Document:

Carriage Services, Inc Second Amended and Restated 2006 Long-Term Incentive Plan

 Exhibit 10.1 
 CARRIAGE SERVICES, INC. 
 SECOND AMENDED AND RESTATED 

2006 LONG-TERM INCENTIVE PLAN 
 ARTICLE I 
 ESTABLISHMENT AND PURPOSE 

1.1 Establishment and Purpose. Carriage Services, Inc. (“Carriage”) hereby further amends and restates the Carriage
Services, Inc. 2006 Long-Term Incentive Plan (the “Plan”) as set forth in this document. The purposes of the Plan are to attract and retain highly qualified individuals to perform services for Carriage and its Affiliates and to serve on
Carriage’s Board of Directors, to further align the interests of those individuals with those of the stockholders of Carriage, and closely link compensation with Company performance. Carriage is committed to creating long-term stockholder
value. Carriage’s compensation philosophy is based on a belief that Carriage can best create stockholder value if employees and directors act and are rewarded as business owners. Carriage believes that an equity stake through equity
compensation programs effectively aligns employee and stockholder interests by motivating and rewarding performance that will enhance stockholder value. 
 1.2 Effectiveness and Term. The Plan originally became effective as of May 25, 2006, and was amended and restated on May 18, 2010 to incorporate the previous amendment to the Plan and
certain other changes. The Plan is hereby further amended and restated as of May 24, 2012 (the “Effective Date”) to incorporate certain changes. Unless terminated earlier by the Board pursuant to Section 13.1, the Plan shall
terminate on the day prior to the tenth anniversary of the Effective Date. Notwithstanding the foregoing, this amendment and restatement of the Plan is expressly conditioned upon the approval by the holders of a majority of all shares of Common
Stock present, or represented, and entitled to vote at a meeting of Carriage’s stockholders. If the stockholders of Carriage should fail to so approve the Plan, this amendment and restatement of the Plan shall not be of any force or effect.

 ARTICLE II 
 DEFINITIONS 
 2.1 “Affiliate” means (a) with
respect to Incentive Stock Options, a “parent corporation” or a “subsidiary corporation” of Carriage, as those terms are defined in Sections 424(e) and (f) of the Code, respectively, and (b) with respect to other
Awards, (i) a “parent corporation” or a subsidiary corporation” of Carriage as defined in (a) above, or (ii) any other person with whom Carriage would be considered a single employer under Section 414(b) of the
Code (controlled group of corporations) or Section 414(c) of the Code (partnerships, proprietorships, etc., under common control), provided that in applying Code Sections 1563(a)(1), (2) and (3) for purposes of determining a
controlled group of corporations under Section 414(b) of the Code, the language “at least 50 percent” shall be used instead of “at least 80 percent” each place it appears in Code Sections 1563(a)(1),
(2) and (3), and in applying Treasury Regulation Section 1.414(c)-2 for purposes of determining trades or businesses (whether or not incorporated) that are under common control for purposes of Section 414(c) of the Code, the
language “at least 50 percent” shall be used instead of “at least 80 percent” each place it appears in Treasury Regulation Section 1.414(c)-2. 

2.2 “ASC Topic 718” means Accounting Standards Codification Topic 718, Compensation – Stock Compensation, or
any successor accounting standard. 
 2.3 “Award” means an award granted to a Participant in the form of
Options, SARs, Restricted Stock, Performance Awards, Stock Awards or Other Incentive Awards, whether granted singly or in combination. 

 2.4 “Award Agreement” means a written agreement between Carriage and
a Participant that sets forth the terms, conditions, restrictions and limitations applicable to an Award. 
 2.5
“Board” means the Board of Directors of Carriage. 
 2.6 “Carriage” means Carriage
Services, Inc., a Delaware corporation, or any successor thereto. 
 2.7 “Cause” means a finding by the
Committee of acts or omissions constituting, in the Committee’s reasonable judgment, (a) a breach of duty by the Participant in the course of his employment involving fraud, acts of dishonesty (other than inadvertent acts or omissions),
disloyalty to the Company, or moral turpitude constituting criminal felony; (b) conduct by the Participant that is materially detrimental to the Company, monetarily or otherwise, or reflects unfavorably on the Company or the Participant to such
an extent that the Company’s best interests reasonably require the termination of the Participant’s employment; (c) acts or omissions of the Participant materially in violation of his obligations under any written employment or other
agreement between the Participant and the Company or at law; (d) the Participant’s failure to comply with or enforce Company policies concerning equal employment opportunity, including engaging in sexually or otherwise harassing conduct;
(e) the Participant’s repeated insubordination; (f) the Participant’s failure to comply with or enforce, in any material respect, all other personnel policies of the Company; (g) the Participant’s failure to devote his
full (or other required) working time and best efforts to the performance of his responsibilities to the Company; or (h) the Participant’s conviction of, or entry of a plea agreement or consent decree or similar arrangement with respect to
a felony or any violation of federal or state securities laws. 
 2.8 “Code” means the Internal Revenue
Code of 1986, as amended from time to time, including regulations thereunder and successor provisions and regulations. 
 2.9
“Committee” means the Compensation Committee of the Board or such other committee of the Board as may be designated by the Board to administer the Plan, which committee shall consist of two or more members of the Board;
provided, however, that with respect to the application of the Plan to Awards made to Outside Directors, the “Committee” shall be the Board. During such time as the Common Stock is registered under Section 12 of the Exchange Act, each
member of the Committee shall be an Independent Director. To the extent that no Committee exists that has the authority to administer the Plan, the functions of the Committee shall be exercised by the Board. 

2.10 “Common Stock” means the common stock of Carriage, $.01 par value per share, or any stock or other
securities of hereafter issued or issuable in substitution or exchange for the Common Stock. 
 2.11
“Company” means Carriage and any Affiliate. 
 2.12 “Corporate Change” means
(a) the dissolution or liquidation of Carriage; (b) a reorganization, merger or consolidation of Carriage with one or more corporations (other than a merger or consolidation effecting a reincorporation of Carriage in another state or any
other merger or consolidation in which the stockholders of the surviving corporation and their proportionate interests therein immediately after the merger or consolidation are substantially identical to the stockholders of Carriage and their
proportionate interests therein immediately prior to the merger or consolidation) (collectively, a “Corporate Change Merger”); (c) the sale of all or substantially all of the assets of the Company; or (d) the occurrence of a
Change in Control. A “Change in Control” shall be deemed to have occurred if (i) individuals who were directors of Carriage immediately prior to a Control Transaction shall cease, within two years of such Control Transaction to
constitute a majority of the Board (or of the Board of Directors of any successor to 

  
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Carriage or to a company which has acquired all or substantially all its assets) other than by reason of an increase in the size of the membership of the applicable Board that is approved by at
least a majority of the individuals who were directors of Carriage immediately prior to such Control Transaction or (ii) any entity, person or Group acquires shares of Carriage in a transaction or series of transactions that result in such
entity, person or Group directly or indirectly owning beneficially 50% or more of the outstanding shares of Common Stock. As used herein, “Control Transaction” means (A) any tender offer for or acquisition of capital stock of Carriage
pursuant to which any person, entity, or Group directly or indirectly acquires beneficial ownership of 20% or more of the outstanding shares of Common Stock; (B) any Corporate Change Merger of Carriage; (C) any contested election of
directors of Carriage; or (D) any combination of the foregoing, any one of which results in a change in voting power sufficient to elect a majority of the Board. As used herein, “Group” means persons who act “in concert” as
described in Sections 13(d)(3) and/or 14(d)(2) of the Exchange Act. 
 2.13 “Effective Date” means the
date the Plan became effective as provided in Section 1.2. 
 2.14 “Employee” means an employee of
the Company; provided, however, that the term “Employee” does not include an Outside Director. 
 2.15
“Exchange Act” means the Securities Exchange Act of 1934, as amended. 
 2.16 “Fair Market
Value” means (a) for so long as the Common Stock is listed on the New York Stock Exchange or any other national stock exchange, the average of the highest and lowest selling prices for such stock as quoted on such exchange for the date
the Award is granted (or if there are no sales for such date of grant, then for the last preceding business day on which there were sales), (b) if the Common Stock is traded in the over-the-counter market, the average of the representative
closing bid and asked prices as reported by NASDAQ for the date the Award is granted (or if there was no quoted price for such date of grant, then for the last preceding business day on which there was a quoted price), or (c) if the Common
Stock is traded in the NASDAQ National Market System, the average of the highest and lowest selling prices for such stock as quoted on the NASDAQ National Market System for the date the Award is granted (or if there are no sales for such date of
grant, then for the last preceding business day on which there were sales), or (d) if the Common Stock is not reported or quoted by any such organization, fair market value of the Common Stock as determined in good faith by the Committee using
a “reasonable application of a reasonable valuation method” within the meaning Section 409A of the Code and the regulations thereunder. Notwithstanding the foregoing, “Fair Market Value” with respect to an Incentive Stock
Option shall mean fair market value as determined in good faith by the Committee within the meaning of Section 422 of the Code. 
 2.17 “Good Reason” means any of the following actions if taken without the Participant’s prior written consent: (a) any material failure by the Company to comply with its
obligations under the terms of a written employment agreement; (b) any demotion of the Participant as evidenced by a material reduction in the Participant’s responsibilities, duties, compensation, or benefits; or (c) any permanent
relocation of the Participant’s place of business to a location 50 miles or more from the then-current location. Neither a transfer of employment among Carriage and any of its Affiliates, a change in any co-employment relationship, nor a mere
change in job title or reporting structure constitutes “Good Reason.” 
 2.18 “Grant Date”
means the date an Award is determined to be effective by the Committee upon the grant of such Award. 
 2.19
“Inability to Perform” means and shall be deemed to have occurred if the Participant has been determined under the Company’s or any co-employer’s long-term disability plan to be eligible for long-term disability
benefits. In the absence of the Participant’s participation in, application for benefits 

