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CARRIAGE SERVICES, INC.
1995 STOCK INCENTIVE PLAN
AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 7, 1997
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TABLE OF CONTENTS
PAGE
ARTICLE I. GENERAL............................................................1
Section 1.1. PURPOSE..................................................1
Section 1.2. ADMINISTRATION...........................................1
Section 1.3. ELIGIBILITY FOR PARTICIPATION............................2
Section 1.4. TYPES OF AWARDS UNDER PLAN...............................2
Section 1.5. AGGREGATE LIMITATION ON AWARDS...........................2
Section 1.6. EFFECTIVE DATE AND TERM OF PLAN..........................3
ARTICLE II. STOCK OPTIONS.....................................................3
Section 2.1. AWARD OF STOCK OPTIONS...................................3
Section 2.2. STOCK OPTION AGREEMENTS..................................4
Section 2.3. STOCK OPTION PRICE.......................................4
Section 2.4. TERM AND EXERCISE........................................4
Section 2.5. MANNER OF PAYMENT........................................4
Section 2.6. DELIVERY OF SHARES.......................................4
Section 2.7. DEATH, RETIREMENT AND TERMINATION OF
EMPLOYMENT OF OPTIONEE...................................4
Section 2.8. TAX ELECTION.............................................4
Section 2.9. EFFECT OF EXERCISE.......................................5
ARTICLE III. INCENTIVE STOCK OPTIONS .........................................5
Section 3.1. AWARD OF INCENTIVE STOCK OPTIONS.........................5
Section 3.2. INCENTIVE STOCK OPTION AGREEMENTS........................5
Section 3.3. INCENTIVE STOCK OPTION PRICE.............................5
Section 3.4. TERM AND EXERCISE........................................5
Section 3.5. MAXIMUM AMOUNT OF INCENTIVE STOCK OPTION GRANT...........5
Section 3.6. DEATH OF OPTIONEE........................................6
Section 3.7. RETIREMENT OR DISABILITY.................................6
Section 3.8. TERMINATION FOR OTHER REASONS............................6
Section 3.9. APPLICABILITY OF STOCK OPTIONS SECTIONS..................6
ARTICLE IV. RELOAD OPTIONS ...................................................6
Section 4.1. AUTHORIZATION OF RELOAD OPTIONS..........................6
Section 4.2. RELOAD OPTION AMENDMENT..................................6
Section 4.3. RELOAD OPTION PRICE......................................7
Section 4.4. TERM AND EXERCISE........................................7
Section 4.5. TERMINATION OF EMPLOYMENT................................7
Section 4.6. APPLICABILITY OF STOCK OPTIONS SECTIONS..................7
ARTICLE V. ALTERNATE APPRECIATION RIGHTS .....................................7
Section 5.1. AWARD OF ALTERNATE APPRECIATION RIGHTS...................7
Section 5.2. ALTERNATE APPRECIATION RIGHTS AGREEMENT..................7
Section 5.3. EXERCISE.................................................7
Section 5.4. AMOUNT OF PAYMENT........................................7
Section 5.5. FORM OF PAYMENT..........................................7
Section 5.6. EFFECT OF EXERCISE.......................................8
Section 5.7. TERMINATION OF EMPLOYMENT, RETIREMENT, DEATH
OR DISABILITY............................................8
(i)
ARTICLE VI. LIMITED RIGHTS ...................................................8
Section 6.1. AWARD OF LIMITED RIGHTS..................................8
Section 6.2. LIMITED RIGHTS AGREEMENT.................................8
Section 6.3. EXERCISE PERIOD..........................................8
Section 6.4. AMOUNT OF PAYMENT........................................8
Section 6.5. FORM OF PAYMENT..........................................8
Section 6.6. EFFECT OF EXERCISE.......................................9
Section 6.7. RETIREMENT OR DISABILITY.................................9
Section 6.8. DEATH OF OPTIONEE OR TERMINATION FOR OTHER REASONS.......9
Section 6.9. TERMINATION RELATED TO A CHANGE IN CONTROL...............9
ARTICLE VII. BONUS STOCK AWARDS...............................................9
Section 7.1. AWARD OF BONUS STOCK.....................................9
Section 7.2. STOCK BONUS AGREEMENTS...................................9
Section 7.3. TRANSFER RESTRICTION.....................................9
ARTICLE VIII. MISCELLANEOUS ..................................................9
Section 8.1. GENERAL RESTRICTION......................................9
Section 8.2. NON-TRANSFERABILITY.....................................10
Section 8.3. WITHHOLDING TAXES.......................................10
Section 8.4. RIGHT TO TERMINATE EMPLOYMENT...........................10
Section 8.5. NON-UNIFORM DETERMINATIONS..............................10
Section 8.6. RIGHTS AS A SHAREHOLDER.................................10
Section 8.7. DEFINITIONS.............................................10
Section 8.8. LEAVES OF ABSENCE.......................................11
Section 8.9. NEWLY ELIGIBLE EMPLOYEES................................11
Section 8.10. ADJUSTMENTS............................................11
Section 8.11. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE.............11
Section 8.12. AMENDMENT OF THIS PLAN.................................12
(ii)
CARRIAGE SERVICES, INC.
1995 STOCK INCENTIVE PLAN
AS AMENDED AND RESTATED EFFECTIVE AS OF JANUARY 7,1997
ARTICLE I. GENERAL
Section 1.1. PURPOSE. The purposes of this Stock Incentive Plan (the
"Plan") are to: (1) closely associate the interests of the management of
Carriage Services, Inc., a Delaware corporation (the "Company"), and its
subsidiaries and affiliates (the Company, together with its subsidiaries and
affiliates, being hereafter collectively referred to as "Carriage") with the
stockholders of the Company to generate an increased incentive to contribute to
the Company's future success and prosperity, thus enhancing the value of the
Company for the benefit of its stockholders; (2) provide management with a
proprietary ownership interest in the Company commensurate with Carriage's
performance, as reflected in increased shareholder value; (3) maintain
competitive compensation levels thereby attracting and retaining highly
competent and talented directors and employees; and (4) provide an incentive to
management for continuous employment with Carriage. The Plan as set forth herein
constitutes an amendment and restatement, effective as of the date of the
adoption of this amendment and restatement (the "Restatement Effective Date") by
the Board of Directors of the Company (the "Board"), of the Plan as previously
adopted and as subsequently amended by the Company, and shall supersede and
replace in its entirety such prior plan.
