Exhibit 10.1

SEPARATION AGREEMENT

This Separation Agreement (this “Agreement”) is made as of August 9, 2012, to
become effective as of August 15, 2012 (the “Effective Date”), by and between
David G. Gallagher (the “Executive”) and CARBO Ceramics Inc., a Delaware
corporation (the “Company”). Executive and the Company may be collectively
referred to herein as the “Parties” and each may be referred to individually as
a “Party.”

WHEREAS, the Company currently employs the Executive as its Vice President of
Marketing and Sales;

WHEREAS, the Executive and the Company mutually desire to terminate their
employment relationship and Executive desires to resign his position as Vice
President of Marketing and Sales and all other director, officer and employee
positions, if any, held by the Executive in the Company or any of its
subsidiaries or affiliates effective as of the Effective Date; and

WHEREAS, the parties desire to set forth their respective rights and obligations
in respect of the end of the Executive’s employment relationship with the
Company in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and conditions set
forth herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties, intending to be legally
bound hereby, agree as follows:

1. Termination of Employment. The Executive hereby resigns, effective as of the
Effective Date, his position as Vice President of Marketing and Sales of the
Company and all other director, officer and employee positions, if any, held by
the Executive in the Company or any of its subsidiaries or affiliates and agrees
to execute all additional documents and take such further steps as may be
required to effectuate such resignation(s). The parties hereto hereby agree that
the Executive’s employment with the Company and its subsidiaries and affiliates
shall end as of the Effective Date.

2. Certain Payments and Benefits.

(a) Accrued Obligations. Within thirty (30) days following the Effective Date,
the Company shall pay to the Executive (i) all base salary earned but unpaid as
of the Effective Date, (ii) an amount in respect of all vacation earned but not
used prior to the Effective Date, and (iii) an amount representing reimbursement
of all reasonable, ordinary and necessary expenses incurred by the Executive
prior to the Effective Date in the performance of the Executive’s duties as Vice
President of Marketing and Sales of the Company; provided that the Executive
accounted to the Company for such expenses in a manner reasonably prescribed by
the Company in accordance with its generally applicable expense reimbursement
policy and practices.

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(b) Prorated Incentive Bonus. The Company agrees to pay the Executive an amount
equal to the amount he would have otherwise received under the Company’s Annual
Incentive Arrangement (the “AIA”) for the 2012 Performance Period (as defined
under the AIA) had his employment not ended on the Effective Date, multiplied by
a fraction, the numerator of which is the number of days in the period
commencing on January 1, 2012 and ending on the Effective Date (inclusive) and
the denominator of which is 366. One-half of such amount shall be paid at the
same general time in 2013 that participants under the AIA receive payments for
the 2012 Performance Period, and one-half of such amount shall be paid on the
one-year anniversary of the Effective Date.

(c) Restricted Stock. All unvested awards of restricted stock of the Company
granted to the Executive pursuant to the CARBO Ceramics Inc. Omnibus Incentive
Plan and outstanding immediately prior to the Effective Date shall be
immediately forfeited and cancelled effective as of the Effective Date.

(d) Continued Medical Benefits. For the period beginning on the Effective Date
and ending on the 18-month anniversary thereof, the Company shall continue to
provide medical benefits to the Executive which are substantially similar to
those provided generally to executive officers of the Company (including any
required contribution by such executive officers) pursuant to such medical plan
as may be in effect from time to time as if the Executive’s employment had not
been terminated (it being understood that the Company may provide such coverage
by paying the Executive’s COBRA premiums, less any contribution required by the
Executive); provided, that if the Executive is eligible to receive health care
benefits from another source (including a subsequent employer) during such
18-month period, the Company shall then be relieved and excused from any further
obligations under this Section 2(d). The Executive agrees to provide the Company
with prompt written notice upon becoming eligible to receive any such benefits
from another source.

(e) No Other Payments or Benefits. The Executive acknowledges that, except for
the payments and benefits provided for in Section 2 of this Agreement, the
Executive is not entitled to any payment or benefits in the nature of severance
or termination pay from the Company or its affiliates.

