Document:

EXHIBIT 10.3

               AMENDED AND RESTATED SECURITY AGREEMENT - PLEDGE

      THIS AMENDED AND RESTATED SECURITY AGREEMENT - PLEDGE, dated effective as
of March 31, 2000, between CARRIAGE SERVICES, INC., a Delaware corporation
(hereinafter called "SECURED PARTY"), whose address is 1300 Post Oak Boulevard,
Suite 1500, Houston, Texas 77056 and (the "Purchaser"), and RUSSELL W. ALLEN,
(hereinafter the "DEBTOR"), whose address is 11301 Lake Forest Drive, Conroe,
Texas 77384;

                             W I T N E S S E T H:
                             - - - - - - - - - -

            WHEREAS, the Debtor is indebted to the Secured Party pursuant to the
following promissory notes (collectively, the "Original Notes"):
<TABLE>
<CAPTION>
      ORIGINAL PRINCIPAL AMOUNT                       DATE
      -------------------------                       ----
<S>                                 <C>
            $ 316,714.00            July 9, 1996 (individually, the "July 9, 1996 Note")
            $  16,156.75            March 31, 1997 (individually, the "March 31, 1997 Note")
            $  23,301.00            March 31, 1998 (individually, the "March 31, 1998 Note")
            $ 507,255.03            April 1, 1999 (individually, the "First April 1, 1999 Note")
            $  50,000.00            April 1, 1999 (individually, the "Second April 1, 1999 Note")
            $ 100,000.00            October 19, 1999 (individually, the "October 19, 1999 Note")
</TABLE>
            WHEREAS, the Debtor has executed a Promissory Note of even date
herewith payable to the order of the Secured Party (the "Consolidated Note")
which renews, modifies, extends, rearranges, replaces and restates (but does not
extinguish) the indebtedness evidenced by the Original Notes; and

            WHEREAS, the Debtor and the Secured Party have entered into that
certain Pledge Agreement executed and delivered as of the 9th day of July, 1996
(the "1996 Pledge Agreement") pursuant to which the Debtor granted to the
Secured Party a security interest in and a pledge of 63,000 shares of Class B
Common Stock, $.01 par value per share, of the Secured Party, which secures the
prompt and full payment and performance of the July 9, 1996 Note, the March 31,
1997 Note, the March 31, 1998 Note and the October 19, 1999 Note; and

            WHEREAS, since the date of the 1996 Pledge Agreement, the Secured
Party has voluntarily relinquished the stock originally pledged thereunder, but
retained a pledge and security interest in any future stock in Payee that might
be acquired by Debtor; and

            WHEREAS, the Debtor and Provident Credit Corp., a Delaware
corporation ("Provident") have entered into that certain Security
Agreement-Pledge dated April 1, 1999 (the "Provident Security Agreement"),
pursuant to which the Debtor granted to Provident a security interest in and a
pledge of 46,392 shares of Common Stock of the Secured Party which secures the
prompt and full payment and performance of the First April 1, 1999 Note and the
Second April 1, 1999 Note; and
<PAGE>
            WHEREAS, the Provident Security Agreement was granted, sold,
transferred, assigned and delivered to the Secured Party pursuant to that
certain Assignment of Note and Liens dated November 30, 1999; and

            WHEREAS, the Debtor and the Secured Party have entered into that
certain Security Agreement (the "Security Agreement") as of even date herewith;
and

            WHEREAS, the Debtor desires to consolidate the 1996 Pledge Agreement
and the Provident Security Agreement into the Security Agreement and this
Amended and Restated Security Agreement-Pledge (hereinafter, the "Pledge
Agreement") to secure the prompt and full payment and performance of the
Consolidated Note, and the Secured Party agrees that the 1996 Pledge Agreement
and the Provident Security Agreement should be consolidated into the Security
Agreement and this Pledge Agreement;

            NOW, THEREFORE, the Debtor and the Secured Party agree to amend and
restate the 1996 Pledge Agreement and the Provident Security Agreement in their
entirety to read as follows:

               AMENDED AND RESTATED SECURITY AGREEMENT - PLEDGE

      I.    PARTIES, COLLATERAL AND OBLIGATIONS

      RUSSELL W. ALLEN, (hereinafter the "DEBTOR"), whose address is 11301 Lake
Forest Drive, Conroe, Texas, 77384, for fair, good and valuable considerations
and reasonably equivalent value, the receipt and sufficiency of which are hereby
acknowledged, hereby grants to Carriage Services, Inc., a Delaware corporation
(hereinafter called "SECURED PARTY"), whose address is 1300 Post Oak Boulevard,
Suite 1500, Houston, Texas 77056, a security interest in the following property
and to Secured Party pledges the following property:

      FORTY-SIX THOUSAND THREE HUNDRED NINETY-TWO (46,392) SHARES OF CARRIAGE
      SERVICES, INC. CLASS B COMMON STOCK, $.01 PER SHARE PAR VALUE PER SHARE

and any and all additions, accessions and substitutions therefor, together with
all proceeds, monies, income and benefits attributable or accruing to said
property, which Debtor is or may hereafter become entitled to receive on account
of said property, including, but not by way of limitation, all interest,
premium, redemption proceeds and other principal payments and all dividends and
other distributions on or with respect to such capital stock, whether payable in
cash, stock or other property and all subscription and other rights (all of such
foregoing property collectively called the "COLLATERAL"). Immediately upon the
execution of this Pledge Agreement by or on behalf of Debtor, Debtor will
deliver or cause to be delivered to Secured Party the instruments, securities
and documents subject to this Pledge Agreement; furthermore, if any money or
monies, certificates of deposit, savings or passbook accounts, bank balances,
instruments, securities, documents, chattel paper, letters of credit or advices

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<PAGE>
of credit are, at any time or times, included in the Collateral, whether as
proceeds or otherwise, Debtor will promptly deliver the same to Secured Party
upon the receipt thereof by Debtor, and in any event, promptly upon demand
therefor by Secured Party. The pledge and security interest granted herein
secures the prompt and full payment and performance of all of the indebtedness,
liabilities and obligations of Debtor to Secured Party (hereinafter collectively
called the "OBLIGATIONS"), whether joint or several, direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
and all renewals, extensions, increases, modifications, rearrangements,
amendments and/or supplements of the Obligations, including, without limiting
the generality of the foregoing, the indebtedness evidenced by or in connection
with the Consolidated Note, and interest, all costs and expenses and attorneys'
fees and legal expenses payable by Secured Party in connection herewith or
therewith, all in accordance with the terms of this Pledge Agreement. Unless
otherwise agreed, all of the Obligations shall be payable at the offices of
Secured Party at the address set forth above.

      II.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR

      Debtor hereby represents, warrants, covenants and agrees that:

      (1) Except for the security interest granted hereby, Debtor is the owner
and holder of all the Collateral free from any adverse claim, security interest,
encumbrance, lien, charge or any other right, title or interest of any person
other than the Secured Party; Debtor has full power and lawful authority to
sell, transfer and assign the Collateral to Secured Party and to grant to
Secured Party a first, prior and valid security interest therein as herein
provided; the execution and delivery and the performance hereof are not in
contravention of any indenture, agreement or undertaking to which Debtor is a
party or by which Debtor (or its property) is bound; and Debtor will defend the
Collateral against all claims and demands of all persons at any time claiming
the same or any interest therein. Debtor hereby represents and warrants to
Secured Party that the Collateral is not subject to any buy-sell agreements,
irrevocable proxies or other restrictions, except as have been disclosed in
writing to Secured Party prior to the time this Pledge Agreement is executed.

      (2)(a) Debtor has not heretofore signed any financing statement or
security agreement, other than a financing statement or security agreement in
favor of the Secured Party, which covers any of the Collateral, and in which
Debtor is named as or has signed as "debtor", and no such financing statement or
security agreement, other than a financing statement or security interest in
favor of the Secured Party, is now on file in any public office.

      (b) As long as any amount remains unpaid on any of the Obligations or as
long as any credit from Secured Party to Debtor is in use by or available to
Debtor, with respect to the Collateral (i) Debtor will not enter into or execute
any security agreement or any financing statement other than those security
agreements and financing statements in favor of Secured Party hereunder, and
further (ii) there will not be on file in any public office any financing
statement or statements (or any documents or papers filed as such) other than
financing statements in favor of Secured Party unless, in any case subject to
this paragraph (b), the specific prior written consent and approval of Secured
Party shall have been obtained.