Section 1.2. ADMINISTRATION.
(a) This Plan shall be administered by a committee (the
"Committee") of, and appointed by, the Board, which shall be comprised
solely of two or more "outside directors" within the meaning of section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code") and
applicable interpretive authority thereunder.
(b) The Committee shall have the authority, in its sole
discretion and from time to time to:
(i) designate the employees or classes of employees of
Carriage and other persons who are eligible to participate in
this Plan;
(ii) grant awards ("Awards") provided in this Plan in
such form and amount as the Committee shall determine;
(iii) impose such limitations, restrictions, and
conditions, not inconsistent with this Plan, upon any such Award
as the Committee shall deem appropriate; and
(iv) interpret this Plan and any agreement, instrument, or
other document executed in connection with this Plan; adopt,
amend, and rescind rules and regulations relating to this Plan;
and make all other determinations and take all other action
necessary or advisable for the implementation and administration
of this Plan.
(c) Decisions and determinations of the Committee on all matters
relating to this Plan shall be in its sole discretion and shall be
final, conclusive, and binding upon all persons, including the Company,
any participant, any shareholder of the Company, and any employee of
Carriage. A majority of the members of the Committee may determine its
actions and fix the time and place of its meetings. No member of the
Committee shall be liable for any action taken or decision made in good
faith relating to this Plan or any Award thereunder.
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Section 1.3. ELIGIBILITY FOR PARTICIPATION. Participants in this Plan
("Participants") shall be selected by the Committee from the directors,
executive officers and other employees of Carriage who are responsible for or
contribute to the management, growth, success and, profitability of Carriage,
and from persons (not otherwise specified above) who are former owners of
funeral homes or cemeteries that have been acquired by Carriage. In making this
selection and in determining the form and amount of Awards, the Committee shall
consider any factors deemed relevant, including the individual's functions,
responsibilities, value of services to Carriage, and past and potential
contributions to Carriage's profitability and growth.
Section 1.4. TYPES OF AWARDS UNDER PLAN. Awards under this Plan may be
in the form of any or more of the following:
(i) Stock Options, as described in Article II;
(ii) Incentive Stock Options, as described in Article III;
(iii) Reload Options, as described in Article IV;
(iv) Alternate Appreciation Rights, as described in Article V;
(v) Limited Rights, as described in Article VI; and/or
(vi) Stock Bonus Awards, as described in Article VII.
Awards under this Plan shall be evidenced by an Award Agreement between the
Company and the recipient of the Award ("Award Agreement"), in form and
substance satisfactory to the Committee, and not inconsistent with this Plan.
Section 1.5. AGGREGATE LIMITATION ON AWARDS.
(a) Shares of stock which may be issued under this Plan shall be
authorized and unissued or treasury shares of either (i) Class A Common
Stock, $.01 par value, of the Company ("Class A Common Stock") or (ii)
Class B Common Stock, $.01 par value, of the Company ("Class B Common
Stock"). As used herein, the term 'Common Stock' shall mean both Class A
Common Stock and Class B Common Stock. The maximum number of shares of
Common Stock that may be issued under this Plan shall be 700,000. The
number of shares that may be issued under this Plan and as to which
options may be granted shall be subject to adjustment as provided in
Sections 8.10 and 8.11. Notwithstanding any provision in this Plan to
the contrary, (1) Awards under this Plan that were granted prior to the
date of the initial public offering of shares of Class A Common Stock
shall be satisfied in shares of Class B Common Stock and (2) Awards
under this Plan that are granted on or after the date of the initial
public offering of shares of Class A Common Stock shall be satisfied in
shares of Class A Common Stock. Further, upon the exercise of an Award,
any exercise payment which is made in shares of Common Stock in
accordance with Section 2.5 hereof shall be made (A) only in shares of
Class B Common Stock if such Award is to be satisfied in Class B Common
Stock or (B) only in shares of Class A Common Stock if such Award is to
be satisfied in shares of Class A Common Stock. Notwithstanding any
provision in the Plan to the contrary, the maximum number of shares of
Common Stock that may be subject to Awards granted to any one employee
during a calendar year is 200,000 shares of Common Stock subject to
adjustment as provided in Sections 8.10 and 8.11. The limitation set
forth in the preceding sentence shall be applied in a manner which will
permit compensation generated under the Plan to constitute
"performance-based" compensation for purposes of section 162(m) of the
Code, including, without limitation, counting against such maximum
number of shares, to the extent required under section 162(m) of the
Code and applicable interpretive authority thereunder, any shares
subject to Stock Options, Reload Options, Alternative Appreciation
Rights and, if applicable, Bonus Stock Awards, that are canceled or
repriced.
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(b) For purposes of calculating the maximum number of shares of
Common Stock that may be issued under this Plan:
(i) all the shares issued (including the shares, if any,
withheld for tax withholding requirements) shall be counted when
cash is used as full payment for shares issued upon exercise of a
Stock Option, Incentive Stock Option, or Reload Option;
(ii) only the shares issued (including the shares, if any,
withheld for tax withholding requirements) as a result of an
exercise of Alternate Appreciation Rights shall be counted; and
(iii) only the net shares issued (including the shares, if
any, withheld for tax withholding requirements) shall be counted
when shares of Common Stock or another Award under this Plan are
used or withheld as full or partial payment for shares issued
upon exercise of a Stock Option, Incentive Stock Option, or
Reload Option.
