def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant
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Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
Carriage Services, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its
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Form, Schedule or Registration Statement No.: |
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Date Filed: |
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CARRIAGE SERVICES, INC.
3040 Post Oak Boulevard, Suite 300
Houston, Texas 77056
April 20, 2009
Dear Carriage Stockholder:
I am pleased to invite you to the 2009 Annual Meeting of Stockholders of Carriage Services,
Inc. (Carriage). The meeting will be held at the Lakes on Post Oak Conference Center, 3050 Post
Oak Boulevard, 2nd Floor, Houston, Texas 77056, on Tuesday, May 19, 2009, at 9:00 a.m., Central
Daylight Time. If you cannot be present at the Annual Meeting, I ask that you participate by
completing the enclosed proxy card and returning it at your earliest convenience.
At the meeting, you and the other stockholders will elect two directors to Carriages Board of
Directors and ratify our independent registered public accounting firm. You will also have the
opportunity to hear what has happened in our business in the past year and to ask questions. I
encourage you to read the enclosed Notice of Annual Meeting and Proxy Statement, which contains
information about the Board of Directors and its committees and the executive management of
Carriage.
We hope you can join us on May 19th. Whether or not you can attend personally, it
is important that your shares are represented at the Annual Meeting. Please mark your votes on the
enclosed proxy card, sign and date the proxy card, and return it to us in the enclosed envelope.
Your vote is important, so please return your proxy card promptly.
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Sincerely,
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MELVIN C. PAYNE |
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Chairman of the Board,
President and Chief Executive Officer |
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CARRIAGE SERVICES, INC.
3040 Post Oak Boulevard, Suite 300
Houston, Texas 77056
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held May 19, 2009
Carriage Services, Inc. (the Company or Carriage) will hold its Annual Meeting of
Stockholders (Annual Meeting) at the Lakes on Post Oak Conference Center, 3050 Post Oak
Boulevard, 2nd Floor, Houston, Texas, 77056, on Tuesday, May 19, 2009, at 9:00 a.m., Central
Daylight Time.
We are holding this meeting:
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To elect two Class I directors to serve for a three-year term expiring at the
annual meeting of stockholders in 2012 and until each respective successor is elected
and qualified. |
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To ratify the selection of KPMG LLP (KPMG) as our independent registered
public accounting firm for the fiscal year ending December 31, 2009. |
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To transact such other business as may properly come before the annual meeting
or any adjournments thereof. |
The Companys Board of Directors has selected March 23, 2009 as the record date for
determining stockholders entitled to vote at the meeting. A list of stockholders as of that date
will be available for inspection at our corporate headquarters, 3040 Post Oak Boulevard, Suite 300,
Houston, Texas for ten days before the Annual Meeting.
You are cordially invited to attend the Annual Meeting. If you are unable to attend the
Annual Meeting, you are requested to sign and date the accompanying proxy card and return it
promptly in the enclosed envelope. If you attend the Annual Meeting, and wish to do so, you may
vote in person regardless of whether you have given your proxy. In any event, a proxy may be
revoked at any time before it is exercised.
This Notice of Annual Meeting Proxy Statement, proxy card and Carriages 2008 Annual Report to
Stockholders are being distributed on or about April 20, 2009.
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By Order of the Board of Directors
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J. Bradley Green |
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Senior Vice President, General Counsel and Secretary |
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Houston, Texas
April 20, 2009
Important Notice Regarding
the Availability of Proxy Materials
for the Annual Meeting of Stockholders of Carriage Services, Inc.
to be Held on May 19, 2009
The Proxy Statement and 2008 Annual Report to Stockholders
is available on the Internet at: www.carriageservices.com
TABLE OF CONTENTS
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i
CARRIAGE SERVICES, INC.
PROXY STATEMENT
GENERAL INFORMATION
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Q:
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Who is soliciting my proxy? |
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A:
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We, the Board of Directors (Board) of Carriage Services, Inc. (the
Company or Carriage), are sending you this Proxy Statement in
connection with our solicitation of proxies for use at Carriages 2009
Annual Meeting of Stockholders (the Annual Meeting). Certain
directors, officers and employees of Carriage and American Stock
Transfer & Trust Company (AST) also may solicit proxies on our
behalf by mail, phone, fax, or in person. |
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Q:
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Who is paying for this solicitation? |
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A:
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Carriage will pay for the solicitation of proxies, including the cost
of preparing and mailing this Proxy Statement. Carriage also will
reimburse banks, brokers, custodians, nominees and fiduciaries for
their reasonable charges and expenses to forward our proxy materials
to the beneficial owners of Carriage stock. No additional fee beyond
the $950 monthly fee paid to AST to act as Carriages transfer agent,
together with ASTs out-of-pocket expenses, will be paid to AST. |
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Q:
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What am I voting on? |
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A:
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(1) The re-election of Melvin C. Payne and the
election of Richard W. Scott to the Board of
Directors as Class I directors. |
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(2) The ratification of KPMG as our independent registered public accounting firm
for the fiscal year 2009. |
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Q:
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Who can vote? |
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A:
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Stockholders as of the close of business on March 23, 2009 are entitled to vote at the Annual Meeting. |
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How do I vote? |
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A:
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You may vote your shares either in person or by proxy. To vote by proxy, you should mark, date, sign and mail the enclosed
proxy card in the prepaid envelope. Giving a proxy will not affect your right to vote your shares if you attend the Annual
Meeting and want to vote in person by voting in person you automatically revoke your proxy. Directions to attend the
meeting in person can be obtained by contacting the Corporate Secretary of Carriage at 713-332-8400. You also may revoke your
proxy at any time before the Annual Meeting by giving the Corporate Secretary written notice of your revocation or by
submitting a later-dated proxy. If you return your proxy card but do not mark your voting preference, the individuals named as
proxies will vote your shares FOR the election of the nominees for director and FOR the other proposal described in this Proxy
Statement. |
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Q:
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How does the Board recommend I vote on the proposal? |
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A:
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The Board recommends votes: |
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FOR the election of each of the director nominees for Class I director. |
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FOR the ratification of KPMG as our independent registered public accounting
firm for the fiscal year 2009. |
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Q:
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Is my vote confidential? |
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A:
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Proxy cards, ballots and voting tabulations that identify individual stockholders are mailed or returned directly to
Carriage and handled in a manner intended to protect your voting privacy. Your vote will not be disclosed except: (1) as
needed to permit Carriage to tabulate and certify the vote; (2) as required by law; or (3) in limited circumstances, such
as a proxy contest in opposition to the Board (which is not currently anticipated). Additionally, all comments written on
the proxy card or elsewhere will be forwarded to management, but your identity will be kept confidential unless you ask
that your name be disclosed. |
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Q:
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How many shares can vote? |
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A:
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As of the record date, March 23, 2009, Carriage had outstanding 17,924,973 shares of common stock, par value $0.01 per
share (Common Stock). Each share of Common Stock is entitled to one (1) vote. |
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What happens if I withhold my vote for the directors? |
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A:
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Because the directors are elected by a plurality of the votes cast at the Annual Meeting, a withheld vote will not have an
effect on the outcome of the election of an individual director. |
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Can I vote on other matters? |
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A:
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Carriages By-laws limit the matters presented at an Annual Meeting to those in the notice of the meeting and those
otherwise properly presented before the Annual Meeting. We do not expect any other matter to come before the Annual
Meeting. If any other matter is presented at the Annual Meeting, your signed proxy gives the individuals named as proxies
authority to vote your shares on such matters at their discretion. |
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Why is it important to send in my proxy card so that it is received on or before May 19, 2009? |
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A:
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Carriage cannot conduct business at the Annual Meeting unless a quorum is present. A quorum will only be present if a
majority of the outstanding shares of Common Stock as of March 23, 2009 is present at the Annual Meeting in person or by
proxy. It is for this reason that we urge you to send in your completed proxy card as soon as possible, so that your
shares can be voted even if you cannot attend the Annual Meeting. |
3
RECORD DATE AND VOTING SECURITIES
Only holders of record of the Common Stock at the close of business on March 23, 2009, the
record date for the Annual Meeting, are entitled to notice of and to vote at the Annual Meeting.
On that date, Carriage had outstanding 17,924,973 shares of Common Stock, each of which is entitled
to one vote.
The presence at the Annual Meeting, in person or by proxy, of the holders of a majority of the
total voting power of the issued and outstanding shares of Common Stock is necessary to constitute
a quorum to transact business. In the absence of a quorum at the Annual Meeting, the Annual
Meeting may be adjourned without notice, other than announcement at the meeting, until a quorum
shall be formed.
With respect to the election of the directors, stockholders may vote (a) in favor of the
nominees or (b) to withhold votes as to the nominees. If a quorum is present at the Annual
Meeting, the nominees for the Class I director will be elected by a plurality vote. Votes
withheld, or abstentions, will be treated as present for purposes of determining a quorum; however,
because directors are elected by a plurality, votes withheld will not affect the outcome of the
election. With respect to each proposal (and any other matter properly brought before the Annual
Meeting), other than the election of the directors, the affirmative vote of the holders of a
majority of the voting power present or represented by proxy at the Annual Meeting will be required
for approval. Abstentions will have the effect of a vote against any of these proposals.
Under the rules of the New York Stock Exchange (NYSE), the proposal to elect the directors
is considered a discretionary item. This means that brokerage firms may vote in their discretion
on this matter on behalf of clients who have not furnished voting instructions at least ten days
before the date of the Annual Meeting.
