10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2009

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     .

Commission File No. 001-15903

CARBO CERAMICS INC.

(Exact name of registrant as specified in its charter)

DELAWARE	72-1100013
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

575 North Dairy Ashford

Suite 300

Houston, TX 77079
(Address of principal executive offices)

(281) 921-6400
(Registrant’s telephone number)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes þ No o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

     As of August 3, 2009, 23,046,279 shares of the registrant’s Common Stock, par value $.01 per share, were outstanding.

CARBO CERAMICS INC.

Index to Quarterly Report on Form 10-Q

	PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements	3
Consolidated Balance Sheets - June 30, 2009 (Unaudited) and December 31, 2008	3
Consolidated Statements of Income (Unaudited) - Three and six months ended June 30, 2009 and 2008	4
Consolidated Statements of Cash Flows (Unaudited) - Six months ended June 30, 2009 and 2008	5
Notes to Consolidated Financial Statements (Unaudited)	6-11
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	12-15
Item 3. Quantitative and Qualitative Disclosures about Market Risk	15
Item 4. Controls and Procedures	15-16
PART II. OTHER INFORMATION
Item 1. Legal proceedings	16
Item 1A. Risk factors	16
Item 2. Unregistered sales of equity securities and use of proceeds	16-17
Item 3. Defaults upon senior securities	17
Item 4. Submission of matters to a vote of security holders	17
Item 5. Other information	17
Item 6. Exhibits	17
Signatures	18
Exhibit Index	19
EX-10.1
EX-10.2
EX-31.1
EX-31.2
EX-32

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CARBO CERAMICS INC.

CONSOLIDATED BALANCE SHEETS

($ in thousands, except per share data)

	June 30,			December 31,
	2009			2008
	(Unaudited)			(see Note 1)
ASSETS
Current assets:
Cash and cash equivalents	$	92,475		$	154,817
Trade accounts and other receivables, net		48,852			65,724
Inventories:
Finished goods, net		48,555			34,886
Raw materials and supplies		24,106			29,958
Total inventories		72,661			64,844
Prepaid expenses and other current assets		3,097			2,243
Prepaid income taxes		285			—
Deferred income taxes		9,287			8,084
Total current assets		226,657			295,712
Property, plant and equipment:
Land and land improvements		10,710			10,208
Land-use and mineral rights		6,279			6,257
Buildings		41,950			42,416
Machinery and equipment		284,403			281,894
Construction in progress		39,472			24,881
Total		382,814			365,656
Less accumulated depreciation		132,308			120,754
Net property, plant and equipment		250,506			244,902
Goodwill		4,859			4,859
Intangible and other assets, net		3,391			3,806
Total assets	$	485,413		$	549,279
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,575		$	15,615
Accrued payroll and benefits		4,455			9,373
Accrued freight		2,519			3,668
Accrued utilities		3,318			4,089
Accrued income taxes		—			47,929
Other accrued expenses		6,937			3,174
Total current liabilities		22,804			83,848
Deferred income taxes		24,747			22,897
Shareholders’ equity:
Preferred stock, par value $0.01 per share, 5,000 shares authorized, none outstanding		—			—
Common stock, par value $0.01 per share, 40,000,000 shares authorized; 23,047,970 and 23,637,678 shares issued and outstanding at June 30, 2009 and December 31, 2008, respectively		230			236
Additional paid-in capital		52,957			73,460
Retained earnings		389,264			371,602
Accumulated other comprehensive loss		(4,589	)		(2,764	)
Total shareholders’ equity		437,862			442,534
Total liabilities and shareholders’ equity	$	485,413		$	549,279

The accompanying notes are an integral part of these statements.

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CARBO CERAMICS INC.

CONSOLIDATED STATEMENTS OF INCOME

($ in thousands, except per share data)
(Unaudited)

	Three months ended						Six months ended
	June 30,						June 30,
	2009			2008			2009			2008
Revenues	$	69,322		$	89,285		$	159,964		$	179,660
Cost of sales		46,130			62,865			100,788			126,196
Gross profit		23,192			26,420			59,176			53,464
Selling, general and administrative expenses		8,831			8,737			20,263			17,319
Start-up costs		—			—			—			231
Loss on disposal or impairment of assets		24			178			91			110
Operating profit		14,337			17,505			38,822			35,804
Other income (expense):
Interest income, net		116			22			320			56
Foreign currency exchange (loss) gain, net		(205	)		(66	)		(246	)		1,427
Other, net		3			170			178			187
		(86	)		126			252			1,670
Income before income taxes		14,251			17,631			39,074			37,474
Income taxes		4,864			5,882			13,259			12,870
Income from continuing operations		9,387			11,749			25,815			24,604
Income from discontinued operations, net of income taxes		—			1,781			—			3,157
Net income	$	9,387		$	13,530		$	25,815		$	27,761
Basic earnings per share:
Income from continuing operations	$	0.41		$	0.48		$	1.11		$	1.01
Income from discontinued operations, net of tax		—			0.07			—			0.13
Basic earnings per share	$	0.41		$	0.55		$	1.11		$	1.14
Diluted earnings per share:
Income from continuing operations	$	0.41		$	0.48		$	1.11		$	1.00
Income from discontinued operations, net of tax		—			0.07			—			0.13
Diluted earnings per share	$	0.41		$	0.55		$	1.11		$	1.13
Other information:
Dividends declared per common share	$	—		$	0.14		$	0.34		$	0.28

The accompanying notes are an integral part of these statements.

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CARBO CERAMICS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in thousands)
(Unaudited)

	Six months ended
	June 30,
	2009			2008
Operating activities
Net income	$	25,815		$	27,761
Adjustments to reconcile net income to net cash (used in) provided by operating activities of continuing operations:
Income from discontinued operations, net of income taxes		—			(3,157	)
Depreciation and amortization		12,324			12,253
Provision for doubtful accounts		749			56
Deferred income taxes		1,629			3,178
Excess tax benefits from stock based compensation		(66	)		(7	)
Loss on disposal or impairment of assets		91			110
Foreign currency transaction loss (gain), net		246			(1,427	)
Stock compensation expense		1,395			1,031
Changes in operating assets and liabilities:
Trade accounts and other receivables		15,877			(13,123	)
Inventories		(8,696	)		(8,796	)
Prepaid expenses and other current assets		(930	)		(1,366	)
Long-term prepaid expenses		—			36
Accounts payable		(10,067	)		(5,504	)
Accrued expenses		(2,661	)		3,249
Accrued income taxes, net		(48,155	)		(2,923	)
Net cash (used in) provided by operating activities of continuing operations		(12,449	)		11,371
Investing activities
Capital expenditures, net		(19,760	)		(8,476	)
Investment in cost-method investee		—			(1,000	)
Net cash used in investing activities of continuing operations		(19,760	)		(9,476	)
Financing activities
Proceeds from bank borrowings		—			5,500
Repayments on bank borrowings		—			(5,500	)
Net proceeds from stock based compensation		602			315
Dividends paid		(7,988	)		(6,884	)
Purchase of common stock		(22,673	)		—
Excess tax benefits from stock based compensation		66			7
Net cash used in financing activities of continuing operations		(29,993	)		(6,562	)
Effect of exchange rate changes on cash		(140	)		176
Net cash provided by discontinued operations		—			1,592
Net decrease in cash and cash equivalents		(62,342	)		(2,899	)
Cash and cash equivalents at beginning of period		154,817			12,296
Cash and cash equivalents at end of period	$	92,475		$	9,397
Supplemental cash flow information
Interest paid	$	—		$	37
Income taxes paid	$	59,784		$	14,551

The accompanying notes are an integral part of these statements.

5

CARBO CERAMICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ in thousands, except per share data)
(Unaudited)

1. Basis of Presentation

     The accompanying unaudited consolidated financial statements of CARBO Ceramics Inc. have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation have been included. The results of the interim periods presented herein are not necessarily indicative of the results to be expected for any other interim period or the full year. The consolidated balance sheet as of December 31, 2008 has been derived from the audited financial statements at that date. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2008 included in the annual report on Form 10-K of CARBO Ceramics Inc. for the year ended December 31, 2008.

     The consolidated financial statements include the accounts of CARBO Ceramics Inc. and its operating subsidiaries (the “Company”). The consolidated financial statements also include a 6% interest in a Texas-based electronic equipment manufacturing company that was acquired in March 2008 that is reported under the cost method of accounting. All significant intercompany transactions have been eliminated.