(c) In addition to shares of Common Stock actually issued
pursuant to the exercise of Stock Options, Incentive Stock Options,
Reload Options, or Alternate Appreciation Rights, there shall be deemed
to have been issued a number of shares equal to the number of shares of
Common Stock in respect of which Limited Rights (as described in Article
VI) shall have been exercised.
(d) Shares tendered by a participant or withheld as payment for
shares issued upon exercise of a Stock Option, Incentive Stock Option,
or Reload Option shall be available for issuance under this Plan. Any
shares of Common Stock subject to a Stock Option, Incentive Stock
Option, or Reload Option that for any reason is terminated unexercised
or expires shall again be available for issuance under this Plan, but
shares subject to a Stock Option, Incentive Stock Option, or Reload
Option that are not issued as a result of the exercise of Limited Rights
shall not again be available for issuance under this Plan.
Section 1.6. EFFECTIVE DATE AND TERM OF PLAN.
(a) The Plan originally became effective on July 1, 1995. This
amendment and restatement of the Plan shall become effective upon the
Restatement Effective Date, provided that this amendment and restatement
of the plan is approved by the stockholders of the Company within twelve
(12) months thereafter.
(b) No Awards shall be made under this Plan after July 1, 2005;
provided, however, that this Plan and all Awards made under this Plan
prior to such date shall remain in effect until such Awards have been
satisfied or terminated in accordance with this Plan and the terms of
such Awards.
(c) Notwithstanding any provision herein to the contrary, if this
amendment and restatement of the Plan is not approved by the
stockholders of the Company within twelve (12) months after the
Restatement Effective Date, then any Award made on or after the
Restatement Effective Date shall be void and canceled in its entirety,
and the Plan shall terminate with respect to any shares of Common Stock
for which Awards were not granted prior to the Restatement Effective
Date.
ARTICLE II. STOCK OPTIONS
Section 2.1. AWARD OF STOCK OPTIONS. The Committee may from time to
time, and subject to the provisions of this Plan and such other terms and
conditions as the Committee may prescribe, grant to any participant in this Plan
one or more options to purchase the number of shares of Common Stock ("Stock
Options") allotted by the Committee. The date a Stock Option is granted shall
mean the date selected by the Committee as of which the Committee allots a
specific number of shares to a participant pursuant to this Plan.
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Section 2.2. STOCK OPTION AGREEMENTS. The grant of a Stock Option shall
be evidenced by a written Award Agreement, executed by the Company and the
holder of a Stock Option (the "Optionee"), stating the number of shares of
Common Stock subject to the Stock Option evidenced thereby, and in such form as
the Committee may from time to time determine.
Section 2.3. STOCK OPTION PRICE. The option price per share of Common
Stock deliverable upon the exercise of a Stock Option shall be an amount
selected by the Committee and shall not be less than 100% of the fair market
value of a share of Common Stock on the date the Stock Option is granted.
Section 2.4. TERM AND EXERCISE. A Stock Option shall not be exercisable
prior to six months from the date of its grant and unless a shorter period is
provided by the Committee or by another Section of this Plan, may be exercised
during a period of ten years from the date of grant thereof (the "Option Term").
No Stock Option shall be exercisable after the expiration of its Option Term.
Section 2.5. MANNER OF PAYMENT. Each Award Agreement providing for Stock
Options shall set forth the procedure governing the exercise of the Stock Option
granted thereunder, and shall provide that, upon such exercise in respect of any
shares of Common Stock subject thereto, the Optionee shall pay to the Company,
in full, the option price for such shares with cash, or with previously owned
Common Stock, or at the discretion of the Committee, in whole or in part with,
the surrender of another Award under this Plan, the withholding of shares of
Common Stock issuable upon exercise of such Stock Option, other property, or any
combination thereof (each based on the fair market value of such Common Stock,
Award or other property on the date the Stock Option is exercised as determined
by the Committee).
Section 2.6. DELIVERY OF SHARES. As soon as practicable after receipt of
payment, the Company shall deliver to the Optionee a certificate or certificates
for such shares of Common Stock. The Optionee shall become a shareholder of the
Company with respect to Common Stock represented by share certificates so issued
and as such shall be fully entitled to receive dividends, to vote and to
exercise all other rights of a shareholder.
Section 2.7. DEATH, RETIREMENT AND TERMINATION OF EMPLOYMENT OF
OPTIONEE. Unless otherwise provided in an Award Agreement or otherwise agreed to
by the Committee:
(a) Upon the death of the Optionee, any rights to the extent
exercisable on the date of death may be exercised by the Optionee's
estate, or by a person who acquires the right to exercise such Stock
Option by bequest or inheritance or by reason of the death of the
Optionee, provided that such exercise occurs within both the remaining
effective term of the Stock Option and one year after the Optionee's
death. The provisions of this Section shall apply notwithstanding the
fact that the Optionee's employment may have terminated prior to death,
but only to the extent of any rights exercisable on the date of death.
(b) Upon termination of the Optionee's employment by reason of
retirement or permanent disability (as each is determined by the
Committee), the Optionee may, within up to a maximum of 36 months from
the date of termination (or such shorter period of time as may be
determined by the Committee in any instance, as reflected in each
Optionee's Award Agreement), exercise any Stock Options to the extent
such options are exercisable during such 36-month period.
(c) Except as provided in Subsections (a) and (b) of this Section
2.7, or except as otherwise determined by the Committee, all Stock
Options shall terminate three months after the date of the termination
of the Optionee's employment (or such shorter period of time as may be
determined by the Committee in any instance, as reflected in each
Optionee's Award Agreement).
