exv10w18



 





Exhibit 10.18




     SEPARATION
AGREEMENT AND RELEASE 

     This Separation Agreement and
Release is between JAMES J. BENARD, a resident of Fort Bend County, Texas (the
“Employee”), and CARRIAGE SERVICES, INC., a Delaware corporation (the “Company”).



     The Employee and the Company agree as follows:



     1. The Employee’s employment with the Company and/or one or more of its
affiliates (the Company, together with its affiliates, being hereafter
collectively referred to as “Carriage”), has terminated or will terminate
effective as of July 17, 2006 (the “Separation Date”) as a result of the
Employee’s voluntary resignation. The Employee shall be entitled to receive all
base compensation, benefits and accrued vacation, if any, through the Separation
Date, but not thereafter. Simultaneously with the parties’ execution of this
Agreement, the Employee shall tender his resignation, effective as of the
Separation Date, as Regional Managing Partner of, together with any and all other
positions he may hold with, the Company. He shall also tender his resignation as
director and officer of or any other capacity with all other Carriage entities of
which he may serve in any such capacity.



     Provided the Employee does not revoke this Agreement as provided in Section
15 hereof, the Company shall pay the Employee the sum of $165,000, less
applicable withholdings (the “Severance Payments”). The Severance Payments shall
be payable to the Employee in nineteen (19) equal bi-weekly installments in the
amount of $8,461.54 each, beginning on the next regularly scheduled payroll date
of the Company after the Company’s receipt from the Employee of a properly
completed and signed Non-Revocation Statement in the form attached as 
Exhibit
A hereto (the “Non-Revocation Statement”), and continuing on each succeeding
payroll date thereafter, until paid in full; with a twentieth and final
installment in the amount of $4,230.74 on the next regularly scheduled payroll
date thereafter. In addition, provided Employee does not so revoke, the remaining
5,000 shares of the Company’s Common Stock not yet vested under



 









 




Employee’s stock bonus grant on January 9, 2003 shall become fully vested in
accordance with the letter agreement of even date herewith.




     2. Additionally, provided the Employee complies with this Agreement and does
not revoke it as provided in Section 15 hereof, if following the Separation Date
the Employee becomes eligible to elect continuation coverage under the
Consolidated Omnibus Budget Reconciliation Act (COBRA) and properly elects such
coverage, the Company shall reimburse the Employee or pay on his behalf the
amount of the premiums under COBRA for the Company’s group health and
hospitalization insurance coverage which the Employee has in effect as of the
Separation Date, up to a maximum of $800 per month, for the period beginning on
the effective date of election and continuing through the earlier to occur of (i)
whenever the Employee thereafter obtains or is eligible to obtain replacement
coverage or (ii) April 16, 2007.



     3. In consideration for the Severance Payments, the Employee hereby
discharges and releases Carriage and Carriage’s past, present and future
stockholders, directors, officers, trustees, partners, employees, insurers,
agents, successors and assigns (collectively, “Released Parties”) from any claim,
demand, and/or cause of action whatsoever, whether vicarious, derivative, or
direct, presently known or unknown, whether sounding in contract, tort or
otherwise, under common law or by statute or regulation, that is based upon facts
arising prior to the date hereof with respect to any matter or action related to
the Employee’s employment with, termination from, and/or affiliation with
Carriage, or in connection with any statements made or actions taken in
connection with such employment relationship or its termination, including, but
not limited to, any claims under the Age Discrimination in Employment Act of
1967, the Americans With Disabilities Act of 1990, the Civil Rights Act of 1964
(Title VII), the Civil Rights Act of 1991, the Family and Medical Leave Act of
1993, the Fair Labor Standards Act, the Employee Retirement Income Security Act
of 1974, the Pregnancy Discrimination Act, the Fair Credit Reporting Act, and the
Texas Labor Code, all as amended and in effect on the date



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hereof, and all claims based on the existence of any contract; breach of any duty
or covenant of good faith and fair dealing; slander; defamation; invasion of
privacy; detrimental reliance; intentional or negligent infliction of emotional
distress; duress; promissory estoppel; negligent misrepresentation; intentional
misrepresentation or fraud; assault; battery; conspiracy; negligent hiring,
retention, or supervision; any alleged act of harassment or intimidation; or any
other claim arising under employment-related statutes, laws, rules and
regulations.




