10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

þ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
For the fiscal year ended December 31, 2009 or

o Transition Report Pursuant to Section 12 or 15(d) of the Securities Exchange Act of 1934.
For the transition period from                  to                 .

Commission file number 1-10776

Calgon Carbon Corporation

(Exact name of registrant as specified in its charter)

Delaware	25-0530110
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

400 Calgon Carbon Drive
Pittsburgh, Pennsylvania
(Address of principal executive offices)
15205
(Zip Code)

Registrant’s telephone number, including area code: (412) 787-6700

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, par value $0.01 per share	New York Stock Exchange
Rights to Purchase Series A Junior Participating	New York Stock Exchange
Preferred Stock (pursuant to Rights Agreement dated
as of January 27, 2005)

Securities registered pursuant to Section 12(g) of the Act:

None

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes þ  No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

Yes o  No þ

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

o Yes o No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Yes o  No þ

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 (Do not check if a smaller company)	Smaller reporting company o

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 February 22, 2010, there were outstanding 55,976,413 shares of Common Stock, par value of $0.01 per share.

The aggregate market value of the voting stock held by non-affiliates as of June 30, 2009 was $735,608,677. The closing price of the Company’s common stock on June 30, 2009, as reported on the New York Stock Exchange was $13.89.

The following documents have been incorporated by reference:

Document	Form 10-K Part Number
Proxy Statement filed pursuant to Regulation 14A in connection with registrant’s	III
Annual Meeting of Shareholders to be held on April 22, 2010

INDEX

PART I
Item 1.	Business	4
Item 1A.	Risk Factors	13
Item 1B.	Unresolved Staff Comments	18
Item 2.	Properties	19
Item 3.	Legal Proceedings	20
Item 4.	Submission of Matters to a Vote of Security Holders	21
PART II
Item 5.	Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Repurchases of Equity Securities	21
Item 6.	Selected Financial Data	23
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	39
Item 8.	Financial Statements and Supplementary Data	40
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	86
Item 9A.	Controls and Procedures	86
Item 9B.	Other Information	86
PART III
Item 10.	Directors, Executive Officers, and Corporate Governance of the Registrant	87
Item 11.	Executive Compensation	87
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	87
Item 13.	Certain Relationships, Related Transactions, and Director Independence	88
Item 14.	Principal Accounting Fees and Services	88
PART IV
Item 15.	Exhibits and Financial Statement Schedules	89
Signatures		93
EX-4.1
EX-10.3
EX-10.12
EX-10.13
EX-10.14
EX-10.15
EX-10.16
EX-23.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2

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Forward-Looking Information Safe Harbor

This Annual Report contains historical information and forward-looking statements. Forward-looking statements typically contain words such as “expect,” “believes,” “estimates,” “anticipates,” or similar words indicating that future outcomes are uncertain. Statements looking forward in time, including statements regarding future growth and profitability, price increases, cost savings, broader product lines, enhanced competitive posture and acquisitions, are included in this Annual Report pursuant to the “safe harbor” provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks and uncertainties that may cause the Company’s actual results in future periods to be materially different from any future performance suggested herein. Further, the Company operates in an industry sector where securities values may be volatile and may be influenced by economic and other factors beyond the Company’s control. Some of the factors that could affect future performance of the Company are higher energy and raw material costs, costs of imports and related tariffs, labor relations, capital and environmental requirements, changes in foreign currency exchange rates, borrowing restrictions, validity of patents and other intellectual property, and pension costs. In the context of the forward-looking information provided in this Annual Report, please refer to the discussions of risk factors and other information detailed in, as well as the other information contained in this Annual Report.

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PART I

Item 1. Business:

The Company

The Company is a global leader in products, services, and solutions for purifying water and air. The Company has three reportable segments: Activated Carbon and Service, Equipment, and Consumer. Each reportable segment is a global profit center which makes and sells different products and services.

     The Activated Carbon and Service segment manufactures granular and powdered activated carbon for use in applications to remove organic compounds from water, air, and other liquids and gases. The service aspect of the segment consists of the leasing, monitoring and maintenance of carbon adsorption equipment (explained below). The Equipment segment provides solutions to customers’ air and water purification problems through the design, fabrication, installation, and sale of equipment systems that utilize a combination of the Company’s enabling technologies: carbon adsorption, ultraviolet light (“UV”), and advanced ion exchange separation (“ISEP^®”). The Consumer segment primarily consists of the manufacture and sale of carbon cloth and new consumer products which utilize the Company’s technologies already proven in large-scale industrial applications.

     Calgon Carbon Corporation was organized as a Delaware corporation in 1967.

Products and Services

The Company offers a diverse range of products, services, and equipment specifically developed for the purification, separation and concentration of liquids, gases and other media through its three business segments. The Activated Carbon and Service segment primarily consists of activated carbon products, field services, and reactivation. The Equipment segment designs and builds systems that include multiple technologies. The Consumer segment supplies carbon products, including activated carbon cloth, for everyday use by consumers. Activated carbon cloth is used in many filtration, adsorption, and separation applications for use in markets such as industrial and medical. For further information, refer to Note 18 to the Company’s consolidated financial statements contained in Item 8 of this Annual Report.

Activated Carbon and Service. The sale of activated carbon is the principle component of the Activated Carbon and Service business segment. Activated carbon is a porous material that removes organic compounds from liquids and gases by a process known as “adsorption.” In adsorption, organic molecules contained in a liquid or gas are attracted and bound to the surface of the pores of the activated carbon as the liquid or gas is passed through.

     The primary raw material used in the production of the Company’s activated carbons is bituminous coal which is crushed, sized and then processed in low temperature kilns followed by high temperature furnaces. This heating process is known as “activation” and develops the pore structure of the carbon. Through adjustments in the activation process, pores of the required size and number for a particular purification application are developed. The Company’s technological expertise in adjusting the pore structure in the activation process has been one of a number of factors enabling the Company to develop many special types of activated carbon available in several particle sizes. The Company also markets activated carbons from other raw materials, including coconut and wood.

     The Company produces and sells a broad range of activated, impregnated or acid washed carbons in granular, powdered or pellet form. Granular Activated Carbon (GAC) particles are irregular in shape and generally used in fixed filter beds for continuous flow purification processes. Powdered Activated Carbon (PAC) is carbon which has been pulverized into powder and often used in batch purification processes, in municipal water applications and for flue gas emissions control. Pelletized activated carbons are extruded particles, cylindrical in shape, and typically used for gas phase applications due to the low pressure drop, high mechanical strength and low dust content of the product.

     Another important component of the Activated Carbon and Service business segment are the optional services associated with supplying the Company’s products and systems required for purification, separation, concentration, taste and odor control. The Company offers a variety of treatment services at customer facilities including carbon supply, equipment leasing, installation and demobilization, transportation, and spent carbon reactivation. Other services include

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feasibility testing, process design, performance monitoring, and major maintenance of Company-owned equipment. The central component of the Company’s service business is reactivation of spent carbon and re-supply. In the reactivation process, the spent carbon is subjected to high temperature re-manufacturing conditions that destroy the adsorbed organics and assure the activated carbon is returned to usable quality. The Company is fully permitted to handle spent carbons containing hazardous and non-hazardous organic compounds (see related discussion in Regulatory Matters). This recycling is conducted at several locations throughout the world. Granular activated carbon is reactivated for environmental and economic reasons to destroy hazardous adsorbed organic compounds and also to conserve natural resources. The Company provides reactivation/recycling services in packages ranging from a fifty-five gallon drum to truckload quantities.

     Transportation services are offered via bulk activated carbon deliveries and spent carbon returns through the Company’s private fleet of trailers, capable of transporting both RCRA hazardous and non-hazardous material. The Company will arrange transportation for smaller volumes of activated carbon in Department of Transportation approved containers and small returnable equipment through a network of less-than-truckload carriers.

     Purification services provided by the Company are used to improve the quality of water, food, chemical, pharmaceutical and petrochemical products. These services may be utilized in permanent installations or in temporary applications, such as pilot studies for new manufacturing processes or recovery of off-specification products.

     Sales from continuing operations for the Activated Carbon and Service segment were $358.2 million, $342.3 million, and $295.6 million for the years ended December 31, 2009, 2008, and 2007, respectively.

Equipment. Along with providing activated carbon products, the Company has developed a complete line of standardized, pre-engineered, adsorption systems—capable of treating liquid flows from 1 gpm to 1,400 gpm—which can be quickly delivered and easily installed at treatment sites. These self-contained adsorption systems are used for vapor phase applications such as volatile organic compound (VOC) control, air stripper off-gases, and landfill gas emissions. Liquid phase equipment systems are used for applications of potable water process purification, wastewater treatment, groundwater remediation and de-chlorination. The Company also custom designs systems to solve unique treatment challenges, providing equipment for activated carbon, ion exchange resins or ultraviolet (UV) technologies each of which can be used for the purification, separation and concentration of liquids or gases.

     More than 20 years ago, the Company introduced an advanced UV oxidation process to remediate contaminated groundwater. In 1998, the Company’s scientists invented a UV disinfection process that could be used to inactivate Cryptosporidium, Giardia and other similar pathogens in surface water, rendering them harmless to humans. The UV light alters the DNA of pathogens, killing them or making it impossible for the pathogens to reproduce and infect humans. In combination with hydrogen peroxide, UV light is effective in destroying many contaminants common in groundwater remediation applications. The Company is a leader in the marketplace for innovative UV technologies with the Sentinel^® line designed to protect municipal drinking water supplies from pathogens, the C3 Series™ open-channel wastewater disinfection product line for municipal wastewater disinfection, and Rayox^® UV advanced oxidation equipment for treatment of contaminants such as 1,4-Dioxane, MTBE, and Vinyl Chloride in groundwater, process water and industrial wastewater.

     The Company also produces a wide range of odor control equipment which typically utilizes catalytic activated carbon to control odors at municipal wastewater treatment facilities and pumping stations.

     UV oxidation equipment can also be combined with activated carbon to provide effective solutions for taste and odor removal in municipal drinking water. Backed by years of experience and extensive research and development, the Company can recommend the best solution for taste and odor problems, whether it’s using activated carbon, UV oxidation, or both. The Company also offers a low cost, non-chemical solution for quenching excess peroxide upon completion of the advanced oxidation processes.

     The proprietary ISEP^® (Ionic Separator) continuous ion exchange units are used for the purification and recovery of many products in the food, pharmaceutical, and biotechnology industries. The ISEP^® Continuous Separator units perform ion exchange separations using countercurrent processing. The ISEP^® and CSEP^® (chromatographic separator) systems are currently used at over 300 installations worldwide in more than 40 applications in industrial settings, as well as in selected environmental applications including perchlorate and nitrate removal from drinking water.

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     Sales from continuing operations for the Equipment segment were $43.9 million, $47.3 million, and $41.3 million for the years ended December 31, 2009, 2008, and 2007, respectively.

Consumer. The primary product offered in the Consumer segment is carbon cloth. Carbon cloth, which is activated carbon in cloth form, is manufactured in the United Kingdom and sold to the medical, military, and specialty markets.

     Activated carbon and carbon cloth are used as the primary raw material in the Company’s consumer home products group. The Company currently has two primary product lines that it markets to the retail channel. The first product line, PreZerve^® storage products, uses carbon cloth to protect and preserve jewelry and keepsakes from deterioration. The PreZerve^® line currently offers over 40 different items. The second product line, AllGone^®, is an odor elimination system that utilizes activated carbon discs to adsorb odors and impurities from the air safely and naturally.

     Sales from continuing operations for the Consumer segment were $9.8 million, $10.7 million, and $14.2 million for the years ended December 31, 2009, 2008, and 2007, respectively.

Markets

The Company participates in six primary areas: Potable Water, Industrial Process, Environmental Water, Environmental Air, Food, and Specialty Markets. Potable Water applications include municipal drinking water purification as well as point of entry and point of use devices. Applications in the Industrial Process Market includes catalysis, product recovery and purification of chemicals, and pharmaceuticals as well as process water treatment. Remediation of water and VOC removal from vapor are the major sub segments for the two Environmental markets. Food applications include brewing, bottling and sweetener purification. Medical, personal protection (military and industrial), cigarette, automotive, consumer, and precious metals applications comprise the Specialty Market.

Potable Water Market. The Company sells activated carbons, equipment, services, ion exchange technology, and UV technologies to municipalities for the treatment of potable water to remove disinfection by-products and their precursors, pesticides and other dissolved organic and inorganic material to meet or exceed current state or federal regulations and to remove tastes and odors to make the water acceptable to the public. The Company also sells to OEM manufacturers of home water purification systems. Granular and powdered activated carbon products are sold in this market and in many cases the granular carbon functions both as the primary filtration media as well as an adsorption media to remove the contaminants from the water. Ion exchange resins are sold in both fixed beds and continuous counter-current operations to meet strict regulatory guidelines for perchlorate in water. UV oxidation and UV disinfection systems are sold for the destruction or inactivation of waterborne contaminants and organisms.

Industrial Process Market. The Company’s products used in industrial processing are used either for purification, separation or concentration of customers’ products in the manufacturing process or for direct incorporation into the customers’ products. The Company sells a wide range of activated carbons and reactivation services to the chemical, petroleum refining, and process industries for the purification of organic and inorganic chemicals, amine, soda ash, antibiotics, and vitamins. Activated carbon products and services are also used to decolorize chemicals such as hydrochloric acid and remove pollutants from wastewater. Further, activated carbon is used in treatment of natural gas, flue gas, and other vapor streams for removal of carbon dioxide, acetylene, hydrogen, sulfur, and mercury compounds. The liquefied natural gas industry, uses activated carbons to remove mercury compounds which would otherwise corrode process equipment. Activated carbons are also sold for gasoline vapor recovery equipment.

Environmental Water and Air Markets. Providing products used for the cleanup of contaminated groundwater, surface impoundments, and accidental spills comprises the significant need in this market. The Company provides carbon, services and carbon equipment for the applications as well as emergency and temporary cleanup services for public and private entities, utilizing both activated carbon adsorption and UV oxidation technologies.

     The Company offers its products and services to private industry to meet stringent environmental requirements imposed by various government entities. The Company’s reactivation/recycle service is an especially important element if the customer has contaminants which are hazardous organic chemicals. The hazardous organic chemicals which are adsorbed by the activated carbons are decomposed at the high temperatures of the reactivation furnace and thereby removed from the environment. Reactivation saves the environment as well as eliminating the customers’ expense and difficulty in securing long-term containment (such as landfills) for hazardous organic chemicals.

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     Activated carbon is also used in the chemical, pharmaceutical, and refining industries for purification of air discharge to remove contaminants such as benzene, toluene, and other volatile organics. Reduction of mercury emissions from coal-fired power plants is a growing market for the Company. In response to this market opportunity, the Company has made significant investments at its Catlettsburg, Kentucky plant. In April 2009, a previously idled production line (B-line) was restarted. This production line can produce up to 70 million pounds of FLUEPAC^® powdered activated carbon annually to serve the needs of coal-fired power plants. In addition, during the fourth quarter of 2009, the Company completed construction and placed into service a pulverization facility to more efficiently produce its FLUEPAC^® product at the Catlettsburg plant.

     Municipal sewage treatment plants purchase the Company’s odor control systems and activated carbon products to remove objectionable odors emanating from operational facilities and to treat the wastewater to meet discharge requirements. Granular activated carbon is used as a filtration/adsorption medium and the powdered activated carbons are used to enhance the performance of existing biological waste treatment processes.

     The Company’s UV oxidation systems offer an ideal solution for groundwater remediation and the treatment of process water and industrial wastewater. The Company’s Rayox^® System is an industry staple for the destruction of organic compounds in groundwater. Rayox^® is also used as a process water and wastewater treatment option for the removal of alcohol, phenol, acetone, total organic compound (TOC), and chemical oxygen demand (COD)/Biological oxygen demand (BOD).

Food Market. Sweetener manufacturers are the principal purchasers of the Company’s products in the food industry. As a major supplier, the Company’s specialty acid-washed activated carbon products are used in the purification of dextrose and high fructose corn syrup. Activated carbons are also sold for use in the purification of cane sugar. Other food processing applications include de-colorization and purification of many different foods and beverages and for purifying water, liquids and gases prior to usage in brewing and bottling. Continuous ion exchange systems are also used in this market for the production of lysine and vitamin E as well as purification of dextrose and high fructose corn syrup.

Specialty Market. The Company is a major supplier of activated carbon to manufacturers of gas masks supplied to the United States and European military as well as protective respirators and collective filters for first responders and private industry. The markets for collective filters for military equipment, indoor air quality and air containment in incineration and nuclear applications are also serviced.

     Other specialty applications using activated carbons include precious metals producers to recover gold and silver from low-grade ore, and cigarette manufacturers in charcoal filters. The Company’s activated carbon cloth product is used in medical and other specialty applications.

Sales and Marketing

For the U.S., the Company operates primarily through a direct sales force and maintains sales offices in Pittsburgh, Pennsylvania; Santa Fe Springs, California; and Marlton, New Jersey. In some markets and technologies the Company also sells through agents and distributors. In Canada and in Latin America the Company maintains offices in Richmond Hill, Ontario; Sao Paulo, Brazil; and Mexico City, Mexico and sells primarily through agent/distributor relationships. In the Asia Pacific Region, the Company maintains offices in Singapore; Beijing and Shanghai, China; Taipei, Taiwan; and Tokyo and Osaka, Japan (a joint venture relationship) and uses direct sales as well as agents and distributors to manage sales.

     In Europe, the Company has sales offices in Feluy, Belgium; Ashton-in-Makerfield, United Kingdom; Houghton le-Spring, United Kingdom; and Beverungen, Germany and operates through a direct sales force. The Company also has a network of agents and distributors that conduct sales in certain countries in Europe, the Middle East and Africa.

     All offices can play a role in sales of products or services from any of the Company’s segments. Geographic sales information can be found in Note 18 to the Company’s consolidated financial statements contained in Item 8 of this Annual Report.

     Over the past three years, no single customer accounted for more than 10% of the total sales of the Company in any year.

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Backlog

The Company had a sales backlog from continuing operations of $14.8 million and $22.3 million as of January 31, 2010 and 2009, respectively, in the Equipment segment. The decline is believed to be related to a lower level of capital spending in the marketplace in 2009 due to municipalities conserving cash during the recent economic downturn. The Company does not expect the January 31, 2010 carryover balance into 2011 to be significant.

Competition

With respect to the production and sale of activated carbon related products, the Company has a major global presence, and has several competitors in the worldwide market. Norit, N.V., a Dutch company, Mead/Westvaco Corporation, a United States company and Siemens Water Technologies, a division of Siemens AG, Erlangen, Germany, are the primary competitors. Chinese producers of coal-based activated carbon and certain East Asian producers of coconut-based activated carbon participate in the market on a worldwide basis and sell principally through numerous resellers. Competition in activated carbons, carbon equipment and services is based on quality, performance, and price. Other sources of competition for the Company’s activated carbon services and systems are alternative technologies for purification, filtration, and extraction processes that do not employ activated carbons.

     A number of other smaller competitors engage in the production and sale of activated carbons in local markets, but do not compete with the Company on a global basis. These companies compete with the Company in the sale of specific types of activated carbons, but do not generally compete with a broad range of products in the worldwide activated carbon business.

     In the United States and Europe, the Company competes with several small regional companies for the sale of its reactivation services and carbon equipment.

     The Company’s UV technologies product line has primary competition from Trojan Technologies, Inc., a Canadian company owned by Danaher Corporation, a United States company, and Wedeco Ideal Horizons, a German company owned by ITT Industries, a United States company.

Raw Materials

The principal raw material purchased by the Company for its Activated Carbon and Service segment is bituminous coal from mines in the Appalachian Region as well as mines outside the United States, usually purchased under both long-term and annual supply contracts.

     The Company purchases natural gas from various suppliers for use in its Activated Carbon and Service segment production facilities. In both the United States and Europe, substantially all natural gas is purchased pursuant to various annual and multi-year contracts with natural gas companies.

     The Company purchases hydrogen peroxide via an annual supply contract for its UV technologies business.

     The only other raw material that is purchased by the Company in significant quantities is pitch, which is used as a binder in the carbon manufacturing process. The Company purchases pitch from various suppliers in North America, Germany, and China under annual supply contracts and spot purchases.

     The purchase of key equipment components is coordinated through agreements with various suppliers.

     The Company does not presently anticipate any problems in obtaining adequate supplies of its raw materials or equipment components.

Research and Development

The Company’s primary research and development activities are conducted at a research center in Pittsburgh, Pennsylvania. This facility is used for the evaluation of experimental activated carbon and equipment and application development. Experimental systems are also designed and evaluated at this location. A facility in Ashton-in-Makerfield, United Kingdom supplements the work performed in Pittsburgh.

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     The principal goals of the Company’s research program are to improve the Company’s position as a technological leader in solving customers’ problems with its products, services and equipment; develop new products and services; and provide technical support to customers and operations of the Company.

     The Company’s research programs include new and improved methods for manufacturing and utilizing new and enhanced activated carbons. The Company has commercial sales of five products for mercury removal from flue gas, including a recently commercialized product for use in high sulfur oxide applications. Development efforts will continue towards refinement of these products to optimize mercury control. In addition, the Company began offering custom potable react to provide the most cost effective solution for controlling disinfection by-product formation in municipal water. The Company continues its UV development efforts, and has recently had several systems tested for use in commercial applications. Two drinking water reactors were tested for disinfection capability and one was tested for chemical contaminant oxidation capability. Additionally, the C3 Series™ reuse system was tested for Title 22 certification, which is required in many jurisdictions for wastewater re-use applications.

     Research and development expenses were $5.5 million, $4.1 million, and $3.7 million in 2009, 2008, and 2007, respectively.

Patents and Trade Secrets

The Company possesses a substantial body of technical knowledge and trade secrets and owns 70 United States patent applications and/or patents as well as 259 patent applications and/or patents in other countries. The issued United States and foreign patents expire in various years from 2010 through 2031.

     The technology embodied in these patents, trade secrets, and technical knowledge applies to all phases of the Company’s business including production processes, product formulations, and application engineering. The Company considers this body of technology important to the conduct of its business.

Regulatory Matters

USA. By letter dated January 22, 2007, the Company received from the United States Environmental Protection Agency (“EPA”), Region 4 a report of a hazardous waste facility inspection performed by the EPA and the Kentucky Department of Environmental Protection (“KYDEP”) as part of a Multi Media Compliance Evaluation of the Company’s Big Sandy Plant in Catlettsburg, Kentucky that was conducted on September 20 and 21, 2005. Accompanying the report was a Notice of Violation (“NOV”) alleging multiple violations of the Federal Resource Conservation and Recovery Act (“RCRA”) and corresponding EPA and KYDEP hazardous waste regulations. The alleged violations mainly concern the hazardous waste spent activated carbon regeneration facility. The Company met with the EPA on April 17, 2007 to discuss the inspection report and alleged violations, and submitted written responses in May and June 2007. In August 2007, the EPA notified the Company that it believes there were still significant violations of RCRA that are unresolved by the information in the Company’s responses, without specifying the particular violations. During a meeting with the EPA on December 10, 2007, the EPA indicated that the agency would not pursue certain other alleged violations. Based on discussions during the December 10, 2007 meeting, subsequent communications with the EPA, and in connection with the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) Notice referred to below, the Company has taken actions to address and remediate a number of the unresolved alleged violations. The Company believes, and the EPA has indicated, that the number of unresolved issues as to alleged continuing violations cited in the January 22, 2007 NOV has been reduced substantially. The EPA can take formal enforcement action to require the Company to remediate any or all of the unresolved alleged continuing violations which could require the Company to incur substantial additional costs. The EPA can also take formal enforcement action to impose substantial civil penalties with respect to violations cited in the NOV, including those which have been admitted or resolved. The Company is awaiting further response from the EPA and cannot predict with any certainty the probable outcome of this matter or range of potential loss, if any.

     On July 3, 2008, the EPA verbally informed the Company that there are a number of unresolved RCRA violations at the Big Sandy Plant which may render the facility unacceptable to receive spent carbon for reactivation from sites regulated under the CERCLA pursuant to the CERCLA Off-Site Rule. The Company received written notice of the unacceptability determination on July 14, 2008 (the “CERCLA Notice”). The CERCLA Notice alleged multiple violations of RCRA and four releases of hazardous waste. The alleged violations and releases were cited in the September 2005 multi-media compliance inspections, and were among those cited in the January 2007 NOV described in the preceding

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paragraph as well. The CERCLA Notice gave the Company until September 1, 2008 to demonstrate to the EPA that the alleged violations and releases are not continuing, or else the Big Sandy Plant would not be able to receive spent carbon from CERCLA sites until the EPA determined that the facility is again acceptable to receive such CERCLA wastes. This deadline subsequently was extended several times. The Company met with the EPA in August 2008 regarding the CERCLA Notice and submitted a written response to the CERCLA Notice prior to the meeting. By letter dated February 13, 2009, the EPA informed the Company that based on information submitted by the Company indicating that the Big Sandy Plant has returned to physical compliance for the alleged violations and releases, the EPA had made an affirmative determination of acceptability for receipt of CERCLA wastes at the Big Sandy Plant. The EPA’s determination is conditioned upon the Company treating certain residues resulting from the treatment of the carbon reactivation furnace off-gas as hazardous waste and not sending material dredged from the onsite wastewater treatment lagoons offsite other than to a permitted hazardous waste treatment, storage or disposal facility. The Company has requested clarification from the EPA regarding these two conditions. The Company has also met with Headquarters of the EPA Solid Waste Division (“Headquarters”) on March 6, 2009 and presented its classification argument, with the understanding that Headquarters would advise Region 4 of the EPA. By letter dated January 5, 2010, the EPA determined certain residues resulting from the treatment of the carbon reactivation furnace off-gas are RCRA listed hazardous wastes and the material dredged from the onsite wastewater treatment lagoons is a RCRA listed hazardous waste and that they need to be managed in accordance with RCRA regulations. The Company has learned that the United States Department of Justice is preparing a complaint with respect to the matters. The cost to treat and/or dispose of the material dredged from the lagoons as hazardous waste could be substantial. However, by letter dated January 22, 2010, the Company received a determination from the KYDEP Division of Waste Management that the material is not listed hazardous waste when recycled as had been the Company’s practice. The Company believes that pursuant to EPA regulations, KYDEP is the proper authority to make this determination. Thus, the Company believes that there is no basis for the position set forth in the EPA’s January 5, 2010 letter and the Company will vigorously defend any complaint on the matter.

     By letter dated August 18, 2008, the Company was notified by the EPA Suspension and Debarment Division (“SDD”) that because of the alleged violations described in the CERCLA Notice, the SDD was making an assessment of the Company’s present responsibility to conduct business with Federal Executive Agencies. Representatives of the SDD attended the August 2008 EPA meeting. On August 28, 2008, the Company received a letter from the Division requesting additional information from the Company in connection with the SDD’s evaluation of the Company’s potential “business risk to the Federal Government,” noting that the Company engages in procurement transactions with or funded by the Federal Government. The Company provided the SDD with all information requested by the letter in September 2008. The SDD can suspend or debar a Company from sales to the Federal Government directly or indirectly through government contractors or with respect to projects funded by the Federal Government. The Company estimates that revenue from sales made directly to the Federal Government or indirectly through government contractors comprised less than 8% of its total revenue for the year ended December 31, 2009. The Company is unable to estimate sales made directly or indirectly to customers and or projects that receive federal funding. In October 2008, the SDD indicated that it was still reviewing the matter but that another meeting with the Company was not warranted at that time. The Company believes that there is no basis for suspension or debarment on the basis of the matters asserted by the EPA in the CERCLA Notice or otherwise. The Company has had no further communication with the SDD since October 2008 and believes the likelihood of any action being taken by the SDD is remote.

     In June 2007, the Company received a Notice Letter from the New York State Department of Environmental Conservation (“NYSDEC”) stating that the NYSDEC had determined that the Company is a Potentially Responsible Party (“PRP”) at the Frontier Chemical Processing Royal Avenue Site in Niagara Falls, New York (the “Site”). The Notice Letter requests that the Company and other PRP’s develop, implement and finance a remedial program for Operable Unit #1 at the Site. Operable Unit #1 consists of overburden soils and overburden and upper bedrock groundwater. The selected remedy is removal of above grade structures and contaminated soil source areas, installation of a cover system, and ground water control and treatment, estimated to cost between approximately $11 million and $14 million, which would be shared among the PRP’s. The Company has not determined what portion of the costs associated with the remedial program it would be obligated to bear and the Company cannot predict with any certainty the outcome of this matter or range of potential loss. The Company has joined a PRP group and has executed a Joint Defense Agreement with the group members. In August 2008, the Company and over 100 PRP’s entered into a Consent Order with NYSDEC for additional site investigation directed toward characterization of the Site to better define the scope of the remedial project. The Company contributed monies to the PRP group to help fund the work required under the Consent Order. The additional site investigation required under the Consent Order was initiated in 2008 and completed in the spring of 2009. A

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final report of the site investigation was submitted to the NYSDEC in October 2009. In a letter dated December 31, 2009, the NYSDEC disapproved the report. The basis for disapproval include concerns regarding proposed alternate soil cleanup objectives, questions regarding soil treatability studies and questions regarding ground water contamination. The PRP Group has discussed the stated concerns with the NYSDEC and is considering alternative soil cleanup approaches.

     By letter dated July 3, 2007, the Company received an NOV from the KYDEP alleging that the Company has violated the KYDEP’s hazardous waste management regulations in connection with the Company’s hazardous waste spent activated carbon regeneration facility located at the Big Sandy Plant in Catlettsburg, Kentucky. The NOV alleges that the Company has failed to correct deficiencies identified by the KYDEP in the Company’s Part B hazardous waste management facility permit application and related documents and directed the Company to submit a complete and accurate Part B application and related documents and to respond to the KYDEP’s comments which were appended to the NOV. The Company submitted a response to the NOV and the KYDEP’s comments in December 2007 by providing a complete revised permit application. The KYDEP has not indicated whether or not it will take formal enforcement action, and has not specified a monetary amount of civil penalties it might pursue in any such action, if any. The KYDEP can also deny the Part B operating permit. On October 18, 2007, the Company received an NOV from the EPA related to this permit application and submitted a revised application to both the KYDEP and the EPA within the mandated timeframe. The EPA has not indicated whether or not it will take formal enforcement action, and has not specified a monetary amount of civil penalties it might pursue in any such action. The Company met with the KYDEP on July 27, 2009 concerning the permit, and the KYDEP indicated that it, and Region 4 of the EPA, would like to see specific additional information or clarifications in the permit application. Accordingly, the Company submitted a new application on October 15, 2009. The KYDEP indicated that it had no intention to deny the permit as long as the Company worked with the state to resolve issues. The Region 4 of the EPA has not indicated any stance on the permit and can deny the application. At this time the Company cannot predict with any certainty the outcome of this matter or range of loss, if any.

     In conjunction with the February 2004 purchase of substantially all of Waterlink’s operating assets and the stock of Waterlink’s U.K. subsidiary, several environmental studies were performed on Waterlink’s Columbus, Ohio property by environmental consulting firms which identified and characterized areas of contamination. In addition, these firms identified alternative methods of remediating the property, identified feasible alternatives and prepared cost evaluations of the various alternatives. The Company concluded from the information in the studies that a loss at this property is probable and recorded the liability as a component of noncurrent other liabilities in the Company’s consolidated balance sheet. At December 31, 2009 and December 31, 2008, the balance recorded was $4.0 million. Liability estimates are based on an evaluation of, among other factors, currently available facts, existing technology, presently enacted laws and regulations, and the remediation experience of other companies. The Company has not incurred any environmental remediation expense for the years ended December 31, 2009, 2008, and 2007. It is reasonably possible that a change in the estimate of this obligation will occur as remediation preparation and remediation activity commences in the future. The ultimate remediation costs are dependent upon, among other things, the requirements of any state or federal environmental agencies, the remediation methods employed, the final scope of work being determined, and the extent and types of contamination which will not be fully determined until experience is gained through remediation and related activities. The accrued amounts are expected to be paid out over the course of several years once work has commenced. The Company has yet to make a determination as to when it will proceed with remediation efforts.

Europe and Asia. The Company is also subject to various environmental health and safety laws and regulations at its facilities in Belgium, Germany, the United Kingdom, China, and Japan. These laws and regulations address substantially the same issues as those applicable to the Company in the United States. The Company believes it is presently in substantial compliance with these laws and regulations.

Indemnification. The Company has a limited indemnification agreement with the previous owner of the Company which will fund certain environmental costs if they are incurred at the Company’s Catlettsburg, Kentucky plant. The Company believes that the amount of the indemnification is sufficient to fund these liabilities if they arise.

Employee Relations

As of December 31, 2009, the Company employed 953 persons on a full-time basis, 665 of whom were salaried and non-union hourly production, office, supervisory and sales personnel. The United Steelworkers represent 233 hourly personnel in the United States. The current contracts with the United Steelworkers expire on February 10, 2013 at the Columbus, Ohio facility and July 1, 2011 at the Pittsburgh, PA location. The contract at the Company’s Catlettsburg,

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Kentucky facility expired on April 1, 2009. The parties are currently working under an extension of the expired agreement as they continue to negotiate the terms and conditions of a multi-year replacement agreement. The 55 hourly personnel at the Company’s Belgian facility are represented by two national labor organizations with contracts expiring on July 31, 2011. The Company also has hourly employees at three non-union United Kingdom facilities, two non-union United States facilities one each located in California and Mississippi, and at two non-union China facilities.

Copies of Reports

The periodic and current reports of the Company filed with the SEC pursuant to Section 13(a) of the Securities Exchange Act of 1934 are available free of charge, as soon as reasonably practicable after the same are filed with or furnished to the SEC, at the Company’s website at www.calgoncarbon.com. All other filings with the SEC are available on the SEC’s website at www.sec.gov.

Copies of Corporate Governance Documents

The following Company corporate governance documents are available free of charge at the Company’s website at www.calgoncarbon.com and such information is available in print to any shareholder who requests it by contacting the Secretary of the Company at 400 Calgon Carbon Drive, Pittsburgh, PA 15205.

• Corporate Governance Guidelines

• Audit Committee Charter

• Compensation Committee Charter

• Corporate Governance Committee Charter

• Code of Business Conduct and Ethics

• Code of Ethical Business Conduct Supplement for Chief Executive and Senior Financial Officers

• Director Orientation and Continuing Education Policy

• Executive Committee Charter

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Item 1A. Risk Factors:

Risks relating to our business

Increases in U.S. and European imports of Chinese or other foreign manufactured activated carbon could have an adverse effect on our financial results.

     We face pressure and competition in our U.S. and European markets from brokers of low cost imported activated carbon products, primarily from China. We believe we offer the market technically superior products and related customer support. However, in some applications, low cost imports have become accepted as viable alternatives to our products because they have been frequently sold at less than fair value in the market. If the markets in which we compete experience an increase in these imported low cost carbons, especially if sold at less than fair value, we could see declines in net sales. In addition, the sales of these low cost activated carbons may make it more difficult for us to pass through raw material price increases to our customers.

     In response to a petition from the U.S. activated carbon industry filed in March 2006, the United States Department of Commerce (the “DOC”) announced the imposition of anti-dumping duties starting in October 2006. The DOC announcement was based on extensive economic analysis of the operations and pricing practices of the Chinese producers and exporters. The DOC announcement required U.S. Customs and Border Protection to require importers of steam activated carbon from China to post a provisional bond or cash deposit in the amount of the duties. The anti-dumping duties are intended to offset the amount by which the steam activated carbon from China is sold at less than fair value in the U.S.

     In March 2007, the International Trade Commission (the “ITC”) determined that these unfairly priced steam activated carbon imports from China caused material injury to the U.S. activated carbon industry. The affirmative decision by the ITC triggered the imposition of significant anti-dumping duties in the form of cash deposits, ranging from 62% to 228%. The anti-dumping duties will be imposed for at least five years but are subject to periodic review within the time frame. The first review period began in April 2008 and covered the tariff period from October 2006 through March 2008. The results of this review indicated that the estimated anti-dumping duties originally imposed for this period were too high and have been substantially reduced. Reviews of annual periods subsequent to this period will begin in April of the year following the twelve month period then completed. The significant anti-dumping duties originally imposed by the DOC and the affirmative decision by the ITC has had an adverse impact on the cost of Chinese manufactured activated carbon imported into the U.S. However, the anti-dumping duties, already substantially reduced by virtue of the DOC’s announced results for the first period of review, could be further reduced or eliminated in the future which could adversely affect demand or pricing of our product.

Our financial results could be adversely affected by an interruption of supply or an increase in coal prices.

     We use bituminous coal as the main raw material in our granular activated carbon production process. We estimate that coal will represent approximately 65% of our carbon product costs in 2010. We have various annual and multi-year contracts in place for the supply of coal that expire at various intervals from 2010 to 2011. Interruptions in coal supply caused by mine accidents, labor disputes, transportation delays, breach of supplier contractual obligations, or other events for other than a temporary period could have an adverse effect on our ability to meet customer demand. Our inability to obtain high-quality coal at competitive prices in a timely manner due to changing market conditions with limited high-quality suppliers could also have an adverse affect on our financial results. In addition, increases in the prices we pay for coal under our supply contracts could adversely affect our financial results by significantly increasing production costs. During 2009, our aggregate costs for coal increased by $3.0 million, or 12.9%, compared to 2008. Based upon the estimated usage of coal in 2010, a hypothetical 10% increase in the price of coal would result in $2.0 million of additional pre-tax expenses to us. We may not be able to pass through raw material price increases to our customers.

Delays in enactment of new state or federal regulations could restrict our ability to reach our strategic growth targets and lower our return on invested capital.

     Our strategic growth initiatives are reliant upon more restrictive environmental regulations being enacted for the purpose of making water and air cleaner and safer. If stricter regulations are delayed or are not enacted or enacted but subsequently repealed or amended to be less strict, or enacted with prolonged phase-in periods, our sales growth targets could be adversely affected and our return on invested capital could be reduced.

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          The Company had expected increased demand for powdered activated carbon products beginning in 2009 largely driven by the EPA’s Clean Air Mercury Rule, which established an emissions trading system to reduce mercury emissions from coal-fired power plants by approximately 70% over a 10 year period. On February 8, 2008, the United States Circuit Court of Appeals for the District of Columbia vacated the Clean Air Mercury Rule. Additional appeals, litigation, and regulatory proceedings could defer implementation of another EPA mercury reduction regulation for years or indefinitely. Even if adoption of a new Clean Air Mercury Rule is delayed indefinitely by the legal legislative and regulatory process, existing federal and state laws and regulations, as well as state or federal legislation introduced in response to the Court of Appeals decision and new litigation, could result in substantially more stringent regulation, resulting in higher-than expected demand for the Company’s products. The Company is unable to predict with certainty when and how the outcome of these complex legal, regulatory and legislative proceedings will affect demand for its products.

Encroachment into our markets by competitive technologies could adversely affect our financial results.

     Activated carbon is utilized in various applications as a cost-effective solution to solve customer problems. If other competitive technologies, such as membranes, ozone and UV, are advanced to the stage in which such technologies could cost effectively compete with activated carbon technologies, we could experience a decline in net sales, which could adversely affect our financial results.

Our business is subject to a number of global economic risks.

     Financial markets in the United States, Europe, and Asia continue to experience extreme disruption, including, among other things, extreme volatility in security prices, severely diminished liquidity and credit availability, rating downgrades of certain investments and declining valuations of others. Governments have taken unprecedented actions intending to address extreme market conditions that include severely restricted credit and declines in values of certain assets.

     An economic downturn in the businesses or geographic areas in which we sell our products could reduce demand for our products and result in a decrease in sales volume that could have a negative impact on our results of operations. Continued volatility and disruption of financial markets in the United States, Europe and Asia could limit our customers’ ability to obtain adequate financing or credit to purchase our products or to maintain operations, and result in a decrease in sales volumes that could have a negative impact on our results of operations.

Our industry is highly competitive. If we are unable to compete effectively with competitors having greater resources than we do, our financial results could be adversely affected.

     Our activated carbon business faces significant competition principally from Norit N.V., Mead/Westvaco Corporation and Siemens Water Technologies, as well as from European and Chinese activated carbon producers and East Asian producers of coconut-based activated carbon. Our UV technology products face significant competition principally from Trojan Technologies, Inc., which is owned by Danaher Corporation, and Wedeco Ideal Horizons, which is owned by ITT Industries. Our competitors include major manufacturers and diversified companies, a number of which have revenues and capital resources exceeding ours, which they may use to develop more advanced or more cost-effective technologies, increase market share or leverage their distribution networks. We could experience reduced net sales as a result of having fewer resources than these competitors.

Failure to innovate new products or applications could adversely affect our ability to meet our strategic growth targets.

     Part of our strategic growth and profitability plans involve the development of new products or new applications for our current products in order to replace more mature products or markets that have seen increased competition. If we are unable to develop new products or applications, our financial results could be adversely affected.

Environmental compliance and remediation and potential climate change could result in substantially increased capital requirements and operating costs.

          Our production facilities are subject to environmental laws and regulations in the jurisdictions in which they operate or maintain properties. Costs may be incurred in complying with such laws and regulations. Each of our domestic production facilities require permits and licenses issued by local, state and federal regulators which regulate air emissions, water discharges, and solid waste handling. These permits are subject to renewal and, in some circumstances, revocation. International environmental requirements vary and could have substantially lesser requirements that may give competitors a competitive advantage. Additional costs may be incurred if environmental remediation measures are required. In addition, the discovery of contamination at any of our current or former sites or at locations at which we dispose of waste may expose us to cleanup obligations and other damages. For example, the

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Company has received Notices of Violations (“NOVs”) from the U.S. EPA and from the Kentucky Department of Environmental Protection. While the Company is attempting to resolve these matters, an unfavorable result could have a significant adverse impact on its results of operations and cash flows. If we receive similar demands in the future, we may incur significant costs in connection with the resolution of those matters. Refer to Regulatory Matters within Item 1, Business for a more detailed discussion. In addition, there is currently vigorous debate over the effect of Co ² gas releases and the effect on climate change. Many of our activities create Co ² gases. Should legislation or regulation be enacted, it could have a material adverse effect upon our ability to expand our operations or perhaps continue to operate as we currently do.

Our financial results could be adversely affected by shortages in energy supply or increases in energy costs.

     The price for and availability of energy resources could be volatile as it is affected by political and economic conditions that are outside our control. We utilize natural gas as a key component in our activated carbon manufacturing process and have annual and multi-year contracts for the supply of natural gas at each of our major facilities. If shortages of, or restrictions on the delivery of natural gas occur, production at our activated carbon facilities would be reduced, which could result in missed deliveries or lost sales. We also have exposure to fluctuations in energy costs as they relate to the transportation and distribution of our products. For example, natural gas prices have increased significantly in recent years. We may not be able to pass through natural gas and other fuel price increases to our customers.

A planned or unplanned shutdown at one of our production facilities could have an adverse effect on our financial results.

     We operate multiple facilities and source product from strategic partners who operate facilities which are close to water or in areas susceptible to hurricanes and earthquakes. An unplanned shutdown at any of our or our strategic partners’ facilities for more than a temporary period as a result of a hurricane, typhoon, earthquake or other natural disaster, or as a result of fire, explosions, war, terrorist activities, political conflict or other hostilities, could significantly affect our ability to meet our demand requirements, thereby resulting in lost sales and profitability in the short-term or eventual loss of customers in the long-term. In addition, a prolonged planned shutdown of any of our production facilities due to a change in the business conditions could result in impairment charges that could have an adverse impact on our financial results.

Our inability to successfully negotiate new collective bargaining agreements upon expiration of the existing agreements could have an adverse effect on our financial results.

     We have collective bargaining agreements in place at four production facilities covering approximately 30% of our full-time workforce as of December 31, 2009. Those collective bargaining agreements expire from 2011 through 2013. However, the agreement at the Company’s Catlettsburg, Kentucky facility expired on April 1, 2009. The parties are working under an extension of the expired agreement as they continue to negotiate terms and conditions of a multi-year replacement contract. Any work stoppages as a result of disagreements with any of the labor unions or our failure to renegotiate any of the contracts as they expire could disrupt production and significantly increase product costs as a result of less efficient operations caused by the resulting need to rely on temporary labor.

Our pension plans are currently underfunded, and we expect to be subject to significant increases in pension contributions to our defined benefit pension plans, thereby restricting our cash flow.

     We sponsor various pension plans in the United States and Europe that are underfunded and require significant cash payments. We contributed $10.5 million and $4.1 million to our U.S. Pension plans and $1.8 million and $2.1 million to our European pension plans in 2009 and 2008, respectively. We currently expect to contribute approximately $1.6 million to our U.S. pension plans to meet minimum funding requirements and $1.8 million to our European pension plans in 2010. The current economic environment is negatively impacting the fair value of our pension assets which could result in increased funding requirements of our pension plans. If our cash flow from operations is insufficient to fund our worldwide pension liability, we may be forced to reduce or delay capital expenditures or seek additional capital.

     The funding status of our pension plans is determined using many assumptions, such as inflation, investment rates, mortality, turnover and interest rates, any of which could prove to be different than projected. If the performance of the assets in our pension plans does not meet our expectations, or if other actuarial assumptions are modified, or not realized, we may be required to contribute more to our pension plans than we currently expect. For example, an approximate 25-basis point decline in the funding target interest rate under Section 730 of the Internal Revenue Code, as

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added by the Pension Protection Act of 2006 for minimum funding requirements, would increase our minimum required contributions to our U.S. pension plans by approximately $0.8 million to $1.1 million over the next three years.

     Our pension plans in the aggregate are underfunded by approximately $36 million as of December 31, 2009 (based on the actuarial assumptions used for Accounting Standards Codification (ASC) 715 “Compensation — Retirement Benefits,” purposes and comparing our projected benefit obligation to the fair value of plan assets) and required a certain level of mandatory contributions as prescribed by law. Our U.S. pension plans, which were underfunded by approximately $21 million as of December 31, 2009, are subject to ERISA. In the event our U.S. pension plans are terminated for any reason while the plans are less than fully funded, we will incur a liability to the Pension Benefit Guaranty Corporation that may be equal to the entire amount of the underfunding at the time of the termination. In addition, changes in required pension funding rules that were affected by the enactment of the Pension Protection Act of 2006 have significantly increased our funding requirements, which could have an adverse effect on our cash flow and require us to reduce or delay our capital expenditures or seek additional capital. Refer to Note 11 to our consolidated financial statements contained in Item 8 of this Annual Report.

Our international operations expose us to political and economic uncertainties and risks from abroad, which could negatively affect our results of operations.

     We have manufacturing facilities and sales offices in Europe, China, Japan, Taiwan, Singapore, Brazil, Mexico, Canada, and the United Kingdom which are subject to economic conditions and political factors within the respective countries which, if changed in a manner adverse to us, could negatively affect our results of operations and cash flow. Political risk factors include, but are not limited to, taxation, nationalization, inflation, currency fluctuations, foreign exchange restrictions, increased regulation and quotas, tariffs and other protectionist measures. Approximately 86% of our sales in 2009 were generated by products sold in the U.S., Canada, and Western Europe while the remaining sales were generated in other areas of the world, such as Asia, Eastern Europe, and Latin America.

Our European and Japanese activated carbon businesses are sourced from both the United States and China, which subjects these businesses to foreign exchange transaction risk.

     Our only production facilities for virgin granular activated carbon are in the United States and China. Those production facilities are used in supplying our global demand for virgin granular activated carbon. All of our foreign operations purchase from the U.S. and China operations in U.S. dollars yet sell in local currency, resulting in foreign exchange transaction risk. We generally execute foreign currency derivative contracts of not more than eighteen months in duration to cover a portion of our known or projected foreign currency exposure. However, those contracts do not protect us from longer-term trends of a strengthening U.S. dollar, which could significantly increase our cost of activated carbon delivered to our European and Japanese markets, and we may not be able to offset these costs by increasing our prices.

We have operations in multiple foreign countries and, as a result, are subject to foreign exchange translation risk, which could have an adverse effect on our financial results.

     We conduct significant business operations in several foreign countries. Of our 2009 net sales, approximately 42% were sales to countries other than the United States, and 2009 net sales denominated in non-U.S. dollars represented approximately 30% of our overall net sales. We conduct business in the local currencies of each of our foreign subsidiaries or affiliates. Those local currencies are then translated into U.S. dollars at the applicable exchange rates for inclusion in our consolidated financial statements. The exchange rates between some of these currencies and the U.S. dollar in recent years have fluctuated significantly and may continue to do so in the future. Changes in exchange rates, particularly the strengthening of the U.S. dollar, could significantly reduce our sales and profitability from foreign subsidiaries or affiliates from one period to the next as local currency amounts are translated into fewer U.S. dollars.

Our business includes capital equipment sales which could have extreme fluctuations due to the cyclical nature of that type of business.

     Our Equipment segment represented approximately 11% of our 2009 net sales. This business generally has a long project life cycle from bid solicitation to project completion and often requires customers to make large capital commitments well in advance of project execution. In addition, this business is usually affected by the general health of the overall economy. As a result, sales and earnings from the Equipment segment could be volatile.

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Declines in the operating performance of one of our business segments could result in an impairment of the segment’s goodwill.

     As of December 31, 2009, we had consolidated goodwill of approximately $26.9 million recorded in our business segments, primarily from our Activated Carbon and Service and Equipment segments. We test our goodwill on an annual basis or when an indication of possible impairment exists in order to determine whether the carrying value of our assets is still supported by the fair value of the underlying business. To the extent that it is not, we are required to record an impairment charge to reduce the asset to fair value. A decline in the operating performance of any of our business segments could result in a goodwill impairment charge which could have a material effect on our financial results.

Our required capital expenditures may exceed estimates.

     Our capital expenditures were $48.3 million in 2009. Future capital expenditures may be significantly higher and may vary substantially if we are required to undertake certain actions to comply with new regulatory requirements or compete with new technologies. We may not have the capital to undertake the capital investments. If we are unable to do so, we may not be able to effectively compete.

Our international operations are subject to political and economic risks for conducting business in corrupt environments.

     Although a portion of our international business is currently in regions where the risk level and established legal systems in many cases are similar to that in the United States, we also conduct business in developing countries, and we are focusing on increasing our sales in regions such as South America, Southeast Asia, India and the Middle East, which are less developed, have less stability in legal systems and financial markets, and are generally recognized as potentially more corrupt business environments than the United States and therefore, present greater political, economic and operational risks. We emphasize compliance with the law and have policies in place, procedures and certain ongoing training of employees with regard to business ethics and key legal requirements such as the U.S. Foreign Corrupt Practices Act (“FCPA”); however, there can be no assurances that our employees will adhere to our code of business conduct, other Company policies or the FCPA. If we fail to enforce our policies and procedures properly or maintain internal accounting practices to accurately record our international transactions, we may be subject to regulatory sanctions. We could incur significant costs for investigation, litigation, fees, settlements and judgments for potential violations of the FCPA or other laws or regulations which, in turn, could negatively affect our results of operations.

