Document:

Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT, made effective as of the 30th day of
March, 2005, is between CARRIAGE SERVICES, INC., a
Delaware corporation (the “Company”), and GEORGE J. KLUG,
a resident of Kingwood, Texas (the “Employee”).

 

1.             Employment
Term.  The Company hereby continues
the employment of the Employee for a term commencing effective on the date
first above written and, subject to earlier termination as provided in Section
7 hereof, continuing until December 31, 2007 (such term being herein referred
to as the “term of this Agreement”).  The
Employee agrees to accept such employment and to perform the services specified
herein, all upon the terms and conditions hereinafter stated.

 

2.             Duties.  The Employee shall serve the Company and shall
report to, and be subject to the general direction and control of the Chief
Executive Officer of the Company or any other officer designated by him.  The Employee shall perform the management and
administrative duties of Senior Vice President of Information Systems and Chief
Information Officer of the Company.  In
such capacity, the Employee shall be responsible for the operation and
management of Company’s information systems, networks and communications
infrastructure.  The Employee shall also
serve as Senior Vice President of Information Systems and Chief Information
Officer of any subsidiary of the Company as requested by the Company, and the
Employee shall perform such other duties as are from time to time assigned to
him by the Chief Executive Officer as are not inconsistent with the provisions
hereof.

 

3.             Extent
of Service.  The Employee shall
devote his full business time and attention to the business of the Company,
and, except as may be specifically permitted by the Company, shall not be
engaged in any other business activity during the term of this Agreement.  The foregoing shall not be construed as
preventing the Employee from making passive investments in other businesses or
enterprises, provided, however, that such investments will not require services
on the part of the Employee which would in any way impair the performance of
his duties under this Agreement.

 

4.             Compensation.  During the term of this Agreement, the
Company shall pay the Employee a salary of $15,833.33 per full calendar month
of service completed, appropriately prorated for partial months at the
commencement and end of the term of this Agreement.  The salary set forth herein shall be payable
in bi-weekly installments in accordance with the payroll policies of the
Company in effect from time to time during the term of this Agreement.  The Company shall have the right to deduct
from any payment of all 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.

 

5.             Benefits.  In addition to the base salary under Section
4, the Employee shall be entitled to participate in the following benefits
during the term of this Agreement:

 

(a)           Consideration for an
annual performance-based bonus within the sole discretion of the Company, as
may be recommended by the Chief Executive Officer and, if applicable, approved
by the Compensation Committee of the Company’s Board of Directors.

 

 

(b)           Eligibility for
consideration of incentive stock options or restricted stock grants under the
terms of one or more of the Company’s stock incentive plans.

 

(c)           Five days of vacation
accrued in each calendar year of service in addition to that provided to the
Employee under the Company’s employee policy.

 

(d)           Such
other employee benefits as are available generally to employees of the Company.

 

6.             Certain
Additional Matters.  The Employee
agrees that at all times during the term of this Agreement and for the two-year
period specified in Section 8:

 

(a)           The Employee will not
knowingly or intentionally do or say any act or thing which will or may impair,
damage or destroy the goodwill and esteem for the Company of its suppliers,
employees, patrons, customers and others who may at any time have or have had
business relations with the Company.

 

(b)           The Employee will not
reveal to any third person any difference of opinion, if there be such at any
time, between him and the management of the Company as to its personnel,
policies or practices.

 

(c)           The Employee will not
knowingly or intentionally do any act or thing detrimental to the Company or
its business.

 

7.             Termination.

 

(a)           Death.  If the Employee dies during the term of this
Agreement and while in the employ of the Company, this Agreement shall
automatically terminate and the Company shall have no further obligation to the
Employee or his estate except that the Company shall pay the Employee’s estate
that portion of the Employee’s base salary under Section 4 accrued through the
date on which the Employee’s death occurred. 
Such payment of base salary 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.

 

(b)           Disability.  If during the term of this Agreement, the
Employee shall be prevented from performing his duties hereunder by reason of
disability, and such disability shall continue for a period of six months, then
the Company may terminate this Agreement at any time after the expiration of
such six-month period.  For purposes of
this Agreement, the Employee shall be deemed to have become disabled when the
Company, upon the advice of a qualified physician, shall have determined that
the Employee has become physically or mentally incapable (excluding infrequent
and temporary absences due to ordinary illness) of performing his duties under
this Agreement.  In the event of a
termination pursuant to this paragraph (b), the Company shall be relieved of
all its obligations under this Agreement, except that the Company shall pay to
the Employee (or his estate in the event of his subsequent death) the Employee’s
base salary under Section 4 through the date on which such termination shall
have occurred, reduced during such period by the amount of any benefits
received under any disability policy maintained by the Company.  All such payments to the

 

2

 

Employee or his 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 become disabled.