      (c) Debtor authorizes Secured Party to file, in jurisdictions where this
authorization will be given effect, a financing statement signed only by Secured
Party covering the Collateral. At the request of Secured Party, Debtor will
execute such documents as Secured Party may determine, from time to time, to be
necessary or desirable under provisions of the Uniform Commercial Code, as
adopted and amended, in the State of Texas (the "UCC") and other applicable law;
without limiting the generality of the foregoing Debtor agrees to execute, at
Secured Party's request, one or more financing statements in form satisfactory
to Secured Party, and Debtor will pay the cost of filing or recording the same,
or of filing or recording this Pledge Agreement in all public offices at any
time and from time to time, whenever filing or recording of any such financing
statement or of this Pledge Agreement is deemed by Secured Party to be necessary

                                       3
<PAGE>
or desirable. In connection with the foregoing, it is agreed and understood
between the parties hereto (and Secured Party is hereby authorized to carry out
and implement the following agreements and understandings and Debtor hereby
agrees to pay the cost thereof) that Secured Party may, at any time or times,
file as a financing statement any counterpart, copy or reproduction of this
Pledge Agreement signed by Debtor if Secured Party shall elect so to file, and
it is also agreed and understood that Secured Party may, if deemed necessary or
desirable, file (or sign and file) as a financing statement any carbon copy of,
or photographic or other reproduction of, this Pledge Agreement or of any
financing statement executed in connection with this Pledge Agreement.

      (3) Debtor will not sell or offer to sell or otherwise transfer or
encumber the Collateral or any interest therein without the express prior
written consent of Secured Party; and Debtor will keep the Collateral free from
any lien, security interest, encumbrance, charge or claim adverse to the
interest of Secured Party.

      (4) Except as specifically otherwise permitted or provided herein, if, at
any time, Debtor holds or has possession of the Collateral or any part or
proceeds thereof, then Debtor shall immediately transfer possession and control
of same to Secured Party, and Debtor will promptly notify Secured Party of any
such Collateral or proceeds thereof in Debtor's possession.

      (5) All information supplied and statements made by Debtor in any
financial, credit or accounting statement or application for credit made or
delivered to Secured Party by or on behalf of Debtor prior to, contemporaneously
with or subsequent to the execution of this Pledge Agreement are and shall be
true, correct, complete, valid and genuine.

      (6) Debtor warrants and represents to Secured Party that the value of the
consideration received and to be received, directly or indirectly, by Debtor as
a result of the credit or other financial accommodations granted and extended by
Secured Party is fair consideration to Debtor and reasonably worth at least as
much as the Obligations, and that the financial accommodations granted and
extended by Secured Party have benefitted and may reasonably be expected to
benefit Debtor directly or indirectly, or both.

      (7) No part of the proceeds of any extension of credit under the
Consolidated Note will be used to purchase or carry any margin stock or to
extend credit to any person for the purpose of purchasing or carrying any such
margin stock. Neither Debtor nor any person acting on its behalf with the
consent of Debtor has taken or will take action which might cause this Pledge
Agreement or the Consolidated Note to violate Regulation G, or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
Section 7 of the Securities Exchange Act of 1934 or any rule or regulation
thereunder, in each case as now in effect or as the same may hereinafter be in
effect. Debtor shall execute concurrently herewith a true, complete and correct
Federal Reserve Form G-3, and from time to time hereafter Debtor shall execute
upon the request of the Secured Party such other forms, stock powers and other
documents as the Secured Party may reasonably request in connection herewith.

      (8) The right of Secured Party to take possession or control of the
Collateral upon the happening of any of the events or conditions constituting a
default may be exercised without resort to any court proceeding or judicial
process whatever and without any hearing whatever thereon; and, in this

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<PAGE>
connection, DEBTOR EXPRESSLY WAIVES ANY CONSTITUTIONAL RIGHTS OF DEBTOR WITH
REGARD TO NOTICE. ANY JUDICIAL PROCESS OR HEARING PRIOR TO THE EXERCISE OF THE
RIGHT OF SECURED PARTY TO TAKE POSSESSION OR CONTROL OF THE COLLATERAL UPON THE
HAPPENING OF ANY OF THE EVENTS OR CONDITIONS CONSTITUTING A DEFAULT.

      III.  SECURED PARTY'S POWER AND DUTIES WITH RESPECT TO COLLATERAL

      (1) Secured Party shall be entitled to receive and have delivered to
Secured Party, to be held by Secured Party under this Agreement as Collateral,
all stock dividends, stock issued as a result of stock splits, and all amounts
paid in cash or other property as liquidating dividends or returns of capital on
any stock pledged hereunder, and all subscription and other rights issued in
connection therewith, and Debtor shall immediately pledge and deposit with
Secured Party any such stock, or amounts that may come into his possession or
control.

      (2) Unless and until an Event of Default hereunder shall have occurred and
be continuing, Debtor shall have the right for all purposes not contrary to
covenants contained herein or otherwise inconsistent with the provisions hereof,
to exercise all voting rights appertaining to all capital stock included in the
Collateral, if any, with the same force and effect as though such Collateral
were not pledged hereunder, and from time to time upon demand of Debtor, Secured
Party shall cause to be made and delivered to Debtor or his nominee, suitable
powers of attorney or proxies so as to exercise such voting rights with respect
to any Collateral which shall have been transferred into the name of Secured
Party or Secured Party's nominee.

      (3) Secured Party shall be under no duty to collect any amount which may
be or become due on any of the Collateral now or hereafter pledged hereunder, or
to realize on the Collateral, collect principal, interest or dividends, to keep
the same insured, make any presentments, demands, notice of protest, in
connection with any of the Collateral, or do anything for the enforcement and
collection of Collateral or the protection thereof.

      (4) Secured Party may, in Secured Party's discretion, but without
obligation to do so, deposit the Collateral or any part thereof with a bank or
banks for the purpose of safekeeping, and the duties of such banks shall be no
greater than those of Secured Party hereunder.

      (5) Notwithstanding the generality of any of the foregoing, but in
amplification of the same, Secured Party shall not be liable to or responsible
for any diminution in the value of the Collateral from any cause whatsoever.

      (6) Debtor agrees to pay all taxes, charges, transfer fees and assessments
against the Collateral and to do all things necessary to preserve and maintain
the value and collectability thereof, and on the failure of Debtor to do so,
Secured Party may, after giving Debtor written notice of Secured Party's
intention to do so, make such payments and advance such sums on account thereof
as to Secured Party in Secured Party's discretion seems desirable. Debtor agrees
to reimburse Secured Party immediately upon demand for all such payments and
advances, repayment of all of which is secured by this Agreement and the pledge
of Collateral hereunder.

                                       5
<PAGE>
      (7) Secured Party shall exercise reasonable care in the custody of any of
the Collateral in its possession or control hereunder at any time or times.
Secured Party shall be deemed to have exercised reasonable care if such
Collateral is accorded treatment substantially equal to that which Secured Party
accords its own property or if Secured Party takes such action with respect to
fhe Collateral as Debtor reasonably requests in writing, but neither failure to
comply with any such request nor any omission to do any act requested by Debtor
shall be deemed to be a failure to exercise reasonable care. Debtor agrees to
take necessary steps to preserve rights against any parties with respect to any
Collateral in Secured Party's possession or control, it being understood however
that Secured Party shall have no responsibility for ascertaining or taking
action with respect to conversions, exchanges, tenders or other matters relative
to any Collateral, whether or not Secured Party has or is deemed to have
knowledge of such matters.

      IV.   EVENTS OF DEFAULT

      Debtor shall be in default under this Pledge Agreement upon the happening
of any one or more of the following events or conditions:

      (1) Default in the payment when due of the principal of, or interest on,
the Consolidated Note or of any other of the Obligations;

      (2) Default in the performance of any agreement or obligation of Debtor or
of any maker, endorser, guarantor or surety of any liability or obligation of
Debtor to the holder of the Obligations;

      (3) Any warranty, representation or statement made in this Pledge
Agreement or made or furnished to Secured Party by or on behalf of Debtor in
connection with this Pledge Agreement or to induce Secured party to make any
loan to Debtor proves to have been false in any material respect when made or
furnished; or any financial statement of Debtor or of any endorser, guarantor or
surety on any of the Obligations which has been or may be furnished to Secured
Party by or on behalf of Debtor or such guarantor, endorser or surety shall
prove to be false in any material respect;

      (4) The levy of any attachment, execution, or other process against Debtor
or any of the Collateral;

      (5) Death, dissolution, termination of existence, insolvency or business
failure of Debtor or any endorser, guarantor or surety of any of the
Obligations, or the appointment of a receiver or other legal representative for
any part of the property of, assignment for the benefit of creditors by, or the
commencement of any proceedings under any bankruptcy or insolvency law by or
against, Debtor or any endorser, guarantor or surety for any of the Obligations;

      (6) Failure or refusal of Debtor to perform or observe any of the
covenants, duties or agreements herein imposed upon or agreed to be performed or
observed by Debtor.