     4. This Agreement is not a suggestion of or an admission of any wrongdoing
or liability on the part of any party. The Employee does not waive any rights or
claims that may arise after the date hereof.



     5. Except as provided below, this Agreement supersedes and extinguishes the
Employment Agreement between the parties dated January 1, 2001, as amended by
Amendment No. 1 effective January 1, 2004 (as amended, “Prior Employment
Agreement”), as well as any other employment agreement and/or bonus or incentive
compensation plan or arrangement, if any, entered into between the Employee and
Carriage. Without limiting the generality of the foregoing, and as additional
inducement to Employee to enter into and perform this Agreement (provided he does
not revoke it), this Agreement supersedes and extinguishes Section 8 (Restrictive
Covenants) of the Prior Employment Agreement, from which he shall be released
hereby. Notwithstanding the foregoing, however, this Agreement does not affect or
supersede Section 6 (Certain Additional Matters) or 9 (Confidential Information)
of the Prior Employment Agreement, each of which is hereby ratified and confirmed
and shall remain in full force and effect for the respective periods therein
specified in accordance with their respective terms.



     6. The Employee agrees and covenants not to sue or participate in any suit,
charge or proceeding of any kind against Carriage or any of the other Released
Parties, based upon any claim, demand, and/or cause of action whatsoever,
presently known or unknown, that is based upon facts arising prior to the date
hereof with respect to any matter or action related to the




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Employee’s employment, termination from, leave of absence with, request to return to work to,
and/or affiliation with Carriage, or in connection with any statements made or actions taken in
connection with such employment relationship or its termination.




     7. Group health insurance benefits will continue only through the Separation Date. Subject to
Section 2 above, after the Separation Date, the Employee is entitled to continue the Employee’s
group health insurance coverage at his own expense, in accordance with applicable law.



     8. After the Separation Date, Employee agrees to make himself available to answer questions
and provide information and assistance with respect to matters in which he was involved during his
employment with Carriage. The foregoing will be provided only when requested by Carriage, at no
out-of-pocket cost to Employee, when Employee is reasonably available to provide such assistance,
and in such a way as to not unreasonably interfere with any new employment he may obtain.



     9. The parties acknowledge that the Employee has been employed by the Company in a key
executive and management positions with Carriage, in which capacities he has had access to and has
actual possession of material inside information concerning Carriage’s operations (including but
not necessarily limited to its cemetery and combination operations and related sales and marketing
programs), and that the disclosure or use of any information obtained by Employee could materially
and irreparably harm Carriage’s interests. Regardless of whether Employee accepts the other
provisions of this Agreement, and without limiting the generality of Section 9 of the Prior
Employment Agreement, Employee acknowledges that it is and will remain his fiduciary duty to
preserve the confidentiality of all of this information, including all market analyses, standards
and models, portfolio profiles, employee and location assessments, financial statements and data,
files, documents, studies and presentations, customer lists and files, lists of suppliers and
vendors, contracts, contract information, brochures, catalogs, training



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materials, computer tapes and diskettes or other portable media, computer-readable
files and data stored on any form of storage media whether portable or installed, and
data processing reports, business records, personnel data, lists of employees, salary
and benefits information and any and all other documents or property over which the
Employee had possession of or control over during the course of the Employee’s
employment with Carriage (all of the foregoing, regardless of form and whether or not
labeled as confidential, being hereafter collectively referred to as “Information”),
and Employee therefore agrees not to disclose or use the Information in any manner or
for any purpose, even after the Separation Date, for so long as the confidential
nature thereof shall continue (excluding any disclosure by Employee in breach hereof).
In addition, whether or not the Employee accepts the terms of this Agreement, the
Employee must return to the Company by no later than the close of business on the
Separation Date, or as soon thereafter as is possible with respect to any items not
then immediately available, any and all items of the Company’s property, including
without limitation keys, computers, cell phones, software, calculators, equipment,
credit cards, forms, files, manuals, correspondence, contracts, contract information,
brochures, catalogs, training materials, computer tapes and diskettes or other
portable media, computer-readable files and data stored on any form of storage media
whether portable or installed, and data processing reports, and any and all other
documents or property over which the Employee had possession of or control over during
the course of the Employee’s employment with Carriage. In the event it appears that
the Employee will be compelled by law or judicial process to disclose any Information,
to avoid potential liability the Employee must notify the Company’s Chief Executive
Officer in writing immediately upon the Employee’s receipt of a subpoena or other
legal process. The Employee further agrees not to disclose or cause to be disclosed
the terms of this Agreement, or the fact that this Agreement exists, except to the
Employee’s attorneys and/or tax advisors or to the extent otherwise required by law.
Employee acknowledges that all materials and other copyrightable works and subject
matter