 

(c)           Discharge
for Cause.  Prior to the end of the
term of this Agreement, the Company may discharge the Employee for Cause and
terminate this Agreement.  In such case
this Agreement shall automatically terminate and the Company shall have no
further obligation to the Employee or his estate other than to pay to the
Employee (or his estate in the event of his subsequent death) that portion of
the Employee’s salary accrued through the date of termination.  For purposes of this Agreement, the Company
shall have “Cause” to discharge the Employee or terminate the Employee’s
employment hereunder upon (i) the Employee’s commission of any felony or any
other crime involving moral turpitude, (ii) the Employee’s failure or refusal
to perform all of his duties, obligations and agreements herein contained or
imposed by law, including his fiduciary duties, to the reasonable satisfaction
of the Company, (iii) the Employee’s commission of acts amounting to negligence
or willful misconduct to the material detriment of the Company, or (iv) the
Employee’s breach of any provision of this Agreement or uniformly applied
provisions of the Company’s employee handbook.

 

(d)           Discharge
Without Cause.  Prior to the end of
the term of this Agreement, the Company may discharge the Employee without
Cause (as defined in paragraph (c) above) and terminate this Agreement.  In such case this Agreement shall
automatically terminate and the Company shall have no further obligation to the
Employee or his estate, except that the Company shall continue to pay to the
Employee (or his estate in the event of his subsequent death) the Employee’s
base salary under Section 4, and shall continue to include the Employee in any group
health and hospitalization insurance program, for a period of 18 months
following the date of discharge.  All
such payments to the Employee or his 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
been discharged.

 

(e)           Corporate
Change.  If there occurs a Corporate
Change (as defined in the Company’s 1996 Stock Incentive Plan), during the term
of this Agreement, and if the Employee is terminated without Cause or resigns
his employment hereunder for Good Cause (as hereafter defined) within twelve
months thereafter, then this Agreement shall automatically terminate (if then
still in effect), in which event Company shall have no further obligation to
the Employee or his estate, except that the Company shall continue to pay to
the Employee (or his estate in the event of his subsequent death) the Employee’s
base salary under Section 4, and shall continue to include the Employee in any
group health and hospitalization insurance program, for a period of 18 months
following the date of discharge, or until expiration of the term of this
Agreement (whichever is longer).  All
such payments to the Employee or his 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
resigned or been discharged.  For
purposes hereof, “Good Cause” means (i) the Company has assigned to Employee
any duties inconsistent with his position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities hereunder,
or taken any other action which results in a diminution in such position,
authority, duties or responsibilities, excluding any isolated, insubstantial or
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Employee; or (ii) the
Company requires the Employee to be based at any office or location outside of
the Greater Houston Metropolitan Area.

 

(f)            No resignation with or without Good
Cause, nor any discharge hereunder, whether or not following a Corporate
Change, will relieve the Employee of his obligations under Sections 6, 8 and 9
hereunder.

 

8.             Restrictive
Covenants.  The Employee acknowledges that in the course of his employment with the
Company as a member of the Company’s senior executive and management team, he
has had and will continue to have access to confidential and proprietary
business

 

3

 

information
of the Company and its affiliates, and will develop through such employment
business systems, methods of doing business, and contacts within the death care
industry, all of which will help to identify him with the business and goodwill
of the Company.  Consequently, it is
important that the Company protect its interests in regard to such matters from
unfair competition.  The parties
therefore agree that for so long as the Employee shall remain employed by the
Company and, if the employment of the Employee ceases for any reason
(including voluntary resignation), then for a period of two (2) years
thereafter, the Employee shall not, directly or indirectly:

 