  
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under, or existence of such a plan, “Inability to Perform” means a finding by the Committee in its sole judgment that the Participant is, despite any reasonable accommodation required
by law, unable to perform the essential functions of his position because of an illness or injury for (a) 60% or more of the normal working days during six consecutive calendar months or (b) 40% or more of the normal working days during
twelve consecutive calendar months. 
 2.20 “Incentive Stock Option” means an Option that is intended to
meet the requirements of Section 422(b) of the Code. 
 2.21 “Independent Director” means a member
of the Board who: (a) meets the independence requirements of the New York Stock Exchange (or such other exchange or quotation system upon which the shares of Common Stock are listed or quoted), (b) from and after the date on which the
remuneration paid pursuant to the Plan becomes subject to the deduction limitation under Section 162(m) of the Code, qualifies as an “outside director” under Section 162(m) of the Code, (c) qualifies as a “non-employee
director” of Carriage under Rule 16b-3, and (d) satisfies independence criteria under any other applicable laws or regulations relating to the issuance of shares of Common Stock to Employees. 

2.22 “NASDAQ” means The NASDAQ Stock Market, Inc. 

2.23 “Nonqualified Stock Option” means an Option that is not an Incentive Stock Option. 

2.24 “Option” means an option to purchase shares of Common Stock granted to a Participant pursuant to
Article VII. An Option may be either an Incentive Stock Option or a Nonqualified Stock Option, as determined by the Committee. 
 2.25 “Other Incentive Award” means an incentive award granted to a Participant pursuant to Article XI. 

2.26 “Outside Director” means a member of the Board who is either: (a) an Independent Director, or
(b) another member of the Board who may be an Employee but who is not an executive officer of Carriage. 
 2.27
“Participant” means an Employee or Outside Director who has been granted an Award; provided, however, that no Award that may be settled in Common Stock may be issued to a Participant that is not a natural person. 

2.28 “Performance Award” means an Award granted to a Participant pursuant to Article X to receive cash or
Common Stock conditioned in whole or in part upon the satisfaction of specified performance criteria. 
 2.29
“Permitted Transferee” shall have the meaning given such term in Section 14.4. 
 2.30
“Plan” means the Carriage Services, Inc. Amended and Restated 2006 Long-Term Incentive Plan, as in effect and amended from time to time. 
 2.31 “Restricted Period” means the period established by the Committee with respect to an Award during which the Award remains subject to forfeiture. 

2.32 “Restricted Stock” means a share of Common Stock granted to a Participant pursuant to Article IX that
is subject to such terms, conditions, and restrictions as may be determined by the Committee. 

  
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 2.33 “Rule 16b-3” means Rule 16b-3 promulgated by the SEC
under the Exchange Act, or any successor rule or regulation that may be in effect from time to time. 
 2.34
“SEC” means the United States Securities and Exchange Commission, or any successor agency or organization. 

2.35 “Section 16 Participant” means a Participant who is subject to Section 16 of the Exchange Act. 

2.36 “Securities Act” means the Securities Act of 1933, as amended. 

2.37 “Stock Appreciation Right” or “SAR” means a right granted to a Participant pursuant to
Article VIII with respect to a share of Common Stock to receive upon exercise cash, Common Stock or a combination of cash and Common Stock, equal to the appreciation in value of a share of Common Stock. 

2.38 “Stock Award” means a stock award granted to a Participant pursuant to Article XI. 

ARTICLE III 

PLAN ADMINISTRATION 
 3.1 Plan Administrator and Discretionary Authority. The Plan shall be administered by the Committee. The Committee shall have total and exclusive responsibility to control, operate, manage and
administer the Plan in accordance with its terms. The Committee shall have all the authority that may be necessary or helpful to enable it to discharge its responsibilities with respect to the Plan. Without limiting the generality of the preceding
sentence, the Committee shall have the exclusive right to: (a) interpret the Plan and the Award Agreements executed hereunder; (b) decide all questions concerning eligibility for, and the amount of, Awards granted under the Plan;
(c) construe any ambiguous provision of the Plan or any Award Agreement; (d) prescribe the form of Award Agreements; (v) correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award Agreement;
(e) issue administrative guidelines as an aid to administering the Plan and make changes in such guidelines as the Committee from time to time deems proper; (f) make regulations for carrying out the Plan and make changes in such
regulations as the Committee from time to time deems proper; (g) determine whether Awards should be granted singly or in combination; (h) to the extent permitted under the Plan, grant waivers of Plan terms, conditions, restrictions and
limitations; (i) accelerate the exercise, vesting or payment of an Award when such action or actions would be in the best interests of the Company; (j) require Participants to hold a stated number or percentage of shares of Common Stock
acquired pursuant to an Award for a stated period; and (k) take any and all other actions the Committee deems necessary or advisable for the proper operation or administration of the Plan. The Committee shall have authority in its sole
discretion with respect to all matters related to the discharge of its responsibilities and the exercise of its authority under the Plan, including without limitation its construction of the terms of the Plan and its determination of eligibility for
participation in, and the terms of Awards granted under, the Plan. The decisions of the Committee and its actions with respect to the Plan shall be final, conclusive and binding on all persons having or claiming to have any right or interest in or
under the Plan, including without limitation Participants and their respective Permitted Transferees, estates, beneficiaries and legal representatives. 
 3.2 Liability; Indemnification. No member of the Committee, nor any person to whom it has delegated authority, shall be personally liable for any action, interpretation or determination made in
good faith with respect to the Plan or Awards granted hereunder, and each member of the Committee (or delegatee of the Committee) shall be fully indemnified and protected by Carriage with respect to any liability he may incur with respect to any
such action, interpretation or determination, to the maximum extent permitted by applicable law. 

  
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 ARTICLE IV 
 SHARES SUBJECT TO THE PLAN 
 4.1 Available Shares. 

(a) Subject to adjustment as provided in Section 4.2, the maximum number of shares of Common Stock that shall be
available for grant of Awards under the Plan shall be 5,000,000 shares of Common Stock. 
 (b) The maximum number
of shares of Common Stock that may be subject to Incentive Stock Options granted under the Plan is 5,000,000. The limitations provided in this Section 4.1(b) shall be subject to adjustment as provided in Section 4.2. 

(c) Shares of Common Stock issued pursuant to the Plan may be original issue or treasury shares or a combination of the foregoing, as the
Committee, in its sole discretion, shall from time to time determine. During the term of the Plan, Carriage will at all times reserve and keep available such number of shares of Common Stock as shall be sufficient to satisfy the requirements of the
Plan. 
 4.2 Adjustments for Recapitalizations and Reorganizations. Subject to Article XII, if there is any change
in the number or kind of shares of Common Stock outstanding (a) by reason of a stock dividend, spin-off, recapitalization, stock split, or combination or exchange of shares, (b) by reason of a merger, reorganization, or consolidation,
(c) by reason of a reclassification or change in par value, or (d) by reason of any other extraordinary or unusual event affecting the outstanding Common Stock as a class without Carriage’s receipt of consideration, or if the value of
outstanding shares of Common Stock is reduced as a result of a spin-off or Carriage’s payment of an extraordinary cash dividend, or distribution or dividend or distribution consisting of any assets of Carriage other than cash, the maximum
number and kind of shares of Common Stock available for issuance under the Plan, the maximum number and kind of shares of Common Stock for which any individual may receive Awards in any fiscal year or under the Plan, the number and kind of shares of
Common Stock covered by outstanding Awards, and the price per share or the applicable market value or performance target of such Awards shall be appropriately adjusted by the Committee to reflect any increase or decrease in the number of, or change
in the kind or value of, issued shares of Common Stock to preclude, to the extent practicable, the enlargement or dilution of rights under such Awards; provided, however, that any fractional shares resulting from such adjustment shall be eliminated.

