<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
CARBO CERAMICS INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
CARBO CERAMICS INC.
---------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Shareholders of Carbo Ceramics Inc.:
Notice is hereby given that the Annual Meeting of Shareholders of Carbo
Ceramics Inc. will be held Tuesday, April 14, 1998 at 11:00 A.M. Central Time,
at the Mansion on Turtle Creek, 2821 Turtle Creek Boulevard, Dallas, Texas, for
the following purposes:
1. To elect six directors, the names of whom are set forth in the
accompanying proxy statement, to serve until the 1999 Annual Meeting.
2. To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company.
3. To transact such other business as may properly be brought before the
meeting.
Shareholders of record at the close of business on March 13, 1998, are the only
shareholders entitled to notice of and to vote at the Annual Meeting of
Shareholders.
By Order of the Board of Directors,
Paul G. Vitek
Secretary/Treasurer
Irving, Texas
March 18, 1998
IMPORTANT
Whether or not you expect to attend the meeting, please vote, sign, date and
return the enclosed proxy in the enclosed self-addressed envelope as promptly
as possible. If you attend the meeting, you may vote your shares in person,
even though you have previously signed and returned your proxy.
<PAGE> 3
CARBO CERAMICS INC.
600 E. Las Colinas Boulevard
Suite 1520
Irving, Texas 75039
--------------------
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
The enclosed Proxy is solicited on behalf of the Board of Directors of
Carbo Ceramics Inc. (the "Company") for use at the Company's Annual Meeting of
Shareholders ("Annual Meeting") to be held April 14, 1998 at 11:00 A.M local
time, or at any adjournment or postponement thereof, for the purposes set forth
herein and in the accompanying Notice of Annual Meeting of Shareholders. The
Annual Meeting will be held at the Mansion on Turtle Creek, 2821 Turtle Creek
Boulevard, Dallas, Texas.
The Company's principal executive offices are located at 600 East Las
Colinas Boulevard, Suite 1520, Irving, Texas 75039. The telephone number at
that address is (972) 401-0090.
These proxy solicitation materials were mailed on or about March 18,
1998 to all shareholders entitled to vote at the Annual Meeting.
INFORMATION CONCERNING SOLICITATION AND VOTING
RECORD DATE AND SHARES OUTSTANDING
Shareholders of record at the close of business on March 13, 1998 are
entitled to notice of, and to vote at, the Annual Meeting. At the record date,
14,602,000 shares of the Company's Common Stock were issued and outstanding and
entitled to vote at the meeting.
REVOCABILITY OF PROXIES
A shareholder giving a proxy pursuant to this solicitation may revoke
it at any time before its use by delivering to the Secretary of the Company a
written notice of revocation or a duly executed proxy bearing a later date or
by attending the Annual Meeting and voting in person.
VOTING AND SOLICITATION
Every shareholder is entitled to one vote for each share held with
respect to each matter, including the election of directors, that comes before
the Annual Meeting. Shareholders do not have the right to cumulate their votes
in the election of directors. If a shareholder specifies how the proxy is to
be voted with respect to any of the proposals for which a choice is provided,
the proxy will be voted in accordance with such specifications. If a
shareholder fails to specify with respect to such proposals, the proxy will be
voted FOR all director nominees and FOR the ratification of Ernst & Young LLP
as independent auditors. Broker non-votes and abstentions are not treated as
votes cast or shares entitled to vote with respect to such proposals.
The cost of preparing, assembling, and mailing the proxy material and
of reimbursing brokers, nominees, and fiduciaries for the out-of-pocket and
clerical expenses of transmitting copies of the proxy material to the
beneficial owners of shares held of record by such persons will be borne by the
Company. The Company does not intend to solicit proxies otherwise than by use
of the mail, but certain employees of the Company, without additional
compensation, may use personal efforts, by telephone or otherwise, to obtain
proxies.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
Proposals of shareholders of the Company which are intended to be
presented by such shareholders at the Company's 1999 Annual Meeting must be
received by the Secretary of the Company no later than November 18, 1998 in
order to be included in the proxy soliciting materials relating to that
meeting.