Cash Equivalents

      The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The carrying amounts reported in the balance sheet for cash equivalents approximate fair value.

2. Sale of Assets (Discontinued Operations)

     On October 10, 2008, the Company sold a substantial portion of the assets of its wholly-owned subsidiary, Pinnacle Technologies, Inc. (“Pinnacle”). The sale included all of the fracture and reservoir diagnostic business, the Pinnacle name and related trademarks (see Note 2 to the Consolidated Financial Statements included in the Company’s Form 10-K for the year ended December 31, 2008, for additional information). As a result, the operations and cash flows associated with these assets have been classified as discontinued operations. Previously, the Pinnacle assets and operations were presented in the Fracture and Reservoir Diagnostics segment, one of the Company’s two reportable segments. Segment information is no longer presented because the remaining operations, which were previously reported in the Fracture and Reservoir Diagnostics segment, do not meet the quantitative thresholds for a reportable segment. Subsequent to the sale, the subsidiary name Pinnacle Technologies, Inc. was changed to StrataGen, Inc.

     Revenues and income before income taxes from discontinued operations were as follows:

	Three months ended		Six months ended
	June 30, 2008		June 30, 2008
Revenues	$	13,752	$	25,266
Income before income taxes	$	2,872	$	5,093

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     Cash flows from discontinued operations were as follows:

	Six months ended
	June 30, 2008
Operating activities:
Net income	$	3,157
Depreciation, amortization and other		3,127
Changes in operating assets and liabilities, net		(2,351	)
Net cash provided by operating activities		3,933
Investing activities: Capital expenditures, net		(2,408	)
Financing activities: Excess tax benefits from stock based compensation		67
Net cash provided by discontinued operations	$	1,592

3. Earnings Per Share

     Effective January 1, 2009, the Company adopted Financial Accounting Standards Board Staff Position (“FSP”) No. EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities” (“FSP No. EITF 03-6-1”). This FSP provides that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The Company has determined that its outstanding non-vested restricted stock awards are participating securities. Accordingly, effective January 1, 2009, earnings per common share is computed using the two-class method prescribed by Statement of Financial Accounting Standards No. 128, “Earnings Per Share.” All previously reported earnings per common share data must be retrospectively adjusted to conform to the new computation method. The adoption of FSP No. EITF 03-6-1 did not have a material effect on earnings per share in any period presented.

     The following table sets forth the computation of basic and diluted earnings per share:

	Three months ended				Six months ended
	June 30,				June 30,
	2009		2008		2009		2008
Numerator for basic and diluted earnings per share:
Income from continuing operations	$	9,387	$	11,749	$	25,815	$	24,604
Effect of reallocating undistributed earnings of participating securities		—		—		—		—
Income from discontinued operations, net of tax		—		1,781		—		3,157
Net income	$	9,387	$	13,530	$	25,815	$	27,761
Denominator:
Denominator for basic earnings per share— weighted-average shares		23,086,358		24,466,485		23,272,175		24,458,834
Effect of dilutive securities:
Employee stock options (See Note 7)		6,987		62,561		10,331		58,144
Nonvested and deferred stock awards (See Note 7)		43,282		47,669		41,528		39,932
Dilutive potential common shares		50,269		110,230		51,859		98,076
Denominator for diluted earnings per share— adjusted weighted-average shares		23,136,627		24,576,715		23,324,034		24,556,910
Basic earnings per share:
Income from continuing operations	$	0.41	$	0.48	$	1.11	$	1.01
Income from discontinued operations, net of tax		—		0.07		—		0.13
Basic earnings per share	$	0.41	$	0.55	$	1.11	$	1.14
Diluted earnings per share:
Income from continuing operations	$	0.41	$	0.48	$	1.11	$	1.00
Income from discontinued operations, net of tax		—		0.07		—		0.13
Diluted earnings per share	$	0.41	$	0.55	$	1.11	$	1.13

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4. Common Stock Repurchase Program

     On August 28, 2008, the Company’s Board of Directors authorized the repurchase of up to two million shares of the Company’s Common Stock. Shares are effectively retired at the time of purchase. During the quarter ended June 30, 2009, the Company repurchased and retired 236,885 shares at an aggregate price of $8,179. As of June 30, 2009, the Company repurchased and retired a total of 1,741,385 shares at an aggregate price of $64,658.

5. Dividends Paid

     On March 17, 2009, the Board of Directors declared a cash dividend of $0.17 per common share payable to shareholders of record on May 1, 2009. The dividend was paid on May 15, 2009. On July 21, 2009, the Board of Directors declared a cash dividend of $0.18 per common share payable to shareholders of record on August 3, 2009. This dividend is payable on August 17, 2009.

6. Comprehensive Income

     The following table sets forth the components of comprehensive income:

	Three months ended				Six months ended
	June 30,				June 30,
	2009		2008		2009			2008
Net income	$	9,387	$	13,530	$	25,815		$	27,761
Foreign currency translation adjustment		2,867		497		(1,825	)		1,818
Comprehensive income	$	12,254	$	14,027	$	23,990		$	29,579

     The foreign currency translation adjustment for the three months ended June 30, 2009 and 2008 is net of deferred income tax expense of $1,543 and $267, respectively. For the six months ended June 30, 2009 and 2008, the foreign currency translation adjustment is net of deferred income tax (benefit) expense of $(983) and $979, respectively.

7. Stock Based Compensation

     On May 19, 2009, the shareholders approved the CARBO Ceramics Inc. Omnibus Incentive Plan (the “Omnibus Incentive Plan”). The Omnibus Incentive Plan replaces the expired restricted stock and stock option plans. Under the Omnibus Incentive Plan, the Company may grant cash-based awards, stock options (both non-qualified and incentive) and other equity-based awards (including stock appreciation rights, phantom stock, restricted stock, restricted stock units, performance shares, deferred share units or share-denominated performance units) to employees and non-employee directors. The amount paid under the Omnibus Incentive Plan to any single participant in any calendar year with respect to any cash-based award shall not exceed $2,000,000. Awards may be granted with respect to a number of shares of the Company’s Common Stock that in the aggregate does not exceed 750,000 shares prior to the fifth anniversary of its effective date, plus (i) the number of shares that are forfeited, cancelled or returned, and (ii) the number of shares that are withheld from the participants to satisfy an option exercise price or minimum statutory tax withholding obligations. No more than 50,000 shares may be granted to any single participant in any calendar year. Equity-based awards may be subject to performance-based and/or service-based conditions. With respect to stock options and stock appreciation rights granted, the exercise price shall not be less than the market value of the underlying Common Stock on the date of grant. The maximum term of an option is ten years. Restricted stock awards granted generally vest (i.e., transfer and forfeiture restrictions on these shares are lifted) proportionately on each of the first three anniversaries of the grant date, but subject to certain limitations, awards may specify other vesting periods. All unvested shares granted to an individual vest upon retirement at or after the age of 62. As of June 30, 2009, 750,000 shares were available for issuance under the Omnibus Incentive Plan. Although the Company’s previous restricted stock and stock option plans have expired, outstanding options and unvested shares granted under these plans remain outstanding in accordance with their terms.

     The Company also has a Director Deferred Fee Plan (the “Plan”) that permits non-employee directors of the Company to elect once in December of each year to defer in the following calendar year the receipt of cash compensation for service as a director, which would otherwise be payable in that year, and to receive those fees

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in the form of the Company’s Common Stock on a specified later date that is on or after the director’s retirement from the Board of Directors. The number of shares reserved for an electing director is based on the fair market value of the Company’s Common Stock on the date immediately preceding the date those fees would have been paid absent the deferral. As of June 30, 2009, a total of 6,515 shares were reserved for future issuance in payment of $261 of deferred fees under the Plan by electing directors.

     A summary of stock option activity and related information for the six months ended June 30, 2009 is presented below:

				Weighted-		Aggregate
				Average		Intrinsic
	Options			Exercise Price		Value
Outstanding at January 1, 2009		53,675		$	23.85
Granted		—			—
Exercised		(27,875	)	$	21.60
Forfeited		—			—
Outstanding at June 30, 2009		25,800		$	26.27	$	205
Exercisable at June 30, 2009		25,800		$	26.27	$	205

     As of June 30, 2009, all compensation cost related to stock options granted under the expired stock option plans has been recognized. The weighted-average remaining contractual term of options outstanding at June 30, 2009 was 3.6 years. The total intrinsic value of options exercised during the six months ended June 30, 2009 was $469.

