Exhibit 10.1
RELEASE AND SEPARATION AGREEMENT
     This RELEASE AND SEPARATION AGREEMENT (the “Agreement”) is made and entered
into by Joseph Saporito (“EMPLOYEE”) and Carriage Services, Inc., its past,
present and future subsidiaries, parents, and affiliates and their past,
present, and future employees, officers, directors, agents, insurers and legal
counsel (hereinafter collectively referred to as the “COMPANY”).
     WHEREAS, EMPLOYEE and COMPANY entered into an Employment Agreement dated
August 7, 2007;
     WHEREAS, EMPLOYEE has advised COMPANY of his intent to resign his
employment as of April 30, 2008, and terminate the Employment Agreement;
     WHEREAS, COMPANY wishes to provide EMPLOYEE with an orderly transition from
the COMPANY and both EMPLOYEE and the COMPANY wish to settle any and all issues
and potential issues which relate or may relate to EMPLOYEE’s employment with
and departure from the COMPANY including, but not limited to, those arising
under the Employment Agreement;
     NOW, THEREFORE, COMPANY and EMPLOYEE agree as follows, in consideration of
the mutual covenants and obligations contained herein, and intending to be
legally held bound:
     1. EMPLOYEE’S RESIGNATION. EMPLOYEE will resign his employment and cease to
be employed by the COMPANY effective April 30, 2008 (the “Termination Date”). In
addition, EMPLOYEE hereby resigns his position as Chief Financial Officer,
Executive Vice President and Assistant Secretary for Carriage Services, Inc.
     2. CONSIDERATION. In consideration for the releases and other covenants set
forth in this Agreement, after this Agreement becomes effective, the COMPANY
agrees to provide EMPLOYEE:
a. COMPANY will continue to pay EMPLOYEE’s base salary at the biweekly rate of
$11,539.21 for a period of twelve (12) months or until EMPLOYEE finds subsequent
full-time employment, whichever occurs first (the “Separation Period”). The
COMPANY shall have the right to deduct from any payment of compensation to the
EMPLOYEE hereunder (x) any federal, state or local taxes required by law to be
withheld with respect to such payments, and (y) any other amounts specifically
authorized to be withheld or deducted by the EMPLOYEE. EMPLOYEE agrees to
provide the Company notice in writing, to the attention of J. Bradley Green at
Carriage Services, Inc., 3040 Post Oak, Blvd, Suite 300, Houston, Texas 77056,
within three (3) days of commencing subsequent employment. EMPLOYEE Payments
during the first ten (10) months of the Separation Period shall be paid in
accordance with the COMPANY’s normal payroll schedule and payroll practices in
effect from time to time. The final payment, representing the last two
(2) months, shall be paid in a single lump sum no later than March 1, 2009.

 

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          b. EMPLOYEE will have the option to exercise his COBRA rights to
continue health insurance coverage under the COMPANY’S group plans. To the
extent EMPLOYEE exercises such right, during the Separation Period, COMPANY will
pay on EMPLOYEE’s behalf the monthly premium costs for COBRA coverage for
EMPLOYEE and EMPLOYEE’s covered dependants.
          c. COMPANY will pay EMPLOYEE an amount of $150,000. The COMPANY shall
have the right to deduct from any payment of compensation to the EMPLOYEE
hereunder (x) any federal, state or local taxes required by law to be withheld
with respect to such payments, and (y) any other amounts specifically authorized
to be withheld or deducted by the EMPLOYEE. Such amount shall be paid in a
single, lump-sum payment no later than ten (10) days after the EMPLOYEE signs
this Agreement.
          d. COMPANY agrees to release EMPLOYEE from any liability arising
pursuant to any breach by him of the Employment Agreement.
          e. COMPANY agrees to pay EMPLOYEE for all accrued, but unused vacation
as of the Termination Date.
          f. COMPANY agrees to provide EMPLOYEE limited secretarial services
during the time the COMPANY is paying consideration pursuant to Subsection 2(a).
These secretarial services will be provided at the complete and sole discretion
of the COMPANY, such that these services may be terminated by the COMPANY at any
time.
          g. In accordance with the terms of the 2006 Long-Term Incentive Plan,
the 18,750 shares of Carriage Services, Inc. common stock granted in the
Restricted Stock Agreement between Joseph Saporito and Carriage Services, Inc.
effective February 13, 2007, that are not currently vested, will become vested
on the date that this Agreement becomes irrevocable. Additionally, in accordance
with the terms of the Second Amended and Restated 1996 Stock Incentive Plan, the
11,250 shares of Carriage Services, Inc. common stock granted in the Restricted
Stock Agreement between Joseph Saporito and Carriage Services, Inc. effective
February 3, 2005, that are not currently vested, will become vested on the date
that this Agreement becomes irrevocable.”
          h. If the EMPLOYEE dies at any time while the COMPANY is paying
consideration pursuant to Subsection 2(a), the Company shall continue making the
remaining payments under Subsection 2(a) to the Employee’s estate. Such payments
to the Employee’s estate shall be made in the same manner and at the same times
as they would have been paid to the Employee had he not died.
     EMPLOYEE acknowledges and agrees that the consideration outlined above does
not constitute monies to which he would otherwise be entitled as a result of his
prior employment with the COMPANY, and that these monies constitute fair and
adequate compensation for the promises and covenants of EMPLOYEE set forth in
this Agreement.