1
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of March 1, 1998, with respect to
each person who is known to the Company to be the beneficial owner of more than
5% of the outstanding shares of Common Stock of the Company, the name and
address of such owner, the number of shares of Common Stock beneficially owned
and the percentage such shares comprised of the outstanding shares of Common
Stock of the Company. Except as indicated, each holder has sole voting and
dispositive power over the listed shares.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED
---------------------
NUMBER PERCENT
--------- ---------
NAME AND ADDRESS
OF BENEFICIAL OWNER
- -------------------
<S> <C> <C>
Lewis L. Glucksman 1,800,000 12.06%
388 Greenwich Street
New York, New York 10013
William A. Griffin 850,000 5 .70%
9753 Pinelake Drive
Houston, Texas 77055
William C. Morris (1) 5,752,000 38.54%
100 Park Avenue
New York, New York 10017
Jesse P. Orsini (2) 765,000 5 .13%
3713 Santiago Ct.
Irving, Texas 75062
Robert S. Rubin 1,700,000 11.39%
390 Greenwich Street
New York, New York 10013
George A. Weigers 900,000 6 .03%
230 Bridge Street
Vail, Colorado 80657
</TABLE>
(1) Shares shown as beneficially owned by Mr. William C. Morris include
700,000 shares of Common Stock owned by Mrs. William C. Morris as to
which Mr. Morris disclaims any beneficial ownership.
(2) Shares shown as beneficially owned by Mr. Jesse P. Orsini include
125,000 shares of Common Stock which Mr. Orsini has the right to
acquire within 60 days based on the terms of options granted to Mr.
Orsini under the Carbo Ceramics Inc. 1996 Stock Option Plan for Key
Employees.
2
<PAGE> 5
The following table sets forth the number of shares of Common Stock of
the Company owned by each of the current directors and executive officers and
by all directors and executive officers as a group as of March 1, 1998.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
------------------------------- PERCENT OF
CURRENTLY ACQUIRABLE COMMON STOCK
DIRECTORS OWNED WITHIN 60 DAYS BENEFICIALLY OWNED
---------- -------------- ------------------
<S> <C> <C> <C>
Claude E. Cooke, Jr. 1,500 0 *
William A. Griffin, Jr. 850,000 0 5.70%
William C. Morris (1) 5,752,000 0 38.54%
John J. Murphy 3,500 0 *
Jesse P. Orsini 640,000 125,000 5.13%
Robert S. Rubin 1,700,000 0 11.39%
OTHER EXECUTIVE OFFICERS
Terry P. Keefe 1,000 55,000 *
C. Mark Pearson 1,000 25,000 *
Paul G. Vitek 0 55,000 *
DIRECTORS AND EXECUTIVE OFFICERS
AS A GROUP (1) 8,949,000 260,000 61.70%
</TABLE>
*Less than 1% of total shares outstanding
(1) Shares shown as beneficially owned by Mr. William C. Morris include
700,000 shares of Common Stock owned by Mrs. William C. Morris to which
Mr. Morris disclaims any beneficial ownership.
ELECTION OF DIRECTORS
NOMINEES
A board of six directors is to be elected at the meeting. Each
director elected to the board will hold office until the next Annual Meeting or
until his or her successor has been elected and qualified. Unless otherwise
instructed, the proxy holders will vote the proxies received by them for the
six nominees named below, all of whom are presently directors of the Company.
In the event that any nominee is unable or declines to serve as a director at
the time of the Annual Meeting, the proxies will be voted for any nominee who
shall be designated by the present Board of Directors to fill the vacancy. The
proxies cannot be voted for a greater number of persons than the number of
nominees named in this proxy statement. It is not expected that any nominee
will be unable or will decline to serve as a director.
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE
DURING PAST 5 YEARS AND DIRECTOR
NAME (AGE) OTHER INFORMATION SINCE
---------- ----------------- -----
<S> <C> <C>
William C. Morris (59) Chairman of the Board of the Company; Chairman of the 1987
Board of Directors of J. & W. Seligman & Co., Incorporated
(investment advisory firm); Chairman of the Board of
Tri-Continental Corporation; and Chairman of the Boards of
the companies in the Seligman family of investment companies,
all since 1988. Director of Kerr-McGee Corporation.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE
DURING PAST 5 YEARS AND DIRECTOR
NAME (AGE) OTHER INFORMATION SINCE
---------- ----------------- -----
<S> <C> <C>
Claude E. Cooke, Jr. (68) Of Counsel with Baker & Botts (law firm); 1996
Partner, Hutcheson & Grundy LLP (law firm) from 1996 to 1997;
Attorney with Pravel, Hewitt, Kimball & Krieger from 1990 to
1996; employed by Exxon Production Research Company from
1954 to 1986; the inventor of sintered bauxite, the original
ceramic proppant.
