CARRIAGE SERVICES, INC.     
SECOND AMENDED AND RESTATED
2006 LONG-TERM INCENTIVE PLAN

PERFORMANCE AWARD AGREEMENT

This Performance 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 “Employee”). Capitalized
terms that are used in this Agreement but not defined herein have the meanings
ascribed to them in the Carriage Services, Inc. Second Amended and Restated 2006
Long-Term Incentive Plan (the “Plan”).

1.Grant of Performance Award. Pursuant to the terms and conditions set forth in
the Plan and this Agreement, the Company hereby grants to the Employee a Stock
Award in the form of a Performance Award pursuant to which the Employee may earn
shares of Common Stock (the “Award”). The target number of shares of Common
Stock subject to the Award is [INSERT TARGET] shares of Common Stock (the
“Target Performance Shares”). Notwithstanding the foregoing and subject to the
terms of this Agreement, the aggregate number of shares of Common Stock that the
Employee actually earns pursuant to the Award (up to a maximum of 200% of the
Target Performance Shares) shall be calculated by the Committee based upon the
Payout Percentage (as defined on Exhibit I attached hereto).
2.    Performance Period. For purposes of this Agreement, the term “Performance
Period” shall be the period commencing on January 1, 2016 and ending on December
31, 2020.
3.    Performance Criteria.
(a)    The performance criteria applicable to the Award are set forth on
Exhibit I attached hereto (the “Performance Criteria”), which exhibit is hereby
incorporated herein by reference. All determinations of whether the Performance
Criteria have been achieved (and, if applicable, the extent of any such
achievement), the number of shares of Common Stock actually earned by the
Employee, and all other matters related to this Section 3 shall be made by the
Committee in its sole discretion.
(b)    Promptly following completion of the Performance Period (and no later
than sixty (60) days following the end of the Performance Period), the Committee
shall review and certify in writing (i) whether, and to what extent, the
Performance Criteria for the Performance Period has been achieved, and (ii) the
Payout Percentage and the number of shares of Common Stock that the Employee has
earned, if any, subject to compliance with the requirements of Section 4. Such
certification shall be final, conclusive and binding on the Employee, and on all
other persons, to the maximum extent permitted by law.
4.    Vesting Date. The Award is subject to forfeiture until it vests. Except as
otherwise provided herein, the Award will vest and no longer be subject to
forfeiture on the date that the

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Committee certifies the achievement of the Performance Criteria in accordance
with Section 3(b) above, subject to the Employee’s continuous employment with
the Company from the Grant Date through the date on which the Committee
certifies the achievement of the Performance Criteria (the “Vesting Date”). The
number of Target Performance Shares that vest and become payable under this
Agreement shall be determined by the Committee at the end of the Performance
Period by multiplying the number of Target Performance Shares by the Payout
Percentage and shall be rounded to the nearest whole share.
5.    Settlement. Payment in respect of the Award earned for the Performance
Period shall be made in shares of Common Stock, which shares of Common Stock
shall be issued to the Employee within 60 days following the Vesting Date. The
Company shall (a) issue and deliver to the Employee the number of shares of
Common Stock earned by the Employee during the Performance Period, if any, as
determined and awarded by the Committee in accordance with the terms of this
Agreement; and (b) enter the Employee’s name on the books of the Company as the
shareholder of record with respect to the shares of Common Stock delivered to
the Employee. Such issuance and delivery shall be made in full satisfaction of
the Award and thereafter Employee shall have no further rights with respect to
the Award or this Agreement.Termination of Employment.
(a)    Except as otherwise expressly provided in this Agreement, if the
Employee’s continuous employment with the Company terminates at any time before
the Vesting Date, the Award shall be automatically forfeited upon such
termination of employment and neither the Company nor any Affiliate shall have
any further obligations to the Employee under this Agreement.
(b)    If, prior to the Vesting Date, the Employee’s employment with the Company
terminates as a result of the Employee’s death or Disability (as defined below),
a pro-rated portion of the Award shall vest, which pro-rated portion shall be
calculated by multiplying the Target Performance Shares by a fraction, the
numerator of which equals the number of days that the Employee was employed
during the Performance Period and the denominator of which equals the total
number of days in the Performance Period. No later than March 15th following the
date the Employee’s employment terminates, the Company shall (a) issue and
deliver to the Employee (or the Employee’s estate) 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 Employee’s (or, if applicable, the
Employee’s estate’s) name on the books of the Company as the shareholder of
record with respect to the shares of Common Stock delivered to the Employee or
the Employee’s estate, as applicable. Upon the issuance and delivery of such
shares, the Award shall be cancelled and terminated. For purposes of this
Agreement, “Disability” shall mean the Employee’s inability, due to mental or
physically incapacity, to perform the duties and services required of the
Employee on a full-time basis for a period of at least 180 consecutive days.
6.    Corporate Change. In the event of a Corporate Change during the
Performance Period, notwithstanding anything in Article XII of the Plan to the
contrary, if Employee’s employment with the Company is terminated without Cause
or for Good Reason within one year following the effective date of such
Corporate Change, the Award shall vest at Target levels on the date of such
termination and Employee shall receive payment in settlement of the Award in an

