or paid by the Executive in connection with any action, proceeding, suit or investigation arising out of or relating to the performance by the Executive of services for (or acting as a fiduciary of any employee benefit plans, programs or arrangements of) the Company, including as a director, officer or employee of the Company. The Company also agrees to maintain a director’s and officers’ liability insurance policy covering the Executive. In addition, the Company will reimburse the Executive for the cost of a supplemental D&O insurance policy for up to Five Million Dollars ($5,000,000). The Company and the Executive shall enter into an indemnification agreement, substantially in the form attached hereto as Exhibit [D].

(b)     Attorneys Fees for Negotiation of this Agreement . The Company shall pay up to Ten Thousand Dollars ($10,000) in attorneys’ fees incurred by the Executive in connection with the review, negotiation and documentation of this Agreement, upon presentation of appropriate receipts for such fees.

(c)     Governing Law; Consent to Jurisdiction . This Agreement shall be governed and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to conflict of law provisions. Any action permitted to be brought by this Agreement, pursuant to and consistent with Section 11 of this Agreement, shall be brought in the state or federal courts in the Eastern District of Pennsylvania and Executive consents to such jurisdiction.

(d)     Recitals. The introductory paragraph and the recitals set forth above are incorporated herein by reference.

(e)     Entire Agreement . This Agreement contains the entire understanding of the Parties with respect to the subject matter herein. There are no restrictions, agreements, promises, warranties, covenants, or undertakings between the Parties with respect to the subject matter herein other than those expressly set forth herein. This Agreement may not be altered, modified, or amended except by written instrument


signed by the Parties hereto. Without limiting the foregoing, this Agreement supersedes and extinguishes all existing employment and similar or related agreements and promises between the Executive and the Company, the Partnership and its affiliates and related entities.

(f)     No Waiver . The failure of a Party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such Party’s rights or deprive such Party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

(g)     Severability . If any provision or part or subpart of any provision in this Agreement or the application thereof is construed to be overbroad, then the court making such determination shall have the authority to narrow the provision or part or subpart of the provision as necessary to make it enforceable and the provision or part or subpart of the provision shall then be enforceable in its/their narrowed form. Moreover, each provision or part or subpart of each provision in this Agreement is independent of and severable from each other. In the event that any provision or part or subpart of any provision in this Agreement is determined to be legally invalid or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, the affected provision or part or subpart of such provision shall be stricken from the Agreement, and the remaining provisions or parts or subparts of such provisions of the Agreement and its enforceability shall remain unaffected thereby

(h)     Assignment . This Agreement shall not be assignable by the Executive. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company, within fifteen (15) days of such succession, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform if no such succession had taken place and Executive agrees that the covenants in Sections 8, 9, 10 and 11 of the Agreement shall likewise be enforced. Upon such assignment and assumption, the rights and obligations of the Company hereunder shall become the rights and obligations of such assignee.

(i)     Successors; Binding Agreement . This Agreement shall inure to the benefit of and be binding upon the Company’s and the Executive’s personal or legal representatives, executors, administrators, successors, and assigns.

(j)     Notice . Any notice, consent, request, or other communication made or given in accordance with this Agreement shall be in writing and shall be deemed to have been duly given (x) in the case of personal delivery, when actually received, (y) in the case of delivery by email or telecopy, on the date of such delivery or, (z) if mailed, three (3) days after mailing by registered or certified mail, return receipt requested, or one (1) business day after mailing by a nationally recognized express mail delivery service, with instructions for next-day delivery, addressed to his residence in the case of the Executive


and/or to the Company’s General Counsel, Chief Legal Officer and Secretary, with a copy to, or at such other address or person’s attention as each may specify by notice to the other. Executive hereby agrees to promptly provide the Company with written notice of any change in Executive’s address for as long as this Agreement remains in effect.

(k)     Withholding Taxes . The Company may withhold from any amounts payable under this Agreement such federal, state, local, or foreign taxes as may be required to be withheld pursuant to any applicable law or regulation.

(l)     Counterparts . This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

(m)     Review . Executive acknowledges that he has carefully read the foregoing Agreement, that he fully understands the meaning and intent of this document, that he has signed this Agreement voluntarily and knowingly, that he had a full opportunity to consult with his advisors prior to executing this Agreement, and that he intends to be legally bound by the promises contained in this Agreement.

[Signature Page Follows]


IN WITNESS HEREOF , intending to be legally bound, the Parties hereto have duly executed this Agreement as of the day and year first written above.

 

EXECUTIVE :

/s/ R. Paul Grady

R. Paul Grady
COMPANY :
StoneMor GP LLC

By:

/s/ Robert B. Hellman, Jr.

Robert B. Hellman, Jr.

Chairman of the Board


EXHIBIT A

OUTSIDE ACTIVITIES

 

  Member of the Board of Directors of Inheritance of Hope

 

  Member of the Advisory Council at Stetson University


EXHIBIT B

RESTRICTED UNIT AGREEMENT

See Attached


[FORM SUBJECT TO CHANGES BY COMPENSATION COMMITTEE

APPLICABLE TO ALL RECIPIENTS]

EXECUTIVE RESTRICTED UNIT AGREEMENT

UNDER THE

STONEMOR PARTNERS L.P. LONG-TERM INCENTIVE PLAN

This Restricted Unit Agreement (the “Agreement”) entered into as of [insert], 2017 (the “Agreement Date”), by and between StoneMor GP LLC (the “Company”), the general partner of and acting on behalf of StoneMor Partners L.P., a Delaware limited partnership (the “Partnership”) and R. Paul Grady, an executive of the Company (the “Participant”).

BACKGROUND:

In order to make certain awards to key employees, directors and consultants of the Company and its Affiliates, the Company maintains on behalf of the Partnership the StoneMor Partners L.P. 2014 Long-Term Incentive Plan (the “Plan”). The Plan is administered by a Committee (as defined in the Plan) of the Board of Directors (“Board”) of the Company. The Committee has determined to grant to the Participant, pursuant to the terms and conditions of the Plan, an award (the “Award”) of Restricted Units (as defined in the Plan), but only effective upon and conditioned on satisfying time vesting conditions set forth in this Agreement. The Participant has determined to accept such Award. Any initially capitalized terms and phrases used in this Agreement, but not otherwise defined herein, shall have the respective meanings ascribed to them in the Plan.

NOW, THEREFORE, the Company and the Participant, each intending to be legally bound hereby, agree as follows:

ARTICLE 1

AWARD OF RESTRICTED UNITS

1.1     Grant of Units and Vesting . The Participant is hereby granted the following Units under the Plan, but only effective upon and conditioned on satisfying the applicable vesting conditions contained herein, which will permit the Participant receive the following number of Units of the Partnership:

 

Date of Grant

  

[insert], 2017

Total Number of Units

   [$300,000/closing price] Units

Units vest in equal monthly installments over the two (2) year period following the Date of Grant.

Certificates for Units shall be issued to the Participant upon the vesting of any Units, subject to the provisions of the Plan, including, but not limited to, Sections 6(d) and 8(f) of the Plan, and further subject to the Participant paying, or making suitable arrangements to pay, all applicable foreign, federal, state and local taxes, as more fully provided in Section 2.3 hereof, not later than the period permitted by Regulation 1.409A-1(b)(4) entitled “Short-term deferrals” and any successor guidance under the Code.


1.2     Forfeiture . All unvested Units hereunder are subject to the forfeiture provisions of Section 1.4 hereof and to the clawback provision referenced in Section 2.2 hereof.

1.3     Unit Distribution Rights (“UDRs”) . The unvested Units shall be entitled to receive distributions made by the Partnership to holders of common units. Any UDR payments will be made to the Participant on or promptly following the date on which the distributions are otherwise paid to the holders of common units; provided, however, in no event shall the distribution payment be made later than 30 days following the date on which the Partnership pays such distributions to the holders of common units generally.

1.4     Forfeiture of Unvested Units Upon Termination of Employment . In the event of the termination of the employment of the Participant (whether voluntary or involuntary and regardless of the reason for the termination, or for no reason whatsoever) with the Company or its Affiliates, all Units which have not vested on the date of such termination shall be deemed to be automatically forfeited, unless the Participant’s employment is on that date transferred to the Company or another Affiliate. If a Participant’s employment is with an Affiliate and that entity ceases to be an Affiliate, the Participant’s employment will be deemed to have terminated when the entity ceases to be an Affiliate unless the Participant transfers employment to the Company or its remaining Affiliates. Nothing contained herein shall be deemed to amend or otherwise modify any employment agreement between the Company and the Participant.

1.5     Nonalienation of Benefits . Participant shall not have the right to sell, assign, transfer or otherwise convey or encumber in whole or in part the unvested Units under this Agreement, and the right to receive any payment hereunder shall not be subject to attainment, lien or other involuntary encumbrance.

ARTICLE 2

GENERAL PROVISIONS

2.1     No Right Of Continued Service . The receipt of this Award does not give the Participant, and nothing in the Plan or in this Agreement shall confer upon the Participant, any right to continue in the employment of the Company or any of its Affiliates. Nothing in the Plan or in this Agreement shall affect any right which the Company or any of its Affiliates may have to terminate the employment of the Participant.

2.2     Clawback . The Units and related UDRs are subject to clawback under any clawback policies which are adopted by the Committee, as amended from time to time, including, but not limited to, clawback listing requirements of the New York Stock Exchange imposed by SEC rules adopted pursuant to Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

2.3     Tax Withholding . The Participant is responsible to pay to the Company, or make suitable arrangements to pay, all applicable foreign, federal, state and local tax withholding as a condition to receiving certificates for the vested Units and as a condition to receiving payment of UDRs, not later than the period permitted by Regulation 1.409A-1(b)(4) entitled “Short-term

 

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deferrals” and any successor guidance under the Code. The Company shall withhold a sufficient number of Units to equal all income tax payments due from the Participant in connection with vested Units and receiving payment of UDRs and shall be responsible for paying such income tax payments on behalf of the Participant.

2.4     Administration . Pursuant to the Plan, the Committee is vested with conclusive authority to interpret and construe the Plan, to adopt rules and regulations for carrying out the Plan, and to make determinations with respect to all matters relating to this Agreement, the Plan and awards made pursuant thereto. The authority to manage and control the operation and administration of this Agreement shall be likewise vested in the Committee, and the Committee shall have all powers with respect to this Agreement as it has with respect to the Plan. Any interpretation of this Agreement by the Committee, and any decision made by the Committee with respect to this Agreement, shall be final and binding and conclusive in the absence of clear and convincing evidence that such decision was made in bad faith.

2.5     Effect of Plan; Construction . The entire text of the Plan is expressly incorporated herein by this reference and so forms a part of this Agreement. In the event of any inconsistency or discrepancy between the provisions of this Agreement and the terms and conditions of the Plan under which the Units are granted, the provisions of the Plan shall govern and prevail. The Units and this Agreement are each subject in all respects to, and the Company and the Participant each hereby agree to be bound by, all of the terms and conditions of the Plan, as the same may have been amended from time to time in accordance with its terms; provided, however, that no such amendment shall deprive the Participant, without the Participant’s consent, of any rights earned or otherwise due to the Participant hereunder.

2.6     Amendment, Supplement or Waiver . This Agreement shall not be amended, supplemented, or waived in whole or in part, except by an instrument in writing executed by the parties to this Agreement.

2.7     Captions . The captions at the beginning of each of the numbered Articles and Sections herein are for reference purposes only and will have no legal force or effect. Such captions will not be considered a part of this Agreement for purposes of interpreting, construing or applying this Agreement and will not define, limit, extend, explain or describe the scope or extent of this Agreement or any of its terms and conditions.

2.8     Governing Law . THE VALIDITY, CONSTRUCTION, INTERPRETATION AND EFFECT OF THIS AGREEMENT SHALL EXCLUSIVELY BE GOVERNED BY AND DETERMINED IN ACCORDANCE WITH THE LAW OF THE COMMONWEALTH OF PENNSYLVANIA (WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF).

2.9     Notices . All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing, sent by facsimile, by overnight courier or by registered or certified mail, postage prepaid and return receipt requested. Notices to the Company shall be deemed to have been duly given or made upon actual receipt by the Company. Such communications shall be addressed and directed to the parties listed below (except where this

 

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Agreement expressly provides that it be directed to another) as follows, or to such other address or recipient for a party as may be hereafter notified by such party hereunder:

 

(a)    if to the Partnership or Company:   StoneMor GP LLC
  3600 Horizon Blvd.
  Trevose, PA 19053, or its then current principal office
  Attention: Chief Financial Officer

(b)    if to the Participant: to the address for the Participant as it appears on the Company’s records.

2.10     Severability . If any provision hereof is found by a court of competent jurisdiction to be prohibited or unenforceable, it shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability, and such prohibition or unenforceability shall not invalidate the balance of such provision to the extent it is not prohibited or unenforceable, nor invalidate the other provisions hereof.

2.11     Entire Agreement; Counterparts; Construction . This Agreement constitutes the entire understanding and supersedes any and all other agreements, oral or written, between the parties hereto, in respect of the subject matter of this Agreement, and embodies the entire understanding of the parties with respect to the subject matter hereof. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original against any party whose signature appears thereon. The rule of construction that ambiguities in a document are construed against the draftsperson shall not apply to this Agreement.

2.12     Binding Agreement . The terms and conditions of this Agreement shall be binding upon, and inure to the benefit of, the estate, heirs, beneficiaries and other representatives of the Participant. The terms and conditions of this Agreement shall be binding upon the Company and the Partnership and their respective successors and assigns.

2.13     Arbitration . Any dispute or disagreement with respect to any portion of this Agreement or its validity, construction, meaning, performance, or Participant’s rights hereunder shall be settled by arbitration, conducted in Philadelphia, Pennsylvania, in accordance with the Commercial Arbitration Rules of the American Arbitration Association or its successor, as amended from time to time. However, prior to submission to arbitration the Participant will attempt to resolve any disputes or disagreements with the Partnership over this Agreement amicably and informally, in good faith, for a period not to exceed two weeks. Thereafter, the dispute or disagreement will be submitted to arbitration. At any time prior to a decision from the arbitrator(s) being rendered, the Participant and the Partnership may resolve the dispute by settlement. The Participant and the Partnership shall equally share the costs charged by the American Arbitration Association or its successor, but the Participant and the Partnership shall otherwise be solely responsible for their own respective counsel fees and expenses. The decision of the arbitrator(s) shall be made in writing, setting forth the award, the reasons for the decision and award and shall be binding and conclusive on the Participant and the Partnership. Further, neither Participant nor the Partnership shall appeal any such award. Judgment of a court of competent jurisdiction may be entered upon the award and may be enforced as such in accordance with the provisions of the award. THE PARTICIPANT HEREBY WAIVES ANY RIGHT TO A JURY TRIAL.

 

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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have executed this Agreement as of the day first above written.

 

STONEMOR PARTNERS L.P.
By:   StoneMor GP LLC
By:  

 

  Name:  

 

  Title:  

 

The Participant hereby acknowledges receipt of a copy of the foregoing Restricted Unit Agreement and the Plan, and having read them, hereby signifies the Participant’s understanding of, and the Participant’s agreement with, their terms and conditions. The Participant hereby accepts this Restricted Unit Agreement in full satisfaction of any previous written or verbal promises made to the participant by the Partnership or the Company or any of its other Affiliates with respect to awards under the Plan.

 

 

  (seal)    

 

R. Paul Grady       (Date)

 

     

 

Name of Primary Death Beneficiary       Relationship to Participant

 

     

 

Name of Contingent Death Beneficiary       Relationship to Participant

 

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EXHIBIT C

FORM OF SEVERANCE AGREEMENT AND GENERAL RELEASE

AND WAIVER OF CLAIMS

See Attached


FORM SEVERANCE AGREEMENT

SUBJECT TO CHANGES REASONABLY RECOMMENDED BY STONEMOR

COUNSEL TO COMPLY WITH APPLICABLE LAW

Severance Agreement and General Release and Waiver of Claims

This Agreement (“Agreement”) is made effective as of [INSERT DATE], by and between StoneMor GP LLC (“the Company”), the general partner of StoneMor Partners L.P. (the “Partnership”), and R. Paul Grady (“you”):

WHEREAS, you are currently employed as President and Chief Executive Officer of the Company pursuant to an Employment Agreement with an effective date of May 17, 2017 (“Employment Agreement”), a copy of which is attached hereto Exhibit “A.”