     A summary of restricted stock activity and related information for the six months ended June 30, 2009 is presented below:

				Weighted-
				Average
				Grant-Date
	Shares			Fair Value
Nonvested at January 1, 2009		103,850		$	40.29
Granted		77,155		$	35.03
Vested		(40,550	)	$	43.36
Forfeited		(11,445	)	$	36.51
Nonvested at June 30, 2009		129,010		$	36.51

     As of June 30, 2009, there was $3,317 of total unrecognized compensation cost, net of estimated forfeitures, related to restricted shares granted under the expired restricted stock plan. That cost is expected to be recognized over a weighted-average period of 2.1 years. The total fair value of shares vested during the six months ended June 30, 2009 was $1,758.

     The Company also has an International Long-Term Incentive Plan that provides for granting units of stock appreciation rights (“SARs”) or phantom shares to key international employees. One-third of the units subject to an award vest and cease to be forfeitable on each of the first three anniversaries of the grant date. Participants awarded units of SARs have the right to receive an amount, in cash, equal to the excess of the fair market value of a share of Common Stock as of the vesting date, or in some cases on a later exercise date chosen by the participant, over the exercise price. Participants awarded units of phantom shares are entitled to a lump sum cash payment equal to the fair market value of a share of Common Stock on the vesting date. In no event will Common Stock of the Company be issued under the International Long-Term Incentive Plan. As of June 30, 2009, there were 11,615 units of phantom shares granted under the plan, of which 2,348 have vested and 325 have been forfeited, with a total value of $306, the vested portion of which is recorded as a liability within Other Accrued Expenses.

8. Foreign Currencies

     As of June 30, 2009, the Company’s net investment that is subject to foreign currency fluctuations totaled $74,459 and the Company has recorded a cumulative foreign currency translation loss of $4,589, net of deferred income tax benefit. This cumulative translation loss is included in Accumulated Other Comprehensive Loss. Also, the Company’s subsidiary in Russia previously borrowed up to $40,845 from another subsidiary of the Company to fund construction of a manufacturing plant in Russia. This indebtedness, while eliminated in

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consolidation of the financial statements, is subject to exchange rate fluctuations between the local reporting currency and the currency in which the debt is denominated. Currency exchange rate fluctuations associated with this indebtedness result in gains and losses that impact net income. The gains and losses are presented in Other Income (Expense). During the third quarter of 2008, this indebtedness was significantly reduced, and was further reduced to $155 at June 30, 2009.

9. New Accounting Pronouncements

     In July 2009, the Financial Accounting Standards Board (the “FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 168, “FASB Accounting Standards Codification” (“SFAS 168”), as the single source of authoritative nongovernmental U.S. generally accepted accounting principles. The Codification is effective for interim and annual periods ending after September 15, 2009. All existing accounting standards are superseded as described in SFAS 168. All other accounting literature not included in the Codification is nonauthoritative. Management is currently evaluating the impact of the adoption of SFAS 168 but does not expect the adoption of SFAS 168 to impact the Company’s results of operations, financial position or cash flows.

     In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (“SFAS 165”), which establishes (i) the period after the balance sheet date during which management shall evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements; (ii) the circumstances under which an entity shall recognize events or transactions occurring after the balance sheet date in its financial statements; and (iii) the disclosures that an entity shall make about events or transactions that occurred after the balance sheet date. SFAS 165 is effective for interim or fiscal periods ending after June 15, 2009. The Company adopted SFAS 165 as of April 1, 2009. The adoption did not have a material impact on the Company’s financial position, results of operations or cash flows.

     Effective 1 April 2009, the Company adopted FASB Staff Position (FSP) FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments.” This FSP extends the disclosure requirements under SFAS No. 107, “Disclosures about Fair Value of Financial Instruments,” to interim financial statements. It also amends APB Opinion No. 28, “Interim Financial Reporting,” to require those disclosures in summarized financial information at interim reporting periods. This FSP only requires additional disclosure and did not have an impact on the Company’s consolidated financial statements.

     Effective January 1, 2009, the Company adopted SFAS No. 141(R), “Business Combinations” (“SFAS 141(R)”), which replaces SFAS No. 141. The statement retains the purchase method of accounting for acquisitions, but requires a number of changes, including changes in the way assets and liabilities are recognized in purchase accounting. It also changes the recognition of assets acquired and liabilities assumed arising from contingencies, requires the capitalization of in-process research and development at fair value, and requires the expensing of acquisition-related costs as incurred. The guidance in SFAS 141(R) is applied prospectively to business combinations completed on or after January 1, 2009, and as a result has not had any impact to the Company.

10. Legal Proceedings

     The Company is subject to legal proceedings, claims and litigation arising in the ordinary course of business. While the outcome of these matters is currently not determinable, management does not expect that the ultimate costs to resolve these matters will have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows.

     On January 26, 2007, following self-disclosure of certain air pollution emissions, the Company received a Notice of Violation (“NOV”) from the State of Georgia Environmental Protection Division (“EPD”) regarding appropriate permitting for emissions of two specific substances from its Toomsboro, Georgia facility. On May 22, 2007, a second NOV was issued for the McIntyre plant for alleged violations similar to those in the January NOV related to the Toomsboro facility.

     In May 2009, the Company entered into a consent order with the EPD to resolve the Toomsboro and McIntyre NOVs. Pursuant to the consent order, the Company has paid the EPD a fine of $258. In addition, the Company must pay the EPD a further fine of $112 within approximately one year from the date of the consent order, less certain amounts that the Company can demonstrate have been spent in order to implement emission reductions at these facilities. Finally, the consent order requires the Company to pay any unpaid permit fees from certain

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prior years that would have been payable on account of the Company’s actual emissions at the time. While the amount of these further permit fees are not determinable at this time, the Company presently estimates the amount of such fees to be less than approximately $100.

11. Subsequent Events

     In July 2009, the Company idled ceramic proppant manufacturing operations at its New Iberia, Louisiana facility. This facility will continue to function as a distribution center and the Company is planning to build a resin coating plant within the existing manufacturing infrastructure of the facility. The resin coating plant will be utilized to coat ceramic proppant and is expected to be completed during the fourth quarter of 2009.

     The Company has evaluated subsequent events through August 5, 2009, the date the consolidated financial statements were issued, and has determined there were no other subsequent events to recognize or disclose in these financial statements.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Business

The Company manufactures ceramic proppant and provides services that are used in the hydraulic fracturing of natural gas and oil wells.

On October 10, 2008, the Company sold a substantial portion of the assets of its wholly-owned subsidiary, Pinnacle Technologies, Inc. (“Pinnacle”). The sale included all of the fracture and reservoir diagnostic business, the Pinnacle name and related trademarks (see Note 2 to the Consolidated Financial Statements included in the Company’s Form 10-K for the year ended December 31, 2008, for additional information). As a result, operations and cash flows associated with these assets have been classified as discontinued operations. Previously, the Pinnacle assets and operations were presented in the Fracture and Reservoir Diagnostics segment, one of the Company’s two reportable segments. Segment information is no longer presented because the remaining operations, which were previously reported in the Fracture and Reservoir Diagnostics segment, do not meet the quantitative thresholds for a reportable segment. Subsequent to the sale, the subsidiary name Pinnacle Technologies, Inc. was changed to StrataGen, Inc.

Critical Accounting Policies

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require the Company to make estimates and assumptions (see Note 1 to the consolidated financial statements included in the annual report on Form 10-K for the year ended December 31, 2008). The Company believes that some of its accounting policies involve a higher degree of judgment and complexity than others. Critical accounting policies for the Company include revenue recognition, estimating the recoverability of accounts receivable, inventory valuation, accounting for income taxes, accounting for long-lived assets and accounting for legal contingencies. Critical accounting policies are discussed more fully in the Company’s annual report on Form 10-K for the year ended December 31, 2008 and there have been no changes in the Company’s evaluation of its critical accounting policies since the preparation of that report.

