Document:

Exhibit

EXHIBIT 10.1

Execution Version
LIMITED WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS LIMITED WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Fourth Amendment”), dated as of May 18, 2020, is by and among CARRIAGE SERVICES, INC., a Delaware corporation (the “Borrower”), the banks listed as Lenders on the signature pages hereof (the “Lenders”), and BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer (in said capacity as Administrative Agent, the “Administrative Agent”).
BACKGROUND
A.The Borrower, certain of the Lenders, and the Administrative Agent are parties to that certain Credit Agreement, dated as of May 31, 2018, as amended by that certain First Amendment to Credit Agreement, dated as of November 8, 2018, that certain Second Amendment to Credit Agreement, dated as of July 31, 2019 and that certain Third Amendment and Commitment Increase to Credit Agreement, dated as of December 19, 2019 (said Credit Agreement, as amended, the “Credit Agreement”; the terms defined in the Credit Agreement and not otherwise defined herein shall be used herein as defined in the Credit Agreement).

B.The Borrower has informed Administrative Agent and the Lenders that the Borrower is unable to comply with Section 7.11(a) of the Credit Agreement, regarding the maximum Total Leverage Ratio covenant for the Fiscal Quarter ended March 31, 2020, which constitutes an Event of Default under Section 8.01(b) of the Credit Agreement (the “Existing Default”).

C.The Borrower has requested that the Lenders waive the Existing Default and the parties hereto are willing to make certain amendments to the Credit Agreement, as more fully set forth herein.

NOW, THEREFORE, in consideration of the covenants, conditions and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are all hereby acknowledged, the parties hereto covenant and agree as follows:
1.LIMITED WAIVER.  Subject to the conditions to effectiveness set forth in Section 4 hereof, the Lenders and the Administrative Agent hereby waive the Existing Default for the Fiscal Quarter ending March 31, 2020.  This waiver shall be effective only to the extent specifically set forth herein and shall not (a) be construed as a waiver of any breach, Default or Event of Default other than as specifically waived herein nor as a waiver of any breach, Default or Event of Default of which the Lenders have not been informed by the Loan Parties, (b) affect the right of the Lenders to demand compliance by the Loan Parties with all terms and conditions of the Loan Documents, except as specifically modified or waived by this Fourth Amendment, (c) be deemed a waiver of any transaction or future action on the part of the Loan Parties requiring the Lenders’ or the Required Lenders’ consent or approval under the Loan Documents, or (d) except as waived hereby, be deemed or construed to be a waiver or release of, or a limitation upon, the Administrative Agent’s or the Lenders’ exercise of any rights or remedies under the Credit Agreement or any other Loan Document, whether arising as a consequence of any Default or Event of Default (other than the Existing Default) which may now exist or otherwise, all such rights and remedies hereby being expressly reserved.

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EXHIBIT 10.1

2.AMENDMENTS.  

(a)Section 1.01 of the Credit Agreement is hereby amended by adding the following defined terms thereto in proper alphabetical order:

 “Fourth Amendment” means that certain Limited Waiver and Fourth Amendment to Credit Agreement, dated as of May 18, 2020, among the Borrower, the Lenders party thereto and the Administrative Agent.
“Fourth Amendment Effective Date” means the date that all conditions of effectiveness set forth in Section 4 of the Fourth Amendment have been satisfied.
(b)The definition of “Applicable Rate” set forth in Section 1.01 of the Credit Agreement is hereby amended to read as follows:

“Applicable Rate” means the applicable percentage per annum set forth below determined by reference to the Total Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(a):
	
				
	Applicable Rate

	Pricing Level
	Total
Leverage Ratio
	Eurodollar Rate / Letter of Credit Fees
	Base Rate

	1
	< 3.50 :  1.00
	2.250%
	1.250%

	2
	< 4.25 :  1.00 but ≥ 3.50 :  1.00
	2.375%
	1.375%

	3
	< 5.00 :  1.00 but ≥ 4.25 :  1.00
	2.500%
	1.500%

	4
	≥ 5.00 :  1.00
	3.000%
	2.000%

Any increase or decrease in the Applicable Rate resulting from a change in the Total Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(a); provided, however, that if a Compliance Certificate is not delivered when due in accordance with such Section, then, upon the request of the Required Lenders, Pricing Level 4 shall apply in respect of the Revolving Credit Facility as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered and in each case shall remain in effect until the date on which such Compliance Certificate is delivered.  Furthermore, the Applicable Rate in effect from and after the Fourth Amendment Effective Date through and including the date the Compliance Certificate is delivered pursuant to Section 6.02(b) for the Fiscal Quarter ending June 30, 2020 shall be Pricing Level 4.
Notwithstanding anything to the contrary contained in this definition, the determination of the Applicable Rate for any period shall be subject to the provisions of Section 2.10(b).
(c)The definition of “Eurodollar Rate” set forth in Section 1.01 of the Credit Agreement is hereby amended to read as follows:

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EXHIBIT 10.1

“Eurodollar Rate” means:
(a)    for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the London Interbank Offered Rate (“LIBOR”) or a comparable or successor rate, which rate is approved by the Administrative Agent, as published by Bloomberg (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period; and
(b)    for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to LIBOR, at or about 11:00 a.m., London time determined two Business Days prior to such date for U.S. Dollar deposits with a term of one month commencing that day;
provided that to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be applied in a manner consistent with market practice; provided, further, that, to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate shall be applied in a manner as otherwise reasonably determined by the Administrative Agent.
Notwithstanding the foregoing, if the Eurodollar Rate shall be less than 0.75% at any time, such rate shall be deemed to be 0.75% for purposes of this Agreement.
3.REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT.  By its execution and delivery hereof, the Borrower represents and warrants that, as of the date hereof and after giving effect to the limited waiver set forth in Section 1 above:

(a)the representations and warranties contained in the Credit Agreement and the other Loan Documents that are subject to materiality or Material Adverse Effect qualifications are true and correct in all respects on and as of the date hereof as made on and as of such date, and the representations and warranties contained in the Credit Agreement and the other Loan Documents that are not subject to materiality or Material Adverse Effect qualifications are true and correct in all material respects on and as of the date hereof as made on and as of such date, except in each case to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date, and except that the representations and warranties contained in Sections 5.05(a) and (c) of the Credit Agreement shall be deemed to refer to the most recent financial statements furnished pursuant to Sections 6.01(a) and (b), respectively, of the Credit Agreement;

(b)no event has occurred and is continuing which constitutes a Default or Event of Default;

(c)(i) the Borrower has full power and authority to execute and deliver this Fourth Amendment, (ii) this Fourth Amendment has been duly executed and delivered by the Borrower and (iii) this Fourth Amendment, and the Credit Agreement, as amended hereby, constitute the legal, valid and binding obligations of the Borrower, enforceable in accordance with their respective terms, except as enforceability may be limited by applicable Debtor Relief Laws and by general principles 

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EXHIBIT 10.1

of equity (regardless of whether enforcement is sought in a proceeding in equity or at law) and except as rights to indemnity may be limited by federal or state securities laws;

(d)neither the execution, delivery and performance of this Fourth Amendment or the Credit Agreement, as amended hereby, nor the consummation of any transactions contemplated herein or therein, will conflict with (i) any Organization Documents of the Borrower or its Subsidiaries, (ii) any Law applicable to the Borrower or its Subsidiaries or (iii) any Contractual Obligation to which the Borrower, the Subsidiaries or any of their respective properties are subject; and
(e)no authorization, approval, consent, or other action by, notice to, or filing with, any Governmental Authority or other Person not previously obtained is necessary or required in connection with (i) the execution, delivery or performance by, or enforcement against, the Borrower of this Fourth Amendment or (ii) the acknowledgement by each Guarantor of this Fourth Amendment.

4.CONDITIONS OF EFFECTIVENESS.  All provisions of this Fourth Amendment  shall be effective upon satisfaction of, or completion of, the following:

(a)the Administrative Agent shall have received counterparts of this Fourth Amendment executed by the Borrower, the Required Lenders and acknowledged by each Guarantor;

(b)the representations and warranties set forth in Section 3 of this Fourth Amendment shall be true and correct; 

(c)unless waived by the Administrative Agent, the Borrower shall have paid all fees, charges and disbursements of counsel to the Administrative Agent directly to such counsel to the extent invoiced prior to or on the Fourth Amendment Effective Date;

(d)since December 31, 2019, there shall not have occurred any event or condition that has had or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect; and

(e)the Administrative Agent shall have received, in form and substance satisfactory to the Administrative Agent and its counsel, such other documents, certificates and instruments as the Administrative Agent shall reasonably require.

5.REFERENCE TO THE CREDIT AGREEMENT.