All properly signed proxies received prior to the Annual Meeting will be voted in accordance
with the choices specified. If no choice has been specified in the proxy, the shares will be voted
in favor of all proposals described in this Proxy Statement and in the discretion of the persons
named in the proxy in connection with any other business that may properly come before the Annual
Meeting. A stockholder giving a proxy may revoke it at any time before it is voted at the Annual
Meeting by filing with the Corporate Secretary an instrument revoking it, by signing and delivering
to the Corporate Secretary a proxy bearing a later date, or by voting in person at the Annual
Meeting after giving notice to the Chairman of the Meeting of the stockholders intention to vote
in person notwithstanding the fact that the stockholder previously delivered a proxy.
4
PROPOSAL NO. 1
ELECTION OF DIRECTORS
We currently have five directors on our Board who each serve staggered three-year terms. At
the Annual Meeting, the stockholders will elect two individuals to serve as Class I directors for a
new three-year term expiring on the date of the 2012 annual meeting and until his successor is duly
elected and qualified. Melvin C. Payne is the current Class I director standing for re-election
and Richard W. Scott is the current Class I director standing for election to the Board. Joe R.
Davis, a Class I director, and Gary L. Forbes, a Class II director, each resigned from the Board,
effective February 25, 2009. On February 25, 2009, the Board appointed Mr. Scott as a Class I
director of the Company and Chairman of the Corporate Governance Committee and Mr. L. William
Heiligbrodt as a Class II director of the Company and Chairman of the Compensation Committee. Our
Corporate Governance Committee has recommended that we nominate Mr. Payne for re-election and Mr.
Scott for election at the Annual Meeting to serve as Class I directors for a new three-year term.
Proxies may be voted for the Class I directors. The biography description for Mr. Payne and Mr.
Scott are set forth below.
We recommend that you vote FOR the election of the nominees listed in Proposal No. 1 as
Class I directors. The individuals named as proxies will vote the enclosed proxy FOR the
election of the nominees unless you direct them to withhold your votes for the nominees.
You may not cumulate your votes in the election of the directors. You may withhold authority
to vote for the nominees for director. If the nominees become unable to serve as directors before
the Annual Meeting (or decide not to serve), the individuals named as proxies will vote FOR such
other nominees as we may designate as a replacement or substitute.
The following table sets forth the name, age and title of the persons who have been nominated
for election as Class I directors and our other current directors.
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Nominees for Class I Director
(Current term expiring at 2009 Annual Meeting,
unless elected; if elected term expires at 2012 Annual Meeting) |
Melvin C. Payne
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Chairman of the Board, Chief Executive Officer,
President and Director |
Richard W. Scott(1)(3)
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Director |
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Continuing Class II Directors
(Term expiring at 2010 Annual Meeting) |
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Vincent D. Foster(1)(2)(3)
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52 |
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Director |
L. William Heiligbrodt(1)(2)
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67 |
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Director |
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Continuing Class III Director
(Term expires at 2011 Annual Meeting) |
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Ronald A. Erickson(2)(3)
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Director |
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Member of Compensation Committee |
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Member of Audit Committee |
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Member of Corporate Governance Committee |
Messrs. Erickson, Foster, Heiligbrodt and Scott are independent within the meaning of NYSEs
Corporate Governance Guidelines.
5
Set forth below is a brief description of the business experience of the directors of the
Company.
Directors (listed in same order as table set forth above)
Melvin C. Payne, a management founder of Carriage, has been Chairman of the Board and Chief
Executive Officer since December 1996, prior to which he had been a director and Chief Executive
Officer since Carriages inception in 1991. Prior to co-founding Carriage, Mr. Payne spent ten
years in the private company turnaround business involving numerous industries including refining,
chemicals, trucking, hotel, offshore petroleum supply boat and rent-to own retail industries.
Prior to his turnaround career, Mr. Payne spent ten years in the corporate lending business,
initially with Prudential Insurance Company and later with Texas Commerce Bank in Houston.
Richard W. Scott is
a financial services executive with over thirty years of capital
markets experience. He is currently the Vice President and Chief Investment Officer of Loews
Corporation and formerly Chief Investment Officer, Insurance Portfolio Management, with AIG
Investments. His career has included extensive executive and professional responsibility for all
aspects of fixed income and insurance portfolio management on both domestic and global platforms,
as well as extensive experience as a mergers and acquisition and capital markets professional, both
as an investment professional and as a practicing attorney.
Vincent D. Foster has served as one of our directors since 1999. Since 2007, Mr. Foster has
served as the Chairman and Chief Executive Officer of Main Street Capital Corporation, a specialty
investment company. Since 2002, Mr. Foster has also been the Senior Managing Director of Main
Street Mezzanine Management, LLC and Main Street Capital Partners, LLC. Mr. Foster has also been
the Senior Managing Director of the general partner for Main Street Capital II, L.P., a licensed
small business investment corporation managed by Main Street Capital Partners, LLC, since 2006. He
also served as Senior Managing Director of Main Street Equity Ventures II, L.P. (and its
predecessor firm), a private equity firm, from 1997 through 2002. From 1988 through 1997, Mr.
Foster was a partner of Andersen Worldwide and Arthur Andersen LLP, where he served as the director
of the corporate finance practice and the mergers and acquisitions practice in the southwestern
United States. Mr. Foster has served as a director of the Texas TriCities chapter of the National
Association of Corporate Directors, of which he is a founding member, since 2002. He is also a
director of Quanta Services, Inc., a specialty contracting company that services the electrical
transmission and distribution sector, U.S. Concrete, Inc., a ready-mixed concrete provider, and
Team Industrial Services, Inc., a provider of specialty industrial services.
L. William Heiligbrodt is a private investor and managing partner in a family business. From
February 1999 to February 2003, he served as a consultant to Service Corporation International, a
funeral services corporation (SCI). Mr. Heiligbrodt was the President and Chief Operating
Officer of SCI until February 1999 and he had served in various management positions with SCI since
February 1990. Prior to joining SCI, Mr. Heiligbrodt served as President of Provident Services,
Inc. from March 1988 to February 1990. Prior to that, he served for five years as Vice Chairman
and Chief Executive Officer of WEDGE Group Incorporated.
Ronald A. Erickson has been a director of Carriage since it went public in August 1996. Mr.
Erickson is the Chairman and Chief Executive Officer of Holiday Companies, Minneapolis, Minnesota,
a privately held business consisting primarily of convenience stores. Mr. Erickson is
Vice-Chairman of the Board of Gander Mountain Company, a publicly held company engaged in sporting
goods business, Mr. Erickson is also Chairman of the Board of Bio-E, a non-public bio-technology
company and a director of North American Tungsten, a publicly listed junior Canadian mining
company.
Corporate Governance Guidelines
We have long been committed to integrity, reliability and transparency in our disclosures to
the public. In early 2003, before the corporate governance listing standards of the NYSE and
adopted regulations of the Securities and Exchange Commission (SEC) became effective, we adopted
new charters for our Board committees, a set of corporate governance guidelines, and a code of
business conduct and ethics for our directors, officers and employees, and we moved to increase the
independence of our Board members. In 2004, following the final release of the NYSE and SEC rules,
we amended the committee charters and corporate governance guidelines, and the corporate governance
guidelines and the charter for the Corporate Governance Committee were again modified in early
2005. All of these materials as well as our code of business conduct and ethics are accessible
through the Investor Relations Section of our website at
www.carriageservices.com, or you may
receive copies without charge by writing to us at Carriage Services, Inc., 3040 Post Oak Boulevard, Suite 300, Houston,
Texas 77056, Attn: Investor Relations.
6
Independence. Our corporate governance guidelines require that our Board composition comply
with the NYSE rules, including the requirement that a majority of our Board consist of independent
directors. Under the NYSE rules, a director qualifies as independent if the Board determines
that he or she has no material relationship with Carriage (either directly or as a stockholder,
partner or officer of an organization that has a relationship with Carriage). Further, under the
NYSE guidelines, a director will not be considered independent if:
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The director is, or in the past three years has been, an employee of Carriage, or has an
immediate family member who is or in the past three years has been, an executive officer of
Carriage; |
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The director or an immediate family member (other than an immediate family member who is
a non-executive employee) receives, or in the past three years has received, more than
$120,000 per year in direct compensation from Carriage (other than director fees and
pension or other forms of deferred compensation for prior service that is not contingent in
any way on continued service); |
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The director is, or in the past three years has been, affiliated with or employed by, or
has an immediate family member who is or in the past three years has been, affiliated with
or employed in a professional capacity by a present or former auditor of Carriage; |
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The director is, or in the past three years has been, an executive officer, or has an
immediate family member who is, or in the past three years has been, an executive officer
of another company where any of Carriages present executives serves on that companys
compensation committee; or |
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The director is, or in the past three years has been, an executive officer or an
employee, or has an immediate family member who is, or in the past three years has been, an
executive officer of another company that makes payments to, or receives payments from,
Carriage for property or services in an amount which, in any single fiscal year, exceeds
the greater of $1 million or 2% of such other companys consolidated gross revenues. |
Our Corporate Governance Committee reviewed our Board composition and determined that Messrs.
Erickson, Foster, Heiligbrodt and Scott meet the independence standards set forth above. In
addition, all directors serving on our Audit, Compensation and Corporate Governance Committees
satisfy these independence requirements.