Results of Operations

Three Months Ended June 30, 2009

Revenues. Revenues of $69.3 million for the quarter ended June 30, 2009 decreased 22% compared to $89.3 million in revenues for the same period in 2008. The decrease is mainly attributed to a 23% decrease in proppant sales volume resulting from a decline in the number of rigs drilling for oil and natural gas worldwide. Worldwide proppant sales volume totaled 216 million pounds for the second quarter of 2009 compared to 281 million pounds for the second quarter of 2008. Despite an approximate 50% decrease in the drilling rig count in the U.S. and Canada, sales volume in that region decreased by only 18%. Sales volume decreases for most of the Company’s products in the U.S. and Canada were partially offset by greater demand for CARBOPROP^® and CARBOHYDROPROP^® in shale formations. International (excluding Canada) sales volume decreased 41% primarily due to decreases in Russia and North Africa partially offset by increases in Mexico.

Gross Profit. Gross profit for the second quarter of 2009 was $23.2 million, or 33% of revenues, compared to $26.4 million, or 30% of revenues, for the second quarter of 2008. Despite lower gross profit from decreased sales volume, gross profit as a percentage of sales increased primarily as a result of a change in the mix of products sold, price increases for certain products and lower freight costs.

Selling, General and Administrative (SG&A) and Other Operating Expenses. SG&A expenses of $8.8 million for the second quarter of 2009 were essentially flat compared to SG&A expenses of $8.7 million for the same period in 2008. As a percentage of revenues, SG&A expenses increased to 12.7% compared to 9.8% for second quarter of 2008 due to the fixed nature of these costs relative to lower revenues. Other operating expenses of $0.2 million for the second quarter of 2008 consisted primarily of a loss related to equipment disposals.

Other Income (Expense). Other income for the second quarter of 2009 declined $0.2 million compared to the same period in 2008. This decline is mainly attributable to an increase in foreign currency exchange losses.

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Income Tax Expense. Income tax expense was $4.9 million, or 34.1% of pretax income, for the second quarter of 2009 compared to $5.9 million, or 33.4% of pretax income, for the same period last year. The $1.0 million decrease is due to lower pre-tax income partially offset by a higher effective tax rate primarily associated with a tax refund in the second quarter of 2008 resulting from the filing of an amended prior year state tax return.

Income from Discontinued Operations, Net of Income Taxes. Income from discontinued operations for the second quarter of 2008 was $1.8 million and includes gross profit of $6.1 million offset by selling, general, and administrative expenses of $3.2 million. Income taxes related to discontinued operations for the second quarter of 2008 was $1.1 million. The sale of the discontinued operations was completed on October 10, 2008.

Six Months Ended June 30, 2009

Revenues. Revenues of $160.0 million for the six months ended June 30, 2009 decreased 11% compared to $179.7 million in revenues for the same period in 2008. Revenues decreased primarily due to a 17% decrease in sales volume partially offset by an 8% increase in the average proppant selling price. Worldwide proppant sales volume totaled 469 million pounds in the first six months of 2009 compared to 563 million pounds for the same period in 2008. Despite an approximate 38% decrease in the drilling rig count in the U.S. and Canada, sales volume in that region decreased by only 13%. Sales volume decreases for most of the Company’s products in the U.S. and Canada were partially offset by greater demand for CARBOPROP^® and CARBOHYDROPROP^® in shale formations. International (excluding Canada) sales volume decreased 30% primarily attributable to decreases in Russia and North Africa partially offset by increase in Mexico. The higher average selling price was primarily attributed to price increases introduced in the second half of 2008 that were partially offset by price reductions instituted during the second quarter of 2009.

Gross Profit. Gross profit for the six months ended June 30, 2009 was $59.2 million, or 37% of revenues, compared to $53.5 million, or 30% of revenues, for the same period in 2008. Gross profit, as well as gross profit as a percentage of revenues, for the first half of 2009 increased compared to the first half of 2008 in spite of decreased sales volume. This was primarily the result of a change in the mix of products sold, price increases introduced during the second half of 2008 that were partially offset by price reductions instituted during the second quarter of 2009, and lower freight costs.

Selling, General and Administrative (SG&A) and Other Operating Expenses. SG&A expenses totaled $20.3 million for the six months ended June 30, 2009 compared to $17.3 million for the same period in 2008. As a percentage of revenues, SG&A expenses increased to 12.7% compared to 9.6% for second quarter of 2008. Increases primarily resulted from higher administrative expenses necessary to support the infrastructure for an enterprise information system implemented during the second quarter of 2008, additional allowances for the collection of doubtful accounts, and costs associated with the relocation of certain Company offices. Other operating expenses decreased $0.2 million as a result of costs incurred in early 2008 associated with the start-up of the second production line at the Company’s Toomsboro facility.

Other Income (Expense). Other income for the six months ended June 30, 2009 declined $1.4 million compared to the same period in 2008. This decline is mainly attributed to a $1.7 million decrease in foreign currency exchange gains recognized during the first six months of 2008 that did not recur in 2009 primarily as a result of the reduction in intercompany liabilities that were subject to exchange rate fluctuations.

Income Tax Expense. Income tax expense was $13.3 million, or 33.9% of pretax income, for the six months ended June 30, 2009 compared to $12.9 million, or 34.3% of pretax income for the same period last year. The $0.4 million increase is due to higher pre-tax income partially offset by a lower effective tax rate primarily associated with mining depletion deductions that the Company began claiming in the third quarter of 2008.

Income from Discontinued Operations, Net of Income Taxes. Income from discontinued operations for the six months ended June 30, 2008 was $3.2 million and includes gross profit of $10.9 million offset by selling, general, and administrative expenses of $5.8 million. Income taxes related to discontinued operations for the six months ended June 30, 2008 was $1.9 million. The sale of the discontinued operations was completed on October 10, 2008.

13

Liquidity and Capital Resources

At June 30, 2009, the Company had cash and cash equivalents of $92.5 million compared to cash and cash equivalents of $154.8 million at December 31, 2008. For the six months ended June 30, 2009, the Company used $12.4 million of cash in operating activities of continuing operations, which included $59.8 million of income tax payments associated with the sale of discontinued operations on October 10, 2008, third and fourth quarter 2008 estimated tax payments that were deferred to 2009 as a result of hurricane Gustav tax relief, and 2009 taxable income. The Company also used $19.7 million for capital expenditures, $8.0 million for the payment of cash dividends, $22.7 million for repurchases of the Company’s Common Stock, and $0.1 million from the effect of exchange rate changes on cash. Increases in cash included $0.6 million from employee exercises of stock options.

The Company believes its operating results for the remainder of 2009 will continue to be influenced by the decline in the level of drilling in North America. As a result of increased economic pressures from the decline in rig counts fueled by low natural gas and oil prices and continued weakness in the U.S. credit markets, the Company instituted in April 2009 certain price reductions for its products in an effort to mitigate sales volume erosion. These price reductions will likely continue to lower gross profit margins throughout the remainder of 2009. However, the Company expects its ability to demonstrate the value of ceramic proppant relative to alternatives should allow it to continue to generate sales opportunities. While the contraction in drilling activity has recently slowed, the Company believes the levels of natural gas inventories in North America and the current credit market are likely to prevent any notable recovery in drilling activity until 2010. Eventually, the Company expects that the steep decline curves in the resource plays providing much of the incremental natural gas supply in North America will help in bringing supply and demand more into balance. However, the Company is unable to determine how detrimental of an effect the U.S. economic crisis will have on overall natural gas demand.

Subject to the Company’s financial condition, the amount of funds generated from operations and the level of capital expenditures, the Company’s current intention is to continue to pay quarterly dividends to holders of its common stock. On July 21, 2009, the Board of Directors declared a cash dividend of $0.18 per common share, an increase of 6% from the dividend paid in May 2009. This increased dividend is payable on August 17, 2009, to shareholders of record on August 3, 2009. The Company estimates its total capital expenditures for the remainder of 2009 will be between $30.0 million and $35.0 million, which includes costs associated with the previously announced construction of the Company’s third production line at its Toomsboro, Georgia facility. However, the project has been delayed, as certain permits needed to proceed with construction have not been received as expected. The Company currently anticipates that the project will be completed in the second half of 2010.

The Company maintains an unsecured line of credit of $10.0 million. As of June 30, 2009, there was no outstanding debt under the credit agreement. The Company anticipates that cash on hand, cash provided by operating activities and funds available under its line of credit will be sufficient to meet planned operating expenses, tax obligations, capital expenditures and other cash needs for the next 12 months. The Company also believes that it could acquire additional debt financing, if needed. Based on these assumptions, the Company believes that its fixed costs could be met even with a moderate decrease in demand for the Company’s products.

