EMPLOYMENT AGREEMENT
Exhibit 10.1
EXECUTION COPY
EXECUTION COPY
EMPLOYMENT AGREEMENT (the “Agreement”), made as of this 10th day of May,
2006, by and between Xxxx Xxxxxxx, residing at
(the “Executive”), and CARBO Ceramics Inc.,
a Delaware corporation (the “Company”).
WITNESSETH
WHEREAS, the Company wishes to employ the Executive as President and Chief Executive Officer
of the Company and the Executive wishes to serve the Company in such capacity.
NOW, THEREFORE, in consideration of the conditions and covenants set forth herein, it is
agreed as follows:
1. Employment, Duties and Agreements.
(a) The Company hereby employs the Executive, and the Executive hereby agrees to be
employed by the Company during the Term, as the Company’s President and Chief Executive Officer on
the terms and conditions set forth herein, “Term” shall mean the period commencing on June
1, 2006 (the “Effective Date”) and ending on December 31, 2007; provided, that the
Term shall be extended automatically for successive one-year periods, at the rate of Base Salary
and on other terms then in effect pursuant to this Agreement, unless written notice of an election
not to extend is given by either party to the other at least ninety (90) days prior to the date the
Term would then otherwise expire absent its extension; provided, that the Term may be
terminated prior to its scheduled expiration date in accordance with Section 3 hereof. Upon any
expiration of the Term, the Executive’s employment with the Company shall be at will.
(b) The Executive shall have such responsibilities and duties as the Board of Directors of
the Company (the “Board”) may from time to time reasonably determine consistent with the
Executive’s position as President and Chief Executive Officer of the Company. In rendering his
services hereunder, the Executive shall be subject to, and shall act in accordance with, all
reasonable instructions and directions of the Board and all applicable policies and rules thereof.
The Executive shall devote the Executive’s full working time to the performance of the Executive’s
responsibilities and duties hereunder. During the Term, the Executive will not, without the prior
written consent of the Board, render services, whether or not compensated, to any other person or
entity as an employee, independent contractor, director or otherwise; provided,
however, that nothing herein shall restrict the Executive from rendering services to
not-for-profit organizations, including, without limitation, any country club of which he is a
member, or managing the Executive’s personal investments during the Executive’s non-working time.
(c) During the Term, the Executive will not engage in any other business affiliation with
respect to any entity, including, without limitation, the establishment of a proprietorship or the
participation in a partnership or joint venture, or acquire any equity interest in any entity
(other than the Company) if (i) such engagement or ownership would interfere with the full-time
performance of his responsibilities and duties hereunder or (ii) such entity is
engaged in the business of production, supply or distribution of proppants used in the
hydraulic fracturing of natural gas and oil xxxxx or in the provision of fracture or reservoir
diagnostic services. The Executive represents and warrants that, as of the Effective Date, the
Executive will not be engaged in any such business affiliation and will not own any such equity
interests.
2. Compensation. During the Term, the Executive shall be entitled to the following
compensation.
(a) The Company shall pay the Executive a base salary at the rate of $300,000 per annum,
payable in accordance with the Company’s normal payroll practices (“Base Salary”). The
Board shall have the right to review the Executive’s performance and compensation from time to time
and may, in its sole discretion, increase his Base Salary based on such factors as the Board deems
appropriate.
(b) The Executive will be paid an incentive bonus with respect to each fiscal year during
the Term equal to the sum of (i) 0.5% of the Company’s earnings before interest income and expense
and taxes for such fiscal year (“EBIT”) up to $75,000,000, plus (ii) 1.0% of EBIT in excess
of $75,000,000 (“Incentive Bonus”); provided, that with respect to the 2006 fiscal
year, Executive’s Incentive Bonus shall be equal to the 2006 fiscal year Incentive Bonus to which
Executive would otherwise be entitled pursuant to this Section 2(b) multiplied by a fraction, the
numerator of which is the number of days in the period commencing on the Effective Date and ending
on the last day of the 2006 fiscal year (inclusive) and the denominator of which is 365. Any such
Incentive Bonus shall be paid to the Executive as soon as practicable and in any event no later
than the earlier of (i) thirty (30) days after the completion of the audited financial statements
and determination of EBIT (the “EBIT Determination Date”) for such fiscal year and (ii) two and one
half (2 1/2) months following the end of such fiscal year.