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amount equivalent to the value of such Award at the time of such settlement,
which amount shall be paid no later than sixty (60) days following the date of
such termination of employment.
7.    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 Employee. 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 Employee and all of the Employee’s rights to such Award shall
immediately terminate without any payment or consideration by the Company.
8.    No Rights as Shareholder; No Dividend Equivalents. The Employee 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 this Agreement. Upon and following the settlement of the
Award, the Employee 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).
9.    No Right to Continued Employment. Neither the Plan nor this Agreement
shall confer upon the Employee any right to continued employment. Further,
nothing in the Plan or this Agreement shall be construed to limit the discretion
of the Company to terminate the Employee’s employment at any time, with or
without Cause.
10.    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.
11.    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 Employee, 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 Employee
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 Employee on the settlement of the Award or
(ii) requiring the Employee 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 taxable
income; provided, however, that such withholding may be based on rates in excess
of the minimum statutory

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withholding rates if (A) the Committee (x) determines that such withholding
would not result in adverse accounting, tax or other consequences to the Company
(other than immaterial administrative, reporting or similar consequences) and
(y) authorizes such withholding at such greater rates and (B) the Employee
consents to such withholding at such greater rates.
12.    Compliance with Applicable Laws. The issuance and transfer of shares of
Common Stock shall be subject to compliance by the Company and the Employee 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.
13.    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 Employee under this Agreement shall be in writing and addressed to the
Employee at the Employee’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.
14.    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.
15.    Interpretation. Any dispute regarding the interpretation of this
Agreement shall be submitted by the Employee or the Company to the Committee for
review. The resolution of such dispute by the Committee shall be final and
binding on the Employee and the Company.
16.    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.
17.    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 Employee and
the Employee’s beneficiaries, executors, administrators and the person(s) to
whom the Award may be transferred by will or the laws of descent or
distribution.
18.    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.

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19.    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 Employee’s employment with the Company.
20.    Entire Agreement. This Agreement constitutes the entire agreement of the
parties with regard to the subject matter hereof, and contains all the
covenants, promises, representations, warranties and agreements between the
parties with respect to the Award granted hereby; provided, however, that the
terms of this Agreement shall not modify and shall be subject to the terms and
conditions of any employment and/or severance agreement between the Company and
it Affiliates and the Employee in effect as of the date a determination is to be
made under this Agreement. Without limiting the scope of the preceding sentence,
except as provided therein, all prior understandings and agreements, if any,
among the parties hereto relating to the subject matter hereof are hereby null
and void and of no further force and effect.
21.    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 Employee’s material
rights under this Agreement without the Employee’s consent.
22.    Section 409A. Neither the Award nor any of the amounts that may be
payable pursuant to this Agreement are intended to constitute or provide for a
deferral of compensation that is subject to Section 409A of the Code and the
Treasury regulations and other interpretive guidance issued thereunder
(collectively, “Section 409A”). Notwithstanding the foregoing, (a) the Company
makes no representations that the Award or any amounts payable under this
Agreement are exempt from Section 409A and in no event shall the Company or any
of its Affiliates be liable for all or any portion of any taxes, penalties,
interest or other expenses that may be incurred by the Employee on account of
non-compliance with Section 409A and (b) if any payment provided for under this
Agreement would be subject to additional taxes and interest under Section 409A
if the Employee’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 Employee (or the Employee’s estate, if applicable) until
the earlier of (i) the date of the Employee’s death or (ii) the date that is six
months after the date of the Employee’s separation from service with the
Company.
23.    No Impact on Other Benefits. The value of the Award is not part of the
Employee’s normal or expected compensation for purposes of calculating any
severance, retirement, welfare, insurance or similar employee benefit.
24.    Acceptance. The Employee hereby acknowledges receipt of a copy of the
Plan and this Agreement. The Employee 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 Employee 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 Employee has been advised to
consult a tax advisor prior to such vesting, settlement or disposition. The
Employee acknowledges

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and agrees that none of the Board, the Committee, the Company or any of their
respective Affiliates have made any representation or warranty as to the tax
consequences to the Employee as a result of the receipt of the Award or the
vesting, settlement or disposition thereof. The Employee 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.
25.    Clawback. Notwithstanding any provision in this Agreement to the
contrary, this Award and all Common Stock issued hereunder shall be subject to
any applicable clawback policies or procedures adopted in accordance with the
Plan.
26.    Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one instrument. Delivery of an executed counterpart of this Agreement
by facsimile or pdf attachment to electronic mail shall be effective as delivery
of a manually executed counterpart of this Agreement.
[Remainder of Page Intentionally Blank;
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 Employee has executed this Agreement, effective
for all purposes as provided above.