(a)Upon and during the effectiveness of this Fourth Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, or words of like import shall mean and be a reference to the Credit Agreement, as affected and amended by this Fourth Amendment.

(b)Except as expressly set forth herein, this Fourth Amendment shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights or remedies of the Administrative Agent or the Lenders under the Credit Agreement or any of the other Loan Documents, and shall not alter, modify, amend, or in any way affect the terms, conditions, obligations, covenants, or agreements contained in the Credit Agreement or the other Loan 

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EXHIBIT 10.1

Documents, all of which are hereby ratified and affirmed in all respects and shall continue in full force and effect.

6.COSTS AND EXPENSES.  The Borrower shall be obligated to pay the reasonable out-of-pocket costs and expenses of the Administrative Agent in connection with the preparation, reproduction, execution and delivery of this Fourth Amendment and the other instruments and documents to be delivered hereunder.

7.EXECUTION IN COUNTERPARTS.  This Fourth Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which when taken together shall constitute but one and the same instrument.  For purposes of this Fourth Amendment, a counterpart hereof (or signature page thereto) signed and transmitted by any Person party hereto to the Administrative Agent (or its counsel) by facsimile or other electronic imaging means (e.g., “pdf” or “tif”) is to be treated as an original.  The signature of such Person thereon, for purposes hereof, is to be considered as an original signature, and the counterpart (or signature page thereto) so transmitted is to be considered to have the same binding effect as an original signature on an original document.

8.GOVERNING LAW; BINDING EFFECT.  This Fourth Amendment shall be governed by and construed in accordance with the laws of the State of Texas applicable to agreements made and to be performed entirely within such state; provided that each party shall retain all rights arising under federal law.  This Fourth Amendment shall be binding upon the Borrower, the Guarantors, the Administrative Agent and each Lender and their respective successors and permitted assigns.

9.HEADINGS.  Section headings in this Fourth Amendment are included herein for convenience of reference only and shall not constitute a part of this Fourth Amendment for any other purpose.

10.ENTIRE AGREEMENT.  THE CREDIT AGREEMENT, AS AMENDED BY THIS FOURTH AMENDMENT, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AS TO THE SUBJECT MATTER THEREIN AND HEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.

	
	
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EXHIBIT 10.1

IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment as of the date above written.
                               CARRIAGE SERVICES, INC.

	
		
	 
	 

	By:
	/s/ Carl Benjamin Brink

	 
	Carl Benjamin Brink

	 
	Senior Vice President, Chief Financial 

	 
	Officer and Treasurer

Signature Page - Fourth Amendment             

EXHIBIT 10.1

                   BANK OF AMERICA, N.A.,
                                                                                       as Administrative Agent

	
			
	 
	 
	 

	 
	By:
	/s/ Adam Rose

	 
	Name:
	Adam Rose

	 
	Title:
	Senior Vice President

Signature Page - Fourth Amendment             

EXHIBIT 10.1

                                                                        BANK OF AMERICA, N.A.,
                                                                                       as a Lender, L/C Issuer and Swing Line Lender

	
			
	 
	 
	 

	 
	By:
	/s/ Adam Rose

	 
	Name:
	Adam Rose

	 
	Title:
	Senior Vice President

Signature Page - Fourth Amendment             

EXHIBIT 10.1

                                                                                       REGIONS BANK,
                                                                                       as a Lender

	
			
	 
	 
	 

	 
	By:
	/s/ Matthew N. Walt

	 
	Name:
	Matthew N. Walt

	 
	Title:
	Director

Signature Page - Fourth Amendment             

EXHIBIT 10.1

                                                                                      BBVA USA f/k/a Compass Bank,
                                                                                       as a Lender

	
			
	 
	 
	 

	 
	By:
	/s/ Tom Brosig S.V.P.