WHEREAS, you presently serve as a member of the Company’s Board of Directors (the “Board”);

WHEREAS, pursuant to Section 6(c) of the Employment Agreement, you are eligible for severance benefits in the event that your employment is terminated by the Company without Cause (as defined in the Employment Agreement) or by you for Good Reason (as defined in the Employment Agreement), conditioned upon your timely execution, without proper revocation, of this Agreement and compliance with its terms and conditions;

NOW, THEREFORE, in consideration of the mutual covenants set forth below, the parties agree as follows:

1.     General Terms of Separation of Employment .

(a)    Your last date of employment will be [INSERT DATE] (“Separation Date”). You will be paid your Base Salary through your last date of employment.

(b)    You will cease being a member of the Company’s Board effective as of [INSERT DATE]. If requested by the Company, you agree to execute, within two business days, any documentation necessary to reflect your removal as a member of the Board.

 

  2. Severance Benefits . If you sign this Agreement, agreeing to be bound by the Release in Paragraph 3 below and the other terms and conditions of this Agreement described herein, the Company will provide you with the severance benefits set forth Section 6(c) of your Employment Agreement (the “Severance Benefits”), which Section 6(c) is hereby incorporated by reference, subject to the conditions set forth in the Employment Agreement, including but not limited to Section 6(g)(i) through (iii) of the Employment Agreement.

 

  3. Release .

(a)    In exchange for the Separation Benefits, you release and forever discharge, to the maximum extent permitted by law, the Company and each of the other


“Releasees” as defined below, from any and all claims, causes of action, complaints, lawsuits, demands or liabilities of any kind, known or unknown by you, those that you may have already asserted or raised as well as those that you have never asserted or raised (collectively “Claims”) as described below which you, your heirs, agents, administrators or executors have or may have against the Company or any of the other Releasees arising out of or relating to any conduct, matter, event or omission existing or occurring before you sign this Agreement, and any monetary or other personal relief for such Claims, including but not limited to the following: (i) any Claims having anything to do with your employment (including the cessation of your employment) with the Company and/or any of its parent, subsidiary, related and/or affiliated companies; (ii) any Claims for severance, benefits, bonuses, incentive compensation, equity awards and interests, commissions and/or other compensation of any kind; (iii) any Claims for reimbursement of expenses of any kind; (iv) any Claims for attorneys’ fees or costs; any Claims under the Employee Retirement Income Security Act (“ERISA”); (v) any Claims of discrimination and/or harassment based on age, sex, pregnancy, race, religion, color, creed, disability, handicap, failure to accommodate, citizenship, marital status, national origin, ancestry, sexual orientation, gender identity, genetic information or any other factor protected by Federal, State or Local law as enacted or amended (such as Title VII of the Civil Rights Act of 1964, Section  1981 of the Civil Rights Act of 1866, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Americans with Disabilities Act, the Equal Pay Act, the Genetic Information Non-Discrimination Act and the Pennsylvania Human Relations Act) and any Claims for retaliation under any of the foregoing laws ; (vi) any Claims under the Family and Medical Leave Act; (vii) any Claims under the Pennsylvania constitution; (viii) any whistleblower or retaliation Claims; (ix) any Claims under your Employment Agreement; and/or (x) any other statutory, regulatory, common law or other Claims of any kind, including, but not limited to, Claims for breach of contract, libel, slander, fraud, wrongful discharge, promissory estoppel, equitable estoppel, violation of public policy, invasion of privacy, misrepresentation, emotional distress or pain and suffering.

(b)    Releasees. The term “Releasees” includes: the Company, the Partnership, and any and all of their respective direct or indirect parent, subsidiary, related and/ or affiliated companies, and each of their past and present employees, officers, directors, attorneys, owners, shareholders, members, managers, partners, insurers, benefit plan fiduciaries and agents, and all of their respective successors and assigns.

4.     Non-Released Claims . The Release in Paragraph 3 above does not apply to: any Claims for Accrued Obligations (as defined in the Employment Agreement); any Claims to require the Company to honor its commitments in this Agreement; any Claims as an equity holder in the common units of the Partnership (as your holdings in such common units are limited and/or restricted by the terms of the Employment Agreement or any exhibits thereto); any Claims to interpret or to determine the scope, meaning, enforceability or effect of this Agreement; any Claims that arise after you have signed this Agreement; any other Claims that cannot be waived by a private agreement; and any Claims for indemnification under the Employment Agreement, the Company’s operating agreement and/or the Indemnification Agreement between you and the Company. The Release is subject to and restricted by your Retained Rights in Paragraph 5.

 

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  5. Retained Rights .

(a)    Regardless of whether or not you sign this Agreement, nothing in this Agreement is intended to or shall be interpreted to restrict or otherwise interfere with: (i) your obligation to testify truthfully in any forum; (ii) your right and/or obligation to contact, cooperate with, provide information to, file a charge with, or otherwise participate in any proceeding of, any government agency, commission or entity (including, but not limited, to the EEOC and the SEC); or (iii) your right to disclose any information or produce any documents as is required by law or legal process. However, the Release does prevent you, to the maximum extent permitted by law, from obtaining any monetary or other personal relief for any of the Claims you have released in Paragraph 3 with regard to any charge you may file or which may be filed on your behalf.

(b)    Notwithstanding the foregoing, or any other provision of this Agreement, nothing in this Agreement is intended to prohibit you from reporting possible violations of federal, state or local law, ordinance or regulation to any governmental agency or entity, including, but not limited to, the Department of Justice, the SEC, the Congress and any agency Inspector General, or otherwise taking action or making disclosures that are protected under the whistleblower provisions of any federal, state or local law, ordinance or regulation, including, but not limited to, Rule 21F-17 promulgated under the Securities Exchange Act of 1934, as amended. You are entitled to make reports and disclosures or otherwise take action under this paragraph without prior authorization from or subsequent notification to the Company. Similarly, nothing set forth in this Agreement limits your right to receive a monetary award for information provided to the SEC pursuant to Rule 21F-17 promulgated under the Securities Exchange Act of 1934, as amended, or for information provided to the DOL or any other government agency, commission or entity. Further, nothing set forth in this Agreement limits your immunity and disclosure rights in Section 8(e) of the Employment Agreement which is hereby incorporated by reference.

 

  6. Adequacy of Consideration . You acknowledge and agree that the Company’s Severance Benefits under Paragraph 2 above constitute adequate and sufficient consideration to support your Release above and fully compensate you for Claims you are releasing.

 

  7. Duty to Notify . In the event you receive a request or demand, orally, in writing, electronically or otherwise, for the disclosure or production of confidential information which you created or acquired in the course of your employment, you must notify immediately the Company’s General Counsel, Chief Legal Officer and Secretary by calling: (215)                      and notify him immediately in writing, via first class mail, at the following address: StoneMor GP LLC, 3600 Horizon Blvd., Trevose, PA 19053, enclosing a copy of the request or demand as well as any and all potentially responsive documents. You shall wait at least ten (10)  days (or the maximum time permitted by such legal process, if less) after sending the letter before making a disclosure or production to give the Company time to determine whether the disclosure or production involves confidential and/or proprietary information, in which event the Company may seek to prohibit and/or restrict the production and/or disclosure and/or to obtain a protective order. This obligation shall not apply in the event of requests or demands for confidential information from any government agency, commission or entity.

 

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  8. Non-Defamation .

(a)    You agree that you will not, directly or indirectly, make or ratify any defamatory comments or remarks as defined by law, in writing, orally or electronically, about the Company or any other Releasee (as defined in Paragraph 3 above) and their respective products and services. This restriction is subject to and limited by your Retained Rights in Paragraph 5.

(b)    The Company’s Board, Chief Financial Officer and General Counsel, Chief Legal Officer and Secretary, will not, directly or indirectly, make or ratify any defamatory comments or remarks as defined by law, in writing, orally or electronically, about you.

(c)    The restrictions in subparagraphs (a) and (b) of this Paragraph 8 are not intended to nor shall be interpreted to restrict or otherwise interfere with the Company’s Board’s, Chief Financial Officer’s and General Counsel, Chief Legal Officer and Secretary’s (individual and/or collective): (i) obligation and entitlement to testify truthfully in any forum; (ii) right and/or obligation to contact, cooperate with, provide information to, file a charge or other action with, or otherwise participate in any litigation and/or or other legal proceeding, including of, any government agency, commission or entity (including, but not limited, to the EEOC and the SEC), or (iii) right to disclose any information or produce any documents as is required by law or legal process.

9.     Post-Employment Restrictions . You remain legally bound by, and must comply with the terms, conditions and restrictions of, the non-competition, non-solicitation and confidentiality and other post-employment provisions set forth in Sections 7, 8, 9, 10 and 11 of the Employment Agreement, which survive the cessation of your employment and are hereby incorporated by reference.

 

  10. Cooperation Services . Both prior to and after the Separation Date, you agree to reasonably cooperate with and provide assistance to the Company (for purposes of this Paragraph 10, including the Partnership and any affiliates and/or related entities), without any additional compensation, if called upon by authorized agents of the Company or the Company’s attorneys for the purposes of the transition of your responsibilities as well as with regard to any lawsuit, claim, action, investigation, inquiry, administrative action or review or otherwise, that is currently pending or that may be brought against the Company, or in connection with any internal investigation by the Company. You agree to make yourself reasonably available for interviews, meetings, depositions, hearings and/or trials without the need for subpoena or assurances by the Company, providing any and all documents in your possession that relate to the proceedings, and providing assistance in locating any and all relevant notes and/or documents as necessary. Any cooperation shall be provided by you at reasonable times and locations, with as much advance notice as possible by the Company. In any circumstance, to the extent you are required to incur out-of-pocket expenses in connection with any cooperation that the Company may request of you (such as for travel), the Company will fully reimburse you for reasonable out-of-pocket expenses upon presentation of appropriate receipts.

 

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  11. Interpretation of Agreement . Nothing in this Agreement is intended as or shall be construed as an admission or concession of liability or wrongdoing by the Company or any other Releasee as defined above. This Agreement shall be governed by and construed in accordance with the laws of Pennsylvania and without the aid of any canon, custom or rule of law requiring construction against the draftsperson. If any provision of this Agreement or application thereof is adjudicated to be invalid or unenforceable by a court of competent jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application.

 

  12. Entire Agreement . This Agreement constitutes the entire agreement between the parties regarding the matters contained herein and supersedes any and all prior representations, agreements, written or oral, expressed or implied; except for the post-employment provisions and restrictions of your Employment Agreement, which survive the cessation of your employment and are incorporated herein by reference. This Agreement may not be modified or amended other than by an agreement in writing signed by both parties. This Agreement shall be binding upon and be for the benefit of the parties as well as your heirs and the Company’s successors and assigns.

13.     Acknowledgment . You acknowledge and agree that, subsequent to the cessation of your employment, you shall not be eligible for any payments from the Company or Company-paid benefits, except as expressly set forth in this Agreement.

14.     Tax Matters . To the extent that payments under this Agreement constitute nonqualified deferred compensation subject to Section 409A of the Code, the payments are intended to comply with Section 409A of the Code and any ambiguities in this Agreement shall be interpreted so as to comply. If you are a “specified employee” within the meaning of Code Section 409A(a)(2)(B)(i) at the time of your separation from service, any nonqualified deferred compensation subject to Section 409A that would otherwise have been payable under this Agreement as a result of, and within the first six (6) months following, your separation from service, will become payable six (6) months and one (1) day following the date of the Employee’s separation from service or, if earlier, the date of Employee’s death, if required by Section 409A. All references to “termination of employment,” “cessation of employment,” “retirement” and the like in this Agreement shall mean a “separation from service” within the meaning of Section 409A. Each payment under this Agreement shall be considered a separate payment for purposes of Section 409A. In no event may you directly or indirectly designate the calendar year of a payment under this Agreement. You acknowledge that neither the Company nor its attorneys have provided any tax advice to you.

 

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15.     Representations .

(a)    You agree and represent that: (a) you have read carefully the terms of this Agreement, including the General Release; (b) you have had an opportunity to and have been encouraged to review this Agreement, including the Release, with an attorney; (c) you understand the meaning and effect of the terms of this Agreement, including the waiver of Claims as set forth in the Release (subject to the limitations in Paragraph 4 above and your Retained Rights in Paragraph 5 above); (d) you were given a period of twenty-one (21) days [or forty-five (45) days if it is a group termination] to determine whether you wished to sign this Agreement and your decision to sign this Agreement and waive any and all Claims in Paragraph 3 above is of your own free and voluntary act without compulsion of any kind; (e) no promise or inducement not expressed in this Agreement has been made to you, (f) you understand that you are waiving your Claims as set forth in Paragraph 3 above, including, but not limited to, Claims for age discrimination under the Age Discrimination in Employment Act (subject to the limitations in Paragraph 4 above and your Retained Rights in Paragraph 5 above); and (g) you have adequate information to make a knowing and voluntary waiver of any and all Claims as set forth in Paragraph 3 above.

(b)    If you sign this Agreement, you will retain the right to revoke it for seven (7) days. If you revoke this Agreement, you are indicating that you have changed your mind and do not want to be legally bound by this Agreement. The Agreement shall not be effective until after the Revocation Period has expired without your having revoked it. To revoke this Agreement, you must send a certified letter to the Company’s General Counsel, Chief Legal Officer and Secretary at the following address: StoneMor Partners L.P., 3600 Horizon Blvd., Trevose, PA 1905. The letter must be post-marked within seven (7) days of your execution of this Agreement. If the seventh day is a Sunday or federal holiday, then the letter must be post-marked on the following business day.

IN WITNESS WHEREOF, the Company and you have executed this Agreement intending to be legally bound:

 

      StoneMor GP LLC

 

R. Paul Grady

    By:  

 

      Name:  

 

      Title:  

 

Date:  

 

    Date:  

 

 

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EXHIBIT D

FORM INDEMNIFICATION AGREEMENT

See Attached


[Filed as Exhibit 10.2 to this Current Report on Form 8-K and incorporated by reference herein.]

Exhibit 10.2

INDEMNIFICATION AGREEMENT

THIS AGREEMENT, shall be effective as of May 16, 2017, between StoneMor GP LLC, a Delaware limited liability company (the “Company”), and the undersigned (“Indemnitee”).

WHEREAS, the Company has adopted a Limited Liability Company Agreement (the “LLC Agreement”) providing for indemnification of the Company’s directors and officers to the fullest extent authorized by the Delaware Limited Liability Company Act (the “State Statute”); and

WHEREAS, the LLC Agreement and State Statute contemplate that contracts and insurance policies may be entered into with respect to indemnification of directors and officers; and

WHEREAS, there are questions concerning the adequacy and reliability of the protection which might be afforded to directors and officers from acquisition of policies of Directors and Officers Liability Insurance (“D&O Insurance”), covering certain liabilities which might be incurred by directors or officers in the performance of their services to the Company; and

WHEREAS, it is reasonable, prudent and necessary for the Company to obligate itself contractually to indemnify Indemnitee so that he will serve or continue to serve the Company free from undue concern that he will not be adequately protected; and

WHEREAS, Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on condition that he be so indemnified;

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

1.    Definitions. As used in this Agreement:

(a)    The term “Proceeding” shall include any threatened, pending or completed action, suit, inquiry or proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil, criminal, administrative, arbitrative or investigative nature, in which Indemnitee is or will be involved as a party, as a witness or otherwise, by reason of the fact that Indemnitee is or was a director, officer or agent of the Company, by reason of any action taken by him or of any inaction on his part while acting as a director, officer or agent of the Company or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, limited liability company or other enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification or reimbursement can be provided under this Agreement; provided that any such action, suit or proceeding that is brought by Indemnitee against that company or directors or officers of the Company, other than an action brought by Indemnitee to enforce his rights under this Agreement, shall not be deemed a Proceeding without prior approval by a majority of the Board of Directors of the Company.


(b)    The term “Expenses” shall include, without limitation, any judgments, fines and penalties against Indemnitee in connection with a Proceeding; amounts paid by Indemnitee in settlement of a Proceeding; and all attorneys’ fees and disbursements, accountants’ fees, private investigation fees and disbursements, retainers, court costs, transcript costs, fees of experts, fees and expenses of witnesses, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements, or expenses, reasonably incurred by or for Indemnitee in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in a Proceeding or establishing Indemnitee’s right of entitlement to indemnification for any of the foregoing.

(c)    References to “other enterprise” shall include employee benefit plans; references to “Fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer or agent of the Company that imposes duties on, or involves services by, such director, officer or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interest of the Company” as referred to in this Agreement.

