EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”), dated August 31, 2012 at 5:01 p.m.
(the “Effective Date”), is entered into between CARRIAGE SERVICES, INC., a
Delaware corporation (the “Company”), and Paul D. Elliott, a resident of Harris
County, Texas (the “Employee”).
1.Employment Term. The Company hereby employs the Employee for an initial term
commencing as of the Effective Date and continuing until the third anniversary
of the Effective Date (the “Initial Term”). On the third anniversary of the
Effective Date and on each subsequent anniversary thereafter, this Agreement
shall automatically renew and extend for a period of 12 months (each such
12-month period being a “Renewal Term”) unless written notice of non-renewal is
delivered from either party to the other not less than sixty (60) days prior to
the expiration of the then-existing Initial Term or Renewal Term, as applicable.
Notwithstanding the foregoing, the Employee's employment pursuant to this
Agreement may be terminated prior to the expiration of the then-existing Initial
Term or Renewal Term as provided in Section 7 hereof. The Employee agrees to
accept such employment and to perform the services specified herein, all upon
the terms and conditions hereinafter stated.

2.Duties. The Employee shall serve the Company and shall report to, and be
subject to the general direction and control, of the Chief Executive Officer of
the Company or any other Executive Officer designated by him. The Employee shall
faithfully, diligently, competently, and to the best of Employee's ability,
perform the management and administrative duties of Regional Managing Partner
and Regional Vice President of Operations of the Company. The Employee shall
also serve as Regional Managing Partner and Regional Vice President of
Operations of any subsidiary of the Company as requested by the Company, and the
Employee shall perform such other duties as are from time to time assigned to
him by the Chief Executive Officer or any other Executive Officer designated by
him as are not inconsistent with the provisions hereof. The Employee represents
and warrants to the Company that Employee is not subject to any obligation to
any third party that would restrict or interfere with Employee's ability to
perform hereunder.

3.Extent of Service. The Employee shall devote his full business time and
attention to the business of the Company and, except as may be specifically
permitted by the Company, shall not be engaged in any other business activity
during the term of this Agreement. The foregoing shall not be construed as
preventing the Employee (i) from making passive investments in other businesses
or enterprises, and (ii) from engaging in other civic, charitable and business
activities, provided, however, that such investments and activities will not
require services on the part of the Employee which would in any way impair the
performance of his duties under this Agreement.

4.Compensation. During the term of this Agreement, the Company shall pay the
Employee an annual salary at a rate of not less than $240,000 per full calendar
year of service completed (“Base Salary”), appropriately prorated for partial
years at the commencement and end of the term of this Agreement. The Employee's
salary and benefits will be reviewed annually, and any increase therein shall
remain in the sole discretion of the Company, acting through the Compensation
Committee of the Board (the “Compensation Committee”). The salary set forth

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herein shall not be subject to reduction and shall be payable in bi-weekly
installments in accordance with the payroll policies of the Company in effect
from time to time during the term of this Agreement. The Company shall have the
right to deduct from payment of all compensation to the Employee hereunder (i)
any federal, state or local taxes required by law to be withheld with respectto
such payments, and (ii) any other amounts specifically authorized to be withheld
or deducted by the Employee.

5.Benefits. In addition to the Base Salary, the Employee shall be entitled to
participate in the following benefits during the term of this Agreement:

(a)Employee shall be eligible for an annual, discretionary incentive award (the
“Incentive Award”) for each full calendar year that he is employed hereunder, as
determined in the sole discretion of the Chief Executive Officer of the Company
upon consideration of, among other things, regional, corporate, and individual
performance for the year. The Incentive Award shall be payable before March 15
of the year following the calendar year to which the Incentive Award relates,
following the certification of applicable year-end financial results. Employee
must be employed by the Company on the payment date in order to earn and receive
an Incentive Award.
 
(b)Employee shall be eligible for consideration of awards of restricted stock or
other incentive-based compensation under the terms of the Company's Second
Amended & Restated 2006 Long-Term Incentive Plan or one or more of the Company's
other incentive plans, as may be recommended by the Chief Executive Officer and
approved by the Compensation Committee.

(c)Four weeks of paid vacation in each calendar year, subject to the Company's
personnel policies respecting such matters.

