CARRIAGE SERVICES, INC. PERFORMANCE UNIT AWARD AGREEMENT Grantee
Exhibit 10.1
CARRIAGE SERVICES, INC.
Grantee
Award Date:
|
January 1, 2009 | |||
Performance Unit Value:
|
$ | 1.00 | ||
Number of Performance Units Awarded:
|
||||
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 Xxxxxxx Microcap Index as reported by Xxxxxxx Investment Group (Xxxxxxx). The
Xxxxxxx Microcap Index is reconstituted annually to add or eliminate stocks according to Xxxxxxx’x
microcap segment criteria. For purposes of the Plan, the Shareholder Return reported by Xxxxxxx
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 Xxxxxxx 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.
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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:
(1) multiplied by (2)
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
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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:
(1) multiplied by (2)
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(ii) will be paid by the Company
to you (a) ten (10) business days after the date the Corporate Change of the Company
occurs if the Corporate Change of the Company qualifies as a change in the ownership
or effective control of the corporation, or in the ownership of a substantial
portion of the assets of the corporation, within the meaning of Section 409A, or (b)
on March 15, 2011, if the Corporate Change of the Company does not so qualify. 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.
1.3 Disability. Notwithstanding any other provision of this Agreement to the
contrary, if you become permanently disabled on or after the date that is one month after
the Award Date and is before the last day of the Performance Period, while in the active
employ of one or more members of the Company Group, then the Employer will pay to you in
cash an amount determined under the following formula in lieu of any other amounts under
this Agreement:
(1) multiplied by (2) multiplied by (3) divided by (4)
where (1) is the Performance Unit Value set forth in this Agreement, (2) is the number of
Performance Units that were awarded to you under this Agreement, (3) is the number of days
from (and including) the first day of the Performance Period to (and including) the day you
become permanently disabled, and (4) is the number of days during the Performance Period.
Any amount payable to you pursuant to this Section 1.3 will be paid by the Company to you
ten (10) business days after the date you become permanently disabled. 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 Section 1.3, you will be “permanently disabled” if you (a) are unable to
engage in any substantial gainful activity by reason of any medically determinable physical
or mental impairment which can be expected to result in death or can be expected to last for
a continuous period of not less than 12 months, or (b) are, by reason of any medically
determinable physical or mental
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impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, receiving income replacement benefits for a
period of not less than three (3) months under an accident and health plan covering
employees of the Company Group.
1.4 Death. Notwithstanding any other provision of this Agreement to the contrary,
if you die before the last day of the Performance Period and while in the active employ of
one or more members of the Company Group, then the Employer will pay to your estate in cash
an amount determined under the following formula in lieu of any other amounts under this
Agreement:
(1) multiplied by (2) multiplied by (3) divided by (4)
where (1) is the Performance Unit Value set forth in this Agreement, (2) is the number of
Performance Units that were awarded to you under this Agreement, (3) is the number of days
from (and including) the first day of the Performance Period to (and including) the date of
your death, and (4) is the number of days during the Performance Period. Any amount payable
to your estate pursuant to this Section 1.4 will be paid to your estate by the Employer
ten (10) business days after the date of your death. Such payment will be made in exchange
for the Performance Units and thereafter your estate and heirs, executors, and
administrators shall have no further rights with respect to such Performance Units or this
Agreement and the Company Group will have no further obligations pursuant to the Performance
Units or this Agreement.
1.5 Retirement. Notwithstanding any other provision of this Agreement to the
contrary, if your employment with the Company Group terminates as a result of your
Retirement before the last day of the Performance Period, then the number of Performance
Units issued to you under this Agreement shall automatically be reduced (without further
action by you and/or the Company) on the date your employment relationship with the Company
Group terminates to that number of Performance Units determined under the following formula
(the “Retirement Adjusted Performance Units”):
(1) multiplied by (2) divided by (3)
where (1) is the number of Performance Units that were originally awarded to you under this
Agreement, (2) is the number of days from (and including) the first day of the Performance
Period to (and including) the day before the date your employment relationship with the
Company Group terminates due to Retirement, and (3) is the number of days during the
Performance Period. Your Peer Group 1 Performance Units and Peer Group 2 Performance Units
under this Agreement shall be reduced accordingly to reflect the Retirement Adjusted
Performance Units and the excess of the Performance Units that were originally awarded to
you under this Agreement over the Retirement Adjusted Performance Units shall be immediately
forfeited on the date of the termination of your employment relationship with the Company
Group due to Retirement. Any amount payable to you pursuant to this Agreement will be paid
on March 15, 2011. For purposes of this Section 1.5, the term “Retirement” means the
voluntary termination of your employment relationship with the Company Group on or after the
date on which the sum of your age and years of service with the Company Group equals 65.
