Document:

exv10w1

Exhibit 10.1

FIRST AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     THIS FIRST AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), dated December 29,
2010 (the “Effective Date”), is entered into between CARRIAGE SERVICES, INC., a Delaware
corporation (the “Company”), and Melvin C. Payne, a resident of Harris County, Texas (the
“Employee”).

     1. Employment Term. The Company hereby continues the employment of the Employee for
an initial term commencing as of the Effective Date and continuing until the third anniversary of
the Effective Date (the “Initial Term”). On the third anniversary of the Effective Date and on
each subsequent anniversary thereafter, this Agreement shall automatically renew and extend for a
period of 12 months (each such 12-month period being a “Renewal Term”) unless written notice of
non-renewal is delivered from either party to the other not less than sixty (60) days prior to the
expiration of the then-existing Initial Term or Renewal Term, as applicable. Notwithstanding the
foregoing, the Employee’s employment pursuant to this Agreement may be terminated prior to the
expiration of the then-existing Initial Term or Renewal Term as provided in Section 7 hereof. 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 Board of Directors of the Company (the “Board”). The
Employee shall faithfully, diligently, competently, and to the best of Employee’s ability, perform
the management and administrative duties of President and Chief Executive Officer of the Company.
The Employee shall also serve as an 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 Company’s Board of Directors as are not inconsistent with the provisions hereof. The
Employee represents and warrants to the Company that Employee is not subject to any obligation to
any third party that would restrict or interfere with Employee’s ability to perform hereunder.

     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 (i) from making passive investments in other
businesses or enterprises, and (ii) from engaging in other civic, charitable and business
activities, provided, however, that such investments and activities 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 an annual salary at a rate of not less than $500,000 per full calendar year of service
completed (“Base Salary”), appropriately prorated for partial years at the commencement and end of
the term of this Agreement. The Employee’s salary and benefits will be reviewed annually, and any
increase therein shall remain in the sole discretion of the Company, acting through the
Compensation Committee of the Board (the “Compensation Committee”). The

 

 

salary set forth herein shall not be subject to reduction and 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 payment of all
compensation to the Employee hereunder (i) any federal, state or local taxes required by law to be
withheld with respect to such payments, and (ii) any other amounts specifically authorized to be
withheld or deducted by the Employee.

     5. Benefits. In addition to the Base Salary, the Employee shall be entitled to
participate in the following benefits during the term of this Agreement:

     (a) Employee shall be eligible for an annual, discretionary incentive award (the
“Incentive Award”) for each full calendar year that he is employed hereunder, based on
achievement of specified corporate and individual performance goals established at the
beginning of the year by the Compensation Committee of the Board at its first meeting of the
fiscal year. The goals will be established at three levels: (i) Threshold, (ii) Target,
and (iii) Maximum. If the Compensation Committee determines that performance is achieved
(i) at the Target level the Incentive Award will be 75% of Base Salary, (ii) at the
Threshold level the Incentive Award will be 37 1/2 % of Base Salary and (iii) at the Maximum
level the Incentive Award will be 150% of Base Salary. In the discretion of the Compensation
Committee, awards for performance falling between Threshold, Target and Maximum goals may be
ratably scaled above and below the goal levels. The Incentive Award shall be payable before
March 15 of the year following the calendar year to which the Incentive Award relates,
following the certification of applicable year-end financial results. Employee must be
employed by the Company on the payment date in order to earn and receive an Incentive Award.

     (b) Employee shall be eligible for consideration of awards of restricted stock or other
incentive-based compensation under the terms of the Company’s 2006 Long Term Incentive Plan
or one or more of the Company’s other incentive plans, as may be recommended and approved by
the Compensation Committee.

     (c) Four weeks of paid vacation in each calendar year, subject to the Company’s
personnel policies respecting such matters.

     (d) Participation in the Company’s group health and hospitalization program, and
inclusion in such other employee benefits, as are available generally to executive-level
employees of the Company.

     (e) Reimbursement for travel, lodging and other out-of-pocket expenses reasonably
incurred by Employee in the exercise of Employee’s duties under this Agreement which are
approved by the Company in advance and are duly substantiated in accordance with the
Company’s policies as to reimbursement. In order to assure compliance with Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”), (i) such reimbursements shall be
made as soon as practicable, but in no event later than the last day of the calendar year
following the calendar year in which the expense was incurred, (ii) Employee is not
permitted to receive a payment or other benefit in lieu of reimbursement under this Section
5(e), and (iii) the amount of expenses

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for which Employee is eligible to receive reimbursement during any calendar year shall
not affect the amount of expenses for which Employee is eligible to receive reimbursement
during any other calendar year within the term of the Agreement.

     (f) Insurance premium reimbursement on non-Carriage sponsored disability and life
insurance policies up to $25,000 per calendar year, which such reimbursement will be
provided within sixty (60) days after Employee provides the Company with documentation
evidencing his payment of such premium(s); provided, however, that Employee must provide the
Company with such documentation within ten (10) days of his payment of such premium(s) and
such reimbursement shall in all cases be made in compliance with the last sentence of
Section 5(e) hereof.

     6. Certain Additional Matters. The Employee agrees that at all times during the term
of this Agreement and for a period of two years following any cessation of employment with the
Company:

     (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 held by 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 knowingly or intentionally do any act or thing detrimental to
the Company or its business.

	 	 	     Nothing herein shall be construed to prevent the Employee from complying with any
requirements of law or legal process or taking such actions as the Company may consent to in
writing.

     7. Termination.

     (a) Death. If the Employee dies during the Initial Term or any then-existing
Renewal Term 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 (i) that portion of the Employee’s
Base Salary accrued through the date on which the Employee’s death occurred, (ii) a pro rata
amount of the annual Incentive Award for the year in which the death occurred at the Target
goal level described in Section 5(a) above, based on the number of days the Employee was
employed in the year in comparison to 365, and (iii) all benefits payable under the
governing provisions of any benefit plan or program of the Company (including as provided in
Section 5(f) above). Such payment of Base Salary and Annual Incentive Award 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 Initial Term or any then-existing Renewal Term,
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.

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	 	 	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 is unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than 12 months. 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): (i) the Employee’s Base Salary 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, as
applicable; (ii) subject to the provisions of Section 20 below, a pro rata amount of the
annual Incentive Award for the year in which Employee’s employment was terminated at the
Target goal level described in Section 5(a) above, based on the number of days the Employee
was employed in the year in comparison to 365, which such pro rata Incentive Award payment
shall be provided on the later of the first business day after the Release (as defined in
Section 20 below) is no longer revocable or the payment date that an Incentive Award for the
year of termination otherwise would have been payable pursuant to Section 5(a) above had
Employee’s employment not terminated (provided, that, in no event shall such payment occur
later than the date necessary to qualify such payment as a “short-term deferral” within the
meaning of Treas. Reg. § 1.409A-1(b)(4)); and (iii) all benefits payable under the governing
provisions of any benefit plan or program of the Company (including as provided in Section
5(f) above). Unless otherwise provided above, 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 remained employed by the Company. No such termination pursuant to
this paragraph (b) will relieve the Employee of his obligations under Sections 6, 8 and 9
hereunder.

     (c) Discharge for Cause. The Company may discharge the Employee for Cause and
terminate this Agreement prior to the end of the Initial Term or any then-existing Renewal
Term. 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 conviction
of any felony or any other crime involving moral turpitude, (ii) the Employee’s repeated
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’s Board of Directors, (iii) the Employee’s commission of acts amounting to gross
negligence or willful misconduct to the material detriment of the Company, or (iv) the
Employee’s material breach of any provision of this Agreement or uniformly applied
provisions of the Company’s employee handbook or other personnel policies, including without
limitation, its Code of Business Conduct and Ethics. Such determination of “Cause” shall be
made by the Company’s Board of Directors, and in the event of circumstances described in
(ii) or (iv), the Board shall give

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	 	 	written notice to the Employee specifying such circumstances and providing a period of
30 days in which the Employee shall be allowed to cure such circumstances.

