EXHIBIT 10.34
CONSULTING AGREEMENT
THIS AGREEMENT, made effective as of the 1st day of January, 2001, is
between CARRIAGE SERVICES, INC., a Delaware corporation (the "Company"), and
MARK W. DUFFEY, a resident of Harris County, Texas (the "Consultant").
W I T N E S S E T H:
WHEREAS, the Consultant has heretofore been a full-time employee of the
Company and one or more of its subsidiaries (collectively, "Carriage") as
President of the Company and most of its subsidiaries, pursuant to the terms of
the Executive Employment Agreement dated November 8, 1999 between the Company
and the Consultant (the "Prior Employment Agreement"); and
WHEREAS, pursuant to the Separation Agreement and Release dated December
30, 2000 (the "Separation Agreement") the parties have mutually agreed to
convert the Consultant's status from that of an employee to that of a
consultant, and the Company recognizes that the Consultant's experience,
knowledge, reputation and contacts in the death care industry will continue to
be of great value to the Company and therefore desires to continue to retain his
services, on the terms and conditions hereafter set forth;
NOW, THEREFORE, the Company and the Consultant hereby agree as follows:
1. Term. The Company hereby engages the Consultant for a term commencing
on the date hereof and, subject to Section 5 hereof, ending on December 31, 2004
(the "term of this Agreement"), to consult with and advise the Company as
hereinafter provided. The Consultant agrees to accept such engagement and to
perform the services specified herein, all upon the terms and conditions
hereinafter stated. This Agreement is expressly made subject to the Consultant
not revoking the Separation Agreement, and in the event of such revocation, this
Agreement shall thereupon become void ab initio, as if never entered into.
2. Duties.
(a) During the term of this Agreement, the Consultant shall serve
the Company in a consultive capacity and shall report to the Board of
Directors of the Company or its Chief Executive Officer. The Consultant's
services hereunder shall include providing advice and consultation
regarding the following:
(i) The Company's e-commerce strategies, including its
investment in Lifetime Reflections, L.P., and other exploitation of
opportunities involving the Company through Internet-based
technologies; it is understood, however, that the Consultant's
involvement in Carriage Life Events, Inc. or any other E-Commerce
Venture (as defined in the Separation Agreement) shall not be
covered by this Agreement;
(ii) The Company's relationship with former owners of funeral
homes and cemeteries which have affiliated with the Company; and
(iii) Any other areas involving the Company and its business
and operations as may be mutually identified by the parties.
(b) From January 1, 2001 through June 30, 2001, the Consultant shall
render services to the Company, if and when requested by the Company in
writing, up to 24 hours per month. For each month thereafter throughout
the remainder of the term of this Agreement, the Consultant shall render
services to the Company, if and when requested by the Company in writing,
up to 8 hours per month. The services so required to be rendered by
Consultant hereunder are referred to as "Required Services." The Company
may request that Consultant render services above the level of Required
Services described above, which the Consultant may accept or reject in his
sole discretion.
(c) Consultant shall render services hereunder at times reasonably
convenient to him, but this Section 2 shall not be construed so as to
prevent Consultant from accepting employment on a full-time basis with any
other person, subject to the covenants described in Sections 6 and Section
7 hereof. Consultant shall take reasonable precautions to ensure that this
Agreement does not conflict with any terms or conditions of any new
employment which he may obtain. It shall not be necessary for Consultant
to render Required Services or any other services at the Company's
corporate offices or any other Carriage location, but rather such services
may be rendered at locations of Consultant's choice and may include
services provided electronically, such as by phone, fax or over the
Internet, it being the intention of the parties that Consultant's services
hereunder do not interfere with any new position which Consultant may
accept elsewhere (subject to such covenants).
(d) The Consultant agrees that at all times during the term of this
Agreement:
(i) The Consultant will not knowingly or intentionally do or
say any act in bad faith which is intended to impair, damage or
destroy the goodwill and esteem for Carriage of its suppliers,
employees, patrons, customers and others who may at any time have or
have had business relations with Carriage.
(ii) The Consultant will not directly encourage, recommend or
approve the use at any time of the services of any competitor of
Carriage. This clause (ii) is not intended to (x) restrict an
E-Commerce Venture of which the Consultant may become associated
from networking and otherwise contracting with funeral homes,
cemeteries and other death care businesses, including those which
may be
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competitors of Carriage or (y) prevent Consultant from privately
making recommendations to family, friends and personal
acquaintances.