 4.3 Adjustments for Awards. The Committee shall have sole discretion to determine the manner in which shares of Common
Stock available for grant of Awards under the Plan are counted. Without limiting the discretion of the Committee under this Section 4.3, unless otherwise determined by the Committee, the following rules shall apply for the purpose of
determining the number of shares of Common Stock available for grant of Awards under the Plan: 
 (a) Options,
Restricted Stock and Stock Awards. The grant of Options, Restricted Stock or Stock Awards shall reduce the number of shares of Common Stock available for grant of Awards under the Plan by the number of shares of Common Stock subject to such an
Award. 
 (b) SARs. The grant of SARs that may be paid or settled (i) only in Common Stock or
(ii) in either cash or Common Stock shall reduce the number of shares available for grant of Awards under the Plan by the number of shares subject to such an Award; provided, however, that

  
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upon the exercise of SARs, the excess of the number of shares of Common Stock with respect to which the Award is exercised over the number of shares of Common Stock issued upon exercise of the
Award shall again be available for grant of Awards under the Plan. 
 (c) Performance Awards and Other
Incentive Awards. The grant of a Performance Award or Other Incentive Award denominated in shares of Common Stock and that may be paid or settled (i) only in Common Stock or (ii) in either Common Stock or cash or a combination thereof
shall reduce the number of shares available for grant of Awards under the Plan by the number of shares subject to such an Award; provided, however, that upon settlement of the Award, the excess, if any, of the number of shares of Common Stock that
had been subject to such Award over the number of shares of Common Stock issued upon its settlement shall again be available for grant of Awards under the Plan. The grant of a Performance Award or Other Incentive Award denominated in cash and that
may be paid or settled (i) only in cash or (ii) in either Common Stock or cash or a combination thereof shall reduce the number of shares available for grant of Awards under the Plan by the number of shares of Common Stock, if any, that
are actually issued with respect to such Award. The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting and make adjustments if the number of shares of Common Stock actually delivered differs from
the number of shares previously counted in connection with an Award. 
 (d) Cancellation, Forfeiture and
Termination. If any Award referred to in Sections 4.3(a), (b), or (c) (other than an Award that may be paid or settled only for cash) is canceled or forfeited, or terminates, expires or lapses, for any reason, the shares then subject to
such Award shall again be available for grant of Awards under the Plan. 
 (e) Payment of Exercise Price and
Withholding Taxes. If previously acquired shares of Common Stock are used to pay the exercise price of an Award, the number of shares available for grant of Awards under the Plan shall be increased by the number of shares delivered as payment of
such exercise price. If previously acquired shares of Common Stock are used to pay withholding taxes payable upon exercise, vesting or payment of an Award, or shares of Common Stock that would be acquired upon exercise, vesting or payment of an
Award are withheld to pay withholding taxes payable upon exercise, vesting or payment of such Award, the number of shares available for grant of Awards under the Plan shall be increased by the number of shares delivered or withheld as payment of
such withholding taxes. 
 ARTICLE V 
 ELIGIBILITY 
 The Committee shall select Participants from those Employees
and Outside Directors who, in the opinion of the Committee, are in a position to make a significant contribution to the success of the Company. Once a Participant has been selected for an Award by the Committee, the Committee shall determine the
type and size of Award to be granted to the Participant and shall establish in the related Award Agreement the terms, conditions, restrictions and limitations applicable to the Award, in addition to those set forth in the Plan and the administrative
guidelines and regulations, if any, established by the Committee. 
 ARTICLE VI 

FORM OF AWARDS 
 6.1 Form of Awards. Awards may be granted under the Plan, in the Committee’s sole discretion, in the form of Options pursuant to Article VII, SARs pursuant to Article VIII,
Restricted Stock pursuant to Article IX, Performance Awards pursuant to Article X, and Stock Awards and Other Incentive 

  
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Awards pursuant to Article XI, or a combination thereof. All Awards shall be subject to the terms, conditions, restrictions and limitations of the Plan. The Committee may, in its sole
discretion, subject any Award to such other terms, conditions, restrictions and/or limitations (including without limitation the time and conditions of exercise, vesting or payment of an Award and restrictions on transferability of any shares of
Common Stock issued or delivered pursuant to an Award), provided they are not inconsistent with the terms of the Plan. The Committee may, but is not required to, subject an Award to such conditions as it determines are necessary or appropriate to
ensure that an Award constitutes “qualified performance based compensation” within the meaning of Section 162(m) of the Code and the regulations thereunder. Awards under a particular Article of the Plan need not be uniform, and Awards
under more than one Article of the Plan may be combined in a single Award Agreement. Any combination of Awards may be granted at one time and on more than one occasion to the same Participant. 

6.2 No Repricing or Reload Rights. Except for adjustments made pursuant to Section 4.2, no Award may be repriced, replaced,
regranted through cancellation or otherwise modified without stockholder approval, if the effect would be to reduce the exercise price for the shares underlying such Award. The Committee may not cancel an outstanding Option that is under water for
the purpose of granting a replacement Award of a different type. 
 6.3 Loans. The Committee may, in its sole discretion,
approve the extension of a loan by the Company to a Participant who is an Employee to assist the Participant in paying the exercise price or purchase price of an Award; provided, however, that no loan shall be permitted if the extension of such loan
would violate any provision of applicable law (including but not limited to Section 402 of the Sarbanes-Oxley Act of 2002). Any loan will be made upon such terms and conditions as the Committee shall determine. 

ARTICLE VII 

OPTIONS 

7.1 General. Awards may be granted in the form of Options that may be Incentive Stock Options or Nonqualified Stock Options, or a
combination of both; provided, however, that Incentive Stock Options may be granted only to Employees. The maximum number of shares of Common Stock that may be subject to all Options granted under the Plan to any one Participant (i) during the
fiscal year of Carriage in which the Participant is first hired by the Company is 100,000 shares and (ii) during each subsequent fiscal year is 100,000 shares. 
 7.2 Terms and Conditions of Options. An Option shall be exercisable in whole or in such installments and at such times as may be determined by the Committee. The price at which a share of Common
Stock may be purchased upon exercise of an Option shall be determined by the Committee, but such exercise price shall not be less than 100% of the Fair Market Value per share of Common Stock on the Grant Date unless the Option was granted through
the assumption of, or in substitution for, outstanding awards previously granted to individuals who became Employees as a result of a merger, consolidation, acquisition, or other corporate transaction involving the Company and complies with
Section 409A of the Code. Except as otherwise provided in Section 7.3, the term of each Option shall be as specified by the Committee; provided, however, that no Options shall be exercisable later than ten years after the Grant Date.
Options may be granted with respect to Restricted Stock or shares of Common Stock that are not Restricted Stock, as determined by the Committee in its sole discretion. 

  
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 7.3 Restrictions Relating to Incentive Stock Options. 

(a) Options granted in the form of Incentive Stock Options shall, in addition to being subject to the terms and conditions
of Section 7.2, comply with Section 422(b) of the Code. To the extent the aggregate Fair Market Value (determined as of the times the respective Incentive Stock Options are granted) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by an individual during any calendar year under all incentive stock option plans of the Company exceeds $100,000, such excess Incentive Stock Options shall be treated as options that do not constitute
Incentive Stock Options. The Committee shall determine, in accordance with the applicable provisions of the Code and based on information available to it, which of a Participant’s Incentive Stock Options will not constitute Incentive Stock
Options because of such limitation and will notify the Participant of such determination as soon as practicable after such determination (but without liability for any failure or delay in providing such notification). The price at which a share of
Common Stock may be purchased upon exercise of an Incentive Stock Option shall be determined by the Committee, but such exercise price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the Grant Date. No Incentive
Stock Option shall be granted to an Employee under the Plan if, at the time such Option is granted, such Employee owns stock possessing more than 10% of the total combined voting power of all classes of stock of Carriage or an Affiliate, within the
meaning of Section 422(b)(6) of the Code, unless (i) on the Grant Date of such Option, the exercise price of such Option is at least 110% of the Fair Market Value of the Common Stock subject to the Option and (ii) such Option by its
terms is not exercisable after the expiration of five years from the Grant Date of the Option. 
 (b) Each
Participant awarded an Incentive Stock Option shall notify Carriage in writing immediately after the date he or she makes a disqualifying disposition of any shares of Common Stock acquired pursuant to the exercise of such Incentive Stock Option. A
disqualifying disposition is any disposition (including any sale) of such Common Stock before the later of (i) two years after the Grant Date of the Incentive Stock Option or (ii) one year after the date of exercise of the Incentive Stock
Option. 
 7.4 Exercise of Options. 