(c) On the Effective Date, the Company shall grant to the Employee, under the 2004 CARBO
Ceramics Inc. Long-Term Incentive Plan (the “Plan”), 20,000 restricted shares of common stock of
the Company (the “Restricted Stock”). The grant of the Restricted Stock shall be subject to the
terms and conditions of the Plan and the Executive’s Officer Restricted Stock Award Agreement (the
form of which is attached hereto as Appendix A).
(d) The Executive shall be entitled to four (4) weeks of paid vacation during each
calendar year of the Term in accordance with the Company’s standard vacation policy and practices.
The Executive shall take vacations only at such times as are consistent with reasonable business
needs of the Company.
(e) The Company shall reimburse the Executive for all reasonable, ordinary and necessary
expenses incurred by the Executive in the performance of the Executive’s duties hereunder,
provided that the Executive accounts to the Company for such expenses in a manner
reasonably prescribed by the Company.
(f) The Executive shall be entitled to such benefits and perquisites as are generally made
available to senior executive officers of the Company, provided that the Executive shall
not be eligible to participate in the Company’s Incentive Compensation Plan.
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3. Early Termination of the Term. The Term shall terminate prior to its scheduled
expiration date upon the occurrence of any of the following events.
(a) The Term and the Executive’s employment hereunder shall terminate upon written notice
to the Executive by the Company specifying Disability as the basis for such termination. In respect
of such termination, the Company shall pay to the Executive (i) within thirty (30) days after such
termination, the Executive’s earned but unpaid Base Salary, earned but unused vacation (determined
in accordance with the Company’s standard vacation policy and practices) and reimbursement for
expenses incurred (in accordance with Section 2(e) hereof), all as of the date of such termination
(the “Accrued Obligations”), and (ii) as soon as practicable and in any event no later than the
earlier of (x) the EBIT Determination Date for the fiscal year in which such termination takes
place and (y) two and one half (2 1/2) months following the end of the fiscal year in which such
termination takes place, an amount equal to the Incentive Bonus for such fiscal year (calculated in
accordance with the first sentence of Section 2(b)) multiplied by a fraction, the numerator of
which is the number of days in the period commencing on (1) with respect to a termination in the
2006 fiscal year, the Effective Date or (2) with respect to a termination in any subsequent fiscal
year, January 1 of such fiscal year, and ending on the date of such termination (inclusive) and the
denominator of which is 365 (the “Termination Bonus Amount”). The Executive shall not be entitled
to any further compensation or payments under this Agreement. “Disability” shall mean a
physical or mental impairment of the Executive that (A) qualifies the Executive for (x) disability
benefits under any long-term disability plan maintained by the Company or (y) Social Security
disability benefits or (B) has prevented or, at the date of determination, will reasonably be
likely to prevent, the Executive from performing the essential functions of his position for a
period of six (6) consecutive months. The existence of a Disability shall be determined by the
Board in its absolute discretion. The Executive agrees to submit to medical examinations by a
licensed medical doctor selected by the Board to determine whether a Disability exists, as the
Board may request from time to time.
(b) The Company may terminate the Term and the Executive’s employment hereunder for Cause.
Termination for Cause shall be effective upon written notice to the Executive by the Company
specifying that such termination is for Cause. In respect of such termination, the Company shall
pay to the Executive, within thirty (30) days after such termination, the Accrued Obligations. The
Executive shall not be entitled to any further compensation or payments under this Agreement.
“Cause” shall mean: (i) any material violation by the Executive of this Agreement; (ii) any
failure by the Executive substantially to perform his duties hereunder; (iii) any act or omission
involving dishonesty, fraud, willful misconduct or gross negligence on the part of the Executive
that is or may be materially injurious to the Company; and (iv) any felony or other crime involving
moral turpitude committed by the Executive. If the basis for terminating the Executive’s employment
for Cause is the result of a violation or failure described in clause (i) or (ii) of the foregoing
definition of “Cause” and the majority of the Board (excluding the Executive, if he is a member of
the Board) reasonably determines that such violation or failure is capable of being remedied, the
Board shall give the Executive thirty (30) days’ prior written notice of the Company’s intent to
terminate the Executive’s employment for Cause, which notice shall set forth the violation or
failure forming the basis for the determination to terminate the Executive’s employment for Cause.