	 	 	     Any such termination by virtue of this paragraph (c) shall not prejudice any remedy
that the Company may have at law, in equity, or under this Agreement, for breach hereof by
Employee. No such termination pursuant to this paragraph (c) will relieve the Employee of
his obligations under Sections 6, 8 and 9 hereunder.

     (d) Discharge Without Cause. Prior to the end of the Initial Term or any
then-existing Renewal Term, 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, subject to the provisions of Section 20 below, the Company shall
continue to pay to the Employee (or his estate in the event of his subsequent death): (i)
the Employee’s monthly Base Salary, in arrears, for a period of 24 months following the date
of discharge; provided, however, that the first such payment shall be made on the Company’s
first regular payroll date that comes after the Release is no longer revocable (the “First
Payment Date”) and shall include all payments, if any, that would have otherwise been made
pursuant to this Section 7(d)(i) between the date of Employee’s termination of employment
and the First Payment Date; (ii) a pro rata amount of the annual Incentive Award at the
Target goal level described in Section 5(a) above, based on the number of days the Employee
was employed in the year in comparison to 365, for the year of termination, which such pro
rata Incentive Award payment shall be provided on the later of the first business day after
the Release is no longer revocable or the payment date that an Incentive Award for the year
of termination otherwise would have been payable pursuant to Section 5(a) above had
Employee’s employment not terminated (provided, that, in no event shall such payment occur
later than the date necessary to qualify such payment as a “short-term deferral” within the
meaning of Treas. Reg. § 1.409A-1(b)(4)); and (iii) if following the date of such discharge,
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 the Employee’s behalf 100% of applicable medical
continuation premiums for the benefit of the Employee (and his covered dependents as of the
date of his termination, if any) under the Employee’s then-current plan election, with such
coverage to be provided under the closest comparable plan as offered by the Company from
time to time, for so long during the 36-month period following termination as he remains
eligible for and elects COBRA coverage; provided that such reimbursement shall not be
applicable until the Release becomes irrevocable and the first such reimbursement payment
shall include, if applicable, all reimbursement payments that would have otherwise been made
pursuant to this Section 7(d)(iii) between the date of Employee’s termination of employment
and the date that the Release became irrevocable. The Company will also provide all salary
earned by Employee through the date of termination and any applicable benefits payable under
the governing provisions of any benefit plan or program of the Company. No such termination
pursuant to this paragraph (d) will relieve the Employee of his obligations under Sections
6, 8 and 9 hereunder. Notwithstanding anything to the contrary in this Section 7(d) or
Section 20, in the event the time period (including any applicable

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revocation period) prescribed by the Company for Employee’s execution of the Release
begins in one taxable year and ends in a second taxable year, payments under Section 7(d)(i)
will not commence and the First Payment Date shall not occur until the second taxable year,
irrespective of when the Release actually becomes irrevocable.

     (e) Corporate Change. If following a Corporate Change (as defined in the
Company’s 2006 Long-Term Incentive Plan), the Employee terminates his employment for Good
Reason (as defined below) or the Employee is discharged without Cause, in either case within
24 months following the Corporate Change, then this Agreement shall automatically terminate
and the Company shall have no further obligation to the Employee or his estate, except that,
subject to the provisions of Section 20 below, the Company shall pay to the Employee (or his
estate in the event of his subsequent death): (i) a lump sum payment payable following such
termination equal to two times the Employee’s Base Salary, which such payment shall be made
within ten (10) business days after the Release is no longer revocable; (ii) 100% of the
annual Incentive Award at the Target goal level described in Section 5(a) above for the year
of termination, which such Incentive Award payment shall be provided on the later of the
first business day after the Release is no longer revocable or the payment date that an
Incentive Award for the year of termination otherwise would have been payable pursuant to
Section 5(a) above had Employee’s employment not terminated (provided, that, in no event
shall such payment occur later than the date necessary to qualify such payment as a
“short-term deferral” within the meaning of Treas. Reg. § 1.409A-1(b)(4)); and (iii) if
following the date of such discharge, the Employee becomes eligible to elect continuation
coverage under COBRA and properly elects such coverage, the Company shall reimburse the
Employee or pay on the Employee’s behalf 100% of applicable medical continuation premiums
for the benefit of the Employee (and his covered dependents as of the date of his
termination, if any) under the Employee’s then-current plan election, with such coverage to
be provided under the closest comparable plan as offered by the Company from time to time,
for so long during the 36-month period following termination as he remains eligible for and
elects COBRA coverage; provided that such reimbursement shall not be applicable until the
Release becomes irrevocable and the first such reimbursement payment shall include, if
applicable, all reimbursement payments that would have otherwise been made pursuant to this
Section 7(e)(iii) between the date of Employee’s termination of employment and the date that
the Release became irrevocable. The Company will also provide all salary earned by Employee
through the date of termination and any applicable. The Company will also provide any
applicable benefits payable under the governing provisions of any benefit plan or program of
the Company. No such termination pursuant to this paragraph (e) will relieve the Employee
of his obligations under Sections 6 and 9 hereunder.

	 	 	     “Good Reason” means any of the following actions if taken without the Employee’s prior
written consent: (A) any material breach by the Company to comply with its obligations under
the terms of the Agreement; (B) any material diminution in the Employee’s responsibilities,
authority or duties, (C) a material diminution in the Employee’s Base Salary; or (D) any
change greater than 50 miles in the permanent location at which the Employee performs
services for the Company. The Employee shall give written notice to the Board specifying
such actions within 90 days of the initial

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	 	 	existence of such action and providing a period of 30 days in which the Company shall
be allowed to cure such circumstances. Provided that the condition purporting to give rise
to the Good Reason event is not cured within the 30-day cure period, Employee must exercise
his right to terminate this Agreement for Good Reason within 120 days after the initial
existence of the Good Reason event.

     (f) Equity Award Termination Provision. The impact of Employee’s termination
from employment with the Company on stock option, restricted stock and other share-based
awards made pursuant to a Company incentive plan shall be governed by the terms of such
plan. Where, in the discretion of the Company, the applicable plan(s) is/are silent about
the impact of Employee’s termination from employment on: (i) the vesting of Employee’s stock
option, restricted stock and other share-based awards; or (ii) Employee’s repurchase rights
and obligations following such termination of employment, then the following terms shall
apply with respect to the applicable vested and unvested stock options, restricted stock and
other share-based awards awarded to Employee:

	 	 	 	 	 	 	 
	Reason for	 	 	 	Restricted	 	Other share-based
	Termination	 	Stock Options	 	Stock	 	awards
	Termination for
Cause (as defined in
Section 7(c) above)

	 	Forfeit all

unvested awards
	 	Forfeit all

unvested awards
	 	Forfeit all

unvested awards
	 
	 	 	 	 	 	 
	Involuntary
Termination without
Cause (as defined in
Section 7(c) above)
or for Good Reason
(as defined in
Section 7(e) above)

	 	Forfeit all
unvested awards;
Employee has 12
months from the
date of termination
to exercise all
vested awards
	 	Forfeit all

unvested awards
	 	Forfeit all

unvested awards
	 
	 	 	 	 	 	 
	Voluntary Termination

	 	Forfeit all
unvested awards;
Employee has 90
days from the date
of termination to
exercise all vested
awards
	 	Forfeit all

unvested awards
	 	Forfeit all

unvested awards
	 
	 	 	 	 	 	 
	Death

	 	Immediate vesting
of all unvested
awards; Employee
has 12 months to
exercise all vested
awards
	 	Immediate vesting
of all unvested
awards
	 	Awards will be
prorated based on
termination date
and prorated
payouts will be
made within 60 days
following the end
of the performance
period, provided
that applicable
performance targets
have been met
	 
	 	 	 	 	 	 
	Disability

	 	Forfeit all
unvested awards;
Employee has 12
months to exercise
all vested awards
	 	Immediate vesting
of all unvested
awards
	 	Awards will be
prorated based on
termination date
and prorated
payouts will be
made within 60 days
following the end
of the performance
period,

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	Reason for	 	 	 	Restricted	 	Other share-based
	Termination	 	Stock Options	 	Stock	 	awards
	 