(a) Subject to the terms and conditions of the Plan, Options shall be exercised by the delivery of a written notice of
exercise to Carriage, setting forth the number of whole shares of Common Stock with respect to which the Option is to be exercised, accompanied by full payment for such shares. 

(b) Upon exercise of an Option, the exercise price of the Option shall be payable to Carriage in full either: (i) in
cash or an equivalent acceptable to the Committee, or (ii) in the sole discretion of the Committee and in accordance with any applicable administrative guidelines established by the Committee, by tendering one or more previously acquired
nonforfeitable, unrestricted shares of Common Stock that have been held by the Participant for at least six months having an aggregate Fair Market Value at the time of exercise equal to the total exercise price, or (iii) in a combination of the
forms of payment specified in clauses (i) and (ii) above. 
 (c) During such time as the Common Stock
is registered under Section 12 of the Exchange Act, to the extent permissible under applicable law, payment of the exercise price of an Option may also be made, in the absolute discretion of the Committee , by delivery to Carriage or its
designated agent of an executed irrevocable option exercise form together with irrevocable instructions to a broker-dealer to sell or margin a sufficient portion of the shares with respect to which the Option is exercised and deliver the sale or
margin loan proceeds directly to Carriage to pay the exercise price and any required withholding taxes. 

  
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 (d) As soon as reasonably practicable after receipt of written notification
of exercise of an Option and full payment of the exercise price and any required withholding taxes, Carriage shall (i) deliver to the Participant, in the Participant’s name or the name of the Participant’s designee, a stock
certificate or certificates in an appropriate aggregate amount based upon the number of shares of Common Stock purchased under the Option, or (ii) cause to be issued in the Participant’s name or the name of the Participant’s designee,
in book-entry form, an appropriate number of shares of Common Stock based upon the number of shares purchased under the Option. 

7.5 Termination of Employment. Each Award Agreement embodying the Award of an Option shall set forth the extent to which the
Participant shall have the right to exercise the Option following termination of the Participant’s employment with the Company. Such provisions shall be determined by the Committee in its absolute discretion, need not be uniform among all
Options granted under the Plan and may reflect distinctions based on the reasons for termination of employment. In the event a Participant’s Award Agreement embodying the award of an Option does not set forth such termination provisions, the
following termination provisions shall apply with respect to such Award: 
 (a) Termination Other Than For
Cause. If the employment of a Participant shall terminate for any reason other than Cause, each outstanding Option held by the Participant may be exercised, to the extent then vested, until the earlier of (i) the expiration of one year from
the date of such termination of employment or (ii) the expiration of the term of such Option. 
 (b)
Termination for Cause. Notwithstanding paragraph (a) above, if the employment of a Participant shall terminate for Cause, each outstanding Option held by the Participant may be exercised, to the extent then vested, until the earlier of
(i) the expiration of 30 days from the date of such termination of employment or (ii) the expiration of the term of such Option. 
 Notwithstanding the foregoing provisions of this Section 7.5, an Option will not be treated as an Incentive Stock Option unless at all times beginning on the Grant Date and ending on the day three
months (one year in the case of a Participant who is “disabled” within the meaning of Section 22(e)(3) of the Code) before the date of exercise of the Option, the Participant is an employee of Carriage or an Affiliate (or a
corporation or a parent or subsidiary corporation of such corporation issuing or assuming an option in a transaction to which Section 424(a) of the Code applies). 
 ARTICLE VIII 
 STOCK APPRECIATION RIGHTS 

8.1 General. The Committee may grant Awards in the form of SARs in such numbers and at such times as it shall determine. SARs
shall vest and be exercisable in whole or in such installments and at such times as may be determined by the Committee. The price at which SARs may be exercised shall be determined by the Committee but shall not be less than 100% of the Fair Market
Value per share of Common Stock on the Grant Date unless the SARs were granted through the assumption of, or in substitution for, outstanding awards previously granted to individuals who became Employees as a result of a merger, consolidation,
acquisition, or other corporate transaction involving the Company and comply with Section 409A of the Code. The term of each SAR shall be as specified by the Committee; provided, however, that no SARs shall be exercisable later than ten years
after the Grant Date. At the time of an Award of SARs, the Committee may, in its sole discretion, prescribe additional terms, conditions, restrictions and limitations applicable to the SARs, including without limitation rules pertaining to the
termination of employment (by reason of death, permanent and total disability, or otherwise) of a 

  
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Participant prior to exercise of the SARs, as it determines are necessary or appropriate, provided they are not inconsistent with the Plan. The maximum number of shares of Common Stock that may
be subject to all SARs granted under the Plan to any one Participant (i) during the fiscal year of Carriage in which the Participant is first hired by the Company is 100,000 shares and (ii) during each subsequent fiscal year is 100,000
shares; provided, however that if a SAR is to be paid in cash, the number of shares of Common Stock subject to such SAR shall not count toward the individual share limit set forth in this sentence. 

8.2 Exercise of SARs. SARs shall be exercised by the delivery of a written notice of exercise to Carriage, setting forth the
number of whole shares of Common Stock with respect to which the Award is being exercised. Upon the exercise of SARs, the Participant shall be entitled to receive an amount equal to the excess of the aggregate Fair Market Value of the shares of
Common Stock with respect to which the Award is exercised (determined as of the date of such exercise) over the aggregate exercise price of such shares. Such amount shall be payable to the Participant in cash or in shares of Common Stock, as
provided in the Award Agreement. 
 ARTICLE IX 
 RESTRICTED STOCK 
 9.1 General. Awards may be granted in the form of
Restricted Stock in such numbers and at such times as the Committee shall determine. The Committee shall impose such terms, conditions and restrictions on Restricted Stock as it may deem advisable, including without limitation providing for vesting
upon the achievement of specified performance goals pursuant to a Performance Award and restrictions under applicable Federal or state securities laws. A Participant shall not be required to make any payment for Restricted Stock unless required by
the Committee pursuant to Section 9.2. 
 9.2 Purchased Restricted Stock. The Committee may in its sole discretion
require a Participant to pay a stipulated purchase price for each share of Restricted Stock. 
 9.3 Restricted Period. At
the time an Award of Restricted Stock is granted, the Committee shall establish a Restricted Period applicable to such Restricted Stock. Each Award of Restricted Stock may have a different Restricted Period in the sole discretion of the Committee;
provided, however, that no Award of Restricted Stock (other than an Award of Restricted Stock granted in the form of a Performance Award or an Award of Restricted Stock granted to an Outside Director) shall have a Restricted Period of less than
three years. 
 9.4 Other Terms and Conditions. Restricted Stock shall constitute issued and outstanding shares of Common
Stock for all corporate purposes. Restricted Stock awarded to a Participant under the Plan shall be registered in the name of the Participant or, at the option of Carriage, in the name of a nominee of Carriage, and shall be issued in book-entry form
or represented by a stock certificate. Subject to the terms and conditions of the Award Agreement, a Participant to whom Restricted Stock has been awarded shall have the right to receive dividends thereon during the Restricted Period, to vote the
Restricted Stock and to enjoy all other stockholder rights with respect thereto, except that (a) Carriage shall retain custody of any certificates evidencing the Restricted Stock during the Restricted Period, and (b) the Participant may
not sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the Restricted Stock during the Restricted Period. A breach of the terms and conditions established by the Committee pursuant to the Award of the Restricted Stock may result
in a forfeiture of the Restricted Stock. At the time of an Award of Restricted Stock, the Committee may, in its sole discretion, prescribe additional terms, conditions, restrictions and limitations applicable to the Restricted Stock, including
without limitation rules pertaining to the termination of employment (by reason of death, permanent and total disability, retirement, cause or otherwise) of a Participant prior to expiration of the Restricted Period. 

  
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 9.5 Miscellaneous. Nothing in this Article shall prohibit the exchange of shares of
Restricted Stock pursuant to a plan of merger or reorganization for stock or other securities of Carriage or another corporation that is a party to the reorganization, provided that the stock or securities so received in exchange for shares of
Restricted Stock shall, except as provided in Article XII, become subject to the restrictions applicable to such Restricted Stock. Any shares of Common Stock received as a result of a stock split or stock dividend with respect to shares of
Restricted Stock shall also become subject to the restrictions applicable to such Restricted Stock. 
 ARTICLE X

 PERFORMANCE AWARDS 
 10.1 General. Awards may be granted in the form of Performance Awards that may be payable in the form of cash, shares of Common Stock, or a combination of both, in such amounts and at such times as
the Committee shall determine. Performance Awards shall be conditioned upon the level of achievement of one or more stated performance goals over a specified performance period that shall not be shorter than one year. Without limiting the foregoing,
no Performance Award that is an Award of Restricted Stock or an Other Incentive Award shall have a Restricted Period of less than one year. Performance Awards may be combined with other Awards to impose performance criteria as part of the terms of
such other Awards. 
 10.2 Terms and Conditions. Each Award Agreement embodying a Performance Award shall set forth
(a) the amount, including a target and maximum amount if applicable, a Participant may earn in the form of cash or shares of Common Stock or a formula for determining such amount, (b) the performance criteria and level of achievement
versus such criteria that shall determine the amount payable or number of shares of Common Stock to be granted, issued, retained and/or vested, (c) the performance period over which performance is to be measured, (d) the timing of any
payments to be made, (e) restrictions on the transferability of the Award, and (f) such other terms and conditions as the Committee may determine that are not inconsistent with the Plan. 