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(regardless of whether or not constituting “Information”) produced by or for
Carriage (regardless of whether by the Employee or others, and regardless of
whether or not denoted as copyrighted material) are owned by and proprietary to
Carriage and may not be used or reproduced in whole or in part without Carriage’s
written permission. Employee also agrees not to make any disparaging remarks
regarding Carriage or any of the other Released Parties referred to herein.




     10. This Agreement contains the entire agreement between the Employee and
the Company and cannot be changed, modified, or amended without a written
agreement signed by the Employee and the Company.



     11. This Agreement is made and shall be enforced pursuant to the laws of the
State of Texas.



     12. Should any part of this Agreement be found to be void, that
determination will not affect the remainder of the Agreement.



     13. The Employee waives any right to reinstatement as an employee or any
future employment relationship with Carriage following separation from Carriage.



     14. The offer made by the Company herein will expire at 12:01 a.m. on the
twenty-first day following the date of the offer made herein. The Employee may
accept this offer at any time prior to the expiration by signing this
Agreement.



     15. This Agreement has been entered into voluntarily by the Employee and not
as a result of coercion, duress, or undue influence, economic or otherwise. The
Employee acknowledges that he has read and fully understands the terms of this
Agreement, has been advised to consult with an attorney before executing this
Agreement, and the Severance Payments recited in Section 2 are in excess of that
to which the Employee might otherwise be entitled to receive from the Company.
The Employee represents that he has been given adequate time to consider the
terms of the separation as described herein. Following Employee’s execution of
this Agreement, the Employee shall have a period of seven (7) days to revoke this




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Agreement
(other than Section 9 above) by delivering to the Company, at its address shown opposite
its signature hereof, a written notice revoking this Agreement and specifically referring to the
right to do so under this Section 15. If the Employee desires not to so revoke, the Employee will
deliver the Non-Revocation Notice after expiration of such seven-day
period. Failure to deliver any
notice within such seven-day period shall constitute a lapse of the Employee’s right to revoke, but
the Company’s obligation to pay the Severance Payments shall nonetheless remain subject to receipt
from the Employee of the signed Non-Revocation Statement. If the
Employee revokes this Agreement
as aforesaid, the Employee shall forefeit all rights hereunder, including any right to receive the
Severance Payments, the release of his obligation under
Section 8 of the Prior Employement
Agreement or the acceleration of the unvested portion of his shares
under his stock bonus grant.



Address:




	 	 	 	 	 	 	 
	 	 	/s/ James J. Benard
	 	 	 	 
	11 Waters Lake Blvd.	 	JAMES J. BENARD
	Missouri City, Texas 77459-6438
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Date 8/2/06
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	3040 Post Oak Blvd, Suite 300	 	CARRIAGE SERVICES, INC.
	Houston, Texas 77056
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Melvin C. Payne	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	MELVIN C. PAYNE, Chairman and	 	 
	 

	 	 	 	     Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	Date 8/10/06
	 	 	 	 
	 

	 	 	 	 	 	 







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EXHIBIT A




NON-REVOCATION STATEMENT




     I, JAMES J. BENARD, acknowledge that at least seven (7) days has expired since the execution
of the Separation Agreement and Release between me and Carriage Services, Inc., a
Delaware corporation, on the 2nd day of August, 2006, and I knowingly and voluntarily elect
not to revoke this Separation Agreement and Release.



     EXECUTED this 10 day of August, 2006.