Our products could infringe the intellectual property rights of others, which may cause us to pay unexpected litigation costs or damages or prevent us from selling our products.

     Although it is our intention to avoid infringing or otherwise violating the intellectual property rights of others, our products may infringe or otherwise violate the intellectual property rights of others. We may be subject to legal proceedings and claims, including claims of alleged infringement by us of the patents and other intellectual property rights of third parties. Intellectual property litigation is expensive and time-consuming, regardless of the merits of any claim.

     If we were to discover or be notified that our products potentially infringe or otherwise violate the intellectual property rights of others, we may need to obtain licenses from these parties or substantially re-engineer our products in order to avoid infringement. We might not be able to obtain the necessary licenses on acceptable terms, or at all, or be able to re-engineer our products successfully. Moreover, if we are sued for infringement and lose the suit, we could be required to pay substantial damages and/or be enjoined from using or selling the infringing products. Any of the foregoing could cause us to incur significant costs and prevent us from selling our products.

We could find it difficult to fund the capital needed to complete our growth strategy.

     Our current credit facility requires compliance with various affirmative and negative covenants, including limitations with respect to our ability to pay dividends, make loans, incur indebtedness, grant liens on our property, engage in certain mergers and acquisitions, dispose of assets and engage in certain transactions with our affiliates. As a result, these restrictions may prevent us from being able to borrow sufficient funds under our current credit facility to meet our future capital needs and alternate financing on terms acceptable to us may not be available.

     If our liquidity would remain constrained for more than a temporary period, we may need to either delay certain strategic growth projects or access higher cost capital markets in order to fund our projects, which may adversely affect our financial results.

Our ability to utilize our foreign tax credits and net operating losses may be limited.

     As of December 31, 2009, we had net operating loss carryforwards (“NOLs”) of approximately $40.4 million for state income tax purposes. Under Section 382 of the Internal Revenue Code, if a corporation undergoes an “ownership

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change,” the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes to offset its post-change income may be limited. An ownership change is generally defined as a greater than 50% change in its equity ownership by value over a three-year period. We could experience an ownership change in the future as a result of changes in our stock ownership. If we were to trigger an ownership change in the future, our ability to use any NOLs existing at the time could be limited.

     At December 31, 2009, we had $10.2 million of foreign tax credit carryforwards for which we have established a valuation reserve of $3.4 million. If some or all of these tax credits expire, they will not be available to offset our tax liability.

Our stockholder rights plan and our certificate of incorporation and bylaws and Delaware law contain provisions that may delay or prevent an otherwise beneficial takeover attempt of our Company.

     Our stockholder rights plan and certain provisions of our certificate of incorporation and bylaws and Delaware law could make it more difficult for a third party to acquire us, even if doing so would be beneficial to our stockholders. These include provisions:

• providing for a board of directors with staggered, three-year terms;

• requiring super-majority voting to affect certain amendments to our certificate of incorporation and bylaws;

• limiting the persons who may call special stockholders’ meetings;

• limiting stockholder action by written consent;

• establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon at stockholders’ meetings; and

• allowing our board of directors to issue shares of preferred stock without stockholder approval.

     These provisions, alone or in combination with each other, may discourage transactions involving actual or potential changes of control, including transactions that otherwise could involve payment of a premium over prevailing market prices to holders of our common stock, or could limit the ability of our stockholders to approve transactions that they may deem to be in their best interest.

Item 1B. Unresolved Staff Comments:

None

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Item 2. Properties:

The Company owns nine production facilities, two of which are located in Pittsburgh, Pennsylvania; and one each in the following locations: Catlettsburg, Kentucky; Pearlington, Mississippi; Blue Lake, California; Columbus, Ohio; Feluy, Belgium; Grays, United Kingdom; and Datong, China. The Company leases one production facility in each of the following locations: Coraopolis, Pennsylvania; Houghton le-Spring, United Kingdom; Ashton-in-Makerfield, United Kingdom; and Tianjin, China. The Company’s 49% owned joint venture, Calgon Mitsubishi Chemical Corporation, owns one facility in Fukui, Fukui Prefecture, Japan. The Company owns two warehouses, one of which is in Pittsburgh, Pennsylvania and the other is in La Louviere, Belgium. The Company also leases 35 warehouses, service centers, and sales office facilities. Of these, twenty-six are located in the United States, four in China, and one each in the United Kingdom, Germany, Canada, Singapore, and Taiwan. Four of the United States facilities are located in Pittsburgh, Pennsylvania and one each in the following locations: Downingtown, Pennsylvania; Johnston, Rhode Island; Rockdale, Illinois; Santa Fe Springs, California; Marlton, New Jersey; Stockton, California; Tempe, Arizona; Torrance, California; Ontario, California; Schenley, Pennsylvania; South Point, Ohio; Muncy, Pennsylvania; Steubenville, Ohio; Ironton, Ohio; Troutdale, Oregon; Port Bienville, Mississippi; and Sulphur, Louisiana as well as two in Houston, Texas and three in Huntington, West Virginia. The United Kingdom facility is located in Ashton-in-Makerfield. The facility in Germany is located in Beverungen. Two of the China facilities are located in Shanghai and one each in Beijing and Tianjin. The Taiwan facility is located in Taipei. The Canadian facility is located in Richmond Hill, Ontario. The Company’s 49% owned joint venture, Calgon Mitsubishi Chemical Corporation, leases four offices, one each in Tokyo and Osaka, and two in Fukuoka Prefecture. The Company’s 20% owned joint venture, Calgon Carbon (Thailand) Company Ltd., leases one facility in Nakornrachasima, Thailand.

     The Catlettsburg, Kentucky plant is the Company’s largest facility, with plant operations occupying approximately 50 acres of a 226-acre site. This plant, which serves the Activated Carbon and Service segment, produces granular and powdered activated carbons and acid washed granular activated carbons and reactivates spent granular activated carbons.

     The Pittsburgh, Pennsylvania carbon production plant occupies a four-acre site and serves the Activated Carbon and Service segment. Operations at the plant include the reactivation of spent granular activated carbons, the impregnation of granular activated carbons and the grinding of granular activated carbons into powdered activated carbons. The plant also has the capacity to produce coal-based or coconut-based specialty activated carbons.

     The Pearlington, Mississippi plant occupies a site of approximately 100 acres. The plant has one production line that produces granular and powdered activated carbons for the Activated Carbon and Service segment.

     The Columbus plant occupies approximately 27 acres in Columbus, Ohio. Operations at the plant include the reactivation of spent granular activated carbons, impregnation of activated carbon, crushing activated carbon to fine mesh, acid and water washing, filter-filling, and various other value added processes to granular activated carbon for the Activated Carbon and Service segment.

     The Blue Lake plant, located near the city of Eureka, California, occupies approximately two acres. The plant was previously idled and re-started in November 2008. The primary operation at the plant includes the reactivation of spent granular activated carbons for the Activated Carbon and Service segment.

     The Pittsburgh, Pennsylvania Equipment and Assembly plant is located on Neville Island and is situated within a 16-acre site that includes a 300,000 square foot building. The Equipment and Assembly plant occupies 85,000 square feet with the remaining space used as a centralized warehouse for carbon inventory. The plant, which serves the Equipment and Activated Carbon and Service segments, manufactures and assembles fully engineered carbon equipment for purification, concentration and separation systems. This plant also serves as the east coast staging and refurbishment point for carbon service equipment.

     The Coraopolis, Pennsylvania Engineered Solutions plant is a 44,000 square foot production facility located near Pittsburgh, Pennsylvania. The primary focus of this facility is the manufacture of UV and Ion Exchange (ISEP^®) equipment, including mechanical and electrical assembly, controls systems integration and validation testing of equipment. This location also serves as the Pilot Testing facility for Process Development, as well as the spare parts distribution center for UV and ISEP^® systems.

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     The Company recently entered into a lease with the City of North Tonowanda, New York for use of an existing activated carbon reactivation furnace located at the city’s wastewater treatment facility. This unit is currently being renovated and retrofit for the Company to use for reactivating spent activated carbon from food grade and potable water system customers. It is expected to be operational by the third quarter of 2010.

     The Feluy plant occupies a site of approximately 21 acres located 30 miles south of Brussels, Belgium. Operations at the plant include both the reactivation of spent granular activated carbons and the grinding of granular activated carbons into powdered activated carbons for the Activated Carbon and Service segment.

     The Grays plant occupies a three-acre site near London, United Kingdom. Operations at the plant include the reactivation of spent granular activated carbons for the Activated Carbon and Service segment.

     The Ashton-in-Makerfield plant occupies a 1.6 acre site, 20 miles west of Manchester, United Kingdom. Operations at the plant include the impregnation of granular activated carbons for the Activated Carbon and Service segment. The plant also has the capacity to finish coal-based or coconut-based activated carbons.

     The Houghton le-Spring plant, located near the city of Newcastle, United Kingdom, occupies approximately two acres. Operations at the plant include the manufacture of woven and knitted activated carbon textiles and their impregnation and lamination for the Consumer segment.

     The Fukui, Fukui Prefecture, Japan plant is 49% owned by Calgon Carbon as part of a joint venture with Mitsubishi Chemical Company. The joint venture is Calgon Mitsubishi Chemical Corporation. The plant, which serves the Activated Carbon and Service segment, occupies a site of approximately six acres and has two production lines for carbon reactivation.

     The Datong, China plant occupies 15,000 square meters. The plant produces agglomerated activated carbon intermediate product for the Activated Carbon and Service segment for use in both the potable and industrial markets.

     The Tianjin, China plant is licensed to export activated carbon products. It occupies approximately 35,000 square meters. This plant finishes, sizes, tests, and packages activated carbon products for the Activated Carbon and Service segment for distribution both inside China and for export.

     The Company believes that the plants and leased facilities are adequate and suitable for its current operating needs.

Item 3. Legal Proceedings:

On March 20, 2007, the Company and ADA-ES entered into a Memorandum of Understanding (“MOU”) providing for cooperation between the companies to attempt to jointly market powdered activated carbon (“PAC”) to the electric power industry for the removal of mercury from coal fired power plant flue gas. The MOU provided for commissions to be paid to ADA-ES in respect of product sales. The Company terminated the MOU effective as of August 24, 2007 for convenience. Neither party had entered into sales or supply agreements with prospective customers as of that date. On March 3, 2008, the Company entered into a supply agreement with a major U.S. power generator for the sale of powdered activated carbon products with a minimum purchase obligation of approximately $55 million over a 5 year period. ADA-ES claimed that it is entitled to commissions of at least $8.25 million over the course of the 5 year contract, which the Company denies. On September 29, 2008, the Company filed suit in the United States District Court for the Western District of Pennsylvania for a declaratory judgment from the Court that the Company has no obligation to pay ADA-ES commissions related to this contract or for any future sales made after August 24, 2007. The Company has been countersued alleging breach of contract. Discovery is on-going and the Company intends to vigorously defend the countersuit and pursue the declaratory judgment.

     In 2002, the Company was sued by For Your Ease Only (“FYEO”). The case has been stayed since 2003. The case arises out of the Company’s patent covering anti-tarnish jewelry boxes, U.S. Patent No. 6,412,628 (“the ‘628 Patent”). FYEO and the Company are competitors in the sale of jewelry boxes through a common retailer. In 2002, the Company asserted to the retailer that FYEO’s jewelry box infringed the ‘628 Patent. FYEO filed suit in the U.S. District Court for the Northern District of Illinois for a declaration that the patent was invalid and not infringed, and claiming that the Company

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had tortiously interfered with its relationship with the retailer. The Company defended the suit until December 2003, when the case was stayed pending a re-examination of the ‘628 Patent in the Patent and Trademark Office. That patent was re-examined and certain claims of that patent were rejected by order dated February 25, 2008. The Company appealed, but the re-examination was affirmed by the Court of Appeals for the Federal Circuit. The Patent Trademark Office issued a re-examination certificate on August 25, 2009. Consequently, the stay on litigation is likely to be lifted in the next few months. The Company will assert that, notwithstanding the rejection of certain claims in the ‘628 Patent, the Company had a good-faith belief that its patent was valid and that FYEO’s product infringed, and that such belief insulates the Company from liability for publicizing its patent. At this time the Company cannot predict with any certainty the outcome of this matter or range of loss, if any.

     In addition to the matters described above, the Company is involved in various other legal proceedings, lawsuits and claims, including employment, product warranty and environmental matters of the nature considered normal to its business. It is the Company’s policy to accrue for amounts related to the legal matters when it is probable that a liability has been incurred and the loss amount is reasonably estimable. Management believes that the ultimate liabilities, if any, resulting from such lawsuits and claims will not materially affect the consolidated financial position or liquidity of the Company, but an adverse outcome could be material to the results of operations in a particular period in which a liability is recognized.

Item 4. Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders during the fourth quarter of 2009.

PART II

Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters, and Issuer Repurchases of Equity Securities:

Common Shares and Market Information

Common shares are traded on the New York Stock Exchange under the trading symbol CCC. There were 1,297 registered shareholders at December 31, 2009.

Quarterly Common Stock Price Ranges and Dividends

	2009						2008
Fiscal Quarter	High		Low		Dividend		High		Low		Dividend
First		16.79		12.00		-		18.92		13.19		-
Second		19.31		11.14		-		20.23		12.63		-
Third		16.77		10.93		-		23.03		14.04		-
Fourth		16.61		13.05		-		21.64		9.11		-

     The Company did not declare or pay any dividends in 2009 and 2008. Dividend declaration and payout are at the discretion of the Board of Directors. Future dividends will depend on the Company’s earnings, cash flows, and capital investment plans to pursue long-term growth opportunities. The Company’s Credit Agreement contains a covenant which includes limitations on its ability to declare or pay cash dividends, subject to certain exceptions, such as dividends declared and paid by its subsidiaries and cash dividends paid by the Company in an amount not to exceed 50% of cumulative net after tax earnings following the closing date of the agreement if certain conditions are met.

     The information appearing in Item 12 of Part III below regarding common stock issuable under the Company’s equity compensation plan is incorporated herein by reference.

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Shareholder Return Performance Graph

     The following performance graph and related information shall not be deemed “filed” with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that the Company specifically incorporates it by reference into such filing.

     The graph below compares the yearly change in cumulative total shareholder return of the Company’s common stock with the cumulative total return of the Standard & Poor’s (S&P’s) 500 Stock Composite Index and a Peer Group. The Company believes that its core business consists of purifying air, water and other products. As such, the Company uses a comparative peer group benchmark. The companies included in the group are Clarcor, Inc., Donaldson Co. Inc., Esco Technologies Inc., Flanders Corp., Lydall, Inc., Millipore Corp., and Pall Corp. The data for BHA Group Holdings Inc., Cuno, Inc., and Ionics, Inc. was included in the 2008 graph, however these companies were acquired between 2004 and 2005 and their common stock ceased to be publicly traded. As a result, the data for these companies is no longer included.

Comparison of Five-Year Cumulative Total Return*
Among Calgon Carbon’s Common Stock, S&P 500 Composite Index, and Peer Group

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Issuer Repurchases of Equity Securities

							Maximum Number (or
					Total Number of Shares		Approximate Dollar Value)
					Purchased as Part of Publicly		of Shares that May Yet be
	Total Number of		Average Price		Announced Repurchase Plans		Purchased Under the Plans
Period	Shares Purchased (a)		Paid Per Share		or Programs		or Programs
October 1 – October 31, 2009		25,529		$15.05		-		-
November 1 – November 30, 2009		-		-		-		-
December 1 – December 31, 2009		-		-		-		-

(a) This column includes purchases under Calgon Carbon’s Stock Option Plan which represented withholding taxes due from employees relating to the restricted share awards issued. Further purchases under this plan will be dependent upon employee elections and forfeitures.

Item 6. Selected Financial Data:

FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA
Calgon Carbon Corporation

(Dollars in thousands except per share data)	2009(5)		2008*(4)		2007*		2006*(3)		2005
Income Statement Data:
Net sales	$	411,910	$	400,270	$	351,124	$	316,122	$	290,835
Income (loss) from continuing operations	$	39,159	$	28,840	$	13,597	$	(9,619)	$	(10,507)
Income (loss) from continuing operations per common share, basic	$	0.72	$	0.65	$	0.34	$	(0.24)	$	(0.27)
Income (loss) from continuing operations per common share, diluted	$	0.69	$	0.54	$	0.27	$	(0.24)	$	(0.27)
Cash dividends declared per common share	$	-	$	-	$	-	$	-	$	0.09
Balance Sheet Data (at year end):
Total assets	$	425,718	$	387,262	$	342,577	$	315,598	$	347,868
Long-term debt	$	-	$	-(1)	$	12,925(2)	$	57,306	$	83,925

(1)   Excludes $7.9 million of debt which is classified as current. Refer to Note 7 to the Company’s consolidated financial statements contained in Item 8 of this Annual Report for further information.
(2)   Excludes $48.0 million of debt which is classified as current.
(3)   Includes the gain from insurance settlement and the goodwill impairment charge of $8.1 million and $6.9 million, pre-tax, respectively.
(4)   Includes the gain on AST Settlement of $9.3 million, pre-tax. Refer to Note 16 to the Company’s consolidated financial statements contained in Item 8 of this Annual Report for further information.
(5)   Includes $4.8 million of net earnings related to a reduction of the valuation allowance associated with foreign tax credits.

* Results have been retrospectively adjusted to incorporate the adoption of guidance within ASC 470-20 “Debt with Conversion and Other Options.” (Refer to Note 7 to the Company’s consolidated financial statements contained in Item 8 of this Annual Report).

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations:

Overview
The Company reported net income of $39.2 million or $0.69 per diluted share, as compared to net income of $31.6 million, or $0.59 per diluted share for 2008. Income from continuing operations before equity in income of equity investments increased almost $10.0 million, from $28.0 million in 2008 to $37.9 million in 2009. The 2008 results were impacted by several significant items, including a $9.3 million pre-tax gain from a litigation settlement as well as a charge of $8.9 million for losses incurred in the extinguishment of debt. The 2008 full year results were also burdened by $6.0 million of interest expense that was virtually eliminated in 2009 due to the extinguishment of all the Company’s debt that occurred during the last half of 2008 and throughout 2009.

     The 2009 results reflect increased sales of $11.6 million or 2.9% mainly due to pricing increases instituted in late 2008 and increased sales of the Company’s FLUEPAC^® products for mercury removal. In spite of the higher sales, cost of products sold in 2009 increased by only $0.3 million. Such costs in 2009 were reduced by the reflection of the receipt, or estimated refunds, of tariff deposits. Selling, general, and administrative expense increased 6.4%. As a percent of sales, these costs were 16.5% and 16.0% in 2009 and 2008, respectively. Other costs, including depreciation and research and development, were impacted by costs incurred to serve the growing market for mercury removal. Finally, the Company’s 2009 effective tax rate was almost 10 percentage points less than the 2008 rate. This significant tax rate decrease primarily resulted from the elimination during 2009 of the Company’s overall foreign loss and related ability to use certain foreign tax credits which resulted in a decrease in the deferred tax asset valuation allowance of $4.8 million.

     During 2009, the Company made substantial investments in its property, plant and equipment while at the same time significantly improving its liquidity. Capital expenditures in 2009 totaled over $48.0 million and related primarily to new plant investments at the Catlettsburg, Kentucky facility. Not only did the Company complete the investment in the formerly idled “B-Line” returning it to service in April 2009, but also, a pulverization facility was built allowing the Company to grind feedstock to more efficiently produce FLUEPAC^® products for mercury removal. In total, these investments were $23.7 million or approximately one half of 2009 capital expenditures. In May 2009, the Company entered into a new, five year $95.0 million credit facility which increased borrowing capacity by approximately $35.0 million. Operating cash flow of over $79.0 million in 2009 was driven primarily by improved working capital and allowed the Company to not only fund the aforementioned capital improvements, but also to retire all of its outstanding debt during 2009.

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Results of Operations

2009 Versus 2008

Continuing Operations:
Consolidated net sales increased $11.6 million or 2.9% in 2009 as compared to 2008. The total negative impact of foreign currency translation on consolidated net sales was $10.2 million.

     Net sales for the Activated Carbon and Service segment increased $15.9 million or 4.6%. Although overall volume was down by approximately 10% in 2009, the Company realized increased sales related to activated carbon products used to remove mercury from flue gas of coal-fired power plants in the U.S. of $16.9 million primarily as a result of contracts awarded in 2008 and 2009. In addition, the Company continued to experience favorable pricing of approximately 19% in almost all of its markets as compared to 2008. Foreign currency translation had a negative impact of $8.6 million. Sales in the Equipment segment decreased approximately $3.4 million or 7.1%. The decrease was principally due to a decline in sales of traditional carbon adsorption and odor control equipment of $3.2 million and $3.0 million, respectively. Partially offsetting this decrease was higher revenue related to ultraviolet light (UV) systems used for the disinfection of drinking water of approximately $3.0 million. Foreign currency translation had a negative impact of $0.3 million. Sales for the Consumer segment decreased by $0.9 million or 8.1% which was primarily due to the negative impact of foreign currency translation of $1.3 million. Offsetting this decrease was the increase in demand for activated carbon cloth during the last half of 2009 of approximately $0.4 million.

     Net sales less cost of products sold, as a percent of net sales, was 35.3% in 2009 compared to 33.3% in 2008, an increase of 2.0 percentage points or $11.9 million. The increase was primarily from the Activated Carbon and Service segment of $12.3 million which was principally due to the aforementioned favorable pricing of certain activated carbon products and services. However, also contributing to the increase were lower freight costs of $4.6 million related to volume decline as well as $2.4 million related to the receipt of, or estimated refunds of, tariff deposits that were recorded in the fourth quarter when it was announced that the related tariff rates had been significantly reduced. Partially offsetting this increase were higher plant maintenance costs of approximately $3.2 million at certain of the Company’s production facilities primarily as a result of delaying maintenance turnarounds in 2008 in order to meet demand. Both the Equipment and Consumer segments were comparable to 2008. The Company’s cost of products sold excludes depreciation; therefore it may not be comparable to that of other companies.

     Depreciation and amortization increased by $1.5 million or 8.7% in 2009 as compared to 2008 primarily due to increased depreciation related to the significant capital improvements at the Company’s Catlettsburg, Kentucky plant including the improvements made to a previously idled production line in advance of its April 2009 re-start.

     Selling, general and administrative expenses increased by $4.1 million or 6.4% in 2009. The increase was principally due to employee related costs of $2.5 million, acquisition due diligence costs of approximately $1.0 million (refer to Note 20 of the Company’s consolidated financial statements contained in Item 8 of this Annual Report), and increased legal expense of $0.8 million. On a segment basis, selling, general and administrative expenses increased in 2009 by approximately $4.3 million in the Activated Carbon and Service segment which was primarily related to the aforementioned employee related, acquisition, and legal costs. Selling, general and administrative expenses for the Equipment segment was comparable to 2008 and decreased slightly for the Consumer segment by $0.3 million as compared to 2008.

     Research and development expenses increased by $1.4 million or 33.1%. The increase was primarily due to an increase in testing services related to mercury removal from flue gas.

     The $9.3 million gain on AST settlement for 2008 relates to the resolution of a lawsuit involving the Company’s purchase of the common stock of Advanced Separation Technologies Inc. (“AST”) in 1996. Of the settlement amount, approximately $5.3 million was recorded in the Activated Carbon and Service segment and $4.0 million was recorded in the Equipment segment (Refer to Note 16 of the Company’s consolidated financial statements contained in Item 8 of this Annual Report).

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     The loss on extinguishment of debt of $0.9 million in 2009 was due to the final conversion of the remaining $6.0 million of Senior Convertible Notes (Notes). The loss on extinguishment of debt of $8.9 million in 2008 was a result of the conversion of $69.0 million of Notes. These losses were recorded pursuant to the required January 1, 2009 adoption of new accounting guidance within Accounting Standards Codification (ASC) 470-20. Such guidance was retrospectively applied (Refer to additional discussion in Note 7 of the Company’s consolidated financial statements contained in Item 8 of this Annual Report).

     Interest income decreased in 2009 versus 2008 by $1.0 million or 69.5% primarily due to lower interest rates in 2009 versus 2008.

     Interest expense decreased $5.7 million or 95.3% primarily as a result of the conversion of a substantial portion of the Company’s Notes that occurred in 2008.

     Other expense – net increased in 2009 versus 2008 by $0.8 million or 37.5% primarily due to the write-off of $0.8 million of financing fees related to the Company’s prior credit facility which was replaced in 2009.

          The provision for income taxes for 2009 was $11.8 million as compared to $14.0 million in 2008. The effective tax rate for the year ended December 31, 2009 was 23.7% compared to 33.4% for the year ended December 31, 2008. In 2009, the Company determined that an overall foreign loss position no longer exists and that sufficient foreign source income was generated to use $3.9 million of foreign tax credit carryforwards thereby reversing a valuation allowance recorded as of December 31, 2008 related to these tax credits. The 2009 increased foreign source income also allowed the Company to use more tax credits earned in 2009 versus 2008 thereby reducing the amount of valuation allowance established. Also, in 2009, the Company determined a valuation allowance of $3.1 million for certain foreign tax credits related to uncertain tax positions was no longer required. In total, the valuation allowance for foreign tax credits decreased $0.4 million in 2008 and was reduced by $4.5 million in 2009 which caused the 2009 effective tax rate to be 8.2% lower than 2008’s effective tax rate.

     The Company periodically reviews the need for a valuation allowance against deferred tax assets and recognizes these deferred tax assets to the extent that realization is more likely than not. Based upon a review of earnings history and trends, forecasted earnings and the relevant expiration of carryforwards, the Company believes that the valuation allowances provided are appropriate. At December 31, 2009, the valuation allowance of approximately $3.5 million related primarily to foreign tax credits.

     Equity in income of equity investments increased $0.4 million in 2009 versus 2008. The increase was principally due to increased pricing on carbon products as well as a large volume municipal carbon fill that occurred in early 2009 both related to the Company’s joint venture Calgon Mitsubishi Chemical Corporation in Japan.

Discontinued Operations:

Income from discontinued operations of $2.8 million in 2008 was as a result of the final adjustment to the contingent consideration received from the sale of the Company’s Charcoal/Liquid business that was sold in the first quarter of 2006 (Refer to Note 2 of the Company’s consolidated financial statements contained in Item 8 of this Annual Report).

2008 Versus 2007

Continuing Operations:

Consolidated net sales increased in 2008 compared to 2007 by $49.1 million or 14.0%. Sales increased in the Activated Carbon and Service segment by $46.7 million or 15.8%. The increase was primarily due to higher pricing in all markets as well as increased demand in the food, environmental air treatment, and potable water markets of $13.7 million, $9.7 million, and $8.0 million, respectively. Volume growth, although a contributing factor, was limited by the Company’s capacity constraints experienced throughout 2008. However, the Company was able to achieve higher pricing due to a tighter global supply/demand balance and as a result of the imposition of the anti-dumping tariff by the United States Department of Commerce, which enabled the return of fair market pricing to the marketplace (see further discussion regarding the tariff under the caption “Other”). The Company also increased prices in order to help offset increased costs

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for energy, transportation, and raw materials that had been rising globally during 2008. Also during 2008, the Company had sales of $3.0 million from several new customers related to the use of granular activated carbon (GAC) for drinking water treatment as a result of 2006 U.S. regulations that were established to provide maximum levels for disinfection byproducts (DBPs) in chlorinated drinking water. Foreign currency translation had a positive impact of $2.2 million. Sales in the Equipment segment increased approximately $6.0 million or 14.4%. The increase was principally due to higher demand for ultraviolet light (UV) systems used for the disinfection of drinking water of $2.6 million and carbon adsorption systems of approximately $3.7 million. The increase in UV sales was primarily related to a major UV installation located in Montreal that was awarded in 2008. This contract as well as three others that were awarded in 2008 are valued at more than $15 million. The demand for UV in the U.S. has been driven by regulatory action requiring many municipalities to test drinking water, and if necessary, treat for cryptosporidium by 2012 (specifically, the Long Term 2 Enhanced Surface Water Treatment Rule (LT2)). Partially offsetting this increase was a decrease in demand for ISEP^® systems of $0.7 million primarily in the U.S. as many companies already have such systems in place or are using similar equipment for food processing and pharmaceutical applications. Foreign currency translation had a positive impact of $0.2 million. Sales for the Consumer segment decreased by $3.5 million or 24.9% primarily due to shipment delays related to performance issues with new production equipment that limited the output of activated carbon cloth. These factors are not expected to continue. The slowing economy resulted in decreased demand for PreZerve^® products of approximately $0.8 million which is expected to continue in 2009. Foreign currency translation also had a negative impact of $0.5 million year over year. The total sales increase for all segments attributable to the effect of foreign currency translation was $1.9 million.

     Net sales less cost of products sold, as a percent of net sales, was 33.3% in 2008 compared to 31.0% in 2007, an increase of 2.3 percentage points. The increase was primarily from the Activated Carbon and Service segment which was 33.8% in 2008 versus 31.0% in 2007, an increase of 2.8 percentage points. The increase was principally due to higher selling prices of certain activated carbon products and service. The Equipment segment was 30.6% in 2008 versus 27.7% in 2007, an increase of 2.9 percentage points. The increase was primarily due to the Company’s movement to standardized product offerings and a more selective bids process. The Consumer segment reported 30.1% in 2008 versus 39.8% in 2007, a decline of 9.7 percentage points primarily due to competitive pricing pressure and manufacturing inefficiencies at its activated carbon cloth facility. The Company’s cost of products sold excludes depreciation; therefore it may not be comparable to that of other companies.

     Depreciation and amortization decreased by $0.6 million or 3.3% in 2008 as compared to 2007 primarily due to an increase in fully depreciated fixed assets.

     Selling, general and administrative expenses increased by $2.8 million or 4.6% in 2008. The increase was principally due to higher legal expenses of $1.3 million which were primarily related to the administrative review of the Department of Commerce’s April 2007 anti-dumping order on certain activated carbon products from China as well as increased employee related expense of approximately $1.5 million related to increased compensation-related costs for the Company’s salaried workforce. On a segment basis, selling, general and administrative expenses increased in 2008 by approximately $3.8 million in the Activated Carbon and Service segment which was primarily related to the aforementioned legal expenses and employee related expenses. Selling, general and administrative expenses for the Equipment segment decreased by approximately $0.9 million primarily due to decreased litigation expense related to the completion of the AST litigation and such expenses were comparable for the Consumer segment year over year.

     Research and development expenses increased by $0.4 million or 11.6%. The increase was primarily due to an increase in both employee related expenses and laboratory testing services related to mercury removal from flue gas.

     The $9.3 million gain on AST settlement of 2008 relates to the resolution of a lawsuit involving the Company’s purchase of the common stock of AST in 1996 (Refer to Note 16 of the Company’s consolidated financial statements contained in Item 8 of this Annual Report).

          The loss on extinguishment of debt of $8.9 million in 2008 was a result of the conversion of $69.0 million of Notes. These losses were recorded pursuant to the required January 1, 2009 adoption of new accounting guidance within ASC 470-20. Such guidance was retrospectively applied (See additional discussion in Note 7 of the Company’s consolidated financial statements contained in Item 8 of this Annual Report).

     Interest income was comparable in 2008 versus 2007.

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     Interest expense decreased $2.5 million or 29.5% as a result of the conversion of a substantial portion of the aforementioned Notes and the effect of capitalized interest due to increased capital spending in 2008.

     Other expense – net increased in 2008 versus 2007 by $0.8 million or 55.9% primarily due to non-recurring costs associated with the conversion of a portion of the Notes as well as the negative impact of foreign exchange.

     Income tax expense from continuing operations for 2008 was $14.0 million as compared to $6.6 million in 2007. The effective tax rate for 2008 was 33.4% compared to 36.4% in 2007. In 2008, the Company was able to use a portion of its 2008 foreign tax credits which eliminated the need for a corresponding valuation allowance; as compared to 2007, in which all foreign tax credits were subject to a valuation allowance of 65%. This caused the Company’s effective tax rate to be 6.0% lower than the 2007 effective tax rate. The 2008 effective tax rate also decreased 3.6% versus 2007 due to increased income in foreign jurisdictions where the tax rate was lower than the U.S. rate. In 2007, the Company benefited from deferred tax related adjustments for changes in tax rates which caused the 2008 effective tax rate to be 2.8% higher than the 2007 effective tax rate. The 2008 effective tax rate also increased compared to 2007 by 1.9% due to a change in the mix of states in which the Company operated.

     Equity in income of equity investments decreased in 2008 versus 2007 by $1.1 million. The decrease was principally due to higher product costs realized in 2008 by the Company’s Japanese joint venture Calgon Mitsubishi Chemical Corporation.

Discontinued Operations:

Income from discontinued operations was $2.8 million as compared to a loss from discontinued operations of $0.2 million in 2007. The 2008 results include the final adjustment to the contingent consideration received from the sale of the Company’s Charcoal/Liquid business that was sold in the first quarter of 2006 (Refer to Note 2 of the Company’s consolidated financial statements contained in Item 8 of this Annual Report).

Working Capital and Liquidity

Cash flows provided by operating activities were $79.1 million for the year ended December 31, 2009 as compared to $25.6 million for the year ended December 31, 2008. The $53.5 million increase was primarily due to favorable working capital changes of $46.3 million (exclusive of debt), principally related to accounts receivable of $12.1 million as a result of improved cash collections; inventory of $25.6 million related to the idling of the Datong facility, inventory control measures in Europe and the U.S. including the reduction of purchases of outsourced carbon related products; and other current assets of $8.1 million. Also contributing to the increase was improved operating results of $7.5 million.

     The Company did not have outstanding debt at December 31, 2009 as compared to $9.5 million outstanding at December 31, 2008. During 2009, the Company repaid its Mississippi Industrial Revenue bonds and China credit facility of $2.9 million and $1.6 million, respectively. The non-cash exchange of the remaining $6.0 million of Notes, primarily for the Company’s common stock, also occurred during the year ended December 31, 2009.

5.00% Convertible Senior Notes due 2036
On August 18, 2006, the Company issued $75.0 million in aggregate principal amount of 5.00% Notes due in 2036 (the “Notes”). The Notes accrued interest at the rate of 5.00% per annum which was payable in cash semi-annually in arrears on each February 15 and August 15, which commenced February 15, 2007. The Notes were eligible to be converted under certain circumstances.

     During the period of August 20, 2008 through November 10, 2008, the Company converted and exchanged $69.0 million of the Notes for cash of $11.0 million and approximately 13.0 million shares of its common stock. A pre-tax loss of $8.9 million was recorded on these extinguishments during the year ended December 31, 2008. During the third quarter of 2009, the Company exchanged, for approximately 1.2 million shares of its common stock, the remaining $6.0 million of Notes. A pre-tax loss of $0.9 million was recorded on this extinguishment related primarily to the outstanding discount and deferred financing fees of the Notes upon conversion.

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     Due to the conversion rights of the holders of the Notes, the Company classified the remaining principal amount of outstanding Notes as a current liability as of December 31, 2008. As of December 31, 2009, all Notes have been converted.

     Effective January 1, 2009, the Company implemented guidance within ASC 470-20 “Debt with Conversion and Other Options.” This new guidance required the issuer to separately account for the liability and equity components of convertible debt instruments in a manner that reflects the issuer’s nonconvertible debt borrowing rate. This new accounting method has been applied retrospectively to all periods presented with an impact to retained earnings of $0.6 million as of January 1, 2007. The Company’s $75.0 million principal amount of Notes had an initial measurement that consisted of a liability component of $53.1 million and an equity component of $18.6 million ($11.5 million after the associated deferred tax liability). The carrying amount of the equity component was zero and $0.6 million (after tax) at December 31, 2009 and December 31, 2008, respectively.

     In accordance with guidance within ASC 470-20, the debt discount of $21.9 million was being amortized over the period from August 18, 2006 (the issuance date) to June 15, 2011 (the first put date on the Notes). The effective interest rate for all periods on the liability component was approximately 13.8%. The Company also incurred original issuance costs of $0.4 million which had been deferred and were being amortized over the same period as the discount. For the year ended December 31, 2009, the Company recorded interest expense of $0.2 million related to the Notes, of which $0.1 million related to the amortization of the discount and $0.1 million related to contractual coupon interest, respectively. Similarly, for the years ended December 31, 2008 and 2007, the Company recorded interest expense of $5.7 million and $7.4 million, respectively, related to the Notes, of which $3.0 million and $3.7 million related to the amortization of the discount and $2.7 million and $3.7 million related to contractual coupon interest. The effect of the retrospective adjustment for the years ended December 31, 2008 and 2007 was to decrease previously reported net income from continuing operations by $6.7 million and $1.9 million, respectively, or $0.13 and $0.04, respectively, per diluted common share.

Credit Facility

On August 14, 2008, the Company entered into a third amendment (the “Third Amendment”) to its Credit Facility (the “Prior Credit Facility”). The Third Amendment permitted borrowings in an amount up to $60.0 million and included a separate U.K. sub-facility and a separate Belgian sub-facility. The Prior Credit Facility permitted the total revolving credit commitment to be increased up to $75.0 million. The facility was scheduled to mature on May 15, 2011. Availability for domestic borrowings under the Prior Credit Facility was based upon the value of eligible inventory, accounts receivable and property, plant and equipment, with separate borrowing bases to be established for foreign borrowings under a separate U.K. sub-facility and a separate Belgian sub-facility. Availability under the Prior Credit Facility was conditioned upon various customary conditions.

     On May 8, 2009, the Company and certain of its domestic subsidiaries entered into a Credit Agreement (the “Credit Agreement”) that replaced the Company’s Prior Credit Facility. Concurrent with the closing under the Credit Agreement, the Company terminated and paid in full its obligations under the Prior Credit Facility. The Company provided cash collateral to the former agent bank for the remaining exposure related to outstanding letters of credit and certain derivative obligations. The cash collateral is shown as restricted cash within the consolidated balance sheet as of December 31, 2009. The Company was in compliance with all applicable financial covenants and other restrictions under the Prior Credit Facility as of the effective date of its termination and in May 2009, wrote off deferred costs of approximately $0.8 million, pre-tax, related to the Prior Credit Facility.

     The Credit Agreement provides for an initial $95.0 million revolving credit facility (the “Revolving Credit Facility”) which expires on May 8, 2014. So long as no event of default has occurred and is continuing, the Company from time to time may request one or more increases in the total revolving credit commitment under the Revolving Credit Facility of up to $30.0 million in the aggregate. No assurance can be given, however, that the total revolving credit commitment will be increased above $95.0 million. Availability under the Revolving Credit Facility is conditioned upon various customary conditions. A quarterly nonrefundable commitment fee is payable by the Company based on the unused availability under the Revolving Credit Facility and is currently equal to 0.25%. Any outstanding borrowings under the Revolving Credit Facility on July 2, 2012, up to $50.0 million, automatically convert to a term loan maturing on May 8, 2014 (the “Term Loan”), with the total revolving credit commitment under the Revolving Credit Facility being reduced at that time by the amount of the Term Loan. Total availability under the Revolving Credit Facility at December 31, 2009 was $91.9 million, after considering outstanding letters of credit.

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     On November 30, 2009, the Company entered into a First Amendment to the Credit Agreement (the “First Amendment”). The First Amendment relaxes certain restrictions contained in the Credit Agreement so as to permit the Company to form subsidiaries in connection with future acquisitions or for corporate planning purposes; to permit increased capital expenditures; to increase the amount of cash that may be down-streamed to non-domestic subsidiaries; to permit the issuance of up to $8.0 million of letters of credit outside the Credit Agreement; to increase the amount of indebtedness the Company may obtain outside of the Credit Agreement; to permit the pledging of U.S. assets to secure certain foreign debt; and to permit the purchase of 51% of Calgon Mitsubishi Chemical Corporation (“CMCC”) not already owned by the Company, including funding that transaction with foreign debt.

     The interest rate on amounts owed under the Term Loan and the Revolving Credit Facility will be, at the Company’s option, either (i) a fluctuating base rate based on the highest of (A) the prime rate announced from time to time by the lenders, (B) the rate announced by the Federal Reserve Bank of New York on that day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day plus 3.00% or (C) a daily LIBOR rate plus 2.50%, or (ii) a rate based on the average published LIBOR rates for comparable borrowings and reserve requirements prescribed by the Board of Governors of the Federal Reserve System of the United States. A margin may be added to the applicable interest rate based on the Company’s leverage ratio as set forth in the First Amendment. The interest rate per annum as of December 31, 2009 using option (i) above would have been 3.25% if any borrowings were outstanding.

     The Company incurred issuance costs of $1.0 million which were deferred and are being amortized over the term of the Credit Agreement. As of December 31, 2009, there are no outstanding borrowings under the Revolving Credit Facility.

     Certain of the Company’s domestic subsidiaries unconditionally guarantee all indebtedness and obligations related to borrowings under the Credit Agreement. The Company’s obligations under the Revolving Credit Facility are secured by a first perfected security interest in certain of the domestic assets of the Company and the subsidiary guarantors, including certain real property, inventory, accounts receivable, equipment and capital stock of certain of the Company’s domestic subsidiaries.

     The Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type, including limitations on the Company and its subsidiaries with respect to indebtedness, liens, investments, capital expenditures, mergers and acquisitions, dispositions of assets and transactions with affiliates. The Credit Agreement also provides for customary events of default, including failure to pay principal or interest when due, failure to comply with covenants, the fact that any representation or warranty made by the Company is false or misleading in any material respect, certain insolvency or receivership events affecting the Company and its subsidiaries and a change in control of the Company. If an event of default occurs, the lenders will be under no further obligation to make loans or issue letters of credit. Upon the occurrence of certain events of default, all outstanding obligations of the Company automatically become immediately due and payable, and other events of default will allow the lenders to declare all or any portion of the outstanding obligations of the Company to be immediately due and payable. The Credit Agreement also contains a covenant which includes limitations on its ability to declare or pay cash dividends, subject to certain exceptions, such as dividends declared and paid by its subsidiaries and cash dividends paid by the Company in an amount not to exceed 50% of cumulative net after tax earnings following the closing date of the agreement if certain conditions are met. The Company was in compliance with all such covenants as of December 31, 2009.

Contractual Obligations

The Company is obligated to make future payments under various contracts such as lease agreements and unconditional purchase obligations. The Company is also required to make minimum funding contributions to its pension plans which are estimated at $3.4 million for the year ended December 31, 2010. The following table represents the significant contractual cash obligations and other commercial commitments of the Company as of December 31, 2009.

	Due In
(Thousands)	2010		2011		2012		2013		2014		Thereafter		Total
Operating leases	$	6,272	$	5,686	$	5,092	$	4,773	$	4,418	$	4,696	$	30,937
Unconditional purchase obligations*		38,778		26,026		3,174		1,575		263		-		69,816
Total contractual cash obligations	$	45,050	$	31,712	$	8,266	$	6,348	$	4,681	$	4,696	$	100,753

  *Primarily for the purchase of raw materials, transportation, and information systems services.

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     The long-term tax payable of $12.5 million, pertaining to the tax liability related to the accounting for uncertainty in income taxes, has been excluded from the above table due to the fact that the Company is unable to determine the period in which the liability will be resolved.

     The Company does not have any special-purpose entities or off-balance sheet financing arrangements except for the operating leases disclosed above as well as the indemnities and guaranties disclosed in Note 16 of the Company’s consolidated financial statements contained in Item 8 of this Annual Report.

     The Company maintains qualified defined benefit pension plans (the “Qualified Plans”), which cover substantially all non-union and certain union employees in the United States and Europe. The Company’s pension expense for all pension plans approximated $5.1 million and $2.0 million for the years ended December 31, 2009 and 2008, respectively. The Company expects its 2010 pension expense to be $3.8 million.

     The fair value of the Company’s Qualified Plan assets has increased from $64.5 million at December 31, 2008 to $87.5 million at December 31, 2009. The Pension Protection Act, passed into law in August 2006, prescribes a new methodology for determining the minimum amount that must be contributed to defined benefit pension plans which began in 2008. During the year ended December 31, 2009, the Company funded its Qualified Plans with $12.3 million in contributions of which $10.4 million was made voluntarily by the Company. The Company expects that it will be required to fund the Qualified Plans with approximately $3.4 million in contributions for the year ending December 31, 2010. The Company may make additional contributions to its Qualified Plans in 2010 beyond the required funding. Additional voluntary contributions would be dependent upon, among other things, the Company’s ongoing operating results and liquidity.

     The Company did not declare or pay any dividends in 2009. Dividend declaration and payout are at the discretion of the Board of Directors. Future dividends will depend on the Company’s earnings, cash flows, and capital investment plans to pursue long-term growth opportunities. The Company’s Credit Agreement contains a covenant which includes limitations on its ability to declare or pay cash dividends, subject to certain exceptions, such as dividends declared and paid by its subsidiaries and cash dividends paid by the Company in an amount not to exceed 50% of cumulative net after tax earnings following the closing date of the agreement if certain conditions are met.

Capital Expenditures and Investments

Capital expenditures were $48.3 million in 2009, $33.0 million in 2008, and $11.8 million in 2007. Expenditures for 2009 primarily included $40.0 million for improvements to manufacturing facilities including approximately $8.4 million of improvements related to the 2009 re-start of a previously idled production line, $15.2 million related to a new pulverization facility, and $3.5 million for customer capital. Expenditures for 2008 primarily included $29.3 million for improvements to manufacturing facilities including approximately $13.0 million related to the planned 2009 re-start of a previously idled production line, $3.0 million for customer capital, and $1.8 million related to improvements to information systems. Expenditures for 2007 primarily included $8.4 million for improvements to manufacturing facilities and $3.3 million for customer capital. Capital expenditures for 2010 are projected to be approximately $65.0 million to $75.0 million. The aforementioned expenditures are expected to be funded by operating cash flows, cash on hand, and borrowings.

     No proceeds for sales of property, plant and equipment were received in 2009 compared to $0.9 million in 2008.

     The Company expects that cash from operating activities plus cash balances and available external financing will be sufficient to meet its cash requirements for the next twelve months. The cash needs of each of the Company’s reporting segments are principally covered by the segment’s operating cash flow on a stand alone basis. Any additional needs will be funded by cash on hand or borrowings under the Company’s Revolving Credit Facility. Specifically, the Equipment and Consumer segments historically have not required extensive capital expenditures; therefore, the Company believes that operating cash flows, cash on hand, and borrowings will adequately support each of the segments cash needs.

Other

On March 8, 2006, the Company and another U.S. producer (the “Petitioners”) of activated carbon formally requested that the United States Department of Commerce investigate unfair pricing of certain activated carbon imported from the People’s Republic of China. The Commerce Department investigated imports of activated carbon from China that is

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thermally activated using a combination of heat, steam and/or carbon dioxide. Certain types of activated carbon from China, most notably chemically-activated carbon, were not investigated.

          On March 2, 2007, the Commerce Department published its final determination (subsequently amended) that all of the subject merchandise from China was being unfairly priced, or dumped, and thus that special additional duties should be imposed to offset the amount of the unfair pricing. The resultant tariff rates ranged from 61.95% ad valorem (i.e., of the entered value of the goods) to 228.11% ad valorem. A formal order imposing these tariffs was published on April 27, 2007. All imports from China remain subject to the order and antidumping tariffs. Importers of subject activated carbon from China are required to make cash deposits of estimated antidumping tariffs at the time the goods are entered into the United States customs territory. Deposits of tariffs are subject to future revision based on retrospective reviews conducted by the Commerce Department.

          The Company is both a domestic producer and one of the largest U.S. importers (from our wholly-owned subsidiary Calgon Carbon (Tianjin) Co., Ltd.) of the activated carbon that is subject to this proceeding. As such, the Company’s involvement in the Commerce Department’s proceedings is both as a domestic producer (a “petitioner”) and as a foreign exporter (a “respondent”).

          As one of two U.S. producers involved as petitioners in the case, the Company is actively involved in ensuring the Commerce Department obtains the most accurate information from the foreign producers and exporters involved in the review, in order to calculate the most accurate results and margins of dumping for the sales at issue.

          As an importer of activated carbon from China and in light of the successful antidumping tariff case, the Company was required to pay deposits of estimated antidumping tariffs at the rate of 84.45% ad valorem to the Bureau of Customs and Border Protection (“Customs”) on entries made on or after October 11, 2006 through April 9, 2007. Because of limits on the government’s legal authority to impose provisional tariffs prior to issuance of a final determination, entries made between April 9, 2007 and April 19, 2007 were not subject to tariffs. For the period April 20, 2007 through November 10, 2009, deposits have been paid at 69.54%.

          The Company’s role as an importer that is required to pay tariffs results in a contingent liability related to the final amount of tariffs that it will ultimately have to pay. The Company has made deposits of estimated tariffs in two ways. First, estimated tariffs on entries in the period from October 11, 2006 through April 9, 2007 were covered by a bond. The total amount of tariffs that can be paid on entries in this period is capped as a matter of law, though the Company may receive a refund with interest of any difference due to a reduction in the actual margin of dumping found in the first review. The Company’s estimated liability for tariffs during this period of $0.2 million is reflected in accounts payable and accrued liabilities on the consolidated balance sheet at December 31, 2009. Second, the Company has been required to post cash deposits of estimated tariffs owed on entries of subject merchandise since April 19, 2007. The final amount of tariffs owed on these entries may change, and can either increase or decrease depending on the final results of relevant administrative inquiries. This process is further described below.

          The amount of estimated antidumping tariffs payable on goods imported into the United States is subject to review and retroactive adjustment based on the actual amount of dumping that is found. To do this, the Commerce Department conducts periodic reviews of sales made to the first unaffiliated U.S. customer, typically over the prior 12 month period. These reviews will be possible for at least five years, and can result in changes to the antidumping tariff rate (either increasing or reducing the rate) applicable to any given foreign exporter. Revision of tariff rates has two effects. First, it will alter the actual amount of tariffs that Customs will seek to collect for the period reviewed, by either increasing or decreasing the amount to reflect the actual amount of dumping that was found. If the actual amount of tariffs owed increases, the government will require payment of the difference plus interest. Conversely, when the tariff rate decreases, any difference is refunded with interest. Second, the revised rate becomes the cash deposit rate applied to future entries, and can either increase or decrease the amount of deposits an importer will be required to pay.