Executive Sessions; Lead Director. In accordance with our corporate governance guidelines,
the non-management directors meet in executive session at least quarterly, outside of the presence
of management directors or other members of management, both with the independent auditors and then
without anyone else present. In connection with the 2005 amendments to our corporate governance
guidelines, the Board established the position of Lead Director, who is required to be qualified as
independent and will be appointed by a majority of the non-management directors. The Lead
Directors role is to facilitate the functioning of the Board independently of management and to
enhance the quality of the Boards governance. The Lead Director is required to be a member of the
Corporate Governance Committee and, among other things, will preside at the executive sessions of
the non-management directors. In 2005, Mr. Foster, Chairman of the Audit Committee, was appointed
as the first Lead Director and continues to serve in that capacity.
Board Composition. The Corporate Governance Committee is responsible for reviewing the
requisite skills and characteristics of new Board members as well as the composition of the Board
as a whole. Nominees for directorship will be selected by the Corporate Governance Committee in
accordance with the policies and principles in its charter. The Corporate Governance Committee
believes that the minimum qualifications for serving as a director are that a nominee demonstrate
an ability to make a meaningful contribution to the Boards oversight of our business and affairs
and have a reputation for ethical conduct. Nominees for director will include individuals who,
taking into account their diversity, age, skills, and experience in the context of the needs of the
Board, as well as other relevant factors such as conflicts of interest and other commitments, would
enhance the Boards ability to manage and direct our affairs and business. No director may serve on
more than five other public company boards or on the audit committee for more than three other
public companies. We have not established term limits as we do not wish to risk losing the
contribution of directors who have been able to develop, over a period of time, increasing
insight into our business and operations. However, we have determined that no director may be
nominated to a new term if he or she would be age 75 or older at the time of the election.
7
The Corporate Governance Committee identifies candidates by asking our current directors and
executive officers to notify the Committee if they become aware of individuals who meet the
criteria described above. The Corporate Governance Committee also has the authority to engage
firms that specialize in identifying director candidates. The Corporate Governance Committee will
also consider candidates recommended by stockholders. A stockholder may recommend nominees for
director by giving the Corporate Secretary a written notice not less than ninety (90) days prior to
the anniversary date of the immediately preceding annual meeting. For the annual meeting in 2010,
the deadline will be February 18, 2010, based upon this years meeting occurring on May
19th. The notice must include the name and address of the stockholder giving notice and
the number of shares of our voting stock owned by the stockholder. The notice must also include
the full name, age, business address, principal occupation or employment of the nominee, the number
of shares of Common Stock that the nominee beneficially owns, any other information about the
nominee that must be disclosed in proxy solicitations under Regulation 14A of the Securities
Exchange Act of 1934, and the nominees written consent to the nomination and to serve, if elected.
Once the Corporate Governance Committee has identified a potential candidate, the Committee
collects and reviews available information regarding the individual, and if the Committee
determines that the candidate warrants further consideration, the Committee Chair or another
Committee member will contact the person. Generally, if the individual expresses a willingness to
be considered for election to the Board, the Corporate Governance Committee will request
information from the candidate, review the individuals qualifications, and conduct one or more
interviews with the candidate. When the Corporate Governance Committee has completed this process,
it tenders its recommendation to the full Board for consideration.
Boards Interaction With Stockholders. Our Chief Executive Officer and other corporate
officers are responsible for establishing effective communications with our stockholders. It is
our policy that management speaks for Carriage. This policy does not preclude independent directors
from meeting with stockholders, but where appropriate, management should be present at such
meetings. Stockholders and other interested parties may contact any member of our Board or
Committee thereof via U.S. mail, by addressing any correspondence to the Board, the applicable
Committee, the non-management directors as a group or any individual director by either name or
title, in care of Carriage Services, Inc., 3040 Post Oak Boulevard, Suite 300, Houston, Texas
77056; Attn: Corporate Secretary. In the case of communications addressed to the non-management
directors, the Corporate Secretary will send appropriate stockholder communications to the Lead
Director. In the case of communications addressed to a committee of the Board, the Corporate
Secretary will send appropriate stockholder communications to the Chairman of such committee.
Board and CEO Evaluation. In 2004, we instituted an annual process for the Board and each
Committee to perform self-evaluations. These are conducted through written questionnaires compiled
on a confidential basis by the Chairman of the Corporate Governance Committee with summary results
presented to the full Board annually. In addition, the Compensation Committee performs an annual
evaluation of the Chief Executive Officers performance. As part of the long-range planning, the
Corporate Governance Committee is charged with evaluating Chief Executive Officer succession, both
in the event of emergency and upon retirement.
Business Conduct and Ethics. Our code of business conduct and ethics requires all of our
directors, officers and employees to adhere to certain basic principles to uphold our mission to be
the most professional, ethical and highest quality service organization in the death care industry.
Our code requires them to comply with the law, avoid conflicts of interest, compete fairly and
honestly, maintain a safe and healthy work environment, and preserve company assets. We do not
presently believe that there would be any occasion requiring any changes in or waivers under the
code, but in the event of exceptional circumstances in which such a change or waiver becomes
necessary, it would require Board approval and, where appropriate, prompt public disclosure. Our
code includes specific compliance procedures and a mechanism for reporting violations through our
Human Resources Department. You can access our code of business conduct and ethics on our website
at www.carriageservices.com.
Organization and Committees of the Board
During 2008, the Board met seven times and acted by unanimous written consent five additional
times. Each of the directors attended all of the meetings of the Board. The functions of the
Audit, Compensation and Corporate Governance Committees of the Board, and the number of meetings
held during 2008, are described below.
The Compensation Committee reviews and makes recommendations to the Board concerning the
compensation of Carriages executive officers and approves grants to all officers and employees
under our stock
8
incentive plans. The members of the Compensation Committee are L. William
Heiligbrodt, Chairman, Vincent D. Foster and Richard W. Scott. Gary L. Forbes was the Chairman of
the Compensation Committee through February 25, 2009. In 2008, the Compensation Committee met once
and acted by unanimous consent once. Each member of the Compensation Committee was present at all
meetings. See the report of the Compensation Committee on page 17 of this Proxy Statement.
The Audit Committee evaluates, appoints and engages Carriages independent registered public
accounting firm and reviews the plan, scope and results of the audit with the auditors and
Carriages officers. The Audit Committee also reviews with the auditors the principal accounting
policies and internal accounting controls of Carriage. The members of the Audit Committee are
Vincent D. Foster, Chairman, L. William Heiligbrodt and Ronald A. Erickson. The Audit Committee
met five times during 2008. Each member of the Audit Committee was present at all meetings. See
the report of the Audit Committee on page 11 of this Proxy Statement.
The NYSE, requires that each of its listed companies maintain an independent audit committee.
None of the members of our Audit Committee has a relationship with Carriage that may interfere with
the exercise of his independence from management or Carriage. No member of our Audit Committee is
or has been in the last three years an employee of Carriage, or Carriages auditor, or in a
business relationship with Carriage. Also, no immediate family member related to a member of our
Audit Committee is an executive officer of Carriage, or Carriages auditor, or any of its
affiliates. See above, under the heading Corporate Governance Guidelines, for a specific
description of independence which we apply to our independent directors.
In addition to the independence standard, the NYSE requires that each member of the Audit
Committee be financially literate and at least one member must have accounting or related financial
management expertise. Each member of our Audit Committee is financially literate. Mr. Foster
meets the definition of audit committee financial expert, as such term is defined under the rules
of the SEC, and is a certified public accountant with over 20 years of public accounting
experience. Currently, Mr. Foster is the Chairman and Chief Executive Officer of an investment
company for which he reviews and analyzes financial statements as part of his daily functions.
The Corporate Governance Committee provides oversight with respect to our corporate governance
guidelines, which includes reviewing the structure of the full Board and making recommendations
regarding the size of the Board and the number and classification of directors. The Corporate
Governance Committee also conducts a search for suitable and qualified candidates to serve as
directors when the terms of office are up for election at each years annual meeting of
stockholders, and submits the names of candidates for such positions for consideration by the
Board. The members of the Corporate Governance Committee are Richard W. Scott, Chairman, Vincent
D. Foster and Ronald A. Erickson. Joe R. Davis was the Chairman of the Corporate Governance
Committee through February 25, 2009. The Corporate Governance Committee met once in 2008 (and all
Committee members were present). The Corporate Governance Committee met in early 2009 in
conjunction with the appointment of Messrs. Heiligbrodt and Scott to the Board of Directors.
Director Compensation
We compensate our directors through cash payments, including quarterly retainers and meeting
attendance fees, and through stock-related incentives. Each independent director was entitled to a
quarterly retainer of $10,000. Independent directors in 2008 consist of Messrs. Davis, Erickson,
Forbes and Foster. Effective February 25, 2009, Messrs. Davis and Forbes resigned and the Board
appointed Messrs. Heiligbrodt and Scott as independent directors. The Directors Compensation
Policy provides that any new director will receive upon admission to the Board a grant of
$100,000 in shares of Common Stock. In addition, the Chair of the
Audit Committee receives an annual grant of fully vested shares of our Common Stock, the number of
shares to be determined by dividing $25,000 by the market value of the shares on the Annual Meeting
date.
As a general rule, each independent director is entitled to $1,000 for each regular or special
meeting of the full Board attended in person, and $500 if attended by phone. In addition, Audit
Committee members receive $1,500 for each committee meeting held in person and $1,000 for each such
meeting held by phone, except that those amounts are reduced by one-half if the committee meeting
occurs on the same day as a full Board meeting. Members of the other committees receive $750 for
each committee meeting held in person and $500 for each such meeting held by phone. The amounts
are $1,125 and $750, respectively, for the chair of such committees, and no attendance fees are
payable for these other committees for a meeting that occurs on the same day as a full Board
meeting.