William A. Griffin, Jr. (82) Chairman of the Board, Emerit, and former Chief Executive 1987
Officer of Daniel Industries, Inc. (producer of oil and gas
measurement systems).
John J. Murphy (66) Chairman and Chief Executive Officer of Dresser Industries, 1996
Inc. (hydrocarbon energy services and products)
from 1983 to 1995; President of Dresser Industries, Inc.
from 1982 to 1992; Director of PepsiCo., Inc., Kerr-McGee
Corporation and W.R. Grace & Co.
Jesse P. Orsini (57) President and Chief Executive Officer of the Company. 1987
Robert S. Rubin (66) Managing Director of Salomon Smith Barney (investment 1997
banking firm) and predecessor firms since 1989.
</TABLE>
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
The Board of Directors met four times during the last fiscal year. The
Board of Directors has Audit and Compensation committees each comprised of
three members. The Board of Directors does not have a nominating committee.
The Audit Committee includes: William C. Morris, Claude E. Cooke and John
J. Murphy, all of whom are directors of the Company. The Committee met once
during the last fiscal year. The Audit Committee recommends engagement of the
independent auditors, considers the fee arrangement and scope of the audit,
reviews the financial statements and the independent auditors' report,
considers comments made by the independent auditors with respect to the
Company's internal control structure, and reviews internal accounting
procedures and controls with the Company's financial and accounting staff.
The Compensation Committee is discussed below.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee includes: William C. Morris, William A. Griffin
and John J. Murphy, all of whom are directors of the Company. The Committee
met twice during the last fiscal year. The Compensation Committee establishes
policies relating to the compensation of executive officers and key management
employees of the Company, reviews and approves the President and Chief
Executive Officer's recommendations on incentive compensation awards and
oversees the administration of the Company's stock option plan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on a review of forms furnished to the Company, the Company determined
that William A. Griffin, Jr., a director of the Company, belatedly filed a Form
4 covering one transaction involving the transfer of shares of the Company's
Common Stock to a charitable trust in May 1997.
4
<PAGE> 7
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth certain information concerning annual
and long-term compensation for the Company's Chief Executive Officer and
executive officers whose total salary and bonus exceeded $100,000 for services
rendered in all capacities to the Company during the year ended December 31,
1997:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- -------------------------------------------------------------------------------------------------------------------------
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
-------------------------------------------- ------------
OTHER NUMBER OF
ANNUAL SECURITIES
COMPEN- UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (1) SATION (2) OPTIONS
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Jesse P. Orsini, Director, President 1997 $ 250,000 $ 331,118 $ 15,155 -
and Chief Executive Officer 1996 223,067 110,320 13,817 250,000
Paul G. Vitek, Vice President of 1997 88,800 165,000 15,155 -
Finance, Secretary and Treasurer 1996 84,000 115,000 13,817 110,000
Terry P. Keefe, Vice President of 1997 88,800 165,000 15,155 -
Manufacturing 1996 84,900 115,000 13,817 110,000
C. Mark Pearson, Vice President 1997 66,750 140,000 45,896 110,000
of Marketing (3) 1996 - - - -
</TABLE>
(1) For Messrs. Vitek, Keefe and Dr. Pearson, bonus consists of amounts
payable under the Company's incentive compensation plan and includes a deferred
bonus that may be forfeited to the Company under certain circumstances. The
deferred bonus for Messrs. Vitek and Keefe and Dr. Pearson was $90,000, $90,000
and $80,000, respectively, for 1997 and $55,000 and $50,000, for Messrs. Vitek
and Keefe respectively, for 1996.
(2) For Messrs. Orsini, Vitek and Keefe, consists of Company contributions
to the savings and profit sharing plan. For Mr. Pearson, consists of certain
reimbursed relocation expenses.
(3) Dr. Pearson joined the Company on March 15, 1997.