          On November 10, 2009, the Commerce Department announced the results of its review of the tariff period beginning October 2006 through March 31, 2008 (period of review (POR) I). Based on the POR I results, the Company’s ongoing tariff deposit rate was adjusted from 69.54% to 14.51% (as adjusted by .07% for certain ministerial errors and published in the Federal Register on December 17, 2009) for entries made subsequent to the announcement. In addition, the Company’s assessment rate for POR I was determined to have been too high and, accordingly, the Company reduced its recorded liability for unpaid deposits in POR I and recorded a receivable reflecting expected refunds for tariff deposits

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made during POR I as a result of the announced decrease in the POR I tariff assessment rate. The impact of these adjustments to the Company’s cost of sales increased fourth quarter pre-tax operating income by approximately $1.6 million. Note that the Petitioners have appealed to the U.S. Court of International Trade the Commerce Department’s POR I results challenging, among other things, the selection of certain surrogate values and financial information which in-part caused the reduction in the tariff rate. Other appeals were also filed by Chinese respondents seeking changes to the calculations that either do not relate to the Company’s tariff rate or would, if applied to the Company, lower its tariff rate. There is no deadline for a final decision regarding these appeals but such appeals typically take at least a year to resolve. The Company will not have final settlement of the amounts it may owe or receive as a result of the final POR I tariff rates until the aforementioned appeals are resolved.

          On April 1, 2009, the Commerce Department published a formal notice allowing parties to request a second annual administrative review of the antidumping tariff order covering the period April 1, 2008 through March 31, 2009 (POR II). Requests for review were due no later than April 30, 2009. The Company, in its capacity as a U.S. producer and separately as a Chinese exporter, elected not to participate in this administrative review. By not participating in the review, the Company’s tariff deposits made during POR II are final and not subject to further adjustment.

          For POR I, the Company estimates that a hypothetical 10% increase or decrease in the final tariff rate compared to the announced rate on November 10, 2009 would result in an additional payment or refund of approximately $0.1 million. As noted above, the Company’s tariff deposits made during POR II are fixed and not subject to change. For the period April 1, 2009 through March 31, 2010 (POR III), a hypothetical 10% increase or decrease in the final tariff rate compared to the announced rates in effect for the period would result in an additional payment or refund of $0.1 million based on deposits made for a portion of the POR III period ending December 31, 2009.

          The contingent liability relating to tariffs paid on imports is somewhat mitigated by two factors. First and foremost, the antidumping tariff order’s disciplinary effect on the market encourages the elimination of dumping through fair pricing. Separately, pursuant to the Continued Dumping and Subsidy Offset Act of 2000 (repealed effective Feb. 8, 2006), as an affected domestic producer, the Company is eligible to apply for a distribution of a share of certain tariffs collected on entries of subject merchandise from China from October 11, 2006 to September 30, 2007. In July 2009 and 2008, the Company applied for such distributions. In November 2009 and December 2008, the Company received distributions of approximately $0.8 million and $0.2 million, respectively, which reflected 59.57% of the total amounts then available. The Company anticipates receiving additional amounts in 2010 and future years related to tariffs paid for the period October 11, 2006 through September 30, 2007, though the exact amount is impossible to determine.

Critical Accounting Policies

Management of the Company has evaluated the accounting policies used in the preparation of the financial statements and related footnotes and believes the policies to be reasonable and appropriate. The preparation of the financial statements in accordance with accounting principles generally accepted in the United States requires management to make judgments, estimates, and assumptions regarding uncertainties that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Management uses historical experience and all available information to make these judgments and estimates, and actual results will inevitably differ from those estimates and assumptions that are used to prepare the Company’s financial statements at any given time. Despite these inherent limitations, management believes that Management’s Discussion and Analysis (“MD&A”) and the financial statements and related footnotes provide a meaningful and fair perspective of the Company.

     The following are the Company’s critical accounting policies impacted by management’s judgments, assumptions, and estimates. Management believes that the application of these policies on a consistent basis enables the Company to provide the users of the financial statements with useful and reliable information about the Company’s operating results and financial condition.

Revenue Recognition

The Company recognizes revenue and related costs when goods are shipped or services are rendered to customers provided that ownership and risk of loss have passed to the customer. Revenue for major equipment projects is recognized under the percentage of completion method. The Company’s major equipment projects generally have a long project life cycle from bid solicitation to project completion. The nature of the contracts are generally fixed price with

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milestone billings. The Company recognizes revenue for these projects based on the fixed sales prices multiplied by the percentage of completion. In applying the percentage-of-completion method, a project’s percent complete as of any balance sheet date is computed as the ratio of total costs incurred to date divided by the total estimated costs at completion. As changes in the estimates of total costs at completion and/or estimated total losses on projects are identified, appropriate earnings adjustments are recorded during the period that the change or loss is identified. The Company has a history of making reasonably dependable estimates of costs at completion on our contracts that follow the percentage-of-completion method; however, due to uncertainties inherent in the estimation process, it is possible that estimated project costs at completion could vary from our estimates. The principal components of costs include material, direct labor, subcontracts, and allocated indirect costs. Indirect costs primarily consist of administrative labor and associated operating expenses, which are allocated to the respective projects on actual hours charged to the project utilizing a standard hourly rate.

Allowance for Doubtful Accounts

The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The amount of allowance recorded is primarily based upon a quarterly review of specific customer receivables that remain outstanding at least three months beyond their respective due dates. The Company’s provision for doubtful accounts and loss experience have not varied materially from period to period. However, if the financial condition of the Company’s customers were to deteriorate resulting in an impairment of their ability to make payments, additional allowances may be required.

Inventories

The Company’s inventories are carried at the lower of cost or market. The Company provides for inventory obsolescence based upon a review of specific products that have remained unsold for a prescribed period of time. If the market demand for various products softens, additional allowances may be required.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. Identifiable intangible assets acquired in business combinations are recorded based on their fair values at the date of acquisition. In accordance with guidance within Accounting Standards Codification (ASC) 350 “Intangibles – Goodwill and Other,” goodwill and identifiable intangible assets with indefinite lives are not subject to amortization but must be evaluated for impairment. None of the Company’s identifiable intangible assets other than goodwill have indefinite lives.

     The Company tests goodwill for impairment at least annually by initially comparing the fair value of each of the Company’s reporting units to their related carrying values. If the fair value of the reporting unit is less than its carrying value, the Company performs an additional step to determine the implied fair value of the goodwill. The implied fair value of goodwill is determined by first allocating the fair value of the reporting unit to all of the assets and liabilities of the unit and then computing the excess of the unit’s fair value over the amounts assigned to the assets and liabilities. If the carrying value of goodwill exceeds the implied fair value of goodwill, such excess represents the amount of goodwill impairment, and the Company recognizes such impairment accordingly. Fair values are estimated using discounted cash flow and guideline company method that are based on projections of the amounts and timing of future revenues and cash flows, assumed discount rates and other assumptions as deemed appropriate. The Company also considers such factors as historical performance, anticipated market conditions, operating expense trends and capital expenditure requirements.

          The Company’s identifiable intangible assets other than goodwill have finite lives. Certain of these intangible assets, such as customer relationships, are amortized using an accelerated methodology while others, such as patents, are amortized on a straight-line basis over their estimated useful lives. In addition, intangible assets with finite lives are evaluated for impairment whenever events or circumstances indicated that their carrying amount may not be recoverable, as prescribed by ASC 360, “Property, Plant, and Equipment.”

Pensions

The Company maintains Qualified Plans which cover substantially all non-union and certain union employees in the United States and Europe. Pension expense, which totaled $5.2 million in 2009 and $2.0 million in 2008, is calculated based upon a number of actuarial assumptions, including expected long-term rates of return on our Qualified Plans’ assets, which range from 5.00% to 8.00%. In developing the expected long-term rate of return assumption, the Company evaluated input from its actuaries, including their review of asset class return expectations as well as long-term inflation

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assumptions. The Company also considered historical returns on asset classes, investment mix, and investment manager performance. The expected long-term return on the U.S. Qualified Plans’ assets is based on an asset allocation assumption of 68.0% with equity managers, 30.0% with fixed-income managers, and 2.0% with other investments. The European Qualified Plans’ assets are based on an asset allocation assumption of 36.2% with equity managers, 56.3% with fixed-income managers, and 7.5% with other investments. The Company regularly reviews its asset allocation and periodically rebalances its investments to the targeted allocation when considered appropriate. The Company continues to believe that the range of 6.30% to 8.00% is a reasonable long-term rate of return on its Qualified Plans assets. The Company will continue to evaluate its actuarial assumptions, including its expected rate of return, at least annually, and will adjust as necessary.

     The discount rate that the Company utilizes for its Qualified Plans to determine pension obligations is based on a review of long-term bonds that receive one of the two highest ratings given by a recognized rating agency. The discount rate determined on this basis has decreased from a range of 5.63% to 6.23% at December 31, 2008 to a range of 5.51% to 6.08% at December 31, 2009. The Company estimates that its pension expense for the Qualified Plans will approximate $3.8 million in 2010. Future actual pension expense will depend on future investment performance, funding levels, changes in discount rates and various other factors related to the populations participating in its Qualified Plans.

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     A sensitivity analysis of the projected incremental effect of a hypothetical 1 percent change in the significant assumptions used in the pension calculations is provided in the following table:

	Hypothetical Rate Increase (Decrease)
	U.S. Plans					European Plans
(Thousands)		(1%)		1%		(1%)		1%
Discount rate
Pension liabilities at December 31, 2009		$	12,089	$	(10,588)	$	6,595	$	(5,250)
Pension costs for the year ended December 31, 2009		$	874	$	(857)	$	257	$	(225)
Indexation
Pension liabilities at December 31, 2009		$	-	$	-	$	(746)	$	821
Pension costs for the year ended December 31, 2009		$	-	$	-	$	(39)	$	42
Expected return on plan assets
Pension costs for the year ended December 31, 2009		$	478	$	(477)	$	63	$	(62)
Compensation
Pension liabilities at December 31, 2009		$	(878)	$	896	$	(1,225)	$	1,370
Pension costs for the year ended December 31, 2009		$	(170)	$	178	$	(214)	$	243

Income Taxes

During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Significant judgment is required in determining the Company’s annual effective tax rate and in evaluating tax positions. On January 1, 2007, the Company adopted guidance within ASC 740 regarding the accounting for uncertainty in income taxes. This guidance contains a two-step approach to recognizing and measuring uncertain tax positions taken or expected to be taken in a tax return. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement.

     Although we believe we have adequately reserved for our uncertain tax positions, no assurance can be given that the final tax outcome of these matters will not be different. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit, the refinement of an estimate, or a lapse of a tax statute. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate, as well as the related net interest.

     The Company is subject to varying statutory tax rates in the countries where it conducts business. Fluctuations in the mix of the Company’s income between countries result in changes to the Company’s overall effective tax rate.

     The Company recognizes benefits associated with foreign and domestic net operating loss and credit carryforwards when the Company believes that it is more likely than not that its future taxable income in the relevant tax jurisdictions will be sufficient to enable the realization of the tax benefits. As of December 31, 2009, the Company had recorded total deferred tax assets of $40.3 million, of which $13.2 million (before consideration of a $3.5 million valuation allowance) represents tax benefits resulting from unused foreign tax credits as well as state NOLs and state tax credits. The foreign tax credits of $6.8 million, net, can be carried forward 10 years and expire from 2011 through 2019. The Company recorded a valuation allowance against its foreign tax credits which represents the portion that does not meet the more likely than not threshold of being utilized. State operating loss carryforwards of $1.8 million, net, expire from 2012 to 2027 of which over 90% will not expire before 2019.

     The Company periodically reviews the need for a valuation allowance against deferred tax assets and recognizes these deferred tax assets to the extent that realization is more likely than not. Based upon a review of earnings history and trends, forecasted earnings and the relevant expiration of carryforwards, the Company believes that the valuation allowances provided are appropriate. At December 31, 2009, the valuation allowance of approximately $3.5 million related primarily to foreign tax credits.

     Approximately 75% of the Company’s deferred tax assets, or $30.6 million, represent temporary differences associated with pensions, accruals, and inventories. Approximately 89% of the Company’s deferred tax liabilities of $21.9 million at December 31, 2009 relate to property, plant and equipment. These temporary differences will reverse in the

36

future due to the natural realization of temporary differences between annual book and tax reporting. The Company believes that the deferred tax liabilities generally will impact taxable income of the same character (ordinary income), timing, and jurisdiction as the deferred tax assets.

Litigation

The Company is involved in various asserted and unasserted legal claims. An estimate is made to accrue for a loss contingency relating to any of these legal claims if it is probable that a liability was incurred at the date of the financial statements and the amount of loss can be reasonably estimated. Because of the subjective nature inherent in assessing the outcome of legal claims and because the potential that an adverse outcome in a legal claim could have a material impact on the Company’s legal position or results of operations, such estimates are considered to be critical accounting estimates. The Company will continue to evaluate all legal matters as additional information becomes available. Reference is made to Note 16 of the Company’s consolidated financial statements contained in Item 8 of this Annual Report for a discussion of litigation and contingencies.

Long-Lived Assets

The Company evaluates long-lived assets under the provisions of ASC 360, which addresses financial accounting and reporting for the impairment of long-lived assets, and for long-lived assets to be disposed of. For assets to be held and used, the Company groups a long-lived asset or assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. An impairment loss for an asset group reduces only the carrying amounts of a long-lived asset or assets of the group being evaluated. The loss is allocated to the long-lived assets of the group on a pro-rata basis using the relative carrying amounts of those assets, except that the loss allocated to an individual long-lived asset of the group does not reduce the carrying amount of that asset below its fair value whenever that fair value is determinable without undue cost and effort. Estimates of future cash flows used to test the recoverability of a long-lived asset group include only the future cash flows that are associated with and that are expected to arise as a direct result of the use and eventual disposition of the asset group. The future cash flow estimates used by the Company exclude interest charges.

New Accounting Pronouncement

In June 2009, the Financial Accounting Standards Board (FASB) amended ASC 810-10 for Accounting Standards Update No. 2009-17 (“Update No. 2009-17”) (formerly Financial Accounting Standard (FAS) No. 167, “Amendments to FASB Interpretation No. 46(R))” Update No. 2009-17 is a revision to FASB Interpretation No. 46(R), “Consolidation of Variable Interest Entities,” and amends the consolidation guidance for variable interest entities. Additionally, this standard will require additional disclosures about involvement with variable interest entities and any significant changes in risk exposure due to that involvement. ASC 810-10-65, as updated, is effective January 1, 2010 for companies reporting on a calendar-year basis. Beginning January 1, 2010, the Company will apply the provisions of Update No. 2009-17 to its accounting and disclosure for applicable variable interest entities. The Company is in the process of assessing the impact of this standard.

Outlook

Activated Carbon and Service

     The Company’s activated carbon and service sales volume for 2010 will remain challenging for the Company as not all markets have rebounded from the effects of the worldwide economic slowdown. During 2009, many manufacturers within the Company’s industrial customer base were scaling back or shutting down operations. The Company expects this to continue in 2010, resulting in lower demand for its products in the industrial and food markets. However, helping to offset this volume decline will be the continued higher sales volume for carbon products used to remove mercury from flue gas of coal-fired power plants in the U.S. as a result of contracts that were already awarded to the Company as well as legislation that went into effect in certain U.S. states as of January 1, 2010. The Company also anticipates an increase in demand for drinking water in the municipal market during 2010. While the tariff on imported Chinese thermally activated carbon was lowered significantly in November 2009 (refer to Note 16 of the Company’s consolidated financial statements contained in Item 8 of this Annual Report), current trends do not indicate signs of pricing pressure. However, the Company cannot predict with any certainty that this will remain the case throughout all of 2010.

     During 2009, in addition to the April restart of the previously idled B-line at the Catlettsburg, Kentucky facility, the Company also further invested at this site in a new pulverization facility which is expected to be capable of converting 90

37

million pounds of feedstock to powdered activated carbon (PAC). The pulverization facility commenced operation during the fourth quarter of 2009 and reduces the Company’s reliance on third-party grinding. PAC is recognized today by the U.S. Environmental Protection Agency as the leading abatement technology for mercury removal from coal-fired power plant flue gas. The Company believes that this could become the largest U.S. market for activated carbon and has made great strides in establishing itself as a market leader. Mercury emission standards that begin to take effect in more than a dozen states, primarily in 2010, are driving the current PAC market, but U.S. regulatory or congressional action will determine the national standards in the long-term. Currently, the EPA plans to issue proposed mercury emission standards by March 2010 that would then be finalized by November 2011. The Company currently estimates that annual demand could be as high as 750 million pounds within the next ten years. In addition, more than 140 countries have indicated interest in a multi-nation mercury removal pact that could be agreed upon on as early as 2013. The need for municipal drinking water utilities to comply with the EPA’s Stage 2 Disinfection By-Product Rule (DBPR) is yet another growth driver for the Company. DBP’s are compounds that form when water is disinfected with chemicals, and GAC is recognized by the EPA as a best available control technology (BACT) for the reduction of DBP’s. The EPA promulgated the Stage 2 DBP Rule in 2006, and requires water utilities to come into compliance with the rule in a phased manner between 2012 and 2014. The Company currently estimates that this regulation may increase demand for GAC by municipal water utilities in the United States by as much as 60 million pounds per year by 2015.

     In anticipation of the eventual improvement in the worldwide economy and to meet the increased demand for mercury removal and the DBPR, the Company currently plans to make significant capital expenditures in 2010 totaling $65 million to $75 million. The Company plans on investing in a capacity expansion of the Feluy, Belgium site as well as new reactivation facilities in China and in the northeast United States. In total, these sites are believed to eventually increase the Company’s service business capacity by 59 million pounds annually. Only the U.S. location is expected to commence operation in 2010. In addition to these initiatives, the Company plans on increasing its presence throughout the world. In March 2010, the Company anticipates closing on its purchase of a controlling interest in its current joint venture in Japan with full ownership expected in early 2011 (refer to Note 20 of the Company’s consolidated financial statements contained in Item 8 of this Annual Report). This acquisition will increase the Company’s capabilities in the world’s second largest geographical market by country for activated carbon and will also contribute favorably to the 2010 mid-year planned restart of its currently idled virgin carbon plant in Datong, China. In Europe, the Company acquired Zwicky Denmark and Sweden, long-term distributors of the Company’s activated carbon products and provider of services associated with the reactivation of activated carbon, in January 2010. This acquisition is consistent with the Company’s strategic initiatives to accelerate growth in Denmark, Norway, and Sweden and to expand its service capabilities in Europe outside of the geographic markets it has traditionally served.

Equipment

     The Company’s equipment business is somewhat cyclical in nature and depends on both current regulations as well as the general health of the overall economy. U.S demand for the Company’s ultraviolet light (UV) systems is expected to hold as the Company moves closer to the deadline of 2012 for affected municipalities to treat for Cryptosporidium in drinking water. Although equipment contract awards slowed during 2009, bid activity is expected to be strong in 2010. Backlog at January 31, 2010 is $14.8 million, a decline of approximately 34% as compared to the similar 2009 period. The decline is believed to be related to a lower level of capital spending in the marketplace in 2009 due to municipalities conserving cash during the recent economic downturn. In January 2010, the Company acquired Hyde Marine, Inc., a manufacturer of systems that utilize UV technology to treat marine ballast water. In 2004, the International Maritime Organization (IMO) adopted the International Convention for the Control and Management of Ships’ Ballast Water and Sediments (BWMC) which addresses the transportation of potentially harmful organisms through ballast water. The regulation is scheduled to be phased in globally over a ten-year period beginning in 2010, and industry sources estimate that it will require treatment of ballast water from more than 40,000 vessels by 2020. Hyde Marine’s Hyde Guardian™ system (Guardian), which employs stacked disk and ultraviolet light technology to filter and disinfect ballast water, offers cost, safety, and technological advantages. Guardian has received Type Approval from Lloyd’s Register on behalf of the U.K. Maritime and Coast Guard Agency. Type Approval confirms compliance with the BWMC. This strategic acquisition has provided the Company immediate entry into a global, legislative-driven market with major long-term growth potential.

Consumer

     The Company began to see sales for the Consumer segment increase during the last half of 2009 for activated carbon cloth. The slowing economy contributed to decreased demand for the Company’s PreZerve® products in 2009 and is now expected to have bottomed out with the first signs of a modest recovery expected to occur during the first half of 2010.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk:

Commodity Price Risk

In the normal course of its business, the Company is exposed to market risk or price fluctuations related to the production of activated carbon products. Coal and natural gas, which are significant to the manufacturing of activated carbon, have market prices that fluctuate regularly. Based on the estimated 2009 usage of coal and natural gas, a hypothetical 10% increase (or decrease) in the price of coal and natural gas, would result in the pre-tax loss (or gain) of $2.0 million and $0.5 million, respectively.

     To mitigate the risk of fluctuating prices, the Company has entered into long-term contracts to hedge the purchase of a percentage of the estimated need of coal and natural gas at fixed prices. The future commitments under these long-term contracts, which provide economic hedges, are disclosed within Note 8 of the Company’s consolidated financial statements contained in Item 8 of this Annual Report. The value of the cash-flow hedges for natural gas is disclosed in Note 15 of the Company’s consolidated financial statements contained in Item 8 of this Annual Report.

Interest Rate Risk

The Company’s net exposure to interest rate risk consists primarily of borrowings under its Credit Agreement. The Company’s Credit Agreement bears interest at rates that are benchmarked either to U.S. short-term floating rate interest rates or average LIBOR rates for comparable borrowings, at the Company’s election. There were no borrowings outstanding under the credit agreement as of December 31, 2009. The impact on the Company’s annual net income of a hypothetical one percentage point interest rate change on the average outstanding balances under its Credit Agreement would not result in a material change to interest expense based upon fiscal 2009 average borrowings.

Foreign Currency Exchange Risk

The Company is subject to risk of price fluctuations related to anticipated revenues and operating costs, firm commitments for capital expenditures, and existing assets and liabilities denominated in currencies other than U.S. dollars. The Company enters into foreign currency forward exchange contracts and purchases options to manage these exposures. A hypothetical 10% strengthening (or weakening) of the U.S. dollar against the British Pound Sterling, Canadian Dollar, Chinese Yuan, Japanese Yen, and Euro at December 31, 2009 would result in a pre-tax loss (or gain) of approximately $1.5 million. The foreign currency forward exchange contracts purchased during 2009 have been accounted for according to Accounting Standards Codification (ASC) 815 “Derivatives and Hedging.”

     The Company had also entered into a ten-year foreign currency swap agreement to fix the foreign exchange rate on a $6.5 million intercompany loan between the Company and its subsidiary, Chemviron Carbon Ltd. The swap agreement provides the offset for the foreign currency fluctuation and neutralizes its effect on loan payments and valuation. This swap transaction has been accounted for in accordance with ASC 815.

39

Item 8. Financial Statements and Supplementary Data:

REPORT OF MANAGEMENT

Responsibility for Financial Statements

Management is responsible for the preparation of the financial statements included in this Annual Report. The Consolidated Financial Statements were prepared in accordance with accounting principles generally accepted in the United States of America and include amounts that are based on the best estimates and judgments of management.

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal controls over financial reporting. The Company’s internal control system is designed to provide reasonable assurance concerning the reliability of the financial data used in the preparation of the Company’s financial statements, as well as reasonable assurance with respect to safeguarding the Company’s assets from unauthorized use or disposition. However, no matter how well designed and operated, an internal control system can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

     Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2009. In making this evaluation, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework. Management’s evaluation included reviewing the documentation of our controls, evaluating the design effectiveness of controls, and testing their operating effectiveness. Based on this evaluation, management believes that, as of December 31, 2009, the Company’s internal controls over financial reporting were effective and provide reasonable assurance that the accompanying financial statements do not contain any material misstatement.

     The effectiveness of internal control over financial reporting as of December 31, 2009, has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, who also audited our consolidated financial statements. Deloitte & Touche LLP’s attestation report on the effectiveness of our internal control over financial reporting appears on the next page.

Changes in Internal Control

There have been no changes to our internal control over financial reporting that occurred that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

40

INTERNAL CONTROLS – REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Calgon Carbon Corporation
Pittsburgh, Pennsylvania

We have audited the internal control over financial reporting of Calgon Carbon Corporation and subsidiaries (the “Company”) as of December 31, 2009, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting, included in the accompanying Report of Management. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

     We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

     A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

     Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

     In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2009, based on the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

     We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2009 of the Company and our report dated February 26, 2010 expressed an unqualified opinion on those financial statements and included an explanatory paragraph regarding the Company’s adoption of new accounting standards.

/s/ Deloitte & Touche LLP
Pittsburgh, Pennsylvania
February 26, 2010

41

FINANCIAL STATEMENTS – REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Calgon Carbon Corporation
Pittsburgh, Pennsylvania

We have audited the accompanying consolidated balance sheets of Calgon Carbon Corporation and subsidiaries (the “Company”) as of December 31, 2009 and 2008, and the related consolidated statements of income and comprehensive income, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2009. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

     We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Calgon Carbon Corporation and subsidiaries as of December 31, 2009 and 2008, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2009, in conformity with accounting principles generally accepted in the United States of America.

     As discussed in Note 7 to the consolidated financial statements, the Company adopted the provisions of Financial Accounting Standards Board Accounting Standards Codification 470-20, Debt with Conversion and Other Options, on January 1, 2009 and as discussed in Note 1, the Company adopted the provisions of Financial Accounting Standards Board Accounting Standards Codification 740-10, Income Taxes, related to unrecognized tax benefits on January 1, 2007.

     We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2009, based on the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2010 expressed an unqualified opinion on the Company’s internal control over financial reporting.

/s/ Deloitte & Touche LLP
Pittsburgh, Pennsylvania
February 26, 2010

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CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
Calgon Carbon Corporation

	Year Ended December 31
(Dollars in thousands except per share data)	2009			2008*			2007*
Net Sales	$	398,430		$	390,066		$	341,508
Net sales to related parties		13,480			10,204			9,616
Total		411,910			400,270			351,124
Cost of products sold (excluding depreciation)		266,597			266,885			242,273
Depreciation and amortization		18,130			16,674			17,248
Selling, general and administrative expenses		68,255			64,149			61,348
Research and development expenses		5,495			4,129			3,699
Gain on AST settlement (Note 16)		-			(9,250	)		-
		358,477			342,587			324,568
Income from operations		53,433			57,683			26,556
Interest income		459			1,504			1,695
Interest expense		(286	)		(6,024	)		(8,543	)
Loss on debt extinguishment		(899	)		(8,918	)		-
Other expense – net		(3,089	)		(2,247	)		(1,441	)
Income from continuing operations before income taxes and equity in income of equity investments		49,618			41,998			18,267
Income tax provision (Note 12)		11,754			14,012			6,647
Income from continuing operations before equity in income of equity investments		37,864			27,986			11,620
Equity in income of equity investments, net		1,295			854			1,977
Income from continuing operations		39,159			28,840			13,597
Income (loss) from discontinued operations, net (Note 2)		-			2,793			(166	)
Net income		39,159			31,633			13,431
Other comprehensive (loss) income, net of tax provision (benefit) of $1,028, ($9,507), and $3,449, respectively		5,444			(23,458	)		6,703
Comprehensive income	$	44,603		$	8,175		$	20,134
Basic income from continuing operations per common share	$	.72		$	.65		$	.34
Income (loss) from discontinued operations per common share	$	-		$	.06		$	-
Basic net income per common share	$	.72		$	.71		$	.34
Diluted income from continuing operations per common share	$	.69		$	.54		$	.27
Income (loss) from discontinued operations per common share	$	-		$	.05		$	-
Diluted net income per common share	$	.69		$	.59		$	.27
Weighted average shares outstanding, in thousands
Basic		54,757			44,679			39,788
Diluted		56,529			53,385			50,557

* Results have been retrospectively adjusted to incorporate the adoption of guidance within ASC 470-20 “Debt with Conversion and Other Options.” (Refer to Note 7).

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED BALANCE SHEETS
Calgon Carbon Corporation

	December 31
(Dollars in thousands)	2009			2008*
Assets
Current assets:
Cash and cash equivalents	$	38,029		$	16,750
Restricted cash		5,556			-
Receivables, net of allowance for losses of $1,971 and $1,596		61,716			62,300
Receivables from related parties		2,588			2,215
Revenue recognized in excess of billings on uncompleted contracts		5,963			8,870
Inventories		84,587			93,725
Deferred income taxes – current		15,935			8,911
Other current assets		7,471			7,817
Total current assets		221,845			200,588
Property, plant and equipment, net		155,100			122,960
Equity investments		10,969			11,747
Intangibles, net		4,744			5,930
Goodwill		26,934			26,340
Deferred income taxes – long-term		2,601			13,129
Other assets		3,525			6,568
Total assets	$	425,718		$	387,262
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	44,821		$	39,647
Billings in excess of revenue recognized on uncompleted contracts		4,522			4,639
Accrued interest		-			140
Payroll and benefits payable		9,509			10,522
Accrued income taxes		3,169			1,088
Short-term debt		-			1,605
Current portion of long-term debt		-			7,903
Total current liabilities		62,021			65,544
Deferred income taxes – long-term		189			242
Accrued pension and other liabilities		56,422			68,199
Total liabilities		118,632			133,985
Commitments and contingencies (Notes 8 and 16)
Shareholders’ equity:
Common shares, $.01 par value, 100,000,000 shares authorized, 58,553,617 and 56,961,297 shares issued		586			570
Additional paid-in capital		164,236			153,766
Retained earnings		173,165			134,006
Accumulated other comprehensive loss		(1,006	)		(6,450	)
		336,981			281,892
Treasury stock, at cost, 3,006,037 and 2,902,264 shares		(29,895	)		(28,615	)
Total shareholders’ equity		307,086			253,277
Total liabilities and shareholders’ equity	$	425,718		$	387,262

* Results have been retrospectively adjusted to incorporate the adoption of guidance within ASC 470-20 “Debt with Conversion and Other Options.” (Refer to Note 7).

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS Calgon Carbon Corporation

	Year Ended December 31
(Dollars in thousands)	2009			2008*			2007*
Cash flows from operating activities
Net income	$	39,159		$	31,633		$	13,431
Adjustments to reconcile net income to net cash provided by operating activities:
Gain from divestiture		-			(4,353	)		-
Depreciation and amortization		18,130			16,674			17,248
Equity in income from equity investments		(1,295	)		(854	)		(1,977	)
Distributions received from equity investments		1,407			526			739
Employee benefit plan provisions		5,060			2,063			3,076
Write-off of prior credit facility fees (Note 7)		827			-			-
Amortization of convertible notes discount		218			2,949			3,656
Loss on extinguishment of convertible notes		719			8,462			-
Stock-based compensation		2,398			2,884			2,887
Excess tax benefit from stock-based compensation		(928	)		(2,578	)		-
Deferred income tax expense (benefit)		2,370			(742	)		2,017
Changes in assets and liabilities–net of effects from
foreign exchange:
Decrease (increase) in receivables		2,158			(9,975	)		(1,098	)
Decrease (increase) in inventories		10,707			(14,931	)		(9,559	)
Decrease (increase) in revenue in excess of billings on uncompleted contracts and other current assets		6,034			(2,074	)		287
Increase in accounts payable and accrued liabilities		3,062			2,610			5,390
Pension contributions		(12,307	)		(6,215	)		(7,787	)
Other items–net		1,346			(509	)		1,103
Net cash provided by operating activities		79,065			25,570			29,413
Cash flows from investing activities
Property, plant and equipment expenditures		(48,281	)		(33,006	)		(11,789	)
Proceeds from disposals of property, plant and equipment		-			910			513
Cash pledged for collateral		(13,079	)		-			-
Cash released from collateral		7,523			-			-
Net cash used in investing activities		(53,837	)		(32,096	)		(11,276	)
Cash flows from financing activities
Revolving credit facility borrowings		37,500			-			-
Revolving credit facility repayments		(37,500	)		-			-
Issuance of debt obligations		-			-			1,504
Reductions of debt obligations		(4,530	)		(11,000	)		-
Treasury stock purchased		(1,280	)		(1,191	)		(187	)
Common stock issued		957			5,120			3,090
Excess tax benefit from stock-based compensation		928			2,578			942
Other		(1,208	)		(456	)		-
Net cash (used in) provided by financing activities		(5,133	)		(4,949	)		5,349
Effect of exchange rate changes on cash		1,184			(2,079	)		1,187
Increase (decrease) in cash and cash equivalents		21,279			(13,554	)		24,673
Cash and cash equivalents, beginning of year		16,750			30,304			5,631
Cash and cash equivalents, end of year	$	38,029		$	16,750		$	30,304

* Results have been retrospectively adjusted to incorporate the adoption of guidance within ASC 470-20 “Debt with Conversion and Other Options.” (Refer to Note 7).

The accompanying notes are an integral part of these consolidated financial statements.

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
Calgon Carbon Corporation

										Accumulated
	Common				Additional					Other
	Shares		Common		Paid-In		Retained			Comprehensive						Treasury Stock
(Dollars in thousands)	Issued		Shares		Capital		Earnings			Income (Loss)			Sub-Total			Shares		Amount			Total
Balance, December 31, 2006*		42,550,290	$	425	$	81,716	$	93,428		$	10,305		$	185,874			2,802,448	$	(27,237	)	$	158,637
2007*
Net income		-		-		-		13,431			-			13,431			-		-			13,431
Translation adjustments, net of tax of $1.8 million		-		-		-		-			2,557			2,557			-		-			2,557
Unrecognized gain on derivatives, net of tax of zero		-		-		-		-			498			498			-		-			498
Employee benefit plans, net of tax of $1.6 million		-		-		-		-			3,648			3,648			-		-			3,648
Cumulative effect adjustment due to the Adoption of ASC 740		-		-		-		(4,386	)		-			(4,386	)		-		-			(4,386	)
Employee and director stock plans		494,028		5		6,954		-			-			6,959			-		-			6,959
Treasury stock purchased		-		-		-		-			-			-			24,853		(187	)		(187	)
Balance, December 31, 2007		43,044,318	$	430	$	88,670	$	102,473		$	17,008		$	208,581			2,827,301	$	(27,424	)	$	181,157
2008 *
Net income		-		-		-		31,633			-			31,633			-		-			31,633
Translation adjustments, net of tax of $0.8 million		-		-		-		-			(4,744	)		(4,744	)		-		-			(4,744	)
Unrecognized gain on derivatives, net of tax of $0.3 million		-		-		-		-			(755	)		(755	)		-		-			(755	)
Employee benefit plans, net of tax, of $(10.6) million (Refer to Note 11)		-		-		-		-			(17,959	)		(17,959	)		-		-			(17,959	)
Employee and director stock plans		950,689		10		10,794		-			-			10,804			-		-			10,804
Conversion of Notes (Refer to Note 7)		12,966,290		130		54,302		-			-			54,432			-		-			54,432
Treasury stock purchased		-		-		-		-			-			-			74,963		(1,191	)		(1,191	)
Other		-		-		-		(100	)		-			(100	)		-		-			(100	)
Balance, December 31, 2008		56,961,297	$	570	$	153,766	$	134,006		$	(6,450	)	$	281,892			2,902,264	$	(28,615	)	$	253,277
2009
Net income		-		-		-		39,159			-			39,159			-		-			39,159
Translation adjustments, net of tax of $(0.3) million		-		-		-		-			3,526			3,526			-		-			3,526
Unrecognized loss on derivatives, net of tax of $(0.8) million		-		-		-		-			(1,265	)		(1,265	)		-		-			(1,265	)
Employee benefit plans, net of tax of $2.1 million (Refer to Note 11)		-		-		-		-			3,183			3,183			-		-			3,183
Employee and director stock plans		415,850		4		4,579		-			-			4,583			-		-			4,583
Conversion of Notes (Refer to Note 7)		1,176,470		12		5,891		-			-			5,903			-		-			5,903
Treasury stock purchased		-		-		-		-			-			-			103,773		(1,280	)		(1,280	)
Balance, December 31, 2009		58,553,617	$	586	$	164,236	$	173,165			($1,006	)	$	336,981			3,006,037		($29,895	)	$	307,086

* Results have been retrospectively adjusted to incorporate the adoption of guidance within ASC 470-20 “Debt with Conversion and Other Options.” (Refer to Note 7).

The accompanying notes are an integral part of these consolidated financial statements.

46

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Calgon Carbon Corporation

1. Summary of Accounting Policies

Operations
Calgon Carbon Corporation (the “Company”) is a global leader in services and solutions for purifying water and air, food, beverage, and industrial process streams. The Company’s operations are principally conducted in three business segments: Activated Carbon and Service, Equipment, and Consumer. Each of these segments includes the production, design and marketing of products and services specifically developed for the purification, separation and concentration of liquids and gases. The Activated Carbon and Service segment relies on activated carbon as a base material, while the Equipment segment relies on a variety of methods and materials which involve other products in addition to activated carbon. The Consumer segment brings the Company’s purification technologies directly to the consumer in the form of products and services. The Company’s largest markets are in the United States, Europe, and Japan. The Company also markets in Africa, Canada, India, Latin America, and Asia.

Principles of Consolidation
The consolidated financial statements include the accounts of Calgon Carbon Corporation and its wholly owned subsidiaries, Chemviron Carbon GmbH, Calgon Carbon Canada, Inc., Chemviron Carbon Ltd., Calgon Carbon Investments, Inc., Solarchem Environmental Systems, Inc., Charcoal Cloth (International) Ltd., Charcoal Cloth Ltd., Advanced Separation Technologies Incorporated, Calgon Carbon (Tianjin) Co. Ltd., Datong Carbon Corporation, Calgon Carbon Asia PTE Ltd., Waterlink (UK) Holdings Ltd., Sutcliffe Croftshaw Ltd., Sutcliffe Speakman Ltd., Sutcliffe Speakman Carbons Ltd., Lakeland Processing Ltd., Sutcliffe Speakmanco 5 Ltd., Chemviron Carbon ApS, BSC Columbus, LLC, CCC Columbus, LLC, and CCC Distribution, LLC. The Company has a 49% ownership stake in a joint venture with Mitsubishi Chemical Corporation named Calgon Mitsubishi Chemical Corporation (CMCC). CMCC is accounted for in the Company’s financial statements under the equity method. The Company also has a 20% joint venture company with C. Gigantic Carbon Company named Calgon Carbon (Thailand) Company Ltd. which is accounted for in the Company’s financial statements under the equity method. Intercompany accounts and transactions have been eliminated. Certain of the Company’s international operations in Europe are owned directly by the Company and are operated as branches.

Foreign Currency
Substantially all assets and liabilities of the Company’s international operations are translated at year-end exchange rates; income and expenses are translated at average exchange rates prevailing during the year. Translation adjustments represent other comprehensive income or loss and are accumulated in a separate component of shareholders’ equity, net of tax effects. Transaction gains and losses are included in other expense-net.

Revenue Recognition
Revenue and related costs are recognized when goods are shipped or services are rendered to customers provided that ownership and risk of loss have passed to the customer, the price to the customer is fixed or determinable and collection is reasonably assured. Revenue for major equipment projects is recognized under the percentage of completion method. The Company’s major equipment projects generally have a long project life cycle from bid socialization to project completion. The nature of the contracts are generally fixed price with milestone billings. The Company recognizes revenue for these projects based on the fixed sales prices multiplied by the percentage of completion. In applying the percentage-of-completion method, a project’s percent complete as of any balance sheet date is computed as the ratio of total costs incurred to date divided by the total estimated costs at completion. As changes in the estimates of total costs at completion and/or estimated total losses on projects are identified, appropriate earnings adjustments are recorded during the period that the change or loss is identified. The Company has a history of making reasonably dependable estimates of costs at completion on contracts that follow the percentage-of-completion method; however, due to uncertainties inherent in the estimation process, it is possible that estimated project costs at completion could vary from estimates. The principal components of cost include material, direct labor, subcontracts, and allocated indirect costs. Indirect costs primarily consist of administrative labor and associated operating expenses, which are allocated to the respective projects on actual hours charged to the project utilizing a standard hourly rate.

47

Allowance for Doubtful Accounts
The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The amount of allowance recorded is primarily based upon a quarterly review of specific customer transactions that remain outstanding at least three months beyond their respective due dates.

Inventories
Inventories are carried at the lower of cost or market. Inventory costs are primarily determined using the first-in, first-out (FIFO) method.

Property, Plant and Equipment
Property, plant and equipment is recorded at cost. Repair and maintenance costs are expensed as incurred. Depreciation for financial reporting purposes is computed on the straight-line method over the estimated service lives of the assets, which are from 15 to 30 years for land improvements and buildings, 5 to 15 years for furniture, and machinery and equipment, 5 to 10 years for customer capital, 5 years for vehicles, and 5 to 10 years for computer hardware and software.

Goodwill and Other Intangible Assets
Goodwill represents the excess of the cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. Identifiable intangible assets acquired in business combinations are recorded based on their fair values at the date of acquisition. In accordance with guidance within ASC 350, “Intangibles — Goodwill and Other,” goodwill and identifiable intangible assets with indefinite lives are not subject to amortization but must be evaluated for impairment. None of the Company’s identifiable intangible assets other than goodwill have indefinite lives.

     The Company tests goodwill for impairment at least annually by initially comparing the fair value of each of the Company’s reporting units to their related carrying values. If the fair value of the reporting unit is less than its carrying value, the Company performs an additional step to determine the implied fair value of the goodwill. The implied fair value of goodwill is determined by first allocating the fair value of the reporting unit to all of the assets and liabilities of the unit and then computing the excess of the unit’s fair value over the amounts assigned to the assets and liabilities. If the carrying value of goodwill exceeds the implied fair value of goodwill, such excess represents the amount of goodwill impairment, and the Company recognizes such impairment accordingly. Fair values are estimated using discounted cash flows and other valuation methodologies that are based on projections of the amounts and timing of future revenues and cash flows, assumed discount rates and other assumptions as deemed appropriate. The Company considers such factors as historical performance, anticipated market conditions, operating expense trends and capital expenditure requirements.

     The Company’s identifiable intangible assets other than goodwill have finite lives. Certain of these intangible assets, such as customer relationships, are amortized using an accelerated methodology while others, such as patents, are amortized on a straight-line basis over their estimated useful lives. In addition, intangible assets with finite lives are evaluated for impairment whenever events or circumstances indicate that their carrying amount may not be recoverable, as prescribed by guidance within ASC 360, “Property, Plant, and Equipment.”

Long-Lived Assets
The Company evaluates long-lived assets under the provisions of ASC 360, which addresses financial accounting and reporting for the impairment of long-lived assets and for long-lived assets to be disposed of. For assets to be held and used, the Company groups a long-lived asset or assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. An impairment loss for an asset group reduces only the carrying amounts of a long-lived asset or assets of the group being evaluated. The loss is allocated to the long-lived assets of the group on a pro-rata basis using the relative carrying amounts of those assets, except that the loss allocated to an individual long-lived asset of the group does not reduce the carrying amount of that asset below its fair value whenever that fair value is determinable without undue cost and effort. Estimates of future cash flows to test the recoverability of a long-lived asset group include only the future cash flows that are directly associated with and that are expected to arise as a direct result of the use and eventual disposition of the asset group. The future cash flow estimates used by the Company exclude interest charges.

48

Income Taxes
On January 1, 2007, the Company adopted guidance within ASC 740 “Income Taxes” regarding the accounting for uncertainty in income taxes. This guidance prescribes recognition and measurement standards for a tax position taken or expected to be taken in a tax return. According to this guidance, the evaluation of a tax position is a two step process. The first step is the determination of whether a tax position should be recognized in the financial statements. The benefit of a tax position taken or expected to be taken in a tax return is to be recognized only if the Company determines that it is more-likely-than-not that the tax position will be sustained upon examination by the tax authorities based upon the technical merits of the position. In step two, for those tax positions which should be recognized, the measurement of a tax position is determined as being the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. As a result of the adoption and recognition of the cumulative effect of adoption of this new accounting principle, the Company recorded a $5.7 million increase in the gross unrecognized income tax benefits and a decrease in retained earnings of $4.4 million. The Company recognizes interest and penalties related to uncertain tax positions in the income tax provision (benefit).

     Deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the book and tax basis of assets and liabilities. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized. The Company assesses its ability to realize deferred tax assets based on normalized historical performance and on projections of future taxable income in the relevant tax jurisdictions. Normalized historical performance for purposes of this assessment includes adjustments for those income and expense items that are unusual and non-recurring in nature and are not expected to affect results in future periods. Such unusual and non-recurring items include the effects of discontinued operations, legal fees or settlements associated with specific litigation matters, pension curtailment costs, and restructuring costs. The Company’s projections of future taxable income considers known events, such as the passage of legislation or expected occurrences, and do not reflect a general growth assumption. The Company’s estimates of future taxable income are reviewed annually or whenever events or changes in circumstances indicate that such projections should be modified.

     No provision is made for U.S. income taxes on the undistributed earnings of non-U.S. subsidiaries because these earnings are deemed permanently invested or otherwise indefinitely retained for continuing international operations. These earnings would become subject to income tax if they were remitted as dividends, were loaned to the Company or a U.S. affiliate, or if the Company were to sell its ownership interest in the subsidiaries. Determination of the amount of unrecognized deferred U.S. income tax liability on these unremitted earnings is not practicable.

Pensions
Accounting for pensions involves estimating the cost of benefits to be provided well into the future and attributing that cost over the time period each employee works. To accomplish this, extensive use is made of assumptions about inflation, investment returns, mortality, turnover and discount rates. These assumptions are reviewed annually. In determining the expected return on plan assets, the Company evaluates long-term actual return information, the mix of investments that comprise plan assets and future estimates of long-term investment returns.

Net Income per Common Share
Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number of common shares outstanding plus all potential dilutive common shares outstanding during the period. Potential dilutive common shares are determined using the treasury stock method. Under the treasury stock method, exercise of options is assumed at the beginning of the period when the average stock price during the period exceeds the exercise price of outstanding options and common shares are assumed issued. The proceeds from exercise are assumed to be used to purchase common stock at the average market price during the period. The incremental shares to be issued are considered to be the potential dilutive common shares outstanding. The treasury stock method was also used for the Company’s former convertible senior notes when the average stock price exceeded the conversion price.

Cash and Cash Equivalents
The Company considers all highly liquid, short-term investments made with an original maturity of three months or less to be cash equivalents.

49

Restricted Cash
Restricted cash consists of cash collateral pledged under debt agreements to comply with contractual stipulations, primarily related to outstanding letters of credit and certain derivative obligations. Cash pledged for collateral or released from collateral is classified as an investing activity in the consolidated statement of cash flows.

Derivative Instruments
The Company applies ASC 815, “Derivatives and Hedging.” ASC 815 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. Derivative financial instruments are occasionally utilized by the Company to manage risk exposure to movements in foreign exchange rates, interest rates, or the prices of natural gas. Changes in the value of the derivative financial instruments are measured at the balance sheet date and recognized in current earnings or other comprehensive income depending on whether the derivative is designated as part of a hedge transaction and meets certain other criteria. The Company does not hold derivative financial instruments for trading purposes or any fair value hedges.

Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Labor Agreements
Collective bargaining agreements cover approximately 28% of the Company’s labor force at December 31, 2009. The agreement at the Company’s Catlettsburg, Kentucky facility expired on April 1, 2009 and covers approximately 151 hourly personnel. The parties are working under an extension of the expired agreement as they continue to negotiate the terms and conditions of a multi-year replacement agreement. The Company also has approximately 137 hourly personnel that are covered under collective bargaining agreements that expire on July 1, 2011; July 31, 2011; and February 10, 2013.

Stock-Based Compensation
The Company applies ASC 718, “Compensation — Stock Compensation.” In accordance with guidance within ASC 718, compensation expense for stock options is recorded over the vesting period using the fair value on the date of grant, as calculated by the Company using the Black-Scholes model. The nonvested restricted stock grant date fair value, which is the market price of the underlying common stock, is expensed over the vesting period. The Company’s stock-based compensation plans are more fully described in Note 10.

Concentration of Credit Risk
Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents and customer receivables. The Company places it’s cash with high credit quality financial institutions and invests in low-risk, highly liquid instruments. With respect to customer receivables, the Company believes that it has no significant concentration of credit risk with its largest customer receivable comprising approximately 5% of the total receivables as of December 31, 2009.

Fair Value
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

• Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 – Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

• Level 3 – Unobservable inputs that reflect the reporting entity’s own assumptions.

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Fair Value of Financial Instruments Excluding Derivative Instruments
The Company’s financial instruments, excluding derivative instruments, consist primarily of cash and cash equivalents, restricted cash as well as accounts receivable and accounts payable. The fair value of the cash and cash equivalents, restricted cash, accounts receivable, and accounts payable approximates their carrying value because of the short-term maturity of the instruments.

New Accounting Pronouncement
In June 2009, the Financial Accounting Standards Board (FASB) amended ASC 810-10 for Accounting Standards Update No. 2009-17 (“Update No. 2009-17” (formerly Financial Accounting Standard (FAS) No. 167, “Amendments to FASB Interpretation No. 46(R)).” Update No. 2009-17 is a revision to FASB Interpretation No. 46(R), “Consolidation of Variable Interest Entities,” and amends the consolidation guidance for variable interest entities. Additionally, this standard will require additional disclosures about involvement with variable interest entities and any significant changes in risk exposure due to that involvement. ASC 810-10-65, as updated, is effective January 1, 2010 for companies reporting on a calendar-year basis. Beginning January 1, 2010, the Company will apply the provisions of Update No. 2009-17 to its accounting and disclosure for applicable variable interest entities. The Company is in the process of assessing the impact of this standard.

2. Discontinued Operations

On February 17, 2006, the Company, through its wholly owned subsidiary Chemviron Carbon GmbH, executed an agreement (the “Charcoal Sale Agreement”) with proFagus GmbH, proFagus Grundstuecksverwaltungs GmbH and proFagus Beteiligungen GmbH (as Guarantor) to sell, and sold, substantially all the assets, real estate, and specified liabilities of the Bodenfelde, Germany facility (the “Charcoal/Liquid business”). The aggregate sales price, based on an exchange rate of 1.19 Dollars per Euro, consisted of $20.4 million of cash, which included a final working capital adjustment of $1.3 million. The Company provided guarantees to the buyer related to pre-divestiture tax liabilities, future environmental remediation costs related to pre-divestiture activities and other contingencies. Management believes the ultimate cost of such guarantees is not material. An additional 4.25 million Euro could have been received dependent upon the business meeting certain earnings targets over the next three years. In May 2008, the Company reached a final agreement with proFagus GmbH, proFagus Grundstuecksverwaltungs GmbH and proFagus Beteiligungen GmbH (as Guarantor) regarding the aforementioned additional 4.25 million Euro contingent consideration, fixing the amount to be paid to the Company at 2.8 million Euro. The Company expects to receive this payment in 2010. The unpaid balance earns interest at 7% which is paid annually. The Company recorded the resolution of the additional contingent consideration as an additional pre-tax gain on sale of $4.4 million or $2.8 million, net of tax, within discontinued operations during the year ended December 31, 2008.