Off-Balance Sheet Arrangements

The Company had no off-balance sheet arrangements as of June 30, 2009.

Forward-Looking Information

The statements in this Form 10-Q that are not historical statements, including statements regarding our future financial and operating performance and liquidity and capital resources, are forward-looking statements within the meaning of the federal securities laws. All forward-looking statements are based on management’s current expectations and estimates, which involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Among these factors are:

• changes in overall economic conditions,

• changes in the cost of raw materials and natural gas used in manufacturing our products,

• changes in demand and prices charged for our products,

• changes in the demand for, or price of, oil and natural gas,

14

• risks of increased competition,

• technological, manufacturing and product development risks,

• loss of key customers,

• changes in foreign and domestic government regulations,

• changes in foreign and domestic political and legislative risks,

• the risks of war and international and domestic terrorism,

• risks associated with foreign operations and foreign currency exchange rates and controls, and

• weather-related risks and other risks and uncertainties.

Additional factors that could affect our future results or events are described from time to time in our reports filed with the Securities and Exchange Commission (the “SEC”). See in particular our Form 10-K for the fiscal year ended December 31, 2008 under the caption “Risk Factors” and similar disclosures in subsequently filed reports with the SEC. We assume no obligation to update forward-looking statements, except as required by law.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company’s major market risk exposure is to foreign currency fluctuations that could impact its investments in China and Russia. As of June 30, 2009, the Company’s net investment that is subject to foreign currency fluctuations totaled $74.5 million and the Company has recorded a cumulative foreign currency translation loss of $4.6 million, net of deferred income tax benefit. This cumulative translation loss is included in Accumulated Other Comprehensive Loss. Also, the Company’s subsidiary in Russia previously borrowed up to $40.8 million from another subsidiary of the Company to fund construction of a manufacturing plant in Russia. During the third quarter of 2008, this indebtedness was significantly reduced and subsequently further reduced to $0.2 million as of June 30, 2009. This indebtedness, while eliminated in consolidation of the financial statements, is subject to exchange rate fluctuations between the local reporting currency and the currency in which the debt is denominated. Currency exchange rate fluctuations associated with this indebtedness result in gains and losses that impact net income. The gains and losses are presented in Other Income (Expense). When necessary, the Company may enter into forward foreign exchange contracts to hedge the impact of foreign currency fluctuations. There were no such foreign exchange contracts outstanding at June 30, 2009.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

As of June 30, 2009, management carried out an evaluation, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurances of achieving their control objectives. Based upon and as of the date of that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

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(b) Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2009, that materially affected, or are reasonably likely to materially affect, those controls.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     On January 26, 2007, following self-disclosure of certain air pollution emissions, the Company received a Notice of Violation (“NOV”) from the State of Georgia Environmental Protection Division (“EPD”) regarding appropriate permitting for emissions of two specific substances from its Toomsboro, Georgia facility. On May 22, 2007, a second NOV was issued for the McIntyre plant for alleged violations similar to those in the January NOV related to the Toomsboro facility.

     In May 2009, the Company entered into a consent order with the EPD to resolve the Toomsboro and McIntyre NOVs. Pursuant to the consent order, the Company has paid the EPD a fine of $258,000. In addition, the Company must pay the EPD a further fine of $112,000 within approximately one year from the date of the consent order, less certain amounts that the Company can demonstrate have been spent in order to implement emission reductions at these facilities. Finally, the consent order requires the Company to pay any unpaid permit fees from certain prior years that would have been payable on account of the Company’s actual emissions at the time. While the amount of these further permit fees are not determinable at this time, the Company presently estimates the amount of such fees to be less than approximately $100,000.

ITEM 1A. RISK FACTORS

Not required

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information about the Company’s repurchases of Common Stock during the quarter ended June 30, 2009:

ISSUER PURCHASES OF EQUITY SECURITIES

								Maximum
						Total Number of		Number of
						Shares Purchased		Shares that May
	Total Number			Average		as Part of Publicly		Yet be Purchased
	of Shares			Price Paid		Announced		Under the
Period	Purchased			per Share(1)		Plan(2)(3)		Plan(4)
04/01/09 to 04/30/09		—		$	—		—		495,500
05/01/09 to 05/31/09		38,576		$	35.25		38,576		456,924
06/01/09 to 06/30/09		198,563	(5)	$	34.39		198,309		258,615
Total		237,139					236,885

(1)	Average price paid excludes commissions.
(2)	On August 28, 2008, the Company announced the authorization by its Board of Directors for the repurchase of up to two million shares of its Common Stock.
(3)	Selected repurchases were made under a Written Plan for the Repurchase of Securities with an agent that complies with the requirements of Rule 10b5-1 of the Securities Exchange Act (the “10b5-1 Agreement”). The agent repurchased a number of shares of our Common Stock determined under the terms of the 10b5-1 Agreement each trading day based on the trading price of the stock on that day. Shares were repurchased by the agent at the prevailing market prices in open market transactions, which complied with Rule 10b-18 of the Exchange Act.

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(4)	Represents the maximum number of shares that may be repurchased under the previously announced authorization as of period end. As of August 3, 2009, a maximum of 256,924 shares may be repurchased under the previously announced authorization.
(5)	Includes 254 shares of restricted stock withheld for the payment of withholding taxes upon the vesting of restricted stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

a.	The Annual Meeting of Shareholders of Carbo Ceramics Inc. was held on May 19, 2009.
b.	The following matters were submitted to a vote at the meeting:

(1)  The election of the following nominees as directors of CARBO Ceramics Inc. Votes representing 20,996,233 shares of Common Stock were cast. The vote with respect to each nominee was as follows:

Nominee	For		Withheld
Chad C. Deaton		20,528,819		467,414
James B. Jennings		20,641,683		354,550
Gary A. Kolstad		20,616,845		379,388
H. E. Lentz, Jr.		20,528,771		467,462
Randy L. Limbacher		20,641,479		354,754
William C. Morris		20,443,244		552,989
Robert S. Rubin		15,133,936		5,862,297

(2)	The ratification of the CARBO Ceramics Inc. Omnibus Incentive Plan. Votes representing 19,669,753 shares of Common Stock were cast. Results of the vote were as follows: 18,525,768 for, 12,531 against, and 1,131,454 abstained.
(3)	The ratification of the appointment of Ernst & Young LLP as independent registered public accounting firm to audit the consolidated financial statements of CARBO Ceramics Inc. for the year 2009. Votes representing 20,996,233 shares of Common Stock were cast. Results of the vote were as follows: 20,408,058 for, 3,278 against, and 584,897 abstained.

ITEM 5. OTHER INFORMATION

     Not applicable

ITEM 6. EXHIBITS

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q:

10.1	Form of Amended and Restated Officer Restricted Stock Award Agreement.
10.2	Form of Relocation Policy
31.1	Rule 13a-14(a)/15d-14(a) Certification by Gary A. Kolstad.
31.2	Rule 13a-14(a)/15d-14(a) Certification by Ernesto Bautista III.
32	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CARBO CERAMICS INC.
 

/s/ Gary A. Kolstad  

Gary A. Kolstad 

President and Chief Executive Officer 

/s/ Ernesto Bautista III  

Ernesto Bautista III 

Chief Financial Officer 

Date: August 5, 2009

18

EXHIBIT INDEX

EXHIBIT	DESCRIPTION
10.1	Form of Amended and Restated Officer Restricted Stock Award Agreement.
10.2	Form of Relocation Policy
31.1	Rule 13a-14(a)/15d-14(a) Certification by Gary A. Kolstad.
31.2	Rule 13a-14(a)/15d-14(a) Certification by Ernesto Bautista III.
32	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

19

EX-10.1

EXHIBIT 10.1

OFFICER RESTRICTED STOCK AWARD AGREEMENT

     THIS AWARD AGREEMENT (the “Agreement”), made as of this                      day of                                          20                    , between CARBO Ceramics Inc. (the “Company”), a Delaware corporation, with its principal offices at 6565 MacArthur Boulevard, Suite 1050, Irving, Texas 75039, and                      (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                      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                     .

     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) ___shares of Restricted Stock shall vest on [first anniversary of grant date];

          (b) ___shares of Restricted Stock shall vest on [second anniversary of grant date]; and

          (c) ___shares of Restricted Stock shall vest on [third anniversary of 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 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 have 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

2

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.

     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.