	 	 

	 	 
	 	 provided
that applicable
performance targets
have been met
	 
	 	 	 	 	 	 
	Retirement pursuant
to a plan or policy
adopted by the
Company, if any, or
on terms approved by
the Board of
Directors

	 	Forfeit all
unvested awards;
Employee has 90
days to exercise
all vested awards
	 	Immediate vesting
of all unvested
awards
	 	Awards will be
prorated based on
termination date
and prorated
payouts will be
made within 60 days
following the end
of the performance
period, provided
that applicable
performance targets
have been met

     8. Restrictive Covenants. The Company has provided and shall provide in the
future to the Employee, confidential and proprietary information as that term is defined in Section
9 of this Agreement (“Confidential Information”). 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 shall be given possession of and access to Confidential Information of the Company and its
Affiliates (as defined on Schedule I hereto), 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. In
consideration of the Confidential Information that has been received and that the Company covenants
to provide the Employee in the future, the sufficiency of which is hereby acknowledged by the
Employee, the Employee agrees to enter into the covenants contained in this Agreement. 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:

     (a) alone or for his own account, or as an 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 (i) 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 (ii) 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 Affiliates at the time of such
termination;

     (b) induce or assist anyone in inducing in any way any employee of the Company or any
of its Affiliates to resign or sever his or her employment or to breach an employment
contract with the Company or any Affiliate; or

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     (c) 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 (i) as part of any of the
companies or entities listed on Schedule I, or (ii) 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 Affiliates 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; Copyrightable Material. The Employee acknowledges that
in the course of his employment by the Company he shall receive and access certain trade secrets,
management methods, financial and accounting data (including, but not limited to, reports, studies,
analyses, spreadsheets and other materials and information), operating techniques, prospective
acquisitions, 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 “Confidential Information”) which the Company
desires to protect. The Employee understands that the Confidential Information is confidential and
he agrees not to reveal the Confidential Information to anyone outside the Company so long as the
confidential or secret nature of the Confidential Information shall continue, except as required by
law or legal process. The Employee further agrees that he will at no time use the Confidential
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 him or
coming into his possession by or through his employment or relating to the Confidential Information
and the Employee agrees that all such materials will at all times remain the property of the
Company. The Employee acknowledges that all materials and other copyrightable works and subject
matter (regardless of whether or not constituting “Confidential Information”) produced by the
Employee within the scope of his employment (regardless of whether or not denoted as copyrighted
material) shall be deemed “works made for hire” and shall be owned by and proprietary to the
Company and may not be used or reproduced in whole or in part without the Company’s prior written
consent.

     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

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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 electronic means or facsimile and receipt is confirmed, if
addressed to the respective parties as follows:

			
	     If to the Employee:	 	Melvin C. Payne

1922 North Blvd.

Houston, TX 77098

			
	     If to the Company:	 	Carriage Services, Inc.

3040 Post Oak Blvd, Suite 300

Houston, Texas 77056

Attn: Chairman, Compensation Committee

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

     12. 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.

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

     14. 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.

     15. 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.

     16. 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 including without limitation that Employment Agreement
between the parties dated August 7, 2007.

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     17. 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. Survival. The provisions of Sections 6, 8 and 9 shall survive any termination of
this Agreement or the employment relationship of the Company and Employee; provided, however, if
such termination is the result of Corporate Change as provided in Section 7(e) hereof, Employee
shall not thereafter be bound by the provisions of Section 8 hereof.

     19. 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.

     20. Severance Payments Conditioned on Release; Time of Payments. The amounts payable
to Employee under Sections 7(b)(ii), 7(d)(i)-(iii) and 7(e)(i)-(iii) shall not become payable
unless Employee executes (and does not revoke within seven days of its execution) a release of
claims in a form satisfactory to the Company (the “Release”) within the time period prescribed by
the Company, which such time period shall be no later than fifty (50) days from the date of
Employee’s termination of employment. Notwithstanding anything contained in this Agreement to the
contrary, to the maximum extent permitted by applicable law, amounts payable to Employee pursuant
to Section 7 are intended to be made in reliance upon Treas. Reg. § 1.409A-1(b)(9) (separation pay
plans) or Treas. Reg. § 1.409A-1(b)(4) (short-term deferrals). No amounts payable under Section 7
of this Agreement upon Employee’s termination of employment shall be payable unless Employee’s
termination of employment constitutes a “separation from service” within the meaning of Treas. Reg.
§ 1.409A-1(h). The Company and Employee intend that their exercise of authority or discretion
under this Agreement shall comply with Section 409A of the Code. If any provision of this
Agreement does not satisfy the requirements of Section 409A, such provision shall nevertheless be
applied in a manner consistent with those requirements. In no event whatsoever shall the Company
be liable for any tax, interest or penalties that may be imposed on Employee under Section 409A.
Notwithstanding the foregoing, no particular tax result for Employee with respect to any income
recognized by Employee in connection with this Agreement is guaranteed. Neither the Company nor
any of its affiliates shall have any obligation to indemnify or otherwise hold Employee harmless
from any or all such taxes, interest, penalties, or liability for any damages related thereto.
Each payment under this Agreement is intended to be a “separate payment” and not a series of
payments for purposes of Section 409A. References in this Agreement to Section 409A of the Code
includes rules, regulations and guidance of general applicability issued by the Department of the
Treasury under Code Section 409A. If the Employee is a “specified employee,” as such term is
defined in Section 409A of the Code and related regulations and Treasury pronouncements (“Section
409A”) and determined as described below in this Section 20, any payments payable as a result of
the Employee’s termination (other than death) that are

-11-

 

required to be delayed in accordance with Section 409A of the Code as a result of Employee’s
status as a “specified employee” shall not be payable before the earliest of (i) the date that is
six months after the Employee’s termination, (ii) the date of the Employee’s death, or (iii) the
date that otherwise complies with the requirements of Section 409A. This Section 20 shall be
applied by accumulating all payments that otherwise would have been paid within six months of the
Employee’s termination and paying such accumulated amounts without interest at the earliest date
which complies with the requirements of Section 409A. The Employee shall be a “specified employee”
for the twelve-month period beginning on April 1 of a year if the Employee is a “key employee” as
defined in Section 416(i) of the Code (without regard to Section 416(i)(5)) as of December 31 of
the preceding year or using such dates as designated by the Company in accordance with Section 409A
and in a manner that is consistent with respect to all of the Company’s nonqualified deferred
compensation plans. For purposes of determining the identity of specified employees, the Company
may establish procedures as it deems appropriate in accordance with Section 409A.

     21. Income, Excise or Other Tax Liability. The Company may withhold from any benefits
and payments made pursuant to this Agreement all federal, state, city and other taxes as may be
required pursuant to any law or governmental regulation or ruling and all other normal employee
deductions made with respect to the Company’s employees generally.

     22. Deemed Resignations. Unless otherwise agreed to in writing by the Company and
Employee prior to the termination of Employee’s employment, any termination of Employee’s
employment shall constitute: (i) an automatic resignation of Employee as an officer of the Company
and each affiliate and subsidiary of the Company, as applicable, and (ii) an automatic resignation
of Employee from the Board (if applicable), from the board of directors of any affiliate and
subsidiary of the Company (if applicable), and from the board of directors or any similar governing
body of any corporation, limited liability entity or other entity in which the Company or any
affiliate or subsidiary holds an equity interest and with respect to which board or similar
governing body Employee serves as the Company’s or such affiliate’s or subsidiary’s designee or
other representative (if applicable).

-12-

 

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

	 	 	 	 	 
	 	CARRIAGE SERVICES, INC.

 	 
	 	By:  	/s/ L. William Heiligbrodt
 	 
	 	 	L. William Heiligbrodt 	 
	 	 	Chairman, Compensation Committee 	 
	 
	 	 	 
	 	By:  	            /s/ Melvin C. Payne
 	 
	 	 	Melvin C. Payne 	 
	 	 	Individually 	 
	 

-13-

 

SCHEDULE I

TO

EMPLOYMENT AGREEMENT

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

Service Corporation International

Alderwoods Group, Inc.

Stewart Enterprises, Inc.

Keystone North America, Inc.

Meridian Mortuary Group, Inc.