(d)Participation in the Company's group health and hospitalization program, and
inclusion in such other employee benefits, as are available generally to
executive-level employees of the Company.

(e)Reimbursement for travel, lodging and other out-of-pocket expenses reasonably
incurred by Employee in the exercise of Employee's duties under this Agreement
which are approved by the Company in advance and are duly substantiated in
accordance with the Company's policies as to reimbursement. In order to assure
compliance with Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), (i) such reimbursements shall be made as soon as practicable, but
in no event later than the last day of the calendar year following the calendar
year in which the expense was incurred, (ii) Employee is not permitted to
receive a payment or other benefit in lieu of reimbursement under this Section
5(e), and (iii) the amount of expenses for which Employee is eligible to receive
reimbursement during any calendar year shall not affect the amount of expenses
for which Employee is eligible to receive reimbursement during any other
calendar year within the term of the Agreement.

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6.Certain Additional Matters. The Employee agrees that at all times during the
term of this Agreement and for a period of two years following any cessation of
employment with the Company:

(a)The Employee will not knowingly or intentionally do or say any act or thing
which will or may impair, damage or destroy the goodwill and esteem for the
Company held by its suppliers, employees, patrons, customers and others who may
at any time have or have had business relations with the Company.

(b)The Employee will not knowingly or intentionally do any act or thing
detrimental to the Company or its business.

Nothing herein shall be construed to prevent the Employee from complying with
any requirements of law or legal process or taking such actions as the Company
may consent to in writing.

7.Termination.

(a)Death. If the Employee dies during the Initial Term or any then-existing
Renewal Term and while in the employ of the Company, this Agreement shall
automatically terminate and the Company shall have no further obligation to the
Employee or his estate except that the Company shall pay the Employee's estate
(i) that portion of the Employee's Base Salary accrued through the date on which
the Employee's death occurred; (ii) a pro rata amount of the annual Incentive
Award described in Section 5(a) above for the year in which the death occurred,
if any, based on the number of days the Employee was employed in the year in
comparison to 365; and (iii) all benefits payable under the governing provisions
of any benefit plan or program of the Company (including as provided in Section
5(d) above). Such payment of Base Salary and annual Incentive Award to the
Employee's estate shall be made in the same manner and at the same times as they
would have been paid to the Employee had he not died.

(b)Disability. If during the Initial Term or any then-existing Renewal Term, the
Employee shall be prevented from performing his duties hereunder by reason of
disability, and such disability shall continue for a period of six months, then
the Company may terminate this Agreement at any time after the expiration of
such six-month period. For purposes of this Agreement, the Employee shall be
deemed to have become disabled when the Company, upon the advice of a qualified
physician, shall have determined that the Employee is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months. In the event of a
termination pursuant to this paragraph (b), the Company shall be relieved of all
its obligations under this Agreement, except that the Company shall pay to the
Employee (or his estate in the event of his subsequent death): (i) the
Employee's Base Salary through the date on which such termination shall have
occurred, reduced during such period by the amount of any benefits received
under any disability policy maintained by the Company, as applicable; (ii)
subject to the provisions of Section 20 below, a pro rata amount of the annual
Incentive Award described

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in Section 5(a) above for the year in which the termination occurred, if any,
based on the number of days the Employee was employed in the year in comparison
to 365, which such pro rata Incentive Award payment shall be provided on the
later of the first business day after the Release (as defined in Section 20
below) is no longer revocable or the payment date that an Incentive Award for
the year of termination otherwise would have been payable pursuant to Section
5(a) above had Employee's employment not terminated (provided, that, in no event
shall such payment occur later than the date necessary to qualify such payment
as a “short-term deferral” within the meaning of Treas. Reg. § 1.409A-1(b)(4));
and (iii) all benefits payable under the governing provisions of any benefit
plan or program of the Company (including as provided in Section 5(d) above).
Unless otherwise provided above, all such payments to the Employee or his estate
shall be made in the same manner and at the same times as they would have been
paid to the Employee had he remained employed by the Company. No such
termination pursuant to this paragraph (b) will relieve the Employee of his
obligations under Sections 6, 8 and 9 hereunder.