The Executive shall have the right to remedy such violation or failure within a reasonable period
of time (as determined by the Board), provided that the Executive begins to take
appropriate steps
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to remedy such violation or failure within ten (10) days of the date of such written notice and
diligently prosecutes such efforts thereafter. The Term and the Executive’s employment hereunder
may not be terminated for Cause unless a majority of the Board (excluding the Executive, if he is a
member of the Board) finds in good faith that termination for Cause is justified and, if the basis
for terminating the Executive’s employment for Cause arises as a result of a violation or failure
described in clause (i) or (ii) of the definition of “Cause”, that the violation or failure has not
been remedied within the period of time designated by the Board or that there is no reasonable
prospect that the Executive will remedy the violation or failure forming the basis for terminating
his employment for Cause.
(c) The Term and the Executive’s employment hereunder shall terminate upon the death of
the Executive. In respect of such termination, the Company shall pay to the Executive’s estate or
any beneficiary previously designated by the Executive in writing (a “Designated
Beneficiary”) (i) within thirty (30) days after such termination, the Accrued Obligations, and
(ii) as soon as practicable and in any event no later than the earlier of (x) the EBIT
Determination Date for the fiscal year in which such termination takes place and (y) two and one
half (2 1/2) months following the end of the fiscal year in which such termination takes place, an
amount equal to the Termination Bonus Amount for such fiscal year. The Executive, his estate and
his Designated Beneficiary shall not be entitled to any further compensation or payments under this
Agreement.
(d) The Company may terminate the Term and the Executive’s employment hereunder at any
time without Cause. Such termination without Cause shall be effective upon written notice to the
Executive from the Company of such termination. In respect of such termination, the Company shall
pay to the Executive (i) within thirty (30) days after such termination, the Accrued Obligations,
and (ii) as soon as practicable and in any event no later than the earlier of (x) the EBIT
Determination Date for the fiscal year in which such termination takes place and (y) two and one
half (2 1/2) months following the end of the fiscal year in which such termination takes place, an
amount equal to the Termination Bonus Amount for such fiscal year. In addition, in consideration
for the Executive’s execution of a general release of claims in form and substance satisfactory to
the Company, the Company shall continue to pay to the Executive (or to the Executive’s estate or
Designated Beneficiary, if the Executive should die during such two-year period) the Executive’s
Base Salary (at the level in effect immediately preceding such termination) for the two (2) year
period commencing on the six (6) month anniversary of the date of such termination of employment,
in accordance with the Company’s normal payroll practices. The Executive (or his estate or
Designated Beneficiary) shall not be entitled to any further compensation or payments under this
Agreement. No salary continuation payments made pursuant to this Section 3(d) will constitute
compensation for any purpose under any retirement plan or other employee benefit plan, program,
arrangement or agreement of the Company, and no period during which such payments are made to the
Executive pursuant to this Section 3(d) shall constitute a period of employment with the Company
for any such purposes.
(e) During the one-year period following a Change in Control of the Company, the Company
may terminate the Term and the Executive’s employment hereunder without Cause or the Executive may
voluntarily terminate the Term and his employment hereunder for Good Reason. Such termination shall
be effective upon written notice to the Executive from the Company or from the Executive to the
Company, as applicable, of such termination. In respect
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of such termination, in lieu of all other amounts or benefits to which the Executive would
otherwise be entitled pursuant to any other provisions of Section 3 of this Agreement, the Company
shall pay to the Executive, (i) within thirty (30) days after such termination, the Accrued
Obligations, and (ii) as soon as practicable following the six (6) month anniversary of such
termination, (x) an amount equal to the Incentive Bonus with respect to the fiscal year immediately
preceding the fiscal year in which such termination takes place (calculated in accordance with the
first sentence of Section 2(b)) multiplied by a fraction, the numerator of which is the number of
days in the period commencing on (1) with respect to a termination in the 2006 fiscal year, the
Effective Date or (2) with respect to a termination in any subsequent fiscal year, January 1 of
such fiscal year, and ending on the date of such termination (inclusive) and the denominator of
which is 365 and (y) an amount equal to two times the Executive’s Base Salary (at the rate in
effect as of the date of such termination).
