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Exhibit 10.1    
  

 
 

EMPLOYMENT AGREEMENT    
  

        THIS AGREEMENT, made effective as of the 7th day of May, 2002, is between CARRIAGE SERVICES, INC., a Delaware
corporation (the "Company"), and GEORGE J. KLUG, a resident of Kingwood, Texas (the "Employee"). 

        1.    Employment Term.    The Company hereby continues the employment of the Employee for a term commencing effective
on the date first above written and, subject to earlier termination as provided in Section 7 hereof, continuing until December 31, 2004 (such term being herein referred to as the "term
of this Agreement"). The Employee agrees to accept such employment and to perform the services specified herein, all upon the terms and conditions hereinafter stated. 

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

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

        4.    Compensation.    During the term of this Agreement, the Company shall pay the Employee a salary of $12,500.00
per full calendar month of service completed, appropriately prorated for partial months at the commencement and end of the term of this Agreement. The salary set forth herein shall be payable in
bi-weekly installments in accordance with the payroll policies of the Company in effect from time to time during the term of this Agreement. The Company shall have the right to deduct from any payment
of all compensation to the Employee hereunder (x) any federal, state or local taxes required by law to be withheld with respect to such payments, and (y) any other amounts specifically authorized to
be withheld or deducted by the Employee. 

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

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

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

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

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

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

 

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

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

        7.    Termination.    

        (a)    Death.    If the Employee dies during the term of this Agreement and while in the employ of the Company, this
Agreement shall automatically terminate and the Company shall have no further obligation to the Employee or his estate except that the Company shall pay the Employee's estate that portion of the
Employee's base salary under Section 4 accrued through the date on which the Employee's death occurred. Such payment of base salary to the Employee's estate shall be made in the same manner and
at the same times as they would have been paid to the Employee had he not died. 

        (b)    Disability.    If during the term of this Agreement, the Employee shall be prevented from performing his duties
hereunder by reason of disability, and such disability shall continue for a period of six months, then the Company may terminate this Agreement at any time after the expiration of such six-month
period. For purposes of this Agreement, the Employee shall be deemed to have become disabled when the Company, upon the advice of a qualified physician, shall have determined that the Employee has
become physically or mentally incapable (excluding infrequent and temporary absences due to ordinary illness) of performing his duties under this Agreement. In the event of a termination pursuant to
this paragraph (b), the Company shall be relieved of all its obligations under this Agreement, except that the Company shall pay to the Employee (or his estate in the event of his subsequent death)
the Employee's base salary under Section 4 through the date on which such termination shall have occurred, reduced during such period by the amount of any benefits received under any disability
policy maintained by the Company. All such payments to the Employee or his estate shall be made in the same manner and at the same times as they would have been paid to the Employee had he not become
disabled. 

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

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        (d)    Discharge Without Cause.    Prior to the end of the term of this Agreement, the Company may discharge the
Employee without Cause (as defined in paragraph (c) above) and terminate this Agreement. In such case this Agreement shall automatically terminate and the Company shall have no further
obligation to the Employee or his estate, except that the Company shall continue to pay to the Employee (or his estate in the event of his subsequent death) the Employee's base salary under
Section 4, and shall continue to include the Employee in any group health and hospitalization insurance program for a period of 12 months following the date of discharge. All such payments to
the Employee or his estate shall be made in the same manner and at the same times as they would have been paid to the Employee had he not been discharged. 

        8.    Restrictive Covenants.    If the employment of the Employee is terminated for any reason (including voluntary
resignation), then the Employee agrees that for a period of two (2) years thereafter, he will not, directly or indirectly: 

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

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

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

        Notwithstanding
the foregoing, the above covenants shall not prohibit the passive ownership of not more than one percent (1%) of the outstanding voting securities of any entity. 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. 

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        9.    Confidential Information.    The Employee acknowledges that in the course of his employment by the Company he
has received and will continue to receive certain trade secrets, lists of customers, management methods, operating techniques, prospective acquisitions, employee lists, training manuals and
procedures, personnel evaluation procedures, financial reports and other confidential information and knowledge concerning the business of the Company and its affiliates (hereinafter collectively
referred to as "Information") which the Company desires to protect. The Employee understands that the Information is confidential and he agrees not to reveal the Information to anyone outside the
Company so long as the confidential or secret nature of the Information shall continue. The Employee further agrees that he will at no time use the Information in competing with the Company. Upon
termination of this Agreement, the Employee shall surrender to the Company all papers, documents, writings and other property produced by his or coming into his possession by or through his employment
or relating to the Information and the Employee agrees that all such materials will at all times remain the property of the Company. The Employee acknowledges that a remedy at law for any breach or
attempted breach of the foregoing provisions of this Section 9 or under Section 8 above will be inadequate, and agrees that the Company shall be entitled to specific performance and
injunctive and other equitable relief in case of any such breach or attempted breach. 

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

	 	 	If to the Employee:	 	Mr. George J. Klug

5918 Spring Lodge

Kingwood, Texas 77345
	

 	
 	

If to the Company:	
 	

Carriage Services, Inc.

1900 St. James Place, 4th Floor

Houston, Texas 77056

Attn: President

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

        11.    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. 

        12.    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. 

        13.    Binding Effect.    Subject to the provisions of Section 12 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. 

        14.    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. 

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        15.    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. 

        16.    Governing Law.    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. 

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

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

	 	 	CARRIAGE SERVICES, INC.
	

 	
 	

By:	
 	

/s/  MELVIN C. PAYNE      
 MELVIN C. PAYNE, Chief Executive Officer
	

 	
 	
CARRIAGE SERVICES, INC.
	

 	
 	

/s/  GEORGE J. KLUG      
 GEORGE J. KLUG

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SCHEDULE I

TO

EMPLOYMENT AGREEMENT

(GEORGE J. KLUG) 

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

Service
Corporation International

The Loewen Group Inc.

Stewart Enterprises, Inc.

Keystone Group Holdings, Inc.

Meridian Mortuary Group, Inc.

Cornerstone Family Services, Inc.

Prime Succession, Inc.

Hamilton Group, Inc.

Century Group

Saber Group

Thomas Pierce & Co. 

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

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

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

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Exhibit 10.1

EMPLOYMENT AGREEMENT<Page>

                                                                   Exhibit 4.10

                             CERTIFICATE OF TRUST
                                      OF
                            AMEREN CAPITAL TRUST I

     THIS CERTIFICATE OF TRUST of Ameren Capital Trust I (the "Trust"), dated as
of July 26, 2002, is being duly executed and filed by The Bank of New York
(Delaware), a Delaware banking corporation, as trustee, to form a business trust
under the Delaware Business Trust Act (12 Del. C. Section 3801 et seq.).

     1. Name. The name of the business trust formed hereby is "Ameren Capital
Trust I".

     2. Delaware Trustee. The name and address of the trustee of the Trust with
a principal place of business in the State of Delaware is:

        The Bank of New York (Delaware)
        White Clay Center
        Route 273
        Newark, Delaware 19711

     3. Effective Date. This Certificate of Trust shall be effective upon its
filing with the Secretary of State of the State of Delaware.

     IN WITNESS WHEREOF, the undersigned, being the sole trustee of the Trust,
has executed this Certificate of Trust as of the date first written above.

                               THE BANK OF NEW YORK (DELAWARE),
                               not in its individual capacity,
                               but solely as trustee

                               By: /s/ WILLIAM T. LEWIS
                                  ----------------------------------------------
                                    Name: William T. Lewis
                                    Title: Senior Vice President

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