     On April 24, 2006, the Company completed the sale of the assets of its Solvent Recovery business to MEGTEC Systems, Inc. (“MEGTEC”), a subsidiary of Sequa Corporation. The Solvent Recovery unit provided turnkey on-site regenerable solvent recovery systems, distillation systems, on-site regenerable volatile organic compound concentrators, vapor-phase biological oxidation systems, and related services on a worldwide basis. The sale price of $1.8 million included cash proceeds of approximately $0.8 million and $0.7 million of assumed liabilities, primarily accounts payable. For the year ended December 31, 2007, the Company recorded a loss of $0.2 million, net of tax, related to an indemnity claim.

     The following table details the selected financial information for the businesses included within the discontinued operations in the Consolidated Statements of Income and Comprehensive Income:

	Charcoal/Liquid						Solvent Recovery
	Year Ended December 31						Year Ended December 31
(Dollars in thousands)	2009		2008		2007		2009		2008		2007
Net sales	$	-	$	-	$	-	$	-	$	-	$	-
Income from operations		-		-		-		-		-		-
Other income (expense)-net		-		4,353		-		-		-		(302	)
Income (loss) before income taxes		-		4,353		-		-		-		(302	)
Provision (benefit) for income taxes		-		1,560		45		-		-		(91	)
Income (loss) from discontinued operations	$	-	$	2,793	$	45	$	-	$	-	$	(211	)

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3. Inventories

	December 31
(Thousands)	2009		2008
Raw materials	$	22,657	$	27,241
Finished goods		61,930		66,484
Total	$	84,587	$	93,725

     Inventories are recorded net of reserves of $1.5 million for obsolete and slow-moving items at both December 31, 2009 and 2008, respectively.

4. Property, Plant and Equipment

	December 31
(Thousands)	2009			2008
Land and improvements	$	12,999		$	12,837
Buildings		33,376			29,789
Machinery, equipment and customer capital		368,695			314,014
Computer hardware and software		18,368			17,057
Furniture and vehicles		8,029			7,737
Construction-in-progress		15,798			25,699
		457,265			407,133
Less accumulated depreciation		(302,165	)		(284,173	)
Net	$	155,100		$	122,960

     Depreciation expense for the years ended December 31, 2009, 2008, and 2007 totaled $16.9 million, $15.1 million, and $15.5 million, respectively.

     Repair and maintenance expenses were $11.5 million, $8.3 million, and $7.9 million for the years ended December 31, 2009, 2008, and 2007, respectively.

5. Goodwill and Other Identifiable Intangible Assets

The Company has elected to perform the annual impairment test of its goodwill, as required on December 31 of each year. For purposes of the test, the Company has identified reporting units, as defined within ASC 350, at a regional level for the Activated Carbon and Service segment and at the technology level for the Equipment segment and has allocated goodwill to these reporting units accordingly. The goodwill associated with the Consumer segment is not material and has not been allocated below the segment level. The accumulated impairment loss as of December 31, 2009 was $57.9 million and related entirely to the Equipment segment.

     The changes in the carrying amount of goodwill by segment for the years ended December 31, 2009 and 2008 are as follows:

	Activated
	Carbon and			Equipment			Consumer
(Dollars in Thousands)	Service Segment			Segment			Segment		Total
Balance as of January 1, 2008	$	21,112		$	6,673		$	60	$	27,845
Foreign currency translation		(1,149	)		(356	)		-		(1,505	)
Balance as of December 31, 2008		19,963			6,317			60		26,340
Foreign currency translation		342			252			-		594
Balance as of December 31, 2009	$	20,305		$	6,569		$	60	$	26,934

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     The following is a summary of the Company’s identifiable intangible assets as of December 31, 2009 and 2008, respectively:

	December 31, 2009
	Weighted
	Average	Gross								Net
	Amortization	Carrying		Foreign			Accumulated			Carrying
	Period	Amount		Exchange			Amortization			Amount
Amortized intangible assets:
Patents	15.4 Years	$	1,369	$	-		$	(1,047	)	$	322
Customer Relationships	17.0 Years		9,323		(182	)		(6,399	)		2,742
Product Certification	7.9 Years		1,682		-			(1,192	)		490
Unpatented Technology	20.0 Years		2,875		-			(1,685	)		1,190
Total	16.0 Years	$	15,249	$	(182	)	$	(10,323	)	$	4,744

	December 31, 2008
	Weighted
	Average	Gross								Net
	Amortization	Carrying		Foreign			Accumulated			Carrying
	Period	Amount		Exchange			Amortization			Amount
Amortized intangible assets:
Patents	15.4 Years	$	1,369	$	-		$	(961	)	$	408
Customer Relationships	17.0 Years		9,323		(256	)		(5,678	)		3,389
License Agreements	5.0 Years		500		-			(500	)		-
Product Certification	7.9 Years		1,682		-			(903	)		779
Unpatented Technology	20.0 Years		2,875		-			(1,521	)		1,354
Total	16.0 Years	$	15,749	$	(256	)	$	(9,563	)	$	5,930

     For the years ended December 31, 2009, 2008 and 2007, the Company recognized $1.3 million, $1.5 million, and $1.8 million respectively, of amortization expense related to intangible assets. The Company estimates amortization expense to be recognized during the next five years as follows:

For the year ending December 31:
2010	$	1,155
2011		847
2012		657
2013		582
2014		482

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6. Product Warranties

The Company establishes a warranty reserve for equipment project sales and estimates the warranty accrual based on the history of warranty claims to total sales, adjusted for significant known claims in excess of established reserves.

     Warranty terms are based on the negotiated equipment project contract and typically are either 18 months from shipment date or 12 months from project startup date. The change in the warranty reserve, which is included in accounts payable and accrued liabilities in the consolidated balance sheets, is as follows:

	December 31
(Thousands)	2009			2008			2007
Beginning Balance	$	1,095		$	1,123		$	1,133
Payments and replacement product		(500	)		(471	)		(293	)
Additions to warranty reserve for warranties issued during the period		571			524			366
Change in the warranty reserve for pre-existing warranties		(26	)		(81	)		(83	)
Ending Balance	$	1,140		$	1,095		$	1,123

7. Borrowing Arrangements

Long-Term Debt

	December 31
(Thousands)	2009		2008*
Convertible Senior Notes	$	-	$	6,000
Industrial revenue bonds		-		2,925
Total		-		8,925
Less current portion of long-term debt (net of debt discount)		-		(7,903	)
Less debt discount		-		(1,022	)
Net	$	-	$	-

* Balances have been retrospectively adjusted to incorporate the adoption of guidance within ASC 470-20 “Debt with Conversion and Other Options.” (See discussion below)

5.00% Convertible Senior Notes due 2036

On August 18, 2006, the Company issued $75.0 million in aggregate principal amount of 5.00% Notes due in 2036 (the “Notes”). The Notes accrued interest at the rate of 5.00% per annum which was payable in cash semi-annually in arrears on each February 15 and August 15, which commenced February 15, 2007. The Notes were eligible to be converted under certain circumstances.

          During the period of August 20, 2008 through November 10, 2008, the Company converted and exchanged $69.0 million of the Notes for cash of $11.0 million and approximately 13.0 million shares of its common stock. A pre-tax loss of $8.9 million was recorded on these extinguishments during the year ended December 31, 2008. During the third quarter of 2009, the Company exchanged, for approximately 1.2 million shares of its common stock, the remaining $6.0 million of Notes. A pre-tax loss of $0.9 million was recorded on this extinguishment related primarily to the outstanding discount and deferred financing fees of the Notes upon conversion.

          Due to the conversion rights of the holders of the Notes, the Company classified the remaining principal amount of outstanding Notes as a current liability as of December 31, 2008. As of December 31, 2009, all Notes have been converted.

          Effective January 1, 2009, the Company implemented guidance within Accounting Standards Codification (ASC) 470-20 “Debt with Conversion and Other Options.” This new guidance required the issuer to separately account for the liability and equity components of convertible debt instruments in a manner that reflects the issuer’s nonconvertible debt borrowing rate. This new accounting method has been applied retrospectively to all periods presented with an impact to retained earnings of $0.6 million as of January 1, 2007. The Company’s $75.0 million principal amount of Notes had an initial measurement that consisted of a liability component of $53.1 million and an equity component of $18.6 million

54

($11.5 million after the associated deferred tax liability). The carrying amount of the equity component was zero and $0.6 million (after tax) at December 31, 2009 and December 31, 2008, respectively.

In accordance with guidance within ASC 470-20, the debt discount of $21.9 million was being amortized over the period from August 18, 2006 (the issuance date) to June 15, 2011 (the first put date on the Notes). The effective interest rate for all periods on the liability component was approximately 13.8%. The Company also incurred original issuance costs of $0.4 million which had been deferred and were being amortized over the same period as the discount. For the year ended December 31, 2009, the Company recorded interest expense of $0.2 million related to the Notes, of which $0.1 million related to the amortization of the discount and $0.1 million related to contractual coupon interest, respectively. Similarly, for the years ended December 31, 2008 and 2007, the Company recorded interest expense of $5.7 million and $7.4 million, respectively, related to the Notes, of which $3.0 million and $3.4 million related to the amortization of the discount and $2.7 million and $3.4 million related to contractual coupon interest. The effect of the retrospective adjustment for the years ended December 31, 2008 and 2007 was to decrease previously reported net income from continuing operations by $6.7 million and $1.9 million, respectively, or $0.13 and $0.04, respectively, per diluted common share.

Credit Facility

On August 14, 2008, the Company entered into a third amendment (the “Third Amendment”) to its Credit Facility (the “Prior Credit Facility”). The Third Amendment permitted borrowings in an amount up to $60.0 million and included a separate U.K. sub-facility and a separate Belgian sub-facility. The Prior Credit Facility permitted the total revolving credit commitment to be increased up to $75.0 million. The facility was scheduled to mature on May 15, 2011. Availability for domestic borrowings under the Prior Credit Facility was based upon the value of eligible inventory, accounts receivable and property, plant and equipment, with separate borrowing bases to be established for foreign borrowings under a separate U.K. sub-facility and a separate Belgian sub-facility. Availability under the Prior Credit Facility was conditioned upon various customary conditions.

          On May 8, 2009, the Company and certain of its domestic subsidiaries entered into a Credit Agreement (the “Credit Agreement”) that replaced the Company’s Prior Credit Facility. Concurrent with the closing under the Credit Agreement, the Company terminated and paid in full its obligations under the Prior Credit Facility. The Company provided cash collateral to the former agent bank for the remaining exposure related to outstanding letters of credit and certain derivative obligations. The cash collateral is shown as restricted cash within the consolidated balance sheet as of December 31, 2009. The Company was in compliance with all applicable financial covenants and other restrictions under the Prior Credit Facility as of the effective date of its termination and in May 2009, wrote off deferred costs of approximately $0.8 million, pre-tax, related to the Prior Credit Facility.

          The Credit Agreement provides for an initial $95.0 million revolving credit facility (the “Revolving Credit Facility”) which expires on May 8, 2014. So long as no event of default has occurred and is continuing, the Company from time to time may request one or more increases in the total revolving credit commitment under the Revolving Credit Facility of up to $30.0 million in the aggregate. No assurance can be given, however, that the total revolving credit commitment will be increased above $95.0 million. Availability under the Revolving Credit Facility is conditioned upon various customary conditions. A quarterly nonrefundable commitment fee is payable by the Company based on the unused availability under the Revolving Credit Facility and is currently equal to 0.25%. Any outstanding borrowings under the Revolving Credit Facility on July 2, 2012, up to $50.0 million, automatically convert to a term loan maturing on May 8, 2014 (the “Term Loan”), with the total revolving credit commitment under the Revolving Credit Facility being reduced at that time by the amount of the Term Loan. Total availability under the Revolving Credit Facility at December 31, 2009 was $91.9 million, after considering outstanding letters of credit.

          On November 30, 2009, the Company entered into a First Amendment to the Credit Agreement (the “First Amendment”). The First Amendment relaxes certain restrictions contained in the Credit Agreement so as to permit the Company to form subsidiaries in connection with future acquisitions or for corporate planning purposes; to permit increased capital expenditures; to increase the amount of cash that may be down-streamed to non-domestic subsidiaries; to permit the issuance of up to $8.0 million of letters of credit outside the Credit Agreement; to increase the amount of indebtedness the Company may obtain outside of the Credit Agreement; to permit the pledging of U.S. assets to secure certain foreign debt; and to permit the purchase of 51% of Calgon Mitsubishi Chemical Corporation (“CMCC”) not already owned by the Company, including funding that transaction with foreign debt.

55

          The interest rate on amounts owed under the Term Loan and the Revolving Credit Facility will be, at the Company’s option, either (i) a fluctuating base rate based on the highest of (A) the prime rate announced from time to time by the lenders, (B) the rate announced by the Federal Reserve Bank of New York on that day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day plus 3.00% or (C) a daily LIBOR rate plus 2.50%, or (ii) a rate based on the average published LIBOR rates for comparable borrowings and reserve requirements prescribed by the Board of Governors of the Federal Reserve System of the United States. A margin may be added to the applicable interest rate based on the Company’s leverage ratio as set forth in the First Amendment. The interest rate per annum as of December 31, 2009 using option (i) above would have been 3.25% if any borrowings were outstanding.

          The Company incurred issuance costs of $1.0 million which were deferred and are being amortized over the term of the Credit Agreement. As of December 31, 2009, there are no outstanding borrowings under the Revolving Credit Facility.

          Certain of the Company’s domestic subsidiaries unconditionally guarantee all indebtedness and obligations related to borrowings under the Credit Agreement. The Company’s obligations under the Revolving Credit Facility are secured by a first perfected security interest in certain of the domestic assets of the Company and the subsidiary guarantors, including certain real property, inventory, accounts receivable, equipment and capital stock of certain of the Company’s domestic subsidiaries.

          The Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type, including limitations on the Company and its subsidiaries with respect to indebtedness, liens, investments, capital expenditures, mergers and acquisitions, dispositions of assets and transactions with affiliates. The Credit Agreement also provides for customary events of default, including failure to pay principal or interest when due, failure to comply with covenants, the fact that any representation or warranty made by the Company is false or misleading in any material respect, certain insolvency or receivership events affecting the Company and its subsidiaries and a change in control of the Company. If an event of default occurs, the lenders will be under no further obligation to make loans or issue letters of credit. Upon the occurrence of certain events of default, all outstanding obligations of the Company automatically become immediately due and payable, and other events of default will allow the lenders to declare all or any portion of the outstanding obligations of the Company to be immediately due and payable. The Credit Agreement also contains a covenant which includes limitations on its ability to declare or pay cash dividends, subject to certain exceptions, such as dividends declared and paid by its subsidiaries and cash dividends paid by the Company in an amount not to exceed 50% of cumulative net after tax earnings following the closing date of the agreement if certain conditions are met. The Company was in compliance with all such covenants as of December 31, 2009.

Industrial Revenue Bonds

The Mississippi Industrial Revenue Bonds totaling $2.9 million at December 31, 2008, bore interest at a variable rate, matured in April 2009, and were retired. These bonds were issued to finance certain equipment acquisitions at the Company’s Pearlington, Mississippi plant.

Belgian Loan and Credit Facility

On November 30, 2009, the Company entered into a Loan Agreement (the “Belgian Loan”) in order to help finance expansion of the Company’s Feluy, Belgium facility. The Belgian Loan provides total borrowings up to 6.0 million Euro, which can be drawn on in 120 thousand Euro bond installments at 25% of the total amount invested in the expansion. The maturity date is seven years from the date of the first draw down which has yet to occur. The Belgian Loan is guaranteed by a mortgage mandate on the Feluy site and is subject to customary reporting requirements, though no financial covenants exist and the Company had no outstanding borrowings under the Belgian Loan as of December 31, 2009.

     The Company also maintains a Belgian credit facility totaling 1.5 million Euro which was secured by a U.S. letter of credit as of December 31, 2009. There are no financial covenants, and the Company had no outstanding borrowings under the Belgian credit facility as of December 31, 2009 and December 31, 2008, respectively. Bank guarantees of 0.9 million Euros were issued as of December 31, 2009.

56

United Kingdom Credit Facility

The Company maintains a United Kingdom credit facility for the issuance of various letters of credit and guarantees totaling 0.6 million British Pounds Sterling. This credit facility is secured with a U.S. bank guarantee. Bank guarantees of 0.4 million British Pounds Sterling were issued as of December 31, 2009.

Chinese Credit Facility

The Company previously maintained a Chinese credit facility totaling 11.0 million RMB or $1.6 million which was secured by a U.S. letter of credit. The credit facility was fully repaid in June 2009 and was closed.

Interest Expense

The Company’s interest expense for the years ended December 31, 2009, 2008, and 2007 totaled $0.3 million, $6.0 million, and $8.5 million, respectively. These amounts are net of interest costs capitalized of $0.4 million, $0.4 million, and $0.2 million for the years ended December 31, 2009, 2008, and 2007, respectively.

8. Commitments

The Company has entered into leases covering principally office, research and warehouse space, office equipment and vehicles. Future minimum rental payments required under all operating leases that have remaining noncancelable lease terms in excess of one year are $6.3 million in 2010, $5.7 million in 2011, $5.1 million in 2012, $4.8 million in 2013, $4.4 million in 2014 and $4.7 million thereafter. Total rental expense on all operating leases was $8.1 million, $7.3 million, and $5.7 million for the years ended December 31, 2009, 2008, and 2007, respectively.

     The Company has in place long-term supply contracts for the purchase of raw materials, transportation, and information systems and services. The following table represents the total payments made for the purchases under the aforementioned supply contracts:

	December 31
(Thousands)	2009		2008		2007
Raw and other materials	$	34,104	$	31,837	$	22,145
Transportation	$	6,853		5,733		4,840
Information systems and services		2,951		2,663		2,386
Total payments	$	43,908	$	40,233	$	29,371

57

     Future minimum purchase requirements under the terms of the aforementioned contracts are as follows:

	Due in
(Thousands)	2010		2011		2012		2013		2014		Thereafter
Raw and other materials	$	35,161	$	24,451	$	1,599	$	-	$	-	$	-
Transportation		1,575		1,575		1,575		1,575		263		-
Information systems and services		2,042		-		-		-		-		-
Total contractual cash obligations	$	38,778	$	26,026	$	3,174	$	1,575	$	263	$	-

9. Shareholders’ Equity

The Company’s Board of Directors in 2000 authorized the purchase of up to 500,000 shares of the Company’s stock. As of December 31, 2009, 11,300 shares have been purchased under this stock buy back program.

     The Board of Directors adopted a new Stockholder Rights Plan in February 2005 designated to guard against (1) coercive and abusive tactics that might be used in an attempt to gain control of the Company without paying all stockholders a fair price for their shares or (2) the accumulation of a substantial block of stock without offering to pay stockholders a fair control premium. The Rights Plan will not prevent takeovers, but is designed to preserve the Board’s bargaining power and flexibility to deal with third-party acquirers and to otherwise seek to maximize value for all stockholders. The Plan awards one right for each outstanding share of common stock held by stockholders of record on February 3, 2005 and thereafter. Each right entitles the holder to purchase from the Company one unit of one ten-thousandth of a share of a newly created series of preferred stock at a purchase price of $35 per unit. The rights will be exercisable only if a person or group acquires beneficial ownership of 10% or more of the Company’s outstanding common stock (15% or more in the case of certain institutional investors) or commences a tender or exchange offer upon consummation of which such person or group would beneficially own 10% or more of the Company’s common stock (“Acquiring Person”). If one of those events occurs, each holder of a right (with the exception of the Acquiring Person or group) will thereafter have the right to receive, upon exercise, common stock (or, in certain circumstances, cash, property or other of the Company’s securities) having a value equal to two times the exercise price of the right. The rights can be redeemed by the Board of Directors under certain circumstances, in which case the rights will not be exchangeable for shares.

10. Stock Compensation Plans

At December 31, 2009, the Company had one stock-based compensation plan that was adopted in 2008 and is described below. The former Employee and Non-Employee Directors’ Stock Option Plans were terminated and superceded by the 2008 Equity Incentive Plan, however, they both had stock-based awards outstanding as of December 31, 2009 and 2008.

2008 Equity Incentive Plan

In 2008, the Company adopted an equity incentive plan for eligible employees, service providers, and non-employee directors of the Company and its subsidiaries. The maximum number of shares available for grants and awards is an aggregate of 2,000,000 shares and the plan also includes a fixed sub-limit for the granting of incentive stock options which is 1,500,000 shares. The awards may be stock options, restricted stock units, performance units or other stock-based awards. Stock options may be “nonstatutory” or “incentive.” The exercise price for options and stock appreciation rights shall not be less than the fair market value on the date of grant, except if an incentive stock option is granted to a “10% employee,” as defined by the plan, then the option price may not be less than 110% of such fair market value. Options and stock appreciation rights may be exercisable commencing with the grant date.

Employee Stock Option Plan

The Employee Stock Option Plan for officers and other key employees of the Company permitted grants of stock options, restricted shares or restricted performance shares for up to 8,238,640 shares of the Company’s common stock. Stock options may be “nonstatutory” or “incentive” with a purchase price of not less than 100% of the fair market value on the date of the grant. Stock appreciation rights were permitted to be granted at date of option grant or at any later date during the term of the option. “Incentive” stock options granted since 1986 become exercisable no less than six months after the date of grant and are no longer exercisable after the expiration of four to ten years from the date of the grant.

58

Non-Employee Directors’ Stock Option Plan

The 1993 Non-Employee Directors’ Stock Option Plan, as last amended in 2005, provided for an annual grant on the day following the Annual Meeting of Stockholders of stock options equal to a Black-Scholes calculated value of $25,000 per Director on the date of grant. The options vest and become exercisable six months after the date of the grant and, in general, expire ten years after the date of grant.

Stock-Based Compensation Expense

In accordance with the guidance within ASC 718 “Compensation - Stock Compensation”, compensation expense for stock options is recorded over the vesting period based on the fair value on the date of grant, as calculated by the Company using the Black-Scholes model and the assumptions listed below:

	Year Ended December 31
	2009			2008			2007
Average grant date exercise price per share of unvested awards – options	$	15.57		$	14.41		$	7.89
Dividend yield		.00	%		.00	%		.00	%
Expected volatility		35-44	%		35	%		33-34	%
Risk-free interest rates		1.99-2.76	%		2.76	%		3.99-4.54	%
Expected lives of options	3-6 years			3-6 years			3-6 years
Average grant date fair value per share of unvested option awards	$	6.55		$	5.64		$	3.25

     The Dividend yield is based on the latest annualized dividend rate and the current market price of the underlying common stock at the date of grant.

     Expected volatility is based on the historical volatility of the Company’s stock and the implied volatility calculated from traded options on the Company’s stock.

     The Risk-free interest rates are based on the U.S. Treasury strip rate for the expected life of the option.

     The Expected lives of options are primarily determined from historical stock option exercise data.

Stock Option Activity

The following tables show a summary of the status and activity of stock options for the year ended December 31, 2009:

Employee:

						Weighted-
						Average
				Weighted-		Remaining		Aggregate
				Average		Contractual		Intrinsic
				Exercise		Term		Value
	Shares			Price		(in years)		(in thousands)
Outstanding at beginning of year		1,233,489		$	7.38
Granted		90,620			14.74
Exercised		(128,141	)		7.35
Canceled		(15,100	)		13.68
Outstanding at December 31, 2009		1,180,868		$	7.87		3.53	$	7,325
Exercisable at December 31, 2009		1,058,386		$	6.98		3.47	$	7,325

     The weighted-average grant date fair value of employee stock options granted during the years ended December 31, 2009, 2008, and 2007 was $6.45 per share, $6.76 per share, and $3.39 per share or $0.6 million, $0.5 million, and $0.3 million, respectively. The total grant date fair value of options vested during the years ended December 31, 2009, 2008, and 2007 was $5.08 per share, $3.15 per share, and $3.08 per share, or $0.4 million, $0.3 million, and $0.3 million, respectively.

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Non-Employee Directors:

						Weighted-
						Average
				Weighted-		Remaining		Aggregate
				Average		Contractual		Intrinsic
				Exercise		Term		Value
	Shares			Price		(in years)		(in thousands)
Outstanding at beginning of year		127,592		$	7.09
Granted		-			-
Exercised		(27,820	)		7.72
Canceled		-			-
Outstanding at December 31, 2009		99,772		$	6.92		4.64	$	652
Exercisable at December 31, 2009		99,772		$	6.92		4.64	$	652

     The weighted-average grant date fair value of non-employee director stock options granted during the year ended December 31, 2007 was $3.64 per share or $0.2 million. The total grant date fair value of options vested during the years ended December 31, 2008 and 2007 was $5.31 per share and $3.42 per share or $11 thousand and $0.1 million, respectively.

     During the years ended December 31, 2009, 2008, and 2007 the total intrinsic value of stock options exercised (i.e., the difference between the market price at exercise and the price paid by the employee or non-employee directors to exercise the option) was $0.8 million, $8.8 million, and $3.0 million, respectively. The total amount of cash received from the exercise of options was $1.0 million, $5.1 million, and $3.1 million, for the years ended December 31, 2009, 2008, and 2007, respectively.

Stock Awards

In accordance with guidance within ASC 718, compensation expense for nonvested stock awards is recorded over the vesting period based on the fair value at the date of grant.

     Nonvested restricted and performance restricted stock granted under the Company’s Equity Incentive Plan is valued at the grant date fair value, which is the market price of the underlying common stock, and vest over service or performance periods that range from one to three years. Outstanding performance restricted stock awards, a type of award granted in 2005, vested subject to the Company’s satisfaction of certain performance criteria during 2005, 2006, and 2007. All of the 64,400 shares vested and were issued in March 2008.

     Additionally, performance stock awards, based on Total Shareholder Performance (“TSR”), vest subject to the satisfaction of performance goals, at the end of a three-year performance period. The number of performance stock awards that are scheduled to vest is a function of TSR. Under the terms of the TSR performance stock award, the Company’s actual TSR for the performance period is compared to the results of its peer companies for the same period with the Company’s relative position in the group determined by percentile rank. The actual award payout is determined by multiplying the target award by the performance factor percentage based upon the Company’s percentile ranking and can vest at between zero and 200 percent of the target award. The initial grant date fair value of the TSR performance stock is determined using a Monte Carlo simulation model. The grant date fair value is expensed on a straight-line basis over the three-year performance period. The following significant assumptions were used:

	Year Ended December 31
	2009			2008			2007
Dividend yield		.00	%		.00	%		.00	%
Expected volatility		52-53	%		35-37	%		49-53	%
Risk-free interest rates		1.47-1.78	%		2.10-3.52	%		4.54-5.13	%
Performance period	3 years			3 years			3 years

     The following table shows a summary of the employee TSR performance stock awards outstanding as of December 31, 2009:

TSR
Performance	Fair Value		Minimum		Target		Maximum
Period	(in thousands)		Shares		Shares		Shares
2007-2009	$	739		-		53,950		107,900
2008-2010		553		-		20,500		41,000
2009-2011		596		-		22,200		44,400

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The following table shows a summary of the status and activity of nonvested stock awards for the year ended December 31, 2009:

Employee Non-vested Restricted Stock:

										Weighted-
				TSR						Average
				Performance						Grant Date
	Restricted			Stock Awards						Fair Value
	Stock Awards			(a)			Total			(per share)
Nonvested at January 1, 2009		285,051			147,250			432,301		$	8.31
Granted		98,392			24,600			122,992			14.03
Vested		(190,524	)		(64,400	)		(254,924	)		6.58
Forfeited or Expired		(17,109	)		(10,800	)		(27,909	)		10.37
Nonvested at December 31, 2009		175,810			96,650			272,460		$	12.29

       (a) The number of shares shown for the performance stock awards is based on the target number of share awards.

     The following table presents information on performance restricted stock awards, restricted stock awards, and performance stock awards granted:

	2009		2008		2007
Number of shares granted		122,992		95,525		412,180
Weighted-average grant date fair value per share	$	14.03	$	16.07	$	5.80

Non-Employee Directors’ Non-vested Restricted Stock:

									Weighted-
									Average
				TSR					Grant Date
	Restricted			Performance					Fair Value
	Stock Awards			Stock Awards		Total			(per share)
Nonvested at January 1, 2009		21,143			-		21,143		$	14.87
Granted		23,240			-		23,240			16.67
Vested		(8,889	)		-		(8,889	)		14.82
Forfeited or Expired		-			-		-			-
Nonvested at December 31, 2009		35,494			-		35,494		$	16.06

     Compensation expense related to all stock-based compensation totaled $2.4 million, $2.9 million, and $2.9 million for the years ended December 31, 2009, 2008, and 2007.

     As of December 31, 2009, there was $3.7 million of total future compensation cost related to nonvested share-based compensation arrangements and the weighted-average period over which this cost is expected to be recognized is approximately three years.

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11. Pensions

The Company sponsors defined benefit plans covering substantially all employees. The Company uses a measurement date of December 31 for all its pension plans.

     For all U.S. plans, at December 31, 2009, and 2008 the projected benefit obligation and accumulated benefit obligation each exceed plan assets.

     For U.S. plans, the following table provides a reconciliation of changes in the plans’ benefit obligations and fair value of assets over the two-year period ended December 31, 2009 and the funded status as of December 31 for both years:

(Thousands)	2009			2008
Change in Projected Benefit Obligations
Projected benefit obligations at January 1	$	81,323		$	76,773
Service cost		768			1,024
Interest cost		4,791			4,777
Actuarial loss		3,956			2,884
Benefits paid		(3,706	)		(3,096	)
Curtailment		-			(1,039	)
Projected benefit obligations at December 31		87,132			81,323
Change in Plan Assets
Fair value of plan assets at January 1		47,219			65,752
Actual return on plan assets		11,715			(19,522	)
Employer contributions		10,480			4,085
Benefits paid		(3,706	)		(3,096	)
Fair value of plan assets at December 31		65,708			47,219
Funded status at December 31	$	(21,424	)	$	(34,104	)
Amounts recognized in the Balance Sheets:
Current liability — Accrued benefit cost	$	(82	)	$	(82	)
Noncurrent liability — Accrued benefit cost		(21,342	)		(34,022	)
Net amount recognized	$	(21,424	)	$	(34,104	)

Amounts recognized in Accumulated Other Comprehensive Income consist of:

(Thousands)	2009		2008
Accumulated prior service cost	$	430	$	634
Accumulated net actuarial loss		25,461		31,340
Net amount recognized, before tax effect	$	25,891	$	31,974

     The 2008 curtailment was a result of the Company freezing the benefits under one of its bargaining unit plans as of January 1, 2009.

     The accumulated benefit obligation at the end of 2009 and 2008 was $82.3 million and $77.2 million, respectively.

     For U.S. plans, the assumptions used to determine benefit obligations are shown in the following table:

	2009			2008
Weighted average actuarial assumptions at December 31:
Discount rate		5.79	%		6.06	%
Rate of increase in compensation levels		4.00	%		4.00	%

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     The following table sets forth the fair values of the Company’s U.S. pension plans assets as of December 31, 2009:

(Thousands)	Fair Value Measurements at December 31, 2009
			Quoted
			Prices in
			Active
			Markets for		Significant		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
Asset Category	Total		(Level 1)		(Level 2)		(Level 3)
Cash Equivalents	$	1,080	$	1,080	$	-	$	-
Equities
Large Cap (a)		16,454		16,454		-		-
Mid Cap (b)		8,517		8,517		-		-
Small Cap MF (c)		4,874		-		4,874		-
Microcap MF (d)		3,655		3,655		-		-
International MF (e)		11,545		11,545		-		-
Fixed Income
Mutual Fund (f)		19,583		19,583		-		-
Total	$	65,708	$	60,834	$	4,874	$	-

(a)	This category consists of Growth and Value strategies investing primarily in the common stock of large capitalization companies located in the United States. Growth oriented strategies seek companies within the Russell 1000 Growth Universe with above average earnings, growth, and revenue expectations. Value oriented strategies seek companies within the Russell 1000 Value Universe that are undervalued relative to their intrinsic value. These strategies are benchmarked to the Russell 1000 Growth and Value Indices respectively.
(b)	This category invests primarily in small to mid-sized U.S. companies that are undervalued relative to their intrinsic value. The smaller cap orientation of the strategy requires investment manager to be cognizant of liquidity and capital restraints, which are monitored by the investment team on an ongoing basis. This strategy is benchmarked to the Russell Midcap Value Index.
(c)	This category invests primarily in small capitalization U.S. companies that are either undervalued relative to their intrinsic value or that have above average earnings growth and revenue expectations. The smaller cap orientation of the strategy requires investment manager to be cognizant of liquidity and capital restraints, which are monitored by the investment team on an ongoing basis. This strategy is benchmarked to the Russell 2000 Index.
(d)	This category invests primarily in micro-capitalization U.S. companies that are undervalued relative to their intrinsic value. The smaller cap orientation of the strategy requires investment manager to be cognizant of liquidity and capital restraints, which are monitored by the investment team on an ongoing basis. This strategy is benchmarked to the Russell Micro Cap Value Index.
(e)	This category invests in all types of capitalization companies operating in both developed and emerging markets outside the United States. The strategy targets broad diversification across various economic sectors and seeks to achieve lower overall portfolio volatility by investing with complimentary active managers with varying risk characteristics. Total combined exposure to emerging markets typically ranges from 10% to 20%, with a maximum restriction of 40%. This category is benchmarked to the MSCI EAFE Index and the MSCI All Country World Index ex US.
(f)	This category invests primarily in U.S. denominated investment grade and government securities in addition to MBS and ABS issues. It may invest up to 10% of its assets in non-dollar denominated bonds from issuers located outside of the United States. Investment in non-dollar denominated bonds may be on a currency hedged or un-hedged basis. This category normally invests at least 80% of its assets in bonds and maintains an average portfolio duration that is within ±20% of the duration of the benchmark. This category is benchmarked to the Barclays Capital Aggregate Index.

     The Company’s investment strategy is to earn the highest possible long-term total rate of return while minimizing the associated risk to ensure the preservation of the plan assets for the provision of benefits to participants and their beneficiaries. This is accomplished by active management of a diversified portfolio by fund managers, fund styles, asset types, risk characteristics and investment holdings.

     Information about the expected cash flows for the U.S. pension plans follows:

Year	Pension Benefits (Thousands)
Employer contributions
2010	$	1,588
Benefit Payments
2010	$	4,509
2011		5,861
2012		5,569
2013		5,004
2014		5,507
2015 – 2019		32,307

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     For U.S. plans, the following table provides the components of net periodic pension costs of the plans for the years ended December 31, 2009, 2008, and 2007:

	Year Ended December 31
(Thousands)	2009			2008			2007
Service cost	$	768		$	1,024		$	1,070
Interest cost		4,791			4,777			4,664
Expected return on assets		(3,822	)		(5,388	)		(4,994	)
Prior service cost		203			227			248
Net amortization		1,942			384			351
Settlement		-			-			(122	)
Curtailment		-			(480	)		(265	)
Net periodic pension cost	$	3,882		$	544		$	952

Other Changes in Plan Assets and Benefit Obligations Recognized in Other
Comprehensive Income (Loss)

	Year Ended December 31
(Thousands)	2009			2008
Curtailment effect	$	-		$	(558	)
Current year actuarial (gain) loss		(3,938	)		27,793
Amortization of actuarial loss		(1,942	)		(384	)
Amortization of prior service cost		(203	)		(227	)
Total recognized in other comprehensive income (loss)	$	(6,083	)	$	26,624
Total recognized in net periodic pension cost and other comprehensive income (loss)	$	(2,201	)	$	27,168

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     The estimated amounts that will be amortized from accumulated other comprehensive income into net periodic pension cost in 2010 are as follows:

Prior service cost	$	117
Net actuarial loss		1,599
Total at December 31	$	1,716

     For U.S. plans, the assumptions used in the measurement of net periodic pension cost are shown in the following table:

	2009			2008			2007
Weighted average actuarial assumptions at December 31:
Discount rate		6.06	%		6.23	%		5.93	%
Expected annual return on plan assets		8.00	%		8.00	%		8.00	%
Rate of increase in compensation levels		4.00	%		4.00	%		4.00	%

     The discount rates that the Company utilizes for its Qualified Plans to determine pension obligations are based on a review of long-term bonds that receive one of the two highest ratings given by a recognized rating agency. The expected rate of return on plan assets was determined by evaluating input from the Company’s actuaries including their review of asset class return expectations as well as long-term inflation assumptions. Projected returns are based on broad equity and bond indices that the Company uses to benchmark its actual asset portfolio performance based on its portfolio mix of approximately 68% equity securities, 30% debt securities, and 2% with other investments. The Company also takes into account the effect on its projected returns from any reasonably likely changes in its asset portfolio when applicable. Including the 2009 and 2008 returns of 22.39% and (28.74)%, respectively, the Company’s 15-25 year return ranged from 7.52% to 9.96% on its benchmark portfolio.

     For European plans, the following tables provide a reconciliation of changes in the plan’s benefit obligations and fair value of assets over the two-year period ended December 31, 2009 and the funded status as of December 31 of both years:

(Thousands)	2009			2008
Change in Projected Benefit Obligations
Projected benefit obligations at January 1	$	30,932		$	36,363
Service cost		482			765
Interest cost		1,888			2,140
Employee contributions		171			188
Actuarial loss (gain)		1,733			(293	)
Benefits paid		(1,124	)		(1,311	)
Foreign currency exchange rate changes		2,119			(6,920	)
Projected benefit obligations at December 31		36,201			30,932
Change in Plan Assets
Fair value of plan assets at January 1		17,250			23,143
Actual return on plan assets		2,331			(2,198	)
Employer contributions		1,827			2,130
Employee contributions		171			188
Benefits paid		(1,124	)		(1,311	)
Foreign currency exchange rate changes		1,377			(4,702	)
Fair value of plan assets at December 31		21,832			17,250
Funded Status at December 31	$	(14,369	)	$	(13,682	)
Amounts Recognized in the Balance Sheets:
Current liability – Accrued benefit cost	$	(563	)	$	(521	)
Noncurrent liability – Accrued benefit cost		(13,806	)		(13,161	)
Net amount recognized	$	(14,369	)	$	(13,682	)

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Amounts recognized in Accumulated Other Comprehensive Income consist of:

(Thousands)	2009		2008
Accumulated net actuarial loss	$	4,395	$	3,584
Accumulated transition obligation		32		74
Net amount recognized, before tax effect	$	4,427	$	3,658

     The accumulated benefit obligation at the end of 2009 and 2008 was $33.3 million and $28.3 million, respectively.

     For European plans, the assumptions used to determine end of year benefit obligations are shown in the following table:

	2009			2008
Weighted average actuarial assumptions at December 31:
Discount rate		5.48	%		5.69	%
Rate of increase in compensation levels		4.34	%		4.03	%

     The following table sets forth the fair values of the Company’s European pension plans assets as of December 31, 2009:

(Thousands)	Fair Value Measurements at December 31, 2009
			Quoted
			Prices in
			Active
			Markets for		Significant		Significant
			Identical		Observable		Unobservable
			Assets		Inputs		Inputs
Asset Category	Total		(Level 1)		(Level 2)		(Level 3)
Cash Equivalents	$	232	$	232	$	—	$	—
Equities								—
M&G PP Discretionary Fund (a)		2,774		2,774		—		—
Global Equity 60-40 Index (b)		5,184		5,184		—		—
Fixed Income								—
Delta Lloyd Fixed Income (c)		4,802		—		—		4,802
Corporate Bonds (d)		4,694		4,694		—		—
Government Bonds (e)		1,328		1,328		—		—
Real Estate (f)		1,563		1,563		—		—
Insurance Reserves (g)		1,255		—		—		1,255
Total	$	21,832	$	15,775	$	—	$	6,057

(a)	This fund invests in a mix of equity shares, bonds, property and cash. Only the equity investments are included in this line with the remaining being allocated to other appropriate categories. The fund is actively managed against its benchmark of the CAPS Balanced Pooled Fund Median. A prudent approach of diversification by both location and investment type is employed by the fund and both active stock selection and asset allocation are used to add value.
(b)	This index fund invests 60% in the UK Equity Index Fund and 40% in overseas index funds. The overseas portion has a target allocation of 14% in North American funds, 14% in European funds, (not including the UK), 6% in Japanese funds, and 6% in Pacific Basin funds (not including Japan).
(c)	This category invests in 6 year Fixed Income investments with Delta Lloyd.
(d)	This category invests in the M&G All Stocks Corporate Bond Fund and the Legal & General (LG) AAA Fixed interest — Over 15 Year Fund. These funds, respectively, invest primarily in investment grade corporate bonds, as well as other debt instruments, including higher yielding corporate bonds, government debt, convertible and preferred stocks, money market instruments and equities; and in long-dated sterling denominated AAA-rated corporate bonds, as well as smaller holdings in gilts — both providing a fixed rate of interest.
(e)	This category invests mainly in long term gilts through the LG Over 15 Year Gilts Index and the M&G PP Discretionary Fund.
(f)	This category invests in the M&G UK Property Fund. The fund invests directly in commercial properties in the UK and is actively managed against its performance benchmark of the BNY Mellon CAPS Pooled Fund Property Median. The fund is well diversified investing in the retail, office and industrial sectors of the market. A small portion of this category is also held in the M&G PP Discretionary Fund.
(g)	This category invests in insurance policies in the name of the individual plan members.

     The Company’s Level 3 investments in the Delta Lloyd fixed income fund and insurance reserves were valued using significant unobservable inputs. Inputs to these valuations include characteristics and quantitative data relating to the assets and reserve, investment and insurance policy cost, position size, liquidity, current financial condition of the

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company/insurer and other relevant market data. The following table sets forth fair value measurements using significant unobservable inputs:

	Delta Lloyd			Insurance
(Thousands)	Fixed Income			Reserves
Balance at January 1, 2009	$	4,425		$	1,100
Purchases		1,752			153
Sales/Maturities		(1,498	)		(31	)
Foreign currency translation		123			33
Balance at December 31, 2009	$	4,802		$	1,255

     At the end of 2009, the projected benefit obligations, accumulated benefit obligations, and fair value of plan assets for European pension plans did not have projected benefit obligations or accumulated benefit obligations in excess of plan assets. However, at the end of 2008, the projected benefit obligations, accumulated benefit obligations, and fair value of plan assets for European pension plans with a projected benefit obligation in excess of plan assets, and for pension plans with an accumulated benefit obligation in excess of plan assets, was as follows:

	Projected Benefit Obligation		Accumulated Benefit
	Exceeds the Fair Value of		Obligation Exceeds the Fair
	Plan’s Assets		Value of Plan’s Assets
(Thousands)	2008		2008
Projected benefit obligation	$	30,932	$	24,169
Accumulated benefit obligation	$	28,272	$	22,706
Fair value of plan assets	$	17,250	$	11,658

     Information about the expected cash flows for the European pension plans follows:

Year	Pension Benefits (Thousands)
Employer contributions
2010	$	1,842
Benefit Payments
2010	$	821
2011		1,505
2012		1,368
2013		1,388
2014		1,048
2015 – 2019		6,944

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     Total benefits expected to be paid include both the Company’s share of the benefit cost and the participants’ share of the cost, which is funded by participant contributions to the plan.

     For European plans, the following table provides the components of net periodic pension costs of the plans for the years ended December 31, 2009, 2008 and 2007:

	Year Ended December 31
(Thousands)	2009			2008			2007
Service cost	$	482		$	765		$	783
Interest cost		1,888			2,140			1,885
Expected return on assets		(1,211	)		(1,529	)		(1,405	)
Net amortization		171			83			157
Net periodic pension cost	$	1,330		$	1,459		$	1,420

Other Changes in Plan Assets and Benefit Obligations Recognized in Other
Comprehensive Income

	Year Ended December 31
(Thousands)	2009			2008
Current year actuarial loss	$	614		$	3,435
Amortization of actuarial loss		(124	)		(29	)
Amortization of transition obligation		(47	)		(54	)
Foreign currency exchange		326			(906	)
Total recognized in other comprehensive income	$	769		$	2,446
Total recognized in net periodic pension cost and other comprehensive income	$	2,099		$	3,905

     The estimated amounts that will be amortized from accumulated other comprehensive income into net periodic pension cost in 2010 are as follows:

Net transition obligation	$	11
Net actuarial loss		150
Total at December 31	$	161

     For European plans, the assumptions used in the measurement of the net periodic pension cost are shown in the following table:

	2009			2008			2007
Weighted average actuarial assumptions at December 31:
Discount rate		5.51	%		5.63	%		4.89	%
Expected annual return on plan assets		6.30	%		6.25	%		6.45	%
Rate of increase in compensation levels		3.97	%		4.08	%		3.90	%

     The expected rate of return on plan assets was determined by evaluating input from the Company’s actuaries, including their review of asset class return expectations as well as long-term inflation assumptions. Projected returns are based on broad equity and bond indices that the Company uses to benchmark its actual asset portfolio performance. The Company also takes into account the effect on its projected returns from any reasonably likely changes in its asset portfolio when applicable. The portfolio’s historical 10-year compounded rate of return is 4.0% as the Company was significantly impacted by losses in 2008.

     The non-current portion of $35.1 million and $47.2 million at December 31, 2009 and 2008, respectively, for the U.S. and European pension liabilities is included in accrued pension and other liabilities.

     The Company also sponsors a defined contribution pension plan for certain U.S. employees that permits employee contributions of up to 50% of eligible compensation in accordance with Internal Revenue Service guidance. Under this defined contribution plan, the Company makes a fixed contribution of 2% of eligible employee compensation on a

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quarterly basis and matches contributions made by each participant in an amount equal to 100% of the employee contribution up to a maximum of 2% of employee compensation. In addition, each of these employees is eligible for an additional discretionary Company contribution of up to 4% of employee compensation based upon annual Company performance at the discretion of the Company’s Board of Directors. Employer matching contributions for non-represented employees vest immediately. Employer fixed and discretionary contributions vest after two years of service. For bargaining unit employees at the Catlettsburg, Kentucky facility, the Company contributes a maximum of $25.00 per month to the plan. For bargaining unit employees at the Columbus, Ohio facility, the Company makes contributions to the USW 401(k) Plan of $1.15 per actual hour worked for eligible employees. For bargaining unit employees at the Neville Island facility, the Company, effective January 1, 2009, began making contributions of $1.40 per actual hour worked to the defined contribution pension plan (Thrift/Savings Plan) for eligible employees when their defined benefit pension plan was frozen. Employer matching contributions for bargaining unit employees vest immediately. The Company realized a $0.5 million curtailment gain in 2008 as a result of freezing the Neville Island defined benefit plan. Total expenses related to the defined contribution plans for years ended December 31, 2009, 2008, and 2007 were $1.8 million, $2.0 million, and $1.9 million, respectively.

12. Provision for Income Taxes

The components of the provision for income taxes for continuing operations were as follows:

	Year Ended December 31
(Thousands)	2009		2008*			2007*
Current
Federal	$	6,005	$	11,765		$	1,138
State and local		943		829			(17	)
Foreign		2,436		3,720			3,418
		9,384		16,314			4,539
Deferred
Federal		1,897		(2,349	)		(473	)
State and local		343		398			292
Foreign		130		(351	)		2,289
		2,370		(2,302	)		2,108
Provision for income taxes for continuing operations	$	11,754	$	14,012		$	6,647

* Results have been retrospectively adjusted to incorporate the adoption of guidance within ASC 470-20 “Debt with Conversion and Other Options.” (Refer to Note 7).

     Income from continuing operations before income taxes and equity in income of equity investments includes income generated by operations outside the United States of $10.7 million, $16.9 million, and $12.1 million for 2009, 2008, and 2007, respectively.

     The differences between the U.S. federal statutory tax rate and the Company’s effective income tax rate for continuing operations is as follows:

	Year Ended December 31
	2009			2008*			2007*
U.S. federal statutory rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal income tax benefit		2.3			2.0			1.4
Deferred tax related to equity investment		(1.5	)		-			-
Tax rate differential on foreign income		(0.8	)		(4.0	)		0.2
Valuation allowance release		(9.7	)		-			-
Net foreign tax credits		-			0.6			5.7
Tax statute expiration		(0.5	)		(0.5	)		(7.8	)
Change in uncertain tax positions		0.2			2.0			8.9
Change in tax rates		-			-			(6.7	)
Other – net		(1.3	)		(1.7	)		(0.3	)
Effective income tax rate for continuing operations		23.7	%		33.4	%		36.4	%

* Results have been retrospectively adjusted to incorporate the adoption of guidance within ASC 470-20 “Debt with Conversion and Other Options.” (Refer to Note 7).

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     The Company’s total provision for income taxes is shown below:

	Year Ended December 31
(Thousands)	2009		2008*			2007*
Continuing operations	$	11,754	$	14,012		$	6,647
Discontinued operations		-		1,560			(91	)
Other comprehensive income		1,028		(9,507	)		3,449
Total provision for income taxes	$	12,782	$	6,065		$	10,005

* Results have been retrospectively adjusted to incorporate the adoption of guidance within ASC 470-20 “Debt with Conversion and Other Options.” (Refer to Note 7).

     The Company has the following gross operating loss carryforwards and domestic tax credit carryforwards as of December 31, 2009:

Type (Thousands)	Amount		Expiration Date
Foreign tax credits	$	10,209		2011-2019
State tax credits		1,050		2027
Operating loss carryforwards – state*		40,417		2012-2027
Operating loss carryforwards – foreign		235	None

*Of the total state operating loss-carryforwards, approximately 90% expire in 2019 or later.

     The components of deferred taxes consist of the following:

	December 31
(Thousands)	2009			2008*
Deferred tax assets**
State net operating loss and credit carryforwards***	$	13,175		$	15,037
Accruals		9,151			6,932
Inventories		9,694			5,764
Pensions		11,764			15,849
Valuation allowance		(3,495	)		(7,977	)
Total deferred tax assets		40,289			35,605
Deferred tax liabilities
Property, plant and equipment	$	19,503		$	11,796
Goodwill and other intangible assets		1,357			62
U.S. liability on Belgian net deferred tax assets		8			42
U.S. liability on deferred foreign income		-			733
Cumulative translation adjustment on undistributed earnings		1,074			1,174
Total deferred tax liabilities		21,942			13,807
Net deferred tax asset	$	18,347		$	21,798

* Results have been retrospectively adjusted to incorporate the adoption of guidance within ASC 470-20 “Debt with Conversion and Other Options.” (Refer to Note 7).

**Uncertain tax liabilities of approximately $66 thousand and $60 thousand fully offset the foreign net operating losses and credit carryforwards in 2009 and 2008, respectively.

***Uncertain tax net indirect benefits of approximately $4.7 million and $2.4 million are included in the U.S. net operating loss and credit carryforwards in 2009 and 2008, respectively.

     A valuation allowance is established when it is more likely than not that a portion of the deferred tax assets will not be realized. The valuation allowance is adjusted based on the changing facts and circumstances, such as the expected expiration of an operating loss carryforward.

