Exhibit 10.3

Form for Directors

CARRIAGE SERVICES, INC.

SECOND AMENDED AND RESTATED

2006 LONG-TERM INCENTIVE PLAN

PERFORMANCE-BASED

STOCK AWARD AGREEMENT

This Performance-Based Stock Award Agreement (this “Agreement”) is made and
entered into as of             , 20            (the “Grant Date”) by and between
Carriage Services, Inc. (the “Company”) and             (the “Director”).

To carry out the purposes of the Carriage Services, Inc. Second Amended and
Restated 2006 Long-Term Incentive Plan (the “Plan”), and in consideration of the
mutual agreements and other matters set forth herein and in the Plan, the
Company and the Director hereby agree as follows:

1. Grant of Performance-Based Stock Award. The Company hereby issues to the
Director, as of the Grant Date, a Performance-Based Stock Award under Article X
and Section 11.1 of the Plan in respect of             shares of Common Stock
(the “Award”), subject to all of the terms and conditions set forth in the Plan
and in this Agreement. To the extent vested, the Award represents the right of
the Director to receive Common Stock upon payment of the Purchase Price (as
defined below). Capitalized terms that are used but not defined herein have the
meanings ascribed to them in the Plan unless the context indicates otherwise.
Unless and until the Award vests pursuant to this Agreement, the Director will
have no right to payment in respect of the Award.

2. Purchase Price. Prior to settlement of the Award, but in no event later than
the date that is three business days prior to March 15th of the calendar year
following the calendar year that includes the Vesting Date (as defined in
Section 3 below), the Director shall deliver to the Company, with respect to
each share of Common Stock subject to the Award, an amount equal to the greater
of (a) the Fair Market Value of a share of Common Stock on the Grant Date plus
$0.50 or (b) $9.00 (the “Purchase Price”). The Purchase Price shall be paid in
full either (i) in cash or by certified or bank check, (ii) through irrevocable
instructions to a broker-dealer to sell or margin a sufficient number of shares
of Common Stock subject to the Award and deliver the sale or margin loan
proceeds directly to the Company to pay the Purchase Price, (iii) by reduction
in the number of shares otherwise deliverable upon vesting of the Award having a
Fair Market Value equal to the Purchase Price or (iv) by any combination of the
foregoing methods. Should the Purchase Price not be paid within the time period
set forth in this Section 2, the Award shall thereupon automatically be
forfeited by the Director without further action and without payment of
consideration therefor.

3. Vesting. Except as otherwise provided herein, the Award shall vest in full on
the Vesting Date (as defined below), provided that the Director continues to be
a member of the Board from the Grant Date through the Vesting Date. If the
Director ceases to be a member of the Board at any time before the Vesting Date
for any reason or no reason whatsoever, then, except as otherwise provided in
Section 5 below, Award shall thereupon automatically be

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cancelled and terminated without further action and without payment of any
consideration therefor. For purposes of this Agreement, the “Vesting Date” shall
be the date on which the closing price of the Common Stock (as reported in The
Wall Street Journal or such other reporting service approved by the Committee)
is greater than or equal to $21.50 for the third time (whether or not
consecutive) within a period of 30 consecutive calendar days. Notwithstanding
the foregoing, (a) if the conditions described in the preceding sentence are
satisfied on or prior to the first anniversary of the Grant Date, then the
Vesting Date shall be the first anniversary of the Grant Date and (b) if the
conditions described in the preceding sentence are not satisfied on or prior to
the fifth anniversary of the Grant Date, then the Award shall automatically
terminate without payment of any consideration therefor and shall be of no
further force or effect.

4. Settlement. Subject to Section 10 below, promptly following the Vesting Date
(and in all events, no later than March 15th of the calendar year following the
calendar year in which the Vesting Date occurs), subject to the Director’s
payment of the Purchase Price, the Company shall (a) issue and deliver to the
Director the number of shares of Common Stock subject to the Award (subject to
any reductions and/or withholdings pursuant to this Agreement) and (b) enter the
Director’s name on the books of the Company as the shareholder of record with
respect to the shares of Common Stock delivered to the Director.

