
                                                                    EXHIBIT 10.1

                             CARRIAGE SERVICES, INC.

                        1997 EMPLOYEE STOCK PURCHASE PLAN

The following constitute the provisions of the 1997 Employee Stock Purchase Plan
of Carriage Services, Inc..

1.      PURPOSE. The purpose of the Plan is to provide employees of the Company
        and its Designated Subsidiaries with an opportunity to purchase Common
        Stock of the Company. It is the intention of the Company to have the
        Plan qualify as an "Employee Stock Purchase Plan" under Section 423 of
        the Internal Revenue Code of 1986, as amended. The provisions of the
        Plan shall, accordingly, be construed so as to extend and limit
        participation in a manner consistent with the requirements of that
        section of the Code.

2.      DEFINITIONS.

        a)      "BOARD" shall mean the Board of Directors of the Company.

        b)      "CODE" shall mean the Internal Revenue Code of 1986, as amended.

        c)      "COMMON STOCK" shall mean the Class A Common Stock, $.01 par
                value, of the Company.

        d)      "COMPANY" shall mean Carriage Services, Inc., a Delaware
                corporation.

        e)      "COMPENSATION" shall mean all regular straight time gross
                earnings, overtime bonuses, incentive pay and commissions.

        f)      "CONTINUOUS STATUS AS AN EMPLOYEE" shall mean the absence of any
                interruption or termination of service as an Employee.
                Continuous Status as an Employee shall not be considered
                interrupted in the case of a leave of absence agreed to in
                writing by the Company, provided that such leave is for a period
                of not more than 90 days or reemployment upon the expiration of
                such leave is guaranteed by contract or statute.

        g)      "CONTRIBUTIONS" shall mean all amounts credited to the account
                of a participant pursuant to the Plan.

        h)      "DESIGNATED SUBSIDIARIES" shall mean the Subsidiaries which have
                been designated by the Board from time to time in its sole
                discretion as to which their employees are eligible to
                participate in the Plan.

        i)      "EMPLOYEE" shall mean any person, including an Officer, who is
                employed by the Company or one of its Designated Subsidiaries.

        j)      "ENTRY DATE" shall mean the date an employee first commences
                participation in the Plan. Possible Entry Dates are the
                beginning of the Offering Period or the beginning of a Purchase
                Period within that Offering Period.

        k)      "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
                as amended.

        l)      "EXERCISE DATE" shall mean the last day of each Purchase Period
                of the Plan.

        m)      "PURCHASE DATE" shall mean the last day of each Purchase Period
                of the Plan.

        n)      "OFFERING DATE" shall mean the first business day of each
                Offering Period of the Plan.
 
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        o)      "OFFERING PERIOD" shall mean a period of one (1) year commencing
                on January 1 of each year except as otherwise indicated by the
                Company.

        p)      "OFFICER" shall mean a person who is an officer of the Company
                within the meaning of Section 16 of the Exchange Act and the
                rules and regulations promulgated thereunder.

        q)      "PLAN" shall mean this Employee Stock Purchase Plan.

        r)      "PURCHASE PERIOD" shall mean a period of three (3) months
                beginning on January 1, April 1, July 1 and October 1 and ending
                on the last day preceding the beginning of the next period,
                except as otherwise indicated by the Company.

        s)      "SUBSIDIARY" shall mean a corporation, domestic or foreign, of
                which not less than 50% of the voting shares are held by the
                Company or a Subsidiary, whether or not such corporation now
                exists or is hereafter organized or acquired by the Company or a
                Subsidiary.