Section 2.8. TAX ELECTION. Provided that the Company is a "reporting
company" under the Securities Exchange Act of 1934, as amended, at the time of
exercise of a Stock Option, recipients of Stock Options who are directors or
executive officers of the Company or who own more than 10% of the Common Stock
of the Company ("Section 16(a) Option Holders") at the time of exercise of a
Stock Option may elect, in lieu of paying to the
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Company an amount required to be withheld under applicable tax laws in
connection with the exercise of a Stock Option in whole or in part, to have the
Company withhold shares of Common Stock having a fair market value equal to the
amount required to be withheld. Such election may not be made prior to six
months following the grant of the Stock Option, except in the event of a Section
16(a) Option Holder's death or disability. The election may be made at the time
the Stock Option is exercised by notifying the Company of the election,
specifying the amount of such withholding and the date on which the number of
shares to be withheld is to be determined ("Tax Date"), which shall be either
(i) the date the Stock Option is exercised or (ii) a date six months after the
Stock Option was granted, if later. The number of shares of Common Stock to be
withheld to satisfy the tax obligation shall be the amount of such tax liability
divided by the fair market value of the Common Stock on the Tax Date (or if not
a business day, on the next closest business day). If the Tax Date is not the
exercise date, the Company may issue the full number of shares of Common Stock
to which the Section 16(a) Option Holder is entitled, and such option holder
shall be obligated to tender to the Company on the Tax Date a number of such
shares necessary to satisfy the withholding obligation. Certificates
representing such shares of Common Stock shall bear a legend describing such
Section 16(a) Option Holders obligation hereunder.
Section 2.9. EFFECT OF EXERCISE. The exercise of any Stock Option shall
cancel that number of related Alternate Appreciation Rights and/or Limited
Rights, if any, that is equal to the number of shares of Common Stock purchased
pursuant to said option unless otherwise agreed by the Committee in an Award
Agreement or otherwise.
ARTICLE III. INCENTIVE STOCK OPTIONS
Section 3.1. AWARD OF INCENTIVE STOCK OPTIONS. The Committee may, from
time to time and subject to the provisions of this Plan and such other terms and
conditions as the Committee may prescribe, grant to any participant in this Plan
one or more "incentive stock options" (intended to qualify as such under the
provisions of Section 422 of the Code ("Incentive Stock Options") to purchase
the number of shares of Common Stock allotted by the Committee. The date an
Incentive Stock Option is granted shall mean the date selected by the Committee
as of which the Committee allots a specific number of shares to a participant
pursuant to this Plan.
Section 3.2. INCENTIVE STOCK OPTION AGREEMENTS. The grant of an
Incentive Stock Option shall be evidenced by a written Award Agreement, executed
by the Company and the holder of an Incentive Stock Option (the "Optionee"),
stating the number of shares of Common Stock subject to the Incentive Stock
Option evidenced thereby, and in such form as the Committee may from time to
time determine.
Section 3.3. INCENTIVE STOCK OPTION PRICE. The option price per share of
Common Stock deliverable upon the exercise of an Incentive Stock Option shall be
at least 100% of the fair market value of a share of Common Stock on the date
the Incentive Stock Option is granted; provided, however, the option price per
share of Common Stock deliverable upon the exercise of an Incentive Stock Option
granted to any owner of 10% or more of the total combined voting power of all
classes of stock of the Company and its subsidiaries shall be at least 110% of
the fair market value of a share of Common Stock on the date the Incentive Stock
Option is granted.
Section 3.4. TERM AND EXERCISE. Each Incentive Stock Option shall not be
exercisable prior to six months from the date of its grant and, unless a shorter
period is provided by the Committee or another Section of this Plan, may be
exercised during a period of ten years from the date of grant thereof (the
"Option Term"). No Incentive Stock Option shall be exercisable after the
expiration of its Option Term.
Section 3.5. MAXIMUM AMOUNT OF INCENTIVE STOCK OPTION GRANT. To the
extent that the aggregate fair market value (determined at the time the
respective Incentive Stock Option is granted) of 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
and its parent and subsidiary corporations exceeds $100,000, such excess
Incentive Stock Options shall be treated as options which do not constitute
Incentive Stock Options. The Committee shall determine, in accordance with
applicable provisions of the Code, Treasury Regulations and other administrative
pronouncements,
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which of an Optionee's Incentive Stock Options will not constitute Incentive
Stock Options because of such limitation and shall notify the Optionee of such
determination as soon as practicable after such determination.
Section 3.6. DEATH OF OPTIONEE.
(a) Upon the death of the Optionee, any Incentive Stock Option
exercisable on the date of death may be exercised by the Optionee's
estate or by a person who acquires the right to exercise such Incentive
Stock Option by bequest or inheritance or by reason of the death of the
Optionee, provided that such exercise occurs within both the remaining
option term of the Incentive Stock Option and one year after the
Optionee's death.
(b) The provisions of this Section shall apply notwithstanding
the fact that the Optionee's employment may have terminated prior to
death, but only to the extent of any Incentive Stock Options exercisable
on the date of death.
Section 3.7. RETIREMENT OR DISABILITY. Upon the termination of the
Optionee's employment by reason of permanent disability or retirement (as each
is determined by the Committee), the Optionee may, within 36 months from the
date of such termination of employment (or such shorter period of time as may be
determined by the Committee in any instance, as reflected in each Optionee's
Award Agreement), exercise any Incentive Stock Options to the extent such
Incentive Stock Options were exercisable at the date of such termination of
employment. Notwithstanding the foregoing, the tax treatment available pursuant
to Section 422 of the Code upon the exercise of an Incentive Stock Option will
not be available to an Optionee who exercises any Incentive Stock Options more
than (i) 12 months after the date of termination of employment due to permanent
disability or (ii) three months after the date of termination of employment due
to retirement.