3. Consulting Services.

(a) Consulting Services. For the period beginning on the Effective Date and
ending on the six-month anniversary thereof (the “Consulting Period”), the
Executive agrees to render to the Company such consulting services as the
Company may from time to time reasonably request. Such services shall include,
without limitation, assistance in connection with the transition of business
relationships and the duties and responsibilities of the Executive’s former
position with the Company to other individuals. The Company shall (i) provide
one week advance notice of any out-of-town travel requests of Executive in
connection with the Consulting Period and (ii) reimburse Executive for all
reasonable out-of-pocket expenses incurred by Executive in performing such
services.

(b) Fee. In consideration for the Executive’s services (including, without
limitation, his cooperation with respect to matters set forth above in this
Section 3), the Company shall pay to the Executive on the last day of each
calendar month during the Consulting Period a fee of $15,000, prorated as
applicable to reflect any partial calendar months during the Consulting Period.

 

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4. Outstanding Liabilities. Any liabilities the Executive may have to the
Company or its affiliates, including, without limitation, any liabilities in
respect of outstanding loans or advances by the Company and any liabilities to
reimburse the Company for any personal expenses that the Executive has charged
to the Company, must be paid in full before payment of any amounts will be made
to the Executive under this Agreement or the Company may, at its option, deduct
any such amounts from any payment to be made to the Executive under this
Agreement, to the extent permitted by applicable law. The Company represents
that it is not currently aware of any such liabilities.

5. General Release and Waiver

(a) In consideration of the payments and other consideration provided for in
this Agreement, that being good and valuable consideration, the receipt,
adequacy and sufficiency of which are acknowledged by the Executive, the
Executive, on his own behalf and on behalf of his agents, administrators,
representatives, executors, successors, heirs, devisees and assigns
(collectively, the “Releasing Parties”) hereby fully releases, remises, acquits
and forever discharges the Company and all of its affiliates, and each of their
respective past, present and future officers, directors, shareholders, members,
partners, agents, employees, consultants, independent contractors, attorneys,
advisers, successors and assigns (collectively, the “Released Parties”), jointly
and severally, from any and all claims, rights, demands, debts, obligations,
losses, causes of action, suits, controversies, setoffs, affirmative defenses,
counterclaims, third party actions, damages, penalties, costs, expenses,
attorneys’ fees, liabilities and indemnities of any kind or nature whatsoever
(collectively, the “Claims”), whether known or unknown, suspected or
unsuspected, accrued or unaccrued, whether at law, equity, administrative,
statutory or otherwise, and whether for injunctive relief, back pay, fringe
benefits, reinstatement, reemployment, or compensatory, punitive or any other
kind of damages, which any of the Releasing Parties ever have had in the past or
presently have against the Released Parties, and each of them, arising from or
relating to the Executive’s employment with the Company or its affiliates or the
termination of that employment or any circumstances related thereto, or any
other matter, cause or thing whatsoever, including without limitation all claims
arising under or relating to employment, employment contracts, employee benefits
or purported employment discrimination or violations of civil rights of whatever
kind or nature, including without limitation all claims arising under the Age
Discrimination in Employment Act (“ADEA”), the Americans with Disabilities Act
of 1990, the Family and Medical Leave Act of 1993, the Equal Pay Act of 1963,
the Rehabilitation Act of 1973, Title VII of the United States Civil Rights Act
of 1964, 42 U.S.C. § 1981, the Civil Rights Act of 1991, the Civil Rights Acts
of 1866 and/or 1871, the Texas Commission on Human Rights Act, the Texas Payday
Law, the Texas Labor Code or any other applicable federal, state or local
employment discrimination statute, law or ordinance, including, without
limitation, any workers’ compensation or disability claims under any such laws.
The Executive further agrees that the Executive will not file or permit to be
filed on the Executive’s behalf any such claim. Notwithstanding the preceding
sentence or any other provision of this Agreement, this release is not intended
to interfere with the Executive’s right to file a charge with the Equal
Employment Opportunity Commission (the “EEOC”) in connection

 