3.      ELIGIBILITY.

        a)      Any person who is an Employee as of the Offering Date of a given
                Offering Period shall be eligible to participate in such
                Offering Period under the Plan, subject to the requirements of
                Sections 5(a) and 10 and the limitations imposed by Section
                423(b) of the Code. An Employee may enter at the beginning of
                the Offering Period or at any Entry Date within the Offering
                Period at which he/she remains an Employee.

        b)      Any person who first becomes an Employee after the Offering Date
                of a given Offering Period may enter that Offering Period at any
                Entry Date during that Offering Period on which he/she remains
                an Employee.

        c)      Any provisions of the Plan to the contrary notwithstanding, no
                Employee shall be granted an option under the Plan (i) if,
                immediately after the grant, such Employee (or any other person
                whose stock would be attributed to such an Employee pursuant to
                Section 424(d) of the Code) would own stock and/or hold
                outstanding options to purchase stock possessing five percent
                (5%) or more of the total combined voting power or value of all
                classes of stock of the Company or of any Subsidiary of the
                Company, or (ii) if such option would permit his or her rights
                to purchase stock under all employee stock purchase plans
                (described in Section 423 of the Code) of the Company and its
                Subsidiaries to accrue at a rate which exceeds Twenty-Five
                Thousand Dollars ($25,000) of fair market value of such stock
                (determined at the time such option is granted) for each
                calendar year in which such option is outstanding at any time.

4.      OFFERING PERIODS AND PURCHASE PERIODS.

        a)      The Plan shall be implemented by a series of Offering Periods
                each of one (1) year duration, with new Offering Periods
                commencing on January 1 of each year (or at such other time or
                times as may be determined by the Board of Directors). The Plan
                shall continue until terminated in accordance with Section 19
                hereof. The Board of Directors of the Company shall have the
                power to change the duration and/or the frequency of Offering
                Period with respect to future offerings without stockholder
                approval if such change is announced at least fifteen (15) days
                prior to the scheduled beginning of the first Offering Period to
                be affected. Eligible employees may not participate in more than
                one Offering at a time.

        b)      Each Offering Period shall consist of four three-month Purchase
                Periods, beginning on January 1, April 1, July 1 and October 1
                and ending on the last day preceding the beginning of the next
                period, except as otherwise indicated by the Company.

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5.      PARTICIPATION.

        a)      An eligible Employee may become a participant in the Plan by
                completing a subscription agreement on the form provided by the
                Company and filing it with the Company's payroll office (or at
                such other place as the Company may determine) prior to the
                applicable Offering Date or Entry Date, unless a later time for
                filing the subscription agreement is set by the Board for all
                eligible Employees with respect to a given offering. The
                subscription agreement shall set forth the whole number
                percentage of the participant's Compensation (which shall be not
                less than 1% and not more than 15%) to be paid as Contributions
                pursuant to the Plan. The Company may establish equivalent
                alternative procedures for enrollment.

        b)      Payroll deductions shall commence on the first payroll following
                the Offering Date or Entry Date and shall end on the last
                payroll paid prior to the Exercise Date of the Offering Period
                to which the subscription agreement is applicable, unless sooner
                terminated by the participant as provided in Section 10,
                provided however, that any payroll paid within five (5) business
                days preceding the Exercise Date will be included in the
                subsequent Purchase or Offering Period.

6.      METHOD OF PAYMENT OF CONTRIBUTIONS.

        a)      The participants shall elect to have payroll deductions made on
                each payday during the Offering Period in an amount not less
                than one percent (1%) and not more than fifteen percent (15%)
                (in whole number increments) of such participant's Compensation
                on each such payday. All payroll deductions made by a
                participant shall be credited to his or her account under the
                Plan. A participant may not make any additional payments into
                such account.

        b)      A participant may discontinue his or her participation in the
                Plan as provided in Section 10, or, on one occasion only during
                the Offering Period, may decrease the rate of his or her
                Contributions during the Offering Period by completing and
                filing with the Company a new subscription agreement. The change
                in rate shall be effective as of the beginning of the next
                calendar month following the date of filing of the new
                subscription agreement, if the agreement is filed at least ten
                (10) business days prior to such date and, if not, as of the
                beginning of the next succeeding calendar month.

        c)      Notwithstanding the foregoing, no participant may make payroll
                deductions during any year in excess of $21,250.