StoneMor Partners LP

Saber Management LLC

Thomas Pierce & Co.

Legacy Funeral Holdings, LLC

Northstar Memorial Group, LLC

	 	 	For purposes of this Agreement (and Schedule I hereto), 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.exv10w26

Exhibit 10.26

REAFFIRMATION AGREEMENT,

GENERAL RELEASE & COVENANT NOT TO SUE

     This Reaffirmation Agreement, General Release, and Covenant Not To Sue (“Agreement”) is
entered into between Calumet GP, LLC, a Delaware limited liability company (“Calumet”) and Allan A.
Moyes, III, a resident of the State of Indiana (“Moyes”), wherein the parties agree as follows:

     1. Incorporation of Terms of Prior Agreement. The Parties have entered into a prior
Professional Services and Transition Agreement, attached to this Agreement as Exhibit A (“Prior
Agreement”). The Parties specifically incorporate by reference Sections 5, 6, 7, 9, and 10 of the
Prior Agreement.

     2. Definition. Throughout this Agreement, the term “Calumet” or “Company” when used
alone, shall encompass the following: (a) Calumet GP, LLC, Calumet Specialty Products Partners,
L.P., and any subsidiary, parent company, affiliated entity, related entity, predecessor entity, or
division thereof; and (b) any current or former partner, officer, director, trustee, agent,
employee, representative, insurer, or employee benefit or welfare program or plan (including the
administrators, trustees, fiduciaries, and insurers of such program or plan) of an entity
referenced in or encompassed by subparagraph 2(a).

     3. Employment. Moyes’ last day of employment shall be December 31, 2010. Because
Moyes is receiving and has received certain considerations under the Prior Agreement, Moyes agrees
not to seek, apply, or be considered for reemployment with Calumet.

     4. Severance and Other Consideration. Upon Moyes’ departure from Calumet GP, LLC and
contingent upon Moyes executing this Agreement waiving any and all claims of any kind against
Calumet through his date of separation, Calumet GP, LLC will provide the following:

	 	(a)	 	Assuming Moyes is eligible to and elects to continue health care benefits under
the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), 29 U.S.C. §1161,
etseq., the Company will cover the applicable premiums for the first thirty-two
(32) weeks of Moyes’ COBRA coverage at the same coverage level and the same cost level
that was in effect for Moyes immediately preceding receipt of this Agreement, together
with an amount reasonably determined by Calumet designed to ensure that the after-tax
effect of the provision of such coverage to Moyes would be the same as if he were
employed by Calumet. This benefit will be provided following satisfactory proof and
verification that Moyes is eligible for and elected to continue COBRA benefits.

	 	(b)	 	Calumet will transfer to Moyes the title to the 2009 Buick Enclave which he is
currently using as a company car free and clear of all liens and encumbrances. Moyes
shall be responsible for any costs and fees resulting from the title transfer.

The benefits provided by Calumet GP, LLC in this Section reflect consideration provided to Moyes
over and above anything of value to which he already is entitled, and shall be subject to all
appropriate taxes, deductions, and withholdings. Moyes confirms that there are no other benefits,
wages, or payments that remain unpaid or owing (other than possible retirement or pension benefits,
the eligibility and payment of which are governed by the applicable plans).

     5. General Release and Waiver. Moyes (for himself, his agents, assigns, heirs,
executors, and administrators) releases and discharges Calumet from any claim, demand, action, or
cause of action, known or unknown, which arose at any time from the beginning of time to the date
he executes this Agreement, and waives all claims relating to, arising out of, or in any way
connected with his interactions with the Company, his employment with Calumet GP, LLC or any
predecessor, the cessation of his employment, or the compensation or benefits payable in connection
with that employment or the cessation of that employment, including (without limitation) any claim,
demand, action, or cause of action, including claims for attorneys’ fees, based on but not limited
to: (a) Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000(e),
etseq.; (b) The Americans With Disabilities Act of 1990, as amended, 42 U.S.C. § 12101,
etseq.; (c) The Equal Pay Act, as amended, 29 U.S.C. § 206, etseq.; (d) The Lilly
Ledbetter Fair Pay Act of 2009; (e) The Family and Medical Leave Act of 1993, 29 U.S.C. § 2601,
etseq.; (f) the National Labor Relations Act, 29 U.S.C. § 151, etseq.; (g) The
Employee Retirement Income Security

 

 

Act, as amended, 29 U.S.C. § 1001 etseq.; (h) The Fair Credit Reporting Act, as
amended, 15 U.S.C. § 1681 etseq.; (i) The Civil Rights Act of 1866, 42 U.S.C. § 1981
etseq.; (j) The Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. § 621,
etseq.; (k) any agreement, representation, promise, understanding, policy, practice, plan,
or potential entitlement (regardless of the source); (l) past or future wages, severance,
compensation, vacation pay, benefits, bonuses, commissions, fringe benefits, or other forms of
consideration, payment, or remuneration, except for claims to enforce payment of those sums
explicitly identified in Paragraph 4; (m) The Indiana Civil Rights Law, Ind. Code 22-9-1,
etseq.; (n) any wage law including, without limitation, The Indiana Wage Payment and Wage
Claims Acts, Ind. Code 22-2-5-2, 22-2-2-4, 22-2-5-9, 22-2-9-1, etseq.; (o) any other
federal, state, or local law, whether arising or emanating from statute, executive order,
regulation, code, common law, or other source, including, but not limited to, all actions sounding
in tort, contract, and/or any doctrine of good faith and fair dealing. Notwithstanding the
foregoing, this Agreement is not intended to operate as a waiver of any retirement or
pension benefits that are vested, the eligibility and entitlement to which shall be governed by the
terms of the applicable plan. Moreover, nothing in this Paragraph or Agreement shall be
interpreted to waive or extinguish any rights which — by express and unequivocal terms of law —
may not under any circumstances be waived or extinguished or waive any right Moyes may have to
indemnification under any Calumet policy, plan, by-law or insurance policy.

     6. Covenant Not to Sue. Moyes agrees that he will never sue or file a lawsuit
against Calumet including, without limitation, any lawsuit concerning or in any way related to his
employment with Calumet or its predecessors, the termination of that employment, the compensation
or benefits payable in connection with his employment, or any other interaction or relationship
with Calumet, and that no such suit is currently pending. Should Moyes violate any aspect of this
Section 6, Moyes agrees that any suit shall be null and void, and must be summarily dismissed or
withdrawn. Moyes also agrees that if a claim or charge of any kind should be raised, brought, or
filed in his name or on his behalf, Moyes waives any right to, and agrees not to take, any
resulting award. This Paragraph and this Agreement shall not operate to waive or bar any claim
which — by express and unequivocal terms of law — may not under any circumstances be waived or
barred. Moreover, this Agreement shall not operate to waive rights or claims under the ADEA if
those rights or claims arise after the date Moyes signs this Agreement, nor preclude Moyes from
challenging the validity of the Agreement under the ADEA or otherwise enforcing this Agreement or
from pursuing any claim not released by paragraph 5 above.

     7. Company and Personal Property. Moyes affirms that, by the time he executes this
Agreement, he has returned all equipment, documents, memoranda, records, files, notes, diskettes,
credit cards, keys, computers, and any other matter or materials (from whatever source, including
information electronically stored) that is the property of, or that was purchased or provided by,
Calumet, including any copies of the foregoing.

     8. Conditions. Should Moyes ever breach any provision or obligation under this
Agreement, the parties agree that the range of remedies includes the following:

	 	(a)	 	Moyes shall pay all damages (including, but not limited to, litigation and/or
defense costs, expenses, and reasonable attorneys’ fees) incurred by Calumet following
and/or as a result of Moyes’ breach if such breach is not cured or corrected to
Calumet’s satisfaction within fourteen (14) days of Calumet mailing written notice of
the breach to Moyes’ last known address.

	 	(b)	 	Moyes shall forego and no longer be entitled to any sum or benefit remaining
to be paid or conferred pursuant to this Agreement.

	 	(c)	 	Moyes shall — upon written request by Calumet GP, LLC to do so — reimburse
Calumet via certified check for the value of anything previously paid or provided by
Calumet to Section 4, save $500. In the event this reimbursement provision is
triggered, Moyes agrees that the remaining provisions of the Agreement shall remain in
full force and effect.