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with any claim he believes he may have against the Company or its affiliates.
However, by executing this Agreement, the Executive hereby waives the right to
recover in any proceeding the Executive may bring before the EEOC or any state
human rights commission or in any proceeding brought by the EEOC or any state
human rights commission on the Executive’s behalf. In addition, this release is
not intended to interfere with the Executive’s right to challenge that his
waiver of any and all ADEA claims pursuant to this Agreement is a knowing and
voluntary waiver, notwithstanding the Executive’s specific representation that
he has entered into this Agreement knowingly and voluntarily. This release shall
not apply to (i) any obligation of the Company or its affiliates pursuant to
this Agreement, or any vested benefit to which the Executive is entitled under
any tax qualified pension plan of the Company or its affiliates, COBRA
continuation coverage benefits or any other similar benefits required to be
provided by statute, (ii) indemnification rights provided under the Company’s
Certificate of Incorporation or the General Corporation Law of the State of
Delaware or (iii) indemnification rights under any applicable Director and
Officer insurance policies held by the Company.

(b) The Executive acknowledges that certain of the payments and benefits
provided for in Sections 2 and 3 of this Agreement are in addition to anything
of value to which the Executive already is entitled from the Company and its
affiliates and constitute good and valuable consideration for the release
contained in this Section 5.

6. Restrictive Covenants.

(a) Affirmation of Prior Agreement. The Executive acknowledges and agrees that
the Employee Confidential Information, Inventions, Non-Solicitation and
Non-Competition Agreement, dated January 18, 2010, between the Executive and the
Company (the “Prior Agreement”) shall remain in effect following the Effective
Date in accordance with its terms.

(b) Confidential Information. The Executive agrees that all information
pertaining to the prior, current or contemplated business of the Company and its
affiliates, and their officers, directors, employees, agents, shareholders and
customers (excluding (i) publicly available information (in substantially the
form in which it is publicly available) unless such information is publicly
available by reason of unauthorized disclosure by the Executive or by any person
or entity of whose intention to make such unauthorized disclosure the Executive
is aware and (ii) information of a general nature not pertaining exclusively to
the Company that generally would be acquired in similar employment with another
company) constitutes a valuable and confidential asset of the Company. Such
information includes, without limitation, information related to trade secrets,
customer lists, production techniques, and financial information of the Company.
The Executive agrees that from and after the Effective Date he shall (A) hold
all such information in trust and confidence for the Company and its affiliates,
and (B) not use or disclose any such information to any person, firm,
corporation or other entity other than under court order or other legal or
regulatory requirement. Executive agrees that he has returned or will return
within seven (7) days all equipment and/or property, including all confidential
information, computer software, computer access codes, company credit cards,
keys, and all original and copies of notes, documents, files or programs stored
electronically or otherwise that relate or refer to the business, customers,
financial statements, business contacts or sales of the Company or its
affiliates; provided that the Executive may retain his cell phone. Executive
also agrees to return promptly to the Company any such equipment and/or property
subsequently discovered by the Executive.

 

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(c) Non-Disparagement. The Executive shall not make any statements, encourage
others to make statements or release information that would or is reasonably
expected to disparage or defame the Company, any of its affiliates or any of
their respective directors or officers. The Company represents and warrants that
it has instructed its other current officers in writing not to make any
statements, encourage others to make statements or release information that
would or is reasonably expected to disparage or defame the Executive.
Notwithstanding the foregoing, nothing in this Section 6(c) shall prohibit
either Party from making truthful statements when required by order of a court
or other body having jurisdiction or as required by law.

(d) Acknowledgements Respecting Restrictive Covenants. With respect to the
restrictive covenants set forth in this Section 6 and in the Prior Agreement,
the Executive acknowledges and agrees as follows:

(i) The specified duration of a restrictive covenant shall be extended by and
for the term of any period during which the Executive is in violation of such
covenant.

(ii) The restrictive covenants are in addition to any rights the Company may
have in law or at equity.

(iii) It is impossible to measure in money the damages which will accrue to the
Company in the event that the Executive breaches any of the restrictive
covenants. Therefore, if the Executive breaches any restrictive covenant, the
Company and its affiliates shall be entitled to an injunction restraining the
Executive from violating such restrictive covenants. If the Company or any of
its affiliates shall institute any action or proceeding to enforce a restrictive
covenant, the Executive hereby waives the claim or defense that the Company or
any of its affiliates has an adequate remedy at law and the Executive agrees not
to assert in any such action or proceeding the claim or defense that the Company
or any of its affiliates has an adequate remedy at law. The foregoing shall not
prejudice the Company’s or its affiliates’ right to require the Executive to
account for and pay over to the Company or its affiliates, and the Executive
hereby agrees to account for and pay over, the compensation, profits, monies,
accruals or other benefits derived or received by the Executive as a result of
any transaction constituting a breach of the restrictive covenants.