(c)Discharge for Cause. The Company may discharge the Employee for Cause and
terminate this Agreement prior to the end of the Initial Term or any
then-existing Renewal Term. In such case, this Agreement shall automatically
terminate and the Company shall have no further obligation to the Employee or
his estate other than to pay to the Employee (or his estate in the event of his
subsequent death) that portion of the Employee's Base Salary accrued through the
date of termination.

For purposes of this Agreement, the Company shall have “Cause” to discharge the
Employee or terminate the Employee's employment hereunder upon (i) the
Employee's conviction of any felony or any other crime involving moral
turpitude, (ii) the Employee's repeated failure or refusal to perform all of his
duties, obligations and agreements herein contained or imposed by law, including
his fiduciary duties, to the reasonable satisfaction of the Chief Executive
Officer of the Company, (iii) the Employee's commission of acts amounting to
gross negligence or willful misconduct to the material detriment of the Company,
or (iv) the Employee's material breach of any provision of this Agreement or
uniformly applied provisions of the Company's employee handbook or other
personnel policies, including without limitation, its Code of Business Conduct
and Ethics. Such determination of “Cause” shall be made by the Chief Executive
Officer of the Company.

Any such termination by virtue of this paragraph (c) shall not prejudice any
remedy that the Company may have at law, in equity, or under this Agreement, for
breach hereof by Employee. No such termination pursuant to this paragraph (c)
will relieve the Employee of his obligations under Sections 6, 8 and 9
hereunder.

(d)Discharge Without Cause. Prior to the end of the Initial Term or any
then-existing Renewal Term, the Company may discharge the Employee without Cause
(as defined in paragraph (c) above) and terminate this Agreement. In such case
this Agreement shall automatically terminate and the Company shall have no
further obligation to the Employee or his estate, except that, subject to the
provisions of Section 20 below, the Company shall continue to pay to the
Employee (or his estate in the event of his subsequent death): (i) the
Employee's monthly Base Salary, in arrears, for

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a period of 18 months following the date of discharge; provided, however, that
the first such payment shall be made on the Company's first regular payroll date
that comes after the Release is no longer revocable (the “First Payment Date”)
and shall include all payments, if any, that would have otherwise been made
pursuant to this Section 7(d)(i) between the date of Employee's termination of
employment and the First Payment Date; (ii) a pro rata amount of the annual
Incentive Award described in Section 5(a) above for the year in which the
discharge occurred, if any, based on the number of days the Employee was
employed in the year in comparison to 365, which such pro rata Incentive Award
payment shall be provided on the later of the first business day after the
Release is no longer revocable or the payment date that an Incentive Award for
the year of termination otherwise would have been payable pursuant to Section
5(a) above had Employee's employment not terminated (provided, that, in no event
shall such payment occur later than the date necessary to qualify such payment
as a “short-term deferral” within the meaning of Treas. Reg. § 1.409A-1(b)(4));
and (iii) if, following the date of such discharge, the Employee becomes
eligible to elect continuation coverage under the Consolidated Omnibus Budget
Reconciliation Act (“COBRA”) and properly elects such coverage, the Company
shall reimburse the Employee or pay on the Employee's behalf 100% of applicable
medical continuation premiums for the benefit of the Employee (and his covered
dependents as of the date of his termination, if any) under the Employee's
then-current plan election, with such coverage to be provided under the closest
comparable plan as offered by the Company from time to time, for so long during
the 18-month period following termination as he remains eligible for and elects
COBRA coverage; provided that such reimbursement shall not be applicable until
the Release becomes irrevocable and the first such reimbursement payment shall
include, if applicable, all reimbursement payments that would have otherwise
been made pursuant to this Section 7(d)(iii) between the date of Employee's
termination of employment and the date that the Release became irrevocable. The
Company will also provide all salary earned by Employee through the date of
termination and any applicable benefits payable under the governing provisions
of any benefit plan or program of the Company. No such termination pursuant to
this paragraph (d) will relieve the Employee of his obligations under Sections
6, 8 and 9 hereunder. Notwithstanding anything to the contrary in this Section
7(d) or Section 20, in the event the time period (including any applicable
revocation period) prescribed by the Company for Employee's execution of the
Release begins in one taxable year and ends in a second taxable year, payments
under Section 7(d)(i) will not commence and the First Payment Date shall not
occur until the second taxable year, irrespective of when the Release actually
becomes irrevocable.

