EXHIBIT 10.31
CARRIAGE SERVICES, INC.     
2017 OMNIBUS INCENTIVE PLAN

PERFORMANCE SHARE UNIT AWARD AGREEMENT

This Performance Share Unit 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
“Participant”). Capitalized terms that are used in this Agreement but not
defined herein have the meanings ascribed to them in the Carriage Services, Inc.
2017 Omnibus Incentive Plan (the “Plan”).

1.Grant of Performance Share Unit Award. Pursuant to the terms and conditions
set forth in the Plan and this Agreement, the Company hereby grants to the
Participant a Performance Share Unit Award pursuant to which the Participant 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 Share Units”). Each Target Performance Share Unit shall
represent a right to receive one share of Common Stock based on the achievement
of the Performance Goals as provided in Section 3 below as determined by the
Committee. Notwithstanding the foregoing and subject to the terms of this
Agreement, the aggregate number of shares of Common Stock that the Participant
actually earns pursuant to the Award (up to a maximum of 200% of the Target
Performance Share Units) 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 July 1, 2017 and ending on June 30,
2022.

3.Performance Goals.
(a)The performance goals applicable to the Award are set forth on Exhibit I
attached hereto (the “Performance Goals”), which exhibit is hereby incorporated
herein by reference. All determinations of whether the Performance Goals have
been achieved (and, if applicable, the extent of any such achievement), the
number of shares of Common Stock actually earned by the Participant, 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 Goals for the Performance Period have been achieved, and (ii) the
Payout Percentage (as defined herein) and the number of shares of Common Stock
that the Participant has earned, if any, subject to compliance with the
requirements of Section 4. Such certification shall be final, conclusive and
binding on the Participant, 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

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that the Committee certifies the achievement of the Performance Goals in
accordance with Section 3(b) above, subject to the Participant’s continuous
employment with the Company from the Grant Date through the date on which the
Committee certifies the achievement of the Performance Goals (the “Vesting
Date”). The number of Target Performance Share Units 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 Share
Units subject to the Award by the Payout Percentage actually earned by the
Participant 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 Participant within 60 days following the Vesting Date. The Company
shall (a) issue and deliver to the Participant the number of shares of Common
Stock earned by the Participant 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 Participant’s name on the books of the Company as
the shareholder of record with respect to the shares of Common Stock delivered
to the Participant. Such issuance and delivery shall be made in full
satisfaction of the Award and thereafter Participant shall have no further
rights with respect to the Award or this Agreement.

6.Termination of Employment.
(a)Except as otherwise expressly provided in this Agreement, if the
Participant’s continuous employment with the Company terminates at any time
before the Vesting Date, the Award shall be forfeited automatically upon such
termination of employment and neither the Company nor any affiliate nor any
Subsidiary shall have any further obligations to the Participant under this
Agreement.
(b)If, prior to the Vesting Date, the Participant’s employment with the Company
terminates as a result of the Participant’s death or Disability (as defined in
the Plan), a pro-rated portion of the Award shall vest, which pro-rated portion
shall be calculated by multiplying the Target Performance Share Units by a
fraction, the numerator of which equals the number of days that the Participant
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 Participant’s employment terminates, the Company shall
(a) issue and deliver to the Participant (or the Participant’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 Participant’s
(or, if applicable, the Participant’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 Participant or the Participant’s estate, as applicable. Upon
the issuance and delivery of such shares, the Award shall be cancelled and
terminated.

7.Change in Control. In the event of a Change in Control during the Performance
Period, notwithstanding anything in Article 17 of the Plan to the contrary, if
Participant’s employment with the Company is terminated within one year
following the effective date of such Change in Control either without Cause or
for Good Reason, the Award shall vest at Target levels on the date of such
termination and Participant shall receive payment in settlement of the Award in

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an 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.

8.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 Participant. 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 Participant and all of the Participant’s rights to such Award
shall immediately terminate without any payment or consideration by the Company.

9.No Rights as Shareholder; No Dividend Equivalents. The Participant 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 Participant 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).

10.No Right to Continued Employment. Neither the Plan nor this Agreement shall
confer upon the Participant any right to continued employment. Further, nothing
in the Plan or this Agreement shall be construed to limit the discretion of the
Company, any of its affiliates or any Subsidiary to terminate the Participant’s
employment at any time, with or without Cause.

11.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 4.4 of the Plan.

12.Tax Withholding. Unless other arrangements have been made that are acceptable
to the Company, the Company and each of its affiliates and Subsidiaries 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 Participant, 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 or any Subsidiary to satisfy its tax withholding obligations.
Notwithstanding the foregoing, if the Participant is subject to Rule 16b-3
(“Rule 16b-3”), as promulgated under the Securities Exchange Act of 1934, as
amended (“Section 16 of the Exchange Act”), at the time of vesting 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 or Subsidiaries either by (i)
withholding shares of Common Stock otherwise deliverable to the Participant on
the settlement of the Award or (ii) requiring the Participant to tender a cash
payment to the Company or such affiliate or Subsidiary, in either case, 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

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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
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 Participant
consents to and completes the necessary IRS forms, if any, for such withholding
at such greater rates.

