
                                                                    EXHIBIT 10.1

                            CARRIAGE SERVICES, INC.

                    1998  STOCK OPTION PLAN FOR CONSULTANTS

                           I.   PURPOSE OF THE PLAN

      The CARRIAGE SERVICES, INC. 1998 STOCK OPTION PLAN FOR
CONSULTANTS (the "Plan") is intended to promote the interests of CARRIAGE
SERVICES, INC., a Delaware corporation (the "Company"), and its stockholders by
aligning the interests of certain independent contractors who, directly or
through intermediaries, provide personal services to the Company and its
subsidiaries ("Eligible Consultants") in the development and financial success
of the Company. Accordingly, the Company may grant to Eligible Consultants
("Optionees") the option ("Option") to purchase shares of the Class A Common
Stock, $.01 par value, of the Company ("Stock"), as hereinafter set forth.
Options granted under the Plan shall be options which do not constitute
incentive stock options, within the meaning of section 422(b) of the Internal
Revenue Code of 1986, as amended (the "Code").

                              II.  ADMINISTRATION

      The Plan shall be administered by the Board of Directors of the Company
(the "Board"), unless the Board, in its sole discretion, delegates the authority
for administration of the Plan to a committee thereof. The Board shall have sole
authority to select the Optionees from among Eligible Consultants and to
establish the number of shares which may be issued under each Option. The Plan
is reserved exclusively for Eligible Consultants; without limiting the
generality of the foregoing, in no event shall persons be eligible to receive
Options hereunder who, at the time of grant of an Option, are employees or
directors of the Company or one or more of its subsidiaries. The preceding
sentence shall not, however, disqualify an Optionee from continuing to hold
Options granted hereunder if, subsequent to the date of grant, such Optionee
becomes such an employee or director.

      In selecting the Optionees from among Eligible Consultants and in
establishing the number of shares that may be issued under each Option, the
Board may take into account the nature of the services rendered by such
individuals, their present and potential contributions to the Company's success
and such other factors as the Board in its discretion shall deem relevant. The
Board is authorized to interpret the Plan and may from time to time adopt such
rules and regulations, consistent with the provisions of the Plan, as it may
deem advisable to carry out the Plan. All decisions made by the Board in
selecting the Optionees, in establishing the number of shares which may be
issued under each Option and in construing the provisions of the Plan shall be
final.

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                            III.  OPTION AGREEMENTS

      Each Option shall be evidenced by a written agreement (an "Option
Agreement"). Options shall not be exercisable after the expiration of ten years
from the date of grant thereof unless otherwise specified in an Option
Agreement. Each Option Agreement shall provide that an Option and all rights
granted thereunder shall not be transferable otherwise than (i) by will or the
laws of descent and distribution, (ii) pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended or (iii) with the consent of the Board.

                        IV.  SHARES SUBJECT TO THE PLAN

      The aggregate number of shares which may be issued under Options granted
under the Plan shall not exceed 100,000 shares of Stock. Such shares may consist
of authorized but unissued shares of Stock or previously issued shares of Stock
reacquired by the Company. Any of such shares which remain unissued and which
are not subject to outstanding Options at the termination of the Plan shall
cease to be subject to the Plan, but, until termination of the Plan, the Company
shall at all times make available a sufficient number of shares to meet the
requirements of the Plan. Should any Option hereunder expire or terminate prior
to its exercise in full, the shares theretofore subject to such Option may again
be subject to an Option granted under the Plan. Exercise of an Option shall
result in a decrease in the number of shares of Stock which may thereafter be
available by the number of shares as to which the Option is exercised.

                               V.  OPTION PRICE

     The purchase price of Stock issued under each Option hereunder shall be the
fair market value of the Stock subject to the Option as of the date the Option
is granted. For all purposes under the Plan, the fair market value of a share of
Stock on a particular date shall be equal to the mean of the closing price of
the Stock (i) reported by the National Market System of NASDAQ on that date or
(ii) if the Stock is listed on a national stock exchange, reported on the stock
exchange composite tape on that date; or, in either case, if no prices are
reported on that date, on the last preceding date on which such prices of the
Stock are so reported. If the Stock is traded over the counter at the time a
determination of its fair market value is required to be made hereunder, its
fair market value shall be deemed to be equal to the average between the
reported high and low or closing bid and asked prices of Stock on the most
recent date on which Stock was publicly traded. In the event Stock is not
publicly traded at the time a determination of its value is required to be made
hereunder, the determination of its fair market value shall be made by the Board
in such manner as it deems appropriate.