(f) For purposes of Section 3(e) hereof:
(1) “Change in Control” shall mean (i) the occurrence of a change in control of
the Company of a nature that would be required to be reported or is reported in response to Item
5.01 of the current report on Form 8-K, as in effect on the Effective Date, pursuant to Sections 13
or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); or (ii)
any “Person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or more of the combined voting power of
the Company’s outstanding securities (other than any Person who was a “beneficial owner” of
securities of the Company representing 30% or more of the combined voting power of the Company’s
outstanding securities prior to the Effective Date); or (iii) individuals who constitute the Board
on the Effective Date (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the members of the Board, provided that any person becoming a director
subsequent to the Effective Date whose appointment to fill a vacancy or to fill a new Board
position was approved by a vote of at least three-quarters of the directors comprising the
Incumbent Board, or whose nomination for election by the Company’s shareholders was approved by the
same nominating committee serving under an Incumbent Board, shall be, for purposes of this clause
(iii), considered as though he were a member of the Incumbent Board; or (iv) the occurrence of any
of the following of which the Incumbent Board does not approve (A) merger or consolidation in which
the Company is not the surviving corporation or (B) sale of all or substantially all of the assets
of the Company; or (v) stockholder approval pursuant to a proxy statement soliciting proxies from
stockholders of the Company, by someone other than the then current management of the Company, of a
plan of reorganization, merger or consolidation of the Company with one or more corporations as a
result of which the outstanding shares of the class of securities then subject to the plan of
reorganization are exchanged or converted into cash or property or securities not issued by the
Company.
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(2) “Good Reason” shall mean, without the Executive’s express written consent,
the occurrence of any one or more of the following: (i) the assignment of the Executive to duties
materially inconsistent with the Executive’s authorities, duties, responsibilities and status
(including offices, titles, and reporting requirements) as an officer of the Company, or a
reduction or alteration in the nature or status of the Executive’s authorities, duties, or
responsibilities from those in effect immediately prior to the Change in Control, including a
failure to reelect the Executive to, or a removal of him from, any office of the Company that the
Executive held immediately prior to the Change in Control; or (ii) the Company’s requiring the
Executive to be based at a location more than 50 miles from Irving, Texas, except for required
travel on the Company’s business to an extent substantially consistent with the Executive’s
business obligations immediately prior to the Change in Control; or (iii) the Company materially
breaches this Agreement or any other written agreement with the Executive; or (iv) a material
reduction in the Executive’s level of participation in any of the Company’s welfare benefit,
retirement or other employee benefit plans, policies, practices, or arrangements in which the
Executive participates as of the date of the Change in Control.
4. Restrictive Covenants.
(a) The Executive agrees that all information pertaining to the prior, current or
contemplated business of the Company and its corporate affiliates, and their officers, directors,
employees, agents, shareholders and customers (excluding (i) publicly available information (in
substantially the form in which it is publicly available) unless such information is publicly
available by reason of unauthorized disclosure by the Executive or by any person or entity of whose
intention to make such unauthorized disclosure the Executive is aware and (ii) information of a
general nature not pertaining exclusively to the Company that generally would be acquired in
similar employment with another company) constitutes a valuable and confidential asset of the
Company. Such information includes, without limitation, information related to trade secrets,
customer lists, production techniques, and financial information of the Company. The Executive
agrees that he shall, during the Term and continuing thereafter, (A) hold all such information in
trust and confidence for the Company and its corporate affiliates, and (B) not use or disclose any
such information to any person, firm, corporation or other entity other than under court order or
other legal or regulatory requirement.
(b) Upon expiration of the Term and continuing for a period ending two (2) years after the
Executive’s employment by the Company terminates for any reason whatsoever, the Executive agrees
that the Executive will not, directly or indirectly, own, manage, operate, control, be employed by
(whether as an employee, consultant, independent contractor or otherwise, and whether or not for
compensation) or render services to any person, firm, corporation or other entity, in whatever
form, engaged in the business of (i) the supply or distribution of proppants used in the hydraulic
fracturing of natural gas and oil xxxxx (“Proppants”); (ii) the production of Proppants or
(iii) the provision of fracture or reservoir diagnostic services, other than BJ Services Company,
Dowell Schlumberger Limited and Halliburton Company (but only to the extent that the Executive does
not engage in activities for
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these entities related to the exploration, research, development, production or procurement of
production of Proppants or the provision of fracture or reservoir diagnostic services).