Section 3.8. TERMINATION FOR OTHER REASONS. Except as provided in
Sections 3.6 and 3.7 or except as otherwise determined by the Committee, all
Incentive Stock Options shall terminate three months after the date of the
termination of the Optionee's employment (or such shorter period of time as may
be determined by the Committee in any instance, as reflected in each Optionee's
Award Agreement).
Section 3.9. APPLICABILITY OF STOCK OPTIONS SECTIONS. Sections 2.5,
Manner of Payment; 2.6, Delivery of Shares; 2.8, Tax Elections and 2.9, Effect
of Exercise, applicable to Stock Options, shall apply equally to Incentive Stock
Options. Such Sections are incorporated by reference in this Article III as
though fully set forth herein.
ARTICLE IV. RELOAD OPTIONS
Section 4.1. AUTHORIZATION OF RELOAD OPTIONS. Concurrently with or
subsequent to the award of Stock Options and/or the award of Incentive Stock
Options to any participant in this Plan, the Committee may authorize reload
options ("Reload Options") to purchase shares of Common Stock. The number of
Reload Options shall equal (i) the number of shares of Common Stock used to pay
the exercise price of the underlying Stock Options or Incentive Stock Options
and (ii) to the extent authorized by the Committee, the number of shares of
Common Stock withheld by the Company in payment of the exercise price underlying
the Stock Option or Incentive Stock Option or used to satisfy any tax
withholding requirement incident to the exercise of the underlying Stock Options
or Incentive Stock Options. The grant of a Reload Option will become effective
upon the exercise of underlying Stock Options, Incentive Stock Options, or
Reload Options through the use of shares of Common Stock held by the Optionee or
the withholding of shares by the Company in payment of the exercise price of the
underlying Stock Option or Incentive Stock Option held by the Optionee.
Notwithstanding the fact that the underlying option may be an Incentive Stock
Option, a Reload Option is not intended to qualify as an "incentive stock
option" under Section 422 of the Code.
Section 4.2. RELOAD OPTION AMENDMENT. Each Award Agreement shall state
whether the Committee has authorized Reload Options with respect to the Stock
Options and/or Incentive Stock Options covered by such Agreement. Upon the
exercise of an underlying Stock Option, Incentive Stock Option, or other Reload
Option, the
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Reload Option will be evidenced by an amendment to the underlying Award
Agreement in such form as the Committee shall approve.
Section 4.3. RELOAD OPTION PRICE. The option price per share of Common
Stock deliverable upon the exercise of a Reload Option shall be the fair market
value of a share of Common Stock on the date the grant of the Reload Option
becomes effective.
Section 4.4. TERM AND EXERCISE. Each Reload Option is fully exercisable
six months from the effective date of grant. The term of each Reload Option
shall be equal to the remaining option term of the underlying Stock Option
and/or Incentive Stock Option.
Section 4.5. TERMINATION OF EMPLOYMENT. Unless otherwise determined by
the Committee in an Award Agreement or otherwise, no additional Reload Options
shall be granted to Optionees when Stock Options, Incentive Stock Options,
and/or Reload Options are exercised pursuant to the terms of this Plan following
termination of the Optionee's employment.
Section 4.6. APPLICABILITY OF STOCK OPTIONS SECTIONS. Sections 2.5,
Manner of Payment; 2.6 Delivery of Shares; 2.7, Death, Retirement and
Termination of Employment of Optionee; 2.8, Tax Elections; and 2.9, Effect of
Exercise, applicable to Stock Options, shall apply equally to Reload Options.
Such Sections are incorporated by reference in this Article IV as though fully
set forth herein.
ARTICLE V. ALTERNATE APPRECIATION RIGHTS
Section 5.1. AWARD OF ALTERNATE APPRECIATION RIGHTS. Concurrently with
or subsequent to the award of any Stock Option, Incentive Stock Option, or
Reload Option to purchase one or more shares of Common Stock, the Committee may,
subject to the provisions of this Plan and such other terms and conditions as
the Committee may prescribe, award to the Optionee with respect to each share of
Common Stock covered by an Option, a related alternate appreciation right
permitting the Optionee to be paid the appreciation on the Option in lieu of
exercising the Option ("Alternate Appreciation Right").
Section 5.2. ALTERNATE APPRECIATION RIGHTS AGREEMENT. Alternate
Appreciation Rights shall be evidenced by written Award Agreements in such form
as the Committee may from time to time determine.
Section 5.3. EXERCISE. An Optionee who has been granted Alternate
Appreciation Rights may, from time to time, in lieu of the exercise of an equal
number of Options, elect to exercise one or more Alternate Appreciation Rights
and thereby become entitled to receive from the Company payment in Common Stock
of the number of shares determined pursuant to Sections 5.4 and 5.5. Alternate
Appreciation Rights shall be exercisable only to the same extent and subject to
the same conditions as the Options related thereto are exercisable, as provided
in this Plan. The Committee may, in its discretion, prescribe additional
conditions to the exercise of any Alternate Appreciation Rights.
Section 5.4. AMOUNT OF PAYMENT. The amount of payment to which an
Optionee shall be entitled upon the exercise of each Alternate Appreciation
Right shall be equal to 100% of the amount, if any, by which the fair market
value of a share of Common Stock on the exercise date exceeds the option price
per share on the Option related to such Alternate Appreciation Right. A Section
16(a) Option Holder may elect to withhold shares of Common Stock issued under
this Section to pay taxes as described in Section 2.8.
Section 5.5. FORM OF PAYMENT. The number of shares to be paid shall be
determined by dividing the amount of payment determined pursuant to Section 5.4
by the fair market value of a share of Common Stock on the exercise date of such
Alternate Appreciation Rights. As soon as practicable after exercise, the
Company shall deliver to the Optionee a certificate or certificates for such
shares of Common Stock.