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     3. EMPLOYEE’S RELEASE OF CLAIMS. For and in consideration of the
Consideration as described in paragraph 2 of this Agreement, EMPLOYEE hereby
irrevocably and unconditionally releases, forever discharges, and covenants not
to sue, or bring any other legal action against the COMPANY with respect to any
and all claims and causes of action of any nature, both past and present, known
and unknown, foreseen and unforeseen, which EMPLOYEE has or which could be
asserted on his behalf by any other person or entity, resulting from or relating
to any act or omission of any kind occurring on or before the date of the
execution of this Agreement. EMPLOYEE understands and agrees that this Release
includes, but is not limited to, the following:
     a. All claims and causes of action arising under contract, tort or other
common law, including, without limitation, breach of contract, fraud, estoppel,
misrepresentation, express or implied duties of good faith and fair dealing,
wrongful discharge, discrimination, retaliation, harassment, negligence, gross
negligence, false imprisonment, assault and battery, conspiracy, intentional or
negligent infliction of emotional distress, slander, libel, defamation, refusal
to perform an illegal act and invasion of privacy.
     b. All claims and causes of action arising under any federal, state, or
local law, regulation, or ordinance, including without limitation, the Civil
Rights Act of 1964, as amended, the Civil Rights Act of 1866, the Americans With
Disabilities Act, the Age Discrimination in Employment Act (“ADEA”) (which
prohibits age discrimination in employment), the Older Workers Benefit
Protection Act, the Fair Labor Standards Act, the Family and Medical Leave Act,
the Employee Retirement Income Security Act, and relevant state laws including,
but not limited to the Illinois Human Rights Act, as well as any claims for
wages, employee benefits, vacation pay, severance pay, pension or profit sharing
benefits, health or welfare benefits, bonus compensation, vesting of stock
options, commissions, deferred compensation or other remuneration, or employment
benefits or compensation. EMPLOYEE specifically waives all rights to any
additional bonus and/or awards or payment under the Performance Units Plan, the
2006 Long-Term Incentive Plan or any other plan or policy of the COMPANY.
     c. All claims and causes of action for past or future loss of pay or
benefits, expenses, damages for pain and suffering, mental anguish or emotional
distress damages, liquidated damages, punitive damages, compensatory damages,
attorney’s fees, interest, court costs, physical or mental injury, damage to
reputation, and any other injury, loss, damage or expense or any other legal or
equitable remedy of any kind whatsoever.
     d. All claims and causes of action arising out of or in any way connected
with, directly or indirectly, EMPLOYEE’s employment with the COMPANY, or any
incident thereof, including, without limitation, EMPLOYEE’s treatment by the
COMPANY; the terms and conditions of the EMPLOYEE’s employment; and the
separation of EMPLOYEE’s employment.