      (7) The termination of Debtor's employment by Secured Party by reason of
(i) the breach of Debtor's obligations under the Employment Agreement dated
effective November 8, 1999 between Debtor and Secured Party (the "Employment
Agreement") or (ii) Debtor's discharge for Cause (as defined in the Employment
Agreement).

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<PAGE>
      V. REMEDIES

      (1) In the event of any default in the payment of any of the Obligations
or any principal, interest or other amount payable thereunder, or upon the
occurrence of any of the Events of Default specified in Section IV hereof, at
the option of the Secured Party, any or all of the Obligations shall become
immediately due and payable without demand, presentment for payment, notice of
non-payment, protest, notice of protest, notice of intent to accelerate
maturity, notice of acceleration of maturity or any other notice of any kind to
Debtor, any endorsers, guarantors and sureties of any of the Obligations, or any
part thereof (Debtor and all endorsers, guarantors and sureties of any of the
Obligations, or any part thereof, are herein individually referred to as an
"OBLIGOR" and collectively referred to as the "OBLIGORS"), or any other person
obligated thereon (whether or not liable with respect to the Obligations or any
part thereof), all of which are hereby expressly waived, and Secured Party shall
have and may exercise, with reference to the Collateral and the Obligations, any
or all of the rights and remedies of a secured party under the UCC or other
applicable law, and as otherwise granted herein or under any other law or under
any other agreement executed by Debtor, including, without limitation, the right
and power to sell, at public or private sale or sales, or otherwise dispose of
or utilize the Collateral and any part or parts thereof in any manner permitted
by the UCC or other applicable law after default by a debtor, and to apply the
proceeds thereof toward payment of any costs and expenses, attorneys' fees and
legal expenses thereby incurred by Secured Party and toward payment of the
Obligations in such order or manner as Secured Party may elect. To the extent
permitted by law, Debtor expressly waives any notice of sale or other
disposition of the Collateral and any other rights and remedies of Debtor or
formalities prescribed by law relative to the sale or disposition of the
Collateral or exercise of any other right or remedy of Secured Party existing
after default hereunder; and to the extent any such notice is required and
cannot be waived, Debtor agrees (on its own behalf and on behalf of each other
Obligor) that if such notice is sent as provided in Section VI of this Pledge
Agreement, at least ten (10) days before the time of the sale or disposition,
such notice shall be deemed reasonable and shall fully satisfy any requirement
for giving of notice.

      (2) Secured Party is expressly granted the right, at its option, to
transfer at any time to itself or to its nominee the Collateral, or any part
thereof, and to receive the monies, income, proceeds or benefits attributable or
accruing thereto and to hold the same as security for the Obligations or to
apply the same on the principal and interest or other amounts owing on any of
the Obligations, whether or not then due, in such order or manner as Secured
Party may elect. Secured Party is expressly granted the rights, exercisable at
its option at any time, whether before or after default, to take control of any
proceeds and to notify account debtors, lessees or obligors on any instrument to
make all payments directly to Secured Party on any and all accounts, leases or
instruments constituting, at any time or from time to time, a part of the
Collateral; and Debtor will, upon request of Secured Party, so notify all such
account debtors, lessees or obligors.

      (3) All recitals in any instrument of assignment or any other instrument
executed by Secured Party incident to the sale, transfer, assignment or other
disposition or utilization of the Collateral or any part thereof hereunder shall
be full proof of the matters stated therein and no other proof shall be
requisite to establish full legal propriety of the sale or other action taken by
Secured Party or of any fact, condition or thing incident thereto and all
prerequisites of such sale or other action or of any fact, condition or other
incident thereto shall be presumed conclusively to have been performed or to
have occurred.

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      (4) All rights to marshaling of assets of Debtor, including any such right
with respect to the Collateral, are hereby waived by Debtor.

      VI.   GENERAL

      (1) Any deposit, deposit account, certificate of indebtedness or deposit
or other sums at any time credited by or due from the holder of the Obligations
to Debtor or any endorser, guarantor or surety of any of the Obligations and any
securities or other property of Debtor or any endorser, guarantor or surety of
any of the Obligations in the possession of the holder of the Obligations
(regardless of whether such deposits, sums, securities or certificates are
otherwise part of the Collateral) may at all times be held and treated as, and
shall at all times constitute, additional and cumulative collateral security for
the payment of the Obligations, and Debtor hereby grants a security interest in,
and upon the written demand of Secured Party, will pledge, pawn, hypothecate and
deliver to Secured Party all such deposits, sums, securities, certificates and
other properties as additional and cumulative security for the Obligations. The
holder of the Obligations may apply or set-off such deposits or other sums
against the Obligations at any time in the case of Debtor, but only with respect
to matured liabilities in the case of the endorsers, guarantors or sureties of
any of the Obligations.

      (2) Upon the occurrence of any of the Events of Default specified in
Section IV hereof, Secured Party may, at its option, whether or not the
Obligations are due, demand, sue for, collect or make any compromise or
settlement it deems desirable with reference to the Collateral. Except as
otherwise expressly provided herein, Secured Party shall not be obligated to
take steps necessary to preserve any rights in the Collateral or proceeds
thereof against other parties, which Debtor hereby assumes to do.

      (3) This Pledge Agreement shall not be construed as relieving Debtor from
full personal liability on the Obligations and any and all future and other
indebtedness secured hereby and for any deficiency thereon.

      (4) No delay or omission on the part of Secured Party in exercising any
right hereunder shall operate as a waiver of any such right or any other right.
A waiver on any one or more occasions shall not be construed as a bar to or
waiver of any right or remedy on any future occasion.

      (5) The execution and delivery of this Pledge Agreement in no manner shall
impair or affect any other Security (by endorsement or otherwise) for the
payment of the Obligations and no security taken hereafter as security for
payment of any part or all of the Obligations shall impair in any manner or
affect this Pledge Agreement, all such present and future additional security to
be considered as cumulative security. Any of the Collateral may be released from
this Pledge Agreement without altering, varying or diminishing in any way the
force, effect, lien, security interest or charge of this Pledge Agreement as to
the Collateral not expressly released, and this Pledge Agreement shall continue
as a first priority lien, security interest and charge on all of the Collateral
not expressly released until all sums and indebtedness secured hereby have been
paid in full. Any future assignment or attempted assignment or transfer of the
interest of Debtor in and to any of the Collateral shall not deprive Secured
Party of the right to sell or otherwise dispose of or utilize all of the
Collateral as above provided or necessitate the sale or disposition thereof in
parcels or in severalty.

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      (6) Debtor and each Obligor specifically waives any notice of the
creation, advancement, increase, existence, extension or renewal of, or any
indulgence with respect to, the Obligations and any part thereof, and of any
non-payment thereof, or default thereon, and waives demand, protest, presentment
and notice of demand, protest and presentment, notice of intent to accelerate
maturity, notice of acceleration and any and all other notice with respect to
the Obligations, and waives notice of the amount of the Obligations outstanding
at the time, and agrees that the maturity of the Obligations and any part
thereof, may, to the extent not inconsistent with the express provisions hereof,
be accelerated, extended or renewed by Secured Party in its discretion or as may
be agreed to by any of the Obligors without notice to, or consent by, Debtor or
any Obligor. Debtor agrees that no creation, existence, advance, renewal,
increase or extension of, of any indulgence with respect to, the Obligations, or
any part thereof, no release, substitutions or exchange of any security for the
Obligations, or any part thereof, no release of any of the Obligors, or of any
other person primarily or secondarily liable on the Obligations, or any part
thereof, no delay in enforcement of payment of the Obligations, or any part
thereof, and no delay or omission or lack of diligence or care in exercising any
right or power with respect to the Obligations or any security therefor or
guaranty thereof under this Pledge Agreement shall in any manner impair, affect
or prejudice the rights of Secured Party hereunder or under any other security
agreement or other lien instrument executed by any of the Obligors or any other
person to Secured Party whether or not covering the Collateral. Debtor
specifically agrees it shall not be necessary or required, and that Debtor shall
not be entitled to require, that Secured Party file suit or proceed to obtain or
assert a claim for personal judgment against any of the Obligors or any other
person or that Secured Party proceed against or foreclose against or seek to
realize upon any of the security now or hereafter existing for the Obligations
or to file suit or proceed to obtain or assert a claim for personal judgment
against any Obligor obligated on the Obligations before, or as a condition of,
or at any time after foreclosing upon or otherwise selling or disposing or
utilizing the Collateral for the purpose of paying the Obligations or any part
thereof. Debtor expressly waives any right to the benefit of, or to require or
control applications of, any security or the proceeds of any security now
existing or hereafter obtained by Secured Party as security for the Obligations,
or any part thereof, and agrees that Secured Party shall have no duty or
obligation insofar as Debtor is concerned to apply upon any of the Obligations,
any monies, payments or other property any time received by or paid to the
Secured Party, except as Secured Party shall determine in its sole discretion.