10.3 Code Section 162(m) Requirements. From and after the date on which remuneration paid pursuant to the Plan becomes
subject to the deduction limitation of Section 162(m) of the Code, the Committee shall determine in its sole discretion whether all or any portion of a Performance Award shall be intended to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Code (the “162(m) Requirements”). The performance criteria for any Performance Award that is intended to satisfy the 162(m) Requirements shall be established in writing by the Committee
based on one or more performance goals as set forth in Section 10.4 not later than 90 days after commencement of the performance period with respect to such Award, provided that the outcome of the performance in respect of the goals remains
substantially uncertain as of such time. The maximum amount that may be paid in cash pursuant to Performance Awards granted to a Participant with respect to a Carriage’s fiscal year that are intended to satisfy the 162(m) Requirements is
$1,000,000; provided, however, that such maximum amount with respect to a Performance Award that provides for a performance period longer than one fiscal year shall be the foregoing limit multiplied by the number of full fiscal years in the
performance period. At the time of the grant of a Performance Award and to the extent permitted under Code Section 162(m) and regulations thereunder for a Performance Award intended to satisfy the 162(m) Requirements, the Committee may provide
for the manner in which the performance goals will be measured in light of specified corporate transactions, extraordinary events, accounting changes and other similar occurrences. 

10.4 Performance Goals. The performance measure(s) to be used for purposes of Performance Awards may be described in terms of
objectives that are related to the individual Participant or objectives that are Company-wide or related to a subsidiary, division, department, region, function or business unit of the Company in which the Participant is employed, and may consist of
one or more or any combination of the following criteria: (a) earnings or earnings per share (whether on a pre-tax, after-tax, operational or 

  
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other basis), (b) return on equity, (c) return on assets or net assets, (d) return on capital or invested capital and other related financial measures, (e) cash flow,
(f) revenues, (g) income or operating income, (h) expenses or expense levels, (i) one or more operating ratios, (j) stock price, (k) total stockholder return, (l) market share, (m) operating profit,
(n) profit margin, (o) capital expenditures, (p) net borrowing, debt leverage levels, credit quality or debt ratings, (q) the accomplishment of mergers, acquisitions, dispositions, public offerings or similar extraordinary
business transactions, (r) net asset value per share, (s) economic value added and (t) individual business objectives. The performance goals based on these performance measures may be made relative to the performance of other business
entities. 
 10.5 Certification and Negative Discretion. Prior to the payment of any compensation pursuant to a
Performance Award that is intended to satisfy the 162(m) Requirements, the Committee shall certify the extent to which the performance goals and other material terms of the Award have been achieved or satisfied. The Committee in its sole discretion
shall have the authority to reduce, but not to increase, the amount payable and the number of shares to be granted, issued, retained or vested pursuant to a Performance Award. 
 ARTICLE XI 
 STOCK AWARDS AND OTHER INCENTIVE AWARDS 

11.1 Stock Awards. Stock Awards may be granted to Participants upon such terms and conditions as the Committee may determine;
provided, however, that no Stock Award (other than a Stock Award granted in the form of a Performance Award or a Stock Award granted to an Outside Director) shall have a Restricted Period of less than three years. Shares of Common Stock issued
pursuant to Stock Awards may be issued for cash consideration or for no cash consideration. The Committee shall determine the number of shares of Common Stock to be issued pursuant to a Stock Award. 

11.2 Other Incentive Awards. Other Incentive Awards may be granted in such amounts, upon such terms and at such times as the
Committee shall determine; provided, however, that no Other Incentive Award (other than an Other Incentive Award granted in the form of a Performance Award or an Other Incentive Award granted to an Outside Director) shall have a Restricted Period of
less than three years. Other Incentive Awards may be granted based upon, payable in or otherwise related to, in whole or in part, shares of Common Stock if the Committee, in its sole discretion, determines that such Other Incentive Awards are
consistent with the purposes of the Plan. Each grant of an Other Incentive Award shall be evidenced by an Award Agreement that shall specify the amount of the Other Incentive Award and the terms, conditions, restrictions and limitations applicable
to such Award. Payment of Other Incentive Awards shall be made at such times and in such form, which may be cash, shares of Common Stock or other property (or a combination thereof), as established by the Committee, subject to the terms of the Plan.

 ARTICLE XII 
 CORPORATE CHANGE 
 12.1 Vesting of Awards. Except as provided
otherwise below in this Article or in an Award Agreement at the time an Award is granted, notwithstanding anything to the contrary in the Plan, if a Participant’s employment with the Company is terminated for any reason other than death, Cause
or Inability to Perform or if a Participant voluntarily terminates employment for Good Reason, in either case within the one-year period following a Corporate Change of Carriage, any time periods, conditions or contingencies relating to the exercise
or realization of, or lapse of restrictions under, any Award shall be automatically accelerated or waived so that: 
 (a) if no exercise of the Award is required, the Award may be realized in full at the time of the occurrence of the Participant’s termination of employment; or 

  
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 (b) if exercise of the Award is required, the Award may be exercised in full
commencing on the date of the Participant’s termination of employment; 
 provided, however, that with respect to an Award that
consists of deferred compensation under Section 409A of the Code, in the event of a Corporate Change that does not satisfy the requirements for a change in the ownership or effective control of Carriage or a change in the ownership of a
substantial portion of the assets of Carriage within the meaning of Section 409A of the Code and Treasury guidance and regulations related to Section 409A of the Code, then delivery of payment with respect to such Award as provided above
shall be delayed until payment may be made to the Participant without negative tax consequences to the Participant under Section 409A of the Code.  
 12.2 Replacement Awards. In the event all outstanding Awards are replaced in connection with a Corporate Change by comparable types of awards of at least substantially equivalent value, as
determined by the Committee in its sole discretion, such replacement awards shall provide for automatic acceleration or waiver as provided in Section 12.1 in the event of a Participant’s involuntary termination of employment with the
Company other than for Cause or voluntary termination of employment for Good Reason, as applicable, within the one-year period following the Corporate Change of Carriage. 
 12.3 Cancellation of Awards. Notwithstanding the foregoing, on or prior to the date of a Corporate Change, the Committee may take any of the following actions with respect to all outstanding
Awards, without the consent of any Participant: (a) the Committee may require that Participants surrender their outstanding Options and SARs in exchange for payment by the Company, in cash, Common Stock, the securities of another company, or a
combination thereof, as determined by the Committee, in an amount equal to the amount, if any, by which the then Fair Market Value of the shares of Common Stock subject to the Participant’s unexercised Options and SARs exceeds the exercise
price or grant price, and (b) with respect to Participants holding Restricted Stock, Performance Awards or Other Incentive Awards, the Committee may determine that such Participants shall receive payment in settlement of such Awards (and
dividend rights), in an amount equivalent to the value of such Awards (and dividend rights) at the time of such settlement. 