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     4. RETURN OF COMPANY PROPERTY. EMPLOYEE shall return, in good working
order, any and all property of the COMPANY that is in his possession, custody or
control on or before April 30, 2008. Such property includes, but is not limited
to, keys, software, calculators, equipment, credit cards, forms, files, manuals,
correspondence, business cards, personnel data, lists of or other information
regarding customers, contacts and/or employees, contracts, contract information,
agreements, leases, plans, brochures, catalogues, training materials, computer
tapes and diskettes or other portable media.
     5. TAX ISSUES. The COMPANY may withhold from any benefits and payments made
pursuant to this Agreement all federal, state, city and other taxes as may be
required pursuant to any law or governmental regulation or ruling and all other
normal employee deductions made with respect to the COMPANY’S employees
generally. Notwithstanding anything in this Agreement to the contrary, in the
event it shall be determined that any payment or distribution by the COMPANY to
the EMPLOYEE or for his benefit, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (a
“Payment”), would be subject to the excise tax imposed by Section 4999 of the
Code, or any interest or penalties with respect to such excise tax (such excise
tax, together with any such interest or penalties, are hereinafter collectively
referred to as the “Excise Tax”), the COMPANY shall pay to the EMPLOYEE an
additional payment (a “Gross-up Payment” ) in an amount such that after payment
by the EMPLOYEE of all taxes (including any interest or penalties imposed with
respect to such taxes), including any Excise Tax imposed on any Gross-up
Payment, the EMPLOYEE retains an amount of the Gross-up Payment equal to the
Excise Tax imposed upon the Payments. All determinations required to be made
under this Section 21 shall be made by the COMPANY’S accounting firm (the
“Accounting Firm”). The Accounting Firm shall provide detailed supporting
calculations both to the COMPANY and the EMPLOYEE. All fees and expenses of the
Accounting Firm shall be borne solely by the COMPANY. Absent manifest error, any
determination by the Accounting Firm shall be binding upon the COMPANY and the
EMPLOYEE.
     6. NON-ADMISSION. EMPLOYEE and COMPANY agree that this Agreement and the
payment of money to EMPLOYEE by the COMPANY is not an admission by either party
of any violation of the other party’s rights or of any violation of contract or
statutory or common law.
     7. NON-DISPARAGEMENT. EMPLOYEE specifically covenants and agrees not to,
directly or indirectly, make or cause to be made to anyone any statement, orally
or in writing, criticizing or disparaging the COMPANY with respect to his
employment with the COMPANY. EMPLOYEE specifically covenants and agrees not to,
directly or indirectly, make or cause to be made to anyone any statement, orally
or in writing, criticizing or disparaging the COMPANY, or commenting in a
negative fashion on the operations or business reputation of the COMPANY.
     8. CONTINUING OBLIGATIONS. EMPLOYEE acknowledges that in the course of his
employment with the COMPANY he has obtained confidential and proprietary
information including, but not limited to, financial, business, product,
customer and marketing information, plans, forecasts and strategies. EMPLOYEE
acknowledges and agrees that he has a

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continuing obligation to maintain the confidentiality of all such non-public
information even after the termination of his employment with the COMPANY.
     9. COOPERATION. EMPLOYEE acknowledges and agrees that from and after the
Effective Date of this Agreement, he will cooperate fully with the COMPANY, its
officers, employees, agents, affiliates and attorneys in the defense or
prosecution of, or in preparation for the defense or prosecution of any lawsuit,
dispute, investigation or other legal proceedings (“Proceedings”). EMPLOYEE
further acknowledges and agrees that he will cooperate fully with the COMPANY,
its officers, employees, agents, affiliates and attorneys on any matter related
to COMPANY business (“Matters”) during the period of EMPLOYEE’s employment.
     Such cooperation shall include providing true and accurate information or
documents concerning, or affidavits or testimony about, all or any matters at
issue in any Proceedings/Matters as shall from time to time be requested by the
COMPANY, and shall be with the knowledge of EMPLOYEE. Such cooperation shall be
provided by EMPLOYEE without remuneration, but EMPLOYEE shall be entitled to
reimbursement for all reasonable and appropriate expenses incurred by him in so
cooperating including, by way of example and not by way of limitation, airplane
fares, hotel accommodations, meal charges and other similar expenses to attend
Proceedings/Matters outside of the city of EMPLOYEE’s residence. The reasonable
fees and expenses of EMPLOYEE shall be reimbursed by the COMPANY on a regular,
periodic basis upon presentation by EMPLOYEE of a statement and receipts in
accordance with the COMPANY’S customary practices and policies; provided,
however, that such reimbursement will be paid no later than December 31 of the
calendar year following the calendar year in which EMPLOYEE incurred the
expense. In the event EMPLOYEE is asked by a third party to provide information
regarding the COMPANY, or is called other than by the COMPANY to testify in any
Proceeding/Matter related to the COMPANY, he will notify the COMPANY as soon as
possible in order to give the COMPANY a reasonable opportunity to respond and/or
participate in such Proceeding/Matter.
     10. FEES AND COSTS. Except as set forth in paragraph 12 of this Agreement,
below, the parties shall bear their own attorneys’ fees and costs.
     11. CONSEQUENCES OF BREACH BY EMPLOYEE. EMPLOYEE acknowledges that it would
be unfair for EMPLOYEE to retain or receive the Separation Payments if the
promises given by EMPLOYEE herein are not enforced (excluding a lawsuit filed by
EMPLOYEE solely to challenge the validity of the Age Discrimination in
Employment Act waiver). This provision will not limit EMPLOYEE’s liability if
COMPANY’s actual damages exceed the amount received by EMPLOYEE under this
Agreement.
     COMPANY and EMPLOYEE acknowledge and agree that the prevailing party shall
be entitled to payment of its attorneys’ fees and other costs and expenses
incurred in enforcing this provision of the Agreement and/or in prosecuting any
counterclaim or cross-claim based on this provision of the Agreement.
     12. CHOICE OF LAW/VENUE. This Agreement shall be governed by, construed,
and enforced in accordance with, and subject to, the laws of the State of Texas
or federal law, where applicable, without regard to the conflict of law
principles of any jurisdiction. In the event there shall be any dispute arising
out of the terms and conditions of, or in connection with, this