(iv) (A) Each of the restrictive covenants contained in this Section 6 and in
the Prior Agreement shall be construed as a separate covenant with respect to
each activity to which it applies, (B) if, in any judicial proceeding or
arbitration, a court or arbitrator shall deem any of the restrictive covenants
invalid, illegal or unenforceable because its scope is considered excessive,
such restrictive covenant shall be modified so that the scope of the restrictive
covenant is reduced only to the minimum extent necessary to render the modified
covenant valid, legal and enforceable, and (C) if any restrictive covenant (or
portion thereof) is deemed invalid, illegal or unenforceable in any
jurisdiction, as to that jurisdiction such restrictive covenant (or portion
thereof) shall be ineffective to the extent of such invalidity, illegality or
unenforceability, without affecting in any way the remaining restrictive
covenants (or portion thereof) in such jurisdiction or rendering that or any
other restrictive covenant (or portion thereof) invalid, illegal, or
unenforceable in any other jurisdiction.

 

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(v) The restrictive covenants provided in this Section 6 and in the Prior
Agreement shall be in addition to any restrictions imposed on the Executive by
statute or at common law.

7. Cooperation with Proceedings. The Executive agrees to reasonably cooperate
(including attending meetings) with respect to any claim, arbitral hearing,
lawsuit, action or governmental, regulatory or internal investigation relating
to the business of the Company or its affiliates. The Executive agrees to
provide full and complete disclosure to the Company in response to any inquiry
in connection with any such matters. The Company shall reimburse Executive for
all reasonable out-of-pocket expenses incurred by Executive in connection with
this Section 7.

8. Certain Forfeitures in Event of Breach. The Executive acknowledges and agrees
that, notwithstanding any other provision of this Agreement, in the event the
Executive materially breaches any of his obligations under this Agreement or the
Prior Agreement, or any provision of this Agreement is ruled unenforceable, void
or subject to reduction or modification as determined by a court of competent
jurisdiction, the Executive will forfeit his right to receive the payments and
benefits described in Sections 2 and 3 of this Agreement to the extent not
theretofore paid to him as of the date of such breach or ruling; provided, that
in the event of a breach (other than a breach of confidentiality, noncompetition
or non-solicitation covenants), the Company shall first provide Executive with
written notice and opportunity to cure for a period of fifteen (15) days. If
payments have already been made as of the time of such breach or ruling, the
Executive agrees that he will reimburse the Company, immediately, for the amount
of such payments and benefits.

9. General Provisions

(a) Each provision hereof is severable from this Agreement, and if one or more
provisions hereof are declared invalid the remaining provisions shall
nevertheless remain in full force and effect. If any provision of this Agreement
is so broad, in scope or duration or otherwise, as to be unenforceable, such
provision shall be interpreted to be only so broad as is enforceable.

(b) Any notice to be given hereunder shall be given in writing. Notice shall be
deemed to be given when delivered by hand to the party to whom notice is being
given, or ten (10) days after being mailed, postage prepaid, registered with
return receipt requested, or sent by facsimile transmission with a confirmation
by registered or certified mail, postage prepaid. Notices to the Executive
should be addressed to the Executive as follows:

David G. Gallagher

at the most recent address on file with the Company.

 

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Notices to the Company should be sent as follows:

CARBO Ceramics Inc.

575 North Dairy Ashford

Suite 300

Houston, TX 77079

Attn: General Counsel

Either party may change the address or person to whom notices should be sent to
by notifying the other party in accordance with this Section 9(b).

(c) The Company may withhold from any payments made under this Agreement, or
require the Executive to pay to the Company, all applicable federal, state and
local taxes, including but not limited to income, employment and social
insurance taxes, as shall be required by law, as determined by the Company in
its sole discretion.

(d) The failure to enforce at any time any of the provisions of this Agreement
or to require at any time performance by the other party of any of the
provisions hereof shall in no way be construed to be a waiver of such provisions
or to affect the validity of this Agreement, or any part hereof, or the right of
either party thereafter to enforce each and every such provisions in accordance
with the terms of this Agreement.