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     The Company’s valuation allowance consists of the following:

				State			Total
	U.S. Foreign			Operating Loss			Valuation
(Thousands)	Tax Credits			Carryforwards			Allowance
Balance as of January 1, 2008	$	5,918		$	300		$	6,218
Increase due to uncertainty in realization of tax benefits		3,943			-			3,943
Decrease due to a reduction of tax benefits in the current year		(1,946	)		-			(1,946	)
Decrease due to utilization of state net operating loss carryforwards		-			(238	)		(238	)
Balance as of December 31, 2008		7,915			62			7,977
Increase due to uncertainty of realization of tax benefit		337			-			337
Decrease due to utilization of foreign tax credit carryforwards		(1,688	)		-			(1,688	)
Decrease due to recognition of tax benefits in current year		(3,131	)		-			(3,131	)
Balance as of December 31, 2009	$	3,433		$	62		$	3,495

     The Company adopted guidance within ASC 740, effective January 1, 2007, regarding the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. Upon adoption, the Company recorded a $5.7 million increase in the gross unrecognized income tax benefits and a decrease in retained earnings of $4.4 million. The Company has classified uncertain tax positions as non-current income tax liabilities unless the amount is expected to be paid within one year. The following is a reconciliation of the unrecognized income tax benefits:

(Thousands)	2009			2008			2007
Balance at January 1	$	12,249		$	11,953		$	9,477
Gross increases for tax positions of prior years		266			1,919			124
Gross decreases for tax positions of prior years		(1,014	)		(2,100	)		(1,187	)
Gross increases for tax positions of current year		803			809			4,476
Lapse of statute of limitations		(141	)		(332	)		(937	)
Settlements		(459	)		-			-
Balance at December 31	$	11,704		$	12,249		$	11,953

     As of December 31, 2009, approximately $6.5 million of the $11.7 million, and as of December 31, 2008, approximately $10.0 million of the $12.2 million, of unrecognized tax benefits would reduce the Company’s effective tax rate if recognized. Total uncertain tax positions recorded in accrued pension and other liabilities were approximately $12.5 million and $12.4 million for the year ended December 31, 2009 and 2008, respectively.

     The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. During 2009 and 2008, the Company recognized approximately $0.3 million and $0.2 million, respectively, of interest and penalties. As of December 31, 2009 and 2008, the amount accrued for the payment of interest and penalties is approximately $1.1 million and $0.8 million, respectively.

     At this time, the Company believes that it is reasonably possible that approximately $0.7 million of the estimated unrecognized tax benefits as of December 31, 2009 will be recognized within the next twelve months based on the expiration of statutory review periods.

     As of December 31, 2009, the following tax years remain subject to examination for the major jurisdictions where the Company conducts business:

Jurisdiction	Years
United States	2000, 2003, 2005 – 2009
Kentucky	2005 – 2009
Canada	2005 – 2009
Pennsylvania	2004 – 2009
Germany	2007 – 2009
UK	2003 – 2009
Belgium	1999 – 2009

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13. Accumulated Other Comprehensive Income (Loss)

										Accumulated
	Currency			Pension						Other
	Translation			Benefit			Derivatives and			Comprehensive
(Thousands)	Adjustments			Adjustments			Other			Income (Loss)
Balance, January 1, 2007	$	19,279		$	(8,406	)	$	(568	)	$	10,305
Net Change		2,557			3,648			498			6,703
Balance, December 31, 2007		21,836			(4,758	)		(70	)		17,008
Net Change		(4,744	)		(17,959	)		(755	)		(23,458	)
Balance, December 31, 2008		17,092			(22,717	)		(825	)		(6,450	)
Net Change		3,526			3,183			(1,265	)		5,444
Balance, December 31, 2009	$	20,618		$	(19,534	)	$	(2,090	)	$	(1,006	)

     Foreign currency translation adjustments exclude income tax expense (benefit) for the earnings of the Company’s non-U.S. subsidiaries as management believes these earnings will be reinvested for an indefinite period of time. Determination of the amount of unrecognized deferred U.S. income tax liability on these unremitted earnings is not practicable. The income tax effect included in accumulated other comprehensive income (loss) for other non-U.S. subsidiaries and equity investees that are not permanently reinvested was $1.1 million, $1.2 million, and $0.2 million at December 31, 2009, 2008, and 2007, respectively.

     The income tax benefit associated with ASC 715 “Compensation — Retirement Benefits” included in accumulated other comprehensive income (loss) was $11.3 million, $13.6 million, and $2.7 million at December 31, 2009, 2008, and 2007, respectively. The net income tax benefit associated with the Company’s derivatives included in accumulated other comprehensive income (loss) was $1.1 million, $0.1 million, and zero at December 31, 2009, 2008, and 2007, respectively.

14. Supplemental Cash Flow Information

Cash paid for interest for the years ended December 31, 2009, 2008, and 2007 was $0.5 million, $4.8 million, and $5.3 million, respectively. Income taxes paid, net of refunds, for the years ended December 31, 2009, 2008, and 2007 was $3.8 million, $15.3 million, and $1.8 million, respectively.

     During the year ended December 31, 2009 and 2008, the Company exchanged shares of its common stock for approximately $6.0 million and $44.2 million, respectively, of its 5.00% Convertible Senior Notes. Refer to Note 7.

     The Company has reflected $(0.1) million and $1.9 million of its capital expenditures as a non-cash decrease and increase, respectively, in accounts payable and accrued liabilities for the years ended December 31, 2009 and 2008, respectively.

15. Derivative Instruments

The Company’s corporate and foreign subsidiaries use foreign currency forward exchange contracts and foreign exchange option contracts to limit the exposure of exchange rate fluctuations on certain foreign currency receivables, payables, and other known and forecasted transactional exposures for periods consistent with the expected cash flow of the underlying transactions. The foreign currency forward exchange and foreign exchange option contracts generally mature within eighteen months and are designed to limit exposure to exchange rate fluctuations. The Company uses cash flow hedges to limit the exposure to changes in natural gas prices. The natural gas forward contracts generally mature within one to thirty-six months. The Company also has a ten-year foreign currency swap agreement to fix the foreign exchange rate on a $6.5 million intercompany loan between the Company and its foreign subsidiary, Chemviron Carbon Ltd. Since its inception, the foreign currency swap has been treated as a foreign exchange cash flow hedge. The Company accounts for its derivative instruments under ASC 815 “Derivatives and Hedging.”

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The fair value of outstanding derivative contracts recorded as assets in the accompanying Consolidated Balance Sheets were as follows:

Asset Derivatives
		December 31,		December 31,
(Thousands)	Balance Sheet Locations	2009		2008
Derivatives designated as hedging instruments under ASC 815:
Foreign exchange contracts	Other current assets	$	60	$	1,153
Natural gas contracts	Other current assets		5		—
Currency swap	Other assets		210		662
Natural gas contracts	Other assets		4		—
Total derivatives designated as hedging instruments under ASC 815			279		1,815
Derivatives not designated as hedging instruments under ASC 815:
Foreign exchange contracts	Other current assets		25		14
Total asset derivatives		$	304	$	1,829

The fair value of outstanding derivative contracts recorded as liabilities in the accompanying Consolidated Balance Sheets were as follows:

Liability Derivatives
		December 31,		December 31,
(Thousands)	Balance Sheet Locations	2009		2008
Derivatives designated as hedging instruments under ASC 815:
Foreign exchange contracts	Accounts payable and accrued liabilities	$	716	$	63
Natural gas contracts	Accounts payable and accrued liabilities		1,211		1,323
Natural gas contracts	Accrued pension and other liabilities		852		1,048
Total derivatives designated as hedging instruments under ASC 815			2,779		2,434
Derivatives not designated as hedging instruments under ASC 815:
Foreign exchange contracts	Accounts payable and accrued liabilities		-		39
Total liability derivatives		$	2,779	$	2,473

In accordance with ASC 820, “Fair Value Measurements and Disclosures,” the fair value of the Company’s foreign exchange forward contracts, foreign exchange option contracts, currency swap, and natural gas forward contracts is determined using Level 2 inputs, which are defined as observable inputs. The inputs used are from market sources that aggregate data based upon market transactions.

Cash Flow Hedges

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (OCI) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings and were not material for the years ended December 31, 2009 and 2008, respectively.

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The following table provides details on the changes in accumulated OCI relating to derivative assets and liabilities that qualified for cash flow hedge accounting.

(Thousands)	December 31, 2009			December 31, 2008
Accumulated OCI derivative loss (income) at January 1, 2009	$	1,295		$	(538	)
Effective portion of changes in fair value		3,169			1,459
Reclassifications from accumulated OCI derivative gain to earnings		(1,129	)		424
Foreign currency translation		(140	)		(50	)
Accumulated OCI derivative loss at December 31, 2009	$	3,195		$	1,295

	Amount of (Gain) or Loss
Derivatives in ASC 815 Cash	Recognized in OCI on Derivatives
Flow Hedging Relationships	(Effective Portion)
	December 31,
(Thousands)	2009			2008			2007
Foreign Exchange Contracts	$	1,261		$	(1,842	)	$	—
Currency Swap		(506	)		1,434			78
Natural Gas Contracts		2,414			1,867			781
Total	$	3,169		$	1,459		$	859

		Amount of Gain or (Loss)
Derivatives in ASC 815 Cash Flow		Reclassified from Accumulated
Hedging Relationships	Location of Gain or	OCI in Income (Effective Portion) *
	(Loss) Recognized in	December 31,
(Thousands)	Income on Derivatives	2009			2008			2007
Foreign Exchange Contracts	Cost of products sold	$	1,038		$	316		$	—
Currency Swap	Interest expense		(35	)		(123	)		(165	)
Natural Gas Contracts	Cost of products sold		(2,132	)		230			(832	)
Total		$	(1,129	)	$	423		$	997

		Amount of Loss
		Recognized in Income on
		Derivatives (Ineffective
		Portion and Amount
Derivatives in ASC 815 Cash Flow		Excluded from
Hedging Relationships	Location of	Effectiveness Testing)
	Loss Recognized in	December 31,
(Thousands)	Income on Derivatives	2009			2008			2007
Foreign Exchange Contracts	Other expense — net	$	(20	)	$	(21	)	$	—
Currency Swap	Other expense — net					—			—
Natural Gas Contracts	Other expense — net		—			—			—
Total		$	(20	)	$	(21	)	$	—

* Assuming market rates remain constant with the rates at December 31, 2009, a loss of $2.0 million is expected to be recognized in earnings over the next 12 months.

The Company had the following outstanding derivative contracts that were entered into to hedge forecasted transactions:

	December 31,		December 31,		December 31,
(in thousands except for mmbtu)	2009		2008		2007
Natural gas contracts (mmbtu)		1,070,000		1,290,000		970,000
Foreign exchange contracts	$	14,552	$	21,386	$	-
Currency swap	$	3,646	$	4,293	$	4,889

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Other

The Company has also entered into certain derivatives to minimize its exposure of exchange rate fluctuations on certain foreign currency receivables, payables, and other known and forecasted transactional exposures. The Company has not qualified these contracts for hedge accounting treatment and therefore, the fair value gains and losses on these contracts are recorded in earnings as follows:

		Amount of Loss
		Recognized in Income on
Derivatives Not Designated as	Location of	Derivatives
Hedging Instruments Under ASC 815	Loss Recognized in	December 31,
(Thousands)	Income on Derivatives	2009			2008			2007
Foreign Exchange Contracts *	Other expense - net	$	(294	)	$	(725	)	$	7
Total		$	(294	)	$	(725	)	$	7

*As of December 31, 2009, 2008 and 2007, these foreign exchange contracts were entered into and settled during the respective periods.

Management’s policy for managing foreign currency risk is to use derivatives to hedge up to 75% of the forecasted intercompany sales to its European subsidiaries. The hedges involving foreign currency derivative instruments do not span a period greater than eighteen months from the contract inception date. Management uses various hedging instruments including, but not limited to foreign currency forward contracts, foreign currency option contracts and foreign currency swaps. Management’s policy for managing natural gas exposure is to use derivatives to hedge from 25% to 100% of the forecasted natural gas requirements. These cash flow hedges span up to thirty-six months from the contract inception date. Hedge effectiveness is measured on a quarterly basis and any portion of ineffectiveness is recorded directly to the Company’s earnings.

16. Contingencies

The Company purchased the common stock of Advanced Separation Technologies Incorporated (“AST”) from Progress Capital Holdings, Inc. and Potomac Capital Investment Corporation on December 31, 1996. On January 12, 1998, the Company filed a claim for unspecified damages in the United States District Court for the Western District of Pennsylvania alleging among other things that Progress Capital Holdings and Potomac Capital Investment Corporation materially breached various AST financial and operational representations and warranties included in the Stock Purchase Agreement and had defrauded the Company. A jury returned a verdict in favor of the Company and against the defendants in the amount of $10.0 million on January 26, 2007. After the Court denied all post-trial motions, including the defendants’ motion for a new trial and the Company’s motion for the award of prejudgment interest, all parties appealed to the United States Circuit Court of Appeals for the Third Circuit. The parties settled the case in January 2008 when the defendants agreed to pay the Company $9.25 million. This sum was received and recorded into operations during February 2008. Of the settlement amount recorded into operations, approximately $5.3 million was recorded in the Activated Carbon and Service segment and $4.0 million was recorded in the Equipment segment.

          In conjunction with the February 2004 purchase of substantially all of Waterlink’s operating assets and the stock of Waterlink’s U.K. subsidiary, several environmental studies were performed on Waterlink’s Columbus, Ohio property by environmental consulting firms which identified and characterized areas of contamination. In addition, these firms identified alternative methods of remediating the property, identified feasible alternatives and prepared cost evaluations of the various alternatives. The Company concluded from the information in the studies that a loss at this property is probable and recorded the liability as a component of noncurrent other liabilities in the Company’s consolidated balance sheet. At December 31, 2009, the balance recorded was $4.0 million. Liability estimates are based on an evaluation of, among other factors, currently available facts, existing technology, presently enacted laws and regulations, and the remediation experience of other companies. The Company has not incurred any environmental remediation expense for the years ended December 31, 2009, 2008, and 2007. It is reasonably possible that a change in the estimate of this obligation will occur as remediation preparation and remediation activity commences in the future. The ultimate

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remediation costs are dependent upon, among other things, the requirements of any state or federal environmental agencies, the remediation methods employed, the final scope of work being determined, and the extent and types of contamination which will not be fully determined until experience is gained through remediation and related activities. The accrued amounts are expected to be paid out over the course of several years once work has commenced. The Company has yet to make a determination as to when it will proceed with remediation efforts.

          On March 8, 2006, the Company and another U.S. producer (the “Petitioners”) of activated carbon formally requested that the United States Department of Commerce investigate unfair pricing of certain activated carbon imported from the People’s Republic of China. The Commerce Department investigated imports of activated carbon from China that is thermally activated using a combination of heat, steam and/or carbon dioxide. Certain types of activated carbon from China, most notably chemically-activated carbon, were not investigated.

          On March 2, 2007, the Commerce Department published its final determination (subsequently amended) that all of the subject merchandise from China was being unfairly priced, or dumped, and thus that special additional duties should be imposed to offset the amount of the unfair pricing. The resultant tariff rates ranged from 61.95% ad valorem (i.e., of the entered value of the goods) to 228.11% ad valorem. A formal order imposing these tariffs was published on April 27, 2007. All imports from China remain subject to the order and antidumping tariffs. Importers of subject activated carbon from China are required to make cash deposits of estimated antidumping tariffs at the time the goods are entered into the United States customs territory. Deposits of tariffs are subject to future revision based on retrospective reviews conducted by the Commerce Department.

          The Company is both a domestic producer and one of the largest U.S. importers (from our wholly-owned subsidiary Calgon Carbon (Tianjin) Co., Ltd.) of the activated carbon that is subject to this proceeding. As such, the Company’s involvement in the Commerce Department’s proceedings is both as a domestic producer (a “petitioner”) and as a foreign exporter (a “respondent”).

          As one of two U.S. producers involved as petitioners in the case, the Company is actively involved in ensuring the Commerce Department obtains the most accurate information from the foreign producers and exporters involved in the review, in order to calculate the most accurate results and margins of dumping for the sales at issue.

          As an importer of activated carbon from China and in light of the successful antidumping tariff case, the Company was required to pay deposits of estimated antidumping tariffs at the rate of 84.45% ad valorem to U.S. Customs and Border Protection (“Customs”) on entries made on or after October 11, 2006 through April 8, 2007. Because of limits on the government’s legal authority to impose provisional tariffs prior to issuance of a final determination, entries made between April 9, 2007 and April 19, 2007 were not subject to tariffs. For the period April 20, 2007 through November 10, 2009, deposits have been paid at 69.54%.

          The Company’s role as an importer that is required to pay tariffs results in a contingent liability related to the final amount of tariffs that it will ultimately have to pay. The Company has made deposits of estimated tariffs in two ways. First, estimated tariffs on entries in the period from October 11, 2006 through April 8, 2007 were covered by a bond. The total amount of tariffs that can be paid on entries in this period is capped as a matter of law, though the Company may receive a refund with interest of any difference due to a reduction in the actual margin of dumping found in the first review. The Company’s estimated liability for tariffs during this period of $0.2 million is reflected in accounts payable and accrued liabilities on the consolidated balance sheet at December 31, 2009. Second, the Company has been required to post cash deposits of estimated tariffs owed on entries of subject merchandise since April 19, 2007. The final amount of tariffs owed on these entries may change, and can either increase or decrease depending on the final results of relevant administrative inquiries. This process is further described below.

          The amount of estimated antidumping tariffs payable on goods imported into the United States is subject to review and retroactive adjustment based on the actual amount of dumping that is found. To do this, the Commerce Department conducts periodic reviews of sales made to the first unaffiliated U.S. customer, typically over the prior 12 month period. These reviews will be possible for at least five years, and can result in changes to the antidumping tariff rate (either increasing or reducing the rate) applicable to any given foreign exporter. Revision of tariff rates has two effects. First, it will alter the actual amount of tariffs that Customs will seek to collect for the period reviewed, by either increasing or decreasing the amount to reflect the actual amount of dumping that was found. If the actual amount of tariffs owed increases, the government will require payment of the difference plus interest. Conversely, when the tariff rate

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decreases, any difference is refunded with interest. Second, the revised rate becomes the cash deposit rate applied to future entries, and can either increase or decrease the amount of deposits an importer will be required to pay.

          On November 10, 2009, the Commerce Department announced the results of its review of the tariff period beginning October 2006 through March 31, 2008 (period of review (POR) I). Based on the POR I results, the Company’s ongoing tariff deposit rate was adjusted from 69.54% to 14.51% (as adjusted by .07% for certain ministerial errors and published in the Federal Register on December 17, 2009) for entries made subsequent to the announcement. In addition, the Company’s assessment rate for POR I was determined to have been too high and, accordingly, the Company reduced its recorded liability for unpaid deposits in POR I and recorded a receivable reflecting expected refunds for tariff deposits made during POR I as a result of the announced decrease in the POR I tariff assessment rate. The impact of these adjustments to the Company’s cost of sales increased fourth quarter pre-tax operating income by approximately $1.6 million. Note that the Petitioners have appealed to the U.S. Court of International Trade the Commerce Department’s POR I results challenging, among other things, the selection of certain surrogate values and financial information which in-part caused the reduction in the tariff rate. Other appeals were also filed by Chinese respondents seeking changes to the calculations that either do not relate to the Company’s tariff rate or would, if applied to the Company, lower its tariff rate. There is no deadline for a final decision regarding these appeals but such appeals typically take at least a year to resolve. The Company will not have final settlement of the amounts it may owe or receive as a result of the final POR I tariff rates until the aforementioned appeals are resolved.

          On April 1, 2009, the Commerce Department published a formal notice allowing parties to request a second annual administrative review of the antidumping tariff order covering the period April 1, 2008 through March 31, 2009 (POR II). Requests for review were due no later than April 30, 2009. The Company, in its capacity as a U.S. producer and separately as a Chinese exporter, elected not to participate in this administrative review. By not participating in the review, the Company’s tariff deposits made during POR II are final and not subject to further adjustment.

          For POR I, the Company estimates that a hypothetical 10% increase or decrease in the final tariff rate compared to the announced rate on November 10, 2009 would result in an additional payment or refund of approximately $0.1 million. As noted above, the Company’s tariff deposits made during POR II are fixed and not subject to change. For the period April 1, 2009 through March 31, 2010 (POR III), a hypothetical 10% increase or decrease in the final tariff rate compared to the announced rates in effect for the period would result in an additional payment or refund of $0.1 million based on deposits made for a portion of the POR III period ending December 31, 2009.

          The contingent liability relating to tariffs paid on imports is somewhat mitigated by two factors. First and foremost, the antidumping tariff order’s disciplinary effect on the market encourages the elimination of dumping through fair pricing. Separately, pursuant to the Continued Dumping and Subsidy Offset Act of 2000 (repealed effective Feb. 8, 2006), as an affected domestic producer, the Company is eligible to apply for a distribution of a share of certain tariffs collected on entries of subject merchandise from China from October 11, 2006 to September 30, 2007. In July 2009 and 2008, the Company applied for such distributions. In November 2009 and December 2008, the Company received distributions of approximately $0.8 million and $0.2 million, respectively, which reflected 59.57% of the total amounts then available. The Company anticipates receiving additional amounts in 2010 and future years related to tariffs paid for the period October 11, 2006 through September 30, 2007, though the exact amount is impossible to determine.

          By letter dated January 22, 2007, the Company received from the United States Environmental Protection Agency (“EPA”), Region 4 a report of a hazardous waste facility inspection performed by the EPA and the Kentucky Department of Environmental Protection (“KYDEP”) as part of a Multi Media Compliance Evaluation of the Company’s Big Sandy Plant in Catlettsburg, Kentucky that was conducted on September 20 and 21, 2005. Accompanying the report was a Notice of Violation (“NOV”) alleging multiple violations of the Federal Resource Conservation and Recovery Act (“RCRA”) and corresponding EPA and KYDEP hazardous waste regulations. The alleged violations mainly concern the hazardous waste spent activated carbon regeneration facility. The Company met with the EPA on April 17, 2007 to discuss the inspection report and alleged violations, and submitted written responses in May and June 2007. In August 2007, the EPA notified the Company that it believes there were still significant violations of RCRA that are unresolved by the information in the Company’s responses, without specifying the particular violations. During a meeting with the EPA on December 10, 2007, the EPA indicated that the agency would not pursue certain other alleged violations. Based on discussions during the December 10, 2007 meeting, subsequent communications with the EPA, and in connection with the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) Notice referred to below, the Company has taken actions to address and remediate a number of the unresolved alleged violations. The Company

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believes, and the EPA has indicated, that the number of unresolved issues as to alleged continuing violations cited in the January 22, 2007 NOV has been reduced substantially. The EPA can take formal enforcement action to require the Company to remediate any or all of the unresolved alleged continuing violations which could require the Company to incur substantial additional costs. The EPA can also take formal enforcement action to impose substantial civil penalties with respect to violations cited in the NOV, including those which have been admitted or resolved. The Company is awaiting further response from the EPA and cannot predict with any certainty the probable outcome of this matter or range of potential loss, if any.

          On July 3, 2008, the EPA verbally informed the Company that there are a number of unresolved RCRA violations at the Big Sandy Plant which may render the facility unacceptable to receive spent carbon for reactivation from sites regulated under the CERCLA pursuant to the CERCLA Off-Site Rule. The Company received written notice of the unacceptability determination on July 14, 2008 (the “CERCLA Notice”). The CERCLA Notice alleged multiple violations of RCRA and four releases of hazardous waste. The alleged violations and releases were cited in the September 2005 multi-media compliance inspections, and were among those cited in the January 2007 NOV described in the preceding paragraph as well. The CERCLA Notice gave the Company until September 1, 2008 to demonstrate to the EPA that the alleged violations and releases are not continuing, or else the Big Sandy Plant would not be able to receive spent carbon from CERCLA sites until the EPA determined that the facility is again acceptable to receive such CERCLA wastes. This deadline subsequently was extended several times. The Company met with the EPA in August 2008 regarding the CERCLA Notice and submitted a written response to the CERCLA Notice prior to the meeting. By letter dated February 13, 2009, the EPA informed the Company that based on information submitted by the Company indicating that the Big Sandy Plant has returned to physical compliance for the alleged violations and releases, the EPA had made an affirmative determination of acceptability for receipt of CERCLA wastes at the Big Sandy Plant. The EPA’s determination is conditioned upon the Company treating certain residues resulting from the treatment of the carbon reactivation furnace off-gas as hazardous waste and not sending material dredged from the onsite wastewater treatment lagoons offsite other than to a permitted hazardous waste treatment, storage or disposal facility. The Company has requested clarification from the EPA regarding these two conditions. The Company has also met with Headquarters of the EPA Solid Waste Division (“Headquarters”) on March 6, 2009 and presented its classification argument, with the understanding that Headquarters would advise Region 4 of the EPA. By letter dated January 5, 2010, the EPA determined certain residues resulting from the treatment of the carbon reactivation furnace off-gas are RCRA listed hazardous wastes and the material dredged from the onsite wastewater treatment lagoons is a RCRA listed hazardous waste and that they need to be managed in accordance with RCRA regulations. The Company has learned that the United States Department of Justice is preparing a complaint with respect to the matters. The cost to treat and/or dispose of the material dredged from the lagoons as hazardous waste could be substantial. However, by letter dated January 22, 2010, the Company received a determination from the KYDEP Division of Waste Management that the material is not listed hazardous waste when recycled as had been the Company’s practice. The Company believes that pursuant to EPA regulations, KYDEP is the proper authority to make this determination. Thus, the Company believes that there is no basis for the position set forth in the EPA’s January 5, 2010 letter and the Company will vigorously defend any complaint on the matter.

          By letter dated August 18, 2008, the Company was notified by the EPA Suspension and Debarment Division (“SDD”) that because of the alleged violations described in the CERCLA Notice, the SDD was making an assessment of the Company’s present responsibility to conduct business with Federal Executive Agencies. Representatives of the SDD attended the August 2008 EPA meeting. On August 28, 2008, the Company received a letter from the Division requesting additional information from the Company in connection with the SDD’s evaluation of the Company’s potential “business risk to the Federal Government,” noting that the Company engages in procurement transactions with or funded by the Federal Government. The Company provided the SDD with all information requested by the letter in September 2008. The SDD can suspend or debar a Company from sales to the Federal Government directly or indirectly through government contractors or with respect to projects funded by the Federal Government. The Company estimates that revenue from sales made directly to the Federal Government or indirectly through government contractors comprised less than 8% of its total revenue for the year ended December 31, 2009. The Company is unable to estimate sales made directly or indirectly to customers and or projects that receive federal funding. In October 2008, the SDD indicated that it was still reviewing the matter but that another meeting with the Company was not warranted at that time. The Company believes that there is no basis for suspension or debarment on the basis of the matters asserted by the EPA in the CERCLA Notice or otherwise. The Company has had no further communication with the SDD since October 2008 and believes the likelihood of any action being taken by the SDD is remote.

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          In June 2007, the Company received a Notice Letter from the New York State Department of Environmental Conservation (“NYSDEC”) stating that the NYSDEC had determined that the Company is a Potentially Responsible Party (“PRP”) at the Frontier Chemical Processing Royal Avenue Site in Niagara Falls, New York (the “Site”). The Notice Letter requests that the Company and other PRP’s develop, implement and finance a remedial program for Operable Unit #1 at the Site. Operable Unit #1 consists of overburden soils and overburden and upper bedrock groundwater. The selected remedy is removal of above grade structures and contaminated soil source areas, installation of a cover system, and ground water control and treatment, estimated to cost between approximately $11 million and $14 million, which would be shared among the PRP’s. The Company has not determined what portion of the costs associated with the remedial program it would be obligated to bear and the Company cannot predict with any certainty the outcome of this matter or range of potential loss. The Company has joined a PRP group and has executed a Joint Defense Agreement with the group members. In August 2008, the Company and over 100 PRP’s entered into a Consent Order with the NYSDEC for additional site investigation directed toward characterization of the Site to better define the scope of the remedial project. The Company contributed monies to the PRP group to help fund the work required under the Consent Order. The additional site investigation required under the Consent Order was initiated in 2008 and completed in the spring of 2009. A final report of the site investigation was submitted to the NYSDEC in October 2009. In a letter dated December 31, 2009, the NYSDEC disapproved the report. The basis for disapproval include concerns regarding proposed alternate soil cleanup objectives, questions regarding soil treatability studies and questions regarding ground water contamination. The PRP Group has discussed the stated concerns with the NYSDEC and is considering alternative soil cleanup approaches.

          By letter dated July 3, 2007, the Company received an NOV from the KYDEP alleging that the Company has violated the KYDEP’s hazardous waste management regulations in connection with the Company’s hazardous waste spent activated carbon regeneration facility located at the Big Sandy Plant in Catlettsburg, Kentucky. The NOV alleges that the Company has failed to correct deficiencies identified by the KYDEP in the Company’s Part B hazardous waste management facility permit application and related documents and directed the Company to submit a complete and accurate Part B application and related documents and to respond to the KYDEP’s comments which were appended to the NOV. The Company submitted a response to the NOV and the KYDEP’s comments in December 2007 by providing a complete revised permit application. The KYDEP has not indicated whether or not it will take formal enforcement action, and has not specified a monetary amount of civil penalties it might pursue in any such action, if any. The KYDEP can also deny the Part B operating permit. On October 18, 2007, the Company received an NOV from the EPA related to this permit application and submitted a revised application to both the KYDEP and the EPA within the mandated timeframe. The EPA has not indicated whether or not it will take formal enforcement action, and has not specified a monetary amount of civil penalties it might pursue in any such action. The Company met with the KYDEP on July 27, 2009 concerning the permit, and the KYDEP indicated that it, and Region 4 of the EPA, would like to see specific additional information or clarifications in the permit application. Accordingly, the Company submitted a new application on October 15, 2009. The KYDEP indicated that it had no intention to deny the permit as long as the Company worked with the state to resolve issues. The Region 4 of the EPA has not indicated any stance on the permit and can deny the application. At this time the Company cannot predict with any certainty the outcome of this matter or range of loss, if any.

          On March 20, 2007, the Company and ADA-ES entered into a Memorandum of Understanding (“MOU”) providing for cooperation between the companies to attempt to jointly market powdered activated carbon (“PAC”) to the electric power industry for the removal of mercury from coal fired power plant flue gas. The MOU provided for commissions to be paid to ADA-ES in respect of product sales. The Company terminated the MOU effective as of August 24, 2007 for convenience. Neither party had entered into sales or supply agreements with prospective customers as of that date. On March 3, 2008, the Company entered into a supply agreement with a major U.S. power generator for the sale of powdered activated carbon products with a minimum purchase obligation of approximately $55 million over a 5 year period. ADA-ES claimed that it is entitled to commissions of at least $8.25 million over the course of the 5 year contract, which the Company denies. On September 29, 2008, the Company filed suit in the United States District Court for the Western District of Pennsylvania for a declaratory judgment from the Court that the Company has no obligation to pay ADA-ES commissions related to this contract or for any future sales made after August 24, 2007. The Company has been countersued alleging breach of contract. Discovery is on-going and the Company intends to vigorously defend the countersuit and pursue the declaratory judgment.

          In 2002, the Company was sued by For Your Ease Only (“FYEO”). The case has been stayed since 2003. The case arises out of the Company’s patent covering anti-tarnish jewelry boxes, U.S. Patent No. 6,412,628 (“the ‘628 Patent”). FYEO and the Company are competitors in the sale of jewelry boxes through a common retailer. In 2002, the

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Company asserted to the retailer that FYEO’s jewelry box infringed the ‘628 Patent. FYEO filed suit in the U.S. District Court for the Northern District of Illinois for a declaration that the patent was invalid and not infringed, and claiming that the Company had tortiously interfered with its relationship with the retailer. The Company defended the suit until December 2003, when the case was stayed pending a re-examination of the ‘628 Patent in the Patent and Trademark Office. That patent was re-examined and certain claims of that patent were rejected by order dated February 25, 2008. The Company appealed, but the re-examination was affirmed by the Court of Appeals for the Federal Circuit. The Patent Trademark Office issued a re-examination certificate on August 25, 2009. Consequently, the stay on litigation is likely to be lifted in the next few months. The Company will assert that, notwithstanding the rejection of certain claims in the ‘628 Patent, the Company had a good-faith belief that its patent was valid and that FYEO’s product infringed, and that such belief insulates the Company from liability for publicizing its patent. At this time the Company cannot predict with any certainty the outcome of this matter or range of loss, if any.

          The Company owns a 49% interest in a joint venture, Calgon Mitsubishi Chemical Corporation (CMCC), which was formed on October 1, 2002. At December 31, 2009, CMCC had $15.2 million in borrowings from an affiliate of the majority owner of the joint venture. The Company has agreed with the joint venture and the lender that, upon request by the lender, the Company will execute a guarantee for up to 49% of such borrowings. At December 31, 2009, the lender had not requested, and the Company has not provided, such guarantee.

In addition to the matters described above, the Company is involved in various other legal proceedings, lawsuits and claims, including employment, product warranty and environmental matters of a nature considered normal to its business. It is the Company’s policy to accrue for amounts related to these legal matters when it is probable that a liability has been incurred and the loss amount is reasonably estimable. Management believes that the ultimate liabilities, if any, resulting from such lawsuits and claims will not materially affect the consolidated financial position or liquidity of the Company, but an adverse outcome could be material to the results of operations in a particular period in which a liability is recognized.

17. Basic and Diluted Net Income from Continuing Operations Per Common Share

Computation of basic and diluted net income per common share from continuing operations is performed as follows:

	For the Year Ended
(Dollars in thousands, except per share amounts)	2009		2008		2007
Income from continuing operations available to common shareholders	$	39,159	$	28,840	$	13,597
Weighted Average Shares Outstanding
Basic		54,757,279		44,679,169		39,788,063
Effect of Dilutive Securities		1,771,994		8,706,256		10,769,218
Diluted		56,529,273		53,385,425		50,557,281
Basic net income from continuing operations per common share	$	.72	$	.65	$	.34
Diluted net income from continuing operations per common share	$	.69	$	.54	$	.27

     For the years ended December 31, 2009, 2008 and 2007, there were 160,145; 80,625; and 8,100 options, respectively, that were excluded from the dilutive calculations as the effect would have been antidilutive.

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18. Segment Information

The Company’s management has identified three segments based on the product line and associated services. Those segments include Activated Carbon and Service, Equipment, and Consumer. The Company’s chief operating decision maker, its chief executive officer, receives and reviews financial information in this format. The Activated Carbon and Service segment manufactures granular activated carbon for use in application to remove organic compounds from liquids, gases, water, and air. This segment also consists of services related to activated carbon including reactivation of spent carbon and the leasing, monitoring, and maintenance of carbon fills at customer sites. The service portion of this segment also includes services related to the Company’s ion exchange technologies for treatment of groundwater and process streams. The Equipment segment provides solutions to customers’ air and water process problems through the design, fabrication, and operation of systems that utilize the Company’s enabling technologies: carbon adsorption, ultraviolet light, and advanced ion exchange separation. The Consumer segment brings the Company’s purification technologies directly to the consumer in the form of products and services including carbon cloth and activated carbon for household odors. The following segment information represents the results of continuing operations:

	Year Ended December 31
(Thousands)	2009		2008		2007
Net sales
Activated Carbon and Service	$	358,196	$	342,326	$	295,608
Equipment		43,916		47,288		41,328
Consumer		9,798		10,656		14,188
Consolidated net sales	$	411,910	$	400,270	$	351,124

	Year Ended December 31
(Thousands)	2009			2008*			2007*
Income (loss) from continuing operations before amortization
Activated Carbon and Service	$	53,051		$	53,368		$	28,038
Equipment		1,629			6,018			(1,715	)
Consumer		14			(159	)		2,029
	$	54,694		$	59,227		$	28,352
Reconciling items:
Amortization		(1,261	)		(1,544	)		(1,796	)
Interest income		459			1,504			1,695
Interest expense		(286	)		(6,024	)		(8,543	)
Loss on debt extinguishment (Refer to Note 7)		(899	)		(8,918	)		—
Other expense - net		(3,089	)		(2,247	)		(1,441	)
Consolidated income from continuing operations before income taxes and equity in income of equity investments	$	49,618		$	41,998		$	18,267

	Year Ended December 31
(Thousands)	2009		2008		2007
Depreciation
Activated Carbon and Service	$	15,666	$	13,854	$	14,542
Equipment		955		997		628
Consumer		248		279		282
	$	16,869	$	15,130	$	15,452
Amortization		1,261		1,544		1,796
Consolidated depreciation and amortization	$	18,130	$	16,674	$	17,248

	Year Ended December 31
(Thousands)	2009		2008*		2007*
Total assets
Activated Carbon and Service	$	368,363	$	334,675	$	297,862
Equipment		44,001		38,867		31,261
Consumer		13,354		13,720		13,454
Consolidated total assets	$	425,718	$	387,262	$	342,577

* Results have been retrospectively adjusted to incorporate the adoption of guidance within ASC 470-20 “Debt with Conversion and Other Options.” (Refer to Note 7).

81

	Year Ended December 31
(Thousands)	2009			2008			2007
Property, plant and equipment expenditures
Activated Carbon and Service	$	45,907		$	33,033		$	10,947
Equipment		2,392			1,294			684
Consumer		63			615			158
Consolidated property, plant and equipment expenditures	$	48,362	(1)	$	34,942	(2)	$	11,789

(1)	Includes $2.8 million which is included in accounts payable and accrued liabilities at December 31, 2009.
(2)	Includes $2.7 million which is included in accounts payable and accrued liabilities at December 31, 2008.

Net Sales by Product:

	Year Ended December 31
(Thousands)	2009		2008		2007
Carbon products	$	336,986	$	317,940	$	267,934
Capital equipment		35,367		35,155		31,601
Equipment leasing		15,232		16,020		13,943
Spare parts		8,549		8,581		9,727
Carbon cloth products		7,918		12,133		11,262
Home consumer products		1,880		2,074		2,926
Other services		5,978		8,367		13,731
Total sales	$	411,910	$	400,270	$	351,124

Geographic Information

	Year Ended December 31
(Thousands)	2009		2008		2007
Net sales
United States	$	238,241	$	218,864	$	192,843
United Kingdom		24,967		25,913		28,569
Germany		17,131		17,111		17,056
Canada		15,517		17,721		13,312
France		14,874		16,562		13,953
Japan		13,590		10,656		10,304
Belgium		8,875		10,888		8,738
Spain		7,716		6,702		5,565
Netherlands		7,037		7,336		5,192
China		6,871		9,127		3,954
Singapore		5,704		2,066		2,261
South Korea		5,559		2,431		1,952
Switzerland		4,971		5,286		4,492
Mexico		4,465		5,317		4,285
Finland		3,017		3,427		2,534
Other		33,375		40,863		36,114
Consolidated net sales	$	411,910	$	400,270	$	351,124

Net sales are attributable to countries based on location of customer.

82

	Year Ended December 31
(Thousands)	2009		2008		2007
Long-lived assets
United States	$	139,832	$	113,528	$	95,142
Belgium		30,964		25,455		25,343
Japan		10,760		11,566		9,148
United Kingdom		9,265		8,620		11,684
China		6,822		7,382		7,209
Canada		3,579		3,029		3,454
Germany		48		3,963		61
France		2		2		2
		201,272		173,545		152,043
Deferred taxes		2,601		13,129		6,419
Consolidated long-lived assets	$	203,873	$	186,674	$	158,462

83

19. Related Party Transactions

Net sales to related parties and receivables from related parties primarily reflect sales of activated carbon products to equity investees. Related party sales transactions were $13.5 million, $10.2 million, and $9.6 million for the years ended December 31, 2009, 2008, and 2007 respectively. Receivables from equity investees amounted to $2.6 million and $2.2 million at December 2009 and 2008, respectively. The Company’s equity investees are included in the Activated Carbon and Service segment.

20. Subsequent Events

          On January 4, 2010, the Company acquired Zwicky Denmark and Sweden, long-term distributors of Chemviron Carbon’s activated carbon products and providers of services associated with the reactivation of activated carbon. Zwicky Denmark and Sweden had sales of EUR 3.1 million ($4.2 million) in 2008. The Zwicky companies have been Chemviron Carbon’s exclusive distributor of its activated carbon products and provider of its mobile filter technology through a service center in Kolding, Denmark. Also, on January 29, 2010 the Company acquired the outstanding stock of Hyde Marine, Inc., a manufacturer of systems that utilize ultraviolet light technology to treat marine ballast water. The purchase price for these acquisitions included cash paid or to be paid of $3.5 million and an earn-out based on future earnings of the businesses acquired.

          On February 12, 2010, the Company signed a definitive agreement to acquire the shares of Calgon Mitsubishi Chemical Corporation (“CMCC”) which it does not currently own. CMCC is a joint venture between Calgon Carbon Corporation and Mitsubishi Chemical Corporation (“MCC”). In 2008, CMCC recorded sales of approximately ¥6.8 billion ($67 million). Under the terms of the definitive agreement, the Company will increase its current 49% ownership interest in CMCC to 80% at the closing, which is currently expected to occur on March 31, 2010. The Company will acquire the remaining 20% interest on or about March 31, 2011. The total purchase price of the MCC shares, subject to adjustment for changes in net asset value, is approximately ¥951,000,000 ($10.6 million). Of the total, ¥722,810,146 ($8.0 million) will be paid at the closing on March 31, 2010, and ¥228,189,854 ($2.7 million) will be paid in March 2011. The Company will also assume MCC’s share of CMCC’s debt which is estimated to be ¥714,000,000 ($7.9 million). The closing is subject to certain conditions typically associated with this type of transaction.

          CMCC provides a full-range of outsourced activated carbon products to the Japanese market, including coal-based, granular activated carbon produced at Calgon Carbon’s manufacturing facilities in the U.S. and China. CMCC also produces and sell reactivated carbon in Japan, and included in the purchase price is a reactivation facility in Fukui, Fukui Prefecture, which is currently owned and operated by the joint venture company.

84

QUARTERLY FINANCIAL DATA — UNAUDITED

	2009								2008 *
(Thousands except per share data)	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		1st Quarter		2nd Quarter		3rd Quarter			4th Quarter
Net sales	$	90,633	$	103,090	$	107,495	$	110,692	$	90,331	$	108,476	$	99,069		$	102,394
Net sales less cost of products sold from continuing operations	$	29,419	$	32,771	$	36,406	$	46,717	$	28,566	$	37,455	$	33,608		$	33,756
Net income from continuing operations	$	5,974	$	6,098	$	13,859	$	13,228	$	10,373	$	9,284	$	2,434		$	6,749
Income (loss) from discontinued operations	$	-	$	-	$	-	$	-	$	-	$	3,447	$	(211	)	$	(443	)
Net income	$	5,974	$	6,098	$	13,859	$	13,228	$	10,373	$	12,731	$	2,223		$	6,306
Common Stock Data:
Basic:
Income from continuing operations per common share	$	0.11	$	0.11	$	0.25	$	0.24	$	0.26	$	0.23	$	0.05		$	0.13
Income (loss) from discontinued operations per common share	$	-	$	-	$	-	$	-	$	-	$	0.09	$	-		$	(0.01	)
Net income per common share	$	0.11	$	0.11	$	0.25	$	0.24	$	0.26	$	0.32	$	0.05		$	0.12
Diluted:
Income from continuing operations per common share	$	0.11	$	0.11	$	0.25	$	0.23	$	0.20	$	0.18	$	0.04		$	0.12
Income (loss) from discontinued operations per common share	$	-	$	-	$	-	$	-	$	-	$	0.06	$	-		$	(0.01	)
Net income per common share	$	0.11	$	0.11	$	0.25	$	0.23	$	0.20	$	0.24	$	0.04		$	0.11
Average common shares outstanding
Basic		54,117		54,331		54,940		55,622		40,240		40,558		44,625			53,247
Diluted		56,079		56,285		56,448		56,654		51,756		52,025		53,798			55,662

* Results have been retrospectively adjusted to incorporate the adoption of guidance within ASC 470-20 “Debt with Conversion and Other Options.” (Refer to Note 7).

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure:

Not Applicable.

Item 9A. Controls and Procedures:

Evaluation of Disclosure Controls and Procedures
The Company maintains controls and procedures designed to ensure that it is able to collect the information it is required to disclose in the reports it files with the SEC, and to process, summarize, and disclose this information within the time periods specified in the rules of the SEC. Our management, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company’s “disclosure controls and procedures”, as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this annual report.

     Based on this evaluation, the Company’s management has concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this annual report.

Management’s Annual Report on Internal Control over Financial Reporting
Management’s Annual Report on Internal Control over Financial Reporting is contained in “Item 8. Financial Statements and Supplementary Data — Report of Management — Responsibility for Preparation of the Financial Statements and Establishing and Maintaining Adequate Internal Control Over Financial Reporting.”

Attestation Report of the Independent Registered Public Accounting Firm
The attestation report of the Independent Registered Public Accounting Firm is contained in “Item 8. Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm.”

Changes in Internal Control
There have been no changes in our internal control over financial reporting that occurred that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information:

None.

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PART III

Item 10. Directors, Executive Officers, and Corporate Governance of the Registrant:

Information concerning the directors and executive officers of the Corporation required by this item is incorporated by reference to the material appearing under the headings “Board of Directors and Committees of the Board,” “Election of Directors,” “Corporate Governance” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the Company’s Proxy Statement for the 2010 Annual Meeting of its Shareholders.

Item 11. Executive Compensation:

Information required by this item is incorporated by reference to the material appearing under the headings “Executive and Director Compensation” in the Company’s Proxy Statement for the 2010 Annual Meeting of its Shareholders. The information contained in the “Compensation Committee Report” is specifically not incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters:

The following table sets forth information as of December 31, 2009 concerning common stock issuable under the Company’s equity compensation plans.

Equity Compensation Plan Information

					Number of securities remaining
	Number of securities to be				available for future issuance under
	issued upon exercise of outstanding		Weighted-average exercise price of outstanding		equity compensation plans (excluding
	options, warrants		options, warrants		securities reflected
	and rights		and rights		in column (a))
Plan category	(a)		(b)		(c)
Equity compensation plans approved by security holders		1,280,640	$	6.98		1,861,250
Equity compensation plans not approved by security holders		-		-		49,490	(1)
Total		1,280,640	$	6.98		1,910,740

(1) On December 31, 2009 there were 49,490 shares available for issuance under the Company’s 1997 Directors’ Fee Plan, as last amended in 2005. The Plan provides non-employee directors of the Company with payment alternatives for retainer fees by being able to elect to receive Common Stock of the Company instead of cash for such fees. Under the plan, directors have the alternative to elect their retainer fees in a current payment of shares of Common Stock of the Company, or to defer payment of such fees into a Common Stock account. Shares which are deferred are credited to a deferred stock compensation other liability account maintained by the Company. On each date when director fees are otherwise payable to a director who has made a stock deferral election, his or her stock deferral account will be credited with a number of shares equal to the cash amount of the director’s fees payable divided by the fair market value of one share of the Common Stock on the date on which the fees are payable. Dividends or other distributions payable on Common Stock are similarly credited to the deferred stock account of a director on the date when such dividends or distributions are payable. The deferred stock compensation accounts are payable to the directors in accordance with their stock deferral elections and are typically paid either in a lump sum or in annual installments after the retirement or other termination of service of the director from the Company’s Board of Directors.

The additional information required by this item is incorporated by reference to the material appearing under the heading “Security Ownership of Management and Certain Beneficial Owners” in the Company’s Proxy Statement for the 2010 Annual Meeting of its Shareholders.

87

Item 13. Certain Relationships, Related Transactions, and Director Independence:

Information required by this item is incorporated by reference to the material appearing under the headings “Election of Directors” and “Corporate Governance” in the Company’s Proxy Statement for the 2010 Annual Meeting of its Shareholders.

Item 14. Principal Accounting Fees and Services:

Information required by this item is incorporated by reference to the material appearing under the heading “Independent Auditors – Certain Fees” in the Company’s Proxy Statement for the 2010 Annual Meeting of its Shareholders.

88

PART IV

Item 15. Exhibits and Financial Statements Schedules:

A. Financial Statements and Reports of Independent Registered Public Accounting Firm
(see Part II, Item 8 of this Form 10-K).