The following table sets forth certain information concerning options
granted during 1997 to the named executives:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS (1)
- -------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS GRANTED EXERCISE OR
UNDERLYING TO EMPLOYEES IN BASE PRICE EXPIRATION GRANT DATE
NAME OPTIONS GRANTED FISCAL YEAR PER SHARE DATE PRESENT VALUE (2)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
C. Mark Pearson 100,000 38.46% $19.00 3/15/2007 $669,000
10,000 3.85% $32.25 12/16/2007 $113,500
</TABLE>
- ----------
(1) All options become exercisable in four equal annual installments
commencing on the first anniversary of the date of grant or earlier upon the
change in control of the Company.
(2) Option values reflect Black-Scholes model output for options. The
assumptions used in the model were expected volatility of .337, risk-free rate
of return of 5.34%, dividend yield of 1.0%, and time to exercise of five years.
5
<PAGE> 8
The following table summarizes options exercised during 1997 and
presents the value of unexercised options held by the named executives at
December 31, 1997:
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
NUMBER OF UNEXERCISED OPTIONS OPTIONS
SECURITIES AT FISCAL YEAR-END AT FISCAL YEAR-END
UNDERLYING EXERCISABLE (E)/ EXERCISABLE (E)/
NAME OPTIONS EXERCISED VALUE REALIZED UNEXERCISABLE (U) UNEXERCISABLE (U)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Jesse P. Orsini -- $ -- 187,500 U $2,812,500 U
62,500 E 937,500 E
Paul G. Vitek -- -- 82,500 U 1,237,500 U
27,500 E 412,500 E
Terry P. Keefe -- -- 82,500 U 1,237,500 U
27,500 E 412,500 E
C. Mark Pearson -- -- 110,000 U 1,300,000 U
</TABLE>
The Company has entered into an employment agreement with Mr. Orsini,
which will expire on June 30, 2000 (the "Employment Term"), pursuant to which
Mr. Orsini is employed as President and Chief Executive Officer of the Company.
During the Employment Term, Mr. Orsini will receive an annual base salary of
not less than $250,000 and an incentive bonus for each fiscal year (prorated
for 1996 and 2000) equal to the sum of (a) 0.5% of the Company's earnings
before interest and taxes for such fiscal year ("EBIT) up to $20,000,000 plus
(b) 1.0% of EBIT between $20,000,000 and $25,000,000 plus (c) 2.0% of EBIT in
excess of $25,000,000. Mr. Orsini will also be entitled to continue to
participate in all benefit plans available to other executive officers of the
Company during the Employment Term, other than the Company's Incentive
Compensation Plan. In the event that Mr. Orsini's employment is terminated by
the Company without cause during the Employment Term, Mr. Orsini will receive
two years' base salary, payable in installments, and a prorated incentive
bonus, any unvested stock options that he holds under the Company's stock
option plan will vest immediately and all of his outstanding options under the
Company's stock option plan will be exercisable for a period of 30 days
following termination. In the event that Mr. Orsini's employment is terminated
for any other reason, Mr. Orsini will receive his base salary earned to the
date of termination and any earned but unused vacation and any stock options
that he holds will terminate in accordance with the terms of the Company's
stock option plan. In addition, in the event of Mr. Orsini's death or
disability or if Mr. Orsini terminates his employment following a change in
control of the Company, Mr. Orsini will receive a prorated incentive bonus for
the year in which his employment terminates. The agreement also contains a
five-year non-competition covenant that would become effective upon termination
of Mr. Orsini's employment for any reason.
Directors who are employees of the Company are not compensated for
serving as directors. Directors who are not employees of the Company are paid
$4,000 per calendar quarter plus $1,000 per meeting for attending meetings of
the Board of Directors or meetings of any committee thereof not immediately
preceding or following a meeting of the Board of Directors. The Chairman of
the Board of Directors is paid $8,000 per calendar quarter plus $1,000 per
meeting for attending meetings of the Board of Directors or meetings of any
committee thereof not immediately preceding or following a meeting of the Board
of Directors. All directors are reimbursed for out-of-pocket expenses incurred
by them in attending meetings of the Board of Directors and its committees and
otherwise in performing their duties as directors.
6
<PAGE> 9
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION POLICY. The goal of the Company's compensation policy is to
ensure that executive compensation is related to and supports the Company's
overall objectives of improving profitability and enhancing shareholder value.
To achieve this goal, the Compensation Committee has adopted the following
guidelines to direct compensation decisions:
o provide a competitive compensation package that enables the Company to
attract and retain superior management personnel;
o relate compensation to the performance of the Company and the individual;
o align employee objectives with the objectives of shareholders by
encouraging executive stock ownership.