Independent directors may elect to receive all or any portion of the cash retainer and
attendance fees in shares of our Common Stock, based on the fair market value thereof as of the
date the amount is earned. In 2008, Mr.
9
Davis received 100% of his fees in Common Stock, Messrs.
Forbes and Foster received 50% of their respective fees in Common Stock, and Mr. Erickson received
100% of his fees in cash through September 30, 2008 and then elected to receive 100% of his fees
thereafter in Common Stock.
The Director Compensation Policy
provides for Common Stock grants under our
2006 Long-Term Incentive Plan. We issued 3,000 fully vested shares on the day of our 2008 annual
stockholder meeting to Messrs. Davis, Erickson, Forbes and Foster. The directors will
receive a grant of 3,000 Shares of
Common Stock on May 19th, the day of the 2009 Annual Meeting.
2008 Director Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned and |
|
Stock |
|
Option |
|
All other |
|
|
Name |
|
Paid in Cash(1) |
|
Awards(1)(2) |
|
Awards |
|
Compensation |
|
Total |
|
Joe R. Davis |
|
$ |
29 |
(4) |
|
$ |
69,311 |
|
|
|
|
|
|
|
|
|
|
$ |
69,340 |
|
Vincent D. Foster |
|
$ |
19,552 |
|
|
$ |
64,704 |
|
|
|
|
|
|
|
|
|
|
$ |
84,256 |
|
Ronald A. Erickson |
|
$ |
37,754 |
|
|
$ |
34,836 |
|
|
|
|
|
|
|
|
|
|
$ |
72,590 |
|
Gary L. Forbes |
|
$ |
19,234 |
|
|
$ |
53,980 |
|
|
|
|
|
|
|
|
|
|
$ |
73,214 |
|
L. William Heiligbrodt(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard W. Scott(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Messrs. Davis, Foster, Erickson and Forbes elected to receive Common Stock totaling 12,294,
9,802, 6,289 and 9,730 shares respectively, in lieu of their cash retainer and attendance fees
valued at the fair market value of the Common Stock on the date the fees were earned. |
|
(2) |
|
Messrs. Davis, Foster, Erickson and Forbes received a fully vested common stock grant of
3,000 shares of Common Stock on May 20, 2008 valued at the fair market value. Mr. Foster also
received an annual grant of 3,434 shares of Common Stock for his service as Chairman of the
Audit Committee valued at the grant date fair market value. |
|
(3) |
|
Messrs. Heiligbrodt and Scott were appointed as directors by the Board effective February 25,
2009 and did not receive any fees in 2008. |
|
(4) |
|
The amount of fees earned and paid in cash for Mr. Davis is the remainder of the calculation
for fees paid in Common Stock. |
10
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board has selected KPMG LLP to audit our consolidated financial
statements. KPMG served as our independent registered public accounting firm for 2007 and 2008.
Representatives of KPMG will be present at the Annual Meeting and will have the opportunity to
make a statement if they desire and will be available to respond to appropriate questions from
stockholders.
Although ratification is not required by Delaware law or our By-laws or otherwise, the Board
is submitting the Audit Committees selection of KPMG to our stockholders for ratification as a
matter of good corporate practice. Even if the selection is ratified, the Audit Committee in its
discretion may select a different registered public accounting firm at any time during the year if
it determines that such a change would be in the best interests of the Company and our
stockholders. If the appointment of KPMG is not ratified, the Audit Committee will evaluate the
basis for the stockholders vote when determining whether to continue the firms engagement.
We recommend that you vote FOR the ratification of the selection of KPMG as our independent
registered public accounting firm.
Audit Fees
The fees billed for services by KPMG during 2007 and 2008 related to the audits of Carriages
annual consolidated financial statements and internal controls over financial reporting and reviews
of quarterly financial statements filed in the reports on Form 10-Q and Form 10-K totaled $682,500
and $577,000, respectively.
Audit-Related Fees
There were no fees billed to Carriage by KPMG for audit-related services during 2007 and 2008.
Tax Fees
There were no fees billed to Carriage by KPMG for tax services during 2007 and 2008.
All Other Fees
There were no fees billed to Carriage by KPMG for any other professional services during 2007
and 2008.
Pre-Approval Policy for Services of Independent Registered Public Accounting Firm
As part of its duties, the Audit Committee is required to pre-approve audit and non-audit
services performed by the independent registered public accounting firm in order to assure that the
provision of such services does not impair the audit firms independence. If a type of service to
be provided by the independent registered public accounting firm has not received pre-approval
during this annual process, it will require specific pre-approval by the Audit Committee. The
Audit Committee does not delegate to management its responsibilities to pre-approve services
performed by the independent auditors.
AUDIT COMMITTEE REPORT
The Audit Committee has reviewed and discussed Carriages audited financial statements for the
fiscal year ended December 31, 2008 with management. It has also discussed with the independent
auditors the matters required to be discussed by Statement on Auditing Standard No. 61, as amended,
as adopted by the Public Company Accounting Oversight Board in Rule 3200T. Additionally, the Audit
Committee has received the written disclosures and the letter from the independent auditors at
KPMG, as required by applicable requirements of the Public Company Accounting Oversight Board
regarding the independent auditors communications with the Audit Committee concerning
independence, and has discussed with the independent auditors their independence.
In an effort to maintain the auditors independence, the Audit Committee considers whether
KPMGs rendering of non-audit services is compatible with maintaining its independence. No
non-audit services were approved or rendered during 2007 and 2008.
11
Based on the Audit Committees review and discussions with management and the independent
registered public accountants referred to above, and its review of the representation of management
and the report of the independent registered public accountants to the Audit Committee, the Audit
Committee recommended to the Board of Directors that the audited consolidated financial statements
be included in Carriages Annual Report on Form 10-K for the fiscal year ended December 31, 2008,
for filing with the SEC.
|
|
|
|
|
|
Audit Committee
Vincent D. Foster, Chairman
Ronald A. Erickson
L. William Heiligbrodt |
|
SECURITY OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS
AND CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of March 23, 2009, the number of shares beneficially owned
and percent of the Common Stock held by: (a) each director and director nominee of Carriage, (b)
the Chief Executive Officer, (c) the other executive officers named in the Summary Compensation
Table set forth under Executive Compensation, and (d) all current executive officers and
directors of Carriage as a group. Under the rules of the SEC, on any day a person is deemed to own
beneficially all securities as to which that person owns or shares voting or investment power, as
well as all securities which such person may acquire within 60 days of such date through the
exercise of currently available conversion rights or options. Each person named in the table below
has sole voting and investment power with respect to the shares indicated, except as otherwise
stated in the notes to the table.
Stock Ownership of Management
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent of |
|
|
Common |
|
Stock |
|
Number of Shares |
|
Common |
Beneficial Owner |
|
Stock |
|
Options(1) |
|
Beneficially Owned |
|
Stock |
|
Melvin C. Payne(2) |
|
|
1,320,977 |
|
|
|
360,000 |
|
|
|
1,680,977 |
|
|
|
9.02 |
% |
Ronald A Erickson |
|
|
12,289 |
|
|
|
80,000 |
|
|
|
92,289 |
|
|
|
* |
|
Vincent D. Foster |
|
|
66,491 |
|
|
|
95,000 |
|
|
|
161,491 |
|
|
|
* |
|
L. William
Heiligbrodt(3) |
|
|
63,420 |
|
|
|
|
|
|
|
63,420 |
|
|
|
* |
|
Richard W. Scott(3) |
|
|
63,420 |
|
|
|
|
|
|
|
63,420 |
|
|
|
* |
|
Terry Sanford |
|
|
156,129 |
|
|
|
10,000 |
|
|
|
166,129 |
|
|
|
* |
|
Jay D. Dodds |
|
|
111,542 |
|
|
|
96,212 |
|
|
|
207,754 |
|
|
|
1.11 |
% |
J. Bradley Green |
|
|
49,945 |
|
|
|
|
|
|
|
49,945 |
|
|
|
* |
|
George J. Klug |
|
|
118,817 |
|
|
|
35,000 |
|
|
|
153,817 |
|
|
|
* |
|
Joseph Saporito(4) |
|
|
158,773 |
|
|
|
|
|
|
|
158,773 |
|
|
|
* |
|
Billy D. Dixon(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
All directors and executive
officers as a group (11
persons) |
|
|
2,121,803 |
|
|
|
676,212 |
|
|
|
2,798,015 |
|
|
|
15.04 |
% |
|
|
|
* |
|
Indicates less than one percent. |
|
(1) |
|
The ownership of stock options shown in the table includes shares which may be acquired
within 60 days upon the exercise of outstanding stock options granted under our stock option
plans. All options are currently 100% vested. |
|
(2) |
|
Mr. Payne has pledged 551,000 shares of his Common Stock to a bank as secondary collateral on
real estate loans. |
|
(3) |
|
Mr. Heiligbrodt and Mr. Scott were appointed to the Board effective February 25, 2009. Mr.