The following information is filed as part of this Form 10-K:

	Page
Report of Management		40
Internal Controls – Report of Independent Registered Public Accounting Firm		41
Financial Statements – Report of Independent Registered Public Accounting Firms		42
Consolidated Statements of Income and Comprehensive Income for the Years Ended December 31, 2009, 2008 and 2007		43
Consolidated Balance Sheets as of December 31, 2009 and 2008		44
Consolidated Statements of Cash Flows for the Years Ended December 31, 2009, 2008 and 2007		45
Consolidated Statements of Shareholders’ Equity for Years Ended December 31, 2009, 2008 and 2007		46
Notes to the Consolidated Financial Statements		47

89

B. Financial Statements Scheduled for the years ended December 31, 2009, 2008 and 2007

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Calgon Carbon Corporation
Pittsburgh, Pennsylvania

We have audited the consolidated financial statements of Calgon Carbon Corporation and subsidiaries (the “Company”) as of December 31, 2009 and 2008, and for each of the three years in the period ended December 31, 2009, and the Company’s internal control over financial reporting as of December 31, 2009, and have issued our reports thereon dated February 26, 2010 (which report on the financial statements expresses an unqualified opinion and includes an explanatory paragraph regarding the Company’s adoption of new accounting standards); such consolidated financial statements and reports are included elsewhere in this Form 10-K. Our audits also included the consolidated financial statement schedule of the Company listed in Item 15. This consolidated financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ Deloitte & Touche LLP
Pittsburgh, Pennsylvania
February 26, 2010

90

The following should be read in conjunction with the previously referenced financial statements:

Schedule II

Valuation and Qualifying Accounts
(Thousands)

	Balance at		Additions		Deductions			Balance
	Beginning		Charged to Costs		Returns and			at End
Description	of Year		and Expenses		Write-Offs			of Year
Year ended December 31, 2009
Allowance for doubtful accounts	$	1,596	$	565	$	(190	)	$	1,971
Year ended December 31, 2008
Allowance for doubtful accounts	$	2,834	$	199	$	(1,437	)	$	1,596
Year ended December 31, 2007
Allowance for doubtful accounts		1,981		1,239		(386	)		2,834

	Balance at		Additions		Deductions			Balance
	Beginning		Charged to Costs		Returns and			at End
Description	of Year		and Expenses		Write-Offs			of Year
Year ended December 31, 2009
Income tax valuation allowance	$	7,977	$	337	$	(4,819	)	$	3,495
Year ended December 31, 2008
Income tax valuation allowance		6,218		3,943		(2,184	)		7,977
Year ended December 31, 2007
Income tax valuation allowance		5,742		2,441		(1,965	)		6,218

91

C. Exhibits

		Page
3.1	Restated Certificate of Incorporation	(a)
3.2	Amended and Restated By-laws of the Company	(b)
4.1	Rights Agreement, dated as of January 27, 2005	Filed herewith
10.1*	Calgon Carbon Corporation 2008 Equity Incentive Plan	(c)
10.2*	1997 Directors’ Fee Plan	(d)
10.3*	Employment Agreement between Calgon Carbon Corporation and C. H. S. (Kees) Majoor, dated December 21, 2000.	Filed herewith
10.4	Credit Agreement, dated May 8, 2009	(e)
10.5	First Amendment to Credit Agreement, dated as of November 30, 2009	(f)
10.6*	Employment Agreement between Calgon Carbon Corporation and John S. Stanik, dated February 5, 2010	(g)
10.7*	Employment Agreement between Calgon Carbon Corporation and Leroy M. Ball, dated February 5, 2010	(h)
10.8*	Employment Agreement between Calgon Carbon Corporation and Gail A. Gerono, dated February 5, 2010	(i)
10.9*	Employment Agreement between Calgon Carbon Corporation and Robert P. O’Brien, dated February 5, 2010	(j)
10.10*	Employment Agreement between Calgon Carbon Corporation and Richard D. Rose, dated February 5, 2010	(k)
10.11*	Employment Agreement between Calgon Carbon Corporation and James A. Sullivan, dated February 5, 2010	(l)
10.12	Redemption, Asset Transfer and Contribution Agreement by and among Calgon Mitsubishi Chemical Corporation, Mitsubishi Chemical Corporation and Calgon Carbon Corporation, dated February 12, 2010	Filed herewith
10.13*	Separation Agreement and Release between Calgon Carbon Corporation and Dennis Sheedy, effective October 14, 2009	Filed herewith
10.14*	Addendum to Employment Agreement between Calgon Carbon Corporation and C.H.S. (Kees) Majoor	Filed herewith
10.15*	Addendum to Employment Agreement between Calgon Carbon Corporation and C.H.S. (Kees) Majoor, dated January 2004	Filed herewith
10.16*	Addendum “Change of Control” to Employment Agreement between Calgon Carbon Corporation and C.H.S. (Kees) Majoor, dated as of December 15, 2008	Filed herewith
14.1	Code of Business Conduct and Ethics	(m)
21.0	The wholly owned subsidiaries of the Company at December 31, 2009 are Chemviron Carbon GmbH, a German corporation; Calgon Carbon Canada, Inc., a Canadian corporation; Chemviron Carbon Ltd., a United Kingdom corporation; Calgon Carbon Investments, Inc., a Delaware corporation; Solarchem Environmental Systems, Inc., a Nevada corporation; Charcoal Cloth (International) Ltd., a United Kingdom corporation; Charcoal Cloth Ltd., a United Kingdom corporation; Waterlink (UK) Holdings Ltd., a United Kingdom corporation, Sutcliffe Croftshaw Ltd., a United Kingdom corporation; Sutcliffe Speakman Ltd., a United Kingdom corporation; Sutcliffe Speakman Carbons Ltd., a United Kingdom corporation; Lakeland Processing Ltd., a United Kingdom corporation; Sutcliffe Speakmanco 5 Ltd., a United Kingdom corporation; Chemviron Carbon ApS, a Danish corporation; Advanced Separation Technologies Incorporated, a Florida corporation; Calgon Carbon (Tianjin) Co., Ltd., a Chinese corporation; Datong Carbon Corporation, a Chinese corporation; Calgon Carbon Asia PTE Ltd., a Singapore corporation; BSC Columbus, LLC, a Delaware limited liability company; CCC Columbus, LLC, a Delaware limited liability company; and CCC Distribution LLC, a Delaware limited liability company. In addition, the Company owns 49% of Calgon Mitsubishi Chemical Corporation, a Japanese corporation and 20% of Calgon Carbon (Thailand) Company Ltd., a Thailand corporation	Filed herewith
23.1	Consent of Independent Registered Public Accounting Firm	Filed herewith
31.1	Rule 13a-14(a) Certification of Chief Executive Officer	Filed herewith
31.2	Rule 13a-14(a) Certification of Chief Financial Officer	Filed herewith
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith
32.2	Certification of Chief Financial Officer `Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith
Note:	The Registrant hereby undertakes to furnish, upon request of the Commission, copies of all instruments defining the rights of holders of long-term debt of the Registrant and its consolidated subsidiaries. The total amount of securities authorized thereunder does not exceed 10% of the total assets of the Registrant and its subsidiaries on a consolidated basis.
(a)	Incorporated herein by reference to Exhibit 3.1 to the Company’s report on Form 10-Q filed for the fiscal quarter ended June 30, 2009.
(b)	Incorporated herein by reference to Exhibit 3.2 to the Company’s report on Form 10-K filed for the fiscal year ended December 31, 2009.
(c)	Incorporated herein by reference to Exhibit 10.1 to the Company’s report on Form 8-K filed May 15, 2008.
(d)	Incorporated herein by reference to Exhibit 10.4 to the Company’s report on Form 10-K filed for the fiscal year ended December 31, 2005.
(e)	Incorporated herein by reference to Exhibit 10.6 to the Company’s report on Form 10-Q filed for the fiscal quarter ended June 30, 2009.
(f)	Incorporated herein by reference to Exhibit 10.1 to the Company’s report on Form 8-K filed December 1, 2009.
(g)	Incorporated herein by reference to Exhibit 10.1 to the Company’s report on Form 8-K filed February 5, 2010.
(h)	Incorporated herein by reference to Exhibit 10.2 to the Company’s report on Form 8-K filed February 5, 2010.
(i)	Incorporated herein by reference to Exhibit 10.3 to the Company’s report on Form 8-K filed February 5, 2010.
(j)	Incorporated herein by reference to Exhibit 10.4 to the Company’s report on Form 8-K filed February 5, 2010.
(k)	Incorporated herein by reference to Exhibit 10.5 to the Company’s report on Form 8-K filed February 5, 2010.
(l)	Incorporated herein by reference to Exhibit 10.6 to the Company’s report on Form 8-K filed February 5, 2010.
(m)	Incorporated herein by reference to Exhibit 14.1 to the Company’s report on Form 10-K filed for the fiscal year ended December 31, 2008.
	* Management contract or compensatory plan, contract or arrangement required to be filed by Item 601(b)(10)(iii) of Regulation S-K.

92

'

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

Calgon Carbon Corporation
By	/s/ JOHN S. STANIK
	John S. Stanik
	Chairman, President and Chief Executive Officer  February 26, 2010

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities on the dates indicated.

Signature	Title	Date
/S/ JOHN S. STANIK John S. Stanik	Chairman, President and Chief Executive Officer	February 26, 2010
/S/ LEROY M. BALL Leroy M. Ball	Chief Financial Officer (and Principal Accounting Officer)	February 26, 2010
/S/ J. RICH ALEXANDER J. Rich Alexander	Director	February 26, 2010
Robert W. Cruickshank	Director
/S/ RANDALL S. DEARTH Randall S. Dearth	Director	February 26, 2010
/S/ WILLIAM J. LYONS William J. Lyons	Director	February 26, 2010
/S/ WILLIAM R. NEWLIN William R. Newlin	Director	February 26, 2010
/S/ JULIE S. ROBERTS Julie S. Roberts	Director	February 26, 2010
/S/ TIMOTHY G. RUPERT Timothy G. Rupert	Director	February 26, 2010
/S/ SETH E. SCHOFIELD Seth E. Schofield	Director	February 26, 2010

93

EX-4.1

EXHIBIT 4.1

EXECUTION COPY

Calgon Carbon Corporation

5.00% Convertible Senior Notes due 2036

Registration Rights Agreement

August 18, 2006

J.P. Morgan Securities Inc.
277 Park Avenue
New York, New York 10172

Ladies and Gentlemen:

     Calgon Carbon Corporation, a Delaware corporation (the “Company”), proposes to issue and sell to J.P. Morgan Securities Inc. (the “Initial Purchaser”), upon the terms and subject to the conditions set forth in a purchase agreement, dated August 14, 2006 (the “Purchase Agreement”), among the Company, the Guarantors (as defined below) and the Initial Purchaser, $65,000,000 aggregate principal amount of its 5.00% Convertible Senior Notes due 2036 (the “Firm Notes”) and, at the election of the Initial Purchaser, an additional $10,000,000 aggregate principal amount of the Company’s 5.00% Convertible Senior Notes due 2036 (the “Additional Notes” and, together with the Firm Notes, the “Notes”) to be guaranteed (the “Guarantees”) by the subsidiaries of the Company listed on the signature page hereto (collectively, the “Guarantors”). The Notes will be convertible into fully paid, non-assessable shares of common stock, par value $0.01 per share, of the Company on the terms, and subject to the conditions, set forth in the Indenture (as defined below). Capitalized terms used but not defined herein shall have the meanings given to such terms in the Purchase Agreement.

     As an inducement to the Initial Purchaser to enter into the Purchase Agreement, and in satisfaction of a condition to the obligations of the Initial Purchaser thereunder, the Company and the Guarantors agree with the Initial Purchaser, for the benefit of the holders (including the Initial Purchaser) of the Notes and the Shares (as defined below) (collectively, the “Holders”), as follows:

     1. Certain Definitions.

     For purposes of this Registration Rights Agreement the following terms shall have the following meanings:

     (a) “Additional Guarantor” means any subsidiary of the Company that executes a Subsidiary Guarantee under the Indenture after the date of this Agreement.

     (b) “Additional Interest” has the meaning assigned thereto in Section 2(d).

     (c) “Additional Interest Payment Date” has the meaning assigned thereto in Section 2(d).

     (d) “Additional Notes” has the meaning specified in the first paragraph of this Agreement.

2

     (e) “Agreement” means this Registration Rights Agreement, as the same may be amended from time to time pursuant to the terms hereof.

     (f) “Closing Date” means the date on which any Notes are initially issued.

     (g) “Commission” means the Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose.

     (h) “Company” has the meaning specified in the first paragraph of this Agreement.

     (i) “Deferral Notice” has the meaning assigned thereto in Section 3(b).

     (j) “Deferral Period” has the meaning assigned thereto in Section 3(b).

     (k) “Effective Period” has the meaning assigned thereto in Section 2(a).

     (l) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

     (m) “Firm Notes” has the meaning specified in the first paragraph of this Agreement.

     (n) “Free Writing Prospectus” means each free writing prospectus (as defined in Rule 405 under the Securities Act) prepared by or on behalf of the Company or used or referred to by the Company in connection with the sale of the Securities.

     (o) “Guarantees” has the meaning specified in the first paragraph of this Agreement.

     (p) “Guarantors” has the meaning set forth in the preamble and also includes any Guarantor’s successors and any Additional Guarantors.

     (q) “Holder” means each holder, from time to time, of Registrable Securities (including the Initial Purchaser).

     (r) “Indenture” means the Indenture dated as of the date hereof among the Company, the Guarantors and The Bank of New York, as Trustee, pursuant to which the Notes and the Guarantees are being issued.

     (s) “Initial Purchaser” has the meaning specified in the first paragraph of this Agreement.

     (t) “Issuer Information” has the meaning set forth in Section 6(a) hereof.

     (u) “Material Event” has the meaning assigned thereto in Section 3(a)(iv).

     (v) “Majority Holders” shall mean, on any date, holders of the majority of the Shares constituting Registrable Securities; for the purposes of this definition, Holders of Notes constituting Registrable Securities shall be deemed to be the Holders of the number of Shares into which such Notes are or would be convertible as of such date.

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     (w) “NASD” shall mean the National Association of Securities Dealers, Inc.

     (x) “NASD Rules” shall mean the Conduct Rules and the By-Laws of the NASD.

     (y) “Notes” has the meaning specified in the first paragraph of this Agreement.

     (z) “Notice and Questionnaire” means a written notice delivered to the Company containing substantially the information called for by the Form of Selling Securityholder Notice and Questionnaire attached as Annex A to the Offering Memorandum.

     (aa) “Notice Holder” means, on any date, any Holder that has delivered a Notice and Questionnaire to the Company prior to such date.

     (bb) “Offering Memorandum” means the Offering Memorandum dated August 14, 2006 relating to the offer and sale of the Securities.

     (cc) “Person” means a corporation, association, partnership, organization, business, individual, government or political subdivision

     thereof or governmental agency.

     (dd) “Prospectus” means the prospectus included in any Shelf Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any amendment or prospectus supplement, including post-effective amendments, and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such Prospectus.

     (ee) “Purchase Agreement” has the meaning specified in the first paragraph of this Agreement.

     (ff) “Registrable Securities” means

(i)

any Notes and the Subsidiary Guarantees until the earliest of (i) their effective registration under the Securities Act and the resale of all such Notes and Subsidiary Guarantees in accordance with the Shelf Registration Statement, (ii) the date on which such Notes and Subsidiary Guarantees are (A) sold pursuant to Rule 144 under circumstances in which any legend borne by such Notes and Subsidiary Guarantees relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed or (B) freely transferable without restriction under Rule 144(k) or (iii) the date on which such Notes have been converted (and the related Subsidiary Guarantees have been terminated) or otherwise cease to be outstanding;

(ii)

any Shares issuable upon conversion of any Notes constituting Registrable Securities, until the earliest of (i) their effective registration under the Securities Act and the resale of all such Shares in accordance with the Shelf Registration Statement, (ii) the date on which such Shares are (A) sold pursuant to Rule 144 under circumstances in which any legend borne by such Shares relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed or (B) freely transferable without restriction under Rule 144(k) or (iii) the date on which such Shares cease to be outstanding.

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     (gg) “Registration Default” has the meaning assigned thereto in Section 2(d).

     (hh) “Registration Expenses” has the meaning assigned thereto in Section 5.

     (ii) “Rule 144,” “Rule 405” and “Rule 415” mean, in each case, such rule as promulgated under the Securities Act.

     (jj) “Securities” means, collectively, the Notes and the Shares.

     (kk) “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

     (ll) “Shares” means the shares of common stock of the Company, par value $0.01 per share, into which the Notes are convertible or that have been issued upon a conversion from Notes into common stock of the Company.

     (mm) “Shelf Registration Statement” means the shelf registration statement referred to in Section 2(a), as amended or supplemented by any amendment or supplement, including post-effective amendments, and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such Shelf Registration Statement.

     (nn) “Special Counsel” shall have the meaning assigned thereto in Section 5.

     (oo) “Subsidiary Guarantee” means, individually, any Guarantee of payment of the Securities by a Subsidiary Guarantor pursuant to the terms of the Indenture and any supplemental indenture thereto and, collectively, all such Guarantees. Each such Subsidiary Guarantee will be in the form prescribed by the Indenture.

     (pp) “Trust Indenture Act” means the Trust Indenture Act of 1939, as amended, or any successor thereto, and the rules, regulations and forms promulgated thereunder.

     (qq) “Trustee” shall have the meaning assigned such term in the Indenture.

     Unless the context otherwise requires, any reference herein to a “Section” or “clause” refers to a Section or clause, as the case may be, of this Agreement, and the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision. Unless the context otherwise requires, any reference to a statute, rule or regulation refers to the same (including any successor statute, rule or regulation thereto) as it may be amended from time to time.

     2. Registration Under the Securities Act.

     (a) The Company and the Guarantors agree to file under the Securities Act as promptly as practicable but in any event within 90 days after the Closing Date a shelf registration statement providing for the registration of, and the sale on a continuous or delayed basis by the Holders of, all of the Registrable Securities, pursuant to Rule 415 or any similar rule that may be adopted by the Commission. The Company and the Guarantors agree to use their reasonable efforts to cause the Shelf Registration Statement to become effective within 240 days after the Closing Date and to keep such Shelf Registration Statement continuously effective until the earlier of (i) the second anniversary of the Closing Date or (ii) such time as there are no longer any Registrable Securities outstanding (the “Effective Period”). None of the Company’s securityholders or the Guarantors’ securityholders (other

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than Holders of Registrable Securities) shall have the right to include any of the Company’s securities or the Guarantors’ securities in the Shelf Registration Statement.

     (b) The Company and the Guarantors further agree that they shall cause the Shelf Registration Statement and the related Prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement or such amendment or supplement, (i) to comply in all material respects with the applicable requirements of the Securities Act; and (ii) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made) not misleading, and the Company and the Guarantors agree to furnish to the Holders of the Registrable Securities copies of any supplement or amendment prior to its being used or promptly following its filing with the Commission; provided, however, that the Company shall have no obligation to deliver to Holders of Registrable Securities copies of any amendment consisting exclusively of an Exchange Act report or other Exchange Act filing otherwise publicly available on the Company’s website. If the Shelf Registration Statement, as amended or supplemented from time to time, ceases to be effective for any reason at any time during the Effective Period (other than because all Registrable Securities registered thereunder shall have been sold pursuant thereto or shall have otherwise ceased to be Registrable Securities), the Company and the Guarantors shall use their reasonable best efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof.

     (c) Each Holder of Registrable Securities agrees that if such Holder wishes to sell Registrable Securities pursuant to the Shelf Registration Statement and related Prospectus, it will do so only in accordance with this Section 2(c) and Section 3(b). From and after the date the Shelf Registration Statement is declared or becomes effective, the Company and the Guarantors shall, as promptly as is practicable after the date a Notice and Questionnaire is delivered, and in any event within fifteen (15) days after the date of receipt of such Notice and Questionnaire, or if the use of the Prospectus has been suspended by the Company under Section 3(b) hereof at the time of receipt of the Notice and Questionnaire, fifteen (15) days after the expiration of the period during which the use of the Prospectus is suspended:

     (i) if required by applicable law, file with the Commission a post-effective amendment to the Shelf Registration Statement or prepare and, if required by applicable law, file a supplement to the related Prospectus or a supplement or amendment to any document incorporated therein by reference or file any other required document so that the Holder delivering such Notice and Questionnaire is named as a selling security holder in the Shelf Registration Statement and the related Prospectus in such a manner as to permit such Holder to deliver such Prospectus to purchasers of the Registrable Securities in accordance with applicable law and, if the Company and the Guarantors shall file a post-effective amendment to the Shelf Registration Statement, use their reasonable efforts to cause such post-effective amendment to be declared or to otherwise become effective under the Securities Act as promptly as is practicable. Notwithstanding the foregoing, the Company and the Guarantors shall not be required to file more than one post-effective amendment to the Shelf Registration Statement or supplement to the related Prospectus during any thirty (30) day period;

     (ii) provide such Holder copies of any documents filed pursuant to Section 2(c)(i); and

     (iii) notify such Holder as promptly as practicable after the effectiveness under the Securities Act of any post-effective amendment filed pursuant to Section 2(c)(i);

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provided that if such Notice and Questionnaire is delivered during a Deferral Period, the Company shall so inform the Holder delivering such Notice and Questionnaire and shall take the actions set forth in clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in accordance with Section 3(b). Notwithstanding anything contained herein to the contrary, the Company and the Guarantors shall be under no obligation to name any Holder that is not a Notice Holder as a selling securityholder in any Shelf Registration Statement or related Prospectus; provided, however, that any Holder that becomes a Notice Holder pursuant to the provisions of this Section 2(c) (whether or not such Holder was a Notice Holder at the time the Shelf Registration Statement was declared or otherwise became effective) shall be named as a selling securityholder in the Shelf Registration Statement or related Prospectus in accordance with the requirements of this Section 2(c).

     (d) If any of the following events (any such event a “Registration Default”) shall occur, then additional interest (the “Additional Interest”) shall become payable jointly and severally by the Company and the Guarantors to Holders in respect of the Notes as follows:

     (i) if the Shelf Registration Statement is not filed with the Commission within 90 days following the Closing Date, then commencing on the 91st day after the Closing Date, Additional Interest shall accrue on the principal amount of the outstanding Notes that are Registrable Securities at a rate of 0.25% per annum for the first 90 days following such 91st day and at a rate of 0.50% per annum thereafter; or

     (ii) if the Shelf Registration Statement is not declared effective and does not otherwise become effective within 240 days following the Closing Date, then commencing on the 241st day after the Closing Date, Additional Interest shall accrue on the principal amount of the outstanding Notes that are Registrable Securities at a rate of 0.25% per annum for the first 90 days following such 241st day and at a rate of 0.50% per annum thereafter; or

     (iii) if the Company or the Guarantors have failed to perform their obligations set forth in Section 2(c) hereof within the time periods required therein, then commencing on the first day after the date by which the Company and the Guarantors were required to perform such obligations, Additional Interest shall accrue on the principal amount of the outstanding Notes that are Registrable Securities at a rate of 0.25% per annum for the first 90 days and at a rate of 0.50% per annum thereafter;

     (iv) if the Shelf Registration Statement has been declared effective or has otherwise become effective but such Shelf Registration Statement ceases to be effective at any time during the Effective Period (other than pursuant to Section 3(b) hereof), then commencing on the day such Shelf Registration Statement ceases to be effective, Additional Interest shall accrue on the principal amount of the outstanding Notes that are Registrable Securities at a rate of 0.25% per annum for the first 90 days following such date on which the Shelf Registration Statement ceases to be effective and at a rate of 0.50% per annum thereafter; or

     (v) if the aggregate duration of Deferral Periods in any period exceeds the number of days permitted in respect of such period pursuant to Section 3(b) hereof, then commencing on the day the aggregate duration of Deferral Periods in any period exceeds the number of days permitted in respect of such period (and again on the first day of any subsequent Deferral Period during such period), Additional Interest shall accrue on the principal amount of the outstanding Notes that are Registrable Securities at a rate of 0.25% per annum for the first 90 days and at a rate of 0.50% per annum thereafter;

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provided, however, that the Additional Interest rate on the Notes shall not exceed in the aggregate 0.50% per annum and shall not be payable under more than one clause above for any given period of time, except that if Additional Interest would be payable under more than one clause above, but at a rate of 0.25% per annum under one clause and at a rate of 0.50% per annum under the other, then the Additional Interest rate shall be the higher rate of 0.50% per annum; provided further, however, that (1) upon the filing of the Shelf Registration Statement (in the case of clause (i) above), (2) upon the effectiveness of the Shelf Registration Statement (in the case of clause (ii) above), (3) upon the performance by the Company and the Guarantors of their obligations set forth in Section 2(c) hereof within the time periods required therein (in the case of clause (iii) above), (4) upon the effectiveness of the Shelf Registration Statement which had ceased to remain effective (in the case of clause (iv) above), (5) upon the termination of the Deferral Period that caused the limit on the aggregate duration of Deferral Periods in a period set forth in Section 3(b) to be exceeded (in the case of clause (v) above) or (6) upon the termination of certain transfer restrictions on the Securities as a result of the application of Rule 144(k) or any successor provision, Additional Interest on the Notes as a result of such clause, as the case may be, shall cease to accrue.

     Additional Interest on the Notes, if any, will be payable in cash on February 15 and August 15 of each year (the “Additional Interest Payment Date”) to holders of record of outstanding Notes that are Registrable Securities on each preceding February 1 and August 1; provided that any Additional Interest accrued with respect to any Notes or portion thereof called for redemption on a redemption date or converted into Shares on a conversion date prior to the Registration Default shall, in any such event, be paid instead to the Holder who submitted such Notes or portion thereof for redemption or conversion on the applicable redemption date or conversion date, as the case may be, on such date (or promptly following the conversion date, in the case of conversion). Following the cure of all Registration Defaults requiring the payment of Additional Interest to the Holders of Notes that are Registrable Securities pursuant to this Section, the accrual of Additional Interest will cease (without in any way limiting the effect of any subsequent Registration Default requiring the payment of Additional Interest).

     The Company shall notify the Trustee immediately upon the happening of each and every Registration Default. The Trustee shall be entitled, on behalf of Holders of Securities, to seek any available remedy for the enforcement of this Agreement, including for the payment of any Additional Interest. Notwithstanding the foregoing, the parties agree that the sole monetary damages payable for a violation of the terms of this Agreement with respect to which additional monetary amounts are expressly provided shall be as set forth in this Section 2(d). Nothing shall preclude a Notice Holder or Holder of Registrable Securities from pursuing or obtaining specific performance or other equitable relief with respect to this Agreement.

     (e) A Shelf Registration Statement pursuant to this Section 2 will not be deemed to have become effective unless it has been declared effective by the SEC or is automatically effective upon filing with the SEC as provided by Rule 462 under the Securities Act.

     3. Registration Procedures.

     The following provisions shall apply to the Shelf Registration Statement filed pursuant to Section 2:

(a) The Company and the Guarantors shall:

     (i) prepare and file with the Commission a registration statement with respect to the shelf registration on any form which may be utilized by the Company and the Guarantors and which shall permit the disposition of the Registrable Securities in accordance

8

with the intended method or methods thereof, as specified in writing by the Holders of the Registrable Securities, and use their reasonable efforts to cause such registration statement to become effective in accordance with Section 2(a) above;

     (ii) before filing any Shelf Registration Statement or Prospectus or any amendments or supplements thereto with the Commission, furnish to the Initial Purchaser copies of all such documents proposed to be filed and use reasonable efforts to reflect in each such document when so filed with the Commission such comments as the Initial Purchaser reasonably shall propose within three (3) Business Days of the delivery of such copies to the Initial Purchaser;

     (iii) use their reasonable efforts to prepare and file with the Commission such amendments and post-effective amendments to the Shelf Registration Statement and file with the Commission any other required document as may be necessary to keep such Shelf Registration Statement continuously effective until the expiration of the Effective Period; cause the related Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act; and comply with the provisions of the Securities Act applicable to it with respect to the disposition of all Securities covered by such Shelf Registration Statement during the Effective Period in accordance with the intended methods of disposition by the sellers thereof set forth in such Shelf Registration Statement as so amended or such Prospectus as so supplemented;

     (iv) promptly notify the Notice Holders of Registrable Securities (A) when such Shelf Registration Statement or the Prospectus included therein or any amendment or supplement to the Prospectus or post-effective amendment has been filed with the Commission, and, with respect to such Shelf Registration Statement or any post-effective amendment, when the same has become effective, (B) of any request, following the effectiveness of the Shelf Registration Statement, by the Commission or any other Federal or state governmental authority for amendments or supplements to the Shelf Registration Statement or related Prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such Shelf Registration Statement or the initiation or written threat of any proceedings for that purpose, including the receipt by the Company of any notice of objection of the Commission to the use of a Shelf Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act, (D) of the receipt by the Company or any Guarantor of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or written threat of any proceeding for such purpose, (E) of the occurrence of (but not the nature of or details concerning) any event or the existence of any fact (a “Material Event”) as a result of which any Shelf Registration Statement shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, or any Prospectus shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided, however, that no notice by the Company shall be required pursuant to this clause (E) in the event that the Company either promptly files a prospectus supplement to update the Prospectus or a Form 8-K or other appropriate Exchange Act report that is incorporated by reference into the Shelf Registration Statement, which, in either case, contains the requisite information with respect to such Material Event that results in such Shelf Registration Statement no longer containing any untrue statement of material fact or omitting to state a material fact necessary to make the statements contained therein not misleading), (F) of the determination by the Company that a post-effective amendment to the Shelf Registration Statement will be filed with the Commission,

9

which notice may, at the discretion of the Company (or as required pursuant to Section 3(b)), state that it constitutes a Deferral Notice, in which event the provisions of Section 3(b) shall apply or (G) at any time when a Prospectus is required to be delivered under the Securities Act, that the Shelf Registration Statement, Prospectus, Prospectus amendment or supplement or post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder;

     (v) prior to any public offering of the Registrable Securities pursuant to the Shelf Registration Statement, use their reasonable best efforts to register or qualify, or cooperate with the Notice Holders of Securities included therein and their respective counsel in connection with the registration or qualification of, such Securities for offer and sale under the securities or blue sky laws of such jurisdictions as any such Notice Holders reasonably requests in writing and do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the Securities covered by the Shelf Registration Statement; prior to any public offering of the Registrable Securities pursuant to the Shelf Registration Statement, use its reasonable efforts to keep each such registration or qualification (or exemption therefrom) effective during the Effective Period in connection with such Notice Holder’s offer and sale of Registrable Securities pursuant to such registration or qualification (or exemption therefrom) and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of such Registrable Securities in the manner set forth in the Shelf Registration Statement and the related Prospectus; provided that the Company and the Guarantors will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to general service of process or to taxation in any such jurisdiction where it is not then so subject;

     (vi) use its reasonable best efforts to prevent the issuance of, and if issued, to obtain the withdrawal of any order suspending the effectiveness of the Shelf Registration Statement or, in the event of an objection of the SEC pursuant to Rule 401(g)(2), promptly file an amendment to such Shelf Registration Statement on the proper form, and to lift any suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction in which they have been qualified for sale, in each case at the earliest practicable date;

     (vii) upon reasonable notice, for a reasonable period prior to the filing of the Shelf Registration Statement, and throughout the Effective Period, (i) make reasonably available for inspection by a representative of, and Special Counsel acting for, Majority Holders of the Securities being sold and any underwriter (and its counsel) participating in any disposition of Securities pursuant to such Shelf Registration Statement, all relevant financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries and (ii) use reasonable best efforts to have their officers, directors, employees, accountants and counsel supply all relevant information reasonably requested by such representative, Special Counsel or any such underwriter in connection with such Shelf Registration Statement;

     (viii) if requested by Majority Holders of the Securities being sold in an underwriting, their Special Counsel or the managing underwriters (if any) in connection with such Shelf Registration Statement, use their reasonable best efforts to cause (i) their counsel to deliver an opinion relating to the Shelf Registration Statement and the Securities in customary form, (ii) their officers to execute and deliver all customary documents and certificates requested by the Majority Holders of the Securities being sold, their Special Counsel or the managing underwriters (if any) and (iii) their independent registered public accounting firm to provide a letter confirming that they are an independent registered public accounting firm within the rules and regulations

10

adopted by the SEC and the Public Accounting Oversight Board (United States) and as required by the Securities Act, substantially in the form of the letter delivered to the Initial Purchaser pursuant to Section 6(h) of the Purchase Agreement, with, in the case of an amendment or supplement that includes audited financial information, such changes as may be necessary to reflect the amended or supplemented financial information.

     (ix) if reasonably requested by the Initial Purchaser or any Notice Holder, promptly incorporate in a prospectus supplement or post-effective amendment to the Shelf Registration Statement such information as the Initial Purchaser or such Notice Holder shall, on the basis of a written opinion of nationally-recognized counsel experienced in such matters, determine to be required to be included therein by applicable law and make any required filings of such prospectus supplement or such post-effective amendment; provided, that the Company shall not be required to take any actions under this Section 3(a)(ix) that are not, in the reasonable opinion of counsel for the Company, in compliance with applicable law;

     (x) promptly furnish to each Notice Holder and the Initial Purchaser, upon their request and without charge, at least one (1) conformed copy of the Shelf Registration Statement and any amendments thereto, including financial statements but excluding schedules, all documents incorporated or deemed to be incorporated therein by reference and all exhibits; provided, however, that the Company shall have no obligation to deliver to Notice Holders or the Initial Purchaser a copy of any amendment consisting exclusively of an Exchange Act report or other Exchange Act filing otherwise publicly available on the Company’s website;

     (xi) during the Effective Period, deliver to each Notice Holder in connection with any sale of Registrable Securities pursuant to the Shelf Registration Statement, without charge, as many copies of the Prospectus relating to such Registrable Securities (including each preliminary prospectus) and any amendment or supplement thereto as such Notice Holder may reasonably request; and the Company hereby consents (except during such periods that a Deferral Notice is outstanding and has not been revoked) to the use of such Prospectus or each amendment or supplement thereto by each Notice Holder in connection with any offering and sale of the Registrable Securities covered by such Prospectus or any amendment or supplement thereto in the manner set forth therein; and

     (xii) cooperate with the Notice Holders of Securities to facilitate the timely preparation and delivery of certificates representing Securities to be sold pursuant to the Shelf Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders thereof may request in writing at least two business days prior to sales of Securities pursuant to such Shelf Registration Statement; provided that nothing herein shall require the Company to deliver certificated Notes to any beneficial holder of Notes except as required by the Indenture.

     (b) Upon (A) the issuance by the Commission of a stop order suspending the effectiveness of the Shelf Registration Statement or the initiation of proceedings with respect to the Shelf Registration Statement under Section 8(d) or 8(e) of the Securities Act, (B) the occurrence of any event or the existence of any Material Event as a result of which the Shelf Registration Statement shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, or any Prospectus shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (C) the occurrence or existence of any corporate development that, in the discretion of the Company, makes it appropriate to suspend the availability of the Shelf Registration

11

Statement and the related Prospectus, the Company will (i) in the case of clause (B) above, subject to the third sentence of this provision, as promptly as is practicable prepare and file a post-effective amendment to such Shelf Registration Statement or a supplement to the related Prospectus or any document incorporated therein by reference or file any other required document that would be incorporated by reference into such Shelf Registration Statement and Prospectus so that such Shelf Registration Statement does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and such Prospectus does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, as thereafter delivered (or, to the extent permitted by law, made available) to the purchasers of the Registrable Securities being sold thereunder, and, in the case of a post-effective amendment to the Shelf Registration Statement, subject to the third sentence of this provision, use reasonable efforts to cause it to be declared effective or otherwise become effective as promptly as is practicable, and (ii) give notice to the Notice Holders that the availability of the Shelf Registration Statement is suspended (a “Deferral Notice”). Upon receipt of any Deferral Notice, each Notice Holder agrees not to sell any Registrable Securities pursuant to the Shelf Registration Statement until such Notice Holder’s receipt of copies of the supplemented or amended Prospectus provided for in clause (i) above, or until it is advised in writing by the Company that the Prospectus may be used, and has received copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in such Prospectus. The Company will use its reasonable best efforts to ensure that the use of the Prospectus may be resumed (x) in the case of clause (A) above, as promptly as is practicable, (y) in the case of clause (B) above, as soon as, in the sole judgment of the Company, public disclosure of such Material Event would not be prejudicial to or contrary to the interests of the Company or, if necessary to avoid unreasonable burden or expense, as soon as practicable thereafter and (z) in the case of clause (C) above, as soon as, in the discretion of the Company, such suspension is no longer appropriate; provided that the period during which the availability of the Shelf Registration Statement and any Prospectus is suspended (the “Deferral Period”), without the Company incurring any obligation to pay Additional Interest pursuant to Section 2(d), shall not exceed 120 days in the aggregate in any 12 month period.

     (c) Each Holder of Registrable Securities agrees that upon receipt of any Deferral Notice from the Company, such Holder shall forthwith discontinue (and cause any placement or sales agent or underwriters acting on their behalf to discontinue) the disposition of Registrable Securities pursuant to the registration statement applicable to such Registrable Securities until such Holder (i) shall have received copies of such amended or supplemented Prospectus and, if so directed by the Company, such Holder shall deliver to the Company (at the Company’s expense) all copies, other than permanent file copies, then in such Holder’s possession of the Prospectus covering such Registrable Securities at the time of receipt of such notice or (ii) shall have received notice from the Company that the disposition of Registrable Securities pursuant to the Shelf Registration may continue.

     (d) The Company and the Guarantors shall, so long as any Registrable Securities remain outstanding, cause each Additional Guarantor upon the creation or acquisition by the Company of such Additional Guarantor, to (i) execute and deliver a supplemental indenture to the Indenture and (ii) deliver to the Trustee an opinion of counsel to the effect that (A) the supplemental indenture has been duly executed and authorized and (B) the supplemental indenture constitutes a valid, binding and enforceable obligation of such Additional Guarantor, except insofar as enforcement thereof may be limited by bankruptcy, insolvency or similar laws (including, without limitation, all laws relating to fraudulent transfers) and except insofar as enforcement thereof is subject to general principles of equity.

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     (e) The Company may require each Holder of Registrable Securities as to which any registration pursuant to Section 2(a) is being effected to furnish to the Company such information regarding such Holder and such Holder’s intended method of distribution of such Registrable Securities as the Company may from time to time reasonably request in writing, but only to the extent that such information is required in order to comply with the Securities Act. Each such Holder agrees to notify the Company as promptly as practicable of any inaccuracy or change in information previously furnished by such Holder to the Company or of the occurrence of any event in either case as a result of which any Prospectus relating to such registration contains or would contain an untrue statement of a material fact regarding such Holder or such Holder’s intended method of disposition of such Registrable Securities or omits to state any material fact regarding such Holder or such Holder’s intended method of disposition of such Registrable Securities required to be stated therein or necessary to make the statements therein not misleading, and promptly to furnish to the Company any additional information required to correct and update any previously furnished information or required so that such Prospectus shall not contain, with respect to such Holder or the disposition of such Registrable Securities, an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

     (f) The Company shall comply with all applicable rules and regulations of the Commission and make generally available to its securityholders earning statements (which need not be audited) satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than (i) 40 days after the end of any 12-month period (or 60 days after the end of any 12-month period if such period is a fiscal year) if the Company is at such time an “accelerated filer” and (ii) 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) if the Company is not an “accelerated filer” commencing on the first day of the first fiscal quarter of the Company commencing after the effective date of the Shelf Registration Statement, which statements shall cover said 12-month periods.

     (g) The Company shall provide a CUSIP number for all Registrable Securities covered by the Shelf Registration Statement not later than the initial effective date of such Shelf Registration Statement and provide the Trustee for the Notes and the transfer agent for the Shares with printed certificates for the Registrable Securities that are in a form eligible for deposit with The Depository Trust Company.

     (h) The Company shall use its reasonable efforts to provide such information as is required for any filings required to be made with the National Association of Securities Dealers, Inc.

     (i) Until the expiration of two years after the Closing Date, the Company will not, and will not permit any of its “affiliates” (as defined in Rule 144) to, resell any of the Securities that have been reacquired by any of them except pursuant to an effective registration statement under the Securities Act.

     (j) The Company shall cause the Indenture to be qualified under the Trust Indenture Act in a timely manner.

     (k) The Company shall enter into such customary agreements and take all such other necessary, reasonable and lawful actions in connection therewith (including those requested by the Majority Holders of the Registrable Securities covered by the Shelf Registration Statement) in order to expedite or facilitate disposition of such Registrable Securities.

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     4. Holder’s Obligations.

     Each Holder agrees, by acquisition of the Registrable Securities, that no Holder of Registrable Securities shall be entitled to sell any of such Registrable Securities pursuant to the Shelf Registration Statement or to receive a Prospectus relating thereto, unless such Holder has furnished the Company with a Notice and Questionnaire as required pursuant to Section 2(c) hereof (including the information required to be included in such Notice and Questionnaire) and the information set forth in the next sentence. Each Notice Holder agrees promptly to furnish to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Notice Holder not misleading and any other information regarding such Notice Holder and the distribution of such Registrable Securities as may be required to be disclosed in the Shelf Registration Statement under applicable law or pursuant to Commission comments. Each Holder further agrees not to sell any Registrable Securities pursuant to the Shelf Registration Statement without delivering, or causing to be delivered, a Prospectus to the purchaser thereof and, following termination of the Effective Period, to notify the Company, within 10 business days of a request by the Company, of the amount of Registrable Securities sold pursuant to the Shelf Registration Statement and, in the absence of a response, the Company may assume that all of the Holder’s Registrable Securities were so sold.

     5. Registration Expenses.

     The Company agrees to bear and to pay or cause to be paid promptly upon request being made therefor all expenses incident to the Company’s performance of or compliance with this Agreement, including, but not limited to, (a) all Commission and any NASD registration and filing fees and expenses, (b) all fees and expenses in connection with the qualification of the Securities for offering and sale under the State securities and Blue Sky laws referred to in Section 3(a)(v) hereof, including reasonable fees and disbursements of one counsel for the placement agent or underwriters, if any, in connection with such qualifications, (c) all expenses relating to the preparation, printing, distribution and reproduction of the Shelf Registration Statement, the related Prospectus and each amendment or supplement to each of the foregoing, the certificates representing the Securities and all other documents relating hereto, (d) fees and expenses of the Trustee under the Indenture, any escrow agent or custodian, and of the registrar and transfer agent for the Shares, (e) fees, disbursements and expenses of counsel and independent certified public accountants of the Company (including the expenses of any opinions or “cold comfort” letters required by or incident to such performance and compliance) and (f) reasonable fees, disbursements and expenses of not more than one counsel for the Holders of Registrable Securities retained in connection with the Shelf Registration Statement, as selected by the Company (unless reasonably objected to by the Majority Holders of the Registrable Securities being registered, in which case the Majority Holders shall select such counsel for the Holders) (“Special Counsel”), and fees, expenses and disbursements of any other Persons, including special experts, retained by the Company in connection with such registration (collectively, the “Registration Expenses”). To the extent that any Registration Expenses are incurred, assumed or paid by any Holder of Registrable Securities or any underwriter or placement agent therefor, the Company shall reimburse such Person for the full amount of the Registration Expenses so incurred, assumed or paid promptly after receipt of a documented request therefor. Notwithstanding the foregoing, the Holders of the Registrable Securities being registered shall pay all underwriting discounts and commissions and placement agent fees and commissions attributable to the sale of such Registrable Securities and the fees and disbursements of any counsel or other advisors or experts retained by such Holders (severally or jointly), other than the counsel and experts specifically referred to above.

     6. Indemnification.

     (a) The Company and each of the Guarantors shall jointly and severally indemnify and hold harmless each Holder (including, without limitation, the Initial Purchaser), its affiliates, their

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respective officers, directors, employees, representatives and agents, and each person, if any, who controls such Holder within the meaning of the Securities Act or the Exchange Act (collectively referred to for purposes of this Section 6 and Section 7 as a Holder) from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof (including, without limitation, any loss, claim, damage, liability or action relating to purchases and sales of Securities), to which that Holder may become subject, whether commenced or threatened, under the Securities Act, the Exchange Act, any other federal or state statutory law or regulation, at common law or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any such Registration Statement, (ii) any untrue statement or alleged untrue statement of a material fact contained in any Prospectus, any Free Writing Prospectus or any “issuer information” (“Issuer Information”) filed or required to be filed pursuant to Rule 433(d) under the Securities Act or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and shall reimburse each Holder promptly upon demand for any legal or other expenses reasonably incurred by that Holder in connection with investigating or defending or preparing to defend against or appearing as a third party witness in connection with any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Company and the Guarantors shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of, or is based upon, an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with any information provided by a Holder in its most recent Notice and Questionnaire; and provided, further, that with respect to any such untrue statement in or omission from any related preliminary prospectus, the indemnity agreement contained in this Section 6(a) shall not inure to the benefit of any Holder from whom the person asserting any such loss, claim, damage, liability or action received Securities to the extent that such loss, claim, damage, liability or action of or with respect to such Holder results from the fact that both (A) a copy of the final prospectus was not sent or given to such person at or prior to the written confirmation of the sale of such Securities to such person and (B) the untrue statement in or omission from the related preliminary prospectus was corrected in the final prospectus unless, in either case, such failure to deliver the final Prospectus was a result of non-compliance by the Company or any Guarantor with Section 4. This indemnity agreement shall be in addition to any liability that the Company or the Guarantor may otherwise have.

     The Company and the Guarantors also shall jointly and severally indemnify and hold harmless as provided in this Section 6(a) or contribute as provided in Section 7 hereof with respect to any loss, claim, damage, liability or action of each underwriter, if any, of Securities registered under the Shelf Registration Statement, its affiliates, their respective officers, directors, employees, representatives and agents, and each person, if any, who controls such underwriter within the meaning of the Securities Act or the Exchange Act on substantially the same basis as that of the indemnification of the selling Holders provided in this paragraph (a) and shall, if requested by any Holder, enter into an underwriting agreement reflecting such agreement.

     (b) Each Holder shall indemnify and hold harmless the Company, each Guarantor and their respective affiliates, their respective officers, directors, employees, representatives and agents, and each person, if any, who controls the Company or any Guarantor within the meaning of the Securities Act or the Exchange Act (collectively referred to for purposes of this Section 6(b) and Section 7 as the Company), from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof, to which the Company may become subject, whether commenced or threatened, under the Securities Act, the Exchange Act, any other federal or state statutory law or regulation, at common law or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact

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contained in any such Registration Statement or any prospectus forming part thereof or in any amendment or supplement thereto or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, but in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with any information furnished to the Company by such Holder in its most recent Notice and Questionnaire, and shall reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending or preparing to defend against or appearing as a third party witness in connection with any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that no such Holder shall be liable for any indemnity claims hereunder in excess of the amount of net proceeds received by such Holder from the sale of Securities pursuant to such Shelf Registration Statement. This indemnity agreement will be in addition to any liability which any such Holder may otherwise have.

     (c) Promptly after receipt by an indemnified party under this Section 6 of notice of any claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party pursuant to Section 6(a) or 6(b), notify the indemnifying party in writing of the claim or the commencement of that action; provided, however, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this Section 6 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 6. If any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 6 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than the reasonable costs of investigation; provided, however, that an indemnified party shall have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel for the indemnified party will be at the expense of such indemnified party unless (1) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded (based upon advice of counsel to the indemnified party) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict exists (based upon advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (4) the indemnifying party has not in fact employed counsel reasonably satisfactory to the indemnified party to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm of attorneys (in addition to any local counsel) at any one time for all such indemnified party or parties. Each indemnified party, as a condition of the indemnity agreements contained in Sections 6(a) and 6(b), shall use all reasonable efforts to cooperate with the indemnifying party in the defense of any such action or claim. No indemnifying party shall be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with its written consent or if

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there be a final judgment for the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment or if the indemnifying party has not paid the expenses and fees for which it is liable 20 days after notice by the indemnified party of request for reimbursement. No indemnifying party shall, without the prior written consent of the indemnified party (which consent shall not be unreasonably withheld), effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement (i) includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding and (ii) does not include a statement or admission of fault, culpability or a failure to act, by or on behalf of the indemnified party.

     (d) The provisions of this Section 6 and Section 7 shall remain in full force and effect, regardless of any investigation made by or on behalf of any Holder, the Company, the Guarantors or any of the indemnified Persons referred to in this Section 6 and Section 7, and shall survive the sale by a Holder of securities covered by the Shelf Registration Statement.

     7. Contribution.

     If the indemnification provided for in Section 6 is unavailable or insufficient to hold harmless an indemnified party under Section 6(a) or 6(b), then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company and the Guarantors from the offering and sale of the Notes, on the one hand, and a Holder with respect to the sale by such Holder of Securities, on the other, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and each of the Guarantors on the one hand and such Holder on the other with respect to the statements or omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company and each of the Guarantors on the one hand and a Holder on the other with respect to such offering and such sale shall be deemed to be in the same proportion as the total net proceeds from the offering of the Notes (before deducting expenses) received by or on behalf of the Company and each of the Guarantors, on the one hand, and the total discounts and commissions received by such Holder with respect to the Securities, on the other, bear to the total gross proceeds from the sale of Securities. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to the Company and each of the Guarantors or information supplied by the Company and each of the Guarantors on the one hand or to any information contained in the relevant Notice and Questionnaire supplied by such Holder on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 7 were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section 7 shall be deemed to include, for purposes of this Section 7, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending or preparing to defend any such action or claim. Notwithstanding the provisions of this Section 7, an indemnifying party that is a Holder of Securities shall not be required to contribute any amount in excess of the amount by which the total price at which the Securities sold by such indemnifying party to any purchaser exceeds the amount of any damages which such indemnifying party has otherwise paid or become liable to pay by

17

reason of any untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Holders’ obligations to contribute pursuant to this Section 7 are several and not joint.

     8. Rule 144A and Rule 144.

     So long as any Registrable Securities remain outstanding, the Company shall use its reasonable best efforts to file the reports required to be filed by it under Rule 144A(d)(4) under the Securities Act and the Exchange Act in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the written request of any Holder of Registrable Securities, make publicly available other information so long as necessary to permit sales of such Holder’s securities pursuant to Rules 144 and 144A. The Company and the Guarantors covenant that they will take such further action as any Holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rules 144 and 144A (including, without limitation, the requirements of Rule 144A(d)(4)). Upon the written request of any Holder of Registrable Securities, the Company and the Guarantors shall deliver to such Holder a written statement as to whether it has complied with such requirements. Notwithstanding the foregoing, nothing in this Section 8 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act.

     9. Miscellaneous.

     (a) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of Majority Holders. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose Securities are being sold pursuant to the Shelf Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by Holders of a majority in aggregate amount of the Securities being sold by such Holders pursuant to the Shelf Registration Statement.

     (b) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail, telecopier or air courier guaranteeing next-day delivery:

     (i) If to the Company or the Guarantors, initially at the address set forth in the Purchase Agreement;

     (ii) If to the Initial Purchaser, initially at its address set forth in the Purchase Agreement; and

     (iii) If to a Holder, to the address of such Holder set forth in the security register, the Notice and Questionnaire or other records of the Company.

     All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; one business day after being delivered to a next-day air courier; five business days after being deposited in the mail; and when receipt is acknowledged by the recipient’s telecopier machine, if sent by telecopier.

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     (c) Successors and Assigns. This Agreement shall be binding upon the Company, the Guarantors and their respective successors and assigns.

     (d) Counterparts. This Agreement may be executed in any number of counterparts (which may be delivered in original form or by telecopier) and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

     (e) Definition of Terms. For purposes of this Agreement, (a) the term “business day” means any day on which the New York Stock Exchange, Inc. is open for trading, (b) the term “subsidiary” has the meaning set forth in Rule 405 under the Securities Act and (c) except where otherwise expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities Act.

     (f) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

     (g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     (h) Remedies. In the event of a breach by the Company or any of the Guarantors or by any Holder of any of their respective obligations under this Agreement, each Holder or the Company or any Guarantor, as the case may be, in addition to being entitled to exercise all rights granted by law, including recovery of damages (other than the recovery of damages for a breach by the Company or any Guarantor of their obligations under Section 2 hereof for which Additional Interest have been paid pursuant to Section 3 hereof), will be entitled to specific performance of its rights under this Agreement. The Company, each Guarantor and each Holder agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agree that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

     (i) No Inconsistent Agreements. Each of the Company and each Guarantor represents, warrants and agrees that (i) it has not entered into, and shall not, on or after the date of this Agreement, enter into any agreement that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof, (ii) it has not previously entered into any agreement which remains in effect granting any registration rights with respect to any of its debt securities to any person and (iii) without limiting the generality of the foregoing, without the written consent of the Holders of a majority in aggregate principal amount of the then outstanding Registrable Securities, it shall not grant to any person the right to request the Company to register any debt securities of the Company under the Securities Act unless the rights so granted are not in conflict or inconsistent with the provisions of this Agreement.

     (j) No Piggyback on Registrations. Neither the Company nor the Guarantors nor any of their respective security holders (other than the Holders of Registrable Securities in such capacity) shall have the right to include any securities of the Company in any Shelf Registration Statement other than Registrable Securities.