(e)Corporate Change. If following a Corporate Change (as defined in the
Company's 2006 Long-Term Incentive Plan), the Employee terminates his employment
for Good Reason (as defined below) or the Employee is discharged without Cause,
in either case within 24 months following the Corporate Change, then this
Agreement shall automatically terminate and the Company shall have no further
obligation to the Employee or his estate, except that, subject to the provisions
of Section 20 below, the Company shall pay to the Employee (or his estate in the
event of his subsequent death): (i) a lump sum payment payable following such
termination equal to one and a half times the Employee's Base Salary, which such
payment shall be made within ten (10) business days after the Release is no
longer revocable; (ii) 100% of the annual Incentive Award described in Section
5(a) above for the year of termination, if any, which such Incentive Award
payment shall be provided on the later of the first business day after the
Release is no longer revocable or the payment date that an Incentive Award for
the year of termination otherwise would have been payable pursuant to Section
5(a) above had Employee's employment not terminated (provided, that,

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in no event shall such payment occur later than the date necessary to qualify
such payment as a “short-term deferral” within the meaning of Treas. Reg. §
1.409A-1(b)(4)); and (iii) if, following the date of such discharge, the
Employee becomes eligible to elect continuation coverage under COBRA and
properly elects such coverage, the Company shall reimburse the Employee or pay
on the Employee's behalf 100% of applicable medical continuation premiums for
the benefit of the Employee (and his covered dependents as of the date of his
termination, if any) under the Employee's then-current plan election, with such
coverage to be provided under the closest comparable plan as offered by the
Company from time to time, for so long during the 36-month period following
termination as he remains eligible for and elects COBRA coverage; provided that
such reimbursement shall not be applicable until the Release becomes irrevocable
and the first such reimbursement payment shall include, if applicable, all
reimbursement payments that would have otherwise been made pursuant to this
Section 7(e)(iii) between the date of Employee's termination of employment and
the date that the Release became irrevocable. The Company will also provide all
salary earned by Employee through the date of termination and any applicable
benefits payable under the governing provisions of any benefit plan or program
of the Company. No such termination pursuant to this paragraph (e) will relieve
the Employee of his obligations under Sections 6 and 9 hereunder.

“Good Reason” means any of the following actions if taken without the Employee's
prior written consent: (A) any material breach by the Company to comply with its
obligations under the terms of the Agreement; (B) any material diminution in the
Employee's responsibilities, authority or duties, (C) a material diminution in
the Employee's Base Salary; or (D) any change greater than 50 miles in the
permanent location at which the Employee performs services for the Company. The
Employee shall give written notice to the Board specifying such actions within
90 days of the initial existence of such action and providing a period of 30
days in which the Company shall be allowed to cure such circumstances. Provided
that the condition purporting to give rise to the Good Reason event is not cured
within the 30-day cure period, Employee must exercise his right to terminate
this Agreement for Good Reason within 120 days after the initial existence of
the Good Reason event.
(f)    Notice. Prior to the end of the term of this Agreement, the Employee may
terminate this Agreement upon ninety (90) days written notice. This Agreement
shall automatically terminate at the end of the notice period, and the Company
shall have no further obligation to the Employee other than to pay to the
Employee that portion of the Employee's Base Salary accrued through the date of
termination. No such termination pursuant to this paragraph (f) will relieve the
Employee of his obligations under Sections 6, 8 and 9 hereunder