Nothing in this Section is intended to limit or restrict any other rights or remedies Calumet may
have by virtue of this Agreement or otherwise.

     9. Application. This Agreement shall apply to Moyes, as well as to Moyes’ heirs,
executors, administrators, assigns, and successors. This Agreement also shall apply to, and inure
to the benefit of, Calumet, the predecessors, successors, and assigns of Calumet GP, LLC, and each
past, present, or future employee, agent, representative, officer, or director of Calumet GP, LLC.

 

 

     10. Disclaimer of Liability. This Agreement shall not be construed as an admission
of liability or wrong-doing by either party but is entered into in an effort to provide Moyes with
a transition package and part ways on an amicable basis.

     11. Effective Date. This Agreement may only be accepted during the 21-day period
after Moyes receives this Agreement. In the event Moyes signs this Agreement within the twenty-one
(21) days following his receipt of this Agreement, he shall have an additional seven (7) days to
revoke the Agreement (with any revocation needing to be mailed and faxed to the attention
of the Human Resources Department at Calumet GP, LLC; 2780 Waterfront Pkwy E. Dr., Suite 200,
Indianapolis, IN 46204 (fax: 317-293-9725). This Agreement shall not become effective, and none of
the benefits set forth in this Agreement will become due or payable, until after the Effective Date
of this Agreement (the “Effective Date” being the first day after Moyes has executed the Agreement
within the allotted 21-day period and the 7-day revocation period has expired without revocation
being exercised).

     12. Complete Agreement. This Agreement sets forth the complete agreement between the
parties relating to any and all payments or obligations owed or potentially owed to Moyes by
Calumet and to the other subjects identified herein. Moyes acknowledges and agrees that, in
executing this Agreement, he does not rely and has not relied upon any representations or
statements not set forth herein made by Calumet with regard to the subject matter, basis, or effect
of this Agreement, the benefits to which Moyes is or may be entitled, or any other matter.
Notwithstanding the foregoing, nothing in this Agreement is intended to or shall limit, supersede,
nullify, or affect any other duty or responsibility Moyes may have or owe to Calumet by virtue of
any separate agreement or obligation (including, without limitation, the Professional Services and
Transition Agreement dated November 2, 2009).

 

 

Knowledge and Understanding

     Moyes acknowledges under penalties of perjury that (a) Moyes received this Agreement on
December 1, 2010; (b) Moyes has been and is hereby advised to consult with an attorney prior to
executing this Agreement; (c) Moyes has been given a period of twenty-one (21) days within which to
consider this Agreement; (d) Moyes has signed this Agreement free of duress or coercion; and (e)
Moyes is fully aware of his rights, and has carefully read and fully understands all provisions of
this Agreement before signing.

AGREED TO BY:

	 	 	 	 	 	 	 	 	 

	Allan A. Moyes, III	 	 	 	Calumet GP, LLC	 	 
	 

	 	 
	 	 	 	 	 	 
	/s/ Allan A. Moyes, III

	 	 	 	By:	 	/s/ R. Patrick Murray, II	 	 
	 

	 	 	 	 	 	 	 	 
	Signature

	 	 	 	 	 	Signature	 	 
	 
	 	 	 	 	 	 	 	 
	Allan A. Moyes, III

	 	 	 	 	 	R. Patrick Murray, II (VP & CFO)	 	 
	 

	 	 	 	 	 	 	 	 
	Printed Name

	 	 	 	 	 	Printed Name	 	 
	 
	 	 	 	 	 	 	 	 
	Dated: December 22, 2010

	 	 	 	 	 	Dated: December 22, 2010	 	 

 

 

Exhibit A

PROFESSIONAL SERVICES AND TRANSITION AGREEMENT

     This Professional Services and Transition Agreement (“Agreement”) is entered into by and
between Calumet GP, LLC a Delaware limited liability company (“Calumet”) and Allan A. Moyes, III, a
resident of the State of Indiana (“Moyes”).

RECITALS

	 	A.	 	Moyes is employed by Calumet in the position of Executive Vice President.

	 	B.	 	The parties have agreed to terms which will permit Moyes to focus his
day-to-day activities on special project-related activities and eventually conclude
employment with Calumet.

	 	C.	 	In consideration for and conditioned upon Moyes’ continued performance of
services and eventual separation, Calumet has decided to offer certain benefits and
other consideration described below to assist Moyes, conditioned upon Moyes (1)
remaining employed in good standing through the anticipated date his employment will
end; and (2) Moyes agreeing to forever release and dispose of all claims Moyes may have
effective at the anticipated date his employment with Calumet will end.

AGREEMENT

     1. Definition. Throughout this Agreement, the term “Calumet” or “Company” when used
alone, shall encompass the following: (a) Calumet, Calumet Specialty Products Partners, L.P., and
any subsidiary, parent company, predecessor, affiliated entity, related entity, or division
thereof; and (b) any current or former partner, officer, director, trustee, agent, employee,
representative, insurer, or employee benefit or welfare program or plan (including the
administrators, trustees, fiduciaries, and insurers of such program or plan) of an entity
referenced in or encompassed by subSection 1(a).

     2. Transition of Services. Moyes will remain in the position of Executive Vice
President through December 31, 2010 and shall perform such duties as shall be assigned from
time-to-time by Calumet’s President and Chief Executive Officer or its Board of Directors. Moyes
understands that, as a result of his executing this Agreement, his last day of service will be no
later than December 31, 2010. Moyes further understands that but for his entering into this
Agreement, his employment with Calumet would have ended no later than December 31, 2009. Because
Moyes is receiving certain considerations under this Agreement, Moyes agrees not to seek, apply
for, or be considered for reemployment with Calumet.

     3. Compensation During Transition Period and Other Consideration. In consideration for
entering into this Agreement and compliance with the terms of this Agreement, Calumet shall provide
Moyes with the following payments and other consideration:

	 	(a)	 	Assuming he remains employed in good standing, (i.e., is not terminated for
cause pursuant to Section 8 and does not voluntarily leave employment, become
disabled, or die), and follows all Company policies and directives, Calumet will
continue to pay Moyes an annual base salary in the amount currently in effect through
December 31, 2010 pursuant to Calumet’s ordinary payroll schedule and practices and
subject to all applicable taxes and payroll withholding obligations and similar
deductions.

	 	(b)	 	Assuming he remains employed in good standing, (i.e., is not terminated for
cause pursuant to Section 8 and does not voluntarily leave employment, become
disabled, or die), and follows all Company policies and directives, Moyes will be
eligible to participate in any Calumet benefit plan(s) offered to similarly-situated
employees, including the Cash Incentive Plan, the Executive Deferred Compensation
Plan, the Long-Term Incentive Plan and any health or welfare plan, in which he is
currently participating or otherwise eligible to participate, subject to the
eligibility and other requirements and subject to Moyes paying the employee portion
of any premiums or contributions required by the terms of the respective plans.

 

 

	 	(c)	 	Assuming Moyes is eligible to and elects to continue health care benefits
under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), 29 U.S.C.
§1161, et seq., Calumet will, beginning on January 1, 2011 cover or reimburse Moyes
for the applicable premiums for the first 32 weeks of Moyes’ COBRA coverage at the
same coverage level and the same cost level that was in effect for Moyes immediately
preceding December 31, 2010, together with an amount reasonably determined by Calumet
designed to ensure that the after-tax effect of the provision of such coverage to
Moyes would be the same as if he were employed by Calumet. This benefit will be
provided following satisfactory proof and verification that Moyes is eligible for and
elected to continue COBRA benefits. Moyes acknowledges and agrees that this benefit
will not be provided to him unless and until he signs a Reaffirmation Agreement,
General Release and Covenant Not To Sue, in a form substantially similar to that
attached as Exhibit A, waiving any and all claims of any kind against Calumet through
his separation; and

	 	(d)	 	Upon Moyes’ departure from Calumet and contingent upon Moyes executing the
Reaffirmation Agreement, General Release and Covenant Not To Sue on or after his date
of separation, Calumet will transfer to Moyes the title to the 2009 Buick Enclave
which he is currently using as a company car free and clear of all liens and
encumbrances.