ARTICLE XIII 
 AMENDMENT AND TERMINATION 
 13.1 Plan Amendment and Termination. The
Board may at any time suspend, terminate, amend or modify the Plan, in whole or in part; provided, however, that no amendment or modification of the Plan shall become effective without the approval of such amendment or modification by the holders of
at least a majority of the shares of Common Stock if (a) such amendment or modification increases the maximum number of shares subject to the Plan (except as provided in Article IV) or changes the designation or class of persons eligible
to receive Awards under the Plan, or (b) counsel for Carriage determines that such approval is otherwise required by or necessary to comply with applicable law or the listing requirements of the New York Stock Exchange or such other exchange or
association on which the Common Stock is then listed or quoted. An amendment to the Plan shall not require stockholder approval if it curtails rather than expands the scope of the Plan, nor if it is made to conform the Plan to new statutory or
regulatory requirements that arise after submission of the Plan to stockholders for their approval, such as, without limitation, changes to Code Section 409A, or regulations issued thereunder. Upon termination of the Plan, the terms and
provisions of the Plan shall, notwithstanding such termination, continue to apply to Awards granted prior to such termination. Except as otherwise provided herein, no suspension, termination, amendment or modification of the Plan shall adversely
affect in any material way any Award previously granted under the Plan, without the consent of the Participant (or the Permitted Transferee) holding such Award. Notwithstanding the foregoing, Carriage may amend any Award Agreement to be exempt from

  
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Code Section 409A or to comply with the requirements of Code Section 409A or to modify any provision that causes an Award that is intended to be classified as an “equity
instrument” under ASC Topic 718 to be classified as a liability on Carriage’s financial statements. 
 13.2 Award
Amendment and Cancellation. The Committee may amend the terms of any outstanding Award granted pursuant to the Plan, but except as otherwise provided herein, no such amendment shall adversely affect in any material way the Participant’s (or
a Permitted Transferee’s) rights under an outstanding Award without the consent of the Participant (or the Permitted Transferee) holding such Award. 
 ARTICLE XIV 
 MISCELLANEOUS 

14.1 Award Agreements. After the Committee grants an Award under the Plan to a Participant, Carriage and the Participant shall
enter into an Award Agreement setting forth the terms, conditions, restrictions and limitations applicable to the Award and such other matters as the Committee may determine to be appropriate. The Committee may permit or require a Participant to
defer receipt of the payment of cash or the delivery of shares of Common Stock that would otherwise be due to the Participant in connection with any Award. Awards that are not paid currently shall be recorded as payable on Carriage’s records
for the Plan. The terms and provisions of the respective Award Agreements need not be identical. All Award Agreements shall be subject to the provisions of the Plan, and in the event of any conflict between an Award Agreement and the Plan, the terms
of the Plan shall govern. 
 14.2 Listing; Suspension. 

(a) As long as the Common Stock is listed on a national securities exchange or system sponsored by a national securities
association, the issuance of any shares of Common Stock pursuant to an Award shall be conditioned upon such shares being listed on such exchange or system. Carriage shall have no obligation to issue such shares unless and until such shares are so
listed, and the right to exercise any Option or other Award with respect to such shares shall be suspended until such listing has been effected. 
 (b) If at any time counsel to Carriage or its Affiliates shall be of the opinion that any sale or delivery of shares of Common Stock pursuant to an Award is or may in the circumstances be unlawful or
result in the imposition of excise taxes on Carriage or its Affiliates under the laws of any applicable jurisdiction, Carriage or its Affiliates shall have no obligation to make such sale or delivery, or to make any application or to effect or to
maintain any qualification or registration under the Securities Act, or otherwise, with respect to shares of Common Stock or Awards, and the right to exercise any Option or other Award shall be suspended until, in the opinion of such counsel, such
sale or delivery shall be lawful or will not result in the imposition of excise taxes on Carriage or its Affiliates. 
 (c) Upon termination of any period of suspension under this Section, any Award affected by such suspension that shall not then have expired or terminated shall be reinstated as to all shares available
before such suspension and as to shares that would otherwise have become available during the period of such suspension, but no such suspension shall extend the term of any Award unless otherwise determined by the Committee in its sole discretion.

 14.3 Additional Conditions. Notwithstanding anything in the Plan to the contrary: (a) the Committee may, if it
shall determine it necessary or desirable in its sole discretion, at the time of grant of any Award or the issuance of any shares of Common Stock pursuant to any Award, require the recipient of

  
 15 

 
the Award or such shares of Common Stock, as a condition to the receipt thereof, to deliver to Carriage a written representation of present intention to acquire the Award or such shares of Common
Stock for his own account for investment and not for distribution, (b) the certificate for shares of Common Stock issued to a Participant may include any legend that the Committee deems appropriate to reflect any restrictions on transfer, and
(c) all certificates for shares of Common Stock delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the SEC,
any stock exchange or association upon which the Common Stock is then listed or quoted, any applicable federal or state securities law, and any applicable corporate law, and the Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions. 
 14.4 Transferability. 

(a) All Awards granted to a Participant shall be exercisable during his lifetime only by such Participant, or if applicable, a Permitted
Transferee as provided in subsection (c) of this Section; provided, however, that in the event of a Participant’s legal incapacity, an Award may be exercised by his guardian or legal representative. When a Participant dies, the personal
representative, beneficiary, or other person entitled to succeed to the rights of the Participant may acquire the rights under an Award. Any such successor must furnish proof satisfactory to Carriage of the successor’s entitlement to receive
the rights under an Award under the Participant’s will or under the applicable laws of descent and distribution. 
 (b)
Except as otherwise provided in this Section, no Award shall be subject to execution, attachment or similar process, and no Award may be sold, transferred, pledged, exchanged, hypothecated or otherwise disposed of, other than by will or pursuant to
the applicable laws of descent and distribution. Any attempted sale, transfer, pledge, exchange, hypothecation or other disposition of an Award not specifically permitted by the Plan or the Award Agreement shall be null and void and without effect.

 (c) If provided in the Award Agreement, Nonqualified Stock Options may be transferred by a Participant to a Permitted
Transferee. For purposes of the Plan, “Permitted Transferee” means (i) a member of a Participant’s immediate family, (ii) any person sharing the Participant’s household (other than a tenant or employee of the
Participant), (iii) trusts in which a person listed in (i) or (ii) above has more than 50% of the beneficial interest, (iv) a foundation in which the Participant or a person listed in (i) or (ii) above controls the
management of assets, (v) any other entity in which the Participant or a person listed in (i) or (ii) above owns more than 50% of the voting interests, provided that in the case of the preceding clauses (i) through (v), no
consideration is provided for the transfer, and (vi) any transferee permitted under applicable securities and tax laws as determined by counsel to Carriage. In determining whether a person is a “Permitted Transferee,” immediate family
members shall include a Participant’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
including adoptive relationships. 
 (d) Incident to a Participant’s divorce, the Participant may request that Carriage
agree to observe the terms of a domestic relations order which may or may not be part of a qualified domestic relations order (as defined in Code Section 414(p)) with respect to all or a part of one or more Awards made to the Participant under
the Plan. Carriage’s decision regarding such a request shall be made by the Committee, in its sole and absolute discretion, based upon the best interests of Carriage. The Committee’s decision need not be uniform among Participants. As a
condition of participation, a Participant agrees to hold Carriage harmless from any claim that may arise out of Carriage’s observance of the terms of any such domestic relations order. 

  
 16 

 14.5 Withholding Taxes. The Company shall be entitled to deduct from any payment made
under the Plan, regardless of the form of such payment, the amount of all applicable income and employment taxes required by law to be withheld with respect to such payment, may require the Participant to pay to the Company such withholding taxes
prior to and as a condition of the making of any payment or the issuance or delivery of any shares of Common Stock under the Plan, and shall be entitled to deduct from any other compensation payable to the Participant any withholding obligations
with respect to Awards. In accordance with any applicable administrative guidelines it establishes, with respect to a Participant who is not a Section 16 Participant, the Committee may allow such Participant to pay the amount of taxes required
by law to be withheld from or with respect to an Award by (i) withholding shares of Common Stock from any payment of Common Stock due as a result of such Award, or (ii) permitting the Participant to deliver to the Company previously
acquired shares of Common Stock, in each case having an aggregate Fair Market Value equal to the amount of such required withholding taxes. No payment shall be made and no shares of Common Stock shall be issued pursuant to any Award unless and until
the applicable tax withholding obligations have been satisfied. Notwithstanding the foregoing, a Section 16 Participant shall satisfy the tax withholding obligations with respect to an Award by either (x) tendering a cash payment to the
Company or (y) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to such Section 16 Participant as a result of the exercise or acquisition of Common Stock under the Award. In the
event that shares of Common Stock that would otherwise be issued pursuant to an Award are used to satisfy such withholding obligations, the number of shares of Common Stock which may be withheld or surrendered shall be limited to the number of
shares of Common Stock which have a Fair Market Value (which, in the case of a broker-assisted transaction, shall be determined by the Committee, consistent with applicable provisions of the Code), on the date of withholding, equal to the aggregate
amount of such liabilities based on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such supplemental taxable income. No payment shall be made and no shares of
Common Stock shall be issued pursuant to any Award unless and until the applicable tax withholding obligations have been satisfied. 
 14.6 No Fractional Shares. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan or any Award granted hereunder, provided that the Committee in its sole discretion
may round fractional shares down to the nearest whole share or settle fractional shares in cash. 
 14.7 Notices. All
notices required or permitted to be given or made under the Plan or pursuant to any Award Agreement (unless provided otherwise in such Award Agreement) shall be in writing and shall be deemed to have been duly given or made if (a) delivered
personally, (b) transmitted by first class registered or certified United States mail, postage prepaid, return receipt requested, (c) sent by prepaid overnight courier service, or (d) sent by telecopy or facsimile transmission, with
confirmation receipt, to the person who is to receive it at the address that such person has theretofore specified by written notice delivered in accordance herewith. Such notices shall be effective (i) if delivered personally or sent by
courier service, upon actual receipt by the intended recipient, (ii) if mailed, upon the earlier of five days after deposit in the mail or the date of delivery as shown by the return receipt therefor, or (iii) if sent by telecopy or
facsimile transmission, when the answer back is received. Carriage or a Participant may change, at any time and from time to time, by written notice to the other, the address that it or such Participant had theretofore specified for receiving
notices. Until such address is changed in accordance herewith, notices hereunder or under an Award Agreement shall be delivered or sent (A) to a Participant at his address as set forth in the records of the Company or (B) to Carriage at
the principal executive offices of Carriage clearly marked “Attention: Chief Financial Officer.” 
 14.8 Clawback.
To the extent required by (i) applicable law, including, without limitation, the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, any SEC rule or any applicable securities exchange listing standards
and/or (ii) any policy that may be adopted by the 

  
 17 

 
Board, Awards and amounts paid or payable pursuant to or with respect to Awards shall be subject to clawback to the extent necessary to comply with such law(s) and/or policy, which clawback may
include forfeiture, repurchase and/or recoupment of Awards and amounts paid or payable pursuant to or with respect to Awards. 