	 	 	 
	 

	 	/s/ James J. Benard
	 

	 	 
	 

	 	JAMES J. BENARD

















 








July 27, 2006




Mr. James J. Benard

11 Waters Lake Blvd.

Missouri City, Texas 77459-6438



Re:     Restricted Stock Agreement Under Carriage Services, Inc.

          1995 Stock Incentive Plan



Dear Mr. Benard:




     Reference is made to the Restricted Stock Agreement dated on or about January 9, 2003 (the
“2003 Agreement”), under which you were granted 20,000 shares (“Restricted Shares”) of the Common
Stock, $.01 par value, of Carriage Services, Inc., a Delaware corporation (the “Company”), subject
to the restrictions contained in the 2003 Agreement. Capitalized terms used but not defined herein
shall have the meanings given such terms in the 2003 Agreement.



     Of the Restricted Shares, 15,000 have vested and the remaining 5,000 (the “Unvested Shares”)
remain subject to forfeiture. In connection with your resignation of employment effective as of
July 17, 2006 with the Company and its subsidiaries pursuant to the Separation Agreement and
Release dated on or about the date hereof (“Separation Agreement”), this evidences the agreement
between you and the Company that the Restrictions on all of the Unvested Shares shall lapse
effective as of the date of your resignation. Consequently, the Restrictions described in Section
4 of the 2003 Agreement are hereby terminated, and the Unvested Shares shall not be subject to
forfeiture as described in Section 5 of the 2003 Agreement.



     The foregoing is subject in all respects to the effectiveness and validity of the Separation
Agreement, and if for any reason the Separation Agreement is terminated, including without
limitation your revocation thereof, then this letter agreement shall be null and void and the
Restrictions, forfeiture conditions and other terms and provisions of the 2003 Agreement shall
automatically be reinstated.



     This letter agreement shall constitute an amendment to the 2003 Agreement. In accordance with
Section 9 of the 2003 Agreement, the Company represents to you that the Compensation Committee of
its Board of Directors has consented to this amendment.



 









 







Mr. James J. Benard

July 27, 2006

Page 2




     This letter has no effect on the Restricted Stock Agreement dated on or about February 3,
2005. Any shares not vested thereunder as of the effective date of termination of your employment
shall be forfeited as provided in such Agreement.



     This letter agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, successors and assigns.



     If the foregoing accurately reflects the agreement between you and the Company with respect
to the subject matter hereof, please evidence that agreement by signing in the space provided
below.



	 	 	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 	 	 
	 	 	CARRIAGE SERVICES, INC.
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Melvin C. Payne	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	MELVIN C. PAYNE, Chairman and	 	 
	 

	 	 	 	     Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	AGREED TO AND ACCEPTED
	 	 	 	 	 	 
	Effective this 27 day of July, 2006:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ James J. Benard
	 	 	 	 	 	 
	 

JAMES J. BENARD

	 	 	 	 	 	 







 









 








July 17, 2006




The Board of Directors

Carriage Services, Inc.




Gentlemen:




     I hereby resign as Regional Managing Partner for Cemetery/Combination Operations and as any
other officer of, and from any and all other positions I may hold with, the consolidated
subsidiaries of Carriage Services, Inc., a Delaware corporation, including those reflected on
Schedule I hereto.



	 	 	 
	 

	 	Very truly yours,
	 
	 	 
	 

	 	/s/ James J. Benard
	 

	 	James J. Benard






 









 





SCHEDULE I




	 	 	 	 	 
	                         
           Name	 	Incorporation	 
	Carriage Funeral Holdings, Inc.
	 	Delaware
	Carriage Holding Company, Inc.
	 	Delaware
	CFS Funeral Services, Inc.
	 	Delaware
	Carriage Cemetery Services, Inc.
	 	Texas
	Carriage Services of Oklahoma, L.L.C.
	 	Oklahoma
	Carriage Team Florida (Cemetery), LLC
	 	Delaware
	Carriage Team Florida (Funeral), LLC
	 	Delaware
	Carriage Municipal Cemetery Services of Nevada, Inc.
	 	Nevada
	Carriage Investments, Inc.
	 	Delaware