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Exhibit 10.2    
  

CONSULTING
AGREEMENT 

        THIS
AGREEMENT, made effective as of the 1st day of August, 2002, is between CARRIAGE SERVICES, INC., a Delaware
corporation (the "Company"), and THOMAS C. LIVENGOOD, a resident of Harris County, Texas (the "Consultant"). 

W
I T N E S S E T H: 

        WHEREAS,
the Consultant has heretofore been a full-time employee of the Company and one or more of its subsidiaries (collectively, "Carriage") as Executive Vice President and
Chief Financial Officer of the Company and most of its subsidiaries, pursuant to the terms of the Executive Employment Agreement dated November 8, 1999 between the Company and the Consultant
(the "Prior Employment Agreement"); and 

        WHEREAS,
pursuant to the Separation Agreement and Release dated July    , 2002 (the "Separation Agreement"), the parties have mutually agreed to convert the Consultant's
status from that of an employee to that of a consultant, and the Company recognizes that the Consultant's experience and knowledge gained while an employee of the Company will continue to be of great
value to the Company and therefore desires to continue to retain his services, on the terms and conditions hereafter set forth; 

        NOW,
THEREFORE, the Company and the Consultant hereby agree as follows: 

        1.    Term.    The Company hereby engages the Consultant for a term commencing on the date hereof and, subject to
Section 5 hereof, ending on November 8, 2004 (the "term of this Agreement"), to consult with and advise the Company as hereinafter provided. The Consultant agrees to accept such
engagement and to perform the services specified herein, all upon the terms and conditions hereinafter stated. This Agreement is expressly made subject to the Consultant not revoking the Separation
Agreement, and in
the event of such revocation, this Agreement shall thereupon become void ab initio, as if never entered into. 

        2.    Duties.    

        (a)  During
the term of this Agreement, the Consultant shall serve the Company in a consultive capacity and shall report to the Board of Directors of the Company or its Chief
Executive Officer. The Consultant's services hereunder shall include providing advice and consultation to the Company's management regarding the following: 

        (i)    Financial
positions and results reported to the public while Employee served as Chief Financial Officer, including issues relating to revenue recognition, expenses,
assets, reserves, impairments, liabilities, stockholders' equity, cash flows and related issues; in particular, as to accounting methodologies and positions taken by the Company relating to SAB 101,
Project Fresh Start and SFAS 142; 

        (ii)  The
Company's lending arrangements and relationships under its senior revolving credit facility and senior notes; and 

        (iii)  Any
other areas involving the Company and its business and operations as may be mutually identified by the parties. 

        (b)  During
the term of this Agreement, the Consultant shall render services to the Company, when requested by it, at times reasonably convenient to him, but this
Section 2 does not impose on the Consultant any minimum hours required to be devoted toward rendering services nor shall this Agreement be construed so as to prevent Consultant from accepting
employment with any other person. Consultant shall take reasonable precautions to ensure that this Agreement does not conflict with any terms or conditions of any new employment which he may obtain.
It shall not be necessary for Consultant to render services at the Company's corporate offices or any other 

Carriage location, but rather such services may be rendered at locations of Consultant's choice and may include services provided electronically, such as by phone, fax or over the Internet. 

        (c)  The
Consultant agrees that at all times during the term of this Agreement: 

        (i)    The
Consultant will not knowingly or intentionally do or say any act in bad faith which is designed to impair, damage or destroy the goodwill and esteem for Carriage of
its suppliers, employees, patrons, customers and others who may at any time have or have had business relations with Carriage. 

        (ii)  The
Consultant will not encourage, recommend or approve the use at any time of the services of any competitor of Carriage. 

        (iii)  The
Consultant will not reveal to any third person any difference of opinion, if there be such at any time, between him and the management of the Company as to its
personnel, policies or practices. 

        3.    Compensation.    

        (a)    Consulting Fee.    As compensation for the Consultant's services hereunder, the Company shall pay to the
Consultant a consulting fee of $500,000.00 in the aggregate (the "Consulting Fee"). The Consulting Fee shall be payable in thirty-six (36) equal bi-weekly installments
of $13,888.89 each, in accordance with the Company's normal processing policies with respect to such payments, commencing with the first whole payroll period after the effective date of this Agreement
and continuing thereafter until the Consulting Fee has been paid in full. The parties acknowledge that the Consulting Fee is estimated to be paid in full by December 2003, but this Agreement
shall continue to remain in effect thereafter until expiration of the term hereof without further accrual or payment of any consulting fee or similar compensation. 