(d)    The term “substantiating documentation” shall mean copies of bills or invoices for costs incurred by or for Indemnitee, or copies of court or agency orders or decrees or settlement agreements, as the case may be, accompanied by a sworn statement from Indemnitee that such bills, invoices, court or agency orders or decrees or settlement agreements, represent costs or liabilities meeting the definition of “Expenses” herein.

(e)    The terms “he” and “his” have been used for convenience and mean “she” and “her” if Indemnitee is a female.

2.    Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify Indemnitee against Expenses to the fullest extent authorized or permitted by law (including the applicable provisions of the State Statute). The phrase “to the fullest extent permitted by law” shall include, but not be limited to (i)  to the fullest extent permitted by any provision of the State Statute that authorizes or permits additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the State Statute and (ii)  to the fullest extent authorized or permitted by any amendments to or replacements of the State Statute adopted after the date of this Agreement that increase the extent to which a limited liability company may indemnify its directors or officers. Any amendment, alteration or repeal of the State Statute that adversely affects any right of Indemnitee shall be prospective only and shall not limit or eliminate any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment or repeal.

3.    Additional Indemnity. The Company hereby further agrees to hold harmless and indemnify Indemnitee against Expenses incurred by reason of the fact that Indemnitee is or was a director, officer or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust,

 

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limited liability company or other enterprise, including, without limitation, any predecessor, subsidiary or affiliated entity of the Company, provided that the Indemnitee shall not be indemnified and held harmless if there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Agreement, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or gross negligence, or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful. The termination of any Proceeding by judgment, order of the court, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not, of itself, create a presumption that Indemnitee acted in bad faith or engaged in fraud, willful misconduct or gross negligence, or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful.

4.    Choice of Counsel. If Indemnitee is not an officer of the Company, he, together with the other directors who are not officers of the Company (the “Outside Directors”), shall be entitled to employ, and be reimbursed for the fees and disbursements of, counsel separate from that chosen by Indemnitees who are officers of the Company. The principal counsel for Outside Directors (“Principal Counsel”) shall be determined by majority vote of the Outside Directors, and the Principal Counsel for the Indemnitees who are not Outside Directors (“Separate Counsel”) shall be determined by majority vote of such Indemnitees. The obligation of the Company to reimburse Indemnitee for the fees and disbursements of counsel hereunder shall not extend to the fees and disbursements of any counsel employed by Indemnitee other than Principal Counsel or Separate Counsel, as the case may be, unless, in the opinion of other counsel for Indemnitee, concurred in by Principal Counsel or Separate Counsel, as the case may be, Indemnitee may have defenses available to him that are in addition to or different from those of the other Indemnitees such that there is a substantial possibility that Principal Counsel of Separate Counsel, as the case may be, will have a conflict of interest in representing Indemnitee.

5.    Advances of Expenses. Expenses (other than judgments, penalties, fines and settlements) incurred by Indemnitee shall be paid by the Company, in advance of the final disposition of the Proceeding, within 10 days after receipt of Indemnitee’s written request accompanied by substantiating documentation and Indemnitee’s written affirmation that he has met the standard of conduct for indemnification and a written undertaking to repay such amount to the extent it is ultimately determined that indemnitee is not entitled to indemnification. No objections based on or involving the question whether such charges meet the definition of “Expenses,” including any question regarding the reasonableness of such Expenses, shall be grounds for failure to advance to such Indemnitee, or to reimburse such Indemnitee for, the amount claimed within such 10-day period, and the undertaking of Indemnitee set forth in Section  7 hereof to repay any such amount to the extent it is ultimately determined that Indemnitee is not entitled to indemnification shall be deemed to include an undertaking to repay any such amounts determined not to have met such definition.

6.    Right of Indemnitee to Indemnification Upon Application; Procedure Upon Application. Any indemnification under this Agreement, other than pursuant to Section  5 hereof, shall be made no later than 45 days after receipt by the Company of the written request of Indemnitee, accompanied by substantiating documentation, unless a determination is made within said 45-day period by (1)  the Board of Directors by a majority vote of a quorum consisting of directors who are not or were not parties to such Proceeding, (2)  by a committee of

 

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the Board of Directors designated by majority vote of the Board of Directors, even though less than a quorum, (3) if there are no such directors, or if such directors so direct, independent legal counsel in a written opinion or (4)  by the members, that Indemnitee has not met the relevant standards for indemnification set forth in Section  3 hereof.

The right to indemnification or advances as provided by this Agreement shall be enforceable by Indemnitee in any court of competent jurisdiction. The burden of proving that indemnification is not appropriate shall be on the Company. Neither the failure of the Company (including its Board of Directors, committee thereof, independent legal counsel or members) to have made a determination prior to the commencement of such action that indemnification is proper in the circumstances because Indemnitee has met the applicable standards of conduct, nor an actual determination by the Company (including its Board of Directors, committee thereof, independent legal counsel or members) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

7.      Undertaking by Indemnitee. Indemnitee hereby undertakes to repay to the Company any advances of Expenses pursuant to Section  5 hereof to the extent that it is ultimately determined that Indemnitee is not entitled to indemnification.

8.      Indemnification Hereunder Not Exclusive. The indemnification and advancement of expenses provided by this Agreement shall not deemed exclusive of any other rights to which Indemnitee may be entitled under the LLC Agreement, the State Statute, D&O Insurance, any agreement, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office; provided, however, that this Agreement supersedes all prior written indemnification agreements between the Company (or any predecessor thereof) and Indemnitee with respect to the subject matter hereof other than as set forth in the Employment Agreement entered into by and between the Company and the Indemnitee contemporaneously herewith. However, Indemnitee shall reimburse the Company for amounts paid to him pursuant to such other rights to the extent such payments duplicate any payments received pursuant to this Agreement.

9.      Continuation of Indemnity. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is a director and/or officer of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, limited liability company or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding.

10.      Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such Expenses to which Indemnitee is entitled.

11.      Settlement of Claims. The Company shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without the Company’s written consent. The Company shall not settle any Proceeding in any manner which

 

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would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent. Neither the Company nor Indemnitee will unreasonably withhold their consent to any proposed settlement. The Company shall not be liable to indemnify Indemnitee under this Agreement with regard to any judicial award if the Company was not given a reasonable and timely opportunity, at its expense, to participate in the defense of such action.

12.    Enforcement.

(a)    The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on the Company hereby in order to induce Indemnitee to serve as a director and/or officer of the Company, and acknowledges that Indemnitee is relying upon this Agreement in continuing as a director and/or officer.

(b)    In the event Indemnitee is required to bring any action or other proceeding to enforce rights or to collect money due under this Agreement and is successful in such action, the Company shall reimburse Indemnitee for all of Indemnitee’s Expenses in bringing and pursuing such action.

13.    Governing Law; Binding Effect; Amendment and Termination.

(a)    This Agreement shall be interpreted and enforced in accordance with the laws of the State of Delaware.

(b)    This Agreement shall be binding upon the Company, its successors and assigns, and shall inure to the benefit of Indemnitee, his heirs, personal representatives and assigns and to the benefit of the Company, its successors and assigns.

(c)    No amendment, modification, termination or cancellation of this Agreement shall be effective unless in writing signed by the Company and Indemnitee.

14.      Severability. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable (a) the validity, legality and enforceability of the remaining provisions of this Agreement shall not be in any way affected or impaired thereby, and (b) to the fullest extent possible, the provisions of this Agreement shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. Each section of this Agreement is a separate and independent portion of this Agreement. If the indemnification to which Indemnitee is entitled as respects any aspect of any claim varies between two or more sections of this Agreement, that section providing the most comprehensive indemnification shall apply.

15.      Notice. Notice to the Company shall be directed to StoneMor GP LLC, 3600 Horizon Boulevard, Trevose, Pennsylvania 19053, Attention: General Counsel. Notice to Indemnitee shall be directed to the address set forth under his signature hereto. The foregoing addresses may be changed from time to time by the addressee upon notice to the other parties.

Notice shall be deemed received three days after the date postmarked if sent by prepaid mail, properly addressed.

 

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

 

STONEMOR GP LLC
By:  

/s/ Robert B. Hellman, Jr.

Name:   Robert B. Hellman, Jr.
Title:   Chairman of the Board
INDEMNITEE

/s/ R. Paul Grady

Name:   R. Paul Grady
Address:   6 Wicklow Court
  Wayne, PA 19087

 

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Exhibit 10.3

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “ Agreement ”) is entered into on May 22, 2017, and shall be effective on May 16, 2017 (the “ Effective Date ”), by and between StoneMor GP LLC, a Delaware limited liability company (the “ Company ”) and the General Partner of StoneMor Partners, L.P. (the “ Partnership ”), and Mark Miller (the “ Executive ”). The Company and Executive are each sometimes referred to herein as “ Party ,” and both of them, together, are sometimes referred to herein as the “ Parties .”

WHEREAS, Executive had been retained by the Company as a consultant for the Company, pursuant to a Consulting Agreement between Mark Miller & Associates, LLC and the Company, effective March 3, 2017 (the “ Consulting Agreement ”), and

WHEREAS Mark Miller & Associates, LLC and the Company agreed to terminate the Consulting Agreement, effective May 16, 2017, waiving any notice requirements; and

WHEREAS , the Company wishes to engage Executive for the position of Chief Financial Officer (“ CFO ”) and Senior Vice President of the Company as of the Effective Date and Executive wishes to accept such employment with the Company, on the terms and conditions set forth in this Agreement; and

WHEREAS, the Parties contemplated entering into this Agreement which memorializes the Parties’ understanding of the terms and conditions of Executive’s employment as of the Effective Date, including Executive’s agreement to the restrictive covenants contained herein; and

WHEREAS, the Company, the Partnership and each of their parents, affiliates, subsidiaries, divisions and related companies and entities, and their respective predecessors, successors and assigns, now existing or hereafter created, are engaged in the deathcare industry and provide a broad scope of products and services through the ownership, development, and operation of cemeteries and funeral homes (the “ Business ”), and

NOW, THEREFORE , in consideration of the facts, mutual promises and covenants contained herein and for other good and valuable consideration, and intending to be legally bound hereby, the Parties agree as follows:

1.     Employment . The Executive’s employment with the Company as CFO and Senior Vice President shall commence on the Effective Date and shall continue unless terminated by either Party.

2.     Position .

(a)    During his employment, the Executive shall serve as the CFO and Senior Vice President of the Company, and shall have such duties and authority as are customarily associated with such positions or as otherwise determined from time to time by the Board of Directors of the Company (the “ Board ”).

(b)    During his employment, the Executive will devote his full business time and best efforts to the performance of his duties hereunder and will perform such duties diligently, faithfully and to the best of his abilities and will not engage in any other business, profession, or occupation, for compensation or otherwise, which would conflict with the performance of Executive’s duties, either


directly or indirectly, without the prior written consent of the Board. It shall not be deemed a violation of the foregoing for the Executive to (i) act or serve as an unpaid director, trustee or committee member of any civic or charitable organization; (ii) manage his personal, financial and legal affairs, including passive investments of not more than 5% of other public companies; or (iii) serve as a director of an organization that is not a civic or charitable organization with the prior consent of the Board, which consent shall not be unreasonably withheld, in each instance so long as such activities individually or in the aggregate do not conflict with the performance of Executive’s duties, either directly or indirectly, or create a business or fiduciary conflict or otherwise violate this Agreement. The activities on Exhibit A are hereby initially approved under this Section 2(b), subject to Executive’s compliance with the requirements of this Section 2(b).

(c)    The Executive shall be principally based in the Company’s Trevose, Pennsylvania office. The Executive acknowledges and agrees that the Executive’s duties hereunder from time to time will include, without limitation, reasonable travel, including travel to locations within and outside of the United States, to attend meetings and other functions as the performance of the Executive’s duties hereunder may require.

(d)    To the extent Executive is appointed to any officer or board position of the Company or of any related or affiliated entity, Executive agrees that upon termination of Executive’s employment with the Company, regardless of the reason, Executive will immediately resign such position(s) if the Board requests that he do so.

(e)    Executive affirms that he has disclosed to the Company any agreement he has signed with any current and/or any prior employer which contains any post-termination restrictions of any kind and understands that he must comply with any such restrictions. Further, Executive is not subject to any agreement with his current and/or any prior employer which would interfere with his ability to perform the duties under this Agreement.    Executive affirms that he will not disclose to or use for the benefit of the Company any confidential and/or proprietary information which he acquired in the course of his employment with his current or any prior employer, regardless of whether there is an agreement with his current or any prior employer protecting such confidential and/or proprietary information.

3.     Compensation .

(a)     Base Salary . The Company shall pay the Executive base salary, subject to annual review by the Board (such base salary, as so adjusted in accordance with the normal annual review practices for senior executives of the Company, the “ Base Salary ”), at the annual rate of Four Hundred and Fifty Thousand Dollars ($450,000), less applicable taxes and required withholdings, payable in accordance with the Company’s usual payroll practices. Any decrease in the Executive’s Base Salary shall be made only if the Company contemporaneously and proportionately decreases the base salaries of all senior executives of the Company.

(b)     Bonus .

(i)    The Executive shall be eligible to receive an annual incentive cash bonus for each Fiscal Year (“ FY ”) of the Company (the “ Bonus ”). The Bonus for each FY shall be within a range of zero percent (0%) to one hundred twelve and five tenths percent (112.5%) of the Executive’s Base Salary during the applicable FY (but prorated for the 2017 FY based on the number of calendar days


between the Effective Date and December 31, 2017), and shall be based on specific, individual and company goals set by the Executive Committee of the Board, in consultation with the Compensation Committee, in its sole discretion and communicated to the Executive no later than January 31st of each FY; however, with respect to the 2017 FY Bonus, the individual and company goals shall be communicated to the Executive promptly following the Effective Date. The Executive shall be entitled to a Bonus equal to seventy-five percent (75%) of Base Salary in a given FY upon achievement of the goals at target established for the Executive’s Bonus for such FY. Payments of a Bonus in excess of 75% of the Executive’s Base Salary shall be subject to the satisfaction of additional stretch goals established for the Executive’s Bonus for such FY, as determined by the Executive Committee of the Board, in consultation with the Compensation Committee, in its sole discretion. Notwithstanding the foregoing and except as provided in Section 6(c) below, Executive shall not be eligible for any Bonus if (a) he is not employed on the last day of the FY to which the Bonus relates and (b) Executive shall not be eligible for such Bonus unless other senior executive team members have also earned a bonus for such FY.

(ii)    In lieu of all or a portion of any cash Bonus for the 2017 FY under Section 3(b)(i), the Executive shall receive, a grant of restricted common LP units in the Partnership equal to One Hundred Thousand Dollars ($100,000) measured as of the date of grant (“ Restricted Units ”), which shall vest in equal monthly installment over the two year period following the grant, have rights to distributions consistent with fully vested common LP units in the Partnership and be subject to such other terms and conditions set forth in the grant agreement attached hereto as Exhibit B . The grant of Restricted Units under this Section 3(b)(ii) will be made as promptly as practicable after the Partnership has filed all of its required reports under the Securities Exchange Act of 1934. To the extent that the Bonus payable to the Executive for the 2017 FY under Section 3(b)(i) above, if any, is determined to exceed $100,000, only the amounts in excess of $100,000 shall be payable to the Executive in cash in accordance with the terms of Section 3(b)(i).

(iii)    Any Bonus amounts payable under this Agreement shall be paid no later than March 15th of the year following the year with respect to which the Bonus was earned and shall be less any taxes and other applicable withholdings.

(c)     Long Term Incentive Plan . The Executive shall be entitled to participate in the Partnership’s long-term incentive plan (the “ LTIP ”) for the 2017 FY and each FY thereafter, to the extent that the Company offers the LTIP to all senior executives of the Company. The Executive’s participation in the LTIP in 2017 FY and in any future FYs, if offered by the Company, shall be in an annual amount equal to fifty percent (50%) of the Executive’s Base Salary, with 50% of such annual amount vesting in equal annual installments over three years and 50% of the annual amount vesting based upon attainment of performance goals as determined by Executive Committee of the Board, in consultation with the Compensation Committee. To the extent the Executive’s employment terminates on account of Retirement (as defined below) during a performance period applicable to a particular LTIP grant, the portion of such LTIP grant that is subject to performance goals shall be earned pro-rata based on actual performance and the number of months that the Executive was employed during the performance period. The pro-rated portion shall be determined by multiplying the number of units eligible to be earned for the performance period, by a fraction, the numerator of which is the number of months that elapsed during the period beginning on the first day of the performance period and ending on the Executive’s termination date, and the denominator of which is the number of months in the performance period. A partial month after the date on which the performance period begins shall count as a full month for purposes of this calculation. For purposes of this Agreement, “ Retirement ” means a retirement by the Executive on or


after the date that the Executive attains age 62, which is communicated to the Board in writing by the Executive setting forth a proposed retirement date, with such communication provided at least three months prior to the proposed retirement date, and such retirement and proposed retirement date are approved by the Board.