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(g) Equity Award Termination Provision. The impact of a Corporate Change (as
defined in Section 7(e) above) and/or Employee's termination from employment
with the Company on stock option, restricted stock and other share-based awards
made pursuant to a Company incentive plan shall be governed by the terms of such
plan. Where, in the discretion of the Company, the applicable plan(s) is/are
silent about the impact of a Corporate Change and/or Employee's termination from
employment on: (i) the vesting of Employee's stock option, restricted stock and
other share-based awards; or (ii) Employee's repurchase rights and obligations
following such termination of employment, then the following terms shall apply
with respect to the applicable vested and unvested stock options, restricted
stock and other share-based awards awarded to Employee:
Reason for Termination
Stock Options
Restricted Stock
Other Share-Based Awards
Termination by the Company for Cause (as defined in Section 7(c) above)
Forfeit all unvested awards
Forfeit all unvested awards
Forfeit all unvested awards
Involuntary Termination by the Company without Cause (as defined in Section 7(c)
above) or by Employee for Good Reason (as defined in Section 7(e) above) other
than during the 24 month period following a Corporate Change
Forfeit all unvested awards; Employee has 3 months from the date of termination
to exercise all vested awards
Forfeit all unvested awards
Forfeit all unvested awards
Voluntary Termination By Employee (not for Good Reason)
Forfeit all unvested awards; Employee has 3 months from the date of termination
to exercise all vested awards
Forfeit all unvested awards
Forfeit all unvested awards
Termination during the 24 month period following a Corporate Change for one of
the reasons specified in Section 7(e) above
Immediate vesting of all unvested awards; Employee has 3 months from the date of
termination to exercise all vested awards
Immediate vesting of all unvested awards
Payouts made within 60 days following the end of the performance period as if
Employee had been employed during the entirety of the period, provided that
applicable performance targets have been met

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Reason for Termination
Stock Options
Restricted Stock
Other Share-Based Awards
Death
Immediate vesting of all unvested awards; Employee's estate has 12 months to
exercise all vested awards
Immediate vesting of all unvested awards
Awards will be prorated based on termination date and prorated payouts will be
made within 60 days following the end of the performance period, provided that
applicable performance targets have been met
Disability
Immediate vesting of all unvested awards; Employee has 12 months to exercise all
vested awards
Immediate vesting of all unvested awards
Awards will be prorated based on termination date and prorated payouts will be
made within 60 days following the end of the performance period, provided that
applicable performance targets have been met
Retirement pursuant to a plan or policy adopted by the Company, if any, or on
terms approved by the Board of Directors
Forfeit all unvested awards; Employee has 3 months to exercise all vested awards
Immediate vesting of all unvested awards
Awards will be prorated based on termination date and prorated payouts will be
made within 60 days following the end of the performance period, provided that
applicable performance targets have been met.

(h)    Reduction of Payments. Notwithstanding anything to the contrary in this
Agreement, if Employee is a “disqualified individual” (as defined in Section
280G(c) of the Code, and the payments and benefits provided for in this
Agreement, together with any other payments and benefits which Employee has the
right to receive from the Company or any of its affiliates, would constitute a
“parachute payment” (as defined in Section 280G(b)(2) of the Code), then the
payments and benefits provided for in this Agreement shall be reduced (but not
below zero) so that the present value of such total amounts and benefits
received by Employee from the Company and its affiliates will be one dollar
($1.00) less than three times Employee's “base amount” (as defined in Section
280G(b)(3) of the Code) and so that no portion of such amounts and benefits
received by Employee shall be subject to the excise tax imposed by Section 4999
of the Code. The reduction of payments and benefits hereunder, if applicable,
shall be made by reducing, first, payments or benefits to be paid in cash
hereunder in the order in which such payment or benefit would be paid or
provided (beginning with such payment or benefit that would be made last in time
and continuing, to the extent necessary, through to such payment or benefit that
would be made first in time) and, then, reducing any benefit to be provided
in-kind hereunder in a similar order. The determination as to the extent of any
such reduction in the amount of the payments and benefits provided hereunder

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shall be made by the Company in good faith. If a reduced payment or benefit is
made or provided and through error or otherwise that payment or benefit, when
aggregated with other payments and benefits from the Company (or its affiliates)
used in determining if a “parachute payment” exists, exceeds one dollar ($1.00)
less than three times Employee's base amount, then Employee shall immediately
repay such excess to the Company upon notification that an overpayment has been
made. Nothing in this Section 7(h) shall require the Company to be responsible
for, or have any liability or obligation with respect to, Employee's excise tax
liabilities under Section 4999 of the Code, if any.
8.Restrictive Covenants. The Company has provided and shall provide in the
future to the Employee, confidential and proprietary information as that term is
defined in Section 9 of this Agreement (“Confidential Information”). The
Employee acknowledges that in the course of his employment with the Company as a
member of the Company's senior executive and management team, he shall be given
possession of and access to Confidential Information of the Company and its
Affiliates (as defined on Schedule I hereto), and will develop through such
employment business systems, methods of doing business, and contacts within the
death care industry, all of which will help to identify him with the business
and goodwill of the Company. Consequently, it is important that the Company
protect its interests in regard to such matters from unfair competition. In
consideration of the Confidential Information that has been received and that
the Company covenants to provide the Employee in the future, the sufficiency of
which is hereby acknowledged by the Employee, the Employee agrees to enter into
the covenants contained in this Agreement. The parties therefore agree that for
so long as the Employee shall remain employed by the Company and, if the
employment of the Employee ceases for any reason (including voluntary
resignation), then for a period of two (2) years thereafter, the Employee shall
not, directly or indirectly:

(a)alone or for his own account, or as an officer, director, shareholder,
partner, member, trustee, employee, consultant, advisor, agent or any other
capacity of any corporation, partnership, joint venture, trust, or other
business organization or entity, encourage, support, finance, be engaged in,
interested in, or concerned with (i) any of the companies and entities described
on Schedule I hereto, except to the extent that any activities in connection
therewith are confined exclusively outside the continental United States, or
(ii) any other business within the death care industry having an office or being
conducted within a radius of fifty (50) miles of any funeral home, cemetery or
other death care business owned or operated by the Company or any of its
Affiliates at the time of such termination, if the Employee had management
responsibilities either directly or indirectly, over that funeral home,
cemetery, or other death care business at any time during the previous 12
months;

(b)induce or assist anyone in inducing in any way any employee of the Company or
any of its Affiliates to resign or sever his or her employment or to breach an
employment contract with the Company or any Affiliate; or

(c)own, manage, advise, encourage, support, finance, operate, join, control, or
participate in the ownership, management, operation, or control of or be
connected in any manner with any business which is or may be in the funeral,
mortuary, crematory, cemetery or burial insurance business or in any business
related thereto (i) as part of any of the companies or entities listed on
Schedule I, or (ii) otherwise within a radius of fifty (50) miles of any funeral
home, cemetery

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or other death care business owned or operated by the Company or any of its
Affiliates at the time of such termination, if the Employee had management
responsibilities either directly or indirectly, over that funeral home,
cemetery, or other death care business at any time during the previous 12
months.

Notwithstanding the foregoing, the above covenants shall not prohibit the
passive ownership of not more than one percent (1%) of the outstanding voting
securities of any entity within the death care industry. The foregoing covenants
shall not be held invalid or unenforceable because of the scope of the territory
or actions subject hereto or restricted hereby, or the period of time within
which such covenants respectively are operative, but the maximum territory, the
action subject to such covenants and the period of time they are enforceable are
subject to any determination by a final judgment of any court which has
jurisdiction over the parties and subject matter.
9.Confidential Information; Copyrightable Material. The Employee acknowledges
that in the course of his employment by the Company he shall receive and access
certain trade secrets, management methods, financial and accounting data
(including, but not limited to, reports, studies, analyses, spreadsheets and
other materials and information), operating techniques, prospective
acquisitions, employee lists, training manuals and procedures, personnel
evaluation procedures, and other confidential information and knowledge
concerning the business of the Company and its Affiliates (hereinafter
collectively referred to as “Confidential Information”) which the Company
desires to protect. The Employee understands that the Confidential Information
is confidential and he agrees not to reveal the Confidential Information to
anyone outside the Company so long as the confidential or secret nature of the
Confidential Information shall continue, except as required by law or legal
process. The Employee further agrees that he will at no time use the
Confidential Information in competing with the Company. Upon termination of this
Agreement, the Employee shall surrender to the Company all papers, documents,
writings and other property produced by him or coming into his possession by or
through his employment or relating to the Confidential Information and the
Employee agrees that all such materials will at all times remain the property of
the Company. The Employee acknowledges that all materials and other
copyrightable works and subject matter (regardless of whether or not
constituting “Confidential Information”) produced by the Employee within the
scope of his employment (regardless of whether or not denoted as copyrighted
material) shall be deemed “works made for hire” and shall be owned by and
proprietary to the Company and may not be used or reproduced in whole or in part
without the Company's prior written consent.