      (7) Any notice or demand to Debtor hereunder or in connection herewith may
be given and shall conclusively be deemed and considered to have been given and
received upon the deposit thereof in writing in the United States Mail, duly
stamped and addressed to Debtor at the address first shown herein above given
for Debtor at the beginning of this Pledge Agreement or, if applicable, at such
other address as may have been designated most recently in writing by Debtor to
Secured Party; but actual notice to Debtor, however given or received, shall
always be effective.

      (8) All rights of Secured Party hereunder shall inure to the benefit of
its successors and assigns; and all obligations of Debtor shall bind its
successors and assigns.

      (9) Each term used in this Pledge Agreement, unless the context otherwise
requires, and in all events subject to any express definitions set forth in this
Pledge Agreement, shall be deemed to have the same meaning herein as that given
each such term under the UCC or other applicable law. As used in this Pledge
Agreement and when required by the context, each number (singular and plural)
shall include all numbers, and each gender shall include all genders; and unless
the context otherwise requires, the word "person" shall include "corporation,
firm or association".

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      (10) The law governing this secured transaction shall be that of the State
of Texas existing as of the date hereof, provided, that if any additional rights
or remedies are granted by the law of the State of Texas to secured parties or
to persons similarly situated to Secured Party, then Secured Party shall also
have and may exercise any such additional rights or remedies.

      (11) This Pledge Agreement may be executed in multiple counterparts, and
each counterpart, when so executed and delivered, shall constitute but one and
the same instrument.

      (12) Debtor hereby agrees to cooperate fully with Secured Party in order
to permit Secured Party to sell, at foreclosure or other private sale, the
Collateral pledged hereunder. Specifically, Debtor agrees to fully comply with
the securities laws of the United States of America and of the State of Texas
and to take such action as may be necessary to permit Secured Party to sell or
otherwise transfer the securities pledged hereunder in compliance with such
laws. Without limited and the foregoing, if in the reasonable judgment of
Secured Party it is necessary in order to effect a commercially reasonable sale
of the Collateral, upon request by Secured Party, Debtor agrees, at its expense,
to effect and obtain such registrations, filings, statements, rulings, consents
and other matters as Secured Party may request.

      (13) Debtor hereby makes, constitutes and appoints Secured Party or its
nominee, its true and lawful attorney in fact and in its name, place and stead,
and on its behalf, and for its use and benefit to complete, execute and file
with the United States Securities and Exchange Commission one or more notices of
proposed sale of securities pursuant to Rule 144 under the Securities Act of
1933 and/or any similar filings or notices with any applicable state agencies,
and said attorney in fact shall have full power and authority to do, take and
perform all and every act and thing whatsoever 'requisite, proper or necessary
to be done, in the exercise of the rights and powers herein granted, as fully to
all intents and purposes as Debtor might or could do if personally present. This
power shall be irrevocable and deemed coupled with an interest. The rights,
powers and authority of said attorney in fact herein granted shall commence and
be in full force and effect, from the date of this Pledge Agreement, and such
rights, powers and authority shall remain in full force and effect, and this
power of attorney shall not be rescinded, revoked, terminated, amended or
otherwise modified, until all Obligations have been fully satisfied.

      (14) Because of the Securities Act of 1933, as amended, and other
applicable laws or regulations, there may be legal restrictions or limitations
affecting Secured Party in any attempts to dispose of certain portions of the
Collateral in the enforcement of its rights and remedies hereunder. For these
reasons Secured Party is hereby authorized by Debtor, but not obligated, upon
the occurrence of any of the Events of Default specified in Section IV hereof,
to sell all or any part of the Collateral at private sale, subject to investment
letter or in any other manner which will not require the Collateral, or any part
thereof, to be registered in accordance with the Securities Act of 1933, as
amended, or the rules and regulations promulgated thereunder, or any other
applicable law or regulation. Secured Party is also hereby authorized by Debtor,
but not obligated, to take such actions, give such notices, obtain such rulings
and consents and do such other things as Secured Party may deem appropriate in
the event of a sale or disposition of any of the Collateral. Debtor clearly
understands that Secured Party may in its discretion approach a restricted
number of potential purchasers and that a sale under such circumstances may
yield a lower price for the Collateral or any part or parts thereof than would
otherwise be obtainable if same were registered and sold in the open market, and

                                       10
<PAGE>
Debtor agrees that such private sales shall constitute a commercially reasonable
method of disposing of the Collateral.

      Executed as of the day and year first above written.

                                    DEBTOR:

                                    ___________________________________________
                                    RUSSELL W. ALLEN

                                    SECURED PARTY:

                                    CARRIAGE SERVICES, INC.

                                    By:______________________________________
                                        MELVIN C. PAYNE,
                                        Chairman and Chief Executive Officer

                                       11EXHIBIT 10.a

                          SANTA FE SNYDER CORPORATION
                     INCENTIVE STOCK COMPENSATION PLAN 2000

SECTION 1. Purpose of the Plan.

     The Santa Fe Snyder Corporation Incentive Stock Compensation Plan 2000 (the
"Plan") is intended to promote the interests of Santa Fe Snyder Corporation, a
Delaware corporation (the "Company"), by encouraging officers, employees,
directors and consultants of the Company and its Affiliates to acquire or
increase their equity interest in the Company and to provide a means whereby
they may develop a sense of proprietorship and personal involvement in the
development and financial success of the Company, and to encourage them to
remain with and devote their best efforts to the business of the Company thereby
advancing the interests of the Company and its stockholders. The Plan is also
contemplated to enhance the ability of the Company and its Affiliates to attract
and retain the services of individuals who are essential for the growth and
profitability of the Company.

SECTION 2. Definitions.

     As used in the Plan, the following terms shall have the meanings set forth
below:

     "Affiliate" shall mean (i) any "parent corporation" of the Company (as
defined in Section 424(e) of the Code) and any "subsidiary corporation" of any
such corporation (as defined in Section 424(f) of the Code), (ii) any entity
that, directly or through one or more intermediaries, is controlled by the
Company, and (iii) any entity in which the Company has a significant equity
interest, as determined by the Committee.

     "Award" shall mean any Option, Restricted Stock, Performance Award, Phantom
Shares, Bonus Shares, Other Stock-Based Award or Cash Award.

     "Award Agreement" shall mean any agreement, contract, or other instrument
or document (written or electronic) evidencing any Award, which may, but need
not, be executed or acknowledged by a Participant.

     "Board" shall mean the Board of Directors of the Company.

     "Bonus Shares" shall mean an award of Shares granted pursuant to Section
6(d) of the Plan.

     "Cash Award" shall mean an award payable in cash granted pursuant to
Section 6(f) of the Plan.