     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:
	[                                 ]
	[                                 ]

3

EX-10.2

Exhibit 10.2

RELOCATION POLICY

Effective April 6, 2009

1

CARBO
RELOCATION POLICY SUMMARY

MISCELLANEOUS RELOCATION ALLOWANCE (taxable and not grossed up)	One month’s salary ($10,000 maximum)
HOME SALE OF PRIMARY RESIDENCE (if sold through ARSI, non-taxable)	The Home Sale Program is a Guaranteed Buyout though CARBO’s Relocation Service Partner, All Relocation Services (ARSI). The Realtor sales commission (not to exceed customary rate) and all normal seller’s closing costs, not to include recurring costs are paid by CARBO. If home is appraised at a value below the employee’s original purchase price, the difference will be taxable to the employee.
HOME SELLING INCENTIVE (taxable, not grossed up)	If employee sells the home within 90 days, a 2% incentive will be paid
LEASE CANCELLATION (taxable and grossed up)	Lease breakage of up to 2 months for unavoidable lease cancellation penalties.
HOME FINDING TRIP EMPLOYEE AND SPOUSE (taxable and grossed up)	One trip, not to exceed 3 days. Travel, car rental, lodging, and meal expenses will be covered.
TEMPORARY LIVING (taxable and grossed up)	Up to 90 days. Reimbursement for reasonable meals for the employee and family. Lodging $3,000 maximum per month for employee and family. Up to 30 days rental car reimbursement.
RETURN TRIP (taxable and grossed up)	In the event the employee relocates before member(s) of his/her household, transportation for return trips home will be allowed every 15 days while in temporary living. Not to exceed 6 trips.
HOME PURCHASE (taxable and grossed up, except origination fee and discount point)	For employees who are homeowners at the time the relocation is initiated, reimbursement of loan origination fee (1 pt.), and all normal and customary buyer closing costs, not to include recurring costs. General home inspection, not to exceed $500.
RENTAL ASSISTANCE (taxable and grossed up)	One rental tour, which includes visiting rental sites, community highlights, schools, and providing community/civic information.
SHIPMENT OF HOUSEHOLD GOODS (non-taxable)	Full packing, full unpacking, and transporting of furniture and personal property. If move is more than 500 miles, up to 2 vehicles may be shipped. Reasonable and customary crating. Third Party Services for appliance disconnect and hook-up. Shipment of household goods to be insured by Third Party Insurance.
STORAGE OF HOUSEHOLD GOODS (1ST 30 days are non-taxable; 31st day-60th day taxable and grossed-up)	Storage of household goods for 60 days.
FINAL MOVE (1st $.24/mile, tolls, parking, last night of lodging at old location while goods in transit, and lodging while in transit are non-taxable and not grossed up)	Reasonable expenses for meals incurred by employee and family while en route to new location. The most direct route must be taken. Mileage will be reimbursed at the IRS rate, currently $.55/mile.

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IMPORTANT NOTICE

CARBO has contracted with a professional relocation service company, All Relocation Services (ARSI), to administer its relocation policy. Once you are authorized to receive relocation benefits, CARBO will initiate your relocation through ARSI. ___with ARSI will be your primary contact throughout your relocation, and will contact you to review your relocation benefits as outlined in the CARBO policy.

Do not make any relocation-related commitments (including any real estate commitments for your home sale or home purchase) before speaking with your ARSI Relocation Consultant.

Failure to comply with the relocation program outlined in this policy may result in reduced benefits and possible exclusion from the program.

The contact information for your relocation consultant is:

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INTRODUCTION AND PURPOSE

Congratulations on your new assignment! CARBO wants to assist you in making a smooth transition to your new location by providing professional assistance with your move. Benefits of the program are based on eligibility and may include:

EXPENSE ADMINISTRATION
•       Expense Administration	Page 7
•       Miscellaneous Relocation Expense Allowance	Page 7
ORIGIN SERVICES
•       Marketing Assistance Program	Page 8
•       Independent Sale	Page 10
•       Home Sale Incentive	Page 10
•       Lease Cancellation	Page 10
DESTINATION SERVICES
•       House Finding Trip	Page 10
•       Temporary Living	Page 11
•       Return Trips	Page 11
•       Home Purchase	Page 11
•       Rental Assistance	Page 12
FINAL MOVE BENEFITS
•       Transportation of Household Goods	Page 12
•       Storage	Page 13
•       Final Move Expenses	Page 13
TAX GROSS-UP	Page 13
AGREEMENT FOR REPAYMENT OF RELOCATION EXPENSES	Page 15

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ELIGIBILITY

Benefits provided under this policy are for all employees transferring as a result of the headquarter move to Houston. In general, the provisions of the relocation program apply to full-time current employees who, at the request of management, are relocated domestically. Full-time, experienced new hires will be handled on a case-by-case basis. Employee requested relocations are not eligible for this program.

IRS regulations require you to work (or expect you to work) in the new location for at least 39 weeks to be eligible to deduct qualified relocation expenses. Exception: if CARBO moves you again or you are laid off, you still qualify for the deduction. In addition, the IRS requires the distance from your old home to your new work place must be a minimum of 50 miles further than the distance from your old home to your old work place.

PAYBACK OF RELOCATION EXPENSES

If an employee leaves the employ of CARBO by voluntary resignation, except for medical reasons, or is terminated for gross misconduct, within one year of relocating, he/she will be required to repay the relocation costs incurred by the company pro rata to the proportion of the one-year period remaining at the time of leaving. See Repayment Agreement.

PROGRAM ADMINISTRATION

The policy for relocation and moving expense reimbursement will be determined and administered by the Human Resources Department. The Company’s decisions regarding the application and interpretation of the relocation policy are final. The Human Resources Department will notify ARSI of all authorized relocations. The “Request for Relocation” form must be signed and approved by the Vice President of Human Resources before a written or verbal offer is made to an employee. Once the offer has been made to the employee, the hiring manager is responsible for notifying Human Resources of his/her acceptance. The notification will begin the relocation process.

IT IS THE HIRING MANAGER’S RESPONSIBILITY TO INFORM THE EMPLOYEE NOT TO LIST THEIR HOME FOR SALE PRIOR TO NOTIFICATION OF HUMAN RESOURCES AND THEIR APPROVAL.

All relocation expenses incurred by the employee must be submitted on a relocation expense reimbursement form provided by All Relocation Service Services.

CARBO has partnered with All Relocation Services (ARSI) as its Relocation Service Partner to administer and implement all parts of its relocation program from initiation to completion. Once ARSI receives proper, written authorization from Human Resources,

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ARSI will begin the initiation process for your relocation. A Relocation Consultant will then contact you within one (1) business day to review the approved benefits of your policy. The Relocation Consultant will be your advocate, manage the relocation from start to finish, and monitor the process to ensure consistent and professional service delivery.

LENDER INFORMATION

The Relocation Consultant will send a relocation package with guidelines and basic information about the relocation process. A list of contact names and numbers, including the names and phone numbers for approved national lenders will be included.

The package will also contain information to help you with your move such as tips for selling a home, tips for buying a home or tips for renting a home.

EXPENSE ADMINISTRATION

Under existing Federal and State Income Tax Regulations, certain relocation expense reimbursements are designated as taxable income. All relocation expenses should be submitted to the Relocation Consultant before being approved by the employee’s manager. ARSI will audit all expenditures to ensure compliance with approved policy and inclusion of proper original receipts. ARSI will process expense reimbursements within three (3) business days of receipt.

MISCELLANEOUS RELOCATION EXPENSE ALLOWANCE

A relocation allowance equal to one month’s salary ($10,000 maximum) will be provided to help with expenses not otherwise reimbursable under the policy. For example:

• Storage over 60 days

• Carpet installation or cleaning

• Cleaning residence

• New window coverings

• Drapery alterations or cleaning

• Chimney cleaning

• Burglar alarms

• Lawn care

• TV antenna installation

• TV adjusting

• Tuition fees lost

• Appliance installation

• Membership dues lost

• Advance entertainment purchase

• Income tax preparation assistance

• Movement of unauthorized vehicles

• Perishable food or firewood left behind

• Movement of domestic pets and farm type animals

• Unusual hobbies

• Snow removal

• Piano tuning

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The miscellaneous relocation allowance may be requested once your relocation has been authorized. It applies to both homeowners and renters. Only one allowance per household will be issued.

