On May 18, 2020, Carriage Services, Inc. (the “Company”) entered into a limited waiver and fourth amendment (the “Fourth Amendment”) to its senior secured revolving credit facility dated May 31, 2019 (as amended, the “Credit Facility”) with the financial institutions party thereto, as lenders, and Bank of America, N.A., as administrative agent (in such capacity, the “Administrative Agent”). to the Fourth Amendment we received a waiver under our Credit Facility for the failure to comply with the Total Leverage Ratio covenant for the fiscal quarter ended March 31, 2020. In addition, the interest rate margin applicable to amounts outstanding under the Credit Facility, which is based on the Company’s Total Leverage Ratio (as defined in the Credit Facility), was increased as shown on the following pricing grid:

The foregoing description of the Fourth Amendment is not complete and is qualified in its entirety by reference to the complete text of the Fourth Amendment, a copy of which is filed herewith as Exhibit 10.1 and incorporated herein by reference.

(e)

Cancellation of Previously Issued Performance Awards

On May 19, 2020, Melvin C. Payne, the Chairman of the Board and Chief Executive Officer of the Company; William W. Goetz, the President and Chief Operating Officer of the Company; Viki K. Blinderman, the Senior Vice President, Principal Financial Officer, Chief Accounting Officer and Secretary of the Company; Carl B. Brink, the Senior Vice President, Chief Financial Officer and Treasurer of the Company; Paul D. Elliott, the Senior Vice President and Regional Partner of the Company; and Shawn R. Phillips, the Senior Vice President and the Head of Strategic and Corporate Development of the Company, each agreed to the cancellation of two separate Performance Award Agreements previously awarded by the Company to each of the above named individuals in February 2019 and February 2020 (collectively, the “Agreements”). Prior to such cancellation, each of the Agreements provided for contingent compensation, which was payable to such individuals in shares of the Company’s common stock, based on the performance of the Company over a five-year period from the date of grant.

The table below sets forth the number of Performance Awards previously granted to each of the above-named individuals to the Agreements in 2019 and 2020, respectively, and the number of Performance Awards cancelled on May 19, 2020.

2019:

2020:

Issuance of New Performance Awards

On May 19, 2020, the Company’s Compensation Committee approved a new Performance Award Agreement (the “New Agreement”) for eligible employees, including the Company’s executive officers. to the New Agreement, the target share awards for each of the Company’s executive officers (each, an “Award”) will vest on December 31, 2024 (the “Vesting Date”) if the Company’s common stock reaches one of five pre-determined growth targets for a sustained period beginning on the grant date of May 19, 2020 and ending on December 31, 2024 (the “Performance Period”).

The Award will result in Ms. Blinderman and Messrs. Brink, Elliott and Phillips (each an “Executive”) each being awarded 13,974 shares if the average closing price of the Company’s common stock, during any twenty consecutive day period during the Performance Period (the “Average Closing Price”), reaches $35.78 (“Target 1”); 22,789 shares will be awarded to each Executive if the Average Closing Price of the Company’s common stock reaches $43.88 (“Target 2”); 32,778 shares will be awarded to each Executive if the Average Closing Price of the Company’s common stock reaches $53.39 (“Target 3”); 38,772 shares will be awarded to each Executive if the Average Closing Price of the Company’s common stock reaches $64.48 (“Target 4”); and 45,255 shares will be awarded to each Executive if the Average Closing Price of the Company’s common stock reaches $77.34 (“Target 5”).

With respect to Mr. Goetz, the Award will result in 33,538 shares being awarded to him if the Average Closing Price of the Company’s common stock reaches Target 1; 61,531 shares will be awarded to him if the Average Closing Price of the Company’s common stock reaches Target 2; 93,650 shares will be awarded to him if the Average Closing Price of the Company’s common stock reaches Target 3; 108,561 shares will be awarded to him if the Average Closing Price of the Company’s common stock reaches Target 4; and 129,299 shares will be awarded to him if the Average Closing Price of the Company’s common stock reaches Target 5.