     "Change in Control" shall mean the occurrence of any one of the following
events:

          (a) any "person" (as such term is used in Section 13(d) and 14(d) of
     the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
     other than a trustee or other fiduciary holding securities under an
     employee benefit plan of the Company or any affiliate, or any corporation
     owned, directly or indirectly, by the stockholders of the Company in
     substantially the same proportions as their ownership of stock of the
     Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3
     under the Exchange Act), directly or indirectly of securities of the
     Company representing 25% or more of the combined voting power of the
     Company's then outstanding securities;

          (b) during any period of two consecutive years (not including any
     period prior to the effective date of the Plan), individuals who at the
     beginning of such period constitute the Board, and any new director (other
     than a director designated by a person who has entered into an agreement
     with the Company to effect a transaction described in clause (a), (c) or
     (d) of this Change in Control definition and excluding any individual whose
     initial assumption of office occurs as a result of either (i) an actual or
     threatened election contest (as such terms are used in Rule 14a-11 of
     Regulation 14A promulgated under the Exchange Act), or an actual or
     threatened solicitation of proxies or consents by or on behalf of a Person
     other than the Board) whose election by the Board or nomination for
     election by the Company's stockholders was approved by a vote of at least
     two-thirds of the directors then still in office who either were directors
     at the beginning of the period or whose election or nomination for election
     was previously

<PAGE>
     so approved (hereinafter referred to as "Continuing Directors"), cease for
     any reason to constitute at least a majority thereof;

          (c) the stockholders of the Company approve a merger or consolidation
     of the Company with any other corporation, other than a merger or
     consolidation which would result in the voting securities of the Company
     outstanding immediately prior thereto continuing to represent (either by
     remaining outstanding or by being converted into voting securities of the
     surviving entity) more than 60% of the combined voting power of the voting
     securities of the Company (or such surviving entity) outstanding
     immediately after such merger or consolidation; or

          (d) the stockholders of the Company approve a plan of complete
     liquidation of the Company or an agreement for the sale or disposition by
     the Company of all or substantially all of the Company's assets. For
     purposes of this clause (d), the term "the sale or disposition by the
     Company of all or substantially all of the Company's assets" shall mean a
     sale or other disposition transaction or series of related transactions
     involving assets of the Company or of any direct or indirect subsidiary of
     the Company (including the stock of any direct or indirect subsidiary of
     the Company) in which the value of the assets or stock being sold or
     otherwise disposed of (as measured by the purchase price being paid
     therefor or by such other method as the Board determines is appropriate in
     a case where there is no readily ascertainable purchase price) constitutes
     more than two-thirds of the "fair market value of the Company" (as
     hereinafter defined). For purposes of the preceding sentence, the "fair
     market value of the Company" shall be the aggregate market value of the
     Company's outstanding common stock (on a fully diluted basis) plus the
     aggregate market value of the Company's other outstanding equity
     securities. The aggregate market value of the Company's common stock shall
     be determined by multiplying the number of shares of the Company's common
     stock (on a fully diluted basis) outstanding on the date of the execution
     and delivery of a definitive agreement with respect to the transaction or
     series of related transactions (the "Transaction Date") by the average
     closing price for the Company's common stock for the ten trading days
     immediately preceding the Transaction Date. The aggregate market value of
     any other equity securities of the Company shall be determined in a manner
     similar to that prescribed in the immediately preceding sentence for
     determining the aggregate market value of the Company's common stock or by
     such other method as the Board shall determine is appropriate. However,
     notwithstanding anything in this clause (d) to the contrary, a spinoff or
     distribution of the stock of a subsidiary of the Company to those persons
     who were stockholders of the Company immediately prior to such spinoff or
     distribution in substantially the same proportion as their ownership of
     Company stock immediately prior to such spinoff or distribution shall not
     constitute a "sale or disposition by the Company of all or substantially
     all of the Company's assets".

     "Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations thereunder.

     "Committee" shall mean the Compensation and Benefits Committee of the
Board.

     "Consultant" shall mean any individual, other than a Director or an
Employee, who renders consulting services to the Company or an Affiliate for a
fee.

     "Director" shall mean a "non-employee director" of the Company, as defined
in Rule 16b-3.

     "Employee" shall mean any employee of the Company or an Affiliate.

     "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

     "Fair Market Value" shall mean, with respect to Shares, the average of the
high and low sales price of a Share on the applicable date (or if there is no
trading in the Shares on such date, on the next preceding date on which there
was trading) as reported in The Wall Street Journal (or other reporting service
approved by the Committee). In the event the Shares are not publicly traded at
the time a determination of its fair market value is required to be made
hereunder, the determination of fair market value shall be made in good faith by
the Committee.

                                       A-2
<PAGE>
     "Option" shall mean an option granted under Section 6(a) of the Plan.
Options granted under the Plan may constitute "incentive stock options" for
purposes of Section 422 of the Code or nonqualified stock options.

     "Other Stock-Based Award" shall mean an award granted pursuant to Section
6(g) of the Plan that is not otherwise specifically provided for, the value of
which is based in whole or in part upon the value of a Share.

     "Participant" shall mean any Director, Employee or Consultant granted an
Award under the Plan.

     "Performance Award" shall mean any right granted under Section 6(c) of the
Plan.

     "Performance Objectives" means the objectives, if any, established by the
Committee that are to be achieved with respect to an Award granted under this
Plan, which may be described in terms of Company-wide objectives, in terms of
objectives that are related to performance of a division, subsidiary, department
or function within the Company or an Affiliate in which the Participant
receiving the Award is employed or in individual or other terms, and which will
relate to the period of time determined by the Committee. The Performance
Objectives intended to qualify under Section 162(m) of the Code shall be with
respect to one or more of the following: earnings per share; earnings before
interest, taxes, depreciation and amortization expenses ("EBITDA"); earnings
before interest and taxes ("EBIT"); EBITDA, EBIT or earnings before taxes and
unusual or nonrecurring items as measured either against the annual budget or as
a ratio to revenue; market share; sales; costs; return on equity; operating cash
flow; production volumes compared to plan or prior years; reserves added;
discretionary cash flow; return on net capital employed; and stock price
performance. Which objectives to use with respect to an Award, the weighting of
the objectives if more than one is used, and whether the objective is to be
measured against a Company-established budget or target, an index or a peer
group of companies, shall be determined by the Committee in its discretion at
the time of grant of the Award. A Performance Objective need not be based on an
increase or a positive result and may include, for example, maintaining the
status quo or limiting economic losses.

     "Person" shall mean individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or political
subdivision thereof or other entity.

     "Phantom Shares" shall mean an Award of the right to receive Shares issued
at the end of a Restricted Period which is granted pursuant to Section 6(e) of
the Plan.

     "Restricted Period" shall mean the period established by the Committee with
respect to an Award during which the Award either remains subject to forfeiture
or is not exercisable by the Participant.

     "Restricted Stock" shall mean any Share, prior to the lapse of restrictions
thereon, granted under Sections 6(b) of the Plan.

     "Rule 16b-3" shall mean Rule 16b-3 promulgated by the SEC under the
Exchange Act, or any successor rule or regulation thereto as in effect from time
to time.

     "SEC" shall mean the Securities and Exchange Commission, or any successor
thereto.

     "Shares" or "Common Shares" or "Common Stock" shall mean the common stock
of the Company, $0.01 par value, and such other securities or property as may
become the subject of Awards under the Plan.

SECTION 3. Administration.

     The Plan shall be administered by the Committee. A majority of the
Committee shall constitute a quorum, and the acts of the members of the
Committee who are present at any meeting thereof at which a quorum is present,
or acts unanimously approved by the members of the Committee in writing, shall
be the acts of the Committee. Subject to the following, the Committee, in its
sole discretion, may delegate any or all of its powers and duties under the
Plan, including the power to grant Awards under the Plan, to the Chief Executive
Officer of the Company, subject to such limitations on such delegated powers and
duties as the Committee may impose. Upon any such delegation all references in
the Plan to the "Committee", other than in Section 8, shall be deemed to include
the Chief Executive Officer; provided, however, that such delegation shall not
limit the Chief Executive Officer's right to receive Awards under the Plan.
Notwithstanding the
                                       A-3
<PAGE>
foregoing, the Chief Executive Officer may not grant Awards to, or take any
action with respect to any Award previously granted to, a person who is an
officer or a member of the Board. Subject to the terms of the Plan and
applicable law, and in addition to other express powers and authorizations
conferred on the Committee by the Plan, the Committee shall have full power and
authority to: (i) designate Participants; (ii) determine the type or types of
Awards to be granted to a Participant; (iii) determine the number of Shares to
be covered by, or with respect to which payments, rights, or other matters are
to be calculated in connection with, Awards; (iv) determine the terms and
conditions of any Award; (v) determine whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash, Shares, other
securities, other Awards or other property, or canceled, forfeited, or suspended
and the method or methods by which Awards may be settled, exercised, canceled,
forfeited, or suspended; (vi) determine whether, to what extent, and under what
circumstances cash, Shares, other securities, other Awards, other property, and
other amounts payable with respect to an Award shall be deferred either
automatically or at the election of the holder thereof or of the Committee;
(vii) interpret and administer the Plan and any instrument or agreement relating
to an Award made under the Plan; (viii) establish, amend, suspend, or waive such
rules and regulations and appoint such agents as it shall deem appropriate for
the proper administration of the Plan; and (ix) make any other determination and
take any other action that the Committee deems necessary or desirable for the
administration of the Plan. Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations, and other decisions under or with
respect to the Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive, and binding
upon all Persons, including the Company, any Affiliate, any Participant, any
holder or beneficiary of any Award, any stockholder and any Employee.

SECTION 4. Shares Available for Awards.