The payments assumed by Calumet in Sections 3(a) — (d) above each respectively reflect
consideration provided to Moyes over and above anything of value to which he already is entitled
and shall be subject to all appropriate taxes, deductions, and withholdings. Moyes confirms that
there are no other benefits, wages, or payments that remain unpaid or owing (other than possible
retirement or pension benefits, the eligibility and payment of which are governed by the applicable
plans).

     4. General Release and Waiver. In exchange for the above-described continued
employment and other consideration, which Moyes acknowledges is in addition to anything which Moyes
is otherwise entitled, Moyes (for himself, his agents, assigns, heirs, executors, and
administrators) releases and discharges Calumet from any claim, demand, action, or cause of action,
known or unknown, which arose at any time from the beginning of time to the date he executes this
Agreement, and waives all claims relating to, arising out of, or in any way connected with his
interactions with the Company, his employment with Calumet or any predecessor, the cessation of his
employment, or the compensation or benefits payable in connection with that employment or the
cessation of that employment, including (without limitation) any claim, demand, action, or cause of
action, including claims for attorneys’ fees, based on but not limited to: (a) Title VII of the
Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000(e), et seq.; (b) The
Americans With Disabilities Act of 1990, as amended, 42 U.S.C. § 12101, et seq.;
(c) The Equal Pay Act, as amended, 29 U.S.C. § 206, et seq.; (d) The Lilly
Ledbetter Fair Pay Act of 2009; (e) The Family and Medical Leave Act of 1993, 29 U.S.C. § 2601,
et seq.; (f) the National Labor Relations Act, 29 U.S.C. § 151, et
seq.; (g) The Employee Retirement Income Security Act, as amended, 29 U.S.C. § 1001
et seq.; (h) The Fair Credit Reporting Act, as amended, 15 U.S.C. § 1681 et
seq.; (i) The Civil Rights Act of 1866, 42 U.S.C. § 1981 et seq.; (j) The
Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. § 621, et seq.; (k) any
agreement, representation, promise, understanding, policy, practice, plan, or potential entitlement
(regardless of the source); (l) past or future wages, severance, compensation, vacation pay,
benefits, bonuses, commissions, fringe benefits, or other forms of consideration, payment, or
remuneration, except for claims to enforce payment of those sums explicitly identified in Section
3; (m) The Indiana Civil Rights Law, Ind. Code 22-9-1, et seq.; (n) any wage law
including, without limitation, The Indiana Wage Payment and Wage Claims Acts, Ind. Code 22-2-5-2,
22-2-2-4, 22-2-5-9, 22-2-9-1, et seq.; (o) any other federal, state, or local law,
whether arising or emanating from statute, executive order, regulation, code, common law, or other
source, including, but not limited to, all actions sounding in tort, contract, and/or any doctrine
of good faith and fair dealing. Notwithstanding the foregoing, this Agreement is not
intended to operate as a waiver of any retirement or pension benefits that are vested, the
eligibility and entitlement to which shall be governed by the terms of the applicable plan.
Moreover, nothing in this Section or Agreement shall be interpreted to waive or extinguish any
rights which — by express and unequivocal terms of law — may not under any circumstances be
waived or extinguished or waive any right Moyes may have to indemnification under any Calumet
policy, plan, by-law or insurance policy.

     5. Covenant Not to Sue. Moyes agrees that he will never sue or file a lawsuit against
Calumet including, without limitation, any lawsuit concerning or in any way related to his
employment with Calumet or its predecessors, the termination of that employment, the compensation or benefits payable in
connection with his employment, or any other interaction or relationship with Calumet, and that no
such suit is currently pending.

 

 

Should Moyes violate any aspect of this Section, Moyes agrees that
any suit shall be null and void, and must be summarily dismissed or withdrawn. Moyes also agrees
that if a claim or charge of any kind should be raised, brought, or filed in his name or on his
behalf, Moyes waives any right to, and agrees not to take, any resulting award. This Section and
this Agreement shall not operate to waive or bar any claim which — by express and unequivocal
terms of law — may not under any circumstances be waived or barred. Moreover, this Agreement shall
not operate to waive rights or claims under the ADEA if those rights or claims arise after the date
Moyes signs this Agreement, nor preclude Moyes from challenging the validity of the Agreement under
the ADEA or otherwise enforcing this Agreement or pursuing any claim not released by paragraph 4
above.

     6. Return of Property. Moyes agrees that upon his separation of employment, or sooner
if demanded by Calumet, he will return all equipment, documents, memoranda, records, files, notes,
diskettes, credit cards, keys, computers, and any other matter or materials (from whatever source,
including information electronically stored) that is the property or, or was purchased or provided
by, Calumet, including any copies of the foregoing.

     7. Non-Disclosure. Moyes agrees that: (a) Moyes will not use or disclose confidential,
sensitive, or proprietary information concerning Calumet obtained by Moyes during his employment,
or as a result of his position, with Calumet or its predecessors. For purposes of this Agreement,
“confidential information” includes, without limitation, all materials and information (whether
written or not) about Calumet’s current or former employees (including their compensation,
benefits, or other personnel or personal information), contracts, business plans, customers,
suppliers, products, services, pricing, promotions, processes, research, finances, purchasing,
sales, marketing, accounting, costs, improvements, discoveries, software, business methods,
formulae, inventions, quality, internal communications, production, output, profit margins, and/or
any other aspect of Calumet’s business or operations which are not generally known by the public at
large, which are not required to be disclosed by applicable law, and/or which provide Calumet with
a competitive advantage; (b) Moyes will not make any legally impermissible statements or
representations that disparage, demean, or impugn Calumet, including without limitation any legally
impermissible statements impugning the personal or professional character of any director, officer,
or employee for Calumet, nor will Moyes encourage or assist others to make any such statements or
representations; and (c) Moyes will not directly or indirectly seek to cause any person or
organization to discontinue or limit their current relationship with Calumet. Moyes agrees that the
terms and requirements in this Section are reasonably necessary to protect the legitimate business
interests of Calumet. Moyes acknowledges that disclosure of the confidential information described
in this Section would cause irreparable harm to Calumet but in an amount incapable of precise
determination. Should Moyes violate this Section, Calumet shall be entitled to injunctive relief in
addition to any other available remedy or form of legal and equitable relief. Moyes further
acknowledges that this non-disclosure provision is a material element of this Agreement and that
consideration has been given for this provision.

     8. Termination of Agreement. Notwithstanding anything herein to the contrary, Calumet
may immediately terminate this Agreement and Moyes’ employment prior to December 31, 2010 for cause
upon written notice to Moyes. Calumet agrees that before it terminates this Agreement for cause
under subSection (b), (c) or (d) below, it will give Moyes written notice of the reason(s)
therefore and a reasonable opportunity for Moyes to correct or cure the problem. For purposes of
this Agreement, the term “cause” shall be defined as a determination by Calumet that any one of the
following events has occurred:

	 	(a)	 	The conviction of or plea of guilty or no contest by Moyes of any crime
constituting a felony, any crime involving moral turpitude, any crime involving
controlled substances, or driving under the influence of alcohol or any other
controlled substance;

	 	(b)	 	A material breach by Moyes of this Agreement;

	 	(c)	 	Conduct on the part of Moyes which is materially disruptive to Calumet;

	 	(d)	 	Failure to meet performance goals (as determined by Calumet);

	 	(e)	 	Insubordination;

	 	(f)	 	Violation of Company policy, including but not limited to the Code of
Business Conduct and Ethics, the Insider Trading Policy, and the Electronic Mail
Usage and Public Internet Usage Policy.

 

 

	 	(g)	 	Moyes’ death or permanent disability, with “permanent disability” being
defined as a determination by Calumet in its sole discretion that Moyes is unable to
perform the essential functions of his position (with or without reasonable
accommodation) for a period of ninety (90) consecutive days, or for an aggregate of
ninety (90) total days in any twelve month period.