7.      GRANT OF OPTION.

        a)      On the Offering Date of each Offering Period, or on the Entry
                Date if later, each eligible Employee participating in such
                Offering Period shall be granted an option to purchase on each
                Purchase Date a number of shares of the Company's Common Stock
                determined by dividing such Employee's Contribution accumulated
                prior to such Purchase Date and retained in the participant's
                account as of the Purchase Date by the lower of (i) eighty-five
                percent (85%) of the fair market value of a share of the
                Company's Common Stock on the Employee's Entry Date, or (ii)
                eighty-five percent (85%) of the fair market value of the
                Company's Common Stock on the Purchase Date; provided however,
                that the maximum number of shares an Employee may purchase
                during each Offering Period shall be 5,000 shares, and provided
                further that such purchase shall be subject to the limitations
                set forth in Section 3(c) and 12. However, for each
                participating Employee whose Entry Date is subsequent to the
                Offering Date, the clause (i) amount shall in no event be less
                than 85% of the fair market value per share on the Offering
                Date. The fair market value of a share of the Company's Common
                Stock shall be determined as provided in Section 7(b).

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        b)      The option price per share of the shares offered in a given
                Purchase Period of an Offering Period shall be the lower of: (i)
                85% of the fair market value of a share of the Common Stock of
                the Company on the Offering Date; or (ii) 85% of the fair market
                value of a share of the Common Stock of the Company on the
                Exercise Date of that Purchase Period. For Employees whose Entry
                Date is subsequent to the Offering Date, the amount in clause
                (i) shall be the higher of (a) 85% of the fair market value of a
                share of the Common Stock of the Company on the Offering Date
                and (b) 85% of the fair market value per share of the Common
                Stock of the Company on the Employee's Entry Date. The fair
                market value of the Company's Common Stock on a given date shall
                be determined by the Board in its discretion based on the
                closing price of the Common Stock for such date (or, in the
                event that the Common Stock is not traded on such date, on the
                immediately preceding trading date on which there was a closing
                price), as reported on the Nasdaq National Market or, if such
                price is not reported, the mean of the bid and asked prices per
                share of the Common Stock as reported by Nasdaq National Market
                or, in the event the Common Stock is listed on a stock exchange,
                the fair market value per share shall be the closing price on
                such exchange on such date (or, in the event that the Common
                Stock is not traded on such date, on the immediately preceding
                trading date), as reported in THE WALL STREET JOURNAL.


8.      EXERCISE OF OPTION. Unless a participant withdraws from the Plan as
        provided in Section 10, his or her option for the purchase of shares
        will be exercised automatically on each Exercise Date of an Offering
        Period, and the maximum number of full shares subject to the option will
        be purchased at the applicable option price with the accumulated
        Contributions in his or her account. The shares purchased upon exercise
        of an option hereunder shall be deemed to be transferred to the
        participant on that Exercise Date. During his or her lifetime, a
        participant's option to purchase shares hereunder is exercisable only by
        him or her.

9.      DELIVERY. As promptly as practicable after each Exercise Date of an
        Offering Period, the Company shall arrange the delivery to each
        participant, as appropriate, including, but not limited to, direct
        deposit into a book entry account or brokerage account, the shares
        purchased upon exercise of his or her option. Any cash remaining to the
        credit of a participant's account under the Plan after a purchase by him
        or her of shares on the Exercise Date, other than amounts representing
        fractional shares, will be returned to him or her as soon as
        practicable. Amounts representing fractional shares will be carried
        forward for use in subsequent purchases.