Scott is a nominee for Class I director at the 2009 Annual Meeting. A grant of 63,420 of
Common Stock was made to each upon their appointment to the Board. |
|
(4) |
|
Mr. Saporito served as the Companys principal financial officer until
April 30, 2008 and Mr. Dixon served in that capacity from July 14, 2008
through August 29, 2008. |
12
Stock Ownership of Certain Beneficial Owners
As of March 23, 2009, the persons named below were, to our knowledge, the only beneficial
owners of more than 5% of our outstanding Common Stock, determined in accordance with Rule 13d-3 of
the Securities Exchange Act of 1934, as amended (the Exchange Act), other than directors and
executive officers whose beneficial ownership is described in the above table.
|
|
|
|
|
|
|
|
|
|
|
Number of Shares |
|
|
Percent of |
|
Beneficial Owner |
|
Beneficially Owned |
|
|
Common Stock |
|
FMR LLC(1)
|
|
|
2,934,437 |
|
|
|
15.7 |
% |
82 Devonshire Street
Boston, MA 02109 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Zazove Associates, LLC(2)
|
|
|
2,778,722 |
|
|
|
14.9 |
% |
1001 Tahoe Blvd.
Incline Village, NV 89451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dimensional Fund Advisors LP(3)
|
|
|
1,563,445 |
|
|
|
8.4 |
% |
1299 Ocean Avenue
Santa Monica, CA 90401 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Wilshire Securities Management, Inc.(4)
|
|
|
1,354,737 |
|
|
|
7.3 |
% |
1224 East Green Street, Suite 200
Pasadena, CA 91106 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Renaissance Technologies LLC5)
|
|
|
940,800 |
|
|
|
5.0 |
% |
800 Third Avenue
New York, NY 10022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
9,572,141 |
|
|
|
51.3 |
% |
|
|
|
|
|
|
|
|
|
|
(1) |
|
Based solely on Schedule 13G filed with the SEC on February 17, 2009. FMR LLC has sole
voting and dispositive power as to 2,934,437 shares. |
|
(2) |
|
Based solely on Schedule 13G filed with the SEC on February 13, 2009. Zazove Associates, LLC
has sole voting and dispositive power as to 2,778,722 shares, which shares are issuable upon
the conversion of Carriage Services Capital Trust Preferred Securities. Such conversion had
not occurred as of the record date. |
|
(3) |
|
Based solely on Schedule 13G filed with the SEC on February 9, 2009. Dimensional Fund
Advisors LP has sole voting power as to 1,540,038 shares and sole dispositive power as to
1,563,445 shares. |
|
(4) |
|
Based solely on Schedule 13G filed with the SEC on February 13, 2009. First Wilshire
Securities Management, Inc. has sole voting power as to 77,000 shares and sole dispositive
power as to 1,354,737 shares. |
|
(5) |
|
Based solely on Schedule 13G filed with the SEC on February 13, 2009. Renaissance
Technologies LLC has sole voting and dispositive power as to 940,800 shares. |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires Carriages directors and executive officers, and
persons who own more than 10% of a registered class of Carriages equity securities, to file with
the SEC and the NYSE reports of ownership and changes in ownership of Common Stock and other equity
securities of Carriage on Forms 3, 4 and 5. Executive officers, directors and greater than 10%
beneficial owners are required by SEC regulations to furnish Carriage with copies of all Forms 3, 4
and 5 they file.
Based solely on a review of the copies of such reports furnished to Carriage or written
representations from reporting persons that no Form 5 is required, Carriage believes that all
filing requirements applicable to its executive officers, directors and greater than 10% beneficial
owners were complied with during 2008, except for the following: A late Form 4 report was filed on
behalf of Mr. Payne, with respect to two transactions related to gifts of 12,000 shares of Common Stock. A late Form 3 report was filed on behalf of Mr. Scott reporting
shares of restricted Common Stock granted upon becoming a director.
13
EXECUTIVE MANAGEMENT
The following table sets forth the name, age and title of our executive officers who are not
directors.
|
|
|
|
|
|
Name |
|
Age |
|
Title |
Terry E. Sanford
|
|
53 |
|
|
Senior Vice President and Chief Financial Officer |
Jay D. Dodds
|
|
48 |
|
|
Senior Vice President and Chief Operating Officer |
J. Bradley Green
|
|
36 |
|
|
Senior Vice President, General Counsel and Secretary |
George J. Klug
|
|
64 |
|
|
Senior Vice President and Chief Information Officer |
Set forth below is a brief description of the business experience of the executive officers of
our company.
Terry E. Sanford is the Senior Vice President and Chief Financial Officer of Carriage. Having
joined the Company in 1997 as the Financial Controller, Mr. Sanford was promoted in 2000 to Vice
President and Corporate Controller and in 2006 to Chief Accounting Officer and Treasurer and in
September 2008 to his current position. Mr. Sanford work history prior to joining Carriage included
senior financial positions in manufacturing, financial services and consumer products companies and
public accounting. Mr. Sanford is a CPA and possesses a BBA in Accounting and an MBA in finance.
Jay D. Dodds is the Senior Vice President and Chief Operating Officer of Carriage. Mr. Dodds
has been in senior operations leadership for Carriage since October 2000, most recently as Regional
Managing Partner for the Central Region and Regional Vice President of Operations. Mr. Dodds
joined Carriage in 1994 as an operations Vice President. He has over 25 years of professional
funeral home, cemetery and crematory operations experience. Prior to joining Carriage, he was
affiliated with Stewart Enterprises for 13 years serving in numerous operating positions. Mr. Dodds
is a licensed Funeral Director and holds a BBA degree from the University of Texas Arlington. Mr.
Dodds is a member of the National Funeral Directors Association, The Cremation Associations of
North America and the International Funeral, Cemetery and Cremation Association.
J. Bradley Green is the
Senior Vice President, General Counsel and Secretary of Carriage. Effective January 1, 2009,
Mr. Green also assumed responsibility over the Companys business development
activities. He
joined the Company in October 2006. Prior to joining Carriage, Mr. Green was an attorney, focusing
his practice on employment and commercial litigation. From 1998 to 2002, Mr. Green held legal and
human resource positions, including General Counsel, at a Fortune 1000 company that had operations
in 42 countries. Prior to that, Mr. Green was an attorney at a national law firm, focusing on the
field of labor and employment law.
George J. Klug has been Senior Vice President of Information Systems and Chief Information
Officer of Carriage since May 2002. Before joining Carriage, Mr. Klug served from 1997 to 2000 as
Vice President of Information Technology at Allright Corporation, an owner operator of parking
facilities both national and international. Prior to Allright, Mr. Klug served as Vice President of
Information Technology for various retail companies including Oshmans, Sportstown, and Zaks.
COMPENSATION DISCUSSION AND ANALYSIS
Our executive compensation program is designed to attract, motivate and retain talented
executives so the Company can produce long-term superior results and maximize return to its
stockholders. Our Compensation Committee consists entirely of independent Board members and is
responsible for the approval and oversight of compensation and benefit plans and employment
agreements affecting executive management.
To achieve our compensation objectives, our Compensation Committee has structured our annual
and long-term incentive-based cash and non-cash executive compensation to motivate executives to
achieve the business goals set by us and reward executives for achieving such goals. In
furtherance of these goals, our Compensation Committee engaged Towers Perrin, an independent
compensation consulting firm, to conduct a review in 2007 of the total compensation program for our
Chief Executive Officer and other key executives. Towers Perrin provided
our Compensation Committee with relevant market data and alternatives to consider when making
compensation decisions for our Chief Executive Officer and other executives.
14
Compensation Program Objectives
Our executive compensation objectives are to:
|
|
|
pay competitive levels of salary and total compensation; |
|
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|
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reward management for strong Company performance and successful execution of
our strategic operating models; and |
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align incentives with the long-term interests of the stockholders. |
Elements of the Compensation Program
Our executive compensation program consists of the following basic elements:
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base salaries; |
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annual cash incentive bonuses; |
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long-term, share-based incentives; and |
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other benefits. |
Allocation of compensation among these elements is designed to provide the appropriate mix of
short-term incentives and long-term incentives, and cash compensation and share-based compensation.
Base Salaries
The base salaries for each of our executive officers are determined on an individual basis,
taking into account such factors as the duties, experience and levels of responsibility of the
executive and compensation levels within other companies in the service sector of comparable
revenue size. Base salaries for the Named Executive Officers (as defined below) are evaluated
annually and adjustments are approved by the Compensation Committee based on their evaluation of
individual performance and expected future contributions. During 2008, the Compensation Committee
did not change Mr. Paynes base salary, which remained at $500,000. Base salaries for the other
Named Executive Officers did not change during 2008 except for Mr. Sanford, who received
an
increase from $190,000 to $250,000 as a result of his promotion to Senior Vice President and Chief
Financial Officer.
Annual Cash Incentive Bonuses
The annual cash bonus for each executive is linked to specific financial and operating
targets, and specific qualitative goals established at the beginning of the year, and are designed
to reward each executive for achieving results consistent with our Standards Operating and 4E
Leadership Models. Of the criteria, and depending on the individual role and responsibilities,
40-80% is weighted against objective quantitative goals, such as Being the Best Standards
Achievement and Field EBITDA dollars and Margins, as well as departmental overhead trends and
20-60% against qualitative goals. The executives are eligible to receive annual cash bonuses set
at a target percentage of their base salary times the percent of goals achieved, and can earn above
or below the target percentage based on actual performance.
Mr. Paynes cash incentive bonus for 2008 totaled $150,000 or 40% of his 2008 target annual
bonus. Mr. Paynes 2008 incentive bonus was weighted 75% to quantitative and 25% to qualitative
goals approved by the Compensation Committee in February 2008. The Company exceeded its targeted
total overhead as a percentage of revenue of 12.6%, resulting in a quantitative weighting of 15%
and Mr. Payne achieved all of his qualitative goals.
The Committee also approved the other Named Executive Officers cash incentive bonuses for 2008
which ranged from $80,000 to $104,000. The achievement of financial and operating targets,
qualitative and quantitative goals, as well as each individuals personal contribution to the
Company was considered in determining the amount of the cash incentive bonus.