(iii)The Consultant will not reveal to any third person any
difference of opinion, if there be such at any time, between him and
the management of the Company as to its personnel, policies or
practices.
3. Compensation.
(a) Consulting Fees. As compensation for the Required Services, the
Company shall pay to the Consultant a consulting fee of (i) $1,000.00 per
month for the period January 2001 through June 2001, and (ii) $250.00 per
month for the remainder of the term of this Agreement, in each case
payable on or before the last day of each month. It is understood,
however, that the foregoing fees are for only for the Required Services.
If the Company requests any additional services from Consultant and
Consultant agrees to provide such services, then the Company shall pay
Consultant such additional consulting fees, at such rates and at such
times and in such manner as the parties mutually agree.
(b) Out-of-Pocket Expenses. The Company shall reimburse the
Consultant for all reasonable out-of-pocket expenses incurred by him in
rendering services hereunder, provided that the same are in accordance
with the Company's expense reimbursement policy from time to time in
effect and the Company has approved each and every such expense in advance
and in writing.
4. Independent Contractor. The Consultant is retained and engaged by the
Company only for the purposes and to the extent set forth herein, and the
Consultant's relation to the Company shall, during the term of this Agreement,
be that of an independent contractor and not that of an employee. In rendering
his services hereunder, the Consultant shall not, without the prior written
consent of the Company, represent that he has the right or authority to bind the
Company in any respect.
5. Termination.
(a) Death. If the Consultant dies during the term of this Agreement,
this Agree ment shall automatically terminate and the Company shall have
no further obligation to the Consultant or his estate under this Agreement
except that the Company shall pay the Consultant's estate that portion of
any consulting fee which may have become earned as of the date of death
but not yet paid in accordance with Section 3(a) hereof. Consultant's
death shall not affect the Company's obligations under the Separation
Agreement or any other exhibit thereto except to the extent expressly
provided therein.
(b) Discharge for Cause. Prior to the end of the term of this
Agreement, the Company may discharge the Consultant for Cause and
terminate this Agreement. In such
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case this Agreement shall automatically terminate and the Company shall
have no further obligation to the Consultant or his estate other than to
pay to the Consultant or his estate in the event of his subsequent death
any consulting fee which may have become earned through the date of
termination but not yet paid in accordance with Section 3(a) hereof. For
purposes of this Agreement, the Company shall have "Cause" to discharge
the Consultant or terminate the Consultant's services hereunder upon (i)
the Consultant's failure to cure, after reasonable notice of not less than
thirty (30) days, a material breach of any of the terms of this Agreement;
(ii) the Consultant's conviction of a felony involving moral turpitude,
fraud, theft, embezzlement, assault, battery, rape or other violent act or
another crime; or (iii) the Consultant having engaged in willful
misconduct in the performance of the Required Services that has a material
adverse effect on the Company; provided, however, no act or failure to act
shall be deemed "willful" if due primarily to an error in judgment or
negligence or if made in good faith and with reasonable belief that such
act is in the best interest of the Company. Neither Consultant's failure
to render the required number of hours of Required Services in a
particular month, nor the quality or nature of such services, will by
itself constitute "Cause" hereunder. On the other hand, a violation of
Section 2(d), 6 or 7 of this Agreement may, subject to the above
qualifications, constitute "Cause."
(c) Discharge Without Cause. Prior to the end of the term of this
Agreement, the Company may discharge the Consultant without Cause (as
defined in paragraph (b) above) and terminate this Agreement. In such case
this Agreement shall automatically terminate and the Company shall have no
further obligation to the Consultant or his estate, except that the
Company shall (i) continue to pay the consulting fees for Required
Services pursuant to Section 3(a) hereof for the remainder of the
four-year term of this Agreement, subject to his continued compliance with
Sections 6 and 7 hereof, in the same manner and at the same times as they
would have been paid to the Consultant had he not been discharged; and
(ii) pay any consulting fees due for services rendered beyond the Required
Services prior to the effective date of termination. A discharge of the
Consultant without Cause shall not affect the Company's obligations under
the Separation Agreement or any other exhibit thereto.