(d)     Profit Participation .    The Executive shall be entitled to a one percent (1%) profit participation in the “General Partner”, with the terms of such profit participation (including, but not limited to, vesting terms and distribution participation rights) to be finalized within sixty (60) days following the Effective Date upon mutual agreement of the Parties, and subject to such arrangements being structured in a manner that complies with the applicable requirements of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder (the “ Code ”).

(e)     Change in Control . In the event of a Change in Control (as defined below), all outstanding equity interests granted to the Executive by the Company that are subject to time-based vesting provisions and that are not fully vested (including, but not limited to, the Restricted Units and LTIP set forth above) shall become fully vested as of the date of such Change in Control. For purposes of this Section 3(e), “ Change in Control ” means, and shall be deemed to have occurred upon one or more of the following events:

(i)    the members of the Company approve, in one or more related transactions, a plan of complete liquidation of the Company; or

(ii)    the sale or other disposition by either the Company or the Partnership of all or substantially all of its assets.

For the avoidance of doubt, the parties specifically agree that there shall be no acceleration in a dilution change in control.

4.     Benefits . The Executive shall be entitled to participate in the Company’s health, life insurance, disability, dental, retirement, savings, flexible spending accounts and other employee benefit and fringe benefit plans, programs and arrangements, if any, on the same basis as benefits are generally made available to other senior executives of the Company.    The Executive shall be entitled to four (4) week’s paid vacation per calendar year in accordance with the Company’s policy, pro-rated for the first calendar year.

5.     Business Expenses . Executive shall be eligible to be reimbursed for reasonable and documented business expenses incurred by the Executive in the performance of his duties hereunder in accordance with Company policies on expense reimbursement in effect from time to time.

6.     Post-Termination Payments and Benefits .

(a)    Either Party can terminate this Agreement and the employment relationship between the Parties at any time and for any or no reason. The Company may terminate this Agreement and the Executive’s employment without “Cause,” (as defined below) upon thirty (30) days’ written notice, which the Company may waive, in its sole discretion, by paying Executive his Base Salary for such notice period and the Company may accelerate the effective date of Executive’s termination; provided, however, the Company may terminate Executive’s employment immediately without any prior notice in the event of “Cause” or Executive’s death. The Executive may terminate this Agreement and the


Executive’s employment with “Good Reason” (as defined below) within the timeframes set forth in the definition of Good Reason below, or without Good Reason upon thirty (30) days’ written notice, which the Company may waive, in its sole discretion, by paying Executive his Base Salary for such thirty (30) day notice period and the Company may accelerate the effective date of Executive’s termination.

(b)    Executive (or his estate) shall not be eligible for any severance payments or benefits from the Company subsequent to the termination of his employment if Executive voluntarily resigns other than for Good Reason, dies, is terminated by the Company for Cause or incurs a Disability (as defined below) other than (i) any Base Salary for days actually worked through the date of termination; (ii) reimbursement of all expenses for which the Executive is entitled to be reimbursed pursuant to Section 5 above, but for which he has not yet been reimbursed; (iii) any vested accrued benefits under the Company’s employee benefit plans 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 or the Partnership, including, but not limited to, the Restricted Units and any LTIP participation, (v) any bonus or other incentive (or portion thereof) for any preceding completed FY that has been awarded by the company to the Executive, but has not been received prior to the date of termination and (vi) accrued but unused vacation, to the extent Executive is eligible in accordance with Company policy (together, the “ Accrued Obligations ”). The Accrued Obligations shall be paid as soon as practicable after the date of termination.

(c)    In addition to the Accrued Obligations, if the Executive’s employment is terminated by the Company without “Cause” or by the Executive for Good Reason, and provided that Executive complies with Section 6(g) below (Release), Executive shall be entitled to Severance Benefits, which shall consist of: (A) payment of Executive’s Base Salary for a period of twelve (12) months (“ Severance Period ”) following the effective date of Executive’s termination (“ Severance Pay ”), to be paid in equal installments in accordance with the normal payroll practices of the Company, commencing within sixty (60) days following the date of termination and the first payment will include any amounts not yet paid between the date of termination and the date of the first payment and (B) a pro-rata Bonus for the FY of the Company in which such termination occurs, if any, determined by the Company and subject to the restrictions as set forth in Section 3(b)(i), which shall 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 of the FY following the FY in which the date of termination occurs.

(d)    For purposes of this Section 6, “ Cause ,” shall mean the Company’s determination that Executive engaged in one or more of the following:

(i)    Executive’s willful misconduct or gross negligence in the performance of his duties which materially adversely affects the reputation or business activities of the Company or the Partnership; provided that the Company shall give the Executive notice of any such commission describing in reasonable detail the circumstances constituting Cause and the Executive shall have thirty (30) days following such notice to cure any commission (if susceptible to cure) to the reasonable satisfaction of the Board;

(ii)    Executive’s conviction of a felony (other than traffic offenses) or conviction of any crime involving fraud, embezzlement, theft, or moral turpitude, that, in the reasonable opinion of the Board, renders the Executive’s continued employment damaging or detrimental to the Company and/or Partnership or potentially damaging or detrimental to the Company and/or Partnership; or


(iii)    Executive’s willful and repeated failure to perform lawful directives of the Board; provided that the Company shall give the Executive notice of any such failure describing in reasonable detail the circumstances constituting Cause and the Executive shall have thirty (30) days following such notice to cure any failure.

(e)    For purposes of this Agreement, “ Good Reason ” means the occurrence of one or more of the following without the Executive’s consent, other than on account of the Executive’s Disability:

(i)    A material change in the geographic location at which Executive must perform services under this Agreement (which, for purposes of this Agreement, means relocation of the headquarters of the Company at which Executive is principally employed to a location that increases the Executive’s commute to work by more than fifty (50) miles); or

(ii)    A material diminution in the Executive’s Base Salary (other than an across the board reduction in accordance with Section 3(a)).

The Executive must provide written notice of termination for Good Reason to the Company within ninety (90) days after the event constituting Good Reason. The Company shall have a period of thirty (30) days in which it may correct the act or failure to act that constitutes the grounds for Good Reason as set forth in the Executive’s notice of termination. If the Company does not correct the act or failure to act, the Executive will have sixty (60) days to terminate employment for Good Reason.

(f)    For purposes of this Agreement, “ Disability ” shall mean that the Executive becomes eligible for benefits under the Company’s disability plan or is determined by the Company, in good faith, to be unable to perform the essential functions of his position, regardless of the reason, with or without a reasonable accommodation, for a total (whether consecutive or cumulative) of twenty-six (26) weeks in any rolling fifty-two (52) week period by reason of an illness or injury, or in the event that the Company receives a medical or other certification that the Executive will not be able to perform the essential functions of his position permanently or for the indefinite future.

(g)     Release .

(i)    Executive’s entitlement to Severance Benefits in accordance with Section 6(c) above is contingent upon Executive signing, without properly revoking, a Severance Agreement and General Release and Waiver of Claims upon the termination of Executive’s employment, substantially in the form attached hereto as Exhibit C, with such changes that are reasonably recommended by Company’s legal counsel to comply with applicable law. For the avoidance of doubt, the Executive is entitled to the Accrued Obligations, regardless of whether Executive signs or revokes the Severance Agreement and General Release and Waiver of Claims.

(ii)    The Severance Benefits described in Section 6(c) are subject to deductions and withholdings required by applicable law.


(iii)    The Severance Benefits described in Section 6(c) are also contingent upon Executive complying with and continuing to comply with Executive’s obligations set forth in Sections 7, 8, 9 and 10 of this Agreement.

7.     Company Property . Executive agrees that all documents, information and equipment of any kind furnished to Executive by the Company, or developed by Executive on behalf of the Company, or at the Company’s direction or for the Company’s use or otherwise in connection with Executive’s employment hereunder, are and shall remain the sole property of the Company, including but not limited to, data, reports, proposals, lists, specifications, drawings, blueprints, sketches, material, computer programs, software, customer information and records, business records, price lists or information, samples, or any other materials or electronic data. Upon termination of employment (or earlier, upon request of the Company), and as a condition precedent to Executive receipt of Severance Benefits under this Agreement, Executive shall return all such Company property to the Company, retaining no copies.

8.     Confidential Information .

(a)    Without the prior written consent of the Board, except as shall be necessary in the performance of Executive’s assigned duties, Executive shall not disclose the Company’s Confidential Information (as hereinafter defined) to any third party or use the Company’s Confidential Information for Executive’s direct or indirect benefit or the direct or indirect benefit of any third party, and Executive shall maintain in strict confidence, both during and after Executive’s employment, the confidentiality of any and all Company Confidential Information.

(b)    For purposes of this Agreement, the Company’s “ Confidential Information ” means any information (written, oral or stored in any information storage and/or retrieval medium or device) that the Company treats as confidential or proprietary, including, but not limited to, all of the Company’s know how, trade secrets, technical processes, designs and design projects, inventions and research projects, pricing and business strategies and policies, operational methods, marketing and/or strategic plans, business studies; business development plans, financial information (including but not limited to regarding the budget, compensation strategy, forecasts, analyses, operating budget and indebtedness), information with respect to Company’s employees and independent contractors, including, but not limited to, their skills, abilities, assignments, performance, compensation, and benefits, as well as the nature and other terms and conditions of their relationship with the Company, customer lists, price lists, contract terms, vendor contract terms, investigations, documents and/or records protected by federal, state and/or local law and other trade secrets, proprietary data or information or confidential data or information not generally known by or readily accessible to the public. Executive’s obligations under this section apply during and after Executive’s employment with the Company (as well as with respect to Confidential Information to which Executive had access during the period of time he was a consultant) and survive the termination of Executive’s employment.

(c)    Subject to subsection (d) below, in the event Executive receives a request or demand, orally, in writing, electronically or otherwise, for the disclosure or production of confidential and/or proprietary information which Executive acquired in the course of Executive’s employment (regardless of whether Executive believes the information is Confidential Information as described above), Executive must notify immediately, in writing, the Company. Any and all documents relating to the request or demand shall be included with the notification.    Executive shall wait a minimum of ten (10) days (or the maximum time permitted by such legal process, if less) after sending the letter before making


a disclosure or production to give the Company time to determine whether the disclosure or production involves confidential and/or proprietary information, in which event the Company may seek to prohibit and/or restrict the production and/or disclosure and/or to obtain a protective order with regard thereto. If the request or demand is in conjunction with judicial, administrative, arbitration or other adversarial proceedings, copies of all correspondence regarding the request or demand shall be included with the information sent to the Company in accordance with this section.

(d)    Nothing in this Agreement is intended to or shall be interpreted: (i) to restrict or otherwise interfere with Executive’s obligation to testify truthfully in any forum; (ii) to restrict or otherwise interfere with Executive’s right and/or obligation to contact, cooperate with, provide information in confidence to, report possible violations of federal, state or local law, ordinance or regulation--or testify or otherwise participate in any action, investigation or proceeding of--any government agency, entity or commission (including but not limited to the EEOC, the Department of Justice, the Securities and Exchange Commission, the Congress and any Agency Inspector General ) or otherwise taking action or making disclosures that are protected under the whistleblower provisions of any federal, state or local law, ordinance or regulation, including, but not limited to, Rule 21F-17 promulgated under the Securities Exchange Act of 1934, as amended. Executive is entitled to make reports and disclosures or otherwise take action under this section without prior authorization from or subsequent notification to the Company; or (iii) to disclose any information or produce any documents as is required by law or legal process.

(e)    In addition, the Defend Trade Secrets Act of 2016 (the “ Act ”) provides that: (1) An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that – (A) is made – (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. The Act further provides that: (2) An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual – (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.

9.     Restrictive Covenants .

(a)     Non-Solicitation . Executive agrees that, during Executive’s employment and for a period of twelve (12) months after the termination of Executive’s employment with the Company, regardless of the reason and whether initiated by Executive or the Company. Executive shall not, for Executive’s own benefit or for the benefit of any third-party, directly or indirectly, in any capacity (as an employee, independent contractor, owner, partner or otherwise) participate in any of the following:

(i)    Solicit, induce, or encourage any prospective employee, director, officer, associate, consultant, agent or independent contractor of the Company not to establish an employment, contractual or other relationship with the Company or any current employee, director officer, associate, consultant, agent or independent contractor of the Company to terminate such person’s employment, contractual or other relationship with the Company.


(ii)    Employ or establish a business relationship with or encourage or assist any person or entity to employ or establish a business relationship with, any person who is employed by or has a business relationship with the Company or who was employed by or had a business relationship with the Company at any time during Executive’s employment and/or during the twelve (12) month period immediately following Executive’s termination of employment.

(iii)    Direct or do any act or thing which may interfere with or adversely affect the relationship (contractual or otherwise) of the Company with any Customer, vendor, investor, or supplier of the Company, or otherwise induce or attempt to induce any such Customer, vendor, investor or supplier not to do business with, cease doing business with, reduce or otherwise limit its business with the Company. For purposes of this provision, the term “ Customer ” means any person or entity for whom the Company is providing any goods or services or has provided goods or services during the twelve (12) month period immediately preceding Executive’s termination of employment, and any person or entity with whom the Company was communicating, at any point during the twelve (12) month period immediately preceding Executive’s termination of employment, to provide goods or services, in any state or marketing area in which the Company is doing business or is qualified to do business.

(b)     Non-Compete . Executive agrees that, during Executive’s employment with the Company and for a period of twelve (12) months after the termination of Executive’s employment with the Company, regardless of the reason and whether initiated by Executive or the Company, Executive shall not, for Executive’s own benefit or for the benefit of any third-party, directly or indirectly, in any capacity (as an employee, independent contractor, owner, partner or otherwise) engage in any business activity, be employed by or otherwise be associated with (as an employee, independent contractor, owner, partner or otherwise) any person or entity which, at the time of Executive’s termination, Competes (as defined below) in any way with the business activities of the Company. The term “ Competes ” as used in this Section 9(b) shall mean any person or entity that engages in, directly or indirectly, any Business of the type or character engaged in or competitive with that conducted by the Company in any state or marketing area in which the Company is doing business or is qualified to do business at the time of the termination of Executive’s employment or at any time during the twenty-four (24) month period prior to the termination of Executive’s employment. Executive acknowledges that these restrictions on competition are fair because, in the position of President and Chief Executive Officer, Executive will have knowledge of and access to all business practices and information, without limitation to a specific geography, department or customer. However, this Section 9(b) shall not preclude Executive from owning up to 5% of a publicly traded company.

10.     Intellectual Property .

(a)    Any and all work, writings, inventions, improvements, concepts, ideas, modifications, methods, discoveries, formula, trade secrets, trademarks, domain names, copyright, know-how, processes, procedures, techniques and the like (all of the above collectively referred to herein as the “ Intellectual Property ”), whether or not suitable for patent, trademark or copyright, which Executive has made, created, conceived, discovered, enhanced, developed or reduced to practice, either solely or jointly with others, at any time during Executive’s employment with the Company, whether or not during working hours, and whether or not at the request or upon the suggestion of the Company, and which (i) relate to the business, work or activities of the Company and/or its affiliates, or (ii) result from or are suggested by the carrying out of Executive’s duties relating to Executive’s employment with the Company or from or by any information that Executive may receive as an employee of the Company shall be the sole


and exclusive property of the Company. Executive shall not be entitled to any additional or special compensation or reimbursement regarding any and all Intellectual Property or intellectual property rights. Nothing herein shall be construed as a license to Executive by the Company to use any materials protected by copyright, trademark or other intellectual property rights.

(b)    With respect to all work or Intellectual Property which qualify as “work(s) made for hire” under 17 U.S.C. §101, Executive and the Company agree by this written instrument that, for the purposes of Title 17 of the United States Code, the Company shall be the “person for whom the work is prepared,” and that, any other written agreement between the Parties notwithstanding, the Company shall be considered the sole author of, and shall own all right, title in and to the copyrights in, such works. In this respect, all work or Intellectual Property created by Executive within the scope of this Agreement shall be considered a “work made for hire” under the United States copyright law (17 U.S.C. §101 et seq.) and any other laws of the United States or Foreign Countries and made under the course of this Agreement. Even if any Intellectual Property, work or other intellectual property rights, by operation of law or otherwise, may not be considered a “work made for hire,” Executive agrees to irrevocably assign, and hereby does irrevocably assign to the Company, all right, title and interest in and to any Intellectual Property or work, including all intellectual property rights or proprietary rights arising under any United States or International laws.