14.9 Compliance with Law and Stock Exchange or Association Requirements. In addition, it is the intent of Carriage that Options
designated Incentive Stock Options comply with the applicable provisions of Section 422 of the Code, and that Awards intended to constitute “qualified performance-based awards” comply with the applicable provisions of
Section 162(m) of the Code and that any deferral of the receipt of the payment of cash or the delivery of shares of Common Stock that the Committee may permit or require, and all Awards either be exempt from Code section 409A or, if not exempt,
comply with the requirements of Section 409A of the Code. To the extent that any legal requirement of Section 16 of the Exchange Act or Sections 422, 162(m) or 409A of the Code as set forth in the Plan ceases to be required under
Section 16 of the Exchange Act or Sections 422, 162(m) or 409A of the Code, that Plan provision shall cease to apply. Any provision of the Plan to the contrary notwithstanding, the Committee may revoke any Award if it is contrary to law,
governmental regulation, or stock exchange or association requirements or modify an Award to bring it into compliance with any government regulation or stock exchange or association requirements. The Committee may agree to limit its authority under
this Section. 
 14.10 California Blue Sky Laws. Prior to the effective registration of the Common Stock under
Section 12 of the Exchange Act, (a) Carriage shall deliver a balance sheet and an income statement at least annually to each Participant who performs services in the State of California, unless such Participant is a key employee whose
duties in connection with the Company assure such Participant access to equivalent information, (b) the Committee may not impose upon any Award grant made to a Participant who performs services in the State of California a vesting schedule that
is more restrictive than 20 percent per year vesting, with the initial vesting to occur not later than one year after the Award’s grant date; provided, however, that such vesting limitation shall not be applicable to any Award grants
made to individuals who are officers of Carriage, and (c) with respect to California Participants (including any individual whose Award is based in whole or in part on services performed in California), the Plan shall otherwise be administered
in accordance with California Corporations Code Section 25102(o) and California Code of Regulations, Title 10, Sections 260.140.41, 260.140.42, 260.140.45, and 260.140.46. 

14.11 Binding Effect. The obligations of Carriage under the Plan shall be binding upon any successor corporation or organization
resulting from the merger, consolidation or other reorganization of Carriage, or upon any successor corporation or organization succeeding to all or substantially all of the assets and business of Carriage. The terms and conditions of the Plan shall
be binding upon each Participant and his Permitted Transferees, heirs, legatees, distributees and legal representatives. 

14.12 Severability. If any provision of the Plan or any Award Agreement is held to be illegal or invalid for any reason, the
illegality or invalidity shall not affect the remaining provisions of the Plan or such agreement, as the case may be, but such provision shall be fully severable and the Plan or such agreement, as the case may be, shall be construed and enforced as
if the illegal or invalid provision had never been included herein or therein. 
 14.13 No Restriction of Corporate Action.
Nothing contained in the Plan shall be construed to prevent Carriage or any Affiliate from taking any corporate action (including any corporate action to suspend, terminate, amend or modify the Plan) that is deemed by Carriage or such Affiliate
to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any Awards made or to be made under the Plan. No Participant or other person shall have any claim against Carriage or any Affiliate as
a result of such action. 

  
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 14.14 Governing Law. The Plan shall be governed by and construed in accordance with
the internal laws (and not the principles relating to conflicts of laws) of the State of Texas except as superseded by applicable federal law. 
 14.15 No Right, Title or Interest in Company Assets. No Participant shall have any rights as a stockholder of Carriage as a result of participation in the Plan until the date of issuance of Common
Stock in his name and, in the case of Restricted Stock, unless and until such rights are granted to the Participant pursuant to the Plan. To the extent any person acquires a right to receive payments from the Company under the Plan, such rights
shall be no greater than the rights of an unsecured general creditor of the Company, and such person shall not have any rights in or against any specific assets of the Company. All Awards shall be unfunded. 

14.16 Risk of Participation. Nothing contained in the Plan shall be construed either as a guarantee by Carriage or the Affiliates,
or their respective stockholders, directors, officers or employees, of the value of any assets of the Plan or as an agreement by Carriage or the Affiliates, or their respective stockholders, directors, officers or employees, to indemnify anyone for
any losses, damages, costs or expenses resulting from participation in the Plan. 
 14.17 No Guarantee of Tax Consequences.
No person connected with the Plan in any capacity, including without limitation Carriage and the Affiliates and their respective directors, officers, agents and employees, makes any representation, commitment or guarantee that any tax treatment,
including without limitation federal, state and local income, estate and gift tax treatment, will be applicable with respect to any Awards or payments thereunder made to or for the benefit of a Participant under the Plan or that such tax treatment
will apply to or be available to a Participant on account of participation in the Plan. 
 14.18 Continued Employment.
Nothing contained in the Plan or in any Award Agreement shall confer upon any Participant the right to continue in the employ of the Company, or interfere in any way with the rights of the Company to terminate a Participant’s employment at
any time, with or without cause. The loss of existing or potential profit in Awards will not constitute an element of damages in the event of termination of employment for any reason, even if the termination is in violation of an obligation of
Carriage or an Affiliate to the Participant. 
 14.19 Miscellaneous. Headings are given to the articles and sections 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 of the Plan or any provisions hereof. The use of the masculine gender shall also include within its
meaning the feminine. Wherever the context of the Plan dictates, the use of the singular shall also include within its meaning the plural, and vice versa. 

  
 19Form of Director Performance-Based Stock Award Agreement

 Exhibit 10.3 
 Form for Directors 
 CARRIAGE SERVICES, INC. 

SECOND AMENDED AND RESTATED 
 2006 LONG-TERM INCENTIVE PLAN 
 PERFORMANCE-BASED 

STOCK AWARD AGREEMENT 
 This Performance-Based Stock Award Agreement (this “Agreement”) is made and entered into as of             ,
20            (the “Grant Date”) by and between Carriage Services, Inc. (the “Company”) and
            (the “Director”). 
 To carry out the
purposes of the Carriage Services, Inc. Second Amended and Restated 2006 Long-Term Incentive Plan (the “Plan”), and in consideration of the mutual agreements and other matters set forth herein and in the Plan, the Company and the
Director hereby agree as follows: 
 1. Grant of Performance-Based Stock Award. The Company hereby issues
to the Director, as of the Grant Date, a Performance-Based Stock Award under Article X and Section 11.1 of the Plan in respect of             shares of Common Stock
(the “Award”), subject to all of the terms and conditions set forth in the Plan and in this Agreement. To the extent vested, the Award represents the right of the Director to receive Common Stock upon payment of the Purchase
Price (as defined below). Capitalized terms that are used but not defined herein have the meanings ascribed to them in the Plan unless the context indicates otherwise. Unless and until the Award vests pursuant to this Agreement, the Director will
have no right to payment in respect of the Award. 
 2. Purchase Price. Prior to settlement of the Award,
but in no event later than the date that is three business days prior to March 15th of the calendar year following the calendar year that includes the Vesting Date (as defined in Section 3 below), the Director shall deliver to the Company,
with respect to each share of Common Stock subject to the Award, an amount equal to the greater of (a) the Fair Market Value of a share of Common Stock on the Grant Date plus $0.50 or (b) $9.00 (the “Purchase
Price”). The Purchase Price shall be paid in full either (i) in cash or by certified or bank check, (ii) through irrevocable instructions to a broker-dealer to sell or margin a sufficient number of shares of Common Stock subject
to the Award and deliver the sale or margin loan proceeds directly to the Company to pay the Purchase Price, (iii) by reduction in the number of shares otherwise deliverable upon vesting of the Award having a Fair Market Value equal to the
Purchase Price or (iv) by any combination of the foregoing methods. Should the Purchase Price not be paid within the time period set forth in this Section 2, the Award shall thereupon automatically be forfeited by the Director without
further action and without payment of consideration therefor. 
 3. Vesting. Except as otherwise provided
herein, the Award shall vest in full on the Vesting Date (as defined below), provided that the Director continues to be a member of the Board from the Grant Date through the Vesting Date. If the Director ceases to be a member of the Board at any
time before the Vesting Date for any reason or no reason whatsoever, then, except as otherwise provided in Section 5 below, Award shall thereupon automatically be 