     9. Severability. The parties expressly agree that the terms of this Agreement are
reasonable and enforceable. Moreover, the provisions of this Agreement are severable, and the
invalidity of any one or more provisions shall not affect or limit the enforceability of the
remaining provisions. In the unlikely event that a court of competent jurisdiction determines that
any of the terms, provisions, or covenants contained in this Agreement are unreasonable or
unenforceable, the court shall limit the application of such term, provision, or covenant, or
modify any such term, provision, or covenant, and proceed to enforce the Agreement as so limited or
modified, to the maximum extent permitted by law.

     10. Applicable Law. This Agreement shall be interpreted, enforced, and governed under
the laws of Indiana, the state in which Calumet is headquartered.

     11. Conditions. Should Moyes ever breach any provision or obligation under this
Agreement, the parties agree that the range of remedies includes the following:

	 	(a)	 	Moyes shall pay all damages (including, but not limited to, litigation
and/or defense costs, expenses, and reasonable attorneys’ fees) incurred by Calumet
following and/or as a result of Moyes’ breach if such breach is not cured or
corrected to Calumet’s satisfaction within fourteen (14) days of Calumet mailing
written notice of the breach to Moyes’ last known address.

	 	(b)	 	Moyes shall forego and no longer be entitled to any sum or benefit
remaining to be paid or conferred pursuant to this Agreement.

	 	(c)	 	Moyes shall — upon written request by Calumet to do so — reimburse Calumet via certified
check for the value of anything previously paid or provided by Calumet pursuant to subSections 3
(c) and (d), save $300. In the event this reimbursement provision is triggered, Moyes agrees that
the remaining provisions of the Agreement shall remain in full force and effect.

Nothing in this Section is intended to limit or restrict any other rights or remedies Calumet may
have by virtue of this Agreement or otherwise.

     12. Application. This Agreement shall apply to Moyes, as well as to Moyes’ heirs,
executors, administrators, assigns, and successors. This Agreement also shall apply to, and inure
to the benefit of, Calumet, the predecessors, successors, and assigns of Calumet and each past,
present, or future employee, agent, representative, officer, or director of Calumet.

     13. Disclaimer of Liability. This Agreement shall not be construed as an admission of
liability or wrong-doing by either party but is entered into in an effort to provide Moyes with a
severance package and part ways on an amicable basis.

     14. Effective Date. Moyes received an initial draft of this Agreement on or about
October 12, 2009 and subsequently requested changes thereto. The parties agree that changes made to
this Agreement shall not restart the running of the twenty-one (21) day period provided to Moyes
for consideration of the initial draft of this Agreement. In the event Moyes signs this Agreement
within the twenty-one (21) days following his receipt of the initial draft of the Agreement, he
shall have an additional seven (7) days to revoke the Agreement (with any revocation needing to
be mailed and faxed to the attention of the Human Resources Department at Calumet;
2780 Waterfront Pkwy E. Dr., Suite 200, Indianapolis, IN 46204 (fax: 317-293-9725). This Agreement
shall not become effective, and none of the benefits set forth in this Agreement will become due or
payable, until after the Effective Date of this Agreement (the “Effective Date” being the first day
after Moyes has executed the Agreement within the allotted 21-day period and the 7-day revocation
period has expired without revocation being exercised).

 

 

     15. Complete Agreement. This Agreement sets forth the complete agreement between the
parties relating to any and all payments or obligations owed or potentially owed to Moyes by
Calumet and to the other subjects identified herein. Moyes acknowledges and agrees that, in
executing this Agreement, he does not rely and has not relied upon any representations or
statements not set forth herein made by Calumet with regard to the subject matter, basis, or effect
of this Agreement, the benefits to which Moyes is or may be entitled, or any other matter.
Notwithstanding the foregoing, nothing in this Agreement is intended to or shall limit, supersede,
nullify, or affect any other duty or responsibility Moyes may have or owe to Calumet by virtue of
any separate agreement or obligation.

Knowledge and Understanding

     Moyes acknowledges under penalties of perjury that: (a) Moyes received an initial draft of
this Agreement on October 12, 2009; (b) Moyes has been and is hereby advised to consult with an
attorney prior to executing this Agreement; (c) Moyes has been given a period of twenty-one (21)
days within which to consider this Agreement; (d) Moyes has signed this Agreement free of duress or
coercion; and (e) Moyes is fully aware of his rights, and has carefully read and fully understands
all provisions of this Agreement before signing.

AGREED TO BY:

	 	 	 	 	 	 	 	 	 

	Allan A. Moyes, III	 	 	 	Calumet GP, LLC	 	 
	 

	 	 
	 	 	 	 	 	 
	/s/ Allan A. Moyes, III

	 	 	 	By:	 	/s/ R. Patrick Murray, II	 	 
	 

	 	 	 	 	 	 	 	 
	Signature

	 	 	 	 	 	Signature	 	 
	 
	 	 	 	 	 	 	 	 
	Allan A. Moyes, III

	 	 	 	 	 	R. Patrick Murray, II (VP & CFO)	 	 
	 

	 	 	 	 	 	 	 	 
	Printed Name

	 	 	 	 	 	Printed Name	 	 
	 
	 	 	 	 	 	 	 	 
	Dated: November 2, 2009

	 	 	 	 	 	Dated: November 2, 2009	 	 

 

 

EXHIBIT A

REAFFIRMATION AGREEMENT,

GENERAL RELEASE & COVENANT NOT TO SUE

     This Reaffirmation Agreement, General Release, and Covenant Not To Sue (“Agreement”) is
entered into between Calumet GP, LLC, a Delaware limited liability company (“Calumet”) and Allan A.
Moyes, III, a resident of the State of Indiana (“Moyes”), wherein the parties agree as follows:

     1. Incorporation of Terms of Prior Agreement. The Parties have entered into a prior
Professional Services and Transition Agreement, attached to this Agreement as Exhibit A (“Prior
Agreement”). The Parties specifically incorporate by reference Sections 5, 6, 7, 9, and 10 of the
Prior Agreement.

     2. Definition. Throughout this Agreement, the term “Calumet” or “Company” when used
alone, shall encompass the following: (a) Calumet GP, LLC, Calumet Specialty Products Partners,
L.P., and any subsidiary, parent company, affiliated entity, related entity, predecessor entity, or
division thereof; and (b) any current or former partner, officer, director, trustee, agent,
employee, representative, insurer, or employee benefit or welfare program or plan (including the
administrators, trustees, fiduciaries, and insurers of such program or plan) of an entity
referenced in or encompassed by subparagraph 2(a).

     3. Employment. Moyes’ last day of employment shall be December 31, 2010. Because Moyes
is receiving and has received certain considerations under the Prior Agreement, Moyes agrees not to
seek, apply, or be considered for reemployment with Calumet.

     4. Severance and Other Consideration. Upon Moyes’ departure from Calumet GP, LLC and
contingent upon Moyes executing this Agreement waiving any and all claims of any kind against
Calumet through his date of separation, Calumet GP, LLC will provide the following:

	 	(a)	 	Assuming Moyes is eligible to and elects to continue health care benefits
under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), 29 U.S.C.
§1161, et seq., the Company will cover the applicable premiums for
the first thirty-two (32) weeks of Moyes’ COBRA coverage at the same coverage level
and the same cost level that was in effect for Moyes immediately preceding receipt of
this Agreement, together with an amount reasonably determined by Calumet designed to
ensure that the after-tax effect of the provision of such coverage to Moyes would be
the same as if he were employed by Calumet. This benefit will be provided following
satisfactory proof and verification that Moyes is eligible for and elected to
continue COBRA benefits.

	 	(b)	 	Calumet will transfer to Moyes the title to the 2009 Buick Enclave which he
is currently using as a company car free and clear of all liens and encumbrances.
Moyes shall be responsible for any costs and fees resulting from the title transfer.

The benefits provided by Calumet GP, LLC in this Section reflect consideration provided to Moyes
over and above anything of value to which he already is entitled, and shall be subject to all
appropriate taxes, deductions, and withholdings. Moyes confirms that there are no other benefits,
wages, or payments that remain unpaid or owing (other than possible retirement or pension benefits,
the eligibility and payment of which are governed by the applicable plans).

