EXHIBIT 10.5
CARBO CERAMICS INC.
INCENTIVE COMPENSATION PLAN
(AS AMENDED JANUARY 14, 2003)
TERMS
Purpose: The Carbo Ceramics Inc. Incentive Compensation Plan (the "Plan")
is being adopted by the Board of Directors of the Company to
foster the interest of the executives and other key employees of
the Company in the Company's financial performance.
Duration: The Plan is effective January 1, 2001, and unless earlier
terminated or revoked by the Board, it will terminate on December
31, 2003.
The Pool: Payments to an executive under the Plan will be made out of a
"Total Pool" of which the total size will be determined by the
"Net Income Before Tax" ("NIBT") of the Company as indicated by
the financial statement of the Company.
The Total Pool shall be considered to be comprised of two parts,
the "Current Pool" and the "Deferred Pool."
For each annual Plan period ending December 31st:
If Positive NIBT is: The Total Pool will be:
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- $0 up to $5,000,000 - An amount equal to 5% of
NIBT.
- $5,000,001 up to $50,000,000 - $250,000 plus an amount
equal to 2.5% of all NIBT
over $5,000,000 and up to
$50,000,000
For purposes of determining the Current Pool and the Deferred
Pool, the Current Pool will be equal to 50% of the Total Pool.
In all cases, the Deferred Pool shall be equal to the Total Pool
less the Current Pool.
Payments: In January of each year in which the Plan is in effect, the
Company shall calculate the Total Pool based on the NIBT for the
prior year and the President shall propose, for approval by the
Compensation Committee of the Company, a list of individual
executives to whom payments from the
Total Pool shall be made and a schedule of payments to such
individual executives. Any difference in the size of the Total
Pool caused by a variance between the actual audited NIBT and the
January estimate shall be an adjustment to the Total Pool for the
following year.
Actual payment of the amounts awarded from the Deferred Pool will
be made in three equal annual installments beginning in the
January immediately following the year in which the executive is
informed of the Deferred Pool award (e.g., 2002 Deferred Pool
awards would be announced in January, 2003, and paid in equal
installments in January of 2004, 2005 and 2006).
An executive shall forfeit all rights to receive any unpaid
portion of the Deferred Pool if such executive's employment with
the Company terminates for any reasons other than normal
retirement, death, or permanent disability. In the event of normal
retirement, death, or permanent disability, the unpaid portion of
any Deferred Pool can be either paid out in lump sum or per the
terms of the original Plan, at the discretion of the Company.
Notwithstanding any other provision of this Plan, the President
and Chief Executive Officer of the Company shall not be eligible
to receive any payments pursuant to this Plan.
Revocability: The Board of Directors of the Company shall have the absolute
right to interpret the Plan and to modify or terminate the Plan if
there shall be a material change in the nature of the business of
the Company, in the ownership or control of the Company, or if the
Board of Directors in its judgment determines that continuation of
the Plan would not be in the Company's best interests as a result
of a material change in circumstances.