(c) During the Term and continuing for a period ending twelve (12) months after the Executive’s
employment by the Company terminates for any reason whatsoever, the Executive agrees that the
Executive will not, directly or indirectly, individually or on behalf of other persons, solicit,
aid or induce (i) then remaining employees of the Company or its corporate affiliates to leave
their employment with the Company or its corporate affiliates in order to accept employment with or
render services to or with another person, firm, corporation or other entity, or assist or aid any
other person, firm, corporation or other entity in identifying or hiring such employees or (ii) any
customer of the Company or its corporate affiliates who was a customer of the Company or its
corporate affiliates at any time during which the Executive was actively employed by the Company to
purchase products or services then sold by the Company or its corporate affiliates from another
person, firm, corporation or other entity, or assist or aid any other person or entity in
identifying or soliciting any such customer.
(d) Prior to agreeing to, or commencing to, act as an employee, officer, director, trustee,
principal, agent or other representative of any type of business other than as an employee of the
Company during the period in which the non-competition agreement, as described in Section 4(b),
applies, the Executive shall (i) disclose such agreement in writing to the Company and (ii)
disclose to the other entity with which he proposes to act in such capacity, or to the other
principal together with whom he proposes to act as a principal, the existence of this Agreement,
including, in particular, the non-disclosure agreement contained in Section 4(a), the
non-competition agreement contained in Section 4(b), and the non-solicitation agreement contained in
Section 4(c).
(e) With respect to the restrictive covenants set forth in Sections 4(a), 4(b) and 4(c), the
Executive acknowledges and agrees as follows.
(i) The specified duration of a restrictive covenant shall be extended by and for the term
of any period during which the Executive is in violation of such covenant.
(ii) The restrictive covenants are in addition to any rights the Company may have in law or
at equity.
(iii) It is impossible to measure in money the damages which will accrue to the Company in the
event that the Executive breaches any of the restrictive covenants. Therefore, if the Executive
breaches any restrictive covenant, the Company and its corporate affiliates shall be entitled to an
injunction restraining the Executive from violating such restrictive covenants. If the Company or
any of its corporate affiliates shall institute any action or proceeding to enforce a restrictive
covenant, the Executive hereby waives the claim or defense that the Company or any of its corporate
affiliates has an adequate remedy at law and the Executive agrees not to assert in any such action
or proceeding the claim or defense that the Company or any of its corporate affiliates has an
adequate remedy at law. The foregoing shall not prejudice the
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Company’s or its corporate affiliates’ right to require the Executive to account for and pay over
to the Company or its corporate affiliates, and the Executive hereby agrees to account for and pay
over, the compensation, profits, monies, accruals or other benefits derived or received by the
Executive as a result of any transaction constituting a breach of the restrictive covenants.
(f) The restrictions in this Section 4 shall be in addition to any restrictions imposed on the
Executive by statute or at common law.
5.
Arbitration of Disputes.
(a) Any disagreement, dispute, controversy or claim arising out of or relating to this
Agreement or the interpretation or validity hereof shall be settled exclusively and finally by
arbitration. It is specifically understood and agreed that any disagreement, dispute or
controversy which cannot be resolved between the parties, including without limitation any matter
relating to interpretation of this Agreement, may be submitted to arbitration irrespective of the
magnitude thereof, the amount in controversy or whether such disagreement, dispute or controversy
would otherwise be considered justiciable or ripe for resolution by a court or arbitral tribunal.
Notwithstanding this Section 5, the Company shall be entitled to institute a court action or
proceeding for injunctive relief as provided in Section 4 of this Agreement.
(b) The arbitration shall be conducted in accordance with the Commercial Arbitration Rules (the
“Arbitration Rules”) of the American Arbitration Association (“AAA”).
(c) The arbitral tribunal shall consist of one arbitrator. The parties to the arbitration
jointly shall directly appoint such arbitrator within thirty (30) days of initiation of the
arbitration. If the parties shall fail to appoint such arbitrator as provided above, such
arbitrator shall be appointed by the AAA as provided in the Arbitration Rules and shall be a person
who (i) maintains his principal place of business within thirty (30) miles of the City of Irving,
Texas and (ii) has substantial experience in executive compensation. The parties shall each pay an
equal portion of the fees, if any, and expenses of such arbitrator.