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PROHIBITED ACTIVITY. Notwithstanding any other provision of this Agreement, if you engage in
a “Prohibited Activity,” as described below, while employed by one or more members of the Company
Group, during the Performance Period or within two years after the date your employment with the
Company Group terminates, then your right to receive payment under this Agreement, to the extent
still outstanding at that time, shall be completely forfeited. A “Prohibited Activity” shall be
deemed to have occurred, as determined by the Committee in its sole and absolute discretion, if you
divulge any non-public, confidential or proprietary information of the Company or of its past,
present or future affiliates (collectively, the “Carriage Services Inc. Group”), but excluding
information that (a) becomes generally available to the public other than as a result of your
public use, disclosure, or fault, or (b) becomes available to you on a non-confidential basis after
your employment termination date from a source other than a member of the Carriage Services Inc.
Group prior to the public use or disclosure by you, provided that such source is not bound by a
confidentiality agreement or otherwise prohibited from transmitting the information by a
contractual, legal or fiduciary obligation.
TAX WITHHOLDING. To the extent that the receipt of the Performance Units or any payment
pursuant to this Agreement results in income, wages or other compensation to you for any income,
employment or other tax purposes with respect to which the Company or any other member of the
Company Group has a withholding obligation, you shall deliver to the Company at the time of such
receipt or payment, as the case may be, such amount of money as the Company Group may require to
meet its obligation under applicable tax laws or regulations, and, if you fail to do so, the
Company is authorized to withhold from any payment under this Agreement or from any cash or stock
remuneration or other payment then or thereafter payable to you any tax required to be withheld by
reason of such taxable income, wages or compensation.
NONTRANSFERABILITY. This Agreement is not transferable by you otherwise than by will or by the
laws of descent and distribution.
CAPITAL ADJUSTMENTS AND REORGANIZATIONS. The existence of the Performance Units shall not
affect in any way the right or power of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in its capital structure or its business, engage
in any merger or consolidation, issue any debt or equity securities, dissolve or liquidate, or
sell, lease, exchange or otherwise dispose of all or any part of its assets or business, or engage
in any other corporate act or proceeding.
PERFORMANCE UNITS DO NOT AWARD ANY RIGHTS OF A STOCKHOLDER. You shall not have the voting
rights or any of the other rights, powers or privileges of a holder of the stock of the Company
with respect to the Performance Units that are awarded hereby.
EMPLOYMENT RELATIONSHIP. For purposes of this Agreement, you shall be considered to be in the
employment of the Company Group as long as you have an employment relationship with the Company
Group. The Committee shall determine any questions as to whether and when there has been a
termination of such employment relationship, and the cause of such termination, under the Plan and
the Committee’s determination shall be final and binding on all persons.
NOT AN EMPLOYMENT AGREEMENT. This Agreement is not an employment agreement, and no provision
of this Agreement shall be construed or interpreted to create an employment relationship between
you and the Company or any Affiliate or guarantee the right to remain employed by the Company or
any Affiliate for any specified term.
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LIMIT OF LIABILITY. Under no circumstances will the Company or an Affiliate be liable for any
indirect, incidental, consequential or special damages (including lost profits) of any form
incurred by any person, whether or not foreseeable and regardless of the form of the act in which
such a claim may be brought, with respect to the Plan.
EMPLOYER LIABLE FOR PAYMENT. Except as specified in Section 1.2, the legal entity that is a
member of the Company Group and that is classified by the Company Group as your employer (the
“Employer”) is liable for the payment of any amounts that become due under this Agreement.
MISCELLANEOUS. This Agreement is awarded pursuant to and is subject to all of the provisions
of the Plan, including amendments to the Plan, if any. In the event of a conflict between this
Agreement and the Plan provisions, the Plan provisions will control. The term “you” and “your”
refer to the Grantee named in this Agreement. Capitalized terms that are not defined herein shall
have the meanings ascribed to such terms in the Plan.
The Performance Units that are hereby awarded to you shall be subject to the prohibitions and
restrictions set forth herein with respect to the sale or other disposition of such Performance
Units and the obligation to forfeit and surrender such Performance Units.