10.     VOLUNTARY WITHDRAWAL; TERMINATION OF EMPLOYMENT.

        a)      A participant may withdraw all but not less than all the
                Contributions credited to his or her account under the Plan at
                any time prior to two (2) business days prior to an Exercise
                Date of an Offering Period by completing a Company approved
                notification. All of the participant's Contributions credited to
                his or her account will be paid to him or her as soon as
                practicable after receipt of his or her notice of withdrawal and
                his or her option for the current period will be automatically
                terminated, and no further Contributions for the purchase of
                shares will be made during the Offering Period.

        b)      Upon termination of the participant's Continuous Status as an
                Employee prior to an Exercise Date of an Offering Period for any
                reason, including retirement or death, the Contributions
                credited to his or her account will be returned to him or her
                or, in the case of his or her death, to the person or persons
                entitled thereto under Section 14, and his or her option will be
                automatically terminated.

        c)      Should a participant voluntarily withdraw from participation
                during an Offering Period, the participant will not be eligible
                to participate in the Plan until the beginning of the next
                Offering Period.

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11.     INTEREST. No interest shall accrue on the Contributions of a participant
        in the Plan.

12.     STOCK.

        a)      The maximum number of shares of the Company's Common Stock which
                shall be made available for sale under the Plan shall be one
                million (1,000,000) shares, subject to adjustment upon changes
                in capitalization of the Company as provided in Section 18. If
                the total number of shares which would otherwise be subject to
                options granted pursuant to Section 7(a) on the Offering Date of
                an Offering Period exceeds the number of shares then available
                under the Plan (after deduction of all shares for which options
                have been exercised or are then outstanding), the Company shall
                make a pro rata allocation of the shares remaining available for
                option grant in as uniform a manner as shall be practicable and
                as it shall determine to be equitable. In such event, the
                Company shall give written notice of such reduction of the
                number of shares subject to the option to each Employee affected
                thereby and shall similarly reduce the rate of Contributions, if
                necessary.

        b)      A participant will have no interest or voting right in shares
                covered by his or her option until such option has been
                exercised.

        c)      Shares to be delivered to a participant under the Plan will be
                registered in the "Street Name" of a Company approved broker.

13.     ADMINISTRATION. The Board, or a committee named by the Board, shall
        supervise and administer the Plan and shall have full power to adopt,
        amend and rescind any rules deemed desirable and appropriate for the
        administration of the Plan and not inconsistent with the Plan, to
        construe and interpret the Plan, and to make all other determinations
        necessary or advisable for the administration of the Plan. The
        composition of the committee shall be in accordance with the
        requirements to obtain or retain any available exemption from the
        operation of Section 16(b) of the Exchange Act pursuant to Rule 16b-3
        promulgated thereunder.

14.     DESIGNATION OF BENEFICIARY.

        a)      A participant may file a written designation of a beneficiary
                who is to receive shares and cash, if any, from the
                participant's account under the Plan in the event of such
                participant's death subsequent to the end of an Offering Period
                but prior to delivery to him or her of such shares and cash. In
                addition, a participant may file a written designation of a
                beneficiary who is to receive any cash from the participant's
                account under the Plan in the event of such participant's death
                prior to the Exercise Date of an Offering Period. If a
                participant is married and the designated beneficiary is not the
                spouse, spousal consent shall be required for such designation
                to be effective.

        b)      Such designation of beneficiary may be changed by the
                participant (and his or her spouse, if any) at any time by
                written notice. In the event of the death of a participant and
                in the absence of a beneficiary validly designated under the
                Plan who is living at the time of such participant's death, the
                Company shall deliver such shares and/or cash to the executor or
                administrator of the estate of the participant, or if no such
                executor or administrator has been appointed (to the knowledge
                of the Company), the Company, in its discretion, may deliver
                such shares and/or cash to the spouse or to any one or more
                dependents or relatives of the participant, or if no spouse,
                dependent or relative is known to the Company, then to such
                other person as the Company may designate.

15.     TRANSFERABILITY. Neither Contributions credited to a participant's
        account nor any rights with regard to the exercise of an option or to
        receive shares under the Plan may be assigned, transferred, pledged or
        otherwise disposed of in any way (other than by will, the laws of
        descent and distribution, or as provided in Section 14) by the
        participant. Any such attempt at assignment, transfer, pledge or other
        disposition shall be without effect, except that the Company may treat
        such act as election to withdraw funds in accordance with Section 10.
 