ELEMENTS OF COMPENSATION. The Committee believes that the above objectives
are best achieved by combining current and deferred cash compensation with
equity based compensation. In 1997, the Company's compensation program for
executive officers and other key managers consisted of (i) base salary; (ii)
performance-based current and deferred bonuses based upon the Company's net
income before tax; (iii) stock option grants under the Company's 1996 Stock
Option Plan for Key Employees; and (iv) matching contributions and
discretionary contributions under the Company's Savings and Profit Sharing
Plan.
Base Salary. Executives' base salary levels are reviewed annually to
determine whether they are near the median range for persons holding similar
positions with companies that are engaged in similar businesses, are of a
similar size and complexity or that would otherwise compete for the services of
the Company's key managers and executive officers . It is the goal of the
Compensation Committee to set salary ranges for the Company's executive
officers at the 50th percentile when compared to these similar businesses. The
Compensation Committee uses various salary surveys, prepared by independent
compensation analysts, to determine the salary level that falls at the 50th
percentile. Individual salaries are established within the salary range based
on individual performance in the most recently completed twelve months.
Current and Deferred Bonuses. Since the inception of the Company, it has
been management's objective to have a significant portion of key employee
compensation performance-based. In order to achieve this objective the Company
established the Carbo Ceramics Inc. Incentive Compensation Plan ("the Incentive
Compensation Plan") that generates an incentive compensation "pool", the size
of which is determined by the net income before tax that is generated by the
Company annually. Upon its formation, the Compensation Committee reviewed and
ratified the Incentive Compensation Plan.
The President and Chief Executive Officer of the Company recommends to the
Compensation Committee a distribution of the pool among key employees,
including executive officers, of the Company. Individual performance is the
key factor considered by the President and Chief Executive Officer in
determining the recommended distribution for each key employee and executive
officer. In order to retain the services of key employees and executive
officers, a substantial portion of the amount awarded under the Incentive
Compensation Plan is paid on a deferred basis over a three year period and is
subject to forfeiture if the executive's employment with the Company ceases for
any reason other than death, permanent disability or normal retirement. In
1997, the portion of incentive compensation that was deferred was approximately
50%.
Stock Options. The Compensation Committee strongly believes that the
interests of shareholders and executives become more closely aligned when
executives are provided with an opportunity to acquire a proprietary interest
in the Company through ownership of the Company's Common Stock. Accordingly,
key employees and executive officers of the Company are eligible to participate
in the 1996 Stock Option Plan for Key Employees whereby they are granted
options to purchase shares of the Company's Common Stock in the future at a
price that is specified at the time of the grant. Stock options are granted
with an exercise price of no less than the fair market value on the date of the
grant and are exercisable in four equal annual installments beginning one year
after the date of the grant.
Individual stock option grants are determined based on individual and
company performance. Stock options to purchase a total of 110,000 shares of
the Company's Common Stock were granted to executive officers, excluding the
President and Chief Executive Officer, of the Company in 1997. Of these stock
options, 100,000
7
<PAGE> 10
allow the option holder to purchase shares of the Company's Common Stock at a
price of $19.00 per share and 10,000 allow the option holder to purchase shares
of the Company's Common Stock at price of $32.25 per share. All of the options
were granted with exercise prices equal to the market value of the Company's
Common Stock at the time the options were granted.
CEO COMPENSATION. Jesse P. Orsini has been President and Chief Executive
Officer of the Company since its inception in 1987. Mr. Orsini's compensation
package has been designed to encourage short and long-term performance in line
with shareholder interests. Mr. Orsini has an employment agreement with the
Company that expires on June 30, 2000. Under the terms of the agreement, Mr.
Orsini will receive an annual base salary of not less than $250,000 per year
and an incentive bonus based on the net income before tax generated by the
Company. In light of the existence of the employment agreement between the
Company and Mr. Orsini, none of the incentive bonus earned under the terms of
the agreement is deferred. In 1996, Mr. Orsini was granted options to
purchase 250,000 shares of the Company's Common Stock at a price of $17.00 per
share under the terms of the 1996 Stock Option Plan for Key Employees.
The Compensation Committee believes that Mr. Orsini's total compensation is
reflective of his position and responsibility and that he is paid comparably to
chief executive officers of companies of similar size and complexity.