	 
	Name:
	TOM BROSIG

	 
	Title:
	SENIOR VICE PRESIDENT

Signature Page - Fourth Amendment             

EXHIBIT 10.1

                                                                                      GOLDMAN SACHS BANK USA,
                                                                                       as a Lender

	
			
	 
	 
	 

	 
	By:
	/s/ Jamie Minieri

	 
	Name:
	Jamie Minieri

	 
	Title:
	Authorized Signatory

Signature Page - Fourth Amendment             

EXHIBIT 10.1

                                                                                      VERITEX COMMUNITY BANK,
                                                                                       as a Lender

	
			
	 
	 
	 

	 
	By:
	/s/ Sam Jarvis

	 
	Name:
	Sam Jarvis

	 
	Title:
	Vice President

    

Signature Page - Fourth Amendment             

EXHIBIT 10.1

RATIFICATION OF GUARANTORS
Each of the undersigned Guarantors hereby (a) acknowledges and consents to the foregoing Fourth Amendment and the Borrower’s execution, delivery and performance thereof; (b) joins the foregoing Fourth Amendment for the purpose of consenting to and being bound by the provisions thereof; (c) acknowledges and agrees that its obligations in respect of its Guaranty are not released, diminished, waived, modified, impaired or affected in any manner by this Fourth Amendment or any of the provisions contemplated herein; (d) ratifies and confirms all of its obligations and liabilities under the Loan Documents to which it is a party and ratifies and confirms that such obligations and liabilities extend to and continue in effect with respect to, and continue to guarantee and secure the Obligations of the Borrower under the Credit Agreement, as amended pursuant to the terms of the Fourth Amendment; and (e) acknowledges and agrees that as of the date of the foregoing Fourth Amendment, such Guarantor (i) does not have any claim or cause of action against the Administrative Agent or any Lender (or any of their respective directors, officers, employees, agents, attorneys or other representatives) under or in connection with its Guaranty and the other Loan Documents to which it is a party and (ii) has no offsets against, or defenses or counterclaims to, its Guaranty.  
The Guarantors: 

CARRIAGE CEMETRY SERVICES, INC.
CARRIAGE CEMETRY SERVICES OF
     CALIFORNIA, INC.
CARRIAGE CEMETRY SERVICES OF IDAHO,
     INC.
CARRIAGE FLORIDA HOLDINGS, INC.
CARRIAGE FUNERAL HOLDINGS, INC.
CARRIAGE FUNERAL MANAGEMENT, INC.
CARRIAGE FUNERAL SERVICES OF
     CALIFORNIA, INC.
CARRIAGE FUNERAL SERVICES OF
     KENTUCKY, INC.
CARRIAGE FUNERAL SERVICES OF
     MICHIGAN, INC.
CARRIAGE HOLDING COMPANY, INC.
CARRIAGE INTERNET STRATEGIES, INC.
CARRIAGE LIFE EVENTS, INC.
CARRIAGE MANAGEMENT, INC.
CARRIAGE MERGER VI, INC.
CARRIAGE MUNICIPAL CEMETRY
     SERVICES OF NEVADA, INC.
CARRIAGE OPERATIONS, INC.
CARRIAGE PENNSYLVANIA HOLDINGS, INC.

Signature Page to Ratification of Guarantors - Fourth Amendment

EXHIBIT 10.1

CARRIAGE SERVICES OF CONNECTICUT,
     INC.
CARRIAGE SERVICES OF LOUISIANA, INC.
CARRIAGE SERVICES OF NEVADA, INC.
CARRIAGE SERVICES OF NEW MEXICO, INC.
CARRIAGE SERVICES OF OHIO, LLC
CARRIAGE SERVICES OF OKLAHOMA, L.L.C.
CARRIAGE SERVICES OF TENNESSEE, INC.
CARRIAGE TEAM CALIFORNIA
     (CEMETERY), LLC
CARRIAGE TEAM CALIFORNIA (FUNERAL), 
LLC
CARRIAGE TEAM FLORIDA (CEMETERY), 
LLC
CARRIAGE TEAM FLORIDA (FUNERAL), LLC
CARRIAGE TEAM KANSAS, LLC
CATAUDELLA FUNERAL HOME, INC.
CFS FUNERAL SERVICES, Inc.
CHC INSURANCE AGENCY OF OHIO, INC.
CLOVERDALE PARK, INC.
COCHRANE’S CHAPEL OF THE ROSES, INC.
CSI FUNERAL SERVICES OF
     MASSACHUSETTS, INC.
CSRE HOLDINGS, INC.
FORASTIERE FAMILY FUNERAL SERVICE,
     INC.
HORIZON CREMATION SOCIETY, INC.
HUBBARD FUNERAL HOME INC.
PNCA, INC.
ROLLING HILLS MEMORIAL PARK
WILSON & KRATZER MORTUARIES
FAIRFAX MEMORIAL FUNERAL HOME, 
L.L.C.
CALVARY MEMORIAL PARK,     
            INCORPORATED

	
		
	 
	 