Long-Term Share-Based Incentives
Stock options
Stock options have not been granted to Named Executive Officers since 2002.
15
Restricted Stock
Restricted stock was granted to Named Executive Officers and other key employees in 2003,
2005, 2007 and 2008. The shares are awarded by the Compensation Committee after consideration of
the individuals performance toward the Companys recent goals, as well as expected contributions
to the long-term success of the Company. The shares vest 25% each year beginning one year after
the date of the award. The individuals are responsible for the income taxes attributable to the
value of the shares. The Compensation Committee believes that this form of equity ownership helps
to align the executives interests closely with those of the stockholders and incentivizes the
executives to contribute to the long-term growth and success of the Company as a whole.
Performance Unit Plan
The Compensation Committee adopted a long-term incentive compensation plan for selected
officers and key employees effective August 7, 2007. Units granted under the plan have a value of
$1.00 and are subject to the terms and conditions set forth in the Performance Unit Award
Agreements with the grantees. One-half of the units awarded provide the grantee with the
opportunity to earn a cash payment based on the total stockholder return achieved by the Company
for the performance period, which is generally three years, as compared to the total stockholder
return achieved by the companies constituting the Russell Microcap Index (the Peer Group I). The
other one-half of the units awarded provide the grantee with the opportunity to earn a cash payment
based on the total stockholder return achieved by the Company for the performance period as
compared with the total stockholder returns achieved by two companies in our industry, Service
Corporation International and Stewart Enterprises, Inc. (the Peer Group 2). For units associated
with the Peer Group I award, the award ranges from 0% if the percentile rank of the Companys total
stockholder return compared to the total stockholder return of the other members of Peer Group I is
less than 50th, 50% if the percentile rank is 50th, 100% if the percentile
rank is 60th and 150% if the percentile rank is 80th and above, with the
award percentage scaled between 50th and 60th percentiles and between the
60th and 80th percentile. For units associated with the Peer Group 2 award,
the award ranges from 0% if the Companys total stockholder return is less than both of the members
of Peer Group 2, 100% if greater than one of the members but not both and 150% if greater than
both.
Other Benefits and Perquisites
The Company sponsors a defined contribution 401(k) plan to which we match 100% of the first
one percent of the participants contributions and 50% of the next five percent of the
participants contributions. Additionally, the Company sponsors an employee stock purchase plan
that provides the participants the ability to purchase Company stock with a discount of 15% of the
lower of the grant date fair value or the purchase date fair value. The Companys health and
related plans include medical, dental, life and disability coverage. The benefits provided to
executive officers are offered through broad-based plans applicable to all employees, except that
the Chief Executive Officer is prohibited from participating in the employee stock purchase plan.
The Chief Executive Officer was reimbursed for life insurance premiums and club dues, the cost of
which totaled $24,880 in 2008. Otherwise, the Company provides no other perquisites to any other
executives.
Tax and Accounting Considerations
For compensation in excess of $1 million, Section 162(m) of the Internal Revenue Code of 1986,
as amended, generally limits our ability to take a federal income tax deduction for compensation
paid to the Chief Executive Officer and the four most highly compensated executive officers other
than the Chief Executive Officer, except for qualified performance-based compensation. Restricted
stock awards generally would not qualify for this exemption. While the Compensation Committee will
seek to utilize deductible forms of compensation, it does not believe that compensation decisions
should be made solely to maintain the deductibility of compensation for federal income tax
purposes. The Compensation Committee plans to continue to evaluate salary, bonus and stock awards
programs relative to the Section 162(m) deduction limitation.
We adopted Statement of Financial Accounting Standards No. 123R, Share-Based Payment (SFAS)
as of January 1, 2006 and, accordingly, expense the grant-date fair value of equity-based
compensation issued to employees, using the modified prospective method in which compensation cost
is recognized based (1) on the requirements of SFAS 123R for all share-based payments granted after
January 1, 2006 and (2) on the requirements of SFAS 123R for all awards granted to employees prior
to January 1, 2006 that remained unvested on January 1, 2006. Once the fair value of each award is
determined, it is expensed in the income statement ratably over the
vesting period. The Compensation Committee considers the impact of expensing share-based awards
when awarding incentives.
16
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis
with management. Based on such review and discussions, the Compensation Committee has recommended
to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy
Statement.
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Compensation Committee
L. William Heiligbrodt, Chairman
Vincent D. Foster
Richard W. Scott
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Compensation Committee Interlocks and Insider Participation
At December 31, 2008, the members of the Compensation Committee were Gary L. Forbes, Chairman,
Vincent D. Foster, and Joe R. Davis. L. William Heiligbrodt became the Chairman on the
Compensation Committee effective February 25, 2009 following the resignation of Mr. Forbes from the
Board. No member of the Compensation Committee was an officer or employee of Carriage at any time
during 2008.
During 2008, no executive officer of Carriage served as (i) a member of the compensation
committee (or other board committee performing equivalent functions) of another entity, one of
whose executive officers served on the Compensation Committee of the Board of Directors; (ii) a
director of another entity, one of whose executive officers served on the Compensation Committee of
the Board of Directors; or (iii) a member of the compensation committee (or other board committee
performing equivalent functions) of another entity, one of whose executive officers served as a
director of Carriage.
17
EXECUTIVE COMPENSATION
Executive Compensation Table
The following table sets forth information regarding the compensation for the fiscal years
ended December 31, 2008 and 2007, with respect to the Principal Executive Officer, the Principal
Financial Officer and the three other most highly compensated executive officers of Carriage whose
compensation during 2008 exceeded $100,000 (collectively, the Named Executive Officers).
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Name and |
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Stock |
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All Other |
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Principal Position |
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Year |
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Salary |
|
Bonus |
|
Awards(1) |
|
Compensation(2) |
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Total |
|
Melvin C. Payne |
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2008 |
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|
$ |
500,000 |
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$ |
150,000 |
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$ |
423,599 |
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$ |
29,624 |
(2) |
|
$ |
1,103,223 |
|
Chairman of the Board,
Chief Executive Officer and
President |
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2007 |
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|
$ |
488,168 |
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|
$ |
383,000 |
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|
$ |
262,310 |
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$ |
41,449 |
(2) |
|
$ |
1,175,927 |
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Terry E. Sanford(3) |
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2008 |
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$ |
205,000 |
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|
$ |
80,000 |
|
|
$ |
56,035 |
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$ |
11,020 |
(2) |
|
$ |
352,055 |
|
Senior Vice President and
Chief Financial Officer |
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Joseph Saporito
(4) |
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2008 |
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$ |
145,267 |
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$ |
378,638 |
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$ |
334,736 |
(4) |
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$ |
858,641 |
|
Former Executive Vice President and Chief
Financial Officer |
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2007 |
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|
$ |
300,000 |
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$ |
220,296 |
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$ |
520,296 |
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Billy D. Dixon
(5) |
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2008 |
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$ |
33,654 |
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|
$ |
28,877 |
(5) |
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$ |
62,531 |
|
Former Executive Vice President and Chief
Financial Officer |
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Jay D. Dodds |
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2008 |
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$ |
240,000 |
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$ |
104,000 |
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$ |
52,516 |
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$ |
396,516 |
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Senior Vice President and |
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2007 |
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$ |
219,616 |
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$ |
120,000 |
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$ |
43,527 |
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$ |
383,143 |
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Chief Operating Officer |
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J. Bradley Green |
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2008 |
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$ |
268,462 |
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$ |
94,000 |
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$ |
39,741 |
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$ |
402,203 |
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Senior Vice President, |
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2007 |
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$ |
208,846 |
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$ |
110,000 |
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$ |
32,752 |
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$ |
351,598 |
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General Counsel and Secretary |
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George J. Klug |
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2008 |
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$ |
240,000 |
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$ |
80,000 |
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$ |
77,466 |
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$ |
397,466 |
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Senior Vice President and |
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2007 |
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$ |
221,154 |
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$ |
100,000 |
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$ |
68,477 |
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$ |
389,631 |
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Chief Information Officer |
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(1) |
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Reflects compensation expense for performance units and restricted stock grants recognized by
us under SFAS 123(R). The value of performance units is determined by reference to
performance of a share of Common Stock from the inception of the plan period through the end
of the fiscal year in comparison to an index and a peer group as described on page 14. The
value of restricted stock grants is determined at the time of grant based upon the closing
price of a share of Common Stock on the grant date. The Restricted Common Stock grants vest
25% per year beginning on the first anniversary of the date of grant. |
|
(2) |
|
Mr. Payne- Reimbursement of life insurance premiums where the Company was not named the
beneficiary totaling $22,730, reimbursement of club dues totaling $2,150 and 401(k) matching
contributions totaling $2,692. Mr. Sanford Matching Contributions for 401(k) totaling
$6,836, a fringe benefit totaling $3,524 and life insurance paid by the Company. All other
compensation was less than $10,000 for the other Named Executive Officers. |
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(3) |
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Mr. Sanford was not a Named Executive Officer in 2007. Mr. Sanford assumed the position of
Senior Vice President and Chief Financial Officer effective September 12, 2008. |
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(4) |
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Mr. Saporito served as Executive Vice President and Chief Financial Officer until his
resignation on April 30, 2008. The Company and Mr. Saporito entered into a Release and
Settlement Agreement which provided that the Company: (a) continue to pay
Mr. Saporitos base salary for a period of twelve (12) months or until he finds subsequent
full-time employment; (b) pay the monthly premium costs for COBRA coverage for
Mr. Saporito and his covered dependents; (c) pay Mr. Saporito a lump sum payment of
$150,000; (d) provide Mr. Saporito with limited secretarial services during the time he
is receiving his base salary payments; and (e) vest Mr. Saporitos not currently
vested restricted shares, which total 30,000 shares. All Other Compensation includes the lump
sum payment of $150,000, severance totaling $175,396, 401(k) matching contributions totaling 8,050
and life insurance paid by the Company. |
|
(5) |
|
Mr. Dixon served as Executive Vice President and Chief Financial Officer from
July 14, 2008 until his resignation on August 29, 2008. Upon his resignation, the