(d) Survival. The provisions of Sections 6 and 7 hereof survive any
termination of this Agreement.
6. Restrictive Covenants.
(a) Non-Competition. The Consultant acknowledges that in the course
of his employment with the Company as a member of the Company's senior
executive and management team, and during the term of his consultancy
hereunder, he has had and may continue to have access to confidential and
proprietary business information of Carriage, and has developed and may
hereafter continue to develop, through such employment and/or consultancy,
valuable business systems, methods of doing business, and contacts within
the death care industry, all of which have helped to identify him with the
business and goodwill of Carriage. Consequently, it is important that
Carriage protect its interests in regard to such
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matters from unfair competition. During the full four-year term of this
Agreement, the Consultant agrees that he will not, directly or indirectly:
(i) become a director, officer, employee, proprietor,
consultant, advisor or agent of, or own beneficially or of record
more than one percent (1%) of the fully diluted equity securities
(including options, warrants or other securities convertible into
equity securities) of, or otherwise derive any active income from,
any Conflicting Organization (as hereafter defined); or
(ii) induce or assist anyone in inducing in any way any
employee of Carriage to resign or sever his or her employment or to
breach an employment contract with Carriage.
The covenant under clause (i) above restricts the Consultant's
activities only insofar as they relate to the operations of the
Conflicting Organizations within the Continental United States, and any
activities devoted to business transacted exclusively outside the
Continental United States shall not be restricted hereby. Clause (i)
covers all roles or positions involving the Conflicting Organizations,
including but in no way limited to corporate development. For purposes
hereof, a "Conflicting Organization" means (x) any of the firms and
organizations listed on Schedule I hereto, and (y) any other firm or
organization, however structured, which owns or operates one or more
funeral homes, cemeteries or other businesses in the death care industry
anywhere within the Continental United States, whether now existing or
hereafter arising during the four-year term of this Agreement.
(b) E-Commerce Venture. In no event shall an E-Commerce Venture (as
defined in the Separation Agreement) constitute a Conflicting Organization
for purposes of this Agreement. The covenant under clause (ii) of
paragraph (a) above does not apply to Michael S. Lade or Vicki McArthur,
regardless of whether their employment is in connection with an E-Commerce
Venture or any other firm or organization with which the Consultant may
become associated.
(c) Term of Covenants. The covenants in this Section 6 shall
continue for the full four-year term of this Agreement, notwithstanding
that a discharge with or without Cause may sooner occur pursuant to
Section 5. On the other hand, such covenants shall not extend past such
four-year term, except for the duration of any period in which the
Consultant is in material breach of such covenants. It is specifically
understood that the Consultant shall not have the right or option to forgo
any compensation or benefits under this Agreement or the Separation
Agreement in order to be relieved of his covenants hereunder.
(d) Reformation. The foregoing covenants shall not be held invalid
or unen forceable because of the scope of the territory or actions subject
hereto or restricted hereby, or the period of time within which such
covenants respectively are operative, but the
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maximum territory, the action subject to such covenants and the period of
time they are enforceable are subject to any determination by a final
judgment of any court which has juris diction over the parties and subject
matter.
(e) Remedies. Both parties recognize that the services to be
rendered under this Agreement by the Consultant are special, unique, and
of extraordinary character, and that in the event of the breach by the
Consultant of the covenants contained in this Section 6 or Section 7
below, the Company shall be entitled, if it so elects, to suspend (if
applicable) any payments due under this Agreement and the Separation
Agreement and/or to institute and prosecute proceedings in any court of
competent jurisdiction to enforce through injunctive relief such
covenants. Consultant acknowledges and agrees that there is no adequate
remedy at law for his violation of such covenants and that in light of the
numerous years and the scope of his responsibilities with the Company, the
restrictions as to time, geographic scope and scope of activities
restrained in paragraph (a) above are both reasonable and necessary to
protect the goodwill and other legitimate business interests of the
Company. Indeed, the Consultant acknowledges that the payments and
commitments made by the Company in this Agreement and in the Separation
Agreement are in significant part provided by the Company to secure the
Consultant's agreement to such covenants. The Consultant agrees to waive
and hereby waives any requirement for the Company to secure any bond in
connection with the obtaining of such injunction or other equitable
relief.