	By:
	/s/ Carl Benjamin Brink

	 
	Carl Benjamin Brink

	 
	Treasurer for all

Signature Page to Ratification of Guarantors - Fourth AmendmentExhibit

EXHIBIT 10.1

                                         CARRIAGE SERVICES, INC.     
2017 OMNIBUS INCENTIVE PLAN

“GOOD TO GREAT II SHAREHOLDER VALUE CREATION 
PERFORMANCE AWARD AGREEMENT”

This Performance Award Agreement (this “Agreement”) is made and entered into as of May 19, 2020 (the “Grant Date”) by and between Carriage Services, Inc. (the “Company”) and _______________ (the “Employee”).  Capitalized terms that are used in this Agreement, but not defined herein, have the meanings ascribed to them in the Company’s 2017 Omnibus Incentive Plan (the “Plan”).

1.Grant of Performance Award.  Pursuant to the terms and conditions set forth in the Plan and this Agreement, the Company hereby grants to the Employee a Stock Award in the form of a Performance Award pursuant to which the Employee may earn shares of the Company’s common stock (the “Award”).  The target number of shares of common stock subject to the Award is __________ shares (the “Target Performance Shares”).  Notwithstanding the foregoing and subject to the terms of this Agreement, the aggregate number of shares of common stock that the Employee actually earns pursuant to the Award (up to a maximum of _______% of the Target Performance Shares) shall be calculated by the Company’s Compensation Committee (the “Committee”) based upon the Payout definition as outlined in Exhibit I attached hereto). 

2.Performance Period. For purposes of this Agreement, the term “Performance Period” shall be the period commencing on the Grant Date and ending on December 31, 2024.

3.Performance Criteria.
(a)The performance criteria applicable to the Award are set forth on Exhibit I attached hereto (the “Performance Criteria”), which exhibit is hereby incorporated by reference.  All determinations of whether the Performance Criteria have been achieved (and, if applicable, the extent of any such achievement), the number of shares of common stock actually earned by the Employee, and all other matters related to this Section 3 shall be made by the Committee in its sole discretion.
(b)Promptly following completion of the Performance Period (and no later than sixty (60) days following the end of the Performance Period), the Committee shall review and certify in writing, (i) whether, and to what extent, the Performance Criteria for the Performance Period has been achieved, and (ii) the number of shares of common stock that the Employee has earned, if any, subject to compliance with the requirements of Section 4. Such certification shall be final, conclusive and binding on the Employee, and on all other persons, to the maximum extent permitted by law.

4.Vesting Date.  The Award is subject to forfeiture until it vests.  Except as otherwise provided herein, the Award will vest and no longer be subject to forfeiture on December 31, 2024 (the “Vesting Date”), pending certification by the Committee of the achievement of the Performance Criteria in accordance with Section 3(b) above, and subject to the Employee’s continuous employment with the Company from the Grant Date through the date on which the Committee certifies the achievement of the Performance Criteria. The number of Target Performance Shares that vest and become payable under this Agreement 

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EXHIBIT 10.1

shall be determined by the Committee at the end of the Performance Period by referencing the table included in Exhibit 1.

5.Settlement.  Payment in respect of the Award earned for the Performance Period shall be made in shares of common stock, which shares of common stock shall be issued to the Employee within 60 days following the Vesting Date. The Company shall (a) issue and deliver to the Employee the number of shares of common stock earned by the Employee during the Performance Period, if any, as determined and awarded by the Committee in accordance with the terms of this Agreement; and (b) enter the Employee’s name on the books of the Company as the shareholder of record with respect to the shares of common stock delivered to the Employee. Such issuance and delivery shall be made in full satisfaction of the Award and thereafter Employee shall have no further rights with respect to the Award or this Agreement.

6.Termination of Employment.  Except as otherwise expressly provided in this Agreement, if the Employee’s continuous employment with the Company terminates at any time before the Vesting Date, the Award shall be automatically forfeited upon such termination of employment and neither the Company nor any Affiliate shall have any further obligations to the Employee under this Agreement.

7.Corporate Change.  In the event of a Corporate Change during the Performance Period, notwithstanding anything in the Plan to the contrary, if Employee’s employment with the Company is terminated without Cause or Good Reason, and a Payout was earned in accordance with Exhibit 1 prior to Employee’s termination, the Employee shall receive payment in settlement of the Award in an amount equivalent to the value of such Award at the time of such settlement, which amount shall be paid no later than sixty (60) days following the date of such termination of employment.