 
cancelled and terminated without further action and without payment of any consideration therefor. For purposes of this Agreement, the “Vesting Date” shall be the date on which the
closing price of the Common Stock (as reported in The Wall Street Journal or such other reporting service approved by the Committee) is greater than or equal to $21.50 for the third time (whether or not consecutive) within a period of 30
consecutive calendar days. Notwithstanding the foregoing, (a) if the conditions described in the preceding sentence are satisfied on or prior to the first anniversary of the Grant Date, then the Vesting Date shall be the first anniversary of
the Grant Date and (b) if the conditions described in the preceding sentence are not satisfied on or prior to the fifth anniversary of the Grant Date, then the Award shall automatically terminate without payment of any consideration therefor
and shall be of no further force or effect. 
 4. Settlement. Subject to Section 10 below, promptly
following the Vesting Date (and in all events, no later than March 15th of the calendar year following the calendar year in which the Vesting Date occurs), subject to the Director’s payment of the Purchase Price, the Company shall
(a) issue and deliver to the Director the number of shares of Common Stock subject to the Award (subject to any reductions and/or withholdings pursuant to this Agreement) and (b) enter the Director’s name on the books of the Company
as the shareholder of record with respect to the shares of Common Stock delivered to the Director. 
 5. Corporate
Change. In the event of a Corporate Change, notwithstanding anything in Article XII of the Plan to the contrary, the Award shall thereupon automatically be cancelled and terminated and, as soon as administratively practicable thereafter, but
in no event later than March 15th of the calendar year following the calendar year in which such Corporate Change occurs, the Company shall pay (or cause to be paid) to the Director an amount of cash equal to the excess, if any, of the Change
in Control Value (as defined below) of the shares of Common Stock subject to the Award over the Purchase Price, subject to any reductions and/or withholdings pursuant to this Agreement. For purposes of this Section 6, the “Change in
Control Value” shall equal the amount determined in the following clause (a), (b) or (c), whichever is applicable: (a) the per share price offered to stockholders of the Company in any in any merger, consolidation, reorganization,
sale of assets or dissolution or liquidation transaction that constitutes such Corporate Change; (b) the per share price offered to stockholders of the Company in any tender offer or exchange offer whereby such Corporate Change takes place; or
(c) if such Corporate Change occurs other than pursuant to a tender or exchange offer, the Fair Market Value per share of the shares of Common Stock subject to the Award, as determined by the Committee as of the date determined by the Committee
to be the date of cancellation and termination of the Award. In the event that the consideration offered to stockholders of the Company in any Corporate Change consists of anything other than cash, the Committee shall determine the fair cash
equivalent of the portion of the consideration offered that is other than cash. 
 6. Restrictions. Neither
the Award nor any of the rights relating thereto may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Director. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the
Award or the rights relating thereto shall be wholly ineffective and, if any such attempt is made, the Award will be forfeited by the Director and all of the Director’s rights to such Award shall immediately terminate without any payment or
consideration by the Company. 

 7. No Rights as Shareholder; No Dividend Equivalents. The Director
shall not have any rights of a shareholder with respect to the shares of Common Stock underlying the Award (including, without limitation, any right to receive dividends or dividend equivalents) unless and until the Award vests and is settled
pursuant to Section 4. Upon and following the settlement of the Award, the Director shall be the record owner of the shares of Common Stock underlying the Award unless and until such shares are sold or otherwise disposed of, and as record owner
shall be entitled to all rights of a shareholder of the Company (including voting rights). 
 8. No Right to
Continued Board Membership. Neither the Plan nor this Agreement shall confer upon the Director any right to be retained as an Outside Director of the Company. Further, nothing in the Plan or this Agreement shall be construed to limit the
discretion of the Company to terminate the Director’s membership on the Board at any time. 
 9.
Adjustments. If any change is made to the outstanding Common Stock or the capital structure of the Company, if required, the number of shares of Common Stock subject to the Award shall be adjusted or terminated in any manner as
contemplated by Section 4.3 of the Plan. 
 10. Tax Withholding. Unless other arrangements have been
made that are acceptable to the Company, the Company and each of its Affiliates is authorized to deduct or withhold from the Award, or cause to be deducted or withheld from any compensation or other amount owing to the Director, the amount (in cash,
Common Stock, other securities or property, or Common Stock that would otherwise be issued pursuant to the Award) of any applicable taxes payable in respect of the vesting and/or settlement of the Award and to take such other actions as may be
necessary in the opinion of the Company or any of its Affiliates to satisfy its tax withholding obligations. Notwithstanding the foregoing, if the Director is subject to Rule 16b-3 at the time of vesting and/or settlement of the Award, except as
otherwise provided in any tax withholding policy or procedure adopted by the Company, such tax withholding automatically shall be effected by the Company or one of its Affiliates either by (i) withholding shares of Common Stock otherwise
deliverable to the Director on the settlement of the Award or (ii) requiring the Director to tender a cash payment to the Company or such Affiliate in an amount equal to the applicable taxes. In the event that shares of Common Stock that would
otherwise be delivered pursuant to the Award are used to satisfy such withholding obligations, the number of shares that may be withheld shall be limited to the number of shares that have a Fair Market Value, on the date of withholding, equal to the
aggregate amount of such liabilities based on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such supplemental taxable income. 

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

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

13. Governing Law. This Agreement will be construed and interpreted in accordance with the laws of the State of Texas
without regard to conflict of law principles thereof. 
 14. Interpretation. Any dispute regarding the
interpretation of this Agreement shall be submitted by the Director or the Company to the Committee for review. The resolution of such dispute by the Committee shall be final and binding on the Director and the Company. 

15. Award Subject to Plan. This Agreement is subject to the Plan as approved by the Company’s shareholders. The terms
and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. 
 16. Successors and Assigns. The Company may assign any of its
rights under this Agreement. This Agreement will be binding upon, and inure to the benefit of, the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon the Director and
the Director’s beneficiaries, executors, administrators and the person(s) to whom the Award may be transferred by will or the laws of descent or distribution. 
 17. Severability. The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan or this
Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law. 

18. Discretionary Nature of Plan. The Plan is discretionary and may be amended, cancelled or terminated by the Company at
any time, in its discretion. The grant of the Award in this Agreement does not create any contractual right or other right to receive any award in the future. Future awards, if any, will be at the sole discretion of the Company. Any amendment,
modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Director’s membership on the Board. 
 19. Amendment. The Committee has the right to amend, alter, suspend, discontinue or cancel the Award, prospectively or retroactively; provided, however, that no such amendment shall
adversely affect the Director’s material rights under this Agreement without the Director’s consent. 
 20.
Section 409A. This Award is not intended to constitute or provide for a deferral of compensation that is subject to Section 409A of the Code. Notwithstanding the foregoing, (a) the Company makes no representations that the
Award or any amounts payable under this Agreement are exempt from Section 409A of the Code and in no event shall the Company be 

 
liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Director on account of non-compliance with Section 409A of the Code and
(b) if any payment provided for under the Award would be subject to additional taxes and interest under Section 409A of the Code if the Director’s receipt of such payment is not delayed in accordance with the requirements of
Section 409A(a)(2)(B)(i) of the Code, then such payment shall not be provided to the Director (or the Director’s estate, if applicable) until the earlier of (i) the date of the Director’s death or (ii) the date that is six
months after the date of the Director’s separation from service with the Company. 
 21. Acceptance. The
Director hereby acknowledges receipt of a copy of the Plan and this Agreement. The Director has read and understands the terms and provisions thereof, and accepts the Award subject to all of the terms and conditions of the Plan and this Agreement.
The Director acknowledges that there may be adverse tax consequences upon the vesting or settlement of the Award or disposition of the underlying shares and that the Director has been advised to consult a tax advisor prior to such vesting,
settlement or disposition. The Director further acknowledges that the Award and any shares of Common Stock that may be delivered with respect to the Award are subject to clawback as provided in Section 14.8 of the Plan. 

[Signature Page Follows] 

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

					
	CARRIAGE SERVICES, INC.
		
	By:	 	 
		 	Name:	 	 
		 	Title:	 	 
	
	DIRECTOR
	
	 

 SIGNATURE PAGE 

TO 

PERFORMANCE-BASED 
 STOCK AWARD AGREEMENT

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