  (i)          alone
or for his own account, or as a officer, director, shareholder, partner,
member, trustee, employee, consultant, advisor, agent or any other capacity of
any corporation, partnership, joint venture, trust, or other business organization
or entity, encourage, support, finance, be engaged in, interested in, or
concerned with (x) any of the companies and entities described on Schedule I
hereto, except to the extent that any activities in connection therewith are
confined exclusively outside the Continental United States, or (y) any other
business within the death care industry having an office or being conducted
within a radius of fifty (50) miles of any funeral home, cemetery or other
death care business owned or operated by the Company or any of its subsidiaries
at the time of such termination;

 

 (ii)          induce
or assist anyone in inducing in any way any employee of the Company or any of
its subsidiaries to resign or sever his or her employment or to breach an
employment contract with the Company or any such subsidiary; or

 

(iii)          own, manage, advise,
encourage, support, finance, operate, join, control, or participate in the
ownership, management, operation, or control of or be connected in any manner
with any business which is or may be in the funeral, mortuary, crematory,
cemetery or burial insurance business or in any business related thereto (x) as
part of any of the companies or entities listed on Schedule I, or (y) otherwise
within a radius of fifty (50) miles of any funeral home, cemetery or other
death care business owned or operated by the Company or any of its subsidiaries
at the time of such termination.

 

Notwithstanding the foregoing, the above covenants
shall not prohibit the passive ownership of not more than one percent (1%) of
the outstanding voting securities of any entity within the death care industry.
The foregoing covenants shall not be held invalid or unenforceable because of
the scope of the territory or actions subject hereto or restricted hereby, or
the period of time within which such covenants respectively are operative, but
the maximum territory, the action subject to such covenants and the period of
time they are enforceable are subject to any determination by a final judgment
of any court which has jurisdiction over the parties and subject matter.

 

9.             Confidential
Information.  The Employee
acknowledges that in the course of his employment by the Company he has
received and will continue to receive certain trade secrets, lists of
customers, management methods, financial and accounting data (including but not
limited to reports, studies, analyses, spreadsheets and other materials and
information), operating techniques, prospective acquisitions and dispositions,
employee lists, training manuals and procedures, personnel evaluation
procedures, and other confidential information and knowledge concerning the
business of the Company and its affiliates (hereinafter collectively referred
to as “Information”) which the Company desires to protect.  The Employee understands that the Information
is confidential and he agrees not to reveal the Information to anyone outside
the Company so long as the confidential or

 

4

 

secret nature of the
Information shall continue.  The Employee
further agrees that he will at no time use the Information in competing with
the Company.  Upon termination of this
Agreement, the Employee shall surrender to the Company all papers, documents,
writings and other property produced by his or coming into his possession by or
through his employment or relating to the Information and the Employee agrees
that all such materials will at all times remain the property of the Company.

 

10.           Remedies.  The parties recognize that the services to be rendered under this Agreement
by the Employee are special, unique, and of extraordinary character, and that
in the event of the breach by the Employee of the covenants contained in
Section 8 or Section 9 hereof, the Company may suffer irreparable harm as a
result.  The parties therefore agree
that, in the event of any breach or threatened breach of any of such covenants,
the Company shall be entitled to specific performance or injunctive relief, or
both, and may, in addition to and not in lieu of any claim or proceeding for
damages, institute and prosecute proceedings in any court of competent
jurisdiction to enforce through injunctive relief such covenants.  In addition, the Company may, if it so
elects, suspend (if applicable) any payments due under this Agreement pending
any such breach and offset against any future payments the amount of the
Company’s damages arising from any such breach. 
The Employee agrees to waive and hereby waives any requirement for the
Company to secure any bond in connection with the obtaining of such injunction
or other equitable relief.

 

11.           Notices.  All notices, requests, consents and other
communications under this Agreement shall be in writing and shall be deemed to
have been delivered on the date personally delivered or three business days
after the date mailed, postage prepaid, by certified mail, return receipt
requested, or when sent by telex or telecopy and receipt is confirmed, if addressed
to the respective parties as follows:

 

If to the Employee:               Mr.
George J. Klug

5918 Spring Lodge

Kingwood, Texas 
77345

 

If to the Company:               Carriage
Services, Inc.

1900 St. James Place, 4th Floor

Houston, Texas 
77056

Attn:  Chief
Executive Officer

 

Either party hereto may designate a different address by providing
written notice of such new address to the other party hereto.

 

102.         Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such provision or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.