     (a) Shares Available. Subject to adjustment as provided in Section 4(c),
the number of Shares with respect to which Awards may be granted under the Plan
shall be five million; provided, however, not more than two million of such five
million Shares may be issued with respect to Restricted Stock, Performance
Awards, Phantom Shares and Other Stock-Based Awards. If any Award is exercised,
paid, forfeited, terminated or canceled without the delivery of Shares, then the
Shares covered by such Award, to the extent of such payment, exercise,
forfeiture, termination or cancellation, shall again be Shares with respect to
which Awards may be granted.

     (b) Sources of Shares Deliverable Under Awards. Any Shares delivered
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares or of treasury Shares.

     (c) Adjustments. In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares such
that an adjustment is determined by the Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan, then the Committee shall, in such manner as
it may deem equitable, adjust any or all of (i) the number and type of Shares
(or other securities or property) with respect to which Awards may be granted,
(ii) the number and type of Shares (or other securities or property) subject to
outstanding Awards, and (iii) the grant or exercise price with respect to any
Award or, if deemed appropriate, make provision for a cash payment to the holder
of an outstanding Award.

SECTION 5. Eligibility.

     Any Employee, Director or Consultant shall be eligible to be designated a
Participant and receive an Award under the Plan. In addition, each Director
shall receive Awards automatically as provided in Section 7.

SECTION 6. Awards.

     (a) Options. Subject to the provisions of the Plan, the Committee shall
have the authority to determine the Participants to whom Options shall be
granted, the number of Shares to be covered by each Option, the

                                       A-4
<PAGE>
purchase price therefor and the conditions and limitations applicable to the
exercise of the Option, including the following terms and conditions and such
additional terms and conditions, as the Committee shall determine, that are not
inconsistent with the provisions of the Plan.

          (i) Exercise Price. The purchase price per Share purchasable under an
     Option shall be determined by the Committee at the time the Option is
     granted, but shall not be less than the Fair Market Value per Share on such
     grant date.

          (ii) Time and Method of Exercise. The Committee shall determine the
     time or times at which an Option may be exercised in whole or in part
     (which may include the achievement of one or more Performance Objectives),
     and the method or methods by which, and the form or forms (which may
     include, without limitation, cash, check acceptable to the Company, Shares
     already-owned for more than six months, outstanding Awards, Shares that
     would otherwise be acquired upon exercise of the Option, a
     "cashless-broker" exercise through procedures approved by the Company,
     other securities or other property, loans, notes approved by the Committee,
     or any combination thereof, having a Fair Market Value on the exercise date
     equal to the relevant exercise price) in which payment of the exercise
     price with respect thereto may be made or deemed to have been made.

          (iii) Incentive Stock Options. The terms of any Option granted under
     the Plan intended to be an incentive stock option shall comply in all
     respects with the provisions of Section 422 of the Code, or any successor
     provision, and any regulations promulgated thereunder. Incentive stock
     options may be granted only to employees of the Company and its parent
     corporation and subsidiary corporations, within the meaning of Section 424
     of the Code. To the extent the aggregate Fair Market Value of the Shares
     (determined as of the date of grant) of an Option to the extent exercisable
     for the first time during any calendar year (under all plans of the Company
     and its parent and subsidiary corporations) exceeds $100,000, such Option
     Shares in excess of $100,000 shall be nonqualified stock options.

          (iv) Limits. The maximum number of Options that may be granted to any
     Participant during any calendar year shall not exceed 1.0 million Shares.

     (b) Restricted Stock. Subject to the provisions of the Plan, the Committee
shall have the authority to determine the Participants to whom Restricted Stock
shall be granted, the number of Shares of Restricted Stock to be granted to each
such Participant, the duration of the Restricted Period during which, and the
conditions, including Performance Objectives, if any, under which if not
achieved, the Restricted Stock may be forfeited to the Company, and the other
terms and conditions of such Awards. Unless subject to the achievement of
Performance Objectives or a special determination is made by the Committee as to
a shorter Restricted Period, the Restricted Period shall not be less than three
years.

          (i) Dividends. Dividends paid on Restricted Stock may be paid directly
     to the Participant, may be subject to risk of forfeiture and/or transfer
     restrictions during any period established by the Committee or sequestered
     and held in a bookkeeping cash account (with or without interest) or
     reinvested on an immediate or deferred basis in additional shares of Common
     Stock, which credit or shares may be subject to the same restrictions as
     the underlying Award or such other restrictions, all as determined by the
     Committee in its discretion.

          (ii) Registration. Any Restricted Stock may be evidenced in such
     manner as the Committee shall deem appropriate, including, without
     limitation, book-entry registration or issuance of a stock certificate or
     certificates. In the event any stock certificate is issued in respect of
     Restricted Stock granted under the Plan, such certificate shall be
     registered in the name of the Participant and may bear an appropriate
     legend referring to the terms, conditions, and restrictions applicable to
     such Restricted Stock or such legend may be noted in the records of the
     transfer agent.

          (iii) Forfeiture and Restrictions Lapse. Except as otherwise
     determined by the Committee or the terms of the Award that granted the
     Restricted Stock, upon termination of a Participant's employment (as
     determined under criteria established by the Committee) for any reason
     during the applicable Restricted Period, all Restricted Stock shall be
     forfeited by the Participant and reacquired by the Company. Unrestricted
     Shares, evidenced in such manner as the Committee shall deem appropriate,
     shall be issued to the holder of Restricted Stock promptly after the
     applicable restrictions have lapsed or otherwise been satisfied.
                                       A-5
<PAGE>
          (iv) Transfer Restrictions. During the Restricted Period, Restricted
     Stock will be subject to the limitations on transfer as provided in Section
     6(i)(iii).

          (v) Limits. The maximum number of Shares of Restricted Stock that may
     be granted to any Participant during any calendar year shall not exceed
     500,000 shares.

     (c) Performance Awards. The Committee shall have the authority to determine
the Participants who shall receive a Performance Award, which shall be
denominated as a cash amount (e.g., $100 per award unit) at the time of grant
and confer on the Participant the right to receive payment of such Award, in
whole or in part, upon the achievement of such Performance Objectives during
such performance periods as the Committee shall establish with respect to the
Award.

          (i) Terms and Conditions. Subject to the terms of the Plan and any
     applicable Award Agreement, the Committee shall determine the Performance
     Objectives to be achieved during any performance period, the length of any
     performance period, the amount of any Performance Award and the amount of
     any payment or transfer to be made pursuant to any Performance Award.

          (ii) Payment of Performance Awards. Performance Awards, to the extent
     earned, shall be paid (in cash and/or in Shares, in the sole discretion of
     the Committee) in a lump sum following the close of the performance period.

          (iii) Limits. The maximum value of Performance Awards that may be
     granted to any Participant during any calendar year shall not exceed $1.0
     million.

     (d) Bonus Shares. The Committee shall have the authority, in its
discretion, to grant Bonus Shares to Participants. Each Bonus Share shall
constitute a transfer of an unrestricted Share to the Participant, without other
payment therefor, as additional compensation for the Participant's services to
the Company. Bonus Shares shall be in lieu of a cash bonus that otherwise would
be granted to the Participant.

     (e) Phantom Shares. The Committee shall have the authority to grant Awards
of Phantom Shares to Participants upon such terms and conditions as the
Committee may determine.

          (i) Terms and Conditions. Each Phantom Share Award shall constitute an
     agreement by the Company to issue or transfer a specified number of Shares
     or pay an amount of cash equal to a specified number of Shares, or a
     combination thereof to the Participant in the future, subject to the
     fulfillment during the Restricted Period of such conditions, including
     Performance Objectives, if any, as the Committee may specify at the date of
     grant. During the Restricted Period, the Participant shall not have any
     right to transfer any rights under the subject Award, shall not have any
     rights of ownership in the Phantom Shares and shall not have any right to
     vote such shares.

          (ii) Dividends. Any Phantom Share award may provide that amount equal
     to any or all dividends or other distributions paid on Shares during the
     Restricted Period be credited in a cash bookkeeping account (without
     interest) or that equivalent additional Phantom Shares be awarded, which
     account or shares may be subject to the same restrictions as the underlying
     Award or such other restrictions as the Committee may determine.

          (iii) Limits. The maximum number of Phantom Shares that may be granted
     to any Participant during any calendar year shall not exceed 500,000.

     (f) Cash Awards. The Committee shall have the authority to determine the
Participants to whom Cash Awards shall be granted, the amount, and the terms or
conditions, if any, as additional compensation for the Participant's services to
the Company or its Affiliates. A Cash Award may be granted (simultaneously or
subsequently) separately or in tandem with another Award and may entitle a
Participant to receive a specified amount of cash from the Company upon such
other Award becoming taxable to the Participant, which cash amount may be based
on a formula relating to the anticipated taxable income associated with such
other Award and the payment of the Cash Award.