5. Corporate Change. In the event of a Corporate Change, notwithstanding
anything in Article XII of the Plan to the contrary, the Award shall thereupon
automatically be cancelled and terminated and, as soon as administratively
practicable thereafter, but in no event later than March 15th of the calendar
year following the calendar year in which such Corporate Change occurs, the
Company shall pay (or cause to be paid) to the Director an amount of cash equal
to the excess, if any, of the Change in Control Value (as defined below) of the
shares of Common Stock subject to the Award over the Purchase Price, subject to
any reductions and/or withholdings pursuant to this Agreement. For purposes of
this Section 6, the “Change in Control Value” shall equal the amount determined
in the following clause (a), (b) or (c), whichever is applicable: (a) the per
share price offered to stockholders of the Company in any in any merger,
consolidation, reorganization, sale of assets or dissolution or liquidation
transaction that constitutes such Corporate Change; (b) the per share price
offered to stockholders of the Company in any tender offer or exchange offer
whereby such Corporate Change takes place; or (c) if such Corporate Change
occurs other than pursuant to a tender or exchange offer, the Fair Market Value
per share of the shares of Common Stock subject to the Award, as determined by
the Committee as of the date determined by the Committee to be the date of
cancellation and termination of the Award. In the event that the consideration
offered to stockholders of the Company in any Corporate Change consists of
anything other than cash, the Committee shall determine the fair cash equivalent
of the portion of the consideration offered that is other than cash.

6. Restrictions. Neither the Award nor any of the rights relating thereto may be
assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by the Director. Any attempt to assign, alienate, pledge, attach,
sell or otherwise transfer or encumber the Award or the rights relating thereto
shall be wholly ineffective and, if any such attempt is made, the Award will be
forfeited by the Director and all of the Director’s rights to such Award shall
immediately terminate without any payment or consideration by the Company.

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7. No Rights as Shareholder; No Dividend Equivalents. The Director shall not
have any rights of a shareholder with respect to the shares of Common Stock
underlying the Award (including, without limitation, any right to receive
dividends or dividend equivalents) unless and until the Award vests and is
settled pursuant to Section 4. Upon and following the settlement of the Award,
the Director shall be the record owner of the shares of Common Stock underlying
the Award unless and until such shares are sold or otherwise disposed of, and as
record owner shall be entitled to all rights of a shareholder of the Company
(including voting rights).

8. No Right to Continued Board Membership. Neither the Plan nor this Agreement
shall confer upon the Director any right to be retained as an Outside Director
of the Company. Further, nothing in the Plan or this Agreement shall be
construed to limit the discretion of the Company to terminate the Director’s
membership on the Board at any time.

9. Adjustments. If any change is made to the outstanding Common Stock or the
capital structure of the Company, if required, the number of shares of Common
Stock subject to the Award shall be adjusted or terminated in any manner as
contemplated by Section 4.3 of the Plan.

10. Tax Withholding. Unless other arrangements have been made that are
acceptable to the Company, the Company and each of its Affiliates is authorized
to deduct or withhold from the Award, or cause to be deducted or withheld from
any compensation or other amount owing to the Director, the amount (in cash,
Common Stock, other securities or property, or Common Stock that would otherwise
be issued pursuant to the Award) of any applicable taxes payable in respect of
the vesting and/or settlement of the Award and to take such other actions as may
be necessary in the opinion of the Company or any of its Affiliates to satisfy
its tax withholding obligations. Notwithstanding the foregoing, if the Director
is subject to Rule 16b-3 at the time of vesting and/or settlement of the Award,
except as otherwise provided in any tax withholding policy or procedure adopted
by the Company, such tax withholding automatically shall be effected by the
Company or one of its Affiliates either by (i) withholding shares of Common
Stock otherwise deliverable to the Director on the settlement of the Award or
(ii) requiring the Director to tender a cash payment to the Company or such
Affiliate in an amount equal to the applicable taxes. In the event that shares
of Common Stock that would otherwise be delivered pursuant to the Award are used
to satisfy such withholding obligations, the number of shares that may be
withheld shall be limited to the number of shares that have a Fair Market Value,
on the date of withholding, equal to the aggregate amount of such liabilities
based on the minimum statutory withholding rates for federal, state, local and
foreign income tax and payroll tax purposes that are applicable to such
supplemental taxable income.