CARRIAGE SERVICES, INC.

By: ______________________________________    
Name: ________________________________    
Title: ________________________________    

EMPLOYEE

__________________________________________
    

SIGNATURE PAGE
TO
PERFORMANCE AWARD AGREEMENT

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EXHIBIT I
PERFORMANCE CRITERIA

Payout Percentage

The “Payout Percentage” shall be the sum of “A” and “B,” where:

•
“A” is the product of 25% and the EBITDA Earned Percentage (as defined below);
and

•
“B” is the product of 75% and the TSR Earned Percentage (as defined below).

EBITDA Earned Percentage

As used herein, the following terms have the meanings set forth below:

“Adjusted Consolidated EBITDA Margin” means, with respect to a fiscal year of
the Company, the Company’s Adjusted Consolidated EBITDA Margin set forth in the
“trend reports” included in the earnings release filed by the Company with the
SEC for such fiscal year.

“Average Adjusted Consolidated EBITDA Margin” means the average Adjusted
Consolidated EBITDA Margin for each of the Company’s five fiscal years in the
Performance Period.

“EBITDA Earned Percentage” means the percentage determined in accordance with
the table set forth below:

 
Below Threshold

Threshold

Target

Maximum
Average Adjusted Consolidated EBITDA Margin
˂ 30%
30%
31%
>32%
EBITDA Earned Percentage*
0%
50%
100%
200%

*If the Average Adjusted Consolidated EBITDA Margin is between the Threshold
amount and the Target amount set forth in the first row of the table above, then
the EBITDA Earned Percentage shall be determined by linear interpolation between
Threshold (50%) and Target (100%) based on the Average Adjusted Consolidated
EBITDA Margin. If the Average Adjusted Consolidated EBITDA Margin is between the
Target amount and the Maximum amount set forth in the first row of the table
above, then the EBITDA Earned Percentage shall be determined by linear
interpolation between Target (100%) and Maximum (200%) based on the Average
Adjusted Consolidated EBITDA Margin. The EBITDA Earned Percentage, as determined
by linear interpolation, shall be rounded to four decimal places.

EXHIBIT I-1

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TSR Earned Percentage

As used herein, the following terms have the meanings set forth below:

“Beginning Company Stock Price Average” means the average closing price of the
Common Stock, as reported by the Reporting Service, during the 20 trading days
immediately preceding the first day of the Performance Period.

“Beginning Russell 3000 Index Stock Price Average” means the average closing
price of the Russell 3000 Index, as reported by the Reporting Service, during
the 20 trading days immediately preceding the first day of the Performance
Period.

“Company Stock Price Performance” means the quotient obtained by dividing (i)
the Ending Company Stock Price Average minus the Beginning Company Stock Price
Average, by (ii) the Beginning Company Stock Price Average.

“Ending Company Stock Price Average” means the average closing price of the
Common Stock, as reported by the Reporting Service, during the 20 trading days
immediately preceding the last day of the Performance Period.

“Ending Russell 3000 Index Stock Price Average” means the average closing price
of the Russell 3000 Index, as reported by the Reporting Service, during the 20
trading days immediately preceding the last day of the Performance Period.

“Reporting Service” means Bloomberg L.P. (or any other publicly available
reporting service that the Committee may designate from time to time).

“Russell 3000 Index Performance” means the quotient obtained by dividing (i) the
Ending Russell 3000 Index Stock Price Average minus the Beginning Russell 3000
Index Stock Price Average, by (ii) the Beginning Russell 3000 Index Stock Price
Average.

“TSR Earned Percentage” means 100% (the “Baseline Percentage”), adjusted as
follows:

•
If the Company Stock Price Performance exceeds the Russell 3000 Index
Performance determined as of the last day of the Performance Period, then the
Baseline Percentage shall be increased by the percentage by which the Company
Stock Price Performance exceeds the Russell 3000 Index Performance, multiplied
by two (2); or

•
If the Russell 3000 Index Performance exceeds the Company Stock Price
Performance determined as of the last day of the Performance Period, then the
Baseline Percentage shall be decreased by the percentage by which the Russell
3000 Index Performance exceeds the Company Stock Price Performance, multiplied
by three (3). The TSR Earned Percentage shall be determined as of the last day
of each Performance Period, and shall not be less than 0% nor more than 200%.

EXHIBIT I-2