     (g) Other Stock-Based Awards. The Committee may grant to Participants an
Other Stock-Based Award, which shall consist of a right which is an Award
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Shares as is deemed by the Committee to be
consistent

                                       A-6
<PAGE>
with the purposes of the Plan. Subject to the terms of the Plan, including the
Performance Objectives, if any, applicable to such Award, the Committee shall
determine the terms and conditions of any such Other Stock-Based Award. The
maximum number of Shares or the value for which Other Stock-Based Awards may be
granted to any Participant during any calendar year shall not exceed 500,000
shares, if the Award is in Shares, or $1.0 million, if the Award is denominated
in dollars.

     (h) Replacement Awards. The Committee shall have the authority to grant an
Award to any Participant conditioned upon such Participant canceling his or her
rights with respect to a similar award granted to the Participant under another
plan of the Company, including, without limitation, the Company's 1999 Retention
Stock Compensation Plan.

     (i) General.

          (i) Awards May Be Granted Separately or Together. Awards may, in the
     discretion of the Committee, be granted either alone or in addition to, in
     tandem with, or in substitution for any other Award granted under the Plan
     or any award granted under any other plan of the Company or any Affiliate.
     Awards granted in addition to or in tandem with other Awards or awards
     granted under any other plan of the Company or any Affiliate may be granted
     either at the same time as or at a different time from the grant of such
     other Awards or awards.

          (ii) Forms of Payment by Company Under Awards. Subject to the terms of
     the Plan and of any applicable Award Agreement, payments or transfers to be
     made by the Company or an Affiliate upon the grant, exercise or payment of
     an Award may be made in such form or forms as the Committee shall
     determine, including, without limitation, cash, Shares, other securities,
     other Awards or other property, or any combination thereof, and may be made
     in a single payment or transfer, in installments, or on a deferred basis,
     in each case in accordance with rules and procedures established by the
     Committee. Such rules and procedures may include, without limitation,
     provisions for the payment or crediting of reasonable interest on
     installment or deferred payments.

          (iii) Limits on Transfer of Awards.

             (A) Except as provided in (C) below, each Award, and each right
        under any Award, shall be exercisable only by the Participant during the
        Participant's lifetime, or by the person to whom the Participant's
        rights shall pass by will or the laws of descent and distribution.

             (B) Except as provided in (C) below, no Award and no right under
        any such Award may be assigned, alienated, pledged, attached, sold or
        otherwise transferred or encumbered by a Participant otherwise than by
        will or by the laws of descent and distribution (or, in the case of
        Restricted Stock, to the Company) and any such purported assignment,
        alienation, pledge, attachment, sale, transfer or encumbrance shall be
        void and unenforceable against the Company or any Affiliate.

             (C) Notwithstanding anything in the Plan to the contrary, to the
        extent specifically provided by the Committee with respect to a grant, a
        nonqualified stock option may be transferred to immediate family members
        or related family trusts, or similar entities on such terms and
        conditions as the Committee may establish.

          (iv) Term of Awards. The term of each Award shall be for such period
     as may be determined by the Committee; provided, that in no event shall the
     term of any Award exceed a period of 10 years from the date of its grant.

          (v) Share Certificates. All certificates for Shares or other
     securities of the Company or any Affiliate delivered under the Plan
     pursuant to any Award or the exercise thereof shall be subject to such stop
     transfer orders and other restrictions as the Committee may deem advisable
     under the Plan or the rules, regulations, and other requirements of the
     SEC, any stock exchange upon which such Shares or other securities are then
     listed, and any applicable federal or state laws, and the Committee may
     cause a legend or legends to be put on any such certificates to make
     appropriate reference to such restrictions.

          (vi) Consideration for Grants. Awards may be granted for no cash
     consideration or for such consideration as the Committee determines
     including, without limitation, such minimal cash consideration as may be
     required by applicable law.

                                       A-7
<PAGE>
          (vii) Delivery of Shares or other Securities and Payment by
     Participant of Consideration. No Shares or other securities shall be
     delivered pursuant to any Award until payment in full of any amount
     required to be paid pursuant to the Plan or the applicable Award Agreement
     (including, without limitation, any exercise price, tax payment or tax
     withholding) is received by the Company. Such payment may be made by such
     method or methods and in such form or forms as the Committee shall
     determine, including, without limitation, cash, Shares, other securities,
     other Awards or other property, withholding of Shares, cashless exercise
     with simultaneous sale, or any combination thereof; provided that the
     combined value, as determined by the Committee, of all cash and cash
     equivalents and the Fair Market Value of any such Shares or other property
     so tendered to the Company, as of the date of such tender, is at least
     equal to the full amount required to be paid pursuant to the Plan or the
     applicable Award Agreement to the Company.

SECTION 7. Automatic Director Awards.

     Each Director who is elected or appointed to the Board for the first time
after the effective date of this Plan shall automatically receive, on the date
of his or her election or appointment, a nonqualified Option for 10,000 shares
of Common Stock.

     On the date of the regular Annual Meeting of Stockholders of the Company in
each year that this Plan is in effect (commencing with the Annual Meeting of
Stockholders in 2000), each Director who is serving on that day, including a
Director who was elected for the first time at such annual meeting, shall
automatically receive the following:

     (a) Director Options. A nonqualified Option grant for 5,000 shares of
     Common Stock. Each such Option will be subject to all of the limitations
     contained in the following provisions:

          (i) Each such Director Option shall become exercisable (vested) six
     months and one day after its grant date.

          (ii) The purchase price of each Director Option shall be the Fair
     Market Value of the Common Stock on its grant date.

          (iii) Each such Director Option may be exercised in full at one time
     or in part from time to time by giving written notice to the Company,
     stating the number of shares of Common Stock with respect to which the
     Director Option is being exercised, accompanied by payment in full of the
     option purchase price for such shares, which payment may be (i) in cash by
     check acceptable to the Company, (ii) by the transfer to the Company of
     shares of Common Stock already owned by the optionee having an aggregate
     Fair Market Value at the date of exercise equal to the aggregate option
     purchase price, (iii) from the proceeds of a sale through a broker of some
     or all of the shares to which such exercise relates, or (iv) by a
     combination of such methods of payment.

          (iv) Each Director Option shall expire 10 years from the grant date
     thereof, but shall be subject to earlier termination as follows: (1) to the
     extent exercisable as of the date a Director ceases to serve as a director
     of the Company (the "Resignation Date"), the Director Option may be
     exercised only within three years of such Resignation Date by the Director
     or the Director's legal representative or the person to whom the Director's
     rights shall pass by will or the laws of descent and distribution, as the
     case may be, and to the extent not so exercised shall terminate on the
     third anniversary of the Resignation Date and (2) to the extent not
     exercisable as of the Resignation Date, the Director Option shall terminate
     on such Resignation Date.

     (b) Restricted Stock. A Restricted Stock Award for 4,000 shares of Common
     Stock.

          (i) The Restricted Period shall lapse on an Award of Restricted Stock
     granted to a Director pursuant to this Section upon the earlier of the date
     that is six months and one day after the grant date, the Director's death,
     termination from the Board either after reaching age 65 or due to a
     disability. If a Director ceases to be a member of the Board during a
     Restricted Period for any other reason, the Restricted Stock subject to
     such Restricted Period shall be forfeited.

                                       A-8
<PAGE>
          (ii) Each certificate representing Restricted Stock awarded hereunder
     shall be registered in the name of the Director and, during the Restricted
     Period, shall be left on deposit with the Company with a stock power
     endorsed in blank. Directors shall have the right to receive dividends paid
     on their Restricted Stock and to vote such shares. Restricted Stock may not
     be sold, pledged, assigned, transferred or encumbered during the Restricted
     Period other than by will or the laws of descent and distribution.

     In addition, each Director who is serving on the date of the Annual Meeting
of Stockholders in 2000 shall receive a grant of 2,000 Bonus Shares on that
date.

     In the event that the number of shares of Common Stock available for
automatic Director Awards under this Plan is insufficient to make all such
automatic Awards provided for in this Section on the applicable date, then all
Directors who are entitled to a grant on such date shall share ratably in the
number of shares then available for grant under this Plan (Restricted Stock
Awards shall be made first, then the Director Options), and shall have no right
to receive a grant with respect to the deficiencies in the number of available
shares and all future grants under this Section.