The Performance Units and your rights under this Agreement may not be sold, assigned, pledged,
exchanged, hypothecated or otherwise transferred, encumbered or disposed of (other than by will or
the applicable laws of descent and distribution). Any such attempted sale, assignment, pledge,
exchange, hypothecation, transfer, encumbrance or disposition in violation of this Agreement shall
be void and the Company Group shall not be bound thereby.
In accepting the award of Performance Units set forth in this Agreement you accept and agree
to be bound by all the terms and conditions of the Plan, and this Agreement.
| CARRIAGE SERVICES, INC. | ||||
| Name: Xxxxxx X. Xxxxx | ||||
| Title: Chairman and CEO |
Tables to follow:
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PERFORMANCE GOALS
FOR PERFORMANCE UNIT AWARDS GRANTED IN 2009 UNDER
THE CARRIAGE SERVICES, INC. 2006 LONG-TERM INCENTIVE PLAN
FOR PERFORMANCE UNIT AWARDS GRANTED IN 2009 UNDER
THE CARRIAGE SERVICES, INC. 2006 LONG-TERM INCENTIVE PLAN
Peer Group 1 Earned Award Factor
For Performance Units granted by the Company under the Plan, the Peer Group 1 Earned Award
Factor shall be the factor specified in the table below; provided, however, that if the Company’s
Total Shareholder Return for the Performance Period is zero or less than zero the Peer Group 1
Earned Award Factor for the Performance Period shall be zero.
| Percentile Rank of the Company’s Total Shareholder Return for | ||||
| the Performance Period as Compared to the Total Shareholder | Peer Group 1 | |||
| Returns of the Other Members of Performance Peer Group 1 for | Earned Award | |||
| the Performance Period. | Factor | |||
Less than 50th
|
0.0 | % | ||
50th
|
50.0 | % | ||
51st
|
55.0 | % | ||
52nd
|
60.0 | % | ||
53rd
|
65.0 | % | ||
54th
|
70.0 | % | ||
55th
|
75.0 | % | ||
56th
|
80.0 | % | ||
57th
|
85.0 | % | ||
58th
|
90.0 | % | ||
59th
|
95.0 | % | ||
60th
|
100.0 | % | ||
61st
|
102.5 | % | ||
62nd
|
105.0 | % | ||
63rd
|
107.5 | % | ||
64th
|
110.0 | % | ||
65th
|
112.5 | % | ||
66th
|
115.0 | % | ||
67th
|
117.5 | % | ||
68th
|
120.0 | % | ||
69th
|
122.5 | % | ||
70th
|
125.0 | % | ||
71st
|
127.5 | % | ||
72nd
|
130.0 | % | ||
73rd
|
132.5 | % | ||
74th
|
135.0 | % | ||
75th
|
137.5 | % | ||
76th
|
140.0 | % | ||
77th
|
142.5 | % | ||
78th
|
145.0 | % | ||
79th
|
147.5 | % | ||
80th and above
|
150.0 | % | ||
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The Committee shall have the discretion to calculate Total Shareholder Returns for the Company
and each company included in Performance Peer Group 1 and to determine the formula to achieve such
calculations.
1. Peer Group 2 Earned Award Factor
For Performance Units granted by the Company under the Plan, if the common stock of both of
the members of Performance Peer Group 2 Earned Award Factor shall be the factor specified in the
table below; provided, however, that (a) if the Company’s Total Shareholder Return for the
Performance Period is zero or less than zero then the Peer Group 2 Earned Award Factor for the
Performance Period shall be zero and (b) if the common stock of either or both of the members of
Performance Peer Group 2 is not publicly traded on the last day of the Performance Period then the
Peer Group 2 Earned Award Factor shall be the amount of the Peer Group 1 Earned Award Factor for
such Performance Period.
| Rank of the Company’s Total Shareholder Return for the | |||
| Performance Period as Compared to the Total Shareholder | Peer Group 2 | ||
| Returns of the Other Members of the Performance Peer | Earned Award | ||
| Group 2 for the Performance Period | Factor | ||
First
|
150.0 | % | |
| Second | 100.0 | % | |
| Less than Second | 0.0 | % | |
The Committee shall have the discretion to calculate Total Shareholder Returns for the Company and
each company included in Performance Peer Group 2 and to determine the formula to achieve such
calculations.
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