(c)    Executive hereby assigns, transfers and conveys to the Company all of Executive’s right, title and interest in and to any and all such Intellectual Property, and agrees to take all such actions as may be requested by the Company at any time and with respect to any such Intellectual Property, to confirm or evidence such assignment, transfer and conveyance. Furthermore, at any time and from time to time, upon the request of the Company, Executive shall execute and deliver to the Company any and all instruments, documents and papers, give evidence and do any and all other acts that, in the opinion of counsel for the Company, are or may be necessary or desirable to document such assignment, transfer and conveyance or to enable the Company to file and prosecute applications for and to acquire, maintain and enforce any and all patents, trademark registrations or copyrights under United States or foreign law with respect to any such Intellectual Property, or to obtain any extension, validation, reissue, continuance or renewal of any such patent, trademark or copyright. The Company shall be responsible for the preparation of any such instruments, documents and papers and for the prosecution of any such proceedings and shall reimburse Executive for all reasonable expenses incurred by Executive in compliance with the provisions of this section.

11.     Equitable Relief

(a)    The Executive acknowledges and agrees that he will, in his role of President and Chief Executive Officer, have access to, receive, learn, develop and/or conceive information that is confidential and/or proprietary to the Company and/or related to all aspects of its Business, including but not limited to financials, customers and contracts and will be required to develop, maintain, and/or supervise technology, products and customer relationships and intellectual property that is valuable to the Company and which must be kept in strict confidence to protect the Business and the Company’s and the Partnership’s competitive position in the marketplace and that such information would be useful to the Company and the Partnership’s competitors for indefinite periods of time. Executive further acknowledges and agrees that the Company and the Partnership would be irreparably harmed by Executive’s subsequent work with, for, or as a competitor of the Company or the Partnership due to the possibility that there would be inadvertent or other disclosures of the confidential and/or proprietary


information or that there would be improper interference with its valuable customer relationships and goodwill. Executive acknowledges and agrees that the provisions of Sections 8, 9 and 10, including the subject matter and temporal and/or geographic scope, are reasonable and necessary to protect the interests of the Company. If the Executive breaches any of the provision of Sections 8, 9 and 10, the Company shall have the right and remedy, without regard to any other available remedy, to (i) have the provisions specifically enforced by any court of competent jurisdiction, and (ii) have issued an injunction or other equitable relief, including restraining any such breach of the provisions, without posting of a bond (unless a bond is required by law and in which case the Parties shall jointly request a nominal bond); it being agreed that any breach of any of the Confidentiality or Restrictive Covenants provisions would cause irreparable and material harm, loss, and damage to the Company, the amount of which cannot not be readily determined and as to which the Company will not have an adequate remedy at law or in damages.

(b)    If any court determines that any of the Restrictive Covenants, or any one of them or any parts thereof, is invalid or unenforceable, then the court making such determination shall have the authority to narrow the provision or part of the provision as necessary to make it enforceable and the provision or part of the provision shall then be enforceable in its/their narrowed form. In the event that any provision or part of any provision is determined to be legally invalid or unenforceable by any court and cannot be modified to be enforceable, the affected provision or part of such provision shall be stricken, and the remaining provisions or parts of such provisions and its enforceability shall remain unaffected thereby.

(c)    Executive agrees and acknowledges that the Confidentiality and Restrictive Covenants provisions contained in Sections 8, 9 and 10 do not preclude the Executive from earning a livelihood, nor do they unreasonably impose limitations on the Executive’s ability to earn a living. In the event that Executive violates any of the covenants in Section 9 and the Company commences legal action for injunctive or other equitable relief, the Company shall have the benefit of the full period of the Restrictive Covenant such that the restriction shall have the duration of twelve (12) months computed from the date the Executive ceased violation of the covenants, either by order of the court or otherwise

(d)    For all purposes of Sections 7, 8, 9, 10 and 11, the “Company” shall be construed to include the Company, the Partnership and each of their respective parents, affiliates, subsidiaries, divisions and related companies and entities, and their respective predecessors, successors and assigns, now existing or hereafter created. The provisions of Sections 7, 8, 9, 10 and 11 shall survive the termination of Executive’s employment, without regard to the reasons therefore and whether initiated by the Company or by Executive.

12.     Arbitration . All disputes, claims, or controversies arising out of or in connection with Executive’s business relationship with the Company, the Partnership and each of their parents, affiliates, subsidiaries, divisions and related companies and entities, and their respective predecessors, successors and assigns, now existing or hereafter created, including but not limited to under this Agreement (except claims by Executive or the Company with respect to Sections 8, 9 and 10 herein, including for injunctive relief or declaratory judgment) and including but not limited to those concerning workplace discrimination and all other statutory claims, shall be finally settled by arbitration before a single arbitrator who shall be a member of and recognized by the American Arbitration Association (the “ AAA ”) in accordance with the AAA National Rules for the Resolution of Employment Disputes then in effect. Any arbitration commenced by either Party shall be held in Trevose, Pennsylvania. The requirement to arbitrate does not apply to the filing of an employment related claim, dispute or controversy with a federal,


state or local administrative agency, including the EEOC and the Securities and Exchange Commission. However, Executive understands that by entering into this Agreement, Executive is waiving Executive’s right to have a court and a jury determine Executive’s rights, including under federal, state and local statutes prohibiting employment discrimination, including sexual harassment and discrimination on the basis of age, sex, race, color, religion, national origin, disability, veteran status or any other factor prohibited by governing law. The decision of the arbitrator shall contain findings of fact and conclusions of law, shall be final and binding, and shall not be appealable upon any grounds other than as permitted pursuant to the Federal Arbitration Act. The award, in the arbitrator’s discretion, may include reasonable attorney’s fees and costs. Judgment on the award may be entered, confirmed and enforced in any court of competent jurisdiction. There shall be no right or authority for any disputes, claims or controversies to be arbitrated on a class action or collective action basis or together with the claim of any other person. The Parties acknowledge and agree that in connection with any such arbitration, the AAA filing fee, arbitrator’s costs and administrative expenses shall be borne by the Company (unless Executive initiates the arbitration, in which case his portion of the AAA filing fee shall be $200).

13.     Code Section 409A .

(a)    The intent of the Parties is that payments and benefits under this Agreement comply with, or be exempt from, Section 409A of the Code (“ Section 409A ”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. Severance benefits under the Agreement are intended to be exempt from Section 409A under the “short-term deferral” exception, to the maximum extent applicable, and then under the “separation pay” exception, to the maximum extent applicable. In no event shall the Company be liable for any additional tax, interest or penalty that may be imposed on Executive under Section 409A or damages for failing to comply with Section 409A; provided that amounts are paid in accordance with the terms set forth herein.

(b)    A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”

(c)    If the Executive is a Specified Employee, within the meaning of Section 409A, on the date of his “separation from service,” as defined in Treasury Regulation Section 1.409A-1(h), any amounts payable on account of such separation from service that constitute “deferred compensation” within the meaning of Section 409A shall be paid on the date that is six (6) months following such separation from service, or the date of Executive’s death, if earlier, but only to the extent necessary to avoid the imposition of additional taxes under Section 409A.

(d)    To the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Section 409A, (i) all such expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by Executive, (ii) any such right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (iii) no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.


(e)    For purposes of Section 409A, Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.

(f)    Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes “nonqualified deferred compensation” for purposes of Section 409A be subject to offset by any other amount unless otherwise permitted by Section 409A.

14.     Miscellaneous .

(a)     Indemnification . To the fullest extent permitted by law and the Company’s operating agreement, the Company shall promptly indemnify Executive for all amounts (including, without limitation, judgments, fines, settlement payments, losses, damages, costs and expenses (including reasonable attorneys’ fees)) incurred or paid by the Executive in connection with any action, proceeding, suit or investigation arising out of or relating to the performance by the Executive of services for (or acting as a fiduciary of any employee benefit plans, programs or arrangements of) the Company, including as a director, officer or employee of the Company. The Company also agrees to maintain a director’s and officers’ liability insurance policy covering the Executive. In addition, the Company will reimburse the Executive for the cost of a supplemental D&O insurance policy for up to Five Million Dollars ($5,000,000). The Company and the Executive shall enter into an indemnification agreement, substantially in the form attached hereto as Exhibit D.

(b)     Attorneys’ Fees for Negotiation of this Agreement . The Company shall pay up to Ten Thousand Dollars ($10,000) in attorneys’ fees incurred by the Executive in connection with the review, negotiation and documentation of this Agreement, upon presentation of appropriate receipts for such fees.

(c)     Governing Law; Consent to Jurisdiction . This Agreement shall be governed and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to conflict of law provisions. Any action permitted to be brought by this Agreement, pursuant to and consistent with Section 11 of this Agreement, shall be brought in the state or federal courts in the Eastern District of Pennsylvania and Executive consents to such jurisdiction.

(d)     Consideration . Executive understands and agrees that the Company’s offer of employment and the payments, benefits, terms and conditions of this Agreement constitute new and sufficient consideration to support Executive entering into the restrictive covenants set forth herein.

(e)     Recitals. The introductory paragraph and the recitals set forth above are incorporated herein by reference.

(f)     Entire Agreement . This Agreement contains the entire understanding of the Parties with respect to the subject matter herein. There are no restrictions, agreements, promises, warranties, covenants, or undertakings between the Parties with respect to the subject matter herein other than those expressly set forth herein. This Agreement may not be altered, modified, or amended except by written instrument signed by the Parties hereto. Without limiting the foregoing, this Agreement supersedes and extinguishes all existing employment and similar or related agreements and promises between the Executive and the Company, the Partnership and its affiliates and related entities.


(g)     No Waiver . The failure of a Party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such Party’s rights or deprive such Party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

(h)     Severability . If any provision or part or subpart of any provision in this Agreement or the application thereof is construed to be overbroad, then the court making such determination shall have the authority to narrow the provision or part or subpart of the provision as necessary to make it enforceable and the provision or part or subpart of the provision shall then be enforceable in its/their narrowed form. Moreover, each provision or part or subpart of each provision in this Agreement is independent of and severable from each other. In the event that any provision or part or subpart of any provision in this Agreement is determined to be legally invalid or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, the affected provision or part or subpart of such provision shall be stricken from the Agreement, and the remaining provisions or parts or subparts of such provisions of the Agreement and its enforceability shall remain unaffected thereby

(i)     Assignment . This Agreement shall not be assignable by the Executive. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company, within fifteen (15) days of such succession, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform if no such succession had taken place and Executive agrees that the covenants in Sections 8, 9, 10 and 11 of the Agreement shall likewise be enforced. Upon such assignment and assumption, the rights and obligations of the Company hereunder shall become the rights and obligations of such assignee.

(j)     Successors; Binding Agreement . This Agreement shall inure to the benefit of and be binding upon the Company’s and the Executive’s personal or legal representatives, executors, administrators, successors, and assigns.

(k)     Notice . Any notice, consent, request, or other communication made or given in accordance with this Agreement shall be in writing and shall be deemed to have been duly given (x) in the case of personal delivery, when actually received, (y) in the case of delivery by email or telecopy, on the date of such delivery or, (z) if mailed, three (3) days after mailing by registered or certified mail, return receipt requested, or one (1) business day after mailing by a nationally recognized express mail delivery service, with instructions for next-day delivery, addressed to his residence in the case of the Executive and/or to the Company’s General Counsel, Chief Legal Officer and Secretary, with a copy to, or at such other address or person’s attention as each may specify by notice to the other. Executive hereby agrees to promptly provide the Company with written notice of any change in Executive’s address for as long as this Agreement remains in effect.

(l)     Withholding Taxes . The Company may withhold from any amounts payable under this Agreement such federal, state, local, or foreign taxes as may be required to be withheld pursuant to any applicable law or regulation.

(m)     Counterparts . This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.


(n)     Review . Executive acknowledges that he has carefully read the foregoing Agreement, that he fully understands the meaning and intent of this document, that he has signed this Agreement voluntarily and knowingly, that he had a full opportunity to consult with his advisors prior to executing this Agreement, and that he intends to be legally bound by the promises contained in this Agreement.

[Signature Page Follows]


IN WITNESS HEREOF , intending to be legally bound, the Parties hereto have duly executed this Agreement as of the day and year first written above.

 

EXECUTIVE :

/s/ Mark L. Miller

Mark Miller
COMPANY :
StoneMor GP LLC
By:   /s/ Leo J. Pound


EXHIBIT A

OUTSIDE ACTIVITIES

 

    Volunteer, National Ski Patrol System

 

    Outside personal real estate activities


EXHIBIT B

RESTRICTED UNIT AGREEMENT

See Attached


FORM SUBJECT TO CHANGES BY COMPENSATION COMMITTEE

APPLICABLE TO ALL RECIPIENTS

EXECUTIVE RESTRICTED UNIT AGREEMENT

UNDER THE

STONEMOR PARTNERS L.P. LONG-TERM INCENTIVE PLAN

This Restricted Unit Agreement (the “Agreement”) entered into as of [insert], 2017 (the “Agreement Date”), by and between StoneMor GP LLC (the “Company”), the general partner of and acting on behalf of StoneMor Partners L.P., a Delaware limited partnership (the “Partnership”) and Mark Miller, an executive of the Company (the “Participant”).

BACKGROUND:

In order to make certain awards to key employees, directors and consultants of the Company and its Affiliates, the Company maintains on behalf of the Partnership the StoneMor Partners L.P. 2014 Long-Term Incentive Plan (the “Plan”). The Plan is administered by a Committee (as defined in the Plan) of the Board of Directors (“Board”) of the Company. The Committee has determined to grant to the Participant, pursuant to the terms and conditions of the Plan, an award (the “Award”) of Restricted Units (as defined in the Plan), but only effective upon and conditioned on satisfying time vesting conditions set forth in this Agreement. The Participant has determined to accept such Award. Any initially capitalized terms and phrases used in this Agreement, but not otherwise defined herein, shall have the respective meanings ascribed to them in the Plan.

NOW, THEREFORE, the Company and the Participant, each intending to be legally bound hereby, agree as follows:

ARTICLE 1

AWARD OF RESTRICTED UNITS

1.1     Grant of Units and Vesting . The Participant is hereby granted the following Units under the Plan, but only effective upon and conditioned on satisfying the applicable vesting conditions contained herein, which will permit the Participant receive the following number of Units of the Partnership:

 

Date of Grant    [insert], 2017
Total Number of Units    [$100,000/closing price] Units

Units vest in equal monthly installments over the two (2) year period following the Date of Grant.

Certificates for Units shall be issued to the Participant upon the vesting of any Units, subject to the provisions of the Plan, including, but not limited to, Sections 6(d) and 8(f) of the Plan, and further subject to the Participant paying, or making suitable arrangements to pay, all applicable foreign, federal, state and local taxes, as more fully provided in Section 2.3 hereof, not later than the period permitted by Regulation 1.409A-1(b)(4) entitled “Short-term deferrals” and any successor guidance under the Code.


1.2     Forfeiture . All unvested Units hereunder are subject to the forfeiture provisions of Section 1.4 hereof and to the clawback provision referenced in Section 2.2 hereof.

1.3     Unit Distribution Rights (“UDRs”) . The unvested Units shall be entitled to receive distributions made by the Partnership to holders of common units. Any UDR payments will be made to the Participant on or promptly following the date on which the distributions are otherwise paid to the holders of common units; provided, however, in no event shall the distribution payment be made later than 30 days following the date on which the Partnership pays such distributions to the holders of common units generally.

1.4     Forfeiture of Unvested Units Upon Termination of Employment . In the event of the termination of the employment of the Participant (whether voluntary or involuntary and regardless of the reason for the termination, or for no reason whatsoever) with the Company or its Affiliates, all Units which have not vested on the date of such termination shall be deemed to be automatically forfeited, unless the Participant’s employment is on that date transferred to the Company or another Affiliate. If a Participant’s employment is with an Affiliate and that entity ceases to be an Affiliate, the Participant’s employment will be deemed to have terminated when the entity ceases to be an Affiliate unless the Participant transfers employment to the Company or its remaining Affiliates. Nothing contained herein shall be deemed to amend or otherwise modify any employment agreement between the Company and the Participant.