 

113.         Assignment.  This Agreement may not be assigned by the
Employee.  Neither the Employee nor his
estate shall have any right to commute, encumber or dispose of any right to
receive

 

5

 

payments
hereunder, it being agreed that such payments and the right thereto are
nonassignable and nontransferable.

 

124.         Binding
Effect.  Subject to the provisions of
Section 13 of this Agreement, this Agreement shall be binding upon and inure to
the benefit of the parties hereto, the Employee’s heirs and personal
representatives, and the successors and assigns of the Company.

 

135.         Captions.  The section and paragraph headings in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

 

146.         Complete
Agreement.  This Agreement represents
the entire agreement between the parties concerning the subject hereof and
supersedes all prior agreements and arrangements between the parties concerning
the subject thereof.

 

157.         Governing
Law; Venue.  A substantial portion of
the Employee’s duties under this Agreement shall be performed at the Company’s
corporate headquarters in Houston, Texas, and this Agreement has been
substantially negotiated and is being executed and delivered in the State of
Texas.  This Agreement shall be construed
and enforced in accordance with and governed by the laws of the State of Texas.  Any suit, claim or proceeding arising under
or in connection with this Agreement or the employment relationship evidenced
hereby must be brought, if at all, in a state district court in Harris County,
Texas or federal district court in the Southern District of Texas, Houston
Division.  Each party submits to the
jurisdiction of such courts and agrees not to raise any objection to such
jurisdiction.

 

18.           Counterparts.  This Agreement may be executed in multiple
original counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date and year first above
written.

 

	
   

  	
  CARRIAGE SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Melvin C. Payne

  
	
   

  	
   

  	
  MELVIN C. PAYNE, Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ George J. Klug

  
	
   

  	
  GEORGE J. KLUG

  

 

6

 

SCHEDULE I

TO

EMPLOYMENT
AGREEMENT

(GEORGE J. KLUG)

 

1.             The
following entities, together with all Affiliates thereof:

 

Service Corporation International

Alderwoods Group Inc.

Stewart Enterprises, Inc.

Keystone Group Holdings, Inc.

Meridian Mortuary Group, Inc.

StoneMor Partners

Hamilton Group, Inc.

Century Group

Saber Group

Thomas Pierce & Co.

Graystone Associates

 

For purposes of the foregoing, an “Affiliate” of an
entity is a person that directly or indirectly controls, is under the control
of or is under common control with such entity.

 

2.             Any
new entity which may hereafter be established which acquires any combination of
ten or more funeral homes and/or cemeteries from any of the entities described
in 1 above.

 

3.             Any
funeral home, cemetery or other death care enterprise which is managed by any
entity described in 1 or 2 above.Exhibit 10.1

AFFORDABLE RESIDENTIAL COMMUNITIES INC.

2003 EQUITY INCENTIVE PLAN

 

RESTRICTED STOCK AGREEMENT

 

RESTRICTED STOCK AGREEMENT,
made as of the date set forth on the Notice of Grant of Restricted Stock, by
and between Affordable Residential Communities Inc., a Maryland corporation
(the “Company”), pursuant to the Affordable Residential Communities Inc. 2003
Equity Incentive Plan (the “Plan”) and the employee or director of the Company
or an Affiliate named on the Notice of Grant of Restricted Stock (the “Participant”).  Except as otherwise expressly set forth
herein, this Agreement shall be construed in accordance with the provisions of
the Plan and any capitalized terms not otherwise defined in this Agreement
shall have the definitions set forth in the Plan.

 

WHEREAS, the Plan
administrator has authorized the grant to the Participant of the shares of
Restricted Stock as set forth in the Notice of Grant of Restricted Stock.

 

NOW, THEREFORE, in
consideration of the mutual covenants hereinafter set forth and for other good
and valuable consideration, the parties hereto have agreed and do hereby agree
as follows:

 

1.                                       Grant of Award.  Pursuant to Section 7 of the Plan, the
Company grants to the Participant, as of the effective date of grant specified
in the Notice of Grant of Restricted Stock and subject to the terms and
conditions of the Plan and subject further to the terms and conditions set
forth herein, the number of shares of Restricted Stock as shown on the Notice
of Grant of Restricted Stock.  The Participant’s
grant and record of Restricted Stock share ownership shall be kept on the books
of the Company until the restrictions on transfer have lapsed.  At the Participant’s request, vested shares
may be evidenced by stock certificates.