8.Restrictions.  Neither the Award nor any of the rights relating thereto may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Employee. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Award or the rights relating thereto shall be wholly ineffective and, if any such attempt is made, the Award will be forfeited by the Employee and all of the Employee’s rights to such Award shall immediately terminate without any payment or consideration by the Company.

9.No Rights as Shareholder; No Dividend Equivalents.  The Employee shall not have any rights of a shareholder with respect to the shares of common stock underlying the Award (including, without limitation, any right to receive dividends or dividend equivalents) unless and until the Award vests and is settled pursuant to this Agreement.  Upon and following the settlement of the Award, the Employee shall be the record owner of the shares of common stock underlying the Award unless and until such shares are sold or otherwise disposed of, and as record owner shall be entitled to all rights of a shareholder of the Company (including voting rights).

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

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EXHIBIT 10.1

11.Adjustments. If any change is made to the Company’s outstanding common stock or the capital structure of the Company, if required, the number of shares of common stock subject to the Award shall be adjusted or terminated in any manner as contemplated by Section 4.4 of the Plan.

12.Tax Withholding.  Unless other arrangements have been made that are acceptable to the Company, the Company and each of its Affiliates is authorized to deduct or withhold from the Award, or cause to be deducted or withheld from any compensation or other amount owing to the Employee, the amount (in cash, common stock, other securities or property, or common stock that would otherwise be issued pursuant to the Award) of any applicable taxes payable in respect of the vesting and/or settlement of the Award and to take such other actions as may be necessary in the opinion of the Company or any of its Affiliates to satisfy its tax withholding obligations.  Notwithstanding the foregoing, if the Employee is subject to Rule 16b-3 at the time of vesting and/or settlement of the Award, except as otherwise provided in any tax withholding policy or procedure adopted by the Company, such tax withholding automatically shall be effected by the Company or one of its Affiliates either by (i) withholding shares of common stock otherwise deliverable to the Employee on the settlement of the Award or (ii) requiring the Employee to tender a cash payment to the Company or such Affiliate in an amount equal to the applicable taxes.  In the event that shares of common stock that would otherwise be delivered pursuant to the Award are used to satisfy such withholding obligations, the number of shares that may be withheld shall be limited to the number of shares that have a Fair Market Value, on the date of withholding, equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such taxable income; provided, however, that such withholding may be based on rates in excess of the minimum statutory withholding rates if (A) the Committee (x) determines that such withholding would not result in adverse accounting, tax or other consequences to the Company (other than immaterial administrative, reporting or similar consequences) and (y) authorizes such withholding at such greater rates and (B) the Employee consents to such withholding at such greater rates.  

13.Compliance with Applicable Laws. The issuance and transfer of shares of common stock shall be subject to compliance by the Company and the Employee with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Company’s shares of common stock may be listed. No shares of common stock shall be issued or transferred unless and until any then applicable requirements of state and federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel. 

14.Notices. Any notice required to be delivered to the Company under this Agreement shall be in writing and addressed to the General Counsel of the Company at the Company’s principal corporate offices. Any notice required to be delivered to the Employee under this Agreement shall be in writing and addressed to the Employee at the Employee’s address as shown in the records of the Company. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.

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

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EXHIBIT 10.1

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

17.Award Subject to Plan. This Agreement is subject to the Plan as approved by the Company’s shareholders.  The terms and provisions of the Plan, as it may be amended from time to time, are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.

18.Successors and Assigns. The Company may assign any of its rights under this Agreement.  This Agreement will be binding upon, and inure to the benefit of, the successors and assigns of the Company.  Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Employee and the Employee’s beneficiaries, executors, administrators and the person(s) to whom the Award may be transferred by will or the laws of descent or distribution.

19.Severability. The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law.

20.Discretionary Nature of Plan. The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion. The grant of the Award in this Agreement does not create any contractual right or other right to receive any award in the future. Future awards, if any, will be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Employee’s employment with the Company.

21.Entire Agreement.  This Agreement constitutes the entire agreement of the parties with regard to the subject matter hereof, and contains all the covenants, promises, representations, warranties and agreements between the parties with respect to the Award granted hereby; provided, however, that the terms of this Agreement shall not modify, and shall be subject to the terms and conditions of, any employment and/or severance agreement between the Company and it Affiliates and the Employee in effect as of the date a determination is to be made under this Agreement.  Without limiting the scope of the preceding sentence, except as provided therein, all prior understandings and agreements, if any, among the parties hereto relating to the subject matter hereof are hereby null and void and of no further force and effect.  