Company provided a severance payment of $28,877. |
18
Grants of Plan-Based Awards in 2008
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All other |
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stock awards: |
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Estimated future payouts under |
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number of |
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Grant date |
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equity incentive plan awards |
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shares of |
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fair value |
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Grant |
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Threshold |
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Target |
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Maximum |
|
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stock or |
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of stock |
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Name |
|
Date |
|
|
($) |
|
|
($) |
|
|
($) |
|
|
units(2) |
|
|
awards |
|
Melvin C. Payne |
|
|
1/1/2008 |
|
|
(1) |
|
|
(1) |
|
|
$ |
450,000 |
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|
2/7/2008 |
|
|
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|
|
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|
39,840 |
|
|
$ |
300,000 |
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Terry E. Sanford |
|
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1/1/2008 |
|
|
(1) |
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|
(1) |
|
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$ |
60,000 |
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2/7/2008 |
|
|
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|
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|
|
|
|
|
|
|
|
5,312 |
|
|
$ |
40,000 |
|
|
|
|
9/12/2008 |
|
|
(1) |
|
|
(1) |
|
|
$ |
67,500 |
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|
|
15,000 |
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$ |
57,000 |
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Joseph Saporito |
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Billy D. Dixon |
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Jay D. Dodds |
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1/1/2008 |
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|
(1) |
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|
(1) |
|
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$ |
105,000 |
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|
2/7/2008 |
|
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|
9,296 |
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|
$ |
70,000 |
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J. Bradley Green |
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1/1/2008 |
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(1) |
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(1) |
|
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$ |
105,000 |
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2/7/2008 |
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|
9,296 |
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$ |
70,000 |
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George J. Klug |
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1/1/2008 |
|
|
(1) |
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(1) |
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$ |
105,000 |
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2/7/2008 |
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|
9,296 |
|
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$ |
70,000 |
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(1) |
|
The January 1, 2008 grants represent the units awarded pursuant to the Performance Unit Plan,
as described on page 16. There is no threshold, or minimum amount payable, as by operation of
the Performance Unit Plan; the future payout may be none. Similarly, there is no target award
designated under the Performance Unit Plan. |
|
(2) |
|
These are restricted stock awards that vest over four years. |
Employment Agreements
On August 27, 2007, the Company entered into an employment agreement dated August 7, 2007
(Agreement) with Melvin C. Payne, its Chairman of the Board, Chief Executive Officer and
President for a term until August 6, 2010 (subject to earlier termination or extension), and shall
automatically be renewed on an annual basis thereafter, unless terminated by either party upon
sixty days written notice prior to the end of the term then in effect.
The Agreement provides that Mr. Payne will receive a base annual salary of not less than
$500,000. Upon signing the Agreement, Mr. Payne was granted an award of 100,000 shares of
restricted stock that shall vest in four equal annual installments, subject to continued employment
over the four years following the date of grant. In addition, Mr. Payne shall be entitled to
consideration for an annual performance-based bonus, the target amount of which is 75% of the base
annual salary with a potential maximum amount equal to 150% of the base annual salary and a minimum
amount of zero based on the achievement of quantitative and qualitative metrics determined at the
discretion of the Compensation Committee of the Board. Mr. Payne shall be eligible for awards of
restricted stock and other long-term incentive-based compensation under the terms of the Companys
2006 Long Term Incentive Plan and as approved by the Compensation Committee of the Board. Also,
effective as of January 1, 2007, Mr. Payne is entitled to reimbursement of premiums on non-Company
sponsored disability and life insurance policies up to $25,000 annually.
Carriage is also a party to separate employment agreements with Messrs. Sanford, Dodds, Green
and Klug each for a term until August 6, 2010 (subject to earlier termination or extension), and
each shall automatically be renewed on an annual basis thereafter, unless terminated by either
party upon sixty days written notice prior to the end of the term then in effect.
The current base salaries for
Messrs. Sanford, Dodds, Green and Klug are
$250,000, $280,000, $270,000, and $240,000 respectively. In
addition to the base annual salaries, these executives are entitled to consideration for annual performance-based
bonuses within the sole discretion of the Company, as may be recommended by the Chief Executive
Officer and approved by the Compensation Committee of the Board, and shall be eligible for awards
of restricted stock and other long-term
19
incentive-based compensation under the terms of the Companys 2006 Long Term Incentive Plan and as approved by the Compensation Committee of the Board.
Outstanding Equity Awards at Fiscal Year-End
Option Awards Outstanding at December 31, 2008:
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Number of |
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Securities |
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Equity Incentive Plan |
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Number of Securities |
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Underlying |
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Awards: Number of |
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Underlying |
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Unexercised |
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Securities Underlying |
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Option |
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Unexercised Options |
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Options |
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Unexercised Unearned |
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Option |
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Expiration |
Name |
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Exercisable |
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Unexercisable |
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Options |
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Exercise Price |
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Date |
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Melvin C. Payne |
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300,000 |
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$ |
1.5625 |
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12/22/2010 |
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60,000 |
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$ |
4.7700 |
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2/11/2012 |
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Terry E. Sanford |
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10,000 |
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$ |
4.7700 |
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2/11/2012 |
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Joseph Saporito |
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Billy D. Dixon |
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Jay D. Dodds |
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26,212 |
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$ |
2.8750 |
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6/9/2010 |
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50,000 |
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$ |
1.1875 |
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12/22/2010 |
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20,000 |
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$ |
4.7700 |
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2/11/2012 |
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J. Bradley Green |
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$ |
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George J. Klug |
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15,000 |
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$ |
5.8200 |
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7/27/2011 |
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20,000 |
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$ |
4.7700 |
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2/11/2012 |
|
Stock Awards Outstanding at December 31, 2008:
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Equity Incentive Plan |
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Equity Incentive Plan |
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Awards: Market or |
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Number of Restricted |
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Awards: Number of |
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Payout Value of |
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Shares of Common |
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Market Value of Restricted |
|
Unearned Shares, Units or |
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Unearned Shares, |
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Stock That Have Not |
|
Shares of Common Stock |
|
Other Rights That Have |
|
Units or Other Rights |
Name |
|
Vested(1) |
|
That Have Not Vested(2) |
|
Not Vested(3) |
|
That Have Not Vested |
|
Melvin C. Payne |
|
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159,840 |
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$ |
321,000 |
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Terry E. Sanford |
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35,312 |
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$ |
71,000 |
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Joseph Saporito |
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Billy D. Dixon |
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Jay D. Dodds |
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23,046 |
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$ |
46,000 |
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J. Bradley Green |
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19,296 |
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$ |
39,000 |
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George J. Klug |
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28,046 |
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$ |
56,000 |
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(1) |
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The restricted shares vest on the following dates: |
|
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Mr. Payne15,000 on 2/3/2009; 10,000 on 2/13/2009, 2/13/2010 and 2/13/2011; 25,000
on 8/7/2009, 8/7/2010 and 8/7/2011; 9,960 on 2/7/2009, 2/7/2010, 2/7/2011 and
2/7/2012. |
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Mr. Sanford3,750 on 2/3/2009; 3,750 on 2/13/2009, 2/13/2010 and 2/13/2011; 1,328
on 2/7/2009, 2/7/2010, 2/7/2011 and 2/7/2012; 3,750 on 9/12/2009, 9/12/2010,
9/12/2011 and 9/12/2012. |
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Mr. Dodds2,500 on 2/3/2009; 3,750 on 2/13/2009, 2/13/2010 and 2/13/2011; 2,324 on
2/7/2009, 2/7/2010, 2/7/2011 and 2/7/2012. |
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Mr. Green5,000 on 10/2/2009 and 10/2/2010; 2,324 on 2/7/2009, 2/7/2010, 2/7/2011
and 2/7/2012. |
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Mr. Klug7,500 on 2/3/2009; and 3,750 on 2/13/2009, 2/13/2010 and 2/13/2011; 2,324
on 2/7/2009, 2/7/2010, 2/7/2011 and 2/7/2012. |
|
(2) |
|
The closing market value of the Common Stock at the end of 2008 was $2.01 per share. |
|
(3) |
|
The performance units vest on December 31, 2009 and December 31, 2010. |
20
Option exercises and stock vested during 2008:
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Option Awards |
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Stock Awards |
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Number of Shares |
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Value Realized on |
|
Number of Shares |
|
Value Realized on |
Name |
|
Acquired on Exercise |
|
Exercise |
|
Acquired on Vesting |
|
Vesting(1) |
|
Melvin C. Payne |
|
|
|
|
|
|
|
|
|
|
50,000 |
|
|
$ |
351,700 |
|
Terry E. Sanford |
|
|
34,388 |
|
|
$ |
77,623 |
|
|
|
7,500 |
|
|
$ |
58,988 |
|
Joseph Saporito |
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|
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Billy D. Dixon |
|
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Jay D. Dodds |
|
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|
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|
6,250 |
|
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$ |
48,700 |
|
J. Bradley Green |
|
|
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|
5,000 |
|
|
$ |
16,150 |
|
George J. Klug |
|
|
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11,250 |
|
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$ |
89,850 |
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(1) |
|
Value realized on vesting is calculated using the closing market price on the date that the
shares vested. |
Pension Benefits
Carriage does not sponsor a pension plan.