2.                                   Vesting.  The shares of Restricted Stock granted to the
Participant shall vest in accordance with the vesting schedule set forth in the
Notice of Grant of Restricted Stock. 
Such vesting schedule indicates each date upon which the Participant
shall be entitled to receive shares of freely transferable Common Stock equal
to the number of vested shares of Restricted Stock, provided that, as of the
vesting date, the Participant has not incurred a termination of service with
the Company and all of its Affiliates. 
No vesting shall occur after the termination of a Participant’s
employment or service with the Company and its Affiliates for any reason.

3.                                       Rights as a
Stockholder.  The
Participant shall have all of the rights of a stockholder with respect to the
shares of Restricted Stock, including the right to vote on all matters with
respect to which the stockholders of the Company have the right to vote and the
right to receive dividends thereon.

4.                                       Restrictions on
Transfer.  Shares of
Restricted Stock may not be transferred or otherwise disposed of by the
Participant, including by way of sale,
assignment, transfer, pledge, hypothecation or otherwise, except as permitted
by the Committee, or by will or the laws of descent and distribution.

5.                                       Approvals.  No shares of Common Stock shall be issued
under this Restricted Stock Agreement unless and until all legal requirements
applicable to the issuance of such 

 

 

shares have been complied
with to the satisfaction of the Committee. 
The Committee shall have the right to condition any issuance of shares
to the Participant on the Participant’s undertaking in writing to comply with
such restrictions on the subsequent disposition of such shares as the Committee
shall deem necessary or advisable as a result of any applicable law or regulation.

6.                                   Invalid Transfers.  No purported sale, assignment, mortgage,
hypothecation, transfer, pledge, encumbrance, gift, transfer in trust (voting
or other) or other disposition of, or creation of a security interest in or
lien on, any of the shares of Restricted Stock by any holder thereof in
violation of the provisions of this Restricted Stock Agreement shall be valid,
and the Company will not transfer any of said shares of Restricted Stock on its
books nor will any of said shares of Restricted Stock be entitled to vote, nor
will any dividends be paid thereon, unless and until there has been full
compliance with said provisions to the satisfaction of the Company.  The foregoing restrictions are in addition to
and not in lieu of any other remedies, legal or equitable, available to enforce
said provisions.

7.                                       Effect of
Termination of Employment or Service for Death, Disability, Retirement or
Without Cause.  Unless
otherwise provided in an individual employment, severance or other agreement
entered into between the Participant and the Company, in which case the
provisions of such agreement shall apply, in the event that the Participant’s
employment or service with the Company terminates for any reason prior to the
vesting of all of the shares of Restricted Stock subject hereto, any shares
subject to this Agreement as of the effective date of such termination shall be
immediately forfeited and cancelled.

8.                                       Taxes.  The Participant shall pay to the Company
promptly upon request, and in any event at the time the Participant recognizes
taxable income in respect to the shares of Restricted Stock (or, if the
Participant makes an election under Section 83(b) of the Code in connection
with such grant, on or about the date of grant), an amount equal to the federal,
state and/or local taxes the Company determines it is required to withhold
under applicable tax laws with respect to the shares of Restricted Stock.  The Participant may satisfy the foregoing
requirement by making a payment to the Company in cash or, with the consent of
the Company, by authorizing the Company to withhold cash otherwise due to the
Participant (e.g., by filing a revised form W-4 to increase payroll tax
withholdings). The Participant shall promptly notify the Company of any
election made pursuant to Section 83(b) of the Code. The Participant
understands that the Participant (and not the Company) shall be responsible for
any tax liability that may arise as a result of the transactions contemplated
by this Restricted Stock Agreement.

THE PARTICIPANT ACKNOWLEDGES
THAT IT IS THE PARTICIPANT’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE
TIMELY THE ELECTION UNDER SECTION 83(b) OF THE CODE, IN THE EVENT THAT THE
PARTICIPANT DESIRES TO MAKE THE ELECTION.

 

9.                                   Compliance with Law and
Regulations; Legend.  The award
and any obligation of the Company hereunder shall be subject to all applicable
federal, state and local laws, rules and regulations and to such approvals by
any government or regulatory agency as may be required.  The Company may require, as a condition of
the issuance and delivery of certificates evidencing Restricted Stock pursuant
to the terms hereof, that 

 

 

the certificates bear the
legend set forth immediately below, in addition to any other legends required
under federal and state securities laws or as otherwise determined by the
Committee.