1.5     Nonalienation of Benefits . Participant shall not have the right to sell, assign, transfer or otherwise convey or encumber in whole or in part the unvested Units under this Agreement, and the right to receive any payment hereunder shall not be subject to attainment, lien or other involuntary encumbrance.

ARTICLE 2

GENERAL PROVISIONS

2.1     No Right Of Continued Service . The receipt of this Award does not give the Participant, and nothing in the Plan or in this Agreement shall confer upon the Participant, any right to continue in the employment of the Company or any of its Affiliates. Nothing in the Plan or in this Agreement shall affect any right which the Company or any of its Affiliates may have to terminate the employment of the Participant.

2.2     Clawback . The Units and related UDRs are subject to clawback under any clawback policies which are adopted by the Committee, as amended from time to time, including, but not limited to, clawback listing requirements of the New York Stock Exchange imposed by SEC rules adopted pursuant to Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

2.3     Tax Withholding . The Participant is responsible to pay to the Company, or make suitable arrangements to pay, all applicable foreign, federal, state and local tax withholding as a condition to receiving certificates for the vested Units and as a condition to receiving payment of UDRs, not later than the period permitted by Regulation 1.409A-1(b)(4) entitled “Short-term

 

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deferrals” and any successor guidance under the Code. The Company shall withhold a sufficient number of Units to equal all income tax payments due from the Participant in connection with vested Units and receiving payment of UDRs and shall be responsible for paying such income tax payments on behalf of the Participant.

2.4     Administration . Pursuant to the Plan, the Committee is vested with conclusive authority to interpret and construe the Plan, to adopt rules and regulations for carrying out the Plan, and to make determinations with respect to all matters relating to this Agreement, the Plan and awards made pursuant thereto. The authority to manage and control the operation and administration of this Agreement shall be likewise vested in the Committee, and the Committee shall have all powers with respect to this Agreement as it has with respect to the Plan. Any interpretation of this Agreement by the Committee, and any decision made by the Committee with respect to this Agreement, shall be final and binding and conclusive in the absence of clear and convincing evidence that such decision was made in bad faith.

2.4     Effect of Plan; Construction . The entire text of the Plan is expressly incorporated herein by this reference and so forms a part of this Agreement. In the event of any inconsistency or discrepancy between the provisions of this Agreement and the terms and conditions of the Plan under which the Units are granted, the provisions of the Plan shall govern and prevail. The Units and this Agreement are each subject in all respects to, and the Company and the Participant each hereby agree to be bound by, all of the terms and conditions of the Plan, as the same may have been amended from time to time in accordance with its terms; provided, however, that no such amendment shall deprive the Participant, without the Participant’s consent, of any rights earned or otherwise due to the Participant hereunder.

2.6     Amendment, Supplement or Waiver . This Agreement shall not be amended, supplemented, or waived in whole or in part, except by an instrument in writing executed by the parties to this Agreement.

2.7     Captions . The captions at the beginning of each of the numbered Articles and Sections herein are for reference purposes only and will have no legal force or effect. Such captions will not be considered a part of this Agreement for purposes of interpreting, construing or applying this Agreement and will not define, limit, extend, explain or describe the scope or extent of this Agreement or any of its terms and conditions.

2.8     Governing Law . THE VALIDITY, CONSTRUCTION, INTERPRETATION AND EFFECT OF THIS AGREEMENT SHALL EXCLUSIVELY BE GOVERNED BY AND DETERMINED IN ACCORDANCE WITH THE LAW OF THE COMMONWEALTH OF PENNSYLVANIA (WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF).

 

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2.9     Notices . All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing, sent by facsimile, by overnight courier or by registered or certified mail, postage prepaid and return receipt requested. Notices to the Company shall be deemed to have been duly given or made upon actual receipt by the Company. Such communications shall be addressed and directed to the parties listed below (except where this Agreement expressly provides that it be directed to another) as follows, or to such other address or recipient for a party as may be hereafter notified by such party hereunder:

 

(a)    if to the Partnership or Company:

 

StoneMor GP LLC

 

3600 Horizon Blvd.

 

Trevose, PA 19053, or its then current

 

principal office

 

Attention: Chief Financial Officer

(b)    if to the Participant: to the address for the Participant as it appears on the Company’s records.

2.10     Severability . If any provision hereof is found by a court of competent jurisdiction to be prohibited or unenforceable, it shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability, and such prohibition or unenforceability shall not invalidate the balance of such provision to the extent it is not prohibited or unenforceable, nor invalidate the other provisions hereof.

2.11     Entire Agreement; Counterparts; Construction . This Agreement constitutes the entire understanding and supersedes any and all other agreements, oral or written, between the parties hereto, in respect of the subject matter of this Agreement, and embodies the entire understanding of the parties with respect to the subject matter hereof. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original against any party whose signature appears thereon. The rule of construction that ambiguities in a document are construed against the draftsperson shall not apply to this Agreement.

2.12     Binding Agreement . The terms and conditions of this Agreement shall be binding upon, and inure to the benefit of, the estate, heirs, beneficiaries and other representatives of the Participant. The terms and conditions of this Agreement shall be binding upon the Company and the Partnership and their respective successors and assigns.

2.13     Arbitration . Any dispute or disagreement with respect to any portion of this Agreement or its validity, construction, meaning, performance, or Participant’s rights hereunder shall be settled by arbitration, conducted in Philadelphia, Pennsylvania, in accordance with the Commercial Arbitration Rules of the American Arbitration Association or its successor, as amended from time to time. However, prior to submission to arbitration the Participant will attempt to resolve any disputes or disagreements with the Partnership over this Agreement amicably and informally, in good faith, for a period not to exceed two weeks. Thereafter, the dispute or disagreement will be submitted to arbitration. At any time prior to a decision from the arbitrator(s) being rendered, the Participant and the Partnership may resolve the dispute by settlement. The Participant and the Partnership shall equally share the costs charged by the American Arbitration Association or its successor, but the Participant and the Partnership shall otherwise be solely responsible for their own respective counsel fees and expenses. The decision of the arbitrator(s) shall be made in writing, setting forth the award, the reasons for the decision and award and shall be binding and conclusive on the Participant and the Partnership. Further, neither Participant nor the Partnership shall appeal any such award. Judgment of a court of competent jurisdiction may be entered upon the award and may be enforced as such in accordance with the provisions of the award. THE PARTICIPANT HEREBY WAIVES ANY RIGHT TO A JURY TRIAL.

 

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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have executed this Agreement as of the day first above written.

 

STONEMOR PARTNERS L.P.
By:   StoneMor GP LLC
By:                                                                                             
  Name:                                                                              
  Title:                                                                               

The Participant hereby acknowledges receipt of a copy of the foregoing Restricted Unit Agreement and the Plan, and having read them, hereby signifies the Participant’s understanding of, and the Participant’s agreement with, their terms and conditions. The Participant hereby accepts this Restricted Unit Agreement in full satisfaction of any previous written or verbal promises made to the participant by the Partnership or the Company or any of its other Affiliates with respect to awards under the Plan.

 

                                                                                       (seal)

                                                                                            

Mark Miller

     

(Date)

                                                                                      

     

                                                                                      

Name of Primary Death Beneficiary

     

Relationship to Participant

                                                                                      

     

                                                                                      

Name of Contingent Death Beneficiary

     

Relationship to Participant

 

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EXHIBIT C

FORM OF SEVERANCE AGREEMENT AND GENERAL RELEASE

AND WAIVER OF CLAIMS

See Attached


FORM SEVERANCE AGREEMENT

SUBJECT TO CHANGES REASONABLY RECOMMENDED BY STONEMOR

COUNSEL TO COMPLY WITH APPLICABLE LAW

Severance Agreement and General Release and Waiver of Claims

This Agreement (“Agreement”) is made effective as of [INSERT DATE], by and between StoneMor GP LLC (“the Company”), the general partner of StoneMor Partners L.P. (the “Partnership”), and Mark Miller (“you”):

WHEREAS, you are currently employed as Chief Financial Officer and Senior Vice President of the Company pursuant to an Employment Agreement with an effective date of May 16, 2017 (“Employment Agreement”), a copy of which is attached hereto Exhibit “A.”

WHEREAS, pursuant to Section 6(c) of the Employment Agreement, you are eligible for severance benefits in the event that your employment is terminated by the Company without Cause (as defined in the Employment Agreement) or by you for Good Reason (as defined in the Employment Agreement), conditioned upon your timely execution, without proper revocation, of this Agreement and compliance with its terms and conditions;

NOW, THEREFORE, in consideration of the mutual covenants set forth below, the parties agree as follows:

1.     General Terms of Separation of Employment . Your last date of employment will be [INSERT DATE] (“Separation Date”). You will be paid your Base Salary through your last date of employment.

2.     Severance Benefits . If you sign this Agreement, agreeing to be bound by the Release in Paragraph 3 below and the other terms and conditions of this Agreement described herein, the Company will provide you with the severance benefits set forth Section 6(c) of your Employment Agreement (the “Severance Benefits”), which Section 6(c) is hereby incorporated by reference, subject to the conditions set forth in the Employment Agreement, including but not limited to Section 6(g)(i) through (iii) of the Employment Agreement.

3.     Release.

(a)    In exchange for the Severance Benefits, you release and forever discharge, to the maximum extent permitted by law, the Company and each of the other “Releasees” as defined below, from any and all claims, causes of action, complaints, lawsuits, demands or liabilities of any kind, known or unknown by you, those that you may have already asserted or raised as well as those that you have never asserted or raised (collectively “Claims”) as described below which you, your heirs, agents, administrators or executors have or may have against the Company or any of the other Releasees arising out of or relating to any conduct, matter, event or omission existing or occurring before you sign this Agreement, and any monetary or other personal relief for such Claims, including but not limited to the following: (i) any Claims having anything to do with your employment (including the cessation of your employment) with the Company and/or any of its parent, subsidiary, related and/or affiliated companies; (ii) any Claims


for severance, benefits, bonuses, incentive compensation, equity awards and interests, commissions and/or other compensation of any kind; (iii) any Claims for reimbursement of expenses of any kind; (iv) any Claims for attorneys’ fees or costs; any Claims under the Employee Retirement Income Security Act (“ERISA”); (v) any Claims of discrimination and/or harassment based on age, sex, pregnancy, race, religion, color, creed, disability, handicap, failure to accommodate, citizenship, marital status, national origin, ancestry, sexual orientation, gender identity, genetic information or any other factor protected by Federal, State or Local law as enacted or amended (such as Title VII of the Civil Rights Act of 1964, Section  1981 of the Civil Rights Act of 1866, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Americans with Disabilities Act, the Equal Pay Act, the Genetic Information Non-Discrimination Act and the Pennsylvania Human Relations Act) and any Claims for retaliation under any of the foregoing laws ; (vi) any Claims under the Family and Medical Leave Act; (vii) any Claims under the Pennsylvania constitution; (viii) any whistleblower or retaliation Claims; (ix) any Claims under your Employment Agreement; and/or (x) any other statutory, regulatory, common law or other Claims of any kind, including, but not limited to, Claims for breach of contract, libel, slander, fraud, wrongful discharge, promissory estoppel, equitable estoppel, violation of public policy, invasion of privacy, misrepresentation, emotional distress or pain and suffering.

(b)    Releasees. The term “Releasees” includes: the Company, the Partnership, and any and all of their respective direct or indirect parent, subsidiary, related and/ or affiliated companies, and each of their past and present employees, officers, directors, attorneys, owners, shareholders, members, managers, partners, insurers, benefit plan fiduciaries and agents, and all of their respective successors and assigns.

4.     Non-Released Claims . The Release in Paragraph 3 above does not apply to: any Claims for Accrued Obligations (as defined in the Employment Agreement); any Claims to require the Company to honor its commitments in this Agreement; any Claims as an equity holder in the common units of the Partnership (as your holdings in such common units are limited and/or restricted by the terms of the Employment Agreement or any exhibits thereto); any Claims to interpret or to determine the scope, meaning, enforceability or effect of this Agreement; any Claims that arise after you have signed this Agreement; any other Claims that cannot be waived by a private agreement; and any Claims for indemnification under the Employment Agreement, the Company’s operating agreement and/or the Indemnification Agreement between you and the Company. The Release is subject to and restricted by your Retained Rights in Paragraph 5.

5.     Retained Rights.

(a)    Regardless of whether or not you sign this Agreement, nothing in this Agreement is intended to or shall be interpreted to restrict or otherwise interfere with: (i) your obligation to testify truthfully in any forum; (ii) your right and/or obligation to contact, cooperate with, provide information to, file a charge with, or otherwise participate in any proceeding of, any government agency, commission or entity (including, but not limited, to the EEOC and the SEC); or (iii) your right to disclose any information or produce any documents as is required by law or legal process. However, the Release does prevent you, to the maximum extent permitted by law, from obtaining any monetary or other personal relief for any of the Claims you have released in Paragraph 3 with regard to any charge you may file or which may be filed on your behalf.

 

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(b)    Notwithstanding the foregoing, or any other provision of this Agreement, nothing in this Agreement is intended to prohibit you from reporting possible violations of federal, state or local law, ordinance or regulation to any governmental agency or entity, including, but not limited to, the Department of Justice, the SEC, the Congress and any agency Inspector General, or otherwise taking action or making disclosures that are protected under the whistleblower provisions of any federal, state or local law, ordinance or regulation, including, but not limited to, Rule 21F-17 promulgated under the Securities Exchange Act of 1934, as amended. You are entitled to make reports and disclosures or otherwise take action under this paragraph without prior authorization from or subsequent notification to the Company. Similarly, nothing set forth in this Agreement limits your right to receive a monetary award for information provided to the SEC pursuant to Rule 21F-17 promulgated under the Securities Exchange Act of 1934, as amended, or for information provided to the DOL or any other government agency, commission or entity. Further, nothing set forth in this Agreement limits your immunity and disclosure rights in Section 8(e) of the Employment Agreement which is hereby incorporated by reference.

6.     Adequacy of Consideration . You acknowledge and agree that the Company’s Severance Benefits under Paragraph 2 above constitute adequate and sufficient consideration to support your Release above and fully compensate you for Claims you are releasing.

7.     Duty to Notify . In the event you receive a request or demand, orally, in writing, electronically or otherwise, for the disclosure or production of confidential information which you created or acquired in the course of your employment, you must notify immediately the Company’s General Counsel, Chief Legal Officer and Secretary by calling: (215) _______ and notify him immediately in writing, via first class mail, at the following address: StoneMor GP LLC, 3600 Horizon Blvd., Trevose, PA 19053, enclosing a copy of the request or demand as well as any and all potentially responsive documents. You shall wait at least ten (10) days (or the maximum time permitted by such legal process, if less) after sending the letter before making a disclosure or production to give the Company time to determine whether the disclosure or production involves confidential and/or proprietary information, in which event the Company may seek to prohibit and/or restrict the production and/or disclosure and/or to obtain a protective order. This obligation shall not apply in the event of requests or demands for confidential information from any government agency, commission or entity.

8.     Non-Defamation.

(a)    You agree that you will not, directly or indirectly, make or ratify any defamatory comments or remarks as defined by law, in writing, orally or electronically, about the Company or any other Releasee (as defined in Paragraph 3 above) and their respective products and services. This restriction is subject to and limited by your Retained Rights in Paragraph 5.

(b)    The Company’s Board, Chief Executive Officer and General Counsel, Chief Legal Officer and Secretary, will not, directly or indirectly, make or ratify any defamatory comments or remarks as defined by law, in writing, orally or electronically, about you.

 

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(c)    The restrictions in subparagraphs (a) and (b) of this Paragraph 8 are not intended to nor shall be interpreted to restrict or otherwise interfere with the Company’s Board’s, Chief Executive Officer’s and General Counsel, Chief Legal Officer and Secretary’s (individual and/or collective): (i) obligation and entitlement to testify truthfully in any forum; (ii) right and/or obligation to contact, cooperate with, provide information to, file a charge or other action with, or otherwise participate in any litigation and/or or other legal proceeding, including of, any government agency, commission or entity (including, but not limited, to the EEOC and the SEC), or (iii) right to disclose any information or produce any documents as is required by law or legal process.

9.     Post-Employment Restrictions . You remain legally bound by, and must comply with the terms, conditions and restrictions of, the non-competition, non-solicitation and confidentiality and other post-employment provisions set forth in Sections 7, 8, 9, 10 and 11 of the Employment Agreement, which survive the cessation of your employment and are hereby incorporated by reference.

