CSV Carriage Services Inc

(b) Resignation of Dr. Achille Messac from the Board of Directors and Resignation of Melvin C. Payne as Chief Executive Officer

On June 15, 2023, Dr. Achille Messac, a member of the Carriage Services, Inc. (the “Company”) Board of Directors (the “Board”), provided notice of his resignation from the Board of the Company, effective on that date. Dr. Messac’s resignation was not a result of any disagreement with the Company on any matter related to its operations, policies or practices. The Company is grateful for Dr. Messac’s service on the Board since 2020, including his service as Chair of the Corporate Governance Committee and as a member of the Audit Committee and the Compensation Committee.

As described further below, Melvin C. Payne is stepping down as the Company’s Chief Executive Officer as part of a planned succession process.

(c) Appointment of Carlos R. Quezada to Chief Executive Officer, Melvin C. Payne as Executive Chairman of the Board of Directors and Steven D. Metzger as President

On June 21, 2023, the Company announced that the Board appointed Carlos R. Quezada, age 52, to serve as the Company’s Chief Executive Officer (“CEO”), effective June 21, 2023, as part of a planned succession of Melvin C. Payne, the Company’s founder and CEO. Concurrently with the appointment of Mr. Quezada as CEO, Mr. Payne stepped down as CEO of the Company and the Board approved his appointment as Executive Chairman of the Board, effective June 21, 2023.

Mr. Payne is, and will remain, an employee of the Company in his role as Executive Chairman of the Board and there will be no change to Mr. Payne’s compensation in connection with serving in this new role.

Mr. Quezada joined the Company in June 2020 as Vice President of Cemetery Sales and Marketing and was subsequently promoted to Senior Vice President of Sales and Marketing in February 2021. On June 1, 2021, Mr. Quezada was appointed Executive Vice President and Chief Operating Officer. Immediately prior to his appointment as the Company’s CEO, Mr. Quezada served as the Company’s President and Chief Operating Officer, a position he has held since February 23, 2022. Prior to joining the Company, Mr. Quezada served as a Managing Director for Service Corporation International (“SCI”) from 2009 to 2020, where he held leadership roles for both sales and operations. Mr. Quezada joined the funeral and cemetery industry after serving in the hospitality industry for more than 20 years where he held a variety of leadership roles, including Chief Operating Officer, President and Chief Executive Officer for privately held multiunit companies. Mr. Quezada has a Masters in Management from Tulane University and an MBA with an emphasis in Finance from Universidad Francisco Marroquin.

Mr. Quezada does not have any family relationships with any executive officer or director of the Company, and there are no transactions between Mr. Quezada and the Company that would be required to be disclosed under Item 404(a) of Regulation S-K in connection with his appointment. The appointment of Mr. Quezada to serve as CEO was not pursuant to any arrangement or understanding with respect to any other person.

On June 21, 2023, in connection with the Company’s announced executive leadership changes, the Board appointed Steven D. Metzger, age 45, to serve as the Company’s President, along with remaining in his role as Secretary.

Mr. Metzger joined the Company in May 2018 as Lead Counsel and was subsequently promoted to Senior Vice President and General Counsel in February 2019. On June 1, 2021, in addition to his roles as General Counsel and Secretary, Mr. Metzger was promoted to Executive Vice President and Chief Administrative Officer. Prior to joining Carriage, Mr. Metzger served as Senior Vice President, General Counsel and Secretary for a publicly traded company in the restaurant industry from 2016 to 2018. Prior to that, Mr. Metzger spent seven years with SCI where he served in various leadership roles including Managing Counsel for the Legal Department and Chief Compliance Officer for SCI’s registered investment advisor. Mr. Metzger began his career as a litigator at a Houston law firm and received both his BA in Government and his Juris Doctorate from the University of Texas at Austin.    

Mr. Metzger does not have any family relationships with any executive officer or director of the Company, and there are no transactions between Mr. Metzger and the Company that would be required to be disclosed under Item 404(a) of Regulation S-K in connection with his appointment. The appointment of Mr. Metzger to serve as President was not pursuant to any arrangement or understanding with respect to any other person.

(d) Election of Chad Fargason to the Board of Directors

On June 21, 2023, the Board elected Chad Fargason to serve as a Class II Director until the Company’s 2025 annual meeting of shareholders. Mr. Fargason was appointed to serve on the Audit Committee, along with being appointed Chairman of the Corporate Governance Committee in connection with the resignation of the prior Corporate Governance Committee Chairman, Dr. Messac. There are no family relationships between Mr. Fargason and any directors or officers of the Company, and there have been no transactions, nor are there any proposed transactions, between the Company and Mr. Fargason that would require disclosure pursuant to Item 404(a) of Regulation S-K.

Mr. Fargason currently serves as Senior Portfolio Manager for Vaughan Nelson Investment Management, an investment manager with approximately $15 billion under management. Mr. Fargason has been with Vaughan Nelson for more than ten years. Prior to that, he spent ten years with the global investment firm, KKR & Co., Inc. Mr. Fargason holds a B.A. in Mathematics from Rice University and both a Masters and Ph.D in Mathematics from Duke University.

Concurrently with the election, the Board granted Mr. Fargason 910 shares of the Company’s common stock under the Company’s Director Compensation Policy, which was valued at approximately $25,000 based on the closing price on June 21, 2023.

Amendments to Employment Agreements for certain Named Executive Officers

On June 21, 2023, in connection with his appointment as Executive Chairman, the Company and Melvin C. Payne entered into a written amendment to Mr. Payne’s employment agreement dated November 5, 2019, as previously amended. The written amendment, among other things, updates the terms of Mr. Payne’s current employment agreement to make certain administrative revisions that reflect his change in title and align his annual salary and short-term incentive target with his current compensation, which was previously approved by the Company’s Compensation Committee and disclosed in the Company’s Definitive Proxy Statement on Schedule 14A, dated April 3, 2023.

On June 21, 2023, in connection with his promotion to CEO, the Company and Carlos R. Quezada entered into a written amendment to Mr. Quezada’s employment agreement dated June 25, 2020, as previously amended. The written amendment, among other things, extends the term of Mr. Quezada’s current employment agreement to December 31, 2026, and increases his annual salary to $800,000 and his short-term incentive target to 125% of his annual salary.

On June 21, 2023, in connection with his promotion to President, the Company and Steven D. Metzger entered into a written amendment to Mr. Metzger’s employment agreement dated November 5, 2019, as previously amended. The written amendment, among other things, extends the term of Mr. Metzger’s current employment agreement to December 31, 2026, and increases Mr. Metzger’s annual salary to $600,000 and his short-term incentive target to 125% of his annual salary.

The foregoing summary of the material terms of the amendments to each of the respective employment agreements does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the amendments, which will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the period ending June 30, 2023.