The
transferability of this certificate and the shares of stock represented hereby
are subject to the restrictions, terms and conditions (including forfeiture
provisions and restrictions against transfer) contained in the Affordable
Residential Communities Inc. 2003 Equity Incentive Plan and an Agreement
entered into between the registered owner of such shares and the Company.  A copy of the Plan and Agreement is on file
in the office of the Secretary of the Company, 600 Grant Street, Suite 900,
Denver, CO 80203.

 

Such legend shall not be
removed until such shares vest pursuant to the terms hereof.

 

10.                                 Incorporation
of Plan.  This Agreement is made under
the provisions of the Plan (which is incorporated herein by reference) and
shall be interpreted in a manner consistent with it.  To the extent that this Agreement is silent
with respect to, or in any way inconsistent with, the terms of the Plan, the
provisions of the Plan shall govern and this Restricted Stock Agreement shall
be deemed to be modified accordingly.

11.                             Notices.  Any notices required or permitted hereunder
shall be addressed to the Company, at 600 Grant Street, Suite 900, Denver, CO
80203, or to the Participant at the address then on record with the Company, as
the case may be, and deposited, postage prepaid, in the United States
mail.  Either party may, by notice to the
other given in the manner aforesaid, change his/her or its address for future
notices.

12.                                 Binding
Agreement; Successors.  This
Agreement shall bind and inure to the benefit of the Company, its successors
and assigns, and the Participant and the Participant’s personal representatives
and beneficiaries.

13.                                 Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of the State of Maryland.  The Committee shall have final authority to
interpret and construe the Plan and this Agreement and to make any and all
determinations under them, and its decision shall be binding and conclusive
upon all Persons.

14.                                 Amendment.  This Agreement may be amended or modified by
the Company at any time; provided
that notice is provided to the Participant in accordance with Section 11; and provided,  further,
that no amendment or modification that is adverse to the rights of the
Participant as provided by this Agreement shall be effective unless set forth
in a writing signed by the parties hereto.

 

 

IN WITNESS WHEREOF, the Company has caused
this Agreement to be duly executed by its officer thereunder duly authorized
and the Participant has hereunto set his hand, all as of the day and year set
forth below.

 

 

 

AFFORDABLE RESIDENTIAL

COMMUNITIES INC.

 

 

 

	
   

  
	
  By:

  	
   

  
	
  Its: 

  	
   

  

 

 

 

The undersigned hereby acknowledges having
read this Agreement and the Plan and hereby agrees to be bound by all
provisions set forth herein and in the Plan.

 

 

	
   

  
	
   

  
	
  Date:

  	
   

  

 

 

AFFORDABLE
RESIDENTIAL COMMUNITIES INC.

2003
EQUITY INCENTIVE PLAN

 

NOTICE OF GRANT OF RESTRICTED STOCK

 

                This Notice is to certify that the Participant named
below has been granted the number of shares of Restricted Common Stock set
forth below under the terms and conditions set forth in this Notice.  This Notice is subject to and incorporates by
reference the terms and conditions of the Restricted Stock Agreement ((the “Agreement”),
a copy of which is enclosed).  Please
refer to the Restricted Stock Agreement and the 2003 Equity Incentive Plan
document for an explanation of the terms and conditions of this grant and a
full description of your rights and obligations.  You must sign the Agreement in order for this
Notice and grant to be effective.  Please
sign and date the Agreement on the last page and return it promptly in the
enclosed envelope.

 

	
  Name of Participant:

  	
   

  	
   

  
	
   

  
	
  Number
  of Restricted Shares:

  	
   

  	
   

  
	
   

  
	
  Per
  Share Value on Grant Date:

  	
   

  	
  $

  	
   

  
	
   

  
	
  Grant
  Date:

  	
   

  	
   

  
	
   

  
	
  Vesting
  Schedule:

  	
   

  	
   

  	
  Shares
  vest on Grant Date

  	
   

  	
   

  
	
  (Date(s)
  on which Restricted

  	
   

  	
   

  
	
  Stock
  Restrictions Lapse)

  	
   

  	
   

  	
  Shares
  vest on 

  	
   

  	
   

  
	
   

  
	
  Additional
  Terms:

  	
   

  	
  See
  the Restricted Stock Agreement.

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