     (k) Severability. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect

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and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

     (l) Survival. The respective indemnities, agreements, representations, warranties and each other provision set forth in this Agreement or made pursuant hereto shall remain in full force and effect regardless of any investigation (or statement as to the results thereof) made by or on behalf of any Holder of Registrable Securities, any director, officer or partner of such Holder, any agent or underwriter or any director, officer or partner thereof, or any controlling person of any of the foregoing, and shall survive delivery of and payment for the Registrable Securities pursuant to the Purchase Agreement and the transfer and registration of Registrable Securities by such Holder.

     (m) Securities Held by the Company, etc. Whenever the consent or approval of Holders of a specified percentage of Securities is required hereunder, Securities held by the Company or its affiliates (other than subsequent Holders of Securities if such subsequent Holders are deemed to be affiliates solely by reason of their holdings of such Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

     If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to us a counterpart hereof, whereupon this instrument will become a binding agreement among the Company, the Guarantors and the Initial Purchaser in accordance with its terms.

Very truly yours, CALGON CARBON CORPORATION
By:	/s/ Leroy M. Ball
	Name:	Leroy M. Ball
	Title:	Senior Vice President and Chief Financial Officer
CALGON CARBON INVESTMENTS, INC.
By:	/s/ Leroy M. Ball
	Name:	Leroy M. Ball
	Title:	Vice President and Secretary
BSC COLUMBUS, LLC
By:	/s/ Leroy M. Ball
	Name:	Leroy M. Ball
	Title:	Manager
CCC COLUMBUS, LLC
By:	/s/ Leroy M. Ball
	Name:	Leroy M. Ball
	Title:	Manager

     The foregoing Agreement is hereby confirmed and accepted as of the date first above written.

J.P. MORGAN SECURITIES INC.
By:	/s/ Santosh Sreenivasan
	Name:	Santosh Sreenivasan
	Title:	Vice President

EX-10.3

Exhibit 10.3

EMPLOYMENT AGREEMENT

THE UNDERSIGNED:

     Calgon Carbon Corporation, having its registered office at 400 Calgon Carbon Drive, Pittsburgh, Pennsylvania, U.S.A. 15205 (the “Company”);

     AND

     C. H. S. Majoor, residing at Roeltjesweg 1A7 12/7 TC Hilversum, The Netherlands, (the “Employee”);

HAVE AGREED AS FOLLOWS:

     1. Term. The Company agrees to employ the Employee as Sales, Marketing, and Invest in People Director of the Company, as of January 2, 2001, for an indefinite period under the terms and conditions of this agreement and its addendum.

     2. Duties. The Employee’s responsibilities are to direct the Sales, Marketing, and Invest in People departments for the Company’s European operations. The Company shall have the right, at any time, to assign the Employee, within reasonable limits, duties and responsibilities more extensive than, or different from, those for the performance of which he was engaged. Such assignment shall not constitute a breach or cause for termination of this agreement nor shall it be considered a change in the essential conditions of employment hereunder provided that such assignment does not reduce the Employee’s salary or the level of his responsibilities and that it remains within the limits compatible with his/her qualifications. In addition, the imposition by the Company of additional levels of management between the Employee and his superior, or change made by the Company in the titles of its employees shall not constitute a breach or a cause for termination.

     The Employee agrees, while employed hereunder, to perform his duties faithfully and to the best of his/her ability.

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     3. Place of Work. The Employee shall be employed at Zoning Industrial de Feluy, B-7181, Feluy, Belgium.

     4. Remuneration. The Employee’s gross monthly salary shall be 483,040 Belgian francs. This salary, less applicable withholdings and deductions, shall be paid by transfer to his bank or postal checking account. The annual incentive payout target will be 35% of your annual base salary.

     Any bonuses, gifts, or other payment that the Company may grant or made to the Employee from time to time, and even on a regular basis, in its absolute discretion and without an obligation under law, a collective bargaining agreement or this contract, shall not form part of the Employee’s contractual remuneration. The granting of such a bonus or the making of such a gift or other payment shall not create a right to receive such bonus, gift, or payment in the future.

     The salary will be reviewed annually for adjustment.

     5. Expenses. The Company shall reimburse the Employee from time to time for the reasonable expenses incurred by the employee in connection with the performance of his obligations hereunder.

     6. Working Time. The Employee shall occupy a position of trust and shall therefore not be subject to the rules on overtime. The remuneration set forth in point 4 above shall compensate the employee for all services rendered during and outside normal working hours.

     7. Conflict of Interest. The Employee agrees during the term of this contract to devote all his working time and all his efforts to the interests of the Company, to accept no other employment, and to engage in no outside activity that would in any way conflict with or prejudice his responsibilities to the Company.

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     8. Return Materials. The Employee agrees to return to the Company, at its request and in any event upon the termination of this contract, all documentation, correspondence, and reports and all materials, tools, and equipment that may have been made available to him by the Company.

     9. Company Rules and Policies. The Employee agrees to comply with all rules, regulations, directives, and instructions that the Company may establish for the proper conduct of its business.

     10. Confidentiality. All information, including customer lists, technical, commercial, and financial information, payroll data, specifications, reports, and other information of any kind, directly or indirectly related to the business of the Company, disclosed to the Employee by the Company or by any of its employees, directors, statutory auditors or outside consultants, or with which the Employee becomes acquainted while in the employ of the Company, shall be treated as confidential information.

     The Employee shall at all times, both during his employment and after the termination thereof, keep such confidential information secret and refrain from disclosing it in any way or for any purpose whatsoever and from using it in any manner for his own benefit or for the benefit of any person other than the Company.

     11. Termination with Cause. The Company reserves the right to terminate this agreement at any time, without prior notice or indemnity, in the event of misconduct by the Employee, including insubordination, use of physical violence, repeated unjustified absence or tardiness, refusal to carry out duties properly assigned to him, disclosure of confidential information relating to the Company or giving false or misleading information to the Company either before or after the signature of this contract.

     12. Non-compete. For a period of two years immediately following the termination of this contract, within the limits of the legal provisions and the collective bargaining agreements in effect, the Employee shall not directly or indirectly, alone or as

3

a member of a partnership, or as an officer, director, employee, or shareholder in any company whose activities are similar to those of the Company, or otherwise, engage in Europe or in the United States of America or in any other area in which Calgon Carbon or any of its subsidiaries conduct business or in which Calgon Carbon or any of its subsidiaries customers are located.

     Unless the Company waives completely the effective application of this clause within fifteen (15) days of the termination of the Contract, the Company shall pay to the Employee an indemnity equivalent to one half of his gross remuneration for the last month of employment with the Company, multiplied by the number of months for which this clause is applicable.

     Should the Employee fail to respect his obligation under this Article, the Employee shall be obliged to reimburse to the Company the amount which has been paid by the Company pursuant to the previous paragraph and in addition, shall be obliged to pay to the Company a lump sum amount equal to the amount of said reimbursement, without prejudice to the Company’s right to claim a higher amount as determined by^. actual injury suffered.

     Signed in duplicate in Pittsburgh, Pennsylvania, on December 21, 2000, each party acknowledging receipt of an original.

	/s/ Robert W. Courson II
Employee	Company

4

EX-10.12

Exhibit 10.12

REDEMPTION,
ASSET TRANSFER
AND
CONTRIBUTION
AGREEMENT

by and among

CALGON MITSUBISHI CHEMICAL CORPORATION,

MITSUBISHI CHEMICAL CORPORATION,

and

CALGON CARBON CORPORATION

Dated as of February 12, 2010

TABLE OF CONTENTS

1.	DEFINITIONS	9
	“Acceptance Deadline”	9
	“Accounts Receivable”	9
	“Adjustment”	9
	“Agent”	9
	“Agreement”	9
	“Ancillary Agreements”	9
	“Anti-Corruption Laws”	9
	“Applicable Contract”	9
	“Assigned Intellectual Property”	9
	“Balance Sheet”	9
	“Benefit Arrangements”	9
	“Best Efforts”	9
	“Breach”	10
	“Business”	10
	“Calgon”	10
	“Calgon’s Advisors”	10
	“Calgon Indemnified Persons”	10
	“Closing”	10
	“Closing Balance Sheet”	10
	“Closing Date”	10
	“Closing Date Net Assets Value”	10
	“CMCC”	10
	“CMCC Existing Employees”	10
	“Competing Business”	10
	“Confidential Information”	10
	“Consent”	11
	“Contemplated Transactions”	11
	“Contract”	11
	“Contributed Intellectual Property”	11
	“Contribution Amount”	11
	“Damages”	11
	“Disclosure Letter”	11
	“Employee”	11
	“Encumbrance”	11
	“Environmental Law”	11
	“Equity Contribution”	12
	“Final Closing”	12
	“Final Closing Date”	12
	“First Purchase Shares”	12
	“First Share Purchase Price”	12
	“First Redemption”	12

1

“Fukui Facility”	12
“GAAP”	12
“Government”	12
“Government Official”	12
“Governmental Authorization”	12
“Governmental Body”	12
“Hazardous Activity”	13
“Hazardous Materials”	13
“Income Tax Act”	13
“Income Tax Withholding Amount”	13
“Intellectual Property Agreement”	13
“Intellectual Property Assignment Certifications”	13
“Intellectual Property Purchase Price”	13
“Interim Balance Sheet”	13
“Joint Venture Agreement”	13
“Knowledge”	13
“Kurosaki Facility”	13
“Legal Requirement”	14
“Leased Employee”	14
“Leased Period”	14
“Material Adverse Change”	14
“MCC”	14
“MCC Associated Agreements”	14
“MCC Basket”	14
“MCC Cap”	14
“MCC Indemnified Persons”	14
“MCC Leased Employees”	14
“Mitsubishi Marks”	14
“Net Assets Value Resolution Accountant”	14
“Order”	14
“Ordinary Course of Business”	14
“Organizational Documents”	14
“Person”	14
“Personnel Lease Agreement”	14
“Proceeding”	15
“Prohibited Payment”	15
“Proprietary Rights Agreement”	15
“Redemption”	15
“Related Person”	15
“Release”	15
“Representative”	15
“Restricted Period”	15
“Second Purchase Shares”	15
“Second Share Purchase Price”	15
“Second Redemption”	15
“Share Acquisition Date”	15

2

	“Share Purchase Price”	15
	“Share Restriction Period”	15
	“Shares”	15
	“Specified Intellectual Property Assets”	16
	“Specified Net Assets Value”	16
	“Tax”	16
	“Tax Return”	16
	“Technical Information”	16
	“Threatened”	16
	“Toyota”	16
	“Toyota Co-owned Patents”	16
	“Toyota License”	16
	“Transition Period”	16
2.	CONTRIBUTION; REDEMPTION; ASSET TRANSFER; CLOSING	16
	2.1 Equity Contribution	16
	2.2 Redemption of Shares	17
	2.3 Asset Transfer; License	17
	2.4 Consideration	18
	2.5 Closing	18
	2.6 Closing Obligations	19
	2.7 Final Closing Obligations	20
	2.8 Payment of Adjustment Amount	20
	2.9 Adjustment Procedure	21
3.	REPRESENTATIONS AND WARRANTIES OF MCC TO CMCC AND CALGON	22
	3.1 Organization and Good Standing	22
	3.2 Authority; No Conflict	22
	3.3 Certain Proceedings	22
	3.4 Title to Shares	22
	3.5 Contributed Intellectual Property	23
4.	REPRESENTATIONS AND WARRANTIES OF MCC TO CALGON	24
	4.1 Existence and Good Standing	24
	4.2 Authority; No Conflict	24
	4.3 Capitalization	25
	4.4 Financial Statements	25
	4.5 Books and Records	25
	4.6 Title to Properties, Encumbrances	25
	4.7 Condition and Sufficiency of Assets	26
	4.8 Accounts Receivable	26
	4.9 Inventory	27
	4.10 No Undisclosed Liabilities	27
	4.11 Taxes	27
	4.12 No Material Adverse Change	28
	4.13 Employee Benefits	28

3

	4.14 Compliance with Legal Requirements; Governmental Authorizations	29
	4.15 Legal Proceedings; Orders	30
	4.16 Absence of Certain Changes and Events	31
	4.17 Contracts; No Defaults	32
	4.18 Insurance	34
	4.19 Environmental Matters	34
	4.20 Employees	35
	4.21 Labor Relations; Compliance	35
	4.22 Intellectual Property	36
	4.23 Compliance with Anti-Corruption Laws; Status of Agent Relationships	37
	4.24 Relationships with Related Persons	39
	4.25 Customer and Other Relations	39
	4.26 Disclosure	39
5.	REPRESENTATIONS AND WARRANTIES OF CALGON TO MCC	39
	5.1 Existence and Good Standing	39
	5.2 Authority; No Conflict	39
6.	REPRESENTATIONS AND WARRANTIES OF CALGON TO MCC	40
	6.1 Organization and Good standing	40
	6.2 Authority; No Conflict	40
	6.3 Certain Proceedings	41
7.	COVENANTS	41
	7.1 Board and Shareholder Approval of Redemption	41
	7.2 Change of Name	41
	7.3 Nomination of Directors and Statutory Auditors	41
	7.4 Registration of New Company Name, Directors and Statutory Auditors	41
	7.5 Repayment of the Borrowing from MCFA	41
	7.6 Proper Employees of CMCC	42
	7.7 Access and Investigation	42
	7.8 Operation of the Business of CMCC	42
	7.9 Notification	43
	7.10 No Negotiation	44
	7.11 Confidentiality; Privilege	44
	7.12 Restrictive Covenants	45
	7.13 Record Retention and Access	47
	7.14 IT Systems	47
	7.15 Continuation of MCC Associated Agreements	47
	7.16 Leased Employee Matters	48
	7.17 Co-owned Patents	48
	7.18 Restrictions Regarding Second Purchase Shares	48
	7.19 Purchase activated carbon	49

4

8.	CONDITIONS PRECEDENT TO CALGON’S OBLIGATION TO CLOSE	49
	8.1 Accuracy of Representations	49
	8.2 Performance	49
	8.3 No Proceedings	50
	8.4 No Prohibition	50
	8.5 Trademark Use	50
	8.6 MCC Co-owned Patents	50
	8.7 Financing Matters	50
	8.8 Resignations; Certain Agreements	50
	8.9 Due Diligence	51
	8.10 No Material Adverse Change	51
	8.11 Employees; Employment Violations	51
	8.12 Office Lease	51
	8.13 Assignment of Agreements	51
	8.14 Assignment of Security	51
	8.15 Material Consents	51
	8.16 Exclusive Agreement	52
9.	CONDITIONS PRECEDENT TO MCC’S OBLIGATION TO CLOSE	52
	9.1 Accuracy of Representations	52
	9.2 Performance	52
	9.3 Financing Matters	52
	9.4 No Injunction	52
10.	TERMINATION	53
	10.1 Termination of Events	53
	10.2 Effect of Termination	53
11.	INDEMNIFICATION; REMEDIES	54
	11.1 Survival; Right to Indemnification Not Affected by Knowledge	54
	11.2 Indemnification and Payment of Damages by MCC	54
	11.3 Indemnification and Payment of Damages by MCC—Environmental Matters	55
	11.4 Indemnification and Payment of Damages by Calgon	56
	11.5 Indemnification and Payment of Damages by Calgon—Environmental Matters	56
	11.6 Time Limitations	57
	11.7 Limitations on Amount—MCC	57
	11.8 Limitations on Amount—Calgon	58
	11.9 Procedure for Indemnification—Third-Party Claims	58
	11.10 Procedure for Indemnification—Other Claims	59
12.	GENERAL PROVISIONS	59
	12.1 Expenses	59
	12.2 Public Announcements	59
	12.3 Termination of Joint Venture Agreement	60
	12.4 Waiver and Release	60

5

12.5 Notices	60
12.6 Arbitration	61
12.7 Further Assurances	61
12.8 Waiver	62
12.9 Entire Agreement and Modification	62
12.10 Disclosure Letter	62
12.11 Assignments, Successors, and No Third-Party Rights	62
12.12 Severability	63
12.13 Section Headings, Construction	63
12.14 Governing Law	63
12.15 Counterparts	63

6

EXHIBITS

Exhibit A            Assigned Intellectual Property
Exhibit B            Specified Intellectual Property Assets
Exhibit C            Licensed Intellectual Property
Exhibit D            Toyota Co-owned Patents
Exhibit E            Co-owned MCC Patents
Exhibit F            Co-owned CMCC Patent
Exhibit G            Major Terms and Conditions of the Loan Agreement
Exhibit H            IT Systems List
Exhibit I            Key Person List

7

REDEMPTION, ASSET TRANSFER AND CONTRIBUTION AGREEMENT

THIS REDEMPTION, ASSET TRANSFER AND CONTRIBUTION AGREEMENT (this “Agreement”) is made and entered into as of this 12th day of February, 2010 by and among:

(1) CALGON MITSUBISHI CHEMICAL CORPORATION, a kabushiki kaisha duly organized and existing under the laws of Japan with its principal office at 1-5, Kyobashi 1-chome, Chuo-ku, Tokyo, Japan (“CMCC”);

(2) MITSUBISHI CHEMICAL CORPORATION, a kabushiki kaisha duly organized and existing under the laws of Japan with its principal office at 14-1, Shiba 4-chome, Minato-ku, Tokyo, Japan (“MCC”); and

(3) CALGON CARBON CORPORATION, a corporation duly organized and existing under the laws of the State of Delaware, U.S.A., with its principal office at 400 Calgon Carbon Drive, Pittsburgh, Pennsylvania, U.S.A. (“Calgon”).

(CMCC, MCC, and Calgon are hereinafter also collectively referred to as the “Parties” and individually as a “Party”).

RECITALS

WHEREAS, Calgon and MCC entered into the Joint Venture Agreement dated August 12, 2002 (“Joint Venture Agreement”) pursuant to which MCC acquired 26,020 shares (the “Shares”) of CMCC on October 1, 2002 (the “Share Acquisition Date”);

WHEREAS, Calgon owns 25,000 shares of CMCC;

WHEREAS, MCC wishes to sell to CMCC and CMCC wishes to purchase and redeem from MCC, the Shares, in accordance with the terms and conditions of this Agreement;

WHEREAS, in connection with such redemption, the Joint Venture Agreement will be terminated;

WHEREAS, pursuant to the Joint Venture Agreement, MCC and CMCC entered into the MCC Personnel Lease Agreement, the Building and Facility Lease Agreement, the Intellectual Property Agreement (the “Intellectual Property Agreement”), the Utilities Supply Agreement, the Services Agreement and the Office Lease Agreement, each of which is dated on or about October 1, 2002 (collectively, “MCC Associated Agreements”);

WHEREAS, MCC wishes to sell to CMCC, and CMCC wishes to purchase from MCC, those certain intellectual property assets that are currently licensed to CMCC pursuant to the Intellectual Property Agreement; and

WHEREAS, MCC and CMCC wish to provide, among other things, for the continuation of certain of the MCC Associated Agreements (except the Intellectual Property Agreement) for a specified period after the Shares are purchased by CMCC.

NOW, THEREFORE, the parties, intending to be legally bound, hereby agree as follows:

8

1. DEFINITIONS

     For purposes of this Agreement, the following terms have the meanings specified or referred to in this Section 1:

     “Acceptance Deadline”—as defined in Section 7.6(3).

     “Accounts Receivable”—as defined in Section 4.8.

     “Adjustment”—as defined in Section 2.8.

     “Agent”—means: (i) any Person appointed by a power of attorney or similar instrument granted by CMCC empowering that Person to represent CMCC in matters and dealings by or involving CMCC; and, alternatively (ii) any agent, sales representative, sponsor or other Person appointed or retained to assist CMCC to obtain business or promote the distribution, marketing or sales of products or services of CMCC, including licensing agreements pursuant to which any Person distributes, markets or sells the services, products or technology of CMCC in the name of CMCC.

     “Agreement” —as defined in the first paragraph of this Agreement.

     “Ancillary Agreements”— the certificates delivered pursuant to Sections 2.6(1)(ii), 2.6(3)(ii), 2.7 (1)(ii) and 2.7(2)(ii).

     “Anti-Corruption Laws”—means, collectively, (i) the United States Foreign Corrupt Practices Act, (ii) applicable laws enacted pursuant to the Organization of Economic Cooperation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, including but not limited to the Unfair Competition Prevention Act (Act No. 47 of 1993, as amended), of Japan, (iii) the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade (Act No. 54 of 1947, as amended), and (iv) any other applicable laws of Japan and other relevant jurisdictions prohibiting bribery, corruption, private monopolization, or restraint of trade.

     “Applicable Contract”—any Contract (a) under which CMCC has or may acquire any rights, (b) under which CMCC has or may become subject to any obligation or liability, or (c) by which CMCC or any of the assets owned or used by it is or may become bound.

     “Assigned Intellectual Property” —as defined in Section 2.3.

     “Balance Sheet”—as defined in Section 4.4.

     “Benefit Arrangements”—as defined in Section 4.13.

     “Best Efforts”—the efforts that a prudent Person desirous of achieving a result would use in similar circumstances to ensure that such result is achieved as expeditiously as possible.

9

     “Breach”—a “Breach” of a representation, warranty, covenant, obligation, or other provision of this Agreement or any instrument delivered pursuant to this Agreement will be deemed to have occurred if there is or has been (a) any inaccuracy in or breach of, or any failure to perform or comply with, such representation, warranty, covenant, obligation, or other provision, or (b) any claim (by any Person) or other occurrence or circumstance that is or was inconsistent with such representation, warranty, covenant, obligation, or other provision, and the term “Breach” means any such inaccuracy, breach, failure, claim, occurrence, or circumstance.

     “Business”—as defined in Section 7.12.

     “Calgon”—as defined in the first paragraph of this Agreement.

     “Calgon’s Advisors”—as defined in Section 7.7.

     “Calgon Indemnified Persons”—as defined in Section 11.2.

     “Closing”—as defined in Section 2.5.

     “Closing Balance Sheet”—as defined in Section 2.9(1).

     “Closing Date”—the date and time as of which the Closing actually takes place.

     “Closing Date Net Assets Value”—means the net assets value reflected on the Closing Date Balance Sheet calculated in accordance with GAAP on a basis consistently applied with the December 31, 2008 balance sheet.

     “CMCC”—as defined in the first paragraph of this Agreement.

     “CMCC Existing Employees”—as defined in Section 7.6.

     “Competing Business”—as defined in Section 4.24.

     “Confidential Information”—means of the following disclosed or exchanged in connection with the Contemplated Transactions and all of the following owned or possessed by CMCC: (i) all information that is a trade secret under applicable trade secret or other law; (ii) all information concerning product specifications, data, know-how, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, past, current and planned research and development, current and planned manufacturing or distribution methods and processes, customer lists, current and anticipated customer requirements, price lists, market studies, business plans, computer hardware, computer software and database technologies, systems, structures and architectures; (iii) all information concerning the business and affairs of the disclosing party (which includes historical and current financial statements, financial projections and budgets, tax returns and accountants’ materials, historical, current and projected sales, capital spending budgets and plans, business plans, strategic plans, marketing and advertising plans, publications, client and customer lists and files, contracts, the names and backgrounds of key personnel and personnel training techniques and materials, however documented), and all information obtained from review of the disclosing party’s documents or property or discussions with the disclosing party regardless of the form of the communication; (iv)

10

all proprietary information of CMCC; and (v) all notes, analyses, compilations, studies, summaries and other material prepared by the receiving party to the extent containing or based, in whole or in part, upon any information included in the foregoing. “Confidential Information” shall not include any information that is already known to a party or to others not bound by a duty of confidentiality or information that is publicly available through no fault of such party.

     “Consent”—any approval, consent, ratification, waiver, or other authorization (including any Governmental Authorization).

     “Contemplated Transactions”—all of the transactions contemplated by this Agreement and the Ancillary Agreements.

     “Contract”—any agreement, contract, obligation, promise, or undertaking (whether written or oral and whether express or implied) that is legally binding.

     “Contributed Intellectual Property”—as defined in Section 2.3(2).

     “Contribution Amount”—as defined in Section 2.1.

     “Damages”—as defined in Section 11.2.

     “Disclosure Letter”—the disclosure letter delivered by MCC to Calgon concurrently with the execution and delivery of this Agreement.

     “Employee”—as defined in Section 4.13.

     “Encumbrance”—any charge, claim, community property interest, condition, equitable interest, lien, option, pledge, security interest, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute of ownership.

     “Environmental Law”—any Legal Requirement that requires or relates to the protection of the environment or to human health and safety including, without limitation, (a) the Basic Environment Act (Act No. 91 of 1993, as amended) of Japan, Air Pollution Control Act (Act No. 97 of 1968, as amended) of Japan, Water Pollution Control Act (Act No. 138 of 1970, as amended) of Japan, Act on Special Measures against Dioxins (Act No. 105 of 1999, as amended) of Japan, Offensive Odor Control Act (Act No. 91 of 1971, as amended) of Japan, Act on Confirmation, etc. of Releases of Amounts of Specific Chemical Substances in the Environment and Promotion of Improvements to the Management Thereof (Act No. 86 of 1999, as amended) of Japan, Soil Contamination Countermeasures Act (Act No. 53 of 2002, as amended) of Japan, Waste Management and Public Cleansing Act (Act No. 137 of 1970, as amended) of Japan, and any analogous national or local statutes, ordinances, rules and regulations promulgated under such statutes or ordinances in Japan currently in effect; (b) all other applicable laws of any federal, foreign, state, prefecture, or local government; (b) all other requirements pertaining to reporting, licensing, permitting, investigation or remediation of emissions, discharges, Releases or threats of Releases of Hazardous Materials into the air, surface water, groundwater or land, or relating to the manufacture, processing, distribution, use, sale, treatment, receipt, storage, disposal, transport or

11

handling of Hazardous Materials, and (c) all other requirements pertaining to the protection of the health and safety of employees or the public.

     “Equity Contribution”—as defined in Section 2.1.

     “Final Closing”—as defined in Section 2.5.

     “Final Closing Date”—the date and time as of which the Final Closing actually takes place.

     “First Purchase Shares”—as defined in Section 2.2.

     “First Share Purchase Price”—as defined in Section 2.4.

     “First Redemption”—as defined in Section 2.2.

     “Fukui Facility”—the facility of CMCC located at Aza Hamawari 152-2, Yonodu 49, Mikuni-cho, Sakai-City, Fukui, Japan.

     “GAAP”—generally accepted Japanese accounting principles, applied on a basis consistent with the basis on which the Balance Sheet and the other financial statements referred to in Section 4.4 were prepared.

     “Government”—includes, without limitation: (a) any government, including all levels and subdivisions of government from national to local; (b) any government agency, department, committee or other instrumentality; (c) any government-owned or government-managed company (including, for example, a national oil company); (d) any political party; and (e) any public international organization (including, for example, the United Nations, the World Bank, the International Monetary Fund, etc.).

     “Government Official”—includes, (i) any officer, employee or agent of any Government or of any department, agency or instrumentality (including any business or corporate entity owned, controlled, or managed by a Government, such as a government-owned or —controlled water company) thereof, or any Person acting in an official capacity or performing public duties or functions on behalf of any such Government, department, agency or instrumentality, (ii) any political party or official thereof, (iii) any candidate for public office, or (iv) any officer, employee or agent of a public international organization, including, but not limited to, the United Nations, the International Monetary Fund or the World Bank.

     “Governmental Authorization”—any approval, Consent, license, permit, waiver, or other authorization issued, granted, given, or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement.

     “Governmental Body”—any: (a) nation, state, prefecture, county, city, town, village, district, or other jurisdiction of any nature; (b) national, state, prefectural, local, municipal, foreign, or other government; (c) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal); (d) multi-national organization or body; or (e) body exercising, or entitled to exercise,

12

any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature.

     “Hazardous Activity”—the distribution, generation, handling, importing, management, manufacturing, processing, production, refinement, Release, storage, transfer, transportation, treatment, or use (including any withdrawal or other use of groundwater) of Hazardous Materials in, on, under, about, or from the applicable facility or any part thereof into the environment, and any other act, business, operation, or thing that increases the danger, or risk of danger, or poses an unreasonable risk of harm to persons or property on or off the applicable facility, or that may affect the value of the applicable facility or CMCC.

     “Hazardous Materials”—any waste or other substance that is listed, defined, designated, or classified as, or otherwise determined to be, hazardous, radioactive, or toxic or a pollutant or a contaminant under or pursuant to any Environmental Law.

     “Income Tax Act”—the Income Tax Act (Act No. 33 of March 31, 1965) of Japan.

     “Income Tax Withholding Amount”—the portion of the Share Purchase Price that CMCC is obligated to withhold and pay to the Japanese government pursuant to Article 212, paragraph 3, Article 174, paragraph 1, item 2, Article 25, paragraph 4, item 4 of the Income Tax Act.

     “Intellectual Property Agreement”—as defined in the Recitals of this Agreement.

     “Intellectual Property Assignment Certifications”—as defined in Section 2.6.

     “Intellectual Property Purchase Price”—as defined in Section 2.4.

     “Interim Balance Sheet”—as defined in Section 4.4.

     “Joint Venture Agreement”—as defined in the Recitals to this Agreement.

     “Knowledge”—an individual will be deemed to have “Knowledge” of a particular fact or other matter if: (a) such individual is actually aware of such fact or other matter; or (b) a prudent individual could be expected to discover or otherwise become aware of such fact or other matter in the course of conducting a reasonably comprehensive investigation concerning the existence of such fact or other matter. A Person (other than an individual) will be deemed to have “Knowledge” of a particular fact or other matter if any individual who is serving, or who has at any time served, as a director, officer, partner, executor, or trustee of such Person (or in any similar capacity) has, or at any time had, Knowledge of such fact or other matter. Notwithstanding the foregoing, the Knowledge of directors of CMCC who are also employees of Calgon, the Executive Director of Corporate Planning of CMCC, and the Director of Corporate Planning of CMCC will not be attributed to CMCC and the Knowledge of CMCC or facts or other matters related to CMCC or its business shall not be attributed to any of the foregoing individuals solely because of their position as an officer or director of CMCC.

     “Kurosaki Facility”—the plant of MCC located at Kurosaki Shiroishi 1-1, Yahatanishi-Ku, Kitakyushu-City, Fukuoka, Japan.

13

     “Legal Requirement”—any national, federal, prefectural, state, local, municipal, foreign, international, multinational, or other administrative order, ordinal, code, decree, constitution, law, ordinance, principle of common law, rule, regulation, statute, or treaty.

     “Leased Employee”—as defined in Section 7.12.

     “Leased Period”—as defined in Section 7.16.

     “Material Adverse Change”—As defined in Section 4.12.

     “MCC”—as defined in the first paragraph of this Agreement.

     “MCC Associated Agreements”—as defined in the Recitals to this Agreement.

     “MCC Basket”—as defined in Section 11.7.

     “MCC Cap”—as defined in Section 11.7.

     “MCC Indemnified Persons”—as defined in Section 11.4

     “MCC Leased Employees”—as defined in Section 7.6.

     “Mitsubishi Marks”—as defined in Section 7.2.

     “Net Assets Value Resolution Accountant”—as defined in Section 2.9(2).

     “Order”—any award, decision, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any court, administrative agency, or other Governmental Body or by any arbitrator.

     “Ordinary Course of Business”—an action taken by a Person will be deemed to have been taken in the “Ordinary Course of Business” only if: (a) such action is consistent with the past practices of such Person and is taken in the ordinary course of the normal day-to-day operations of such Person; (b) such action is not required to be authorized by the board of directors of such Person (or by any Person or group of Persons exercising similar authority); and (c) such action is similar in nature and magnitude to actions customarily taken, without any authorization by the board of directors (or by any Person or group of Persons exercising similar authority), in the ordinary course of the normal day-to-day operations of other Persons that are in the same line of business as such Person.

     “Organizational Documents”—(a) any charter, articles of association, or similar document adopted or filed in connection with the creation, formation, or organization of a Person; and (b) any amendment to any of the foregoing.

     “Person”—any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, or other entity or Governmental Body.

     “Personnel Lease Agreement”—as defined in Section 7.16.

14

     “Proceeding”—any action, arbitration, audit, hearing, investigation, litigation, or suit (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Body or arbitrator.

     “Prohibited Payment”—means any payment or provision of money or anything of value (including any loan, reward, advantage or benefit of any kind), either directly or indirectly, to any Government Official or relative of any Government Official, to influence any act, decision or omission of any Government Official, to obtain or retain business, to direct business to CMCC or to gain any advantage or benefit for CMCC.

     “Proprietary Rights Agreement”—as defined in Section 4.20(2).

     “Redemption”—as defined in Section 2.2.

     “Related Person”—means (a) with respect to a particular individual: (i) each other member of such individual’s family (including spouse, siblings, ancestors, and lineal descendents); (ii) any Person that is directly or indirectly controlled by such individual or one (1) or more members of such individual’s family; (iii) any Person in which such individual or members of such individual’s family hold (individually or in the aggregate) a material interest; and (b) with respect to a specified Person other than an individual: (i) any Person that directly or indirectly controls, is directly or indirectly controlled by, or is directly or indirectly under common control with such specified Person; (ii) any Person that holds a material interest in such specified Person; (iii) any Person in which such specified Person holds a material interest; and (iv) any Related Person of any individual described in clause (b)(ii) or (b)(iii).

     “Release”—any spilling, leaking, emitting, discharging, depositing, escaping, leaching, dumping, or other releasing into the Environment, whether intentional or unintentional.

     “Representative”—with respect to a particular Person, any director, officer, employee, agent, consultant, advisor, or other representative of such Person, including legal counsel, accountants, and financial advisors.

     “Restricted Period”—As defined in Section 7.12(3).

     “Second Purchase Shares”—as defined in Section 2.2.

     “Second Share Purchase Price”—as defined in Section 2.4.

     “Second Redemption”—as defined in Section 2.2.

     “Share Acquisition Date”—as defined in the Recitals to this Agreement.

     “Share Purchase Price”—as defined in Section 2.4.

     “Share Restriction Period”—as defined in Section 7.18(1).

     “Shares”—as defined in the Recitals of this Agreement.

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     “Specified Intellectual Property Assets”—as defined in Section 4.22.

     “Specified Net Assets Value”—means 950 million Japanese Yen as the net assets value reflected on the forecasted March 31, 2010 balance sheet of CMCC as agreed by MCC and Calgon.

     “Tax”— any present or future tax, levy, impost, duty, charge, assessment or fee of any nature (including interest, penalties and additions thereto) that is imposed by any government or other taxing authority in any manner whatsoever such as self-assessment and withholding at source, including but not limited to income tax, corporate tax, consumption tax, inhabitant tax, enterprise tax, stamp tax, fixed asset tax, and customs duties.

     “Tax Return”—any return (including any information return), report, statement, schedule, notice, form, or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection, or payment of any Tax owed to a Governmental Body or in connection with the administration, implementation, or enforcement of or compliance with any Legal Requirement relating to any Tax.

     “Technical Information”—all data, know-how and any other technical information developed and owned by MCC on the Closing Date with respect to the technology owned by MCC for the manufacture, use, and sale of activated carbon, regenerated activated carbon and other carbon products made of activated carbon.

     “Threatened”—a claim, Proceeding, dispute, action, or other matter will be deemed to have been “Threatened” if any demand or statement has been made (orally or in writing) or any notice has been given (orally or in writing), or if any other event has occurred or any other circumstances exist, that would lead a prudent Person to conclude that such a claim, Proceeding, dispute, action, or other matter is likely to be asserted, commenced, taken, or otherwise pursued in the future.

     “Toyota”—as defined in Section 7.17.

     “Toyota Co-owned Patents”—as defined in Section 3.5(3).

     “Toyota License”—as defined in Section 7.17.

     “Transition Period”—as defined in Section 7.2.

2.	CONTRIBUTION; REDEMPTION; ASSET TRANSFER; CLOSING
2.1	Equity Contribution
	If CMCC has insufficient funds to pay the Second Share Purchase Price to purchase and redeem the Second Purchase Shares from MCC at the Final Closing, on the terms and subject to the conditions set forth in this Agreement, at the Final Closing, Calgon shall make an equity contribution to CMCC, provided in no event shall the voting rights of Calgon or MCC be affected by any such contribution, (the “Equity Contribution”) of the

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 amount required to enable CMCC to pay the Second Share Purchase Price (the “Contribution Amount”).

2.2 Redemption of Shares

(1)

On the terms and subject to the conditions set forth in this Agreement, at the Closing, MCC shall sell, assign, transfer, convey, and deliver to CMCC, and CMCC shall purchase and redeem from MCC, 19,770 shares of the Shares (the “First Purchase Shares”), free and clear of all Encumbrances (the “First Redemption”).

(2)

On the terms and subject to the conditions set forth in this Agreement, at the Final Closing, MCC shall sell, assign, transfer, convey, and deliver to CMCC, and CMCC shall purchase and redeem from MCC, 6,250 shares of the Shares (the “Second Purchase Shares”), free and clear of all Encumbrances (the “Second Redemption”, together with the First Redemption, the “Redemption”). In case CMCC can not purchase and redeem the Second Purchase Shares from MCC as of the Final Closing for any reason, including without limitation a shortage of the surplus, Calgon shall purchase the Second Purchase Shares from MCC under same terms and conditions of the Second Redemption. Payment by Calgon to purchase the Second Purchase Shares shall be in full satisfaction of the Second Purchase Price.

2.3 Asset Transfer; License

(1)	On the terms and subject to the conditions set forth in this Agreement, at Closing, MCC shall sell, assign, transfer, convey, and deliver to CMCC, and CMCC shall purchase from MCC, the intellectual property assets set forth on Exhibit A (the “Assigned Intellectual Property”), free and clear of all Encumbrances.
(2)	On the terms and subject to the conditions set forth in this Agreement, at Closing, MCC shall assign, transfer, convey, and deliver to CMCC all of MCC’s rights in the patent applications identified on Exhibit E (“Co-owned MCC Patents”).
(3)	On the terms and subject to the conditions set forth in this Agreement, MCC agrees to grant and hereby grants to CMCC a non-exclusive, worldwide, perpetual, non-transferable, royalty-free license, under MCC’s patents and patent applications listed in Exhibit C and under the Technical Information (collectively, the “Licensed Intellectual Property”, together with the Assigned Intellectual Property, the “Contributed Intellectual Property”) to manufacture, have manufactured, use, and sell activated carbon, regenerated activated carbon and other carbon products made of activated carbon. CMCC may grant to its customers to whom CMCC sells carbon materials, sublicenses of claimed inventions as to the use of such carbon materials in Licensed Intellectual Property, to the extent necessary for such sales. CMCC may transfer its rights the Licensed Intellectual Property to its sucessors and assigns. From and after the Closing, MCC shall take any and all actions required to prosecute and maintain the patents

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	and patent applications listed in Exhibit C, provided, however, that MCC may abandon such patents and patent applications after providing CMCC fifteen (15) days advance written notice thereof. If CMCC represents in writing to MCC within fifteen (15) days from such notification, its desire to obtain from MCC the patent applications and patents to be abandoned, then MCC agrees to immediately assign such patent applications and patents without any compensation and to cooperate with CMCC and to cause its employees to cooperate with CMCC, in each case, as reasonably requested by CMCC in connection with its assingnment procedure of any such patents or patent applications.
(4)	It is confirmed that Japanese patent No.4006931 provided in Exhibit A is to be assigned from MCC to CMCC under Section 2.3 (1) in this Agreement. Effective as of the Closing Date, CMCC hereby grants to MCC and The Kansai Coke and Chemicals Co., Ltd. a non-exclusive, worldwide, non-transferable, royalty free license, without the right to sublicense, to manufacture, use, and sell under Japanese patent No.4006931 using spent activated carbon provided directly or through distributors by CMCC or any third parties designated by CMCC; provided that such license shall terminate upon either an assignment by or a change of control with respect to MCC or Kansai Coke and Chemicals Co., Ltd.
(5)	MCC and CMCC hereby agree to terminate the Intellectual Property Agreement dated October 1, 2002 effective as of the Closing Date.

2.4 Consideration

(1)	The purchase price for the First Purchase Shares shall be 721,810,146 Japanese Yen (the “First Share Purchase Price”).
(2)	The purchase price for the Second Purchase Shares shall be 228,189,854 Japanese Yen (the “Second Share Purchase Price”, together with the First Share Purchase Price, the “Share Purchase Price”).
(3)	The price for assigning the Assigned Intellectual Property and MCC’s rights in the Co-owned MCC Patents and licensing the Licensed Intellectual Property shall be 1,000,000 Japanese Yen (“Intellectual Property Purchase Price”).

2.5 Closing

(1) The closing of the purchase and sale of the First Purchase Shares, the Assigned Intellectual Property, and MCC’s interest in the Co-owned MCC Patents and the license of the Licensed Intellectual Property (the “Closing”) provided for in this Agreement will take place at the offices of Anderson Mori & Tomotsune in Tokyo, Japan, at 9:00 a.m. (local time) on the later of (1) March 31, 2010, or (2) or at such other time and place as the parties may mutually agree. Subject to the provisions of Section 10, failure to consummate the purchase and sale provided for in this Agreement on the date and time and at the place determined pursuant to this Section 2.5(1) will not result in the termination of this Agreement and will not relieve any party of any obligation under this Agreement. Except as provided in this Section

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2.5(1) all transactions at the Closing shall be deemed to take place simultaneously and no transaction at the Closing shall be deemed to have been completed and no documents delivered until all transactions have been completed and all documents delivered.

(2)

The closing of the Equity Contribution (if applicable) and the purchase and sale of the Second Purchase Shares (the “Final Closing”) provided for in this Agreement will take place at the offices of Anderson Mori & Tomotsune in Tokyo, Japan, at 9:00 a.m. (local time) on the later of (1) March 31, 2011, or (2) or at such other time and place as the parties may mutually agree. Subject to the provisions of Section 10, failure to consummate the purchase and sale provided for in this Agreement on the date and time and at the place determined pursuant to this Section 2.5(2) will not result in the termination of this Agreement and will not relieve any party of any obligation under this Agreement. Except as provided in this Section 2.5(2) all transactions at the Final Closing shall be deemed to take place simultaneously and no transaction at the Final Closing shall be deemed to have been completed and no documents delivered until all transactions have been completed and all documents delivered.

2.6	Closing Obligations
	At the Closing:

(1)	Calgon will deliver to each of MCC and CMCC: (i) a copy of the resolutions of the board of directors of Calgon authorizing this Agreement and the Contemplated Transactions, and (ii) a certificate executed by Calgon representing and warranting to the recipient that each of Calgon’s representations and warranties made to the recipient in this Agreement was accurate in all respects as of the date of this Agreement and, except as otherwise stated in such certificate, is accurate in all respects as of the Closing Date as if made on the Closing Date.
(2)	MCC will deliver to CMCC: (i) certificates representing the First Purchase Shares, duly issued; and (ii) such documentation as Calgon, in its reasonable discretion, determines is necessary to transfer the Assigned Intellectual Property in all applicable jurisdictions executed by MCC (the “Intellectual Property Assignment Certifications”).
(3)	MCC will deliver to each of Calgon and CMCC: (i) a copy of the resolutions of the board of directors of MCC authorizing this Agreement and the Contemplated Transactions, and (ii) a certificate executed by MCC representing and warranting to the recipient that each of MCC’s representations and warranties made to the recipient in this Agreement was accurate in all respects as of the date of this Agreement and, except as otherwise stated in such certificate, is accurate in all respects as of the Closing Date as if made on the Closing Date.
(4)	CMCC will deliver to MCC payment of an amount equal to the Intellectual Property Purchase Price plus the First Share Purchase Price less the Income Tax

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	Withholding Amount by wire transfer to an account specified by MCC. CMCC will deliver to Calgon the Record of Shareholders of CMCC as of immediately after the First Redemption.
(5)	CMCC will deliver to each of MCC and Calgon a copy of the resolutions of the board of directors of CMCC authorizing this Agreement and the Contemplated Transactions.

As soon as reasonably practicable following the Closing, CMCC will deliver the Income Tax Withholding Amount to the appropriate Governmental Body of Japan as required by the Income Tax Act in full satisfaction of the First Share Purchase Price.

2.7	Final Closing Obligations
	At the Final Closing:

(1)	Calgon will deliver to CMCC: (i) if applicable, the Contribution Amount by wire transfer to an account specified by CMCC, and (ii) a certificate executed by Calgon representing and warranting to CMCC that each of Calgon’s representations and warranties in Section 6 are accurate in all respects as of the Final Closing Date as if made on the Final Closing Date.
(2)	MCC will deliver to CMCC: (i) certificates representing the Second Purchase Shares, duly issued, and (ii) a certificate executed by MCC representing and warranting to CMCC that each of MCC’s representations and warranties in Sections 3.1, 3.2, 3.3, and 3.4 are accurate in all respects as of the Final Closing Date as if made on the Final Closing Date.
(3)	CMCC will deliver to MCC payment of the Second Share Purchase Price less the Income Tax Withholding Amount by wire transfer to an account specified by MCC. CMCC will deliver to Calgon the Record of Shareholders of CMCC as of immediately after the Equity Contribution (if applicable) and the Second Redemption.

As soon as reasonably practicable following the Final Closing, CMCC will deliver the Income Tax Withholding Amount to the appropriate Governmental Body of Japan as required by the Income Tax Act in full satisfaction of the Second Share Purchase Price.

2.8	Payment of Adjustment Amount
	Subject to Section 2.8(3) below, MCC or CMCC, as applicable, shall make a payment to the other party as provided below (the “Adjustment”):

(1)	If the Specified Net Assets Value is greater than the Closing Date Net Assets Value, MCC shall pay to CMCC 51% of the amount of such difference.
(2)	If the Specified Net Assets Value is less than the Closing Date Net Assets Value, CMCC shall pay to MCC 51% of the amount of such difference.

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(3)  No Adjustment shall be made if the amount of such Adjustment is equal to or less than ¥10,000,000.

(4)  Payment of the amount of such Adjustment shall be made by adjusting the Second Share Purchase Price and made at the Final Closing by a wire transfer to an account specified by the applicable recipient.

2.9 Adjustment Procedure

(1)	Within ninety (90) days after the Closing Date, Calgon shall cause to be prepared and delivered to MCC a closing balance sheet as of the Closing Date reflecting the Closing Date Net Assets Value (the “Closing Balance Sheet”). The Closing Balance Sheet shall be prepared in accordance with GAAP on a basis consistently applied with the December 31, 2008 balance sheet.
(2)	Within thirty (30) days after receipt of the Closing Balance Sheet, MCC shall advise Calgon in writing whether it agrees with the determination of the Closing Date Net Assets Value presented in the Closing Balance Sheet or whether it objects to the same. In the event of an objection, MCC shall specify in writing its objections with particularity and provide Calgon with its view as to the proper calculation of the amount of the Closing Date Net Assets Value. If MCC does not provide Calgon with written notice of an objection to the Closing Balance Sheet within said thirty (30) day period, MCC shall be deemed to have accepted the Closing Balance Sheet as delivered by Calgon. Calgon shall respond in writing to MCC’s objections no later than thirty (30) days after receipt thereof. If Calgon fails to so respond or responds but is unable to reach an agreement with MCC on the amount of the Closing Date Net Assets Value by no later than thirty (30) days after the receipt of MCC’s objection, then either party may submit the determination to an independent accounting firm of national standing mutually selected by MCC and Calgon (the “Net Assets Value Resolution Accountant”), who shall be directed to determine the Closing Date Net Assets Value and whose decision shall be final and binding. In the event that MCC and Calgon are unable to mutually agree on the selection of an accounting firm of national standing to conduct the final determination of the Closing Date Net Assets Value, then MCC and Calgon shall each select an independent accounting firm of national standing and the resulting two independent accounting firms shall mutually select a third independent accounting firm of national standing who shall be deemed the Net Assets Value Resolution Accountant and whose decision shall be final and binding on MCC and Calgon.
(3)	The expenses of the Net Assets Value Resolution Accountant shall be (i) paid by MCC if the Net Assets Value Resolution Accountant confirms the amount of the Closing Date Net Assets Value as set forth on the Closing Balance Sheet, (ii) paid by Calgon if the Net Assets Value Resolution Accountant determines that the Closing Date Net Assets Value exceeds the amount set forth on the Closing Balance Sheet by more than 10%, or (iii) borne equally by MCC and Calgon in all other instances.

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3. REPRESENTATIONS AND WARRANTIES OF MCC TO CMCC AND CALGON

       MCC represents and warrants to CMCC and Calgon, as of the date hereof, as of the Closing Date, and, except with respect to Section 3.5, as of the Final Closing Date, as follows:

3.1 Organization and Good Standing

MCC is a kabushiki kaisha duly organized, validly existing and in good standing under the laws of Japan.

3.2 Authority; No Conflict

(1)

This Agreement constitutes the legal, valid, and binding obligation of MCC, enforceable against MCC in accordance with its terms. Upon the execution and delivery by MCC of each of the Ancillary Agreements to which MCC is a party, such Ancillary Agreements will constitute the legal, valid, and binding obligations of MCC, enforceable against MCC in accordance with their respective terms. MCC has the absolute and unrestricted right, power, authority, and capacity to execute and deliver this Agreement and the Ancillary Agreements to which MCC is a party and to perform its obligations hereunder and thereunder.

(2)

Neither the execution, delivery or performance of this Agreement and each of the Ancillary Agreements to which MCC is a party, nor the consummation of Contemplated Transactions will directly or indirectly (with or without notice or lapse of time): (i) violate or contravene any Legal Requirement or Order to which MCC is subject, or any provision of MCC’s internal regulations, (ii) violate any of MCC’s Organizational Documents, (iii) conflict with, result in any contravention or violation or breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any Contract to which MCC is a party or by which it is bound or purports to be binding on MCC or to which any of its assets is subject, or (iv) result in the creation or imposition of any Encumbrance on the Shares or the Contributed Intellectual Property. MCC is not and will not be required to give notice to or obtain any Consent from any Person in connection with (A) the execution and delivery of this Agreement and each of the Ancillary Agreements to which MCC is a Party, or (B) the consummation or performance of any of the Contemplated Transactions.

3.3 Certain Proceedings

There is no pending Proceeding that has been commenced against MCC (or that MCC intends to initiate) and that challenges, or may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the Contemplated Transactions.

3.4 Title to Shares

On the date hereof through and including the Closing Date, MCC is and shall be the legal owner, beneficially and of record, of the entire right, title and interest in and to the Shares,

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free and clear of any Encumbrances of any kind. From and after the Closing Date through and including the Final Closing Date, MCC is and shall be the legal owner, beneficially and of record, of the entire right, title and interest in and to the Second Purchase Shares, free and clear of any Encumbrances of any kind. MCC is not a party to any option, warrant, purchase right, right of first refusal, preemptive right or other contract or commitment that could require MCC to sell, transfer, or otherwise dispose of any of the Shares other than pursuant to this Agreement. MCC is not a party to any voting trust, proxy, or other agreement or understanding with respect to the voting of any of the Shares, other than the Joint Venture Agreement. As of the Closing, the First Purchase Shares shall be transferred and delivered to CMCC free and clear of any Encumbrances of any kind. As of the Final Closing, the Second Purchase Shares shall be transferred and delivered to CMCC free and clear of any Encumbrances of any kind.