Carbo Ceramics Inc. Compensation Committee
William C. Morris, Chairman
William A. Griffin, Jr.
John J. Murphy
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Subject to ratification by the shareholders, the Board of Directors
has reappointed Ernst & Young LLP as independent auditors to audit the
financial statements of the Company for the current fiscal year.
Ernst & Young LLP has acted as auditors for the Company since its
formation in 1987. Representatives of the firm of Ernst & Young LLP are
expected to be present at the Annual Meeting and will have an opportunity to
make a statement if they so desire and will be available to respond to
appropriate questions.
The Audit Committee and the Board of Directors recommend the
shareholders vote "FOR" such ratification.
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before
the Annual Meeting. However, if other matters should properly come before the
Annual Meeting, it is the intention of each of the persons named in the proxy
to vote in accordance with his judgement on such matters.
8
<PAGE> 11
STOCK PERFORMANCE GRAPH
The following graph sets forth the cumulative total shareholder return
(assuming reinvestment of dividends) to Carbo Ceramics Inc. shareholders during
the period beginning April 23, 1996, and ending December 31, 1997, as well as
an overall stock market index (The Nasdaq Stock Market Total Return Index) and
a peer group index (Oil and Gas Field Service Stocks, Source: Media General
Financial Services):
<TABLE>
<CAPTION>
COMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
- --------------------------- FISCAL YEAR ENDING -------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COMPANY 4/23/96 6/30/96 9/30/96 12/31/96 03/31/97 6/30/97 9/30/1997 12/31/1997
CARBO CERAMICS INC 100 106.02 96.72 101.93 91.33 133.23 162.98 157.21
INDUSTRY INDEX 100 97.72 99.33 116.83 121.25 141.77 190.72 175.12
(OIL & GAS FIELD)
BROAD MARKET 100 99.60 102.34 107.16 101.71 120.33 140.29 131.45
(NASDAQ)
</TABLE>
THE INDUSTRY INDEX CHOSEN WAS:
MG INDUSTRY GROUP 351 - Oil and Gas Field Services
THE BROAD MARKET INDEX CHOSEN WAS:
NASDAQ MARKET INDEX
The stock performance graph assumes $100 was invested on April 23,
1996.
9
<PAGE> 12
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
CARBO CERAMICS INC.
The undersigned hereby appoints Jesse P. Orsini and Paul G. Vitek, or any one of
them, as proxies, each with the power to appoint his substitute, and hereby
authorizes each of them to represent and to vote, as designated on the reverse
side, all the shares of Common Stock of Carbo Ceramics Inc. held of record by
the undersigned on March 13, 1998 at the Annual Meeting of Shareholders to be
held on April 14, 1998, or any adjournment or continuation thereof.
(PLEASE SEE REVERSE SIDE)
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE> 13
<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
PLEASE MARK YOUR
VOTES AS INDICATED
IN THIS EXAMPLE [X]
1. To elect six Directors. 2. Proposal to ratify the 3. In their discretion to
appointment of Ernst & vote upon such other
FOR all nominees WITHHOLD Young LLP, certified business as may properly
listed below (except AUTHORITY public accountants, as come before the meeting.
as marked to the to vote for all nominees independent auditors
contrary below) listed below for the fiscal year
ending December 31, 1988.
[ ] [ ]
FOR AGAINST ABSTAIN
INSTRUCTIONS: To withhold authority to vote for
any individual nominee strike a line through the [ ] [ ] [ ]
nominee's name in the list below:
The Board of Directors
Claude E. Cooke, Jr. recommends that you vote
William A. Griffin, Jr. FOR the nominees and the
William C. Morris proposal listed above.
John J. Jurphy this proxy when properly
Jesse P. Mrsini executed will be voted in
Robert S. Rubin the manner directed herein
by the undersigned
- - - - - - shareholder. if no direction
- is given, this proxy will be
- voted FOR the nominees and
- the proposal.
DATED: , 1998
----------------
----------------------------
(SIGNATURE OF SHAREHOLDER)
----------------------------
(SIGNATURE IF HELD JOINTLY)
Please sign exactly as name appears hereon. When shares are held by joint tenants, both should sign. When signing
as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please
sign full corporate name by president or other authorized officer. If a partnership, please sign in partnership
name by authorized person.
- --------------------------------------------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
</TABLE>