10.Remedies. The parties recognize that the services to be rendered under this
Agreement by the Employee are special, unique, and of extraordinary character,
and that in the event of the breach by the Employee of the covenants contained
in Section 8 or Section 9 hereof, the Company may suffer irreparable harm as a
result. The parties therefore agree that, in the event of any breach or
threatened breach of any of such covenants, the Company shall be entitled to
specific performance or injunctive relief, or both, and may, in addition to and
not in lieu of any claim or proceeding for damages, institute and prosecute
proceedings in any court of competent jurisdiction to enforce through injunctive
relief such covenants. In addition, the Company may, if it so elects, suspend
(if applicable) any payments due under this Agreement pending any such breach
and offset against any future payments the amount of the Company's damages
arising from any

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such breach. The Employee agrees to waive and hereby waives any requirement for
the Company to secure any bond in connection with the obtaining of such
injunction or other equitable relief.

11.Notices. All notices, requests, consents and other communications under this
Agreement shall be in writing and shall be deemed to have been delivered on the
date personally delivered or three business days after the date mailed, postage
prepaid, by certified mail, return receipt requested, or when sent by electronic
means or facsimile and receipt is confirmed, if addressed to the respective
parties as follows:

If to the Employee:        Paul Elliott
5219 Laurelwood
Kingwood, Texas 77345

If to the Company:        Carriage Services, Inc.
3040 Post Oak Blvd, Suite 300
Houston, Texas 77056
Attn: Chief Executive Officer

Either party hereto may designate a different address by providing written
notice of such new address to the other party hereto.
12.Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law but
if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
provision or invalidity, without invalidating the remainder of such provision or
the remaining provisions of this Agreement.

13.Assignment. This Agreement may not be assigned by the Employee. Neither the
Employee nor his estate shall have any right to commute, encumber or dispose of
any right to receive payments hereunder, it being agreed that such payments and
the right thereto are nonassignable and nontransferable.

14.Binding Effect. Subject to the provisions of Section 13 of this Agreement,
this Agreement shall be binding upon and inure to the benefit of the parties
hereto, the Employee's heirs and personal representatives, and the successors
and as-signs of the Company.

15.Captions. The section and paragraph headings in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

16.Complete Agreement. This Agreement represents the entire agreement between
the parties concerning the subject hereof and supersedes all prior agreements
and arrangements between the parties con-cerning the subject thereof.

17.Governing Law; Venue. A substantial portion of the Employee's duties under
this Agreement shall be performed at the Company's corporate headquarters in
Houston, Texas, and this Agreement has been substantially negotiated and is
being executed and delivered in the State of

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Texas. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Texas. Any suit, claim or proceeding
arising under or in connection with this Agreement or the employment
relationship evidenced hereby must be brought, if at all, in a state district
court in Harris County, Texas or federal district court in the Southern District
of Texas, Houston Division. Each party submits to the jurisdiction of such
courts and agrees not to raise any objection to such jurisdiction.

18.Survival. The provisions of Sections 6, 8 and 9 shall survive any termination
of this Agreement or the employment relationship of the Company and Employee;
provided, however, if such termination is the result of Corporate Change as
provided in Section 7(e) hereof, Employee shall not thereafter be bound by the
provisions of Section 8 hereof.

19.Counterparts. This Agreement may be executed in multiple original
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