22.Amendment. The Committee has the right to amend, alter, suspend, discontinue or cancel the Award, prospectively or retroactively; provided, however, that no such amendment shall adversely affect the Employee’s material rights under this Agreement without the Employee’s consent. 

23.Section 409A. Neither the Award nor any of the amounts that may be payable pursuant to this Agreement are intended to constitute or provide for a deferral of compensation that is subject to Section 409A of the Code and the Treasury regulations and 

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EXHIBIT 10.1

other interpretive guidance issued thereunder (collectively, “Section 409A”).  Notwithstanding the foregoing, (a) the Company makes no representations that the Award or any amounts payable under this Agreement are exempt from Section 409A and in no event shall the Company or any of its Affiliates be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Employee on account of non-compliance with Section 409A and (b) if any payment provided for under this Agreement would be subject to additional taxes and interest under Section 409A if the Employee’s receipt of such payment is not delayed in accordance with the requirements of Section 409A(a)(2)(B)(i) of the Code, then such payment shall not be provided to the Employee (or the Employee’s estate, if applicable) until the earlier of (i) the date of the Employee’s death or (ii) the date that is six months after the date of the Employee’s separation from service with the Company.
24.No Impact on Other Benefits. The value of the Award is not part of the Employee’s normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit.

25.Acceptance. The Employee hereby acknowledges receipt of a copy of the Plan and this Agreement. The Employee has read and understands the terms and provisions thereof, and accepts the Award subject to all of the terms and conditions of the Plan and this Agreement. The Employee acknowledges that there may be adverse tax consequences upon the vesting or settlement of the Award or disposition of the underlying shares and that the Employee has been advised to consult a tax advisor prior to such vesting, settlement or disposition. The Employee acknowledges and agrees that none of the Board, the Committee, the Company or any of their respective Affiliates have made any representation or warranty as to the tax consequences to the Employee as a result of the receipt of the Award or the vesting, settlement or disposition thereof.  

26.Clawback.  Notwithstanding any provision in this Agreement to the contrary, this Award and all common stock issued hereunder shall be subject to any applicable clawback policies or procedures adopted in accordance with the Plan.

27.Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.  Delivery of an executed counterpart of this Agreement by facsimile or pdf attachment to electronic mail shall be effective as delivery of a manually executed counterpart of this Agreement.

Signature Page Follows

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EXHIBIT 10.1

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Employee has executed this Agreement, effective for all purposes as provided above.
       CARRIAGE SERVICES, INC.

	
		
	 
	 

	By:
	 

	 
	Melvin C. Payne

	 
	Chairman of the Board and Chief Executive Officer

	
		
	 
	EMPLOYEE

	 
	 

	 
	 

	 
	 

    

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EXHIBIT 10.1

EXHIBIT 1
PERFORMANCE CRITERIA

Definitions

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

“Company Stock Price Average” means any 20 consecutive day simple moving average of the closing price of the Company’s common stock, as reported by the Reporting Service, during the period of May 19, 2020-December 31, 2024. 

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

Payout Determination

The “Payout” shall be determined by the performance of the Company’s common stock during the Performance Period.  If the Company Stock Price Average reaches any of the Performance Tiers listed below, the Employee will be entitled to the corresponding Payout, subject to Section 4 and other provisions of the Agreement.  

	
						
	Performance Tiers
	Tier 1
	Tier 2
	Tier 3
	Tier 4
	Tier 5

	Company Stock Price Average
	$35.78
	$43.88
	$53.39
	$64.48
	$77.34

	Payout 
(in shares of Company common stock)
	X
	Y
	Z
	XX
	YY

The Employee will only be entitled to the highest Payout achieved during the Performance Period, regardless of the closing price of the Company’s common stock on the Vesting Date, and may not receive multiple Payouts.  By way of example:

Example 1:  The Company Stock Price Average reaches a high of $40 in the second year of the Performance Period, before closing at $30 on the Vesting Date.  The Employee will be eligible to receive a Payout of X shares.

Example 2:  The Company Stock Price Average reaches $55 in the second year of the Performance Period, and then reaches $67 in the third year, before closing at $50 on the Vesting Date.  The Employee will be eligible to receive a Payout of XX shares.    

             7

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