        (b)    Expenses.    The Company shall reimburse the Consultant for all reasonable
out-of-pocket expenses incurred by him in rendering services hereunder, provided that the same are in accordance with the Company's expense reimbursement policy from time to
time in effect and the Company has approved each and every such expense in advance and in writing. 

        (c)    Medical Benefits Coverage.    During the term of this Agreement, the Company shall cause the Consultant and his
eligible dependents to be included in Carriage's group medical benefits plan from time to time in effect and extended to Carriage's employees (or another plan providing substantially the same
benefits), on substantially the same terms and conditions extended by Carriage to executive employees of the Company, until such time (if prior to the expiration of the term hereof) that Consultant
becomes eligible to participate in any other similar plan which might become available to Consultant and his dependents. The Consultant acknowledges that the period to elect coverage and, if elected,
to obtain continuation benefits from the Company under the Consolidated Omnibus Budget Reconciliation Act (COBRA), commenced as of the "Transition Date" under the Separation Agreement and runs
concurrently with benefits extended under this paragraph (c), and therefore such continuation coverage will not be available upon expiration of benefits under this paragraph (c). 

        4.    Independent Contractor.    The Consultant is retained and engaged by the Company only for the purposes and to
the extent set forth herein, and the Consultant's relation to the Company shall, during the term of this Agreement, be that of an independent contractor and not that of an employee. In rendering his
services hereunder, the Consultant shall not, without the prior written consent of the Company, represent that he has the right or authority to bind the Company in any respect. 

        5.    Termination.    

        (a)    Death or Disability.    Subject to the Consultant's compliance with this Agreement and the Separation
Agreement, the Consulting Fee shall be deemed fully earned upon execution of this Agreement, except as otherwise expressly provided herein, and neither the Consultant's death nor disability shall
impair the Company's obligation to continue paying all remaining installments of 

the Consulting Fee. In case of death or disability, such payments to the Consultant or his estate shall be made in the same manner and at the same times as they would have been paid to the Consultant
had he not died or become disabled. 

        (b)    Discharge for Cause.    Prior to the end of the term of this Agreement, the Company may discharge the
Consultant for Cause and terminate this Agreement. In such case this Agreement shall automatically terminate and the Company shall have no further obligation to the Consultant or his estate other than
to pay to the Consultant or his estate in the event of his subsequent death any Consulting Fee which may have become earned through the date of termination but not yet paid in accordance with
Section 3(a) hereof. For purposes of this Agreement, the Company shall have "Cause" to discharge the Consultant or terminate the Consultant's services hereunder upon (i) the Consultant's
failure to cure, after reasonable notice of not less than thirty (30) days, a material breach of any of the terms of this Agreement; (ii) the Consultant's breach of the Separation
Agreement; (iii) the Consultant's conviction of a felony involving moral turpitude, fraud, theft, embezzlement, assault, battery, rape or other violent act or another crime; or (iv) the
Consultant having engaged in willful misconduct in the performance of his services hereunder that has a material adverse effect on the Company; provided, however, no act or failure to act shall be
deemed "willful" if due primarily to an error in judgment or negligence or if made in good faith and with reasonable belief that such act is in the best interest of the Company. 

        (c)    Discharge Without Cause.    Prior to the end of the term of this Agreement, the Company may discharge the
Consultant without Cause (as defined in paragraph (b) above) and terminate this Agreement. In such case this Agreement shall automatically terminate and the Company shall have no further
obligation to the Consultant or his estate, except that the Company shall continue to pay to the Consultant all remaining installments of the Consulting Fee under Section 3(a), and shall
continue for the remainder of the term of this Agreement to provide the medical benefits coverage under Section 3(c), subject in each instance to Employee's continued compliance with Sections 6
and 7 hereof. Such payments and coverage to the Consultant or his estate shall be made in the same manner and at the same times as they would have been paid and extended to the Consultant had he not
been discharged. 

        (d)    Voluntary Resignation.    The Consultant may resign at any time by giving ten business days' prior written
notice to the Company. In the event of any such resignation, the Company shall be relieved of all obligations under this Agreement (including but not limited to those specified in Section 3),
and the Consultant shall similarly be relieved of his covenants in Sections 2 and 6(a)(i) hereof, in each case from and after the effective date of resignation; provided, however, that the
covenants in Sections 6(a)(ii) and 7 shall remain in full force and effect notwithstanding such resignation. 