     5. General Release and Waiver. Moyes (for himself, his agents, assigns, heirs,
executors, and administrators) releases and discharges Calumet from any claim, demand, action, or
cause of action, known or unknown, which arose at any time from the beginning of time to the date
he executes this Agreement, and waives all claims relating to, arising out of, or in any way
connected with his interactions with the Company, his employment with Calumet GP, LLC or any
predecessor, the cessation of his employment, or the compensation or benefits payable in connection
with that employment or the cessation of that employment, including (without limitation) any claim,
demand, action, or cause of action, including claims for attorneys’ fees, based on but not limited
to: (a) Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000(e), et
seq.; (b) The Americans With Disabilities Act of 1990, as amended, 42 U.S.C. § 12101,
et seq.; (c) The Equal Pay Act, as amended, 29 U.S.C. § 206, et
seq.; (d) The

 

 

Lilly Ledbetter Fair Pay Act of 2009; (e) The Family and Medical Leave Act of 1993, 29 U.S.C.
§ 2601, et seq.; (f) the National Labor Relations Act, 29 U.S.C. § 151, et
seq.; (g) The Employee Retirement Income Security Act, as amended, 29 U.S.C. § 1001
et seq.; (h) The Fair Credit Reporting Act, as amended, 15 U.S.C. § 1681 et
seq.; (i) The Civil Rights Act of 1866, 42 U.S.C. § 1981 et seq.; (j) The
Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. § 621, et seq.; (k) any
agreement, representation, promise, understanding, policy, practice, plan, or potential entitlement
(regardless of the source); (l) past or future wages, severance, compensation, vacation pay,
benefits, bonuses, commissions, fringe benefits, or other forms of consideration, payment, or
remuneration, except for claims to enforce payment of those sums explicitly identified in Paragraph
4; (m) The Indiana Civil Rights Law, Ind. Code 22-9-1, et seq.; (n) any wage law
including, without limitation, The Indiana Wage Payment and Wage Claims Acts, Ind. Code 22-2-5-2,
22-2-2-4, 22-2-5-9, 22-2-9-1, et seq.; (o) any other federal, state, or local law,
whether arising or emanating from statute, executive order, regulation, code, common law, or other
source, including, but not limited to, all actions sounding in tort, contract, and/or any doctrine
of good faith and fair dealing. Notwithstanding the foregoing, this Agreement is not
intended to operate as a waiver of any retirement or pension benefits that are vested, the
eligibility and entitlement to which shall be governed by the terms of the applicable plan.
Moreover, nothing in this Paragraph or Agreement shall be interpreted to waive or extinguish any
rights which — by express and unequivocal terms of law — may not under any circumstances be
waived or extinguished or waive any right Moyes may have to indemnification under any Calumet
policy, plan, by-law or insurance policy.

     6. Covenant Not to Sue. Moyes agrees that he will never sue or file a lawsuit against
Calumet including, without limitation, any lawsuit concerning or in any way related to his
employment with Calumet or its predecessors, the termination of that employment, the compensation
or benefits payable in connection with his employment, or any other interaction or relationship
with Calumet, and that no such suit is currently pending. Should Moyes violate any aspect of this
Section 6, Moyes agrees that any suit shall be null and void, and must be summarily dismissed or
withdrawn. Moyes also agrees that if a claim or charge of any kind should be raised, brought, or
filed in his name or on his behalf, Moyes waives any right to, and agrees not to take, any
resulting award. This Paragraph and this Agreement shall not operate to waive or bar any claim
which — by express and unequivocal terms of law — may not under any circumstances be waived or
barred. Moreover, this Agreement shall not operate to waive rights or claims under the ADEA if
those rights or claims arise after the date Moyes signs this Agreement, nor preclude Moyes from
challenging the validity of the Agreement under the ADEA or otherwise enforcing this Agreement or
from pursuing any claim not released by paragraph 5 above.

     7. Company and Personal Property. Moyes affirms that, by the time he executes this
Agreement, he has returned all equipment, documents, memoranda, records, files, notes, diskettes,
credit cards, keys, computers, and any other matter or materials (from whatever source, including
information electronically stored) that is the property of, or that was purchased or provided by,
Calumet, including any copies of the foregoing.

     8. Conditions. Should Moyes ever breach any provision or obligation under this
Agreement, the parties agree that the range of remedies includes the following:

	 	(a)	 	Moyes shall pay all damages (including, but not limited to, litigation
and/or defense costs, expenses, and reasonable attorneys’ fees) incurred by Calumet
following and/or as a result of Moyes’ breach if such breach is not cured or
corrected to Calumet’s satisfaction within fourteen (14) days of Calumet mailing
written notice of the breach to Moyes’ last known address.

	 	(b)	 	Moyes shall forego and no longer be entitled to any sum or benefit
remaining to be paid or conferred pursuant to this Agreement.

	 	(c)	 	Moyes shall — upon written request by Calumet GP, LLC to do so —
reimburse Calumet via certified check for the value of anything previously paid or
provided by Calumet to Section 4, save $500. In the event this reimbursement
provision is triggered, Moyes agrees that the remaining provisions of the Agreement
shall remain in full force and effect.

Nothing in this Section is intended to limit or restrict any other rights or remedies Calumet may
have by virtue of this Agreement or otherwise.

     9. Application. This Agreement shall apply to Moyes, as well as to Moyes’ heirs,
executors, administrators, assigns, and successors. This Agreement also shall apply to, and inure
to the benefit of, Calumet, the predecessors,

 

 

successors, and assigns of Calumet GP, LLC, and each past, present, or future employee, agent,
representative, officer, or director of Calumet GP, LLC.

     10. Disclaimer of Liability. This Agreement shall not be construed as an admission of
liability or wrong-doing by either party but is entered into in an effort to provide Moyes with a
transition package and part ways on an amicable basis.

     11. Effective Date. This Agreement may only be accepted during the 21-day period after
Moyes receives this Agreement. In the event Moyes signs this Agreement within the twenty-one (21)
days following his receipt of this Agreement, he shall have an additional seven (7) days to revoke
the Agreement (with any revocation needing to be mailed and faxed to the attention of the
Human Resources Department at Calumet GP, LLC; 2780 Waterfront Pkwy E. Dr., Suite 200,
Indianapolis, IN 46204 (fax: 317-293-9725). This Agreement shall not become effective, and none of
the benefits set forth in this Agreement will become due or payable, until after the Effective Date
of this Agreement (the “Effective Date” being the first day after Moyes has executed the Agreement
within the allotted 21-day period and the 7-day revocation period has expired without revocation
being exercised).

     12. Complete Agreement. This Agreement sets forth the complete agreement between the
parties relating to any and all payments or obligations owed or potentially owed to Moyes by
Calumet and to the other subjects identified herein. Moyes acknowledges and agrees that, in
executing this Agreement, he does not rely and has not relied upon any representations or
statements not set forth herein made by Calumet with regard to the subject matter, basis, or effect
of this Agreement, the benefits to which Moyes is or may be entitled, or any other matter.
Notwithstanding the foregoing, nothing in this Agreement is intended to or shall limit, supersede,
nullify, or affect any other duty or responsibility Moyes may have or owe to Calumet by virtue of
any separate agreement or obligation (including, without limitation, the Professional Services and
Transition Agreement dated _____ 2009).

Knowledge and Understanding

     Moyes acknowledges under penalties of perjury that (a) Moyes received this Agreement on _____
2010; (b) Moyes has been and is hereby advised to consult with an attorney prior to executing this
Agreement; (c) Moyes has been given a period of twenty-one (21) days within which to consider this
Agreement; (d) Moyes has signed this Agreement free of duress or coercion; and (e) Moyes is fully
aware of his rights, and has carefully read and fully understands all provisions of this Agreement
before signing.

AGREED TO BY:

	 	 	 	 	 	 	 	 	 

	Allan A. Moyes, III	 	 	 	Calumet GP, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Signature

	 	 	 	 	 	Signature	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Printed Name

	 	 	 	 	 	Printed Name	 	 

	 	 	 	 	 	 	 	 	 	 
	Dated:	 		 	 	 	Dated:

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