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16.     USE OF FUNDS. All Contributions received or held by the Company under
        the Plan may be used by the Company for any corporate purpose, and the
        Company shall not be obligated to segregate such Contributions.

17.     REPORTS. Individual accounts will be maintained for each participant in
        the Plan. Statements of account will be given to participating Employees
        promptly following the Exercise Date, which statements will set forth
        the amounts of Contributions, the per share purchase price, the number
        of shares purchased and the remaining cash balance, if any.

18.     ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; CORPORATE TRANSACTIONS.

        a)      ADJUSTMENT. Subject to any required action by the stockholders
                of the Company, the number of shares of Common Stock covered by
                each option under the Plan which has not yet been exercised and
                the number of shares of Common Stock which have been authorized
                for issuance under the Plan but have not yet been placed under
                option (collectively, the "Reserves"), as well as the price per
                share of Common Stock covered by each option under the Plan
                which has not yet been exercised, shall be proportionately
                adjusted for any increase or decrease in the number of issued
                shares of Common Stock resulting from a stock split, reverse
                stock split, stock dividend, combination or reclassification of
                the Common Stock, or any other increase or decrease in the
                number of shares of Common Stock effected without receipt of
                consideration by the Company; provided, however, that conversion
                of any convertible securities of the Company shall not be deemed
                to have been "effected without receipt of consideration". Such
                adjustment shall be made by the Board, whose determination in
                that respect shall be final, binding and conclusive. Except as
                expressly provided herein, no issue by the Company of shares of
                stock of any class, or securities convertible into shares of
                stock of any class, shall affect, and no adjustment by reason
                thereof shall be made with respect to, the number or price of
                shares of Common Stock subject to an option.

        b)      CORPORATE TRANSACTIONS. In the event of the proposed dissolution
                or liquidation of the Company, the Offering Period will
                terminate immediately prior to the consummation of such proposed
                action, unless otherwise provided by the Board. In the event of
                a proposed sale of all or substantially all of the assets of the
                Company, or the merger of Company with or into another
                corporation, each option under the Plan shall be assumed or an
                equivalent option shall be substituted by such successor
                corporation or a parent or subsidiary of such successor
                corporation, unless the Board determines, in the exercise of its
                sole discretion and in lieu of such assumption or substitution,
                to shorten the Offering Period then in progress by setting a new
                Exercise Date (the "New Exercise Date"). If the Board shortens
                the Offering Period then in progress in lieu of assumption or
                substitution in the even of a merger or sale of assets, the
                Board shall notify each participant in writing, at least ten
                (10) days prior to the New Exercise Date, that the Exercise Date
                for his or her option has been changed to the New Exercise Date
                and that this or her option will be exercised automatically on
                the New Exercise Date, unless prior to such date he or she has
                withdrawn from the Offering Period as provided in Section 10.
                For purposes of this paragraph, an option granted under the Plan
                shall be deemed to be assumed if, following the sale of assets
                or merger, the option confers the right to purchase, for each
                share of option stock subject to the option immediately prior to
                the sale of assets or merger, the consideration (whether stock,
                cash or other securities or property) received in the sale of
                assets or merger by holders of Common Stock for each share of
                Common Stock held on the effective date of the transaction (and
                if such holders were offered a choice of consideration, the type
                of consideration chosen by the holders of a majority of the
                outstanding shares of Common Stock); provided, however, that if
                such consideration received in the sale of assets or merger was
                not solely common stock of the successor corporation or its
                parent (as defined in Section 424(e) of the Code), the Board
                may, with the consent of the successor corporation and the
                participant, provide for the consideration to be received upon
                exercise of the option to be solely common stock of the
                successor corporation or its parent equal in fair market value
                to the per share consideration received by holders of Common
                Stock and the sale of assets of merger.