The miscellaneous allowance is considered a supplemental payment and is subject to tax withholding. The allowance is not qualified for the “tax gross up” calculation.

HOME SALE

Marketing Assistance Program

In order to expedite the transfer, maximize relocation benefits, and reduce overall costs to the employee and CARBO, ARSI’s home sale assistance program should be utilized. The employee should not list his/her home for sale until he/she has spoken to his/her Relocation Consultant about Realtor options. Approved Realtors will be required to work with ARSI and agree to an exclusion clause which will be explained by the Relocation Consultant.

Through an in-depth interview process, the Relocation Consultant will assist in the selection of two qualified, experienced real estate professionals, who will be asked to complete a thorough Broker Market Analysis (BMA) of the employee’s home. If the employee has a real estate agent that he/she would like to utilize, who is experienced, knowledgeable of the local market, and familiar with relocation procedures; he/she may be included in the BMA selection process with the approval of your ARSI relocation consultant.

The two selected agents will meet with the employee to inspect his/her home, talk with him/her about their qualifications and what they would do to market the home effectively. They will then prepare a Broker Marketing Analysis (BMA) report reflecting their opinions of a suggested list price and the probable sale price of the employee’s property within a 90 day marketing period. The agent will then send a copy of the price analysis to the Relocation Consultant for review.

The Relocation Consultant will review the BMA reports and discuss them with the employee, including suggested list prices. The employee will then select one of the agents to list his/her home and ARSI will send the listing agent instructions, with the required “Exclusion Clause” to the selected Realtor. The Relocation Consultant will monitor the performance of the agent throughout the marketing period, keep the employee advised of changes in the market, and help the employee assess his/her options if a change in strategy seems indicated.

Some properties are ineligible for CARBO’s relocation program including those with structural defects of the roof, or foundation; well, or septic systems that fail certification; zoning or easement disputes; building code violations, toxic or hazardous materials or substances (e.g., radon, asbestos, lead paint, composite board siding or UFFI); synthetic stucco siding (EIFS) or co-op apartments.

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All offers received on the home during the Marketing Assistance period must be presented to and negotiated by ARSI. ARSI will present the terms and conditions to the employee for his/her approval but all transactions (i.e., negotiations, counter offers and acceptances) must be managed by ARSI for the employee to receive favorable tax treatment. The employee should call his/her Relocation Consultant immediately upon receiving an offer. If an offer is agreed to and accepted, the Relocation Consultant will sign the contract on behalf of All Relocation Services. The CARBO employee will receive a Contract of Sale from ARSI that mirrors the terms and conditions to which they agreed with the Buyer. Your ARSI Consultant is trained in real estate and negotiations and will be your advocate throughout the negotiations and your relocation process.

If no offer is received during the marketing assistance period, the employee shall receive a guaranteed buyout at the employee’s original purchase price. The employee must submit their HUD-1 form to the Relocation Consultant as evidence of their original purchase price. 60 days into the Marketing Assistance period, CARBO will order 2 independent appraisals. If the average of these appraisals is less than the employee’s purchase price, the difference will be taxable (and not grossed up) to the employee.

Employees are responsible for all costs and risks associated with the home up to and including the date of closing with ARSI. These include proration for taxes, interest on the mortgage, utilities, homeowner’s insurance, agreed upon repairs required from any inspections, and other costs associated with ownership of the home. After the date of closing, ARSI will be responsible for these costs.

At closing, the employee will receive the final net proceeds (the equity) in the property. Net proceeds are defined as the sales price of the home minus liens, mortgages, appropriate prorations and agreed to repair amounts.

CARBO covers the normal and customary closing costs associated with the sale of the employee’s primary residence. It does not cover repairs or concessions Seller agrees to pay on behalf of the buyer. The typical reimbursable cost as follows:

• Sales commission (not to exceed customary, legal rate)

• Legal fees

• Title and abstract expenses

• State or local transfer taxes, revenue stamps

• Recording and notary fees

• Escrow or closing fees

• Home Warranty (Maximum $400)

• Pest Inspection if State Required

• Tax Certificates

CARBO will not reimburse prepayment penalties required of some mortgages when selling a home.

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Please note: It is the responsibility of the employee to work with ARSI to sell his or her residence prior to receiving a Guaranteed Buyout Offer from ARSI.

INDEPENDENT SALE

Should a home be ineligible for the relocation program or should the employee elect not to participate through ARSI, CARBO will reimburse typical costs associated with the home sale transaction but the EMPLOYEE WILL NOT BE ELIGIBLE FOR TAX ASSISTANCE.

Reimbursable expenses include real estate commissions not to exceed 6% and legal fees (i.e., up to $500 for documentation preparation and review) and disbursements (i.e., title search, evaluation and certification of status). HUD statements must support requests for reimbursement.

HOME SELLLING INCENTIVE

CARBO provides a home selling incentive for those individuals who are able to sell their home within ninety (90) days. Employees will receive 2% of the selling price of the home. The incentive will be paid after the property is successfully closed. All offers and contracts must be approved and negotiated in conjunction with ARSI, who will sign as Seller, once terms and conditions meet the employee’s and CARBO’s approval. The employee must not sign, negotiate or take any action regarding his/her home sale on his/her own, without first contacting the ARSI Relocation Consultant.

This payment is not grossed up.

LEASE CANCELLATION

A maximum of 2 months rent will be reimbursed for unavoidable lease cancellation penalties. In requesting reimbursement of lease cancellation expenses, a copy of the lease and any other documents substantiating the expenses should be attached to a relocation expense report, and then submitted to All Relocation Services. When renting in the new location, it is advisable to have a “transfer clause” included in your lease.

HOUSE FINDING TRIP

ARSI will contact the employee directly and oversee the home search through an assigned real estate professional. This service is designed to help the employee identify lifestyle and household needs, and then to find and finance a home that is appropriate for the employee and his/her family. This process will provide objective and reliable information and save the employee time and effort as he/she undertakes the search for his/her new home.

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CARBO will pay reasonable transportation (coach fare if flying), rental car, lodging, and meal expenses for the employee and spouse (no children) to secure permanent housing in the new location. A maximum of one (1) trip is allowed with a limit of (3) days.

TEMPORARY LIVING

Whenever possible, relocation should be scheduled so that the employee can complete the move (with his/her family) and establish residence immediately upon arrival at the new location. If circumstances prevent this from happening, ARSI will arrange for temporary living accommodations for employee and his/her family. Temporary lodging for employee is up to a maximum of $3,000 per month for a maximum of 90 days per relocation event. Reasonable meal expenses for the employee and family will be reimbursed. The employee is required to complete a relocation expense reimbursement form and attach original legible receipts in order to be reimbursed for the above listed expenses. The Relocation Expense form and receipts should be sent to your ARSI Relocation Consultant.

Car rental will be reimbursed up to a maximum of 60 days. This service will be coordinated through All Relocation Services. Mileage reimbursement will be calculated at the current IRS rate.

RETURN TRIP(S)

In the event the employee relocates before his/her household, transportation for return trips home will be allowed every 15 days during the 90 days (maximum 6 trips). Transportation will be limited to air travel (coach fare) or personal vehicle, if a reasonable distance. Whenever possible, trips should be coordinated to include a weekend to reduce the time away from work. All travel will be coordinated through ARSI.

HOME PURCHASE

In order to reduce overall costs to the employee and CARBO, ARSI’s home purchase program must be utilized. The employee should not engage a Realtor until he/she has spoken to his/her Relocation Consultant about Realtor options.

If the employee is a home owner at the time the relocation is initiated, CARBO will reimburse employee for normal closing costs on a new home which by local custom are typically paid by the buyer. The costs include:

• Loan Origination Fee (1 point)

• Mortgage Application Fee

• Lender Processing Fee

• Legal Fees

• Title Search/Insurance

• Credit Report

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• Attorney Fee

• Home Inspection (HR approval is required should the amount exceed $500.00)

• Survey

• Recording and Notary Fees

• Appraisal Fee

• Homeowner Association Transfer Fees

In order to receive reimbursement, the employee must submit the settlement statement or HUD-1 along with the relocation expense report to the Relocation Consultant.

RENTAL ASSISTANCE

CARBO will provide rental assistance to employee through ARSI. The service includes visiting rental sites, community highlights, schools, and providing community/civic information.