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Section 5.6. EFFECT OF EXERCISE. Unless otherwise provided in an Award
Agreement or agreed to by the Committee, the exercise of any Alternate
Appreciation Rights shall cancel an equal number of Stock Options, Incentive
Stock Options, Reload Options, and Limited Rights, if any, related to said
Alternate Appreciation Rights.
Section 5.7. TERMINATION OF EMPLOYMENT, RETIREMENT, DEATH OR DISABILITY.
Unless otherwise provided in an Award Agreement or agreed to by the Committee:
(a) Upon termination of the Optionee's employment (including
employment as a director of the Company after an Optionee terminates
employment as an officer or key employee of the Company) by reason of
permanent disability or retirement (as each is determined by the
Committee), the Optionee may, within six months from the date of such
termination (or such shorter period of time as may be determined by the
Committee in any instance, as reflected in each Optionee's Award
Agreement), exercise any Alternate Appreciation Rights to the extent
such Alternate Appreciation Rights are exercisable during such period.
(b) Except as provided in Section 5.7(a), all Alternate
Appreciation Rights shall terminate three months after the date of the
termination of the Optionee's employment or upon the death of the
Optionee.
ARTICLE VI. LIMITED RIGHTS
Section 6.1. AWARD OF LIMITED RIGHTS. Concurrently with or subsequent to
the award of any Stock Option, Incentive Stock Option, Reload Option, or
Alternate Appreciation Right, the Committee may, subject to the provisions of
this Plan and such other terms and conditions as the Committee may prescribe,
award to the Optionee with respect to each share of Common Stock covered by an
Option, a related limited right permitting the Optionee, during a specified
limited time period, to be paid the appreciation on the option in lieu of
exercising the option ("Limited Right").
Section 6.2. LIMITED RIGHTS AGREEMENT. Limited Rights granted under this
Plan shall be evidenced by written Award Agreements in such form as the
Committee may from time to time determine.
Section 6.3. EXERCISE PERIOD. Limited Rights are exercisable in full for
a period of seven months following the date of a Change in Control of the
Company (the "Exercise Period"); provided, however, that Limited Rights may not
be exercised under any circumstances until the expiration of the six-month
period following the date of grant. As used in this Plan, a "Change in Control"
shall be deemed to have occurred if (a) the Company shall not be the surviving
entity in any merger, consolidation or other reorganization (or survives only as
a subsidiary of an entity), (b) the Company sells, leases or exchanges, or
agrees to sell, lease or exchange, all or substantially all of its assets to any
other person or entity, (c) the Company is to be dissolved and liquidated, (d)
any person or entity, including a "group" as contemplated by Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended, acquires or gains ownership or
control (including, without limitation, power to vote) of more than 50% of the
outstanding shares of the Company's voting stock (based upon voting power), or
(e) as a result of or in connection with a contested election of directors, the
persons who were directors of the Company before such election shall cease to
constitute a majority of the Board.
Section 6.4. AMOUNT OF PAYMENT. The amount of payment to which an
Optionee shall be entitled upon the exercise of each Limited Right shall be
equal to 100% of the amount, if any, which is equal to the difference between
the option price per share of Common Stock covered by the related option and the
Market Price of a share of such Common Stock. "Market Price" is defined to be
the greater of (i) the highest price per share of the Company's Common Stock
paid in connection with any Change in Control and (ii) the fair market value per
share of the Company's Common Stock determined in accordance with Section
8.7(c).
Section 6.5. FORM OF PAYMENT. Payment of the amount to which an Optionee
is entitled upon the exercise of Limited Rights, as determined pursuant to
Section 6.4, shall be made solely in cash.
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Section 6.6. EFFECT OF EXERCISE. If Limited Rights are exercised, the
Stock Options, Incentive Stock Options, Reload Options, and Alternate
Appreciation Rights, if any, related to such Limited Rights shall cease to be
exercisable to the extent of the number of shares with respect to which the
Limited Rights were exercised. Upon the exercise or termination of the Stock
Options, Incentive Stock Options, Reload Options, and Alternate Appreciation
Rights, if any, related to such Limited Rights, the Limited Rights granted with
respect thereto terminate to the extent of the number of shares as to which the
related options and Alternate Appreciation Rights were exercised or terminated.
Section 6.7. RETIREMENT OR DISABILITY. Upon termination of the
Optionee's employment (including employment as a director of the Company after
an Optionee terminates employment as an officer or key employee of the Company)
by reason of permanent disability or retirement (as each is determined by the
Committee), the Optionee may, within six months from the date of termination,
exercise any Limited Right to the extent such Limited Right is exercisable
during such six-month period.
Section 6.8. DEATH OF OPTIONEE OR TERMINATION FOR OTHER REASONS. Except
as provided in Sections 6.7 and 6.9, or except as otherwise determined by the
Committee, all Limited Rights granted under this Plan shall terminate upon the
termination of the Optionee's employment or upon the death of the Optionee.
Section 6.9. TERMINATION RELATED TO A CHANGE IN CONTROL. The requirement
that an Optionee be terminated by reason of retirement or permanent disability
or be employed by Carriage at the time of exercise pursuant to Sections 6.7 and
6.8 respectively, is waived during the Exercise Period as to an Optionee who (i)
was employed by Carriage at the time of the Change in Control and (ii) is
subsequently terminated by Carriage other than for just cause or who voluntarily
terminates if such termination was the result of a good faith determination by
the Optionee that as a result of the Change in Control he is unable to
effectively discharge his present duties or the duties of the position which he
occupied just prior to the Change in Control. As used herein "just cause" shall
mean willful misconduct or dishonesty or conviction of or failure to contest
prosecution for a felony, persistent failure or refusal to attend to duties or
follow Company policy, or excessive absenteeism unrelated to illness.