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19.     AMENDMENT OR TERMINATION.

        a)      The Board of Directors of the Company may at any time terminate
                or amend the Plan. Except as provided in Section 18, no such
                termination may affect options previously granted, nor may an
                amendment make any change in any option theretofore granted
                which adversely affects the rights of any participant. In
                addition, to the extent necessary to comply with Rule 16b-3
                under the Exchange Act , or under Section 423 of the Code (or
                any successor rule or provision or any applicable law or
                regulation), the Company shall obtain stockholder approval in
                such a manner and to such a degree as so required.

        b)      Without stockholder consent and without regard to whether any
                participant rights may be considered to have been adversely
                affected, the Board (or its committee) shall be entitled to
                change the Offering Periods and Purchase Periods, limit the
                frequency and/or number of changes in the amount withheld during
                an Offering Period, establish the exchange ratio applicable to
                amounts withheld in currency other than U.S dollars, permit
                payroll withholding in excess of the amount designated by a
                participant in order to adjust for delays or mistakes in the
                Company's processing of properly completed withholding
                elections, establish reasonable waiting and adjustment periods
                and/or accounting and crediting procedures to ensure that
                amounts applied toward the purchase of Common Stock for each
                participant properly correspond with amounts withheld from the
                participant's Compensation, and establish such other limitations
                or procedures as the Board (or its committee) determines in its
                sole discretion advisable which are consistent with the Plan.

20.     NOTICES. All notices or other communications by a participant to the
        Company under or in connection with the Plan shall be deemed to have
        been duly given when received in the form specified by the Company at
        the location, or by the person, designated by the Company for the
        receipt thereof.

21.     CONDITIONS UPON ISSUANCE OF SHARES.

        a)      Shares shall not be issued with respect to an option unless the
                exercise of such option and the issuance and delivery of such
                shares pursuant thereto shall comply with all applicable
                provisions of law, domestic or foreign, including, without
                limitation, the Securities Act of 1933, as amended, the Exchange
                Act, the rules and regulations promulgated thereunder, and the
                requirements of any stock exchange upon which the shares may
                then be listed, and shall be further subject to the approval of
                counsel for the Company with respect to such compliance.

        b)      As a condition to the exercise of an option, the Company may
                require the person exercising such option to represent and
                warrant at the time of any such exercise that the shares are
                being purchased only for investment and without any present
                intention to sell or distribute such shares if, in the opinion
                of counsel for the Company, such a representation is required by
                any of the aforementioned applicable provisions of law.

        c)      Each participant agrees, by entering the Plan, to promptly give
                the Company notice of any disposition of shares purchased under
                the Plan where such disposition occurs within two (2) years
                after the date of grant of the Option pursuant to which such
                shares were purchased.

        d)      The Company may make such provisions as it deems appropriate for
                withholding by the Company pursuant to all applicable tax laws
                of such amounts as the Company determines it is required to
                withhold in connection with the purchase or sale by a
                participant of any Common Stock acquired pursuant to the Plan.
                The Company may require a participant to satisfy any relevant
                tax requirements before authorizing any issuance of Common Stock
                to such participant.

22.     TERM OF PLAN; EFFECTIVE DATE. The Plan shall become effective upon the
        earlier to occur of its adoption by the Board of Directors or its
        approval by the stockholders of the Company. The Plan shall be subject
        to approval by

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        the stockholders of the Company within twelve months after the date the
        Plan is adopted by the Board of Directors. It shall continue in effect
        for a term of ten (10) years unless sooner terminated under Section 19.

23.     ADDITIONAL RESTRICTIONS OF RULE 16B-3. The terms and conditions of
        options granted hereunder to, and the purchase of shares by, persons
        subject to Section 16 of the Exchange Act shall comply with the
        applicable provisions of Rule 16b-3. This Plan shall be deemed to
        contain, and such options shall contain, and the shares issued upon
        exercise thereof shall be subject to, such additional conditions and
        restrictions as may be required by Rule 16b-3 to qualify for the maximum
        exemption from Section 16 of the Exchange Act with respect to Plan
        transactions.


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