Nonqualified Defined Contributions and Other Nonqualified Deferred Compensation Plans
Carriage does not sponsor any nonqualified defined contribution or other nonqualified deferred
compensation plans.
Potential Payments upon Termination or Change in Control
If Mr. Payne is terminated without cause, the Company shall continue to pay (1) his base pay
for a period of 36 months, (2) fifty percent of the annual target bonus for the year of
termination, (3) all benefits payable under any benefit plan or program of the Company and (4)
medical continuation premiums for a period of up to 36 months. If following a change in control
Mr. Payne voluntarily terminates his employment for Good Reason (as defined in his employment
agreement) or he is discharged without cause, in either case, within 24 months following the change
in control, then the Company shall pay (1) a lump sum payment equal to three times Mr. Paynes base
annual salary, (2) fifty percent of the annual target bonus for the year of termination, (3) all
benefits payable under any benefit plan or program of the Company, and (4) medical continuation
premiums for a period of up to 36 months. In addition, the agreement contains a covenant
prohibiting Mr. Payne from competing with Carriage while he is employed by the Company and, if his
employment is terminated for any reason, then for a period of two years thereafter. The amount
that would be currently payable to Mr. Payne in the event of either termination or change in
control, calculated using his base annual salary at December 31, 2008 of $500,000 and fifty percent
of his current target bonus of 75% of his base annual salary, would be $1,687,500.
If the Company discharged Messrs. Sanford, Dodds, Green or Klug without cause, the Company
shall continue to pay (1) the Executives base pay for a period of eighteen months, (2) fifty
percent of the annual bonus for the year of termination, (3) all benefits payable under any benefit
plan or program of the Company, and (4) medical continuation premiums for a period of up to
eighteen months. If following a change in control the Executive voluntarily terminates his
employment for Good Reason (as defined in his employment agreement) or the Executive is discharged
without cause, in either case, within 24 months following the change in control, then the
employment agreement shall automatically terminate and the Company shall pay (1) a lump sum payment
equal to one and one-half the Executives base annual salary, (2) fifty percent of the annual bonus
for the year of termination, (3) all benefits payable under any benefit plan or program of the
Company, and (4) medical continuation premiums for up to eighteen months. The amounts payable to
Messrs. Sanford, Dodds, Green and Klug as a result of either termination or corporate changes,
based on their respective base salaries at December 31, 2008, would be $375,000, $420,000,
$405,000
and $360,000, respectively, plus 50% of their current year bonus as determined by the Compensation
Committee.
21
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Policies and Procedures for Approval of Related Party Transactions
The Corporate Governance Committee has the responsibility to review and discuss with
management and approve any transactions or courses of dealing with related parties. During this
process, related party transactions are disclosed to all Board members. To the extent such
transactions are ongoing business relationships, the transactions are reviewed annually and such
relationships will be on terms not materially less favorable than what would be usual and customary
in similar transactions between unrelated persons dealing at arms length. The Corporate
Governance Committee intends to approve only those related party transactions that are in the best
interest of Carriage and our stockholders.
Other than as described below, since January 1, 2008 there has not been a transaction or
series of related transactions, or any other currently proposed transaction, to which Carriage was
or is a party involving an amount in excess of $120,000 and in which any director, executive
officer, holder of more than five percent (5%) of any class of our voting securities, or any member
of the immediate family of any of the foregoing persons, had or will have a direct or indirect
material interest.
The Company engaged a law firm, in which one of its partners is the spouse of J. Bradley
Green, the Companys Senior Vice President, General Counsel and Secretary, for various legal
matters. During the fiscal year ended December 31, 2008, the Company paid the law firm $811,000.
Carriage is a 40% shareholder in an entity that provides cremation services. Carriage also
provides 100% of the financing needs for the entity. Jay D. Dodds, Carriages Senior Vice
President and Chief Operating Officer, is a one-third owner in a company that owns 52.8% of this
entity. As of December 31, 2008, the entity owed Carriage $880,820 in the form of a working
capital line of credit.
OTHER BUSINESS
Management does not intend to bring any other business before the Annual Meeting and has not
been informed that any other matters are to be presented at the Annual Meeting by others. If other
matters properly come before the Annual Meeting or any adjournment thereof, the persons named in
the accompanying proxy and acting thereunder will vote in accordance with their best judgment.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the next annual meeting of stockholders
and included in our proxy statement for that meeting, and which are otherwise eligible, must be
received by the Corporate Secretary of Carriage (at the address indicated on the first page of this
Proxy Statement) no later than December 31, 2009, to be included in Carriages proxy material and
form of proxy relating to that meeting. A stockholder proposal not intended to be included in
Carriages proxy statement but intended to be presented at Carriages next annual meeting of
stockholders will be considered untimely and not considered at that meeting if received by us after
March 22, 2010.
ADDITIONAL INFORMATION
Annual Report
The Annual Report to Stockholders for the year ended December 31, 2008 is being mailed to all
stockholders entitled to vote at the Annual Meeting. The Annual Report to Stockholders does not
form any part of the proxy soliciting materials. Copies of the Companys Annual Report on Form
10-K for the fiscal year ended December 31, 2008, as filed with the SEC, are available without
charge to stockholders through the Investor Relations Section of our website at
www.carriageservices.com or upon request to Terry E. Sanford, Senior Vice President and Chief
Financial Officer, Carriage Services, Inc., 3040 Post Oak Boulevard, Suite 300, Houston, Texas
77056 or from the SECs website at www.sec.gov.
22
Number of Proxy Statements and Annual Reports
Only one copy of this Proxy Statement and the Annual Report accompanying this Proxy Statement
will be mailed to stockholders who have the same address, unless we receive contrary instructions
from one or more of such stockholders. Additional copies will be promptly delivered at no
additional cost to the requesting stockholder. Stockholders may contact the Company via U.S. Mail,
by addressing correspondence to the Corporate Secretary in care of Carriage Services, Inc., 3040
Post Oak Boulevard, Suite 300, Houston, Texas 77056.
REGARDLESS OF THE NUMBER OF SHARES YOU OWN, IT IS IMPORTANT THAT THEY BE REPRESENTED AT THE
MEETING, AND YOU ARE RESPECTFULLY REQUESTED TO SIGN, DATE AND RETURN YOUR PROXY CARD IN THE
ENVELOPE PROVIDED AS SOON AS POSSIBLE.
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By Order of the Board of Directors
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J. Bradley Green |
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Senior Vice President, General Counsel and Secretary |
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|
Houston, Texas
April 20, 2009
23
ANNUAL MEETING OF STOCKHOLDERS OF
CARRIAGE SERVICES, INC.
Lakes on Post Oak Conference Center
3050 Post Oak Blvd., 2nd Floor
Houston, Texas 77056
May 19, 2009
9:00 a.m. Central Daylight Time
Directions to attend the meeting in person be obtained by contacting the
Corporate Secretary at 713-332-8400
Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to
be Held on May 19, 2009:
The Proxy Statement and 2008 Annual Report to Stockholders is available on the internet at
www.carriageservices.com
â Please detach along perforated line and mail in the envelope provided. â
n
20230000000000000000 0
051909
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE DIRECTOR NOMINEES AND FOR PROPOSAL 2.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE
x
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1. ELECTION OF TWO CLASS I DIRECTORS for a three-year term ending
at the 2012 Annual Meeting of Stockholders.
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FOR
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AGAINST
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ABSTAIN |
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2. |
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Ratify the appointment of KPMG LLP as the independent registered public accounting firm for 2009. |
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o |
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o |
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o |
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NOMINEES: |
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o
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FOR ALL NOMINEES
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¡ |
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Melvin C. Payne
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¡ |
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Richard W. Scott
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o
o
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WITHHOLD
AUTHORITY
FOR ALL NOMINEES
FOR ALL
EXCEPT (See instructions
below)
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3. |
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In their discretion, the Proxies are authorized to vote upon any
other business as
may properly come before the meeting or any adjournment(s) thereof.
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INSTRUCTIONS:
To withhold authority to vote for any individual nominee(s),
mark FOR ALL EXCEPT and fill in the circle next to each
nominee
you wish to
withhold, as shown here: = |
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To change the address on your account, please check the box at right and indicate your
new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.
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Signature
of Stockholder
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Date:
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Signature
of Stockholder
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Date:
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Note: |
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Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give
full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
|
CARRIAGE
SERVICES, INC.
Proxy Solicited on Behalf of the Board of Directors of
the
Company for the Annual Meeting of Stockholders on May 19, 2009
The undersigned, hereby revoking all prior proxies, hereby appoints Melvin C. Payne and J.
Bradley Green, and each of them, his true and lawful proxies, with full and several power of
substitution, to vote all the shares of Common Stock of CARRIAGE SERVICES, INC. standing in the
name of the undersigned, at the Annual Meeting of Stockholders of CARRIAGE SERVICES, INC. to be
held on May 19, 2009 and at any adjournment(s) thereof, on all matters coming before said meeting.
The Board of Directors recommends a vote FOR each of the proposals on the reverse side of this
proxy card and, unless a contrary choice is specified, this proxy will be voted FOR each of such
proposals.
(Continued and to be signed on the reverse side)