        (e)    Survival.    Except as otherwise expressly set forth herein, the provisions of Sections 6 and 7 hereof survive
any termination of this Agreement. 

        6.    Restrictive Covenants.    

        (a)    Non-Competition.    The Consultant acknowledges that in the course of his employment with the
Company as a member of the Company's senior executive and management team, and during the term of his consultancy hereunder, he has had and may continue to have access to confidential and proprietary
business information of Carriage, and has developed and may hereafter continue to develop, through such employment and/or consultancy, valuable business systems, methods of doing business, and
contacts within the death care industry, all of which have helped to identify him with the business and goodwill of Carriage. Consequently, it is important that Carriage protect its interests in
regard to such matters from unfair competition. During the term of this Agreement, the Consultant agrees that he will not, directly or indirectly: 

        (i)    become
a director, officer, employee, consultant, advisor or agent of, or own beneficially or of record more than five percent (5%) of the fully diluted equity
securities 

(including options, warrants or other securities convertible into equity securities) of, any Conflicting Organization (as hereafter defined); or 

        (ii)  induce
or assist anyone in inducing in any way any employee of Carriage to resign or sever his or her employment or to breach an employment contract with Carriage. 

        The
covenant under clause (i) above restricts the Consultant's activities only insofar as they relate to the operations of the Conflicting Organizations within the Continental
United States, and any activities devoted to activities exclusively outside the Continental United States shall not be restricted hereby. For purposes hereof, a "Conflicting Organization" means
(x) any of the firms and organizations listed on Schedule I hereto, and (y) any other firm or organization, however structured, which owns or operates a funeral home or cemetery
business anywhere within a 50-mile radius of any funeral home or cemetery owned or operated by Carriage at any time during the term of this Agreement. 

        (b)    Reformation.    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. 

        (c)    Remedies.    Both parties recognize that the services to be rendered under this Agreement by the Consultant are
special, unique, and of extraordinary character, and that in the event of the breach by the Consultant of the covenants contained in this Section 6 or Section 7 below, the Company shall
be entitled, if it so elects, to suspend (if applicable) any payments due under this Agreement and the Separation Agreement and/or to institute and prosecute proceedings in any court of competent
jurisdiction to enforce through injunctive relief such covenants. Consultant acknowledges and agrees that there is no adequate remedy at law for his violation of such covenants and that in light of
the numerous years and the scope of his responsibilities with the Company, the restrictions as to time, geographic scope and scope of activities restrained in paragraph (a) above are both
reasonable and necessary to protect the goodwill and other legitimate business interests of the Company. Indeed, the Consultant acknowledges that the payments and commitments made by the Company in
this Agreement and in the Separation Agreement are in significant part provided by the Company to secure the Consultant's agreement to such covenants. The Consultant 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. 

        7.    Confidential Information.    The Consultant acknowledges that in the course of his affiliation with Carriage he
has received, and in the course of his consultancy hereunder he may continue to have access to, certain trade secrets, financial data and information (including but not limited to internal financial
reports, models, forecasts, spreadsheets and similar data; accounting work papers; proceedings of the Company's audit and compensation committees and its full board of directors; Carriage's accounting
methodologies, functions and procedures; and related information of an accounting and financial nature), management methods, operating techniques, employee lists, training manuals and procedures,
personnel evaluation procedures, and other confidential information and knowledge concerning the business of Carriage (hereinafter collectively referred to as "Information") which the Company desires
to protect. The Consultant understands that the Information is confidential and he agrees not to reveal the Information to anyone outside of Carriage so long as the confidential or secret nature of
the Information shall continue. The Consultant further agrees that he will at no time use any Information in competing with Carriage. Consultant represents that upon his transition from employee to
Consultant hereunder, he has surrendered to the Company, and has not kept any copies of, all papers, documents, writings and other property produced by his or coming into his possession by or through
his employment with Carriage or relating to the Information, which the Consultant acknowledges to be and will remain at all times remain the property of Carriage, except insofar as the Company and the
Consultant have specifically identified as necessary to enable the Consultant to 

render services hereunder, and upon termination of the consultancy hereunder, all remaining papers, documents, writings and other property shall similarly be surrendered to the Company, without any
copies thereof retained by Consultant. 

        8.    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
telex or telecopy and receipt is confirmed, if addressed to the respective parties as follows: 

	If to the Consultant:	 	Mr. Thomas C. Livengood

8002 Hertfordshire Circle

Spring, Texas 77379
	

If to the Company:	
 	

Carriage Services, Inc.