(e) This Agreement, together with the Prior Agreement, contains the entire
agreement between the parties with respect to the Executive’s employment with
the Company and the termination thereof effective as of the Effective Date and
supersedes any and all prior understandings, agreements or correspondence
between the parties regarding the Executive’s employment with the Company and
the termination thereof (other than the Prior Agreement).

(f) The parties hereto acknowledge and agree that each party has reviewed and
negotiated the terms and provisions of this Agreement and has contributed to its
preparation (with advice of counsel, if desired). Accordingly, the rule of
construction to the effect that ambiguities are resolved against the drafting
party shall not be employed in the interpretation of this Agreement. Rather, the
terms of this Agreement shall be construed fairly as to both parties hereto and
not in favor of or against either party, regardless of which party generally was
responsible for the preparation of this Agreement.

(g) This Agreement shall be governed by, and interpreted in accordance with, the
laws of Texas, without reference to its principles of conflicts of laws. Venue
of any litigation arising from or relating to this Agreement shall be in a state
or federal district court in Harris County, Houston, State of Texas, and the
parties hereto to personal jurisdiction in such courts.

(h) This Agreement is binding on and is for the benefit of the parties hereto
and their respective successors, assigns, heirs, executors, administrators and
other legal representatives. This Agreement shall not be assignable by either
party hereto without the written consent of the other, provided, however, that
the Company may, without the written consent of the Executive, assign this
Agreement to (i) any entity with which the Company is merged or consolidated or
to which the Company transfers substantially all of its assets or (ii) any
entity controlling, under common control with or controlled by the Company.

 

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(i) This Agreement may be executed in several counterparts, each of which shall
be deemed an original, but all of which shall constitute one and the same
instrument.

(j) The headings in this Agreement are inserted for convenience of reference
only and shall not be a part of or control or affect the meaning of any
provision hereof.

10. Knowing and Voluntary Waiver. The Executive, by the Executive’s free and
voluntary act of signing below, (i) acknowledges that he has been given a period
of twenty-one (21) days to consider whether to agree to the terms contained
herein, (ii) acknowledges that he has been advised to consult with an attorney
prior to executing this Agreement, (iii) acknowledges that he understands that
this Agreement specifically releases and waives all rights and claims he may
have under the ADEA prior to the date on which he signs this Agreement, and
(iv) agrees to all of the terms of this Agreement and intends to be legally
bound thereby. Furthermore, the Executive acknowledges that the payments and
benefits provided for in Sections 2 and 3 of this Agreement will be delayed
until this Agreement becomes effective, enforceable and irrevocable.

This Agreement will become effective, enforceable and irrevocable on the eighth
day after the Effective Date. During the seven-day period prior thereto, the
Executive may revoke his agreement to accept the terms hereof by indicating in
writing to the Company his intention to revoke. If the Executive exercises his
right to revoke hereunder, (i) he shall forfeit his right to receive any of the
payments or benefits provided for herein, and to the extent such payments or
benefits have already been made, the Executive agrees that he will immediately
reimburse the Company for the amounts of such payments and benefits and (ii) the
resignation set forth in Section 1 hereof shall survive and remain in full force
and effect.

[The remainder of this page has been intentionally left blank; signature page
follows.]

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by its
duly authorized representative and the Executive has signed this Agreement as of
the day and year first above written.

 

CARBO CERAMICS INC.

/s/ R. Sean Elliott

By: R. Sean Elliott Title: Vice President, General Counsel, Corporate Secretary
and Chief Compliance Officer

 

/s/ David G. Gallagher

David G. Gallagher

 

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Acknowledgment

STATE OF TEXAS

COUNTY OF HARRIS

On the 9th day of August, 2012, before me personally came David G. Gallagher
who, being by me duly sworn, did depose and say and did acknowledge and
represent that he has had an opportunity to consult with attorneys and other
advisers of his choosing regarding the Separation Agreement attached hereto,
that he has reviewed all of the terms of the Separation Agreement and that he
fully understands all of its provisions, including, without limitation, the
general release and waiver set forth therein.

 

[signed by Notary Public]

Notary Public

Date: August 9, 2012

 

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