Once a rental property is selected and upon execution of the new leasing agreement, the employee should request that the following clause be inserted: “In the event the Tenant is required to move to another area as a condition of employment, Tenant may terminate the lease without penalty upon thirty (30) days written notice to Landlord/Owner. Tenant shall supply Landlord/Owner with written notice from his/her employer that the transfer will occur.”

TRANSPORTATION OF HOUSEHOLD GOODS

The household goods move will be coordinated through ARSI. CARBO will pay the cost of packing, insuring, transporting, and unpacking furniture and personal property. It shall be the responsibility of the employee to pay the cost of shipping pets, domestic or farm animals, disc/dish antennas, dune buggies or go carts, canoes, boats, snowmobiles and their trailers, heavy shop machinery, firewood, bricks, cement blocks, lumber and other building supplies. Wine, ceramics, rocks, or other collections of excessive weight are not covered. If items of this nature are moved, a prorated cost will be calculated and charged to the employee.

Extra stop charges are not authorized by CARBO. If arrangements are made for an extra stop, the charges for this service will be charged to the employee.

If the move is over 500 miles, CARBO will cover the costs to ship or pay mileage for up to 2 vehicles. For moves under 500 miles, the cost of mileage only will be paid for up to 2 vehicles.

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STORAGE

Storage expense is only to be utilized where absolutely necessary. When storage is required, CARBO will pay for up to 60 days.

HOUSEHOLD GOODS CLAIMS PROCESS

In the event of damage or loss, it is the employee’s responsibility to contact ARSI Household Goods Coordinator to request a form and file a claim within 48 hours to report the damage and the claim form must be completed and returned within 30 days. If there are difficulties resolving a claim, the employee should contact the Relocation Consultant for assistance.

FINAL MOVE EXPENSES

Travel will be coordinated through ARSI. The employee will be reimbursed for reasonable expense for meals incurred by the employee and his/her family while en route to the new location. The most direct route must be taken; any deviations from this route (side trips, vacation, etc.) are not reimbursable. The employee is required to complete a relocation expense report for the above listed expense and return it to ARSI.

All relocation expenses and services must be completed and submitted for reimbursement (where applicable) within 1 year of employee’s date of transfer.

TAX GROSS UP

CARBO may reimburse relocation expenses as outlined in the policy. Certain expenses may be excludable from gross income or claimed as deductions on the employee’s Federal tax return. Some of the expenses are not excludable or deductible for tax purposes. Those to be grossed-up by CARBO are listed below:

• Temporary Living

• House Finding Trip

• Lease Cancellation

• Return Trips

• Home Purchase

• Storage (after 30 days)

Expenses which are “qualified” as Deductible/Excludable Moving Expenses by the employee include:

• Transportation costs of moving household goods, personal effects and car

• In-transit storage, not to exceed 30 days

• Some transportation expenses for moving the employee and his/her family

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• Expenses incurred for lodging for the employee and family while en route to the new location

• Some home purchase costs

Expense which are “non-qualified” as Deductible Moving Expenses by the employee include:

• New home finding expenses

• Some home purchase costs

• Temporary living

• Lease cancellation

• In-transit storage over 30 days

• Reimbursed home sale costs

• Miscellaneous allowance

• Part of final trip mileage

At the end of the calendar year, a RTR (Relocation Tax Report) will be provided to each employee. This will show the total amount of relocation expense payments that have been included in the employee’s income. This will guide the employee in determining deductions when filing his/her return. If multiple moves occur in the same calendar year, a separate RTR will be provided for each move

This document in no way shall be construed to contain tax or legal advice for recipients of relocation benefits. It is the employee’s responsibility to assure proper withholding allowances. Neither CARBO nor ARSI makes any representation as to legal or tax matters inherent in this document.

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AGREEMENT FOR REPAYMENT OF

RELOCATION EXPENSES

The undersigned (“Employee”) will receive relocation benefits from CARBO to assist in moving his/her residence in connection with his/her employment by CARBO. These benefits are provided by CARBO subject to the provisions described in the relocation policy. Employee acknowledges he/she has received a copy of this guide and agrees to abide by its provisions.

Employee further agrees to the following terms and conditions with respect to repayment of any relocation benefits provided during his/her employment with CARBO:

1.	Employee understands and agrees that any relocation benefits received from CARBO shall be used solely to defray bona fide expenses reasonably incurred by Employee when he/she moves or transfers to a new location for purposes of employment with CARBO. These benefits shall not be used for any other purpose.
2.	All qualified relocation expenses submitted for reimbursement by CARBO must be accompanied by a valid receipt, invoice, or other documentation indicating the nature and amount of the expense incurred. CARBO will not pay for any otherwise qualified relocation expense for which supporting documentation is not submitted timely.
3.	In the event Employee receives benefits in excess of the amount he/she is eligible to receive, Employee shall promptly repay all such amounts to CARBO. In lieu of direct payment of such amounts, Employee hereby expressly authorizes CARBO to withhold any excess benefit payments he/she has improperly received from any payments which are due or shall become due to Employee from CARBO, including wages and business expense reimbursements. If the payment of such excess relocation benefits is caused by any intentional misrepresentation or concealment on the part of Employee, he/she shall be subject to disciplinary action, up to and including termination of employment by CARBO, as well as potential legal action.
4.	Employee understands and agrees that the following terms apply to their relocation benefits provided by CARBO:

(a) If Employee remains a regular full-time employee of CARBO for twelve (12) months following the Effective Date, as defined in sub-section (c) below, Employee shall thereafter have no further obligation to repay to CARBO any relocation benefits received.

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(b)

If Employee voluntarily terminates his/her employment with CARBO at any time, except for medical reasons, or is terminated for gross misconduct, within twelve (12) months following the Effective Date, Employee agrees to repay CARBO the pro-rata portion of the relocation benefits for the remainder of the 12-month period. Thus, 1/12th of the total relocation benefits received by Employee will be forgiven for each month of service calculated from the Effective Date to the date of termination. If, for example, Employee voluntarily terminates his/her employment six months after the Effective Date, Employee shall be responsible for repayment to CARBO of 50% of the total relocation benefits received. Employee understands and agrees that these obligations survive beyond his/her employment with CARBO.

(c)

“Effective Date,” for purposes of this Section, shall be defined as either: (i) Employee’s date of hire; or (ii) the effective date of Employee’s transfer to a new location, whichever is applicable. The first definition shall apply to employees newly hired by CARBO who become eligible for relocation benefits. The second definition shall apply to existing CARBO Employees who are eligible to receive relocation benefits in connection with a transfer of residence.

5.	If Employee voluntarily terminates his/her employment owing a balance under Section 4, above, Employee expressly authorizes CARBO to withhold from his/her final wage payment and/or business expense reimbursement any amount up to 1/12th of the total relocation benefits received by Employee. Employee shall promptly pay the total remaining balance directly to CARBO. If, following his/her termination, Employee fails to repay to CARBO all or any portion of the relocation benefits owed under this Agreement, CARBO reserves the right to initiate legal action to collect such payments. In that event, Employee agrees to pay CARBO its reasonable attorneys’ fees and costs incurred in any collection action. Employee further agrees to pay CARBO reasonable interest (at the prime rate plus 1 %) on any unpaid balances due.
6.	Nothing in this Agreement is intended to create any contract of continued employment by CARBO or to modify the at-will nature of Employee’s employment.
	I have read, understand and agree to comply with the terms of this Agreement.

Signature	Date
Employee Name

Relocation benefits will not be processed without a signed
Employee Reimbursement Agreement

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EX-31.1

Exhibit 31.1

Quarterly Certification
As required by Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934

I, Gary A. Kolstad, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CARBO Ceramics Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2009

/s/ Gary A. Kolstad Gary A. Kolstad

President & CEO

EX-31.2

Exhibit 31.2

Quarterly Certification
As required by Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934

I, Ernesto Bautista III, certify that:

1. I have reviewed this quarterly report on Form 10-Q of CARBO Ceramics Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 5, 2009

    /s/ Ernesto Bautista III Ernesto Bautista III

Chief Financial Officer

EX-32

Exhibit 32

Certification Pursuant to
18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), each of the undersigned officers of CARBO Ceramics Inc. (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 (the “Form 10-Q”) of the Company fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Form 10-Q.

Dated: August 5, 2009

    /s/ Gary A. Kolstad Name: Gary A. Kolstad

Title: Chief Executive Officer

Dated: August 5, 2009

    /s/ Ernesto Bautista III Name: Ernesto Bautista III

Title: Chief Financial Officer