11. Compliance with Applicable Laws. The issuance and transfer of shares of
Common Stock shall be subject to compliance by the Company and the Director with
all applicable requirements of federal and state securities laws and with all
applicable requirements of any stock exchange on which the Company’s shares of
Common Stock may be listed. No shares of Common Stock shall be issued or
transferred unless and until any then applicable requirements of state and
federal laws and regulatory agencies have been fully complied with to the
satisfaction of the Company and its counsel.

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12. Notices. Any notice required to be delivered to the Company under this
Agreement shall be in writing and addressed to the Secretary of the Company at
the Company’s principal corporate offices. Any notice required to be delivered
to the Director under this Agreement shall be in writing and addressed to the
Director at the Director’s address as shown in the records of the Company.
Either party may designate another address in writing (or by such other method
approved by the Company) from time to time.

13. Governing Law. This Agreement will be construed and interpreted in
accordance with the laws of the State of Texas without regard to conflict of law
principles thereof.

14. Interpretation. Any dispute regarding the interpretation of this Agreement
shall be submitted by the Director or the Company to the Committee for review.
The resolution of such dispute by the Committee shall be final and binding on
the Director and the Company.

15. Award Subject to Plan. This Agreement is subject to the Plan as approved by
the Company’s shareholders. The terms and provisions of the Plan as it may be
amended from time to time are hereby incorporated herein by reference. In the
event of a conflict between any term or provision contained herein and a term or
provision of the Plan, the applicable terms and provisions of the Plan will
govern and prevail.

16. Successors and Assigns. The Company may assign any of its rights under this
Agreement. This Agreement will be binding upon, and inure to the benefit of, the
successors and assigns of the Company. Subject to the restrictions on transfer
set forth herein, this Agreement will be binding upon the Director and the
Director’s beneficiaries, executors, administrators and the person(s) to whom
the Award may be transferred by will or the laws of descent or distribution.

17. Severability. The invalidity or unenforceability of any provision of the
Plan or this Agreement shall not affect the validity or enforceability of any
other provision of the Plan or this Agreement, and each provision of the Plan
and this Agreement shall be severable and enforceable to the extent permitted by
law.

18. Discretionary Nature of Plan. The Plan is discretionary and may be amended,
cancelled or terminated by the Company at any time, in its discretion. The grant
of the Award in this Agreement does not create any contractual right or other
right to receive any award in the future. Future awards, if any, will be at the
sole discretion of the Company. Any amendment, modification, or termination of
the Plan shall not constitute a change or impairment of the terms and conditions
of the Director’s membership on the Board.

19. Amendment. The Committee has the right to amend, alter, suspend, discontinue
or cancel the Award, prospectively or retroactively; provided, however, that no
such amendment shall adversely affect the Director’s material rights under this
Agreement without the Director’s consent.

20. Section 409A. This Award is not intended to constitute or provide for a
deferral of compensation that is subject to Section 409A of the Code.
Notwithstanding the foregoing, (a) the Company makes no representations that the
Award or any amounts payable under this Agreement are exempt from Section 409A
of the Code and in no event shall the Company be

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liable for all or any portion of any taxes, penalties, interest or other
expenses that may be incurred by the Director on account of non-compliance with
Section 409A of the Code and (b) if any payment provided for under the Award
would be subject to additional taxes and interest under Section 409A of the Code
if the Director’s receipt of such payment is not delayed in accordance with the
requirements of Section 409A(a)(2)(B)(i) of the Code, then such payment shall
not be provided to the Director (or the Director’s estate, if applicable) until
the earlier of (i) the date of the Director’s death or (ii) the date that is six
months after the date of the Director’s separation from service with the
Company.

21. Acceptance. The Director hereby acknowledges receipt of a copy of the Plan
and this Agreement. The Director has read and understands the terms and
provisions thereof, and accepts the Award subject to all of the terms and
conditions of the Plan and this Agreement. The Director acknowledges that there
may be adverse tax consequences upon the vesting or settlement of the Award or
disposition of the underlying shares and that the Director has been advised to
consult a tax advisor prior to such vesting, settlement or disposition. The
Director further acknowledges that the Award and any shares of Common Stock that
may be delivered with respect to the Award are subject to clawback as provided
in Section 14.8 of the Plan.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer, and the Director has executed this Agreement, effective
for all purposes as provided above.

 

CARRIAGE SERVICES, INC. By:       Name:       Title:     DIRECTOR  

SIGNATURE PAGE

TO

PERFORMANCE-BASED

STOCK AWARD AGREEMENT