With respect to Mr. Payne, the Award will result in 55,897 shares being awarded to him if the Average Closing Price of the Company’s common stock reaches Target 1; 91,158 shares will be awarded to him if the Average Closing Price of the Company’s common stock reaches Target 2; 140,476 shares will be awarded to him if the Average Closing Price of the Company’s common stock reaches Target 3; 155,087 shares will be awarded to him if the Average Closing Price of the Company’s common stock reaches Target 4; and 181,019 shares will be awarded to him if the Average Closing Price of the Company’s common stock reaches Target 5.

The Awards are designed to directly align certain forms of equity compensation payable to the Company’s executive officers with long-term stockholder value creation and sustainable high performance by the Company. The foregoing descriptions of the material terms of the Awards do not purport to be complete and are qualified in their entirety by reference to the New Agreement, the form of which is filed herewith as Exhibit 10.2 and incorporated by reference herein.

ITEM 5.07 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The 2020 Annual Meeting of Stockholders of the Company was held on May 19, 2020. The matters presented for a vote and the related results are as follows:

PROPOSAL 1 – ELECTION OF DIRECTORS

Proposal 1 was the election of the nominees to serve as Class III directors for a three-year term expiring on the date of the 2023 annual meeting. The result of the vote was as follows:

to the foregoing vote, Mr. Meehan was duly elected as a Class III director.

Mr. Patteson did not receive a majority of the votes cast in the affirmative and, to the terms of the Company’s Amended and Restated By-laws, tendered his resignation to the Board of Directors (the “Board”), with the effectiveness of such resignation being conditioned on the Board’s acceptance of such resignation. The Board subsequently considered Mr. Patteson’s resignation, including a full discussion, wherein the Board agreed that Mr. Patteson’s deep knowledge and understanding of the Company achieved through years of service as a Board member, his prior executive leadership experience as both a Chief Executive Officer and Chief Financial Officer, his service as the Company’s Audit Committee Chairman, and his consistent and valued contributions, questions and insights, make Mr. Patteson an invaluable member of the Board. Mr. Patteson’s tendered resignation was unanimously rejected by the Board on May 21, 2020.

PROPOSAL 2 – ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION

Proposal 2 was to approve, on an advisory basis, our Named Executive Officer compensation. The result of the vote was as follows:

to the foregoing vote, the Named Executive Officer compensation, as disclosed in the Proxy Statement for the 2020 Annual Meeting of Stockholders of the Company, was approved. The Board and the Compensation Committee will carefully consider the voting results when making future decisions regarding executive compensation.

PROPOSAL 3 – RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Proposal 3 was the ratification of Grant Thornton LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2020. The result of the vote was as follows:

to the foregoing vote, the appointment of Grant Thornton LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2020 was ratified.

ITEM 8.01 OTHER EVENTS.

On May 19, 2020, the Company announced its Board’s decision to increase the annual dividend $0.05 to $0.35 annually, beginning with the next dividend declaration in the third quarter of 2020. The declaration and amount of any future dividends, and any future increase (or decrease) in such amount, is at the discretion of the Board of the Company and subject to the Company’s financial condition, results of operations, cash flows and other factors the Board deems relevant.

ITEM 9.01 FINANCIAL STATMENTS AND EXHIBITS.

> The following are filed as part of this Current Report on Form 8-K:

>>>>

CARRIAGE SERVICES INC Exhibit
EX-10.1 2 ex101-creditfacilitywaiver.htm EXHIBIT 10.1 Exhibit EXHIBIT 10.1Execution VersionLIMITED WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENTTHIS LIMITED WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Fourth Amendment”),…
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About Carriage Services, Inc. (NYSE:CSV)

Carriage Services, Inc. is a provider of death care services and merchandise in the United States. The Company operates in two business segments: Funeral Home Operations and Cemetery Operations. The Funeral Homes segment provides funeral services (traditional burial and cremation) and sells related merchandise, such as caskets and urns. Its cemetery products and services include interment services, the rights to interment in cemetery sites (primarily grave sites, mausoleum crypts and niches) and related cemetery merchandise, such as memorials and vaults. It serves suburban and rural markets. It provides funeral and cemetery services and products on both at-need (time of death) and preneed (planned prior to death) basis. It also maintains trusts in connection with funeral home and cemetery operations, including preneed funeral trusts, preneed cemetery merchandise and service trusts and cemetery perpetual care trusts. It operates approximately 167 funeral homes and 32 cemeteries.