1900 St. James Place, 4th Floor

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. 

        9.    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. 

        10.    Assignment.    This Agreement may not be assigned by the Consultant. Neither the Consultant 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. 

        11.    Binding Effect.    Subject to the provisions of Section 10 of this Agreement, this Agreement shall be
binding upon and inure to the benefit of the parties hereto, the Consultant's heirs and personal representatives, and the successors and assigns of the Company. 

        12.    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. 

        13.    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 concerning the subject thereof. Without limiting the generality of the foregoing, this Agreement upon the
effective date hereof will supersede and replace the Prior Employment Agreement (subject to reinstatement if this Agreement is rendered void as described in Section 1 hereof), as well as any
other prior agreements respecting or relating to the Consultant's employment with or compensation from Carriage, except as otherwise expressly set forth in the Separation Agreement. 

        14.    Governing Law.    This Agreement shall be construed and enforced in accordance with and governed by the laws of
the State of Texas. 

        15.    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. 

[the
remainder of this page has intentionally been left blank] 

        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
 
	

 	
 	

 	

 
	

 	
 	

/s/  THOMAS C. LIVENGOOD      
 THOMAS C. LIVENGOOD

SCHEDULE
I

TO

CONSULTING AGREEMENT

(THOMAS C. LIVENGOOD) 

Conflicting
Organization 

For
purposes of this Agreement, the term "Conflicting Organization" specifically includes each of the following: 

1.        The
following entities, together with all Affiliates thereof: 

Service
Corporation International

Alderwoods Group Inc.

Stewart Enterprises, Inc.

Keystone Group Holdings, Inc.

Meridian Mortuary Group, Inc.

Cornerstone Family Services, Inc.

Prime Succession, Inc.

Hamilton Group, Inc.

Century Group

Saber Group

Thomas Pierce & Co. 

For
purposes of the foregoing, 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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Exhibit 10.2QuickLinks
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Exhibit 10.3    
  

EMPLOYMENT
AGREEMENT 

        THIS
AGREEMENT, made effective as of the 16th day of September, 2002, is between CARRIAGE SERVICES, INC., a Delaware
corporation (the "Company"), and JOSEPH SAPORITO, III, a resident of Harris County, Texas (the "Employee"). 

        1.    Employment Term.    The Company hereby employs the Employee for a term commencing effective as of
September 18, 2002 and, subject to earlier termination as provided in Section 7 hereof, continuing until September 30, 2005 (such term being herein referred to as the "term of
this Agreement"). 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. The Employee shall perform the management and administrative duties of Senior Vice President and Chief Financial Officer of the Company. The
Employee shall also serve as Senior Vice President and Chief Financial Officer 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 as are not inconsistent with the provisions hereof. 

        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 from making passive investments in other businesses or enterprises, provided, however, that such investments 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 a salary of $18,750.00
per full calendar month of service completed, appropriately prorated for partial months at the commencement and end of the term of this Agreement. The salary set forth herein 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
any
payment of all compensation to the Employee hereunder (x) any federal, state or local taxes required by law to be withheld with respect to such payments, and (y) any other amounts
specifically authorized to be withheld or deducted by the Employee. 

        5.    Benefits.    (a) In addition to the base salary under Section 4, the Employee shall be entitled
to participate in the following benefits during the term of this Agreement: 

        (i)    Consideration
for an annual performance-based bonus within the sole discretion of the Company, as may be recommended by the Chief Executive Officer and approved by the
Compensation Committee of the Company's Board of Directors, with a maximum bonus target of 50% of base salary. 

        (ii)  Eligibility
for consideration of incentive stock options under the terms of one or more of the Company's stock option plans. 

	(iii)
	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. 

        (b)  In
addition, the Company shall pay the Employee an inducement bonus at the rate of $10,625.00 per month (appropriately prorated for partial months of service), from the
commencement date through December 31, 2002, payable in bi-weekly installments in accordance with the payroll policies of the Company, concurrently with base salary. 

        6.    Certain Additional Matters.    The Employee agrees that at all times during the term of this Agreement and for
the two-year period specified in Section 8: 

        (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 of 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 reveal to any third person any difference of opinion, if there be such at any time, between him and the management of the Company as to its
personnel, policies or practices. 