7. Confidential Information. The Consultant acknowledges that in the
course of his affiliation with Carriage he has received, and in the course of
his consultancy hereunder he may continue to have access to, certain trade
secrets, lists of customers, management methods, operating techniques,
prospective acquisitions, employee lists, training manuals and procedures,
personnel evaluation procedures, financial reports and other confidential
information and knowledge concerning the business of Carriage (hereinafter
collectively referred to as "Information") which the Company desires to protect.
The Consultant understands that the Information is confidential and he agrees
not to reveal the Information to anyone outside of Carriage so long as the
confidential or secret nature of the Information shall continue; provided,
however, that Consultant may disclose E- Commerce Rights (as defined in the
Exclusive Development Agreement between Consultant and the Company of even date
herewith) to the extent necessary to develop the E-Commerce Venture pursuant to
the terms of such Agreement. The Consultant further agrees that he will at no
time use any Information in competing with Carriage. Consultant represents that
upon his transition from employee to Consultant hereunder, he has surrendered to
the Company, and has not kept any copies of, all papers, documents, writings and
other property produced by his or coming into his possession by or through his
employment with Carriage or relating to the Information, which the Consultant
acknowledges to be and will remain at all times remain the property of Carriage,
except insofar as the Company and the Consultant have specifically identified as
necessary to enable the Consultant to render services hereunder, and upon
termination of the consultancy hereunder, all remaining papers, documents,
writings and other property shall similarly be surrendered to the Company,
without any copies thereof retained by Consultant. Notwithstanding the
foregoing, Consultant may
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retain so-called Board books, encompassing materials which Consultant has
heretofore received in his capacity as a director of the Company.
8. Notices. All notices, requests, consents and other communications under
this Agreement shall be in writing and shall be deemed to have been delivered on
the date personally delivered or three business days after the date mailed,
postage prepaid, by certified mail, return receipt requested, or when sent by
telex or telecopy and receipt is confirmed, if addressed to the respective
parties as follows:
If to the Consultant: Mr. Mark W. Duffey
597 Piney Point Road
Houston, Texas 77024
If to the Company: Carriage Services, Inc.
1900 St. James Place, 4th Floor
Houston, Texas 77056
Attn: Chief Executive Officer
Either party hereto may designate a different address by providing written
notice of such new address to the other party hereto.
9. Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
provision or invalidity, without invalidating the remainder of such provision or
the remaining provisions of this Agreement.
10. Assignment. This Agreement may not be assigned by the Consultant.
Neither the Consultant nor his estate shall have any right to commute, encumber
or dispose of any right to receive payments hereunder, it being agreed that such
payments and the right thereto are nonassignable and nontransferable.
11. Binding Effect. Subject to the provisions of Section 10 of this
Agreement, this Agreement shall be binding upon and inure to the benefit of the
parties hereto, the Consultant's heirs and personal representatives, and the
successors and assigns of the Company.
12. Captions. The section and paragraph headings in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13. Complete Agreement. This Agreement represents the entire agreement
between the parties concerning the subject hereof and supersedes all prior
agreements and arrangements between the parties concerning the subject thereof.
Without limiting the generality of the foregoing, this Agreement upon the
effective date hereof will supersede and replace the Prior Employment
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Agreement (subject to reinstatement if this Agreement is rendered void as
described in Section 1 hereof), as well as any other prior agreements respecting
or relating to the Consultant's employment with or compensation from Carriage.
14. Governing Law. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Texas.
15. Counterparts. This Agreement may be executed in multiple original
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
CARRIAGE SERVICES, INC.
By: ________________________________________
MELVIN C. PAYNE, Chief Executive Officer
____________________________________________
MARK W. DUFFEY
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SCHEDULE I
TO
CONSULTING AGREEMENT
(MARK W. DUFFEY)
Conflicting Organization
For purposes of clause (x) of Section 6(a) of this Agreement, the term
"Conflicting Organization" specifically includes each of the following:
Service Corporation International
The Loewen Group Inc.
Stewart Enterprises, Inc.
Keystone Group Holdings, Inc.
Meridian Mortuary Group, Inc.
Cornerstone Family Services, Inc.
Prime Succession, Inc.
Hamilton Group, Inc.
Century Group
Saber Group
Thomas Pierce & Co.
The above listing is not intended to be in limitation of the generality of
clause (y) of Section 6(a).