10.     Cooperation Services . Both prior to and after the Separation Date, you agree to reasonably cooperate with and provide assistance to the Company (for purposes of this Paragraph 10, including the Partnership and any affiliates and/or related entities), without any additional compensation, if called upon by authorized agents of the Company or the Company’s attorneys for the purposes of the transition of your responsibilities as well as with regard to any lawsuit, claim, action, investigation, inquiry, administrative action or review or otherwise, that is currently pending or that may be brought against the Company, or in connection with any internal investigation by the Company. You agree to make yourself reasonably available for interviews, meetings, depositions, hearings and/or trials without the need for subpoena or assurances by the Company, providing any and all documents in your possession that relate to the proceedings, and providing assistance in locating any and all relevant notes and/or documents as necessary. Any cooperation shall be provided by you at reasonable times and locations, with as much advance notice as possible by the Company. In any circumstance, to the extent you are required to incur out-of-pocket expenses in connection with any cooperation that the Company may request of you (such as for travel), the Company will fully reimburse you for reasonable out-of-pocket expenses upon presentation of appropriate receipts.

11.     Interpretation of Agreement . Nothing in this Agreement is intended as or shall be construed as an admission or concession of liability or wrongdoing by the Company or any other Releasee as defined above. This Agreement shall be governed by and construed in accordance with the laws of Pennsylvania and without the aid of any canon, custom or rule of law requiring construction against the draftsperson. If any provision of this Agreement or application thereof is adjudicated to be invalid or unenforceable by a court of competent jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this Agreement which can be given effect without the invalid or unenforceable provision or application.

12.     Entire Agreement . This Agreement constitutes the entire agreement between the parties regarding the matters contained herein and supersedes any and all prior representations, agreements, written or oral, expressed or implied; except for the post-employment provisions and restrictions of your Employment Agreement, which survive the cessation of your employment and are incorporated herein by reference. This Agreement may not be modified or amended

 

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other than by an agreement in writing signed by both parties. This Agreement shall be binding upon and be for the benefit of the parties as well as your heirs and the Company’s successors and assigns.

13.     Acknowledgment . You acknowledge and agree that, subsequent to the cessation of your employment, you shall not be eligible for any payments from the Company or Company-paid benefits, except as expressly set forth in this Agreement.

14.     Tax Matters . To the extent that payments under this Agreement constitute nonqualified deferred compensation subject to Section 409A of the Code, the payments are intended to comply with Section 409A of the Code and any ambiguities in this Agreement shall be interpreted so as to comply. If you are a “specified employee” within the meaning of Code Section 409A(a)(2)(B)(i) at the time of your separation from service, any nonqualified deferred compensation subject to Section 409A that would otherwise have been payable under this Agreement as a result of, and within the first six (6) months following, your separation from service, will become payable six (6) months and one (1) day following the date of the Employee’s separation from service or, if earlier, the date of Employee’s death, if required by Section 409A.    All references to “termination of employment,” “cessation of employment,” “retirement” and the like in this Agreement shall mean a “separation from service” within the meaning of Section 409A. Each payment under this Agreement shall be considered a separate payment for purposes of Section 409A. In no event may you directly or indirectly designate the calendar year of a payment under this Agreement. You acknowledge that neither the Company nor its attorneys have provided any tax advice to you.

15.     Representations.

(a)    You agree and represent that: (a) you have read carefully the terms of this Agreement, including the General Release; (b) you have had an opportunity to and have been encouraged to review this Agreement, including the Release, with an attorney; (c) you understand the meaning and effect of the terms of this Agreement, including the waiver of Claims as set forth in the Release (subject to the limitations in Paragraph 4 above and your Retained Rights in Paragraph 5 above); (d) you were given a period of twenty-one (21) days [or forty-five (45) days if it is a group termination] to determine whether you wished to sign this Agreement and your decision to sign this Agreement and waive any and all Claims in Paragraph 3 above is of your own free and voluntary act without compulsion of any kind; (e) no promise or inducement not expressed in this Agreement has been made to you, (f) you understand that you are waiving your Claims as set forth in Paragraph 3 above, including, but not limited to, Claims for age discrimination under the Age Discrimination in Employment Act (subject to the limitations in Paragraph 4 above and your Retained Rights in Paragraph 5 above); and (g) you have adequate information to make a knowing and voluntary waiver of any and all Claims as set forth in Paragraph 3 above.

(b)    If you sign this Agreement, you will retain the right to revoke it for seven (7) days. If you revoke this Agreement, you are indicating that you have changed your mind and do not want to be legally bound by this Agreement. The Agreement shall not be effective until after the Revocation Period has expired without your having revoked it. To revoke this Agreement, you must send a certified letter to the Company’s General Counsel, Chief

 

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Legal Officer and Secretary at the following address: StoneMor Partners L.P., 3600 Horizon Blvd., Trevose, PA 1905. The letter must be post-marked within seven (7) days of your execution of this Agreement. If the seventh day is a Sunday or federal holiday, then the letter must be post-marked on the following business day.

IN WITNESS WHEREOF, the Company and you have executed this Agreement intending to be legally bound:

 

 

    StoneMor GP LLC
Mark Miller     By:  

 

      Name:  

 

      Title:  

 

Date:  

 

    Date:  

 

 

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EXHIBIT D

FORM INDEMNIFICATION AGREEMENT

See Attached


[Filed as Exhibit 10.4 to this Current Report on Form 8-K and incorporated by reference herein.]

Exhibit 10.4

INDEMNIFICATION AGREEMENT

THIS AGREEMENT, is entered into on May 22, 2017, and shall be effective as of May 16, 2017, between StoneMor GP LLC, a Delaware limited liability company (the “Company”), and the undersigned (“Indemnitee”).

WHEREAS, the Company has adopted a Limited Liability Company Agreement (the “LLC Agreement”) providing for indemnification of the Company’s directors and officers to the fullest extent authorized by the Delaware Limited Liability Company Act (the “State Statute”); and

WHEREAS, the LLC Agreement and State Statute contemplate that contracts and insurance policies may be entered into with respect to indemnification of directors and officers; and

WHEREAS, there are questions concerning the adequacy and reliability of the protection which might be afforded to directors and officers from acquisition of policies of Directors and Officers Liability Insurance (“D&O Insurance”), covering certain liabilities which might be incurred by directors or officers in the performance of their services to the Company; and

WHEREAS, it is reasonable, prudent and necessary for the Company to obligate itself contractually to indemnify Indemnitee so that he will serve or continue to serve the Company free from undue concern that he will not be adequately protected; and

WHEREAS, Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on condition that he be so indemnified;

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

1. Definitions. As used in this Agreement:

(a) The term “Proceeding” shall include any threatened, pending or completed action, suit, inquiry or proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil, criminal, administrative, arbitrative or investigative nature, in which Indemnitee is or will be involved as a party, as a witness or otherwise, by reason of the fact that Indemnitee is or was a director, officer or agent of the Company, by reason of any action taken by him or of any inaction on his part while acting as a director, officer or agent of the Company or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, limited liability company or other enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification or reimbursement can be provided under this Agreement; provided that any such action, suit or proceeding that is brought by Indemnitee against that company or directors or officers of the Company, other than an action brought by Indemnitee to enforce his rights under this Agreement, shall not be deemed a Proceeding without prior approval by a majority of the Board of Directors of the Company.


(b) The term “Expenses” shall include, without limitation, any judgments, fines and penalties against Indemnitee in connection with a Proceeding; amounts paid by Indemnitee in settlement of a Proceeding; and all attorneys’ fees and disbursements, accountants’ fees, private investigation fees and disbursements, retainers, court costs, transcript costs, fees of experts, fees and expenses of witnesses, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements, or expenses, reasonably incurred by or for Indemnitee in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in a Proceeding or establishing Indemnitee’s right of entitlement to indemnification for any of the foregoing.

(c) References to “other enterprise” shall include employee benefit plans; references to “Fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer or agent of the Company that imposes duties on, or involves services by, such director, officer or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interest of the Company” as referred to in this Agreement.

(d) The term “substantiating documentation” shall mean copies of bills or invoices for costs incurred by or for Indemnitee, or copies of court or agency orders or decrees or settlement agreements, as the case may be, accompanied by a sworn statement from Indemnitee that such bills, invoices, court or agency orders or decrees or settlement agreements, represent costs or liabilities meeting the definition of “Expenses” herein.

(e) The terms “he” and “his” have been used for convenience and mean “she” and “her” if Indemnitee is a female.

2. Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify Indemnitee against Expenses to the fullest extent authorized or permitted by law (including the applicable provisions of the State Statute). The phrase “to the fullest extent permitted by law” shall include, but not be limited to (i) to the fullest extent permitted by any provision of the State Statute that authorizes or permits additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the State Statute and (ii) to the fullest extent authorized or permitted by any amendments to or replacements of the State Statute adopted after the date of this Agreement that increase the extent to which a limited liability company may indemnify its directors or officers. Any amendment, alteration or repeal of the State Statute that adversely affects any right of Indemnitee shall be prospective only and shall not limit or eliminate any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment or repeal.

3. Additional Indemnity. The Company hereby further agrees to hold harmless and indemnify Indemnitee against Expenses incurred by reason of the fact that Indemnitee is or was a director, officer or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust,

 

2


limited liability company or other enterprise, including, without limitation, any predecessor, subsidiary or affiliated entity of the Company, provided that the Indemnitee shall not be indemnified and held harmless if there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Agreement, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or gross negligence, or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful. The termination of any Proceeding by judgment, order of the court, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not, of itself, create a presumption that Indemnitee acted in bad faith or engaged in fraud, willful misconduct or gross negligence, or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful.

4. Choice of Counsel. If Indemnitee is not an officer of the Company, he, together with the other directors who are not officers of the Company (the “Outside Directors”), shall be entitled to employ, and be reimbursed for the fees and disbursements of, counsel separate from that chosen by Indemnitees who are officers of the Company. The principal counsel for Outside Directors (“Principal Counsel”) shall be determined by majority vote of the Outside Directors, and the Principal Counsel for the Indemnitees who are not Outside Directors (“Separate Counsel”) shall be determined by majority vote of such Indemnitees. The obligation of the Company to reimburse Indemnitee for the fees and disbursements of counsel hereunder shall not extend to the fees and disbursements of any counsel employed by Indemnitee other than Principal Counsel or Separate Counsel, as the case may be, unless, in the opinion of other counsel for Indemnitee, concurred in by Principal Counsel or Separate Counsel, as the case may be, Indemnitee may have defenses available to him that are in addition to or different from those of the other Indemnitees such that there is a substantial possibility that Principal Counsel of Separate Counsel, as the case may be, will have a conflict of interest in representing Indemnitee.

5. Advances of Expenses. Expenses (other than judgments, penalties, fines and settlements) incurred by Indemnitee shall be paid by the Company, in advance of the final disposition of the Proceeding, within 10 days after receipt of Indemnitee’s written request accompanied by substantiating documentation and Indemnitee’s written affirmation that he has met the standard of conduct for indemnification and a written undertaking to repay such amount to the extent it is ultimately determined that indemnitee is not entitled to indemnification. No objections based on or involving the question whether such charges meet the definition of “Expenses,” including any question regarding the reasonableness of such Expenses, shall be grounds for failure to advance to such Indemnitee, or to reimburse such Indemnitee for, the amount claimed within such 10-day period, and the undertaking of Indemnitee set forth in Section 7 hereof to repay any such amount to the extent it is ultimately determined that Indemnitee is not entitled to indemnification shall be deemed to include an undertaking to repay any such amounts determined not to have met such definition.

6. Right of Indemnitee to Indemnification Upon Application; Procedure Upon Application. Any indemnification under this Agreement, other than pursuant to Section 5 hereof, shall be made no later than 45 days after receipt by the Company of the written request of Indemnitee, accompanied by substantiating documentation, unless a determination is made within said 45-day period by (1) the Board of Directors by a majority vote of a quorum consisting of directors who are not or were not parties to such Proceeding, (2) by a committee of

 

3


the Board of Directors designated by majority vote of the Board of Directors, even though less than a quorum, (3) if there are no such directors, or if such directors so direct, independent legal counsel in a written opinion or (4) by the members, that Indemnitee has not met the relevant standards for indemnification set forth in Section 3 hereof.

The right to indemnification or advances as provided by this Agreement shall be enforceable by Indemnitee in any court of competent jurisdiction. The burden of proving that indemnification is not appropriate shall be on the Company. Neither the failure of the Company (including its Board of Directors, committee thereof, independent legal counsel or members) to have made a determination prior to the commencement of such action that indemnification is proper in the circumstances because Indemnitee has met the applicable standards of conduct, nor an actual determination by the Company (including its Board of Directors, committee thereof, independent legal counsel or members) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

7. Undertaking by Indemnitee. Indemnitee hereby undertakes to repay to the Company any advances of Expenses pursuant to Section 5 hereof to the extent that it is ultimately determined that Indemnitee is not entitled to indemnification.

8. Indemnification Hereunder Not Exclusive. The indemnification and advancement of expenses provided by this Agreement shall not deemed exclusive of any other rights to which Indemnitee may be entitled under the LLC Agreement, the State Statute, D&O Insurance, any agreement, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office; provided, however, that this Agreement supersedes all prior written indemnification agreements between the Company (or any predecessor thereof) and Indemnitee with respect to the subject matter hereof other than as set forth in the Employment Agreement entered into by and between the Company and the Indemnitee contemporaneously herewith. However, Indemnitee shall reimburse the Company for amounts paid to him pursuant to such other rights to the extent such payments duplicate any payments received pursuant to this Agreement.

9. Continuation of Indemnity. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is a director and/or officer of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, limited liability company or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding.

10. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such Expenses to which Indemnitee is entitled.

11. Settlement of Claims. The Company shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without the Company’s written consent. The Company shall not settle any Proceeding in any manner which

 

4


would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent. Neither the Company nor Indemnitee will unreasonably withhold their consent to any proposed settlement. The Company shall not be liable to indemnify Indemnitee under this Agreement with regard to any judicial award if the Company was not given a reasonable and timely opportunity, at its expense, to participate in the defense of such action.

12. Enforcement.

(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on the Company hereby in order to induce Indemnitee to serve as a director and/or officer of the Company, and acknowledges that Indemnitee is relying upon this Agreement in continuing as a director and/or officer.

(b) In the event Indemnitee is required to bring any action or other proceeding to enforce rights or to collect money due under this Agreement and is successful in such action, the Company shall reimburse Indemnitee for all of Indemnitee’s Expenses in bringing and pursuing such action.

13. Governing Law; Binding Effect; Amendment and Termination.

(a) This Agreement shall be interpreted and enforced in accordance with the laws of the State of Delaware.

(b) This Agreement shall be binding upon the Company, its successors and assigns, and shall inure to the benefit of Indemnitee, his heirs, personal representatives and assigns and to the benefit of the Company, its successors and assigns.

(c) No amendment, modification, termination or cancellation of this Agreement shall be effective unless in writing signed by the Company and Indemnitee.

14. Severability. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable (a) the validity, legality and enforceability of the remaining provisions of this Agreement shall not be in any way affected or impaired thereby, and (b) to the fullest extent possible, the provisions of this Agreement shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. Each section of this Agreement is a separate and independent portion of this Agreement. If the indemnification to which Indemnitee is entitled as respects any aspect of any claim varies between two or more sections of this Agreement, that section providing the most comprehensive indemnification shall apply.

15. Notice. Notice to the Company shall be directed to StoneMor GP LLC, 3600 Horizon Boulevard, Trevose, Pennsylvania 19053, Attention: General Counsel. Notice to Indemnitee shall be directed to the address set forth under his signature hereto. The foregoing addresses may be changed from time to time by the addressee upon notice to the other parties.

Notice shall be deemed received three days after the date postmarked if sent by prepaid mail, properly addressed.

 

5


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

 

STONEMOR GP LLC
By:    /s/ Austin K. So
Name:   Austin K. So
Title:   GC, CLO & Secy
INDEMNITEE

/s/ Mark L. Miller

Name:   Mark L. Miller
Address:  

4095 Kozy Korner Rd.

Center Valley, PA 18034

 

6

Exhibit 10.5

INDEMNIFICATION AGREEMENT

THIS AGREEMENT, shall be effective as of May 16, 2017, between StoneMor GP LLC, a Delaware limited liability company (the “Company”), and the undersigned (“Indemnitee”).

