PERFORMANCE UNIT AWARD
AGREEMENT
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January 1, 2009
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$
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1.00
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Number of
Performance Units Awarded:
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AWARD OF PERFORMANCE
UNITS
The Compensation
Committee (the “Committee”) of the Board of Directors
of Carriage Services, Inc., a Delaware corporation (the “
Company ”), pursuant to the Carriage Services, Inc.
2006 Long-Term Incentive Plan (the “ Plan ”),
hereby awards to you, the above-named Grantee, effective as of the
Award Date set forth above, that number of Performance Units set
forth above (each, a “ Performance Unit ”, and
collectively, the “ Performance Units ”), on the
terms and conditions set forth in this Performance Unit Award
Agreement (this “ Agreement ”).
One-half of the
Performance Units awarded under this Agreement (the “ Peer
Group 1 Performance Units ”) provide you an opportunity
to earn a cash payment based upon the Total Shareholder Return
achieved by the Company for the period beginning January 1,
2009, and ending December 31, 2011 (the “ Performance
Period ”) as compared with the Total Shareholder Return
achieved by the companies constituting the Russell Microcap Index
as reported by Russell Investment Group (Russell). The Russell
Microcap Index is reconstituted annually to add or eliminate stocks
according to Russell’s microcap segment criteria. For
purposes of the Plan, the Shareholder Return reported by Russell
for each period shall be used to calculate cash payments without
adjustment for changes in the companies constituting the Microcap
Index. The other one-half of the Performance Units awarded under
this Agreement (the “ Peer Group 2 Performance Units
”) provide you an opportunity to earn a cash payment based
upon the Total Shareholder Return achieved by the Company for the
Performance Period as compared with the Total Shareholder Return
achieved by Service Corporation International and Stewart
Enterprises, Inc. The Committee may not increase the amount payable
under this Agreement.
“Total
Shareholder Return” shall mean the difference between
(i) the per share closing price on the last trading day of the
Performance Period of the common stock of the entity with respect
to which such computation is being made as reported by the
principal stock exchange on which such entity’s common stock
is traded, and (ii) the per share closing price of such common
stock on December 31, 2008, as reported by the principal stock
exchange on which the entity’s common stock is traded,
calculated assuming all cash and other dividends paid on such
common stock during the Performance Period are immediately
reinvested in shares of such common stock.
1
As soon as
reasonably practicable after the end of the Performance Period, the
Committee will calculate the Total Shareholder Returns for the
Performance Period of the Company and each of the members of
Performance Peer Group 1 and Performance Peer Group 2. If the
following conditions exist with respect to the Performance
Period:
(1) your
employment with the Company and all of its Affiliates has not
terminated on or before the last day of the Performance Period;
and
(2) a Corporate
Change does not occur on or before the last day of the Performance
Period;
then you shall
receive a cash payment under this Agreement equal to the sum of
(i) the Peer Group 1 Performance Payment and (ii) the
Peer Group 2 Performance Payment.
The Peer Group 1
Performance Payment shall be equal to:
(A) multiplied by
(B) multiplied by (C)
where
(A) is the number of Peer Group 1 Performance Units,
(B) is the Peer Group 1 Earned Award Factor (as that term has
been defined by the attached table) and (C) the Performance
Unit Value set forth above.
The Peer Group 2
Performance Payment shall be equal to:
(X) multiplied by
(Y) multiplied by (Z)
where
(X) is the number of Peer Group 2 Performance Units,
(Y) is the Peer Group 2 Earned Award Factor (as that term has
been defined by the attached table) and (Z) is the Performance
Unit Value set forth above.
If the Peer Group
1 Earned Award Factor and the Peer Group 2 Earned Award Factor for
the Performance Period are both zero and a Corporate Change of the
Company has not occurred on or before the last day of the
Performance Period, then the award pursuant to this Agreement shall
lapse and be forfeited as of December 31, 2011.
The
Committee’s determination of Total Shareholder Return for the
Company and each member of Performance Peer Group 1 and Performance
Peer Group 2 for the Performance Period for purposes of this
Agreement shall be binding upon all persons.
Any amount payable
to you pursuant to this Agreement will be paid to you by the
Company on March 15, 2012, unless otherwise provided as
hereinafter otherwise set out. Such payment will be made to you in
exchange for the Performance Units and thereafter you shall have no
further rights with respect to such Performance Units or this
Agreement.
2
The following
provisions 1.1 to 1.5 will apply in the event a Corporate Change of
the Company occurs, or your employment with the Company and all
Affiliates (collectively, the “ Company Group ”)
terminates, before the last day of the Performance
Period.
1.1
Termination Generally . If your employment with the Company
Group terminates on or before the last day of the Performance
Period for any reason other than one of the reasons described in
Sections 1.2 through 1.5 below, all of your rights in this
Agreement, including all rights to the Performance Units awarded to
you, will lapse and be completely forfeited on the date your
employment terminates.
1.2
Potential or Actual Corporate Change .
(i)
Termination Without Cause or for Good Reason in Connection With
a Potential Corporate Change on or Before the Last Day of the
Performance Period . If (a) the Company Group terminates
your employment without Cause on or before the last day of the
Performance Period prior to a Corporate Change of the Company
(whether or not a Corporate Change ever occurs) and such
termination is at the request or direction of a person who has
entered into an agreement with the Company the consummation of
which would constitute a Corporate Change of the Company or is
otherwise in connection with or in anticipation of a Corporate
Change of the Company (whether or not a Corporate Change ever
occurs) or (b) you terminate your employment with the Company
Group for Good Reason on or before the last day of the Performance
Period prior to a Corporate Change of the Company (whether or not a
Corporate Change ever occurs) and such termination or the
circumstance or event which constitutes Good Reason occurs at the
request or direction of a person who has entered into an agreement
with the Company the consummation of which would constitute a
Corporate Change of the Company or is otherwise in connection with
or in anticipation of a Corporate Change of the Employer (whether
or not a Corporate Change ever occurs), then the Company will pay
to you in cash an amount determined under the following formula in
lieu of any other amounts under this Agreement:
where
(1) is the Performance Unit Value set forth in this Agreement
and (2) is the number of Performance Units that were awarded
to you under this Agreement. Any amount payable to you pursuant to
this Section 1.2(i) will be paid by the Company to you
ten (10) business days after the date of your Separation From
Service if you are not a Specified Employee or on the date that is
six months following your Separation From Service if you are a
Specified Employee. Such payment will be made to you in exchange
for the Performance Units and thereafter you shall have no further
rights with respect to such Performance Units or this Agreement and
the Company Group will have no further obligations to you pursuant
to the Performance Units or this Agreement. For purposes of this
Agreement, “Separation From Service” has the
meaning ascribed to that term in Section 409A and
“Specified Employee” means a person who is, as
of the date of the person’s Separation From Service, a
“specified employee” within the meaning of
Section 409A, taking into account the elections made and
procedures established in resolutions adopted by the Board of
Directors of the Company. For purposes of this Agreement,
“Section 409A” means section 409A of the
Internal
3
Revenue Code of
1986, as amended and the Department of Treasury rules and
regulations issued thereunder.
(ii)
Employment Not Terminated Before a Corporate Change on or Before
the Last Day of the Performance Period . If a Corporate Change
of the Company occurs on or before the last day of the Performance
Period and your employment with the Company Group does not
terminate before the date the Corporate Change of the Company
occurs, then the Company will pay to you in cash an amount
determined under the following formula in lieu of any other amounts
under this Agreement:
where
(1) is the Performance Unit Value set forth in this Agreement
and (2) is the number of Performance Units that were awarded
to you under this Agreement. Any a
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