ARTICLE VII. BONUS STOCK AWARDS
Section 7.1. AWARD OF BONUS STOCK. The Committee may from time to time,
and subject to the provisions of this Plan and such other terms and conditions
as the Committee may prescribe, grant to any participant in this Plan shares of
Common Stock ("Stock Bonus").
Section 7.2. STOCK BONUS AGREEMENTS. The grant of a Stock Bonus shall be
evidenced by a written Award Agreement, executed by the Company and the
recipient of a Stock Bonus, in such form as the Committee may from time to time
determine, providing for the terms of such grant, including any vesting
schedule, restrictions on the transfer of such Common Stock or other matters.
Specifically, the Committee may provide that the restrictions on the transfer of
such Common Stock shall lapse upon (i) the attainment of targets established by
the Committee that are based on (1) the price of a share of Stock, (2) the
Company's earnings per share, (3) the Company's revenue, (4) the revenue of a
business unit of the Company designated by the Committee, (5) the return on
stockholders' equity achieved by the Company, or (6) the Company's pre-tax cash
flow from operations (ii) the Participant's continued employment with the
Company for a specified period of time, or (iii) a combination of any two or
more of the factors listed in clauses (i) and (ii) of this sentence.
Section 7.3. TRANSFER RESTRICTION. Any Award Agreement providing for the
issuance of Bonus Stock to any person who, at the time of grant, is a person
described in Section 16(a) under the Securities Exchange Act of 1934 shall
provide that such Common Stock cannot be resold for a period of six months
following the grant of such Bonus Stock.
ARTICLE VIII. MISCELLANEOUS
Section 8.1. GENERAL RESTRICTION. Each Award under this Plan shall be
subject to the requirement that, if at any time the Committee shall determine
that (i) the listing, registration, or qualification of the shares of Common
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Stock subject or related thereto upon any securities exchange or under any state
or Federal law, or (ii) the consent or approval of any government regulatory
body, or (iii) an agreement by the grantee of an Award with respect to the
disposition of shares of Common Stock, is necessary or desirable as a condition
of, or in connection with, the granting of such Award or the issue or purchase
of shares of Common Stock thereunder, such Award may not be consummated in whole
or in part unless such listing, registration, qualification, consent, approval
or agreement shall have been effected or obtained free of any conditions not
acceptable to the Committee.
Section 8.2. NON-TRANSFERABILITY. An Incentive Stock Option and all
rights granted thereunder shall not be transferable other than by will or the
laws of descent and distribution or pursuant to a qualified domestic relations
order as defined by the Code or Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), as amended, or the rules thereunder,
and shall be exercisable during the Optionee's lifetime only by the Optionee or
the Optionee's guardian or legal representative. An Award (other than an
Incentive Stock Option) shall not be transferable otherwise than (i) by will or
the laws of descent and distribution, (ii) pursuant to a qualified domestic
relations order as defined by the Code or Title I of ERISA or (iii) with the
consent of the Committee.
Section 8.3. WITHHOLDING TAXES. Whenever the Company proposes or is
required to issue or transfer shares of Common Stock under this Plan, the
Company shall have the right to require the grantee to remit to the Company an
amount sufficient to satisfy any Federal, state, and/or local withholding tax
requirements prior to the delivery of any certificate or certificates for such
shares. Alternatively, the Company may issue or transfer such shares of the
Company net of the number of shares sufficient to satisfy the withholding tax
requirements. For withholding tax purposes, the shares of Common Stock shall be
valued on the date the withholding obligation is incurred.
Section 8.4. RIGHT TO TERMINATE EMPLOYMENT. Nothing in this Plan or in
any agreement entered into pursuant to this Plan shall confer upon any
participant the right to continue in the employment of Carriage or affect any
right which Carriage may have to terminate the employment of such participant.
Section 8.5. NON-UNIFORM DETERMINATIONS. The Committee's determinations
under this Plan (including without limitation determinations of the persons to
receive Awards, the form, amount and timing of such Awards, the terms and
provisions of such Awards and the agreements evidencing same) need not be
uniform and may be made by it selectively among persons who receive, or are
eligible to receive, awards under this Plan, whether or not such persons are
similarly situated.
Section 8.6. RIGHTS AS A SHAREHOLDER. The recipient of any Award under
this Plan shall have no rights as a shareholder with respect thereto unless and
until certificates for shares of Common Stock are issued to him or her.
Section 8.7. DEFINITIONS. In this Plan the following definitions shall
apply:
(a) "Subsidiary" means any corporation of which, at the time more
than 50% of the shares entitled to vote generally in an election of
directors are owned directly or indirectly by the Company or any
subsidiary thereof.
(b) "Affiliate" means any person or entity which directly, or
indirectly through one or more intermediaries, controls, is controlled
by, or is under common control with the Company.
(c) "Fair market value" as of any date and in respect or any
share of Common Stock means (i) until such time as the Common Stock is
traded on a national securities exchange or over-the-counter and
reported on the National Association of Securities Dealers Automated
Quotations System ("NASDAQ"), then the price per share determined in
good faith by the Committee, taking into consideration all factors it
deems relevant, including liquidity, priority, minority interest
discount, and the price per share at which other securities of the
Company have been issued; (ii) if the Common Stock is traded on a
national securities exchange, then the closing price on such date or on
the next business day, if such date is not a business day, of a share of
Common Stock reflected in the consolidated trading tables of THE WALL
STREET JOURNAL or any other publication selected by the Committee; or
(iii) if the Common Stock is traded over-the-counter and
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reported on NASDAQ, then the average of the high and low sales prices on
such trading day as reported in such publication or, if not so
published, then as reported by NASDAQ, and if the Common Stock is not in
the NASDAQ National Market System on such trading day, then the
representative bid and asked prices at the end of such trading day in
such market as reported by NASDAQ. In no event shall the fair market
value of any share of Common Stock be less than its par value.
(d) "Option" means Stock Option, Incentive Stock Option, or
Reload Option.