WHEREAS, the Company has adopted a Limited Liability Company Agreement (the “LLC Agreement”) providing for indemnification of the Company’s directors and officers to the fullest extent authorized by the Delaware Limited Liability Company Act (the “State Statute”); and

WHEREAS, the LLC Agreement and State Statute contemplate that contracts and insurance policies may be entered into with respect to indemnification of directors and officers; and

WHEREAS, there are questions concerning the adequacy and reliability of the protection which might be afforded to directors and officers from acquisition of policies of Directors and Officers Liability Insurance (“D&O Insurance”), covering certain liabilities which might be incurred by directors or officers in the performance of their services to the Company; and

WHEREAS, it is reasonable, prudent and necessary for the Company to obligate itself contractually to indemnify Indemnitee so that he will serve or continue to serve the Company free from undue concern that he will not be adequately protected; and

WHEREAS, Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on condition that he be so indemnified;

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

1. Definitions. As used in this Agreement:

(a) The term “Proceeding” shall include any threatened, pending or completed action, suit, inquiry or proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil, criminal, administrative, arbitrative or investigative nature, in which Indemnitee is or will be involved as a party, as a witness or otherwise, by reason of the fact that Indemnitee is or was a director, officer or agent of the Company, by reason of any action taken by him or of any inaction on his part while acting as a director, officer or agent of the Company or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, limited liability company or other enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification or reimbursement can be provided under this Agreement; provided that any such action, suit or proceeding that is brought by Indemnitee against that company or directors or officers of the Company, other than an action brought by Indemnitee to enforce his rights under this Agreement, shall not be deemed a Proceeding without prior approval by a majority of the Board of Directors of the Company.


(b) The term “Expenses” shall include, without limitation, any judgments, fines and penalties against Indemnitee in connection with a Proceeding; amounts paid by Indemnitee in settlement of a Proceeding; and all attorneys’ fees and disbursements, accountants’ fees, private investigation fees and disbursements, retainers, court costs, transcript costs, fees of experts, fees and expenses of witnesses, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements, or expenses, reasonably incurred by or for Indemnitee in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in a Proceeding or establishing Indemnitee’s right of entitlement to indemnification for any of the foregoing.

(c) References to “other enterprise” shall include employee benefit plans; references to “Fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer or agent of the Company that imposes duties on, or involves services by, such director, officer or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interest of the Company” as referred to in this Agreement.

(d) The term “substantiating documentation” shall mean copies of bills or invoices for costs incurred by or for Indemnitee, or copies of court or agency orders or decrees or settlement agreements, as the case may be, accompanied by a sworn statement from Indemnitee that such bills, invoices, court or agency orders or decrees or settlement agreements, represent costs or liabilities meeting the definition of “Expenses” herein.

(e) The terms “he” and “his” have been used for convenience and mean “she” and “her” if Indemnitee is a female.

2. Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify Indemnitee against Expenses to the fullest extent authorized or permitted by law (including the applicable provisions of the State Statute). The phrase “to the fullest extent permitted by law” shall include, but not be limited to (i) to the fullest extent permitted by any provision of the State Statute that authorizes or permits additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the State Statute and (ii) to the fullest extent authorized or permitted by any amendments to or replacements of the State Statute adopted after the date of this Agreement that increase the extent to which a limited liability company may indemnify its directors or officers. Any amendment, alteration or repeal of the State Statute that adversely affects any right of Indemnitee shall be prospective only and shall not limit or eliminate any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment or repeal.

3. Additional Indemnity. The Company hereby further agrees to hold harmless and indemnify Indemnitee against Expenses incurred by reason of the fact that Indemnitee is or was a director, officer or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust,

 

2


limited liability company or other enterprise, including, without limitation, any predecessor, subsidiary or affiliated entity of the Company, provided that the Indemnitee shall not be indemnified and held harmless if there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Agreement, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or gross negligence, or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful. The termination of any Proceeding by judgment, order of the court, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not, of itself, create a presumption that Indemnitee acted in bad faith or engaged in fraud, willful misconduct or gross negligence, or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful.

4. Choice of Counsel. If Indemnitee is not an officer of the Company, he, together with the other directors who are not officers of the Company (the “Outside Directors”), shall be entitled to employ, and be reimbursed for the fees and disbursements of, counsel separate from that chosen by Indemnitees who are officers of the Company. The principal counsel for Outside Directors (“Principal Counsel”) shall be determined by majority vote of the Outside Directors, and the Principal Counsel for the Indemnitees who are not Outside Directors (“Separate Counsel”) shall be determined by majority vote of such Indemnitees. The obligation of the Company to reimburse Indemnitee for the fees and disbursements of counsel hereunder shall not extend to the fees and disbursements of any counsel employed by Indemnitee other than Principal Counsel or Separate Counsel, as the case may be, unless, in the opinion of other counsel for Indemnitee, concurred in by Principal Counsel or Separate Counsel, as the case may be, Indemnitee may have defenses available to him that are in addition to or different from those of the other Indemnitees such that there is a substantial possibility that Principal Counsel of Separate Counsel, as the case may be, will have a conflict of interest in representing Indemnitee.

5. Advances of Expenses. Expenses (other than judgments, penalties, fines and settlements) incurred by Indemnitee shall be paid by the Company, in advance of the final disposition of the Proceeding, within 10 days after receipt of Indemnitee’s written request accompanied by substantiating documentation and Indemnitee’s written affirmation that he has met the standard of conduct for indemnification and a written undertaking to repay such amount to the extent it is ultimately determined that indemnitee is not entitled to indemnification. No objections based on or involving the question whether such charges meet the definition of “Expenses,” including any question regarding the reasonableness of such Expenses, shall be grounds for failure to advance to such Indemnitee, or to reimburse such Indemnitee for, the amount claimed within such 10-day period, and the undertaking of Indemnitee set forth in Section 7 hereof to repay any such amount to the extent it is ultimately determined that Indemnitee is not entitled to indemnification shall be deemed to include an undertaking to repay any such amounts determined not to have met such definition.

6. Right of Indemnitee to Indemnification Upon Application; Procedure Upon Application. Any indemnification under this Agreement, other than pursuant to Section 5 hereof, shall be made no later than 45 days after receipt by the Company of the written request of Indemnitee, accompanied by substantiating documentation, unless a determination is made within said 45-day period by (1) the Board of Directors by a majority vote of a quorum consisting of directors who are not or were not parties to such Proceeding, (2) by a committee of

 

3


the Board of Directors designated by majority vote of the Board of Directors, even though less than a quorum, (3) if there are no such directors, or if such directors so direct, independent legal counsel in a written opinion or (4) by the members, that Indemnitee has not met the relevant standards for indemnification set forth in Section 3 hereof.

The right to indemnification or advances as provided by this Agreement shall be enforceable by Indemnitee in any court of competent jurisdiction. The burden of proving that indemnification is not appropriate shall be on the Company. Neither the failure of the Company (including its Board of Directors, committee thereof, independent legal counsel or members) to have made a determination prior to the commencement of such action that indemnification is proper in the circumstances because Indemnitee has met the applicable standards of conduct, nor an actual determination by the Company (including its Board of Directors, committee thereof, independent legal counsel or members) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

7. Undertaking by Indemnitee. Indemnitee hereby undertakes to repay to the Company any advances of Expenses pursuant to Section 5 hereof to the extent that it is ultimately determined that Indemnitee is not entitled to indemnification.

8. Indemnification Hereunder Not Exclusive. The indemnification and advancement of expenses provided by this Agreement shall not deemed exclusive of any other rights to which Indemnitee may be entitled under the LLC Agreement, the State Statute, D&O Insurance, any agreement, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office; provided, however, that this Agreement supersedes all prior written indemnification agreements between the Company (or any predecessor thereof) and Indemnitee with respect to the subject matter hereof other than as set forth in the Employment Agreement entered into by and between the Company and the Indemnitee contemporaneously herewith. However, Indemnitee shall reimburse the Company for amounts paid to him pursuant to such other rights to the extent such payments duplicate any payments received pursuant to this Agreement.

9. Continuation of Indemnity. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is a director and/or officer of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, limited liability company or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any possible Proceeding.

10. Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such Expenses to which Indemnitee is entitled.

11. Settlement of Claims. The Company shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without the Company’s written consent. The Company shall not settle any Proceeding in any manner which

 

4


would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent. Neither the Company nor Indemnitee will unreasonably withhold their consent to any proposed settlement. The Company shall not be liable to indemnify Indemnitee under this Agreement with regard to any judicial award if the Company was not given a reasonable and timely opportunity, at its expense, to participate in the defense of such action.

12. Enforcement.

(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on the Company hereby in order to induce Indemnitee to serve as a director and/or officer of the Company, and acknowledges that Indemnitee is relying upon this Agreement in continuing as a director and/or officer.

(b) In the event Indemnitee is required to bring any action or other proceeding to enforce rights or to collect money due under this Agreement and is successful in such action, the Company shall reimburse Indemnitee for all of Indemnitee’s Expenses in bringing and pursuing such action.

13. Governing Law; Binding Effect; Amendment and Termination.

(a) This Agreement shall be interpreted and enforced in accordance with the laws of the State of Delaware.

(b) This Agreement shall be binding upon the Company, its successors and assigns, and shall inure to the benefit of Indemnitee, his heirs, personal representatives and assigns and to the benefit of the Company, its successors and assigns.

(c) No amendment, modification, termination or cancellation of this Agreement shall be effective unless in writing signed by the Company and Indemnitee.

14. Severability. If any provision of this Agreement shall be held to be invalid, illegal or unenforceable (a) the validity, legality and enforceability of the remaining provisions of this Agreement shall not be in any way affected or impaired thereby, and (b) to the fullest extent possible, the provisions of this Agreement shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. Each section of this Agreement is a separate and independent portion of this Agreement. If the indemnification to which Indemnitee is entitled as respects any aspect of any claim varies between two or more sections of this Agreement, that section providing the most comprehensive indemnification shall apply.

15. Notice. Notice to the Company shall be directed to StoneMor GP LLC, 3600 Horizon Boulevard, Trevose, Pennsylvania 19053, Attention: General Counsel. Notice to Indemnitee shall be directed to the address set forth under his signature hereto. The foregoing addresses may be changed from time to time by the addressee upon notice to the other parties.

Notice shall be deemed received three days after the date postmarked if sent by prepaid mail, properly addressed.

 

5


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

 

STONEMOR GP LLC
By:   /s/ Austin K. So
Name:   Austin K. So
Title:   GC, CLO & Secy
INDEMNITEE

/s/ Robert A. Sick

Name:   Robert A. Sick
Address:  

14 Coal Mine View

Portola Valley, CA 94028

 

6

Exhibit 99.1

 

LOGO

 

CONTACT:    John McNamara
   Director - Investor Relations
   StoneMor Partners L.P.
   (215) 826-2945

 

 

STONEMOR APPOINTS R. PAUL GRADY PRESIDENT AND CHIEF

EXECUTIVE OFFICER AND MARK MILLER CHIEF FINANCIAL

OFFICER

Executives Share Strong Track Records of Driving Growth and Extensive MLP Experience

Together, Bring More Than Six Decades of Operations Leadership and Financial Expertise

TREVOSE, PA – May  16, 2017 - StoneMor Partners L.P. (NYSE: STON) (“StoneMor,” the “Partnership,” a leading owner and operator of cemeteries and funeral homes, today announced the appointment of R. Paul Grady as President and Chief Executive Officer, effective May 17, 2017. Mr. Grady, who will also join the StoneMor Board of Directors, replaces Lawrence Miller, who is retiring as Chairman, President and Chief Executive Officer. StoneMor also announced the appointment of Mark Miller as Chief Financial Officer, effective immediately, and added that Bob Sick has joined its Board of Directors.

“We are delighted to welcome seasoned executives Paul and Mark to StoneMor and believe that their extensive leadership experience and proven management skills make them the ideal choice for the Partnership,” said Robert B. Hellman, StoneMor’s lead director and Chairman of the General Partner. “StoneMor will benefit from Paul’s prior work with master limited partnerships, his proven track record managing complex national businesses and his hands-on leadership style. Combined with Mark’s time as a publicly traded MLP CFO and his well-rounded functional background in accounting, treasury, M&A, FP&A and IT, and we have a formidable leadership team in place. I look forward to partnering with Paul and Mark to put StoneMor firmly back on the path to growth.”

“I have committed substantive time to studying the deathcare industry and StoneMor’s situation in particular,” said Paul Grady. “We have fallen short in operational areas, have a salesforce to re-build and haven’t been effective enough with our financial controls, leading to the delay of our recent quarterly filings. I am committed to fixing these issues. Despite these challenges, I believe the future is bright. We are one of the leading players in a growing industry, and I see no reason we cannot capture that growth in the coming years.”

“It has been a challenging year for StoneMor, but I look forward to fixing any historical errors and leveraging my strong track record building and leading teams that are focused on growth and execution,” said Mark Miller. “Like Paul, I am committed to open and transparent communication. We expect to be in a position to provide preliminary financial results for the 2016 fourth quarter and 2017 first quarter shortly and will file our complete financial results as soon as we are able.”


Mr. Grady began his career in 1978 in sales, marketing and corporate development roles at a number of consumer packaged goods companies, including Campbell’s Soup Company. Most recently, Mr. Grady served as Interim Chief Executive Officer of Rio de Janeiro-based NEOgas S.A.. Mr. Grady, a Philadelphia native, has spent the majority of his career at large companies in the Greater Philadelphia area. He brings more than two decades experience in the oil and gas industry and since 1995 has held Chief Operating Officer positions at AmeriGas Propane, Heritage Propane and Titan Propane. He rose to become President of Heritage Propane prior to its acquisition by AmeriGas Propane in 2012. During his time at these companies he was responsible for more than 12,000 employees and oversaw significant growth in earnings at each of these organizations through execution of organic and acquisition strategies.

Mr. Miller began his career at Deloitte & Touche in New York City. He has been working as a consultant for StoneMor in recent months. Prior to that he served as Chief Financial Officer of Allentown-based CrossAmerica Partners, formerly Lehigh Gas Partners, a publicly listed MLP with $2.7 billion in revenue, where he oversaw a team of approximately 50 people. He brings a 31-year finance career with a strong accounting foundation, followed by more recent M&A and financing experience during CrossAmerica’s growth from private company to approximately $42 million of EBITDA in 2014. Mr. Miller took Lehigh public as an MLP in October of 2012.

Mr. Grady graduated in 1975 from Stetson University in Deland, Florida, with a BA in Marketing and Management. He also earned a J. D. from Stetson College of Law. Mr. Miller graduated in 1984 from Northeastern University, Boston, with a Bachelor of Science in Accounting. Both men are Philadelphia natives.

StoneMor also announced today that Bob Sick has joined the Board of Directors. Mr. Sick has been a private equity investor for more than 20 years, performing transition CEO work in a wide variety of industries and with a large number of private equity and GP groups. He has been CEO of approximately 35 companies through his management company, White Oak Capital, LLC. Most recently, he has been Operating Director at American Infrastructure Funds since 2015. Mr. Sick graduated from Stanford University with a Master of Science in Industrial Engineering/Engineering Management.

*    *    *

About StoneMor Partners L.P.

StoneMor Partners L.P., headquartered in Trevose, Pennsylvania, is an owner and operator of cemeteries and funeral homes in the United States, with 316 cemeteries and 100 funeral homes in 27 states and Puerto Rico. StoneMor is the only publicly traded death care company structured as a partnership. StoneMor’s 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. For additional information about StoneMor Partners L.P., please visit StoneMor’s website, and the investors section, at http://www.stonemor.com.

 

2


Cautionary Note Regarding Forward-Looking Statements

Certain statements contained in this release, including, but not limited to, information regarding the the Partnership’s growth prospects and efforts to correct prior accounting errors, are forward-looking statements. Generally, the words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “project,” “expect,” “predict” and similar expressions identify these forward-looking statements. These statements are based on management’s current expectations and estimates. These statements are neither promises nor guarantees and are made subject to risks and uncertainties that could cause actual results to differ materially from those stated or implied by the forward-looking statements, including, without limitation, risks relating to the Partnership’s ability to improve its operations, continue rebuilding its sales force and fully identify and address historical accounting deficiencies, and other risks described in the Partnership’s filings with the U.S. Securities and Exchange Commission. Except as required under applicable law, the Partnership assumes no obligation to update or revise any forward-looking statements made herein or any other forward-looking statements made by it, whether as a result of new information, future events or otherwise.

 

3