20.Severance Payments Conditioned on Release; Time of Payments. The amounts
payable to Employee under Sections 7(b)(ii), 7(d)(i)-(iii) and 7(e)(i)-(iii)
shall not become payable unless Employee executes (and does not revoke within
seven days of its execution) a release of claims in a form satisfactory to the
Company (the “Release”) within the time period prescribed by the Company, which
such time period shall be no later than fifty (50) days from the date of
Employee's termination of employment. Notwithstanding anything contained in this
Agreement to the contrary, to the maximum extent permitted by applicable law,
amounts payable to Employee pursuant to Section 7 are intended to be made in
reliance upon Treas. Reg. § 1.409A-1(b)(9) (separation pay plans) or Treas. Reg.
§ 1.409A-1(b)(4) (short-term deferrals). No amounts payable under Section 7 of
this Agreement upon Employee's termination of employment shall be payable unless
Employee's termination of employment constitutes a “separation from service”
within the meaning of Treas. Reg. § 1.409A-1(h). The Company and Employee intend
that their exercise of authority or discretion under this Agreement shall comply
with Section 409A of the Code. If any provision of this Agreement does not
satisfy the requirements of Section 409A, such provision shall nevertheless be
applied in a manner consistent with those requirements. In no event whatsoever
shall the Company be liable for any tax, interest or penalties that may be
imposed on Employee under Section 409A. Notwithstanding the foregoing, no
particular tax result for Employee with respect to any income recognized by
Employee in connection with this Agreement is guaranteed. Neither the Company
nor any of its affiliates shall have any obligation to indemnify or otherwise
hold Employee harmless from any or all such taxes, interest, penalties, or
liability for any damages related thereto. Each payment under this Agreement is
intended to be a “separate payment” and not a series of payments for purposes of
Section 409A. References in this Agreement to Section 409A of the Code includes
rules, regulations and guidance of general applicability issued by the
Department of the Treasury under Code Section 409A. If the Employee is a
“specified employee,” as such term is defined in Section 409A of the Code and
related regulations and Treasury pronouncements (“Section 409A”) and determined
as described below in this Section 20, any payments payable as a result of the
Employee's termination (other than death) that are required to be delayed in
accordance with Section 409A of the Code as a result of Employee's status as a
“specified employee” shall not be payable before the earliest of (i) the date
that is six months after the Employee's termination, (ii) the date of the
Employee's death, or (iii) the date that otherwise complies with the
requirements of Section

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409A. This Section 20 shall be applied by accumulating all payments that
otherwise would have been paid within six months of the Employee's termination
and paying such accumulated amounts without interest at the earliest date which
complies with the requirements of Section 409A. The Employee shall be a
“specified employee” for the twelve-month period beginning on April 1 of a year
if the Employee is a “key employee” as defined in Section 416(i) of the Code
(without regard to Section 416(i)(5)) as of December 31 of the preceding year or
using such dates as designated by the Company in accordance with Section 409A
and in a manner that is consistent with respect to all of the Company's
nonqualified deferred compensation plans. For purposes of determining the
identity of specified employees, the Company may establish procedures as it
deems appropriate in accordance with Section 409A.

21.Income, Excise or Other Tax Liability. The Company may withhold from any
benefits and payments made pursuant to this Agreement all federal, state, city
and other taxes as may be required pursuant to any law or governmental
regulation or ruling and all other normal employee deductions made with respect
to the Company's employees generally.

22.Deemed Resignations. Unless otherwise agreed to in writing by the Company and
Employee prior to the termination of Employee's employment, any termination of
Employee's employment shall constitute: (i) an automatic resignation of Employee
as an officer of the Company and each affiliate and subsidiary of the Company,
as applicable, and (ii) an automatic resignation of Employee from the Board (if
applicable), from the board of directors of any affiliate and subsidiary of the
Company (if applicable), and from the board of directors or any similar
governing body of any corporation, limited liability entity or other entity in
which the Company or any affiliate or subsidiary holds an equity interest and
with respect to which board or similar governing body Employee serves as the
Company's or such affiliate's or subsidiary's designee or other representative
(if applicable).

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.
CARRIAGE SERVICES, INC.

By:     /s/ Melvin C. Payne
Melvin C. Payne,
Chief Executive Officer
 

EMPLOYEE

By:    /s/ Paul D. Elliott
Paul D. Elliott

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SCHEDULE I
TO
EMPLOYMENT AGREEMENT
    
1.
The following entities, together with all Affiliates thereof:

Service Corporation International
Alderwoods Group, Inc.
Stewart Enterprises, Inc.
Keystone North America, Inc.
Meridian Mortuary Group, Inc.
StoneMor Partners LP
Saber Management LLC
Thomas Pierce & Co.
Legacy Funeral Holdings, LLC
Northstar Memorial Group, LLC
The Signature Group
For purposes of this Agreement (and Schedule I hereto), an “Affiliate” of an
entity is a person that directly or indirectly controls, is under the control of
or is under common control with such entity.
2.
Any new entity which may hereafter be established which acquires any combination
of ten or more funeral homes and/or cemeteries from any of the entities
described in 1 above.

3.
Any funeral home, cemetery or other death care enterprise which is managed by
any entity described in 1 or 2 above.

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