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                               VI.  TERM OF PLAN

      The Plan shall became effective upon its adoption by the Board. Except
with respect to Options then outstanding, if not sooner terminated under the
provisions of Paragraph VIII, the Plan shall terminate upon and no further
Options shall be granted after February 4, 2008.

                   VII.  RECAPITALIZATION OR REORGANIZATION

      A. The existence of the Plan and the Options granted hereunder shall not
affect in any way the right or power of the Board or the stockholders of the
Company to make or authorize any adjustment, recapitalization, reorganization or
other change in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of debt or equity securities, the
dissolution or liquidation of the Company or any sale, lease, exchange or other
disposition of all or any part of its assets or business or any other corporate
act or proceeding.

      B. The shares with respect to which Options may be granted are shares of
Stock as presently constituted, but if, and whenever, prior to the expiration of
an Option theretofore granted, the Company shall effect a subdivision or
consolidation of shares of Stock or the payment of a stock dividend on Stock
without receipt of consideration by the Company, the number of shares of Stock
with respect to which such Option may thereafter be exercised (i) in the event
of an increase in the number of outstanding shares shall be proportionately
increased, and the purchase price per share shall be proportionately reduced,
and (ii) in the event of a reduction in the number of outstanding shares shall
be proportionately reduced, and the purchase price per share shall be
proportionately increased.

      C. If the Company recapitalizes, reclassifies its capital stock, or
otherwise changes its capital structure (a "recapitalization"), the number and
class of shares of Stock covered by an Option theretofore granted shall be
adjusted so that such Option shall thereafter cover the number and class of
shares of stock and securities to which the Optionee would have been entitled
pursuant to the terms of the recapitalization if, immediately prior to the
recapitalization, the Optionee had been the holder of record of the number of
shares of Stock then covered by such Option.

      D. Any adjustment provided for in Subparagraphs B or C above shall be
subject to any required stockholder action.

      E. Except as hereinbefore expressly provided, the issuance by the Company
of shares of stock of any class or securities convertible into shares of stock
of any class, for cash, property, labor or services, upon direct sale, upon the
exercise of rights or warrants to subscribe therefor, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, and in any case whether or not for fair value, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number of
shares of Stock subject to Options theretofore granted or the purchase price per
share.

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                  VIII.  AMENDMENT OR TERMINATION OF THE PLAN

      The Board in its discretion may terminate the Plan at any time with
respect to any shares for which Options have not theretofore been granted. The
Board shall have the right to alter or amend the Plan or any part thereof from
time to time; provided, that no change in any Option theretofore granted may be
made which would impair the rights of the Optionee without the consent of such
Optionee.

                             IX.  SECURITIES LAWS

      A. The Company shall not be obligated to issue any Stock pursuant to any
Option granted under the Plan at any time when the offering of the shares
covered by such Option have not been registered under the Securities Act of
1933, as amended, and such other state and federal laws, rules or regulations as
the Company deems applicable and, in the opinion of legal counsel for the
Company, there is no exemption from the registration requirements of such laws,
rules or regulations available for the offering and sale of such shares.

      B. It is intended that no Option shall be granted under the Plan to a
person who is subject to Section 16 of Securities Exchange Act of 1934, as
amended (the "1934 Act"). If, however, any Optionee becomes subject to said
Section 16, the Board shall take all reasonable steps, if any, within its
control, so as to cause the Plan to meet all of the requirements of Rule 16b-3,
as currently in effect or as hereinafter modified or amended ("Rule 16b-3"),
promulgated under the 1934 Act. In such event, if any provision of the Plan or
any such Option would disqualify the Plan or such Option under, or would
otherwise not comply with, Rule 16b-3, such provision or Option shall be
construed or deemed amended to conform to Rule 16b-3.

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