(d) The arbitration shall be conducted within thirty (30) miles of the City of Irving, Texas or
in such other city in the United States of America as the parties to the dispute may designate by
mutual written consent.
(e) At any oral hearing of evidence in connection with the arbitration, each party thereto or
its legal counsel shall have the right to examine its witnesses and to cross-examine the witnesses
of any opposing party. No evidence of any witness shall be presented unless the opposing party or
parties shall have the opportunity to cross-examine such witness, except as the parties to the
dispute otherwise agree in writing or except under extraordinary circumstances where the interests
of justice require a different procedure.
(f) Any decision or award of the arbitral tribunal shall be final and binding upon the parties
to the arbitration proceeding. The parties hereto hereby waive to the extent permitted by law any
rights to appeal or to seek review of such award by any court or tribunal.
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(g) Nothing herein contained shall be deemed to give the arbitral tribunal any authority, power,
or right to alter, change, amend, modify, add to or subtract from any of the provisions of this
Agreement.
(h) Notwithstanding anything to the contrary in this Agreement, the arbitration provisions set
forth in this Section 5 shall be governed exclusively by the Federal Arbitration Act, Title 9,
United States Code.
6. Miscellaneous.
(a) Each provision hereof is severable from this Agreement, and if one or more provisions
hereof are declared invalid the remaining provisions shall nevertheless remain in full force and
effect. If any provision of this Agreement is so broad, in scope or duration or otherwise, as to be
unenforceable, such provision shall be interpreted to be only so broad as is enforceable.
(b) Any notice to be given hereunder shall be given in writing. Notice shall be deemed to be
given when delivered by hand to the party to whom notice is being given, or ten (10) days after
being mailed, postage prepaid, registered with return receipt requested, or sent by facsimile
transmission with a confirmation by registered or certified mail, postage prepaid. Notices to the
Executive should be addressed to the Executive as follows:
Xxxx Xxxxxxx
c/x Xxxxx Ceramics Inc.
0000 XxxXxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
c/x Xxxxx Ceramics Inc.
0000 XxxXxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Notices to the Company should be sent as follows:
with copies sent to:
Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx LLP
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Either party may change the address or person to whom notices should be sent to by notifying the
other party in accordance with this Section 6(b).
(c) The failure to enforce at any time any of the provisions of this Agreement or to require at
any time performance by the other party of any of the provisions hereof shall in no way be
construed to be a waiver of such provisions or to affect the validity of this Agreement, or
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any part hereof, or the right of either party thereafter to enforce each and every such provision
in accordance with the terms of this Agreement.
(d) This Agreement contains the entire agreement between the parties with respect to the
employment of the Executive by the Company after the Effective Date and supersedes any and all
prior understandings, agreements or correspondence between the parties regarding such employment.
It may not be amended or extended in any respect except by a writing signed by both parties hereto.
(e) The parties hereto acknowledge and agree that each party has reviewed and negotiated the
terms and provisions of this Agreement and has contributed to its preparation (with advice of
counsel, if desired). Accordingly, the rule of construction to the effect that ambiguities are
resolved against the drafting party shall not be employed in the interpretation of this Agreement.
Rather, the terms of this Agreement shall be construed fairly as to both parties hereto and not in
favor of or against either party, regardless of which party generally was responsible for the
preparation of this Agreement.
(f) This Agreement shall be governed by, and interpreted in accordance with, the laws of Texas,
without reference to its principles of conflict of laws.
(g) This Agreement shall not be assignable by either party hereto without the written consent
of the other, provided, however, that the Company may, without the written consent of the
Executive, assign this Agreement to (i) any entity with which the Company is merged or consolidated
or to which the Company transfers substantially all of its assets or (ii) any entity controlling,
under common control with or controlled by the Company.
(h) This Agreement may be executed in several counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same instrument.
(i) The headings in this Agreement are inserted for convenience of reference only and shall not
be a part of or control or affect the meaning of any provision hereof.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by its duly
authorized representative and the Executive has hereunto set his hand as of the day and year first
above written.
| CARBO CERAMICS INC. | ||||||
| By : | /s/ Xxxxxxx X. Xxxxxx | |||||
| /s/ Xxxx Xxxxxxx | ||||||
| Xxxx Xxxxxxx | ||||||
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APPENDIX A TO EMPLOYMENT AGREEMENT
RESTRICTED STOCK AWARD AGREEMENT
THIS AWARD AGREEMENT (the “Agreement”), made as of this 10th day of May 2006, between CARBO
Ceramics Inc. (the “Company”), a Delaware corporation, with its principal offices at 0000 XxxXxxxxx
Xxxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, and Xxxx Xxxxxxx (the “Participant”), who resides at
.