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Agreement, the party seeking relief shall submit such dispute to the United
States District Court for the Southern District of Texas or, if federal
jurisdiction is lacking, the District Courts of Harris County, Texas.
     13. TIME LIMITS. Upon receipt of this Agreement, EMPLOYEE SHALL have up to
twenty-one (21) calendar days to consider and decide whether or not to sign and
return it to COMPANY. If EMPLOYEE decides to sign this Agreement at any time
prior to end of the twenty-one day period, EMPLOYEE agrees to immediately send
the signed Agreement to the COMPANY, by registered or certified United States
mail, return receipt requested, or by commercial overnight carrier requiring
signature upon delivery, to the attention of J. Bradley Green at Carriage
Services, Inc., 3040 Post Oak, Blvd, Suite 300, Houston, Texas 77056, on the
date it is signed by EMPLOYEE. This Agreement shall be considered to have been
delivered to and received by the COMPANY at the address set forth above on the
date it is postmarked.
     14. REVOCATION. EMPLOYEE may revoke this Agreement within seven (7) days of
EMPLOYEE signing it. Revocation must be made by delivering a written notice of
revocation to J. Bradley Green at the address set forth in paragraph 13, above,
either by hand delivery, facsimile or by registered or certified United States
mail, return receipt requested, or by commercial overnight carrier requiring
signature upon delivery. If EMPLOYEE revokes this Agreement it shall not be
effective or enforceable and EMPLOYEE shall not receive the consideration
promised by the COMPANY described in the paragraph 2 of this Agreement.
     15. ENTIRE AGREEMENT. It is expressly understood and agreed that this
Agreement embodies the entire agreement between the Parties relating to
EMPLOYEE’s employment by the COMPANY and all other matters arising between
COMPANY and EMPLOYEE prior to the date and time of execution hereof, and
supersedes any and all prior agreements, arrangements, or understandings between
and among them, with the exception of paragraphs 8 and 9 of the Employment
Agreement executed by EMPLOYEE during his employment with the COMPANY and the
Indemnity Agreement executed by the Company and EMPLOYEE on August 13, 2003.
EMPLOYEE and COMPANY agree that paragraphs 8 and 9 of the Employment Agreement
and the Indemnity Agreement executed by the EMPLOYEE on August 13, 2003 are
enforceable and it is their specific intent that these provisions shall survive
the execution of this Agreement.
     No oral understandings, statements, promises, terms, conditions,
obligations, or agreements contrary or in addition to the terms of this
Agreement exist. This Agreement may not be changed by oral representations, and
may only be amended by written instrument executed by a duly authorized
representative of each of the Parties, or their respective successors or
assigns. If any part of this Agreement is found to be illegal or unenforceable
by any agency or court, the remaining provisions shall continue in full force
and effect.

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     16. OTHER REPRESENTATIONS: EMPLOYEE hereby represents and certifies that
he: (1) has carefully read all of this Agreement; (2) has been given a fair
opportunity to discuss and negotiate the terms of this Agreement;
(3) understands its provisions; (4) has been advised in writing and given the
opportunity to seek advice and consultation with attorneys regarding this
Agreement; (5) has determined that it is in his best interests to enter into
this Agreement; (6) has not been influenced to sign this Agreement by any
statement or representation by the COMPANY not contained in this Agreement; and
(7) enters into this Agreement knowingly and voluntarily.
READ THIS AGREEMENT CAREFULLY BEFORE SIGNING
SIGNING OF RELEASE AND SEPARATION AGREEMENT
     We the undersigned, do hereby sign and agree to the terms set forth in the
Release and Settlement Agreement, on the dates set forth below:

             
/s/ Joseph Saporito
      4/28/2008    
 
           
Joseph Saporito
      Date signed    
 
           
/s/ Melvin C. Payne
      4/28/2008    
 
           
Melvin C. Payne
      Date signed    
Carriage Services, Inc.
           
Chief Executive Officer
           

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