SECTION 8. Amendment and Termination.

     Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:

     (a) Amendments to the Plan. Except as required by applicable law or the
rules of the principal securities market on which the shares are traded and
subject to paragraph (b) below, the Board or the Committee may amend, alter,
suspend, discontinue, or terminate the Plan without the consent of any
stockholder, Participant, other holder or beneficiary of an Award, or other
Person; provided, however, no such amendment may be made without stockholder
approval, if such amendment would (i) materially increase the number of Shares
authorized under the Plan, but excluding any adjustment made pursuant to Section
4(c), or (ii) materially increase the Persons eligible to receive Awards under
the Plan.

     (b) Amendments to Awards. The Committee may waive any conditions or rights
under, amend any terms of, or alter any Award theretofore granted, provided no
change, other than pursuant to paragraph (c) or (d), in any Award shall reduce
the benefit to Participant without the consent of such Participant. In addition,
the Committee may not reduce the exercise price of an Option, except as provided
in Section 4(c), without the approval of the stockholders of the Company.

     (c) Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. Subject to paragraph (d) below, the Committee is hereby
authorized to make adjustments in the terms and conditions of, and the criteria
included in, Awards in recognition of unusual or nonrecurring events (including,
without limitation, the events described in Section 4(c) of the Plan) affecting
the Company, any Affiliate, or the financial statements of the Company or any
Affiliate, or of changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.

     (d) Section 162(m). The Committee, in its sole discretion and without the
consent of the Participant, may amend (i) any stock-based Award to reflect (1) a
change in corporate capitalization, such as a stock split or dividend, (2) a
corporate transaction, such as a corporate merger, a corporate consolidation,
any corporate separation (including a spinoff or other distribution of stock or
property by a corporation), any corporate reorganization (whether or not such
reorganization comes within the definition of such term in Section 368 of the
Code), (3) any partial or complete corporate liquidation, or (4) a change in
accounting rules required by the Financial Accounting Standards Board and (ii)
any Award that is not intended to meet the requirements of Section 162(m) of the
Code, to reflect any significant event that the Committee, in its sole
discretion, believes to be appropriate to reflect the original intent in the
grant of the Award. With respect to an Award that is subject to Section 162(m)
of the Code, the Committee (i) shall not take any action that would disqualify
such Award and (ii) must first certify that the Performance Objectives, if
applicable, have been achieved before the Award may be paid.
                                       A-9
<PAGE>

SECTION 9. Change in Control.

     (a) Subject to paragraph (b) below, and except to the extent an Award
Agreement expressly provides to the contrary, in the event of a Change in
Control of the Company all outstanding Awards automatically shall become fully
vested immediately prior to such Change in Control (or such earlier time as set
by the Committee), all restrictions, if any, with respect to such Awards shall
lapse, all performance criteria, if any, with respect to such Awards shall be
deemed to have been met at the target level, and unless the Company survives as
an independent publicly traded company, all Options outstanding at the time of
the event or transaction shall terminate, except to the extent provision is made
in writing in connection with such event or transaction for the continuation of
the Plan and/or the assumption of the Options theretofore granted, or for the
substitution for such Options of new options covering the stock of a successor
entity, or the parent or subsidiary thereof, with appropriate adjustments as to
the number and kinds of shares and exercise prices, in which event the Plan and
Options theretofore granted shall continue in the manner and under the terms so
provided.

     (b) If a Participant is a "disqualified individual" (as defined in Section
280G of the Code) and the accelerated vesting of an Award and/or the termination
of the Restricted Period occurs with respect to a Change in Control, together
with any other payments which the Participant has the right to receive from the
Company and its Affiliates, whether or not under this Plan, would constitute a
"parachute payment" (as defined in Section 280G of the Code), then, except to
the extent such Participant has entered into an Award Agreement or a written
severance or employment agreement with the Company that expressly provides for a
"parachute tax gross-up", such accelerated vesting and/or termination of the
Restricted Period provided under the paragraph above shall be reduced to the
extent necessary (beginning with Options) so that the present value thereof (as
determined for parachute purposes) to the Participant will be $1.00 less than
three times the Participant's "base amount" (as defined in Section 280G of the
Code), but only if such reduction produces a better net after-tax position to
the Participant. Such determinations shall be made by the Company in good faith.

SECTION 10. General Provisions.

     (a) No Rights to Awards. No Director, Employee, Consultant or other Person
shall have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Consultants, or holders or beneficiaries
of Awards. The terms and conditions of Awards need not be the same with respect
to each recipient.

     (b) Withholding. The Company or any Affiliate is authorized to withhold
from any Award, from any payment due or transfer made under any Award or under
the Plan or from any compensation or other amount owing to a Participant the
amount (in cash, Shares, other securities, Shares that would otherwise be issued
pursuant to such Award, other Awards or other property) of any applicable taxes
payable in respect of an Award, its exercise, the lapse of restrictions thereon,
or any payment or transfer under an Award or under the Plan and to take such
other action as may be necessary in the opinion of the Company to satisfy all
obligations for the payment of such taxes. Notwithstanding the above, a
Participant who is subject to Rule 16b-3 may direct the Company to satisfy such
Participant's tax withholding obligation through the "constructive" tender of
already-owned Shares or the withholding of Shares otherwise to be acquired upon
the exercise or payment of such Award.

     (c) No Right to Employment. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or
any Affiliate. Further, the Company or an Affiliate may at any time dismiss a
Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any Award Agreement.

     (d) Governing Law. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Delaware and applicable federal law.

     (e) Severability. If any provision of the Plan or any Award is or becomes
or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as
to any Person or Award, or would disqualify the Plan or any Award under any law
deemed applicable by the Committee, such provision shall be construed or deemed

                                      A-10
<PAGE>

amended to conform to the applicable laws, or if it cannot be construed or
deemed amended without, in the determination of the Committee, materially
altering the intent of the Plan or the Award, such provision shall be stricken
as to such jurisdiction, Person or Award and the remainder of the Plan and any
such Award shall remain in full force and effect.

     (f) Other Laws. The Committee may refuse to issue or transfer any Shares or
other consideration under an Award if, acting in its sole discretion, it
determines that the issuance of transfer or such Shares or such other
consideration might violate any applicable law or regulation or entitle the
Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary.

     (g) No Trust or Fund Created. Neither the Plan nor the Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant or any other
Person. To the extent that any Person acquires a right to receive payments from
the Company or any Affiliate pursuant to an Award, such right shall be no
greater than the right of any general unsecured creditor of the Company or any
Affiliate.

     (h) No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award, and the Committee shall determine whether
cash, other securities, or other property shall be paid or transferred in lieu
of any fractional Shares or whether such fractional Shares or any rights thereto
shall be canceled, terminated, or otherwise eliminated.

     (i) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference, Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.

SECTION 11. Designation of Beneficiary.

     Each Participant to whom an Award has been made under this Plan may
designate a beneficiary or beneficiaries (which beneficiary may be an entity
other than a natural person) to exercise any rights or receive any payment that
under the terms of such Award may become exercisable or payable on or after the
Participant's death. At any time, and from time to time, any such designation
may be changed or cancelled by the Participant without the consent of any such
beneficiary. Any such designation, change or cancellation must be on a form
provided for that purpose by the Company and shall not be effective until
received by the Company. If no beneficiary has been named by a deceased
Participant, or the designated beneficiaries have predeceased the Participant,
the beneficiary shall be the Participant's estate, If a Participant designates
more than one beneficiary, any such exercise or payment under this Plan shall be
made in equal shares unless the Participant has designated otherwise, in which
case the exercise or payment shall be made in the shares designated by the
Participant.

SECTION 12. Effective Date of the Plan.

     The Plan shall become effective upon its adoption by the Board; however, no
Award may become exercisable or payable unless and until the Plan is approved by
the stockholders of the Company at (1) the first annual meeting of the
stockholders following the date the Plan is adopted by the Board or (2) if
earlier, a special meeting of the stockholders at which the Plan is presented
for approval by the stockholders. In the event such stockholder approval is not
obtained, all Awards outstanding on such date, whichever is applicable, shall be
automatically cancelled without payment.

SECTION 13. Term of the Plan.

     No Award shall be granted under the Plan after the 10th anniversary of the
date the Plan is adopted by the Board. However, unless otherwise expressly
provided in the Plan or in an applicable Award Agreement, any Award granted
prior to such termination, and the authority of the Board or the Committee to
amend, alter, adjust, suspend, discontinue, or terminate any such Award or to
waive any conditions or rights under such Award, shall extend beyond such
termination date.

                                      A-11

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