WHEREAS, the Company has adopted and maintains and the shareholders of the Company have
approved the 2004 CARBO Ceramics Inc. Long-Term Incentive Plan, as amended (the “Plan”) to attract
and retain highly qualified employees and non-employee directors of the Company and reward them for
making significant contributions to the success of the Company and to strengthen the alignment of
interests between such persons and the Company’s stockholders by providing them with a proprietary
interest in the Company;
WHEREAS, the Plan provides for the award to Participants in the Plan of restricted shares of
Common Stock in the Company;
NOW THEREFORE, in consideration of the premises and the mutual covenants hereinafter set
forth, the parties hereto hereby agree as follows:
1. Award of Restricted Stock. Pursuant to, and subject to, the terms and conditions set
forth herein and in the Plan, the Company hereby awards to the Participant 20,000 shares of Common
Stock of the Company (the “Restricted Stock”), which may not be transferred, pledged, assigned or
otherwise encumbered until vested (the “Transfer Restrictions”).
2. Grant Date. The Grant Date of the Restricted Stock hereby awarded is June 1, 2006.
3. Vesting Dates. The Restricted Stock shall vest only in accordance with the provisions of
this Agreement and of the Plan. Subject to the provisions of the Plan, shares of the Restricted
Stock shall become vested on each of the following Vesting Dates as follows:
(a) 6,667 shares of Restricted Stock shall vest on the later of (i) the first anniversary of
the Grant Date and (ii) the first “open window” trading date of the Company following the first
anniversary of the Grant Date;
(b) 6,666 shares of Restricted Stock shall vest on the later of (i) the second anniversary of
the Grant Date and (ii) the first “open window” trading date of the Company following the second
anniversary of the Grant Date; and
(c) 6,666 shares of Restricted Stock shall vest on the later of (i) the third anniversary of
the Grant Date and (ii) the first “open window” trading date of the Company following the third
anniversary of the Grant Date.
4. Forfeiture.
(a) Subject to the provisions of the Plan, in the event that the Participant’s employment with
the Company or any of its Affiliates is terminated prior to the Vesting Date with respect to any of
the Participant’s shares of Restricted Stock (i) for any reason other than due to death, Disability
or Retirement, all such shares of Restricted Stock shall be forfeited on the date of such
termination without payment of any consideration therefor; and (ii) due to death, Disability or
Retirement, all such shares of Restricted Stock shall cease to be subject to the Transfer
Restrictions and cease to be forfeitable as of the date of such termination.
(b) Additionally, in the event that the Participant attempts to transfer, pledge, assign or
otherwise encumber shares of Restricted Stock prior to the applicable Vesting Dates in violation of
the Transfer Restrictions, such transfer, pledge, assignment or encumbrance shall be null and void
and the Participant’s shares of Restricted Stock shall be forfeited without payment of any
consideration therefor.
(c) Notwithstanding the foregoing, shares subject to the Award granted pursuant to this
Agreement shall continue to be subject to the Transfer Restrictions following the Vesting Date with
respect to such shares until the end of the period commencing on the Vesting Date with respect to
such shares and ending on the earlier of (i) a termination of the Participant’s employment for any
reason or (ii) the second anniversary of such Vesting Date (the “Holding Period”) except for any
such Shares used to satisfy any withholding obligations as set forth herein and in the Plan. If
the Participant fails to comply with such Transfer Restrictions during the Holding Period, any
Awards held by the Participant which are then subject to forfeiture shall be forfeited and the
Committee may, in its discretion, take such action as it deems appropriate, including, without
limitation, determine not to make any additional grants of Awards to the Participant under the
Plan.
(d) Notwithstanding the foregoing, all shares subject to an Award shall immediately cease to
be subject to the Transfer Restrictions and cease to be forfeitable upon a Change in Control.