(e) "Option price" means the purchase price per share of Common
Stock deliverable upon the exercise of a Stock Option, Incentive Stock
Option, or Reload Option.
Section 8.8. LEAVES OF ABSENCE. The Committee shall be entitled to make
such rules, regulations, and determinations as it deems appropriate under this
Plan in respect of any leave of absence taken by the recipient of any Award.
Without limiting the generality of the foregoing, the Committee shall be
entitled to determine (i) whether or not any such leave of absence shall
constitute a termination of employment within the meaning of this Plan and (ii)
the impact, if any, of any such leave of absence on Awards under this Plan
theretofore made to any recipient who takes such leave of absence.
Section 8.9. NEWLY ELIGIBLE EMPLOYEES. The Committee shall be entitled
to make such rules, regulations, determinations and awards as it deems
appropriate in respect of any employee who becomes eligible to participate in
this Plan or any portion thereof after the commencement of an award or incentive
period.
Section 8.10. ADJUSTMENTS. In any event of any change in the outstanding
Common Stock by reason of a stock dividend or distribution, recapitalization,
merger, consolidation, split-up, combination, exchange of shares or the like,
the Committee may appropriately adjust the number of shares of Common Stock that
may be issued under this Plan, the number of shares of Common Stock subject to
Options theretofore granted under this Plan, and any and all other matters
deemed appropriate by the Committee.
Section 8.11. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE.
(a) The existence of outstanding Options, Alternate Appreciation
Rights, or Limited Rights shall not affect in any way the right or power
of the Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations, or other changes in the
Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures,
preferred or prior preference stock ahead of or affecting the Common
Stock or the rights thereof, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
(b) If, while there are outstanding Options, the Company shall
effect a subdivision or consolidation of shares or other increase or
reduction of the number of shares of the Common Stock outstanding
without receiving compensation therefor in money, services or property,
then (a) in the event of an increase in the number of such shares
outstanding, the number of shares of Common Stock then subject to
Options hereunder shall be proportionately increased; and (b) in the
event of a decrease in the number of such shares outstanding the number
of shares then available for Option hereunder shall be proportionately
decreased.
(c) After a merger of one or more corporations into the Company,
or after a consolidation of the Company and one or more corporations in
which the Company shall be the surviving corporation, which transaction
alters the outstanding capital structure of the Company, then each
holder of an outstanding Option shall, at no additional cost, be
entitled upon exercise of such Option to receive (subject to any
required action by stockholders) in lieu of the number of shares as to
which such Option shall then be so exercisable, the number and class of
shares of stock or other securities to which such holder would have been
entitled to receive pursuant to the terms of the agreement of merger or
consolidation if, immediately prior to such
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merger or consolidation, such holder had been the holder of record of a
number of shares of the Company equal to the number of shares as to
which such Option had been exercisable.
(d) If the Company is merged into or consolidated with another
corporation or other entity under circumstances where the Company is not
the surviving corporation, or if the Company sells or otherwise disposes
of substantially all of its assets to another corporation or other
entity while unexercised Options remain outstanding, then the Committee
may direct that any of the following shall occur:
(i) If the successor entity is willing to assume the
obligation to deliver shares of stock or other securities after
the effective date of the merger, consolidation or sale of
assets, as the case may be, each holder of an outstanding Option
shall be entitled to receive, upon the exercise of such Option
and payment of the option price, in lieu of shares of Common
Stock, such shares of stock or other securities as the holder of
such Option would have been entitled to receive had such Option
been exercised immediately prior to the consummation of such
merger, consolidation or sale, and any related Alternate
Appreciation Right and Limited Right associated with such Option
shall apply as nearly as practicable to the shares of stock or
other securities purchasable upon exercise of the Option
following such merger, consolidation or sale of assets.
(ii) The Committee may waive any limitations set forth in
or imposed pursuant to this Plan or any Award Agreement with
respect to such Option and any related Alternate Appreciation
Right or Limited Option such that such Option and related
Alternate Appreciation Right and Limited Right shall become
exercisable prior to the record or effective date of such merger,
consolidation or sale of assets.
(iii) The Committee may cancel all outstanding Options and
Alternate Appreciation Rights (but not Limited Rights) as of the
effective date of any such merger, consolidation, or sale of
assets provided that prior notice of such cancellation shall be
given to each holder of an Option at least 30 days prior to the
effective date of such merger, consolidation, or sale of assets,
and each holder of an Option shall have the right to exercise
such Option and any related Alternate Appreciation Right in full
during a period of not less than 30 days prior to the effective
date of such merger, consolidation, or sale of assets. No action
taken by the Committee under this subsection shall have the
effect of terminating, and nothing in this subsection shall
permit the Committee to terminate, any Limited Right held by an
Optionee.
(e) Except as herein provided, the issuance by the Company of
Common Stock or any other shares of capital stock or securities
convertible into shares of capital stock, for cash property, labor done
or other consideration, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of
Common Stock then subject to outstanding Options.
Section 8.12. AMENDMENT OF THIS PLAN.
(a) The Committee may, without further action by the stockholders
and without receiving further consideration from the participants, amend
this Plan or condition or modify Awards under this Plan in response to
changes in securities or other laws or rules, regulations or regulatory
interpretations thereof applicable to this Plan or to comply with stock
exchange rules or requirements.
(b) The Committee may at any time and from time to time terminate
or modify or amend this Plan in any respect, except that without
shareholder approval the Committee may not (i) increase the maximum
aggregate number of shares of Common Stock which may be issued under
this Plan (other than increases pursuant to Sections 8.10 and 8.11) or
(ii) change the class of employees eligible to receive Awards under the
Plan. The termination or any modification or amendment of this Plan,
except as provided in subsection (a), shall not, without the consent of
a participant, affect his or her rights under an Award previously
granted to him or her.
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