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

        7.    Termination.    

        (a)    Death.    If the Employee dies during the term of this Agreement 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 that portion of the
Employee's base salary under Section 4 accrued through the date on which the Employee's death occurred. Such payment of base salary 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 term of this Agreement, 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 has become physically or mentally incapable (excluding infrequent and temporary absences due to ordinary illness) of performing his duties under this Agreement. 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) the Employee's base salary under Section 4 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. 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 not become disabled. 

        (c)    Discharge for Cause.    Prior to the end of the term of this Agreement, the Company may discharge the Employee
for Cause 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 other than to pay to
the Employee (or his estate in the event of his subsequent death) that portion of the Employee's 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 commission of any felony or any other crime involving moral turpitude, (ii) the
Employee's 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
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 breach of any
provision of this Agreement or uniformly applied provisions of the Company's employee handbook. 

        (d)    Discharge Without Cause.    Prior to the end of the term of this Agreement, 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 the Company shall continue to pay 

to the Employee (or his estate in the event of his subsequent death) the Employee's base salary under Section 4, and shall continue to include the Employee in any group health and
hospitalization insurance program, for a period of 12 months following the date of discharge, or until expiration of the term of this Agreement (whichever is shorter), except as otherwise
provided in paragraph (e) below. 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 not
been discharged. 

        (e)    Corporate Change.    If there occurs a Corporate Change (as defined in the Company's 1996 Stock Option Plan),
then the Employee may thereafter voluntarily resign his employment hereunder, and in such event, or in case of a discharge without Cause following a Corporate Change, in either case during the term of
this Agreement, then this Agreement shall automatically terminate and the Company shall have no further obligation to the Employee or his estate, except that the Company shall continue to pay to the
Employee (or his estate in the event of his subsequent death) the Employee's base salary under Section 4, and shall continue to include the Employee in any group health and hospitalization
insurance program, for a period of 12 months following the date of discharge, or until expiration of the term of this Agreement (whichever is longer). 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 not resigned or been discharged. No such voluntary resignation, nor any discharge
hereunder, whether or not following a Corporate Change, will relieve the Employee of his obligations under Sections 6, 8 and 9 hereunder. 

        8.    Restrictive Covenants.    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 will have access to confidential and proprietary business information of the Company and its affiliates, 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. The parties therefore agree that for so long as the Employee shall remain employed by the
Company and, if the employment of the Employee is terminated for any reason (including voluntary resignation), then for a period of two (2) years thereafter, the Employee shall not, directly or
indirectly: 

        (i)    alone
or for his own account, or as a 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 (x) 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 (y) 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 subsidiaries at the time of such termination; 

        (ii)  induce
or assist anyone in inducing in any way any employee of the Company or any of its subsidiaries to resign or sever his or her employment or to breach an
employment contract with the Company or any such subsidiary; or 

        (iii)  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 (x) as part of any of the companies or
entities listed on Schedule I, or (y) otherwise 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 subsidiaries at the time of such termination. 

        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.    The Employee acknowledges that in the course of his employment by the Company he
will receive 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 "Information") which the Company desires to protect. The Employee understands that the Information is confidential
and he agrees not to reveal the Information to anyone outside the Company so long as the confidential or secret nature of the Information shall continue. The Employee further agrees that he will at no
time use the 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
his or coming into his possession by or through his employment or relating to the Information and the Employee agrees that all such materials will at all times remain the property of the Company. 

        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 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
telex or telecopy and receipt is confirmed, if addressed to the respective parties as follows: 

	If to the Employee:	 	Mr. Joseph Saporito, III

1901 Post Oak Park Dr.

No. 2402

Houston, Texas 77027
	

If to the Company:	
 	

Carriage Services, Inc.

1900 St. James Place, 4th Floor

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 assigns 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 concerning the subject thereof. 

        17.    Governing Law.    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 Texas. This Agreement shall be construed
and enforced in accordance with and governed by the laws of the State of Texas. 

        18.    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. 

        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
	

 	
 	

/s/  JOSEPH SAPORITO, III      
 JOSEPH SAPORITO, III

SCHEDULE
I

TO

EMPLOYMENT AGREEMENT

(JOSEPH SAPORITO, III) 

1.        The
following entities, together with all Affiliates thereof: 

Service
Corporation International

Alderwoods Group, Inc.

Stewart Enterprises, Inc.

Keystone Group Holdings, Inc.

Meridian Mortuary Group, Inc.

Cornerstone Family Services, Inc.

Prime Succession, Inc.

Hamilton Group, Inc.

Century Group

Saber Group

Thomas Pierce & Co. 

For
purposes of the foregoing, 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. 

QuickLinks

Exhibit 10.3

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