5. Share Certificates. Subject to the provisions of the Plan, the shares representing the
Restricted Stock will be held in the Participant’s name in book-entry format by the Company’s
transfer agent, Mellon Investor Services, LLC. Upon vesting of the shares of Restricted Stock each
year, the Participant has the right to choose to have a certificate issued in the Participant’s
name, to have the shares transferred to a brokerage account of the Participant’s choice or to
continue to hold the shares in book-entry format with the transfer agent.
6. Dividends. In the event that the Company declares any ordinary cash dividends or
distributions on its Common Stock to its stockholders generally, whether stock or cash dividend or
otherwise, the Participant shall be entitled to receive such cash dividends or distributions with
respect to his Restricted Stock at the same time as stockholders generally. In the event that the
Company declares any ordinary stock dividend, the Participant shall be entitled to such stock
dividends or distribution with respect to his Restricted Stock, provided that such dividends or
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distributions shall be subject to the provisions of Sections 6(b), (c), (d) and (e) of the Plan in
the same manner as the corresponding Restricted Stock to which such dividends or distributions
relate and shall be held by the Company or subject to a legend as determined by the Committee to
effectuate the purposes of the Plan.
7. Voting. Prior to the date that the Participant’s shares subject to an Award cease to be
forfeitable by the Participant pursuant hereto, the Participant shall not have any voting rights
with respect to such shares.
8. Non-Assignability. Except as expressly provided in the Plan or herein, Awards shall not
be assigned, transferred, pledged or encumbered, and any purported assignment, transfer, pledge or
encumbrance shall be null and void; provided, that Awards may be transferred by will or by the laws
of descent and distribution subject to the Committee’s receipt of such documents as may be
requested by the Committee from time.
9. Modification and Waiver. Except as provided in the Plan with respect to determinations of
the Committee and subject to the Company’s Board of Directors’ right to amend, modify or terminate
the Plan, neither this Agreement nor any provision hereof can be changed, modified, amended,
discharged, terminated or waived orally or by any course of dealing or purported course of dealing,
but only by an agreement in writing signed by the Participant and the Company. No such agreement
shall extend to or affect any provision of this Agreement not expressly changed, modified, amended,
discharged, terminated or waived or impair any right consequent on such a provision. The waiver of
or failure to enforce any breach of this Agreement shall not be deemed to be a waiver or
acquiescence in any other breach thereof.
10. Applicable Withholdings. The Company shall have the power and the right to deduct or
withhold, or require the Participant to remit to the Company, the minimum statutory amount to
satisfy federal, state, and local taxes or similar charges, domestic or foreign, required by law or
regulation to be withheld with respect to any taxable event arising as a result of or in connection
with the Plan or any Award. At the request of the Participant, subject to the consent of the
Committee, the Committee shall withhold or permit the Participant to tender a portion of the Shares
subject to each Award to satisfy the applicable federal, state, foreign and local withholding taxes
incurred in connection with the Award.
11. Governing Law. This Agreement, the Plan and all rights under this Agreement and the Plan
shall be governed by and construed and enforced in accordance with the laws of the State of
Delaware without regard to the provisions governing conflict of laws.
12. Participant Acknowledgment. The Participant hereby acknowledges receipt of a copy of the
Plan and that all decisions, determinations and interpretations of the Committee or the Company in
respect of this Agreement shall be final, conclusive and binding.
13. Incorporation of Plan. All terms and provisions of the Plan are incorporated herein and
made part hereof as if stated herein. If any provisions hereof and of the Plan shall be in
conflict, the terms of the Plan shall govern. All capitalized terms used herein and not defined
herein shall have the meanings assigned to them in the Plan.
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14. Entire Agreement. This Agreement represents the final, complete and total agreement of
the parties hereto respecting the Restricted Stock and the matters discussed herein and this
Agreement supersedes any and all previous agreements and understandings, whether written, oral or
otherwise, relating to the Restricted Stock and such matters.
THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, CARBO Ceramics Inc. has caused this Agreement to be duly executed by its
duly authorized officer and said Participant has hereunto signed this Agreement on his own behalf,
THEREBY REPRESENTING THAT HE HAS CAREFULLY READ AND UNDERSTANDS THIS
AGREEMENT AND THE PLAN, as of the
day and year first above written.
| CARBO CERAMICS INC. | ||||||
| By: | /s/ Xxx. X. Xxxxxx | |||||
| By: | /s/ Xxxx Xxxxxxx | |||||
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