13.Section 16. Notwithstanding any provision to the contrary herein, it is the
intent of the Committee that the Award satisfy, and be interpreted in a manner
that satisfies, the applicable requirements of Rule 16b-3 so that the
Participant will be entitled to the benefit of Rule 16b-3, or any other rule
promulgated under Section 16 of Exchange Act, and will not be subject to
short-swing liability under Section 16 of the Exchange Act. Accordingly, if the
operation of any provision of the Award would conflict with the intent expressed
in this Section 13 of this Agreement, then such provision shall be interpreted
and/or deemed amended so as to avoid such conflict to the maximum extent
possible.

14.Compliance with Applicable Laws. The issuance and transfer of shares of
Common Stock shall be subject to compliance by the Company and the Participant
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.

15.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 Participant under this Agreement shall be in writing and addressed to the
Participant at the Participant’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.

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

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

18.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.

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19.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 Participant and the
Participant’s beneficiaries, executors, administrators and the person(s) to whom
the Award may be transferred by will or the laws of descent or distribution.

20.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.

21.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 Participant’s employment with the Company.

22.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 or Subsidiaries and the Participant 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.

23.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 Participant’s material rights under
this Agreement without the Participant’s consent.

24.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, any of its
affiliates or Subsidiaries be liable for all or any portion of any taxes,
penalties, interest or other expenses that may be incurred by the Participant 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 Participant’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 Participant (or the Participant’s
estate, if applicable) until the earlier of (i) the date of the Participant’s
death or (ii) the date that is six months after the date of the Participant’s
separation from service with the Company.

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25.No Impact on Other Benefits. The value of the Award is not part of the
Participant’s normal or expected compensation for purposes of calculating any
severance, retirement, welfare, insurance or similar employee benefit.

26.Acceptance. The Participant hereby acknowledges receipt of a copy of the Plan
and this Agreement. The Participant 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 Participant 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 Participant has been
advised to consult a tax advisor prior to such vesting, settlement or
disposition. The Participant acknowledges and agrees that none of the Board, the
Committee, the Company or any of their respective affiliates or Subsidiaries
have made any representation or warranty as to the tax consequences to the
Participant as a result of the receipt of the Award or the vesting, settlement
or disposition thereof. The Participant further acknowledges that the Award and
any shares of Common Stock that may be delivered with respect to the Award are
subject to clawback policy as provided in Section 22.1(c) of the Plan.

27.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 as provided in Section
22.1(c) of the Plan.
28.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 Participant has executed this Agreement,
effective for all purposes as provided above.
CARRIAGE SERVICES, INC.

By:          
Name:                          
Title:                         

                            
PARTICIPANT

___________________________________
    

    

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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 50% and the EBITDA Margin Earned Percentage (as defined
below); and

•
“B” is the product of 50% and the EBITDA Earned Percentage (as defined below).

Notwithstanding the foregoing or any provision to the contrary, with respect to
each of the EBITDA Margin Earned Percentage and the EBITDA Earned Percentage,
the Participant will be eligible to earn an award percentage amount above the
Target amount only if the weighted average rate of return for all capital
allocation decisions that involve expenditures of $1.0 Million or more
(acquisitions, growth capex, new builds & share repurchases) made during the
grant year (2017) is greater than or equal to the sum of (i) the Company’s
weighted average cost of capital as of June 30, 2022 (as reasonably determined
by the Company’s management and approved by the Committee) plus (ii) 400 basis
points.

EBITDA Margin Earned Percentage

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

“Adjusted Consolidated EBITDA Margin” means, with respect to fiscal quarter
ending June 30, 2022, the Company’s Adjusted Consolidated EBITDA Margin set
forth in the “trend report” included in the earnings release filed by the
Company with the SEC for such fiscal quarter.

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

 
Below Threshold
Threshold
Target
Maximum
Adjusted Consolidated EBITDA Margin
˂ 30.2%
30.2%
31.2%
>32.2%
EBITDA Margin Earned Percentage*
0%
50%
100%
200%

*If the 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
Margin Earned Percentage shall be determined by linear interpolation between
Threshold (50%) and Target (100%) based on the Adjusted Consolidated EBITDA
Margin. If the 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 Margin Earned Percentage shall be determined by linear interpolation

EXHIBIT I-1

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between Target (100%) and Maximum (200%) based on the Adjusted Consolidated
EBITDA Margin. The EBITDA Margin Earned Percentage, as determined by linear
interpolation, shall be rounded to four decimal places.

EBITDA Earned Percentage

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

“Adjusted Consolidated EBITDA” means, with respect to fiscal quarter ending June
30, 2022, the Company’s Adjusted Consolidated EBITDA set forth in the “trend
report” included in the earnings release filed by the Company with the SEC for
such fiscal quarter.

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

 
Below Threshold
Threshold
Target
Maximum
Adjusted Consolidated EBITDA
˂ $95.0 Million
$95.0 Million
$110.0 Million
>$125.0 Million
EBITDA Earned Percentage*
0%
50%
100%
200%

*If the Adjusted Consolidated EBITDA 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 Adjusted Consolidated EBITDA. If the
Adjusted Consolidated EBITDA 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 Adjusted Consolidated EBITDA. The EBITDA Earned Percentage,
as determined by linear interpolation, shall be rounded to four decimal places.

EXHIBIT I-2