3.5 Contributed Intellectual Property

(1)

Except as set forth on Part 3.5(1) of the Disclosure Letter, MCC is the sole and exclusive owner of all of the Contributed Intellectual Property and the Co-owned MCC Patents, including the ability to obtain and convey to CMCC all of MCC’s right, title and interest in and to the Contributed Intellectual Property and the Co-owned MCC Patents free and clear of any Encumbrances of any kind. Except as set forth on Part 3.5(1) of the Disclosure Letter, MCC has the right to use, sell, manufacture, have manufactured, execute, reproduce, display, perform, modify, enhance, distribute, prepare derivative works of, claim priority to, license and sublicense, without payment to any other person, all the Contributed Intellectual Property and the Co-owned MCC Patents, and the consummation of the Contemplated Transactions does not and will not conflict with, violate, alter or impair any such rights. The Contributed Intellectual Property and the Co-owned MCC Patents have not been and are not currently the subject (or Threatened to be the subject) of any interference, opposition, re-examination, invalidation or cancellation proceeding, or litigation or arbitration proceeding. During the past two (2) years, MCC has not received notice from any other person asserting any ownership interest in any Contributed Intellectual Property, or, except as set forth on Exhibit E, the Co-owned MCC Patents.

(2)

With respect to the Contributed Intellectual Property that is registered or subject to an application for registration and the Co-owned MCC Patents, Exhibit A, Exhibit C, and Exhibit E collectively set forth a list of all jurisdictions in which such Contributed Intellectual Property and Co-owned MCC Patents are registered or registrations have been applied for and all registration and application numbers. All of the patents, trademarks and copyrights, and all applications for any of the foregoing, identified on Exhibit A, Exhibit C, and Exhibit E are currently in compliance with all Legal Requirements (including payment of filing, examination, renewal, extension of time and maintenance fees, and any office action responses, proofs of use, the timely post-registration filing of declarations or affidavits of use and incontestability and renewal applications, and any office action responses), and are not, as of the date of this Agreement subject to any maintenance fees or taxes or actions falling due within thirty (30) days after the

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Closing Date. To the Knowledge of MCC, there is and has been no potentially interfering patent or patent application of any third party.

(3)

The Assigned Intellectual Property, the Specified Intellectual Property Assets, the Licensed Intellectual Property, Co-owned MCC Patents, Co-owned CMCC Patent, the patents and patent applications set forth in Exhibit D (the “Toyota Co-owned Patents”) and Japanese Patent No.3420738 represents all of the intellectual property rights necessary in order to operate the CMCC’s business in all respects as currently conducted and as currently proposed to be conducted.

(4)

MCC is the rightful owner of Toyota Co-owned Patents.

4. REPRESENTATIONS AND WARRANTIES OF MCC TO CALGON

     MCC represents and warrants to Calgon, as of the date hereof and as of the Closing Date, as follows:

4.1 Existence and Good Standing

CMCC is a kabushiki kaisha duly organized, validly existing and in good standing under the laws of Japan, with full corporate power and authority to conduct its business as it is now being conducted, to own or use the properties and assets that it purports to own or use, and to perform all its obligations under Applicable Contracts. MCC has caused CMCC to deliver to Calgon copies of the Organizational Documents of CMCC, as currently in effect. CMCC does not currently have, and has never had since the Share Acquisition Date, any subsidiaries.

4.2 Authority; No Conflict

(1)

This Agreement constitutes the legal, valid, and binding obligation of CMCC, enforceable against CMCC in accordance with its terms. Upon the execution and delivery by CMCC of each of the Ancillary Agreements to which CMCC is a party, such Ancillary Agreements will constitute the legal, valid, and binding obligations of CMCC, enforceable against CMCC in accordance with their respective terms. CMCC has the absolute and unrestricted right, power, authority, and capacity to execute and deliver this Agreement and the Ancillary Agreements to which CMCC is a party and to perform its obligations hereunder and thereunder.

(2)

Neither the execution, delivery or performance of this Agreement and each of the Ancillary Agreements by CMCC, nor the consummation of Contemplated Transactions will directly or indirectly (with or without notice or lapse of time): (i) violate or contravene any Legal Requirement or Order to which CMCC is subject, or any provision of CMCC’s internal regulations, (ii) violate any of CMCC’s Organizational Documents, (iii) conflict with, result in any contravention or violation or breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any Contract to which CMCC is a party or by which it is bound or purports to be binding on CMCC or to which any of its assets is subject, or (iv)

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result in the creation or imposition of any Encumbrance on any of the assets owned or used by CMCC. CMCC is not and will not be required to give notice to or obtain any Consent from any Person in connection with (A) the execution and delivery of this Agreement and each of the Ancillary Agreements to which CMCC is a Party, or (B) the consummation or performance of any of the Contemplated Transactions.

4.3 Capitalization

The authorized equity securities of CMCC consist of 80,000 shares, of which 51,020 are issued and outstanding, of which 25,000 are owned by Calgon and 26,020 are owned by MCC. There are no Contracts relating to the issuance, sale, or transfer of any equity securities or other securities of CMCC. There are no securities outstanding which are convertible into, exercisable for or exchangeable for equity securities of CMCC. CMCC does not own, or have any Contract to acquire, any equity securities or other securities of any Person or any direct or indirect equity or ownership interest in any other business. At the Closing, all of the books and records will be in the possession of CMCC.

4.4 Financial Statements

MCC has caused CMCC to deliver to Calgon: (1) a balance sheet of CMCC as at December 31, 2008 (including the notes thereto, the “Balance Sheet”) and the related statements of income and cash flow for the fiscal year then ended, together with the report thereon of Ernst & Young Shinnihon LLC, independent certified public accountants, and (2) an unaudited balance sheet of CMCC as at November 30, 2009 (the “Interim Balance Sheet”) and the related statements of income and cash flow for the period then ended, including in each case the notes thereto. Such financial statements and notes fairly present the financial condition and the results of operations, changes in stockholders’ equity, and cash flow of CMCC as at the respective dates of and for the periods referred to in such financial statements, all in accordance with GAAP; the financial statements referred to in this Section 4.4 reflect consistent application of such accounting principles throughout the periods involved.

4.5 Books and Records

The books of account, minute books, stock record books, and other records of CMCC, all of which have been made available to Calgon, are complete and correct and have been maintained in accordance with sound business practices. The minute books of CMCC contain accurate and complete records of all meetings held of, and corporate action taken by, the shareholders, the board of directors, and committees of the board of directors of CMCC, and no meeting of any such shareholders, board of directors, or committee has been held for which minutes have not been prepared and are not contained in such minute books. At the Closing, all of those books and records will be in the possession of CMCC.

4.6 Title to Properties, Encumbrances

CMCC does not own and has never, since the Share Acquisition Date, owned any real property other than the Fukui Facility. Since the Share Acquisition Date, CMCC has

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maintained its real property in compliance with all applicable Legal Requirements, including without limitation, the Factory Location Act (Act No. 24 of 1959, as amended) of Japan, the Building Standards Act (Act No. 201 of 1950, as amended) of Japan, and the Fire Defense Act (Act No. 186 of 1948, as amended) of Japan. CMCC owns (subject only to the matters permitted by the following sentence) all the properties and assets (whether real, personal, or mixed and whether tangible or intangible) that it purports to own, including all of the properties and assets reflected in the Balance Sheet and the Interim Balance Sheet (except for assets held under capitalized leases and personal property sold since the date of the Balance Sheet and the Interim Balance Sheet, as the case may be, in the Ordinary Course of Business), and all of the properties and assets purchased or otherwise acquired by CMCC since the date of the Balance Sheet (except for personal property acquired and sold since the date of the Balance Sheet in the Ordinary Course of Business and consistent with past practice). All material properties and assets reflected in the Balance Sheet and the Interim Balance Sheet are free and clear of all Encumbrances except: (1) mortgages or security interests shown on the Balance Sheet or the Interim Balance Sheet as securing specified liabilities or obligations, with respect to which no default (or event that, with notice or lapse of time or both, would constitute a default) exists, (2) mortgages or security interests incurred in connection with the purchase of property or assets after the date of the Interim Balance Sheet (such mortgages and security interests being limited to the property or assets so acquired), with respect to which no default (or event that, with notice or lapse of time or both, would constitute a default) exists, and (3) liens for current taxes not yet due.

4.7 Condition and Sufficiency of Assets

The assets of CMCC are in good operating condition and repair, and are adequate for the uses to which they are being put, and none of such assets is in need of maintenance or repairs except for ordinary, routine maintenance and repairs that are not material in nature or cost. The assets of CMCC are sufficient for the continued conduct of CMCC’s business after the Closing in substantially the same manner as conducted prior to the Closing.

4.8 Accounts Receivable

All accounts, notes, and other receivables of CMCC that are reflected on the Balance Sheet, the Interim Balance Sheet, or on the accounting records of CMCC as of the Closing Date (collectively, the “Accounts Receivable”) represent or will represent valid obligations arising from sales actually made, services actually performed, or loans actually made, in each case, in the Ordinary Course of Business. Unless paid prior to the Closing Date, the Accounts Receivable are or will be as of the Closing Date current and collectible net of the respective reserves shown on the Balance Sheet, the Interim Balance Sheet, or on the accounting records of CMCC as of the Closing Date (which reserves are adequate and calculated consistent with past practice and, in the case of the reserve as of the Closing Date, will not represent a greater percentage of the Accounts Receivable as of the Closing Date than the reserve reflected in the Interim Balance Sheet represented of the Accounts Receivable reflected therein and will not represent a material adverse change in the composition of such Accounts Receivable in terms of aging).

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4.9 Inventory

Except as set forth in Part 4.9 of the Disclosure Letter, All inventory of CMCC that is reflected in the Balance Sheet or the Interim Balance Sheet, consists of a quality and quantity usable and salable in the Ordinary Course of Business, except for obsolete items and items of below-standard quality, all of which have been written off or written down to net realizable value in the Balance Sheet or the Interim Balance Sheet or on the accounting records of CMCC as of the Closing Date, as the case may be. All inventories not written off have been priced at the lower of market price or cost on a average basis. The quantities of each item of inventory (whether raw materials, work-in-process, or finished goods) are not excessive, but are reasonable in the present circumstances of CMCC.

4.10 No Undisclosed Liabilities

CMCC has no liabilities or obligations of any nature (whether known or unknown and whether absolute, accrued, contingent, or otherwise) except for liabilities or obligations reflected or reserved against in the Balance Sheet or the Interim Balance Sheet and current liabilities incurred in the Ordinary Course of Business since the respective dates thereof.

4.11 Taxes

(1)	CMCC has filed or caused to be filed (on a timely basis since the Share Acquisition Date) all Tax Returns that are or were required to be filed by or with respect to it, either separately or as a member of a group of corporations, pursuant to applicable Legal Requirements. MCC has caused CMCC to deliver to Calgon copies of all such Tax Returns filed since the Share Acquisition Date. CMCC has paid, or made provision for the payment of, all Taxes that have or may have become due pursuant to those Tax Returns or otherwise, or pursuant to any assessment received by MCC or CMCC.
(2)	CMCC has never been audited by any Governmental Authority. Neither MCC nor CMCC has given or been requested to give waivers or extensions (or is or would be subject to a waiver or extension given by any other Person) of any statute of limitations relating to the payment of Taxes of CMCC or for which CMCC may be liable.
(3)	As of the date of the Interim Balance Sheet, the reserves with respect to Taxes on the books of CMCC are sufficient to cover in full CMCC’s liability for Taxes for or with respect to periods through to the date of the Interim Balance Sheet, and since that date, such reserves have been adjusted in accordance with past practice, are no more than the same percentage to gross revenues than the percentage implied by the Interim Balance Sheet, and are sufficient to cover in full CMCC’s liability for Taxes through to Closing. There exists no proposed tax assessment against CMCC. All Taxes that CMCC is or was required by Legal Requirements to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Body or other Person.

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(4) All Tax Returns filed by (or that include on a consolidated basis) CMCC are true, correct, and complete. There is no tax sharing agreement or similar arrangement that will require any payment by CMCC after the date of this Agreement.

4.12 No Material Adverse Change

Since the date of the Balance Sheet, there has not been any event, circumstance or condition which individually or in the aggregate has had or could reasonably be expected to have a material adverse effect on the business, operations, properties, prospects, assets, or condition, financial or otherwise, of CMCC (“Material Adverse Change”), and no event has occurred or circumstance exists that may result in a Material Adverse Change.

4.13 Employee Benefits

(1)	Part 4.13(1) of the Disclosure Letter contains a complete and accurate list of each employee benefit plan or arrangement, or any plan, agreement or program providing for deferred compensation, bonuses, pension, stock appreciation or other forms of incentive compensation that (i) is entered into, maintained or contributed to, as the case may be, by CMCC and (ii) covers any employee or former employee of CMCC (collectively the “Benefit Arrangements”). Each Benefit Arrangement has been maintained and administered in material compliance with its terms and with the requirements prescribed by any and all statutes, laws, ordinances and regulations which are applicable to such Benefit Arrangements. No Benefit Arrangements have unfunded liabilities that, as of the Closing Date, will not be offset by insurance or fully accrued or reserved against in the Balance Sheet except for overtime and social security obligations of the current month.
(2)	No Benefit Arrangements provide, or have any liability to provide, life insurance, medical or other employee benefits to any current, former, or retired employee, consultant or director of CMCC or any affiliate of CMCC (an “Employee”) upon his or her retirement or termination of employment for any reason, except as may be required by statute, and CMCC has not ever represented, promised or contracted (whether in oral or written form) to any Employee (either individually or to Employees as a group) that such Employee(s) would be provided with life insurance, medical or other employee welfare benefits upon their retirement or termination of employment, except to the extent required by statute.
(3)	The execution of this Agreement and the consummation of the Contemplated Transactions will not constitute an event under any Benefit Arrangements, trust or loan that will or may result in any payment (whether of severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits with respect to any Employee.
(4)	CMCC (i) is in compliance in all material respects with all applicable national, prefectural, foreign and local laws, rules, ordinances and regulations respecting employment, employment practices, terms and conditions of employment and

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	wages and hours, in each case, with respect to Employees; (ii) has withheld all amounts required by law or by agreement to be withheld from the wages, salaries and other payments to Employees; (iii) is not liable for any arrears of wages or any taxes or any penalty for failure to comply with any of the foregoing; and (iv) is not liable for any payment to any trust or other fund or to any governmental or administrative authority, with respect to unemployment compensation benefits, social security or other benefits or obligations for Employees (other than routine payments to be made in the Ordinary Course of Business).
(5)	No Employee of CMCC is in violation of any term of any employment contract, patent disclosure agreement, non-competition agreement, or any restrictive covenant to a former employer relating to the right of any such employee to be employed by CMCC because of the nature of the business conducted or presently proposed to be conducted by CMCC or to the use of trade secrets or proprietary information of others. No notice has been given to MCC or CMCC, nor is MCC or CMCC otherwise aware, that any employee intends to terminate his or her employment with CMCC.
(6)	Part 4.13(6) of the Disclosure Letter contains a complete and accurate list of the benefits provided to the MCC Leased Employees including without limitation a description of each employee benefit plan or arrangement, or any plan, agreement or program providing for deferred compensation, bonuses, pension, stock appreciation or other forms of incentive compensation that covers any MCC Leased Employee.

4.14 Compliance with Legal Requirements; Governmental Authorizations

(1)

Except as set forth in Part 4.14(1) of the Disclosure Letter, (i) CMCC is, and at all times since the Share Acquisition Date has been, in full compliance with each Legal Requirement that is or was applicable to it or to the conduct or operation of its business or the ownership or use of any of its assets; (ii) no event has occurred or circumstance exists that (with or without notice or lapse of time) (A) may constitute or result in a violation by CMCC of, or a failure on the part of CMCC to comply with, any Legal Requirement, or (B) may give rise to any obligation on the part of CMCC to undertake, or to bear all or any portion of the cost of, any remedial action of any nature; and (iii) CMCC has not received, at any time since the Share Acquisition Date, any notice or other communication (whether oral or written) from any Governmental Body or any other Person regarding (A) any actual, alleged, possible, or potential violation of, or failure to comply with, any Legal Requirement, or (B) any actual, alleged, possible, or potential obligation on the part of CMCC to undertake, or to bear all or any portion of the cost of, any remedial action of any nature.

(2)

Part 4.14(2) of the Disclosure Letter contains a complete and accurate list of each Governmental Authorization that is held by CMCC or that otherwise relates to the business of, or to any of the assets owned or used by, CMCC. Each Governmental

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Authorization listed or required to be listed in Part 4.14(2) of the Disclosure Letter is valid and in full force and effect.

     (i) CMCC is, and at all times since the Share Acquisition Date has been, in full compliance with all of the terms and requirements of each Governmental Authorization identified or required to be identified in Part 4.14(2) of the Disclosure Letter;

     (ii) no event has occurred or circumstance exists that may (with or without notice or lapse of time) (A) constitute or result directly or indirectly in a violation of or a failure to comply with any term or requirement of any Governmental Authorization listed or required to be listed in Part 4.14(2) of the Disclosure Letter, or (B) result directly or indirectly in the revocation, withdrawal, suspension, cancellation, or termination of, or any modification to, any Governmental Authorization listed or required to be listed in Part 4.14(2) of the Disclosure Letter;

     (iii) CMCC has not received, at any time since the Share Acquisition Date, any notice or other communication (whether oral or written) from any Governmental Body or any other Person regarding (A) any actual, alleged, possible, or potential violation of or failure to comply with any term or requirement of any Governmental Authorization, or (B) any actual, proposed, possible, or potential revocation, withdrawal, suspension, cancellation, termination of, or modification to any Governmental Authorization; and

     (iv) all applications required to have been filed for the renewal of the Governmental Authorizations listed or required to be listed in Part 4.14(2) of the Disclosure Letter have been duly filed on a timely basis with the appropriate Governmental Bodies, and all other filings required to have been made with respect to such Governmental Authorizations have been duly made on a timely basis with the appropriate Governmental Bodies.

The Governmental Authorizations listed or required to be listed in Part 4.14(2) of the Disclosure Letter collectively constitute all of the Governmental Authorizations necessary to permit CMCC to lawfully conduct and operate its business in the manner it currently conducts and operates its business and to permit CMCC to own and use its assets in the manner in which it currently owns and uses its assets. The Contemplated Transactions will not result in the termination or modification of any such Governmental Authorizations.

4.15 Legal Proceedings; Orders

(1) There exists no pending Proceeding: (i) that has been commenced by or against CMCC or that otherwise relates to or may affect the business of, or any of the assets owned or used by, CMCC; or (ii) that challenges, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the Contemplated Transactions. To the Knowledge of MCC, (A) no such Proceeding has been Threatened, and (B) no event has occurred or circumstance exists that may give rise to or serve as a basis for the commencement of any such Proceeding.

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(2)

(i) There is no Order to which CMCC, or any of the assets owned or used by CMCC, is subject; (ii) CMCC is not subject to any Order that relates to the business of, or any of the assets owned or used by, CMCC; and (iii) to the Knowledge of MCC, no officer, director, agent, or employee of CMCC is subject to any Order that prohibits such officer, director, agent, or employee from engaging in or continuing any conduct, activity, or practice relating to the business of CMCC.

(3)

(i) CMCC is, and at all times since the Share Acquisition Date has been, in full compliance with all of the terms and requirements of each Order to which it, or any of the assets owned or used by it, is or has been subject; (ii) no event has occurred or circumstance exists that may constitute or result in (with or without notice or lapse of time) a violation of or failure to comply with any term or requirement of any Order to which CMCC, or any of the assets owned or used by CMCC, is subject; and (iii) CMCC has not received, at any time since the Share Acquisition Date, any notice or other communication (whether oral or written) from any Governmental Body or any other Person regarding any actual, alleged, possible, or potential violation of, or failure to comply with, any term or requirement of any Order to which CMCC, or any of the assets owned or used by CMCC, is or has been subject.

4.16 Absence of Certain Changes and Events

Since the date of the Balance Sheet, CMCC has conducted its business only in the Ordinary Course of Business and there has not been any:

(1)	change in CMCC’s authorized or issued capital stock; grant of any stock option or right to purchase shares of capital stock of CMCC; issuance of any security convertible into or exchangeable for such capital stock; purchase, redemption, retirement, or other acquisition by CMCC of any shares of any such capital stock; or declaration or payment of any dividend or other distribution or payment in respect of shares of capital stock;
(2)	amendment to the Organizational Documents of CMCC;
(3)	payment or increase by CMCC of any bonuses, salaries, or other compensation to any shareholder, director, officer, or (except in the Ordinary Course of Business) employee or entry into any employment, severance, or similar Contract with any director, officer, or employee;
(4)	adoption of, or increase in the payments to or benefits under, any profit sharing, bonus, deferred compensation, savings, insurance, pension, retirement, or other employee benefit plan for or with any employees of CMCC;
(5)	damage to or destruction or loss of any asset or property of CMCC, whether or not covered by insurance, materially and adversely affecting the properties, assets, business, financial condition, or prospects of CMCC, taken as a whole;

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(6)	entry into, termination of, or receipt of notice of termination of (i) any license, distributorship, dealer, sales representative, joint venture, credit, or similar agreement, or (ii) any Contract or transaction involving a total remaining commitment by or to CMCC of at least ¥10,000,000;
(7)	sale, lease, or other disposition of any asset or property of CMCC or mortgage, pledge, or imposition of any lien or other encumbrance on any material asset or property of CMCC;
(8)	cancellation or waiver of any claims or rights with a value to CMCC in excess of ¥10,000,000;
(9)	material change in the accounting methods used by CMCC; or
(10)	agreement, whether oral or written, by CMCC to do any of the foregoing.

4.17 Contracts; No Defaults

(1) Part 4.17(1) of the Disclosure Letter contains a complete and accurate list, and MCC has caused CMCC to deliver to Calgon true and complete copies, of: (i) each Applicable Contract that CMCC has entered into with the top eight (8) customers with respect to transaction amounts); (ii) each Applicable Contract that CMCC has entered into with the top eight (8) suppliers with respect to transaction amounts); (iii) each Applicable Contract that was not entered into in the Ordinary Course of Business; (iv) each lease, license, installment and conditional sale agreement, and other Applicable Contract affecting the ownership of, leasing of, title to, use of, or any leasehold or other interest in, any real or personal property; (v) each licensing agreement or other Applicable Contract with respect to patents, trademarks, copyrights, or other intellectual property, including agreements with current or former employees, consultants, or contractors regarding the appropriation or the non-disclosure of any of CMCC’s intellectual property assets; (vi) each collective bargaining agreement and other Applicable Contract to or with any labor union or other employee representative of a group of employees; (vii) each joint venture, partnership, and other Applicable Contract (however named) involving a sharing of profits, losses, costs, or liabilities by CMCC with any other Person; (viii) each Applicable Contract containing covenants that in any way purport to restrict the business activity of CMCC or limit the freedom of CMCC or any affiliate of CMCC to engage in any line of business or to compete with any Person; (ix) each Applicable Contract providing for payments to or by any Person based on sales, purchases, or profits, other than direct payments for goods; (x) each power of attorney that is currently effective and outstanding; (xi) each Applicable Contract entered into other than in the Ordinary Course of Business that contains or provides for an express undertaking by CMCC to be responsible for consequential damages; (xii) each Applicable Contract for capital expenditures in excess of ¥30,000,000; (xiii) each written warranty, guaranty, and or other similar undertaking with respect to contractual performance extended by CMCC other

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than in the Ordinary Course of Business; and (xiv) each amendment, supplement, and modification (whether oral or written) in respect of any of the foregoing.

(2)	(i) Except as set forth in Part 4.17(2) of the Disclosure Letter, neither MCC nor any Related Person of MCC has or may acquire any rights under, and MCC does not have or may not become subject to any obligation or liability under, any Contract that relates to the business of, or any of the assets owned or used by, CMCC; and (ii) to the Knowledge of MCC, no officer, director, agent, employee, consultant, or contractor of CMCC is bound by any Contract that purports to limit the ability of such officer, director, agent, employee, consultant, or contractor to (A) engage in or continue any conduct, activity, or practice relating to the business of CMCC, or (B) assign to CMCC or to any other Person any rights to any invention, improvement, or discovery.
(3)	Each Applicable Contract identified or required to be identified in Part 4.17(1) of the Disclosure Letter or that involves performance of services or delivery of goods or materials of an amount or value in excess of ¥10,000,000 is in full force and effect and is valid and enforceable in accordance with its terms.
(4)	Except as set forth in Part 4.17(4) of the Disclosure Letter, (i) CMCC is, and at all times since the Share Acquisition Date has been, in full compliance with all applicable terms and requirements of each Contract under which CMCC has or had any obligation or liability or by which CMCC or any of the assets owned or used by CMCC is or was bound; (ii) to the Knowledge of MCC, each other Person that has or had any obligation or liability under any Contract under which CMCC has or had any rights is, and at all times since the Share Acquisition Date has been, in full compliance with all applicable terms and requirements of such Contract; and (iii) no event has occurred or circumstance exists that (with or without notice or lapse of time) may contravene, conflict with, or result in a violation or breach of, or give CMCC or any other Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate, or modify, any Applicable Contract.
(5)	There are no renegotiations of, attempts to renegotiate, or outstanding rights to renegotiate any material amounts paid or payable to CMCC under current or completed Contracts with any Person and, no such Person has made written demand for such renegotiation. MCC does not have any Knowledge of any termination of, or intent to terminate, any current Contracts with CMCC.
(6)	The Contracts relating to the sale, design, manufacture, or provision of products or services by CMCC have been entered into in the Ordinary Course of Business and have been entered into without the commission of any act alone or in concert with any other Person, or any consideration having been paid or promised, that is or would be in violation of any Legal Requirement.
(7)	All security and other deposits or prepaid amounts paid in satisfaction of or to secure an obligation to CMCC were paid directly to and are currently held directly

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by CMCC. All rights and interests in any deposits or other prepaid amounts paid by or on behalf of CMCC, including the right to the return of such amounts is held directly and exclusively by CMCC.

4.18 Insurance

(1)	MCC has caused CMCC to deliver to Calgon: (i) true and complete copies of all policies of insurance to which CMCC is a party or under which CMCC, or any director of CMCC, is or has been covered at any time since the Share Acquisition Date; (ii) true and complete copies of all pending applications for policies of insurance; and (iii) any statement by the auditor of CMCC’s financial statements with regard to the adequacy of such entity’s coverage or of the reserves for claims.
(2)	Part 4.18(2) of the Disclosure Letter describes: (i) any self-insurance arrangement by or affecting CMCC, including any reserves established thereunder; (ii) any contract or arrangement, other than a policy of insurance, for the transfer or sharing of any risk by CMCC; and (iii) all obligations of CMCC to third parties with respect to insurance (including such obligations under leases and service agreements) and identifies the policy under which such coverage is provided.
(3)	(i) All policies to which CMCC is a party or that provide coverage to CMCC, or any director or officer of CMCC: (A) are valid, outstanding, and enforceable; (B) are issued by an insurer that is financially sound and reputable; (C) taken together, provide adequate insurance coverage for the assets and the operations of CMCC; (D) are sufficient for compliance with all Legal Requirements and Contracts to which CMCC is a party or by which any of them is bound; (E) will continue in full force and effect following the consummation of the Contemplated Transactions; and (F) do not provide for any retrospective premium adjustment or other experienced-based liability on the part of CMCC; (ii) CMCC has not received (A) any refusal of coverage or any notice that a defense will be afforded with reservation of rights, or (B) any notice of cancellation or any other indication that any insurance policy is no longer in full force or effect or will not be renewed or that the issuer of any policy is not willing or able to perform its obligations thereunder; (iii) CMCC has paid all premiums due and has otherwise performed all of its obligations under each policy to which CMCC is a party or that provides coverage to CMCC or director thereof; and (iv) CMCC has given notice to the insurer of all claims that may be insured thereby.

4.19 Environmental Matters

The operation and condition of the Kurosaki Facility does not violate and has not violated Environmental Laws and no condition has existed or event has occurred with respect to the Kurosaki Facility that, with notice or the passage of time, or both, could result in any liability to or obligation of CMCC or Calgon, or any of their respective affiliates, under Environmental Laws. Neither MCC nor CMCC has received any written notice from any Person that the operation or condition of the Kurosaki Facility is or was in violation of or that CMCC is otherwise alleged to have liability related to the Kurosaki Facility under any

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Environmental Law, including, but not limited to, responsibility (or potential responsibility) for the cleanup or other remediation of any Hazardous Materials at, on, beneath, or originating from the Kurosaki Facility.

4.20 Employees

(1)	Part 4.20(1) of the Disclosure Letter contains a complete and accurate list of the following information for each employee or director of CMCC, including each employee on leave of absence or layoff status: employer; name; job title; current compensation paid or payable and any change in compensation since the Balance Sheet Date; vacation accrued; and service credited for purposes of vesting and eligibility to participate under CMCC’s pension, retirement, profit-sharing, thrift-savings, deferred compensation, stock bonus, stock option, cash bonus, or employee stock ownership plans (including investment credit or payroll stock ownership), severance pay, insurance, medical, welfare, or vacation plan, or any other employee benefit plan.
(2)	No employee or director of CMCC is a party to, or is otherwise bound by, any agreement or arrangement, including any confidentiality, noncompetition, or proprietary rights agreement, between such employee or director and any other Person (“Proprietary Rights Agreement”) that in any way adversely affects or will affect (i) the performance of his duties as an employee or director of CMCC, or (ii) the ability of CMCC to conduct its business, including any Proprietary Rights Agreement with MCC or CMCC by any such employee or director. To MCC’s Knowledge, no director, officer, or other key employee of CMCC intends to terminate his employment with CMCC. No employee or director of CMCC is a party to, or is otherwise bound by, any agreement or arrangement which requires notice of termination or severance pay in excess of what is required under applicable Legal Requirements.
(3)	There are no retired employees or directors of CMCC (or their dependents) who are currently receiving or who are scheduled to receive in the future any pension benefits, pension option elections, retiree medical insurance coverage, retiree life insurance coverage or other similar post-retirement benefits.
(4)	No current or former employee or director of CMCC will become entitled to any bonus, retirement, severance, job security or similar benefit or any enhanced benefit as a result of the Contemplated Transactions.

4.21 Labor Relations; Compliance

Since the Share Acquisition Date, CMCC has not been and is not a party to any collective bargaining or other labor Contract. Since the Share Acquisition Date, there has not been, there is not presently pending or existing, and there is not Threatened, (a) any strike, slowdown, picketing, work stoppage, or employee grievance process, (b) any Proceeding against or affecting CMCC relating to the alleged violation of any Legal Requirement pertaining to labor relations or employment matters, including any charge or complaint

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filed by an employee or union with any Governmental Body, organizational activity, or other labor or employment dispute against or affecting any of CMCC or its premises, or (c) any application for certification of a collective bargaining agent. No event has occurred or circumstance exists that could provide the basis for any work stoppage or other labor dispute. CMCC has complied in all respects with all Legal Requirements relating to employment, equal employment opportunity, nondiscrimination, immigration, wages, hours, benefits, collective bargaining, the payment of social security and similar taxes, occupational safety and health, and plant closing. CMCC is not liable for the payment of any compensation, damages, taxes, fines, penalties, or other amounts, however designated, for failure to comply with any of the foregoing Legal Requirements.

4.22 Intellectual Property

(1)

The term “Specified Intellectual Property Assets” means: (i) registered and unregistered trademarks, service marks, and applications; (ii) all patents, patent applications, and inventions and discoveries that may be patentable; (iii) all copyrights in both published works and unpublished works; (iv) all rights in mask works; and (v) all know-how, trade secrets, confidential information, customer lists, software, technical information, data, process technology, plans, drawings, and blue prints; in each case, the rights to which: (A) were assigned or licensed to CMCC by MCC, or (B) were developed or acquired by CMCC independently to any other Person after the Share Acquisition Date, provided, however, that Specific Intellectual Property Assets shall not include (i) registered and unregistered trademarks, service marks, and applications; (ii) all patents, patent applications, and inventions and discoveries that may be patentable; (iii) all copyrights in both published works and unpublished works; (iv) all rights in mask works; and (v) all know-how, trade secrets, confidential information, customer lists, software, technical information, data, process technology, plans, drawings, and blue prints; in each case, the rights to which were licensed or assigned to CMCC by Calgon. Exhibit B sets forth a correct and complete list of all Specified Intellectual Property Assets that is registered or subject to an application for registration.

(2)

Except as set forth in Part 4.22(2) of the Disclosure Letter, CMCC is the sole and exclusive owner of, or has the exclusive, worldwide, perpetual royalty-free right to use, all of the Specified Intellectual Property Assets and the Co-owned CMCC Patent. Except as set forth in Part 4.22(2) of the Disclosure Letter, CMCC has the right to use, sell, manufacture, have manufactured, execute, reproduce, display, perform, modify, enhance, distribute, prepare derivative works of, claim priority to, license and sublicense, without payment to any other person, all the Specified Intellectual Property Assets and the Co-owned CMCC Patent, and the consummation of the Contemplated Transactions does not and will not conflict with, alter or impair any such rights. The Specified Intellectual Property Assets and the Co-owned CMCC Patent are not currently the subject (or Threatened to be the subject) of any interference, opposition, re-examination, invalidation or cancellation proceeding, or litigation or arbitration proceeding. During the past two (2) years, CMCC has not received written notice from any other person

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	asserting any ownership interest in any Specified Intellectual Property Assets or, except as set forth on Exhibit F, the Co-owned CMCC Patent.
(3)	With respect to the Specified Intellectual Property Assets that are registered or subject to an application for registration, Exhibit B sets forth a list of all jurisdictions in which such Specified Intellectual Property Assets are registered or registrations have been applied for and all registration and application numbers. Except as otherwise set forth on Exhibit B, all of the patents, trademarks and copyrights, and all applications for any of the foregoing, identified on Exhibit B are currently in compliance with all Legal Requirements (including payment of filing, examination, renewal, extension of time and maintenance fees, proofs of use, the timely post-registration filing of declarations or affidavits of use and incontestability and renewal applications, and any office action responses), and are not, as of the date of this Agreement subject to any maintenance fees or taxes or actions falling due within thirty (30) days after the Closing Date. To the Knowledge of MCC, there is and has been no potentially interfering patent or patent application of any third party.
(4)	With respect to the patent application identified on Exhibit F (“Co-owned CMCC Patent”), CMCC is the rightful owner of such patent application. Exhibit F sets forth a list of all jurisdictions in which registrations for the Co-owned CMCC Patent have been applied for and all application numbers. Such patent application is currently in compliance with all Legal Requirements (including payment of filing, examination, renewal, extension of time and maintenance fees, proofs of use, the timely post-registration filing of declarations or affidavits of use and incontestability and renewal applications, and any office action responses), and are not, as of the date of this Agreement subject to any maintenance fees or taxes or actions falling due within thirty (30) days after the Closing Date. To the Knowledge of MCC, there is and has been no potentially interfering patent or patent application of any third party.
(5)	The Assigned Intellectual Property, the Specified Intellectual Property Assets, the Licensed Intellectual Property, Co-owned MCC Patents, Co-owned CMCC Patent, the Toyota Co-owned Patents and Japanese Patent No.3420738 represents all of the intellectual property rights necessary in order to operate CMCC’s business in all respects as currently conducted and as currently proposed to be conducted.

4.23 Compliance with Anti-Corruption Laws; Status of Agent Relationships

(1)	MCC, CMCC, each of their respective Representatives, and, to the Knowledge of CMCC and MCC, Agents have used only legitimate business and ethical practices in CMCC’s business and in promoting CMCC’s position on issues before any Governmental Body.
(2)	neither MCC, CMCC nor any of their respective Representatives or, to the Knowledge of CMCC and MCC, Agents have given, offered, promised or authorized any Prohibited Payment.

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(3)	neither MCC, CMCC nor any of their respective Representatives or, to the Knowledge of CMCC and MCC, Agents have given, offered, promised or authorized the giving of money or anything of value, directly or indirectly, to any Person while knowing or being aware of a probability that all or a portion of such money or thing of value would be used to make a Prohibited Payment.
(4)	CMCC has complied in all respects with the applicable Anti-Corruption Laws.
(5)	neither MCC nor CMCC have retained any Agents in connection with CMCC’s business or undertaken or incurred any obligations to the Agents or to third parties which might give rise to any obligations to such Agents.
(6)	no individual Representative of CMCC, nor any relative of any of these, is a Government Official of any country in which CMCC’s business is presently conducted.
(7)	CMCC has not entered into or obtained any Contracts in violation of the warranties set forth in this Section 4.23.
(8)	all machinery, equipment, vehicles, tools, apparatus, computers, software, office furniture, office supplies, inventory, products, chemicals, supplies and other tangible personal property that has been imported into or exported from any jurisdiction in which CMCC’s business has been conducted, have been imported or exported by CMCC strictly in accordance with Legal Requirements (including the obtaining of any required licenses or regulatory approvals in respect of all such imports and exports), and all Taxes have been paid in full by CMCC in connection with all such imports and exports.
(9)	during the past five (5) years, CMCC has not engaged in any commercial activities in or related to the following countries: (i) Cuba; (ii) Iran; (iii) Myanmar (f/k/a Burma); (iv) North Korea; (v) Sudan; (vi) Syria; (vii) Libya prior to April 29, 2004, or (viii) Iraq prior to May 22, 2003, including without limitation providing services to entities located in such countries, selling or delivering products to such countries, or entering into any contract or other obligation to provide services or products to such countries or to purchase goods or services from such countries.
(10)	Part 4.23(10) of the Disclosure Letter sets forth a list of all amounts due and owing by CMCC to, and includes a summary of obligations by CMCC to, its Agents. MCC has provided to Calgon copies of all documents and agreements pertaining to any Agent, including any amounts owed to any such Agent or any obligations of CMCC to any such Agent.
(11)	during the past five (5) years, CMCC has not to its Knowledge, or to MCC’s Knowledge, engaged in any commercial activity with persons who were identified on the United States Treasury Department’s Specially Designated Nationals (SDN) List at the time of such commercial activity.

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4.24 Relationships with Related Persons

Except for KN Carbon Tech Co., Ltd., neither MCC nor any Related Person of MCC or of CMCC is, or since the Share Acquisition Date has owned (of record or as a beneficial owner) an equity interest or any other financial or profit interest in, a Person that has (a) had business dealings or a material financial interest in any transaction with CMCC other than business dealings or transactions conducted in the Ordinary Course of Business with CMCC at substantially prevailing market prices and on substantially prevailing market terms, or (b) engaged in competition with CMCC with respect to any line of services or products of CMCC (a “Competing Business”) in any market presently served by CMCC except for owning less than one percent (1%) of the outstanding capital stock of any Competing Business that is publicly traded on any recognized exchange or in the over-the-counter market. Neither MCC nor any Related Person of MCC or of CMCC is a party to any Contract with, or has any claim or right against, CMCC.

4.25 Customer and Other Relations

There exists no condition or state of facts or circumstances involving CMCC’s customers, suppliers, distributors or sales representatives that MCC can reasonably foresee could adversely affect the CMCC’s business after the Closing Date. No customer or distributor has since the Balance Sheet Date informed CMCC or MCC of an intention to cease doing business with CMCC or materially reducing its business with CMCC, refused to honor a purchase commitment or advised CMCC or MCC that it may cease doing business with CMCC, or that it may reduce the volume of business that it does with CMCC if the Contemplated Transactions are consummated.

4.26 Disclosure

No representation or warranty of MCC in this Agreement and no statement in the Disclosure Letter or any Exhibit to this Agreement omits to state a material fact necessary to make the statements herein or therein, in light of the circumstances in which they were made, not misleading. MCC has caused CMCC to provide all information responsive to the Due Diligence Information Request List provided to MCC in connection with this Agreement.

5. REPRESENTATIONS AND WARRANTIES OF CALGON TO MCC

Calgon will represent and warrant to MCC, as of the Final Closing Date, as follows:

5.1 Existence and Good Standing

CMCC is a kabushiki kaisha duly organized and validly existing under the laws of Japan.

5.2 Authority; No Conflict

(1) This Agreement constitutes the legal, valid, and binding obligation of CMCC, enforceable against CMCC in accordance with its terms. CMCC has the absolute

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and unrestricted right, power, authority, and capacity to perform its obligations hereunder that are to be performed at the Final Closing.

(2) Neither the performance by CMCC of its obligations under this Agreement that are to be performed at the Final Closing, nor the consummation of Contemplated Transactions that are to be consummated at the Final Closing will give any Person the right to prevent, delay, or otherwise interfere with such Contemplated Transactions pursuant to: (i) any amendment to any provision of CMCC’s Organizational Documents made after the Closing Date; (ii) any resolution adopted by the board of directors or the stockholders of CMCC after the Closing Date; (iii) any Legal Requirement or Order to which CMCC became subject after the Closing Date; or (iv) any Contract that CMCC entered into after the Closing Date.

6. REPRESENTATIONS AND WARRANTIES OF CALGON TO MCC

      Calgon represents and warrants to MCC, as of the date hereof, as of the Closing Date, and as of the Final Closing Date, as follows:

6.1 Organization and Good standing

Calgon is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, U.S.A.

6.2 Authority; No Conflict

(1) This Agreement constitutes the legal, valid, and binding obligation of Calgon, enforceable against Calgon in accordance with its terms. Upon the execution and delivery by Calgon of each of the Ancillary Agreements to which Calgon is a party, such Ancillary Agreements will constitute the legal, valid, and binding obligations of Calgon, enforceable against Calgon in accordance with their respective terms. Calgon has the absolute and unrestricted right, power, authority, and capacity to execute and deliver this Agreement and the Ancillary Agreements to which Calgon is a party and to perform its obligations hereunder and thereunder.

(2) Neither the execution nor delivery of this Agreement by Calgon nor the consummation or performance of any of the Contemplated Transactions by Calgon will give any Person the right to prevent, delay, or otherwise interfere with any of the Contemplated Transactions pursuant to: (i) any provision of Calgon’s Organizational Documents; (ii) any resolution adopted by the board of directors or the stockholders of Calgon; (iii) any Legal Requirement or Order to which Calgon may be subject; or (iv) any Contract to which Calgon is a party or by which Calgon may be bound. Calgon is not and will not be required to give notice to or obtain any Consent from any Person in connection with (A) the execution and delivery of this Agreement and each of the Ancillary Agreements to which Calgon is a Party, or (B) the consummation or performance of any of the Contemplated Transactions.

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6.3 Certain Proceedings

There is no pending Proceeding that has been commenced against Calgon and that challenges, or may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the Contemplated Transactions.

7. COVENANTS

7.1 Board and Shareholder Approval of Redemption

(1)	Prior to the Closing, each of Calgon and MCC shall take, and shall cause the board of directors of CMCC to take, such actions as are required to comply with the procedures set forth in the Companies Act (Act No. 86 of 2005) of Japan relating to the First Redemption.
(2)	Prior to the Final Closing, Calgon shall take, and shall cause the board of directors of CMCC to take, such actions as are required to comply with the procedures set forth in the Companies Act of Japan relating to the Second Redemption.

7.2 Change of Name

Prior to the Closing, each of Calgon and MCC shall vote in favor of a shareholder resolution of CMCC to remove the word “Mitsubishi” from its name effective as of the Closing Date. CMCC shall cease to use any trade name and trade mark indicating “Mitsubishi” or “Three Diamond” (the “Mitsubishi Marks”) by the Closing Date, provided, however, that CMCC may, if CMCC obtains MCC’s prior written consent, use the Mitsubishi Marks according to the manner instructed by MCC for the period given by MCC.

7.3 Nomination of Directors and Statutory Auditors

Prior to the Closing, each of Calgon and MCC shall vote in favor of a shareholder resolution of CMCC to appoint a replacement effective as of the Closing Date, as designated by Calgon, for each director and statutory auditor who is to submit a resignation pursuant to the provisions of Section 8.8.

7.4 Registration of New Company Name, Directors and Statutory Auditors

On the Closing, each of Calgon and MCC shall cause CMCC to file for registration of the new company name and directors and statutory auditors approved by CMCC pursuant to the provisions of Section 7.2 and 7.3 respectively.

7.5 Repayment of the Borrowing from MCFA

(1) Between the Closing Date and the Final Closing Date, MCC shall cause MCFA Inc., a wholly owned subsidiary of MCC (“MCFA”) to loan funds to CMCC under a new loan agreement on the terms and conditions identified on Exhibit G, provided, that MCC holds 20% of shares in CMCC. Calgon shall cause CMCC,

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	and MCC shall cause MCFA, to enter into a termination agreement to terminate the Loan Agreement dated October 1, 2002 executed between CMCC and MCFA as of the Closing Date.
(2)	On or prior to the Final Closing Date, Calgon shall cause CMCC to pay MCFA, back all of its borrowing from MCFA with interest thereof and without any prepayment or other penalties, by wire transfer to account specified by MCFA.
(3)	On or prior to the Final Closing Date, Calgon shall cause CMCC to obtain funds needed by CMCC from other commercial banks on its own responsibility; provided however, that MCC shall cooperate in good faith with CMCC’s financing from other commercial banks.

7.6 Proper Employees of CMCC

(1)	On the Closing Date, CMCC shall use commercially reasonable efforts to provide continued employment to those employees of CMCC and to offer such employees substantially similar compensation and benefit packages (the “CMCC Existing Employees”).
(2)	On or prior to the Closing Date, CMCC shall use commercially reasonable efforts to offer employment to those employees of MCC who MCC currently leases to CMCC (the “MCC Leased Employees”). CMCC shall use commercially reasonable efforts to offer the MCC Leased Employees compensation and benefit packages that are substantially similar to such MCC Leased Employees’ respective current compensation and benefit packages.
(3)	MCC Leased Employees shall have until October 1, 2010 (“Acceptance Deadline”) to decide whether to accept CMCC’s offer of employment.

7.7 Access and Investigation

Between the date of this Agreement and the Closing Date, MCC will, and will cause each of CMCC and its Representatives to (1) afford Calgon and its Representatives and prospective lenders and their Representatives (collectively, “Calgon’s Advisors”) full and free access to CMCC’s personnel, properties, contracts, books and records, and other documents and data, (2) furnish Calgon and Calgon’s Advisors with copies of all such contracts, books and records, and other existing documents and data as Calgon may reasonably request, and (3) furnish Calgon and Calgon’s Advisors with such additional financial, operating, and other data and information as Calgon may reasonably request.

7.8 Operation of the Business of CMCC

(1) Between the date of this Agreement and the Closing Date, MCC will, and will cause CMCC to: (i) conduct the business of CMCC only in the Ordinary Course of Business; (ii) use its Best Efforts to preserve intact the current business organization of CMCC, keep available the services of the current officers, employees, and agents of CMCC, and maintain the relations and goodwill with

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	suppliers, customers, landlords, creditors, employees, agents, and others having business relationships with CMCC; (iii) confer with Calgon concerning operational matters of a material nature; and (iv) otherwise report periodically to Calgon concerning the status of the business, operations, and finances of CMCC.
(2)	Except as otherwise expressly permitted by this Agreement, between the date of this Agreement and the Closing Date, MCC will not, and will cause CMCC not to, without the prior consent of Calgon, which consent shall be at Calgon’s sole and absolute discretion, (i) enter into or amend any Contracts with MCC or any MCC Related Person, (ii) amend any of the MCC Associated Agreements; (iii) make any expenditure, enter into any Contract, or make a commitment of any kind, in each case involving a payment or aggregate obligation of CMCC in excess of ¥10,000,000; (iv) enter into any Contract that would be required to be listed in Part 4.17(1) of the Disclosure Letter or that involves performance of services or delivery of goods or materials of an amount or value in excess of ¥10,000,000; or (v) take any affirmative action, or fail to take any reasonable action within their or its control, as a result of which any of the changes or events listed in Section 4.16 is likely to occur.
(3)	Except as otherwise expressly permitted by this Agreement, and notwithstanding anything to the contrary contained in the Joint Venture Agreement, between the date of this Agreement and the Closing Date (unless Calgon shall otherwise approve in writing, which approval shall be in Calgon’s sole and absolute discretion), no orders or authorizations shall unilaterally be given by any Party as a shareholder of CMCC (or any of its appointees who are directors, statutory auditors, or the President-Director of CMCC) to any or all of the representative directors, whether pursuant to CMCC’s internal regulations or otherwise, and all such orders or authorizations, as the case may be, shall be jointly given by each of Calgon and CMCC in the case of an order, or unanimously approved by the board of directors in the case of an authorization.

7.9 Notification

Between the date of this Agreement and the Closing Date, each of MCC and CMCC will promptly notify Calgon in writing if either MCC or CMCC becomes aware of any fact or condition that causes, constitutes, or is reasonably likely to cause or constitute a Breach of MCC’s representations and warranties, or if either MCC or CMCC becomes aware of the occurrence after the date of this Agreement of any fact or condition that would (except as expressly contemplated by this Agreement) cause or constitute a Breach of any such representation or warranty had such representation or warranty been made as of the time of occurrence or discovery of such fact or condition. Should any such fact or condition require any change in the Disclosure Letter if the Disclosure Letter were dated the date of the occurrence or discovery of any such fact or condition, MCC will promptly deliver to Calgon a supplement to the Disclosure Letter specifying such change. During the same period, each of MCC and CMCC will promptly notify Calgon of the occurrence of any Breach of any covenant in this Section 7 or of the occurrence of any event that may make the satisfaction of the conditions in Section 8 impossible or unlikely.

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7.10 No Negotiation

Until such time, if any, as this Agreement is terminated pursuant to Section 10, MCC will not, and will cause CMCC and each of their Representatives not to, directly or indirectly solicit, initiate, or encourage any inquiries or proposals from, discuss or negotiate with, provide any non-public information to, or consider the merits of any unsolicited inquiries or proposals from, any Person (other than Calgon) relating to any transaction involving the sale of the business or assets (other than in the Ordinary Course of Business) of CMCC, or any of the capital stock of CMCC, or any merger, consolidation, business combination, or similar transaction involving CMCC.

7.11 Confidentiality; Privilege

From and after the date hereof and prior to Closing, each Party shall maintain in confidence, and each Party shall cause its agents, representatives and Affiliates to maintain in confidence, and no Party shall use to the detriment or competitive disadvantage of another Party or Affiliate, any and all information exchanged in connection with the Contemplated Transactions (including all Confidential Information, information of a proprietary nature and all trade secrets under applicable state law) in connection with this Agreement or the Contemplated Transactions. The foregoing covenants shall not apply to the extent necessary or appropriate in making any filing or obtaining any Consent or Governmental Authorization required for the consummation of the Contemplated Transactions. From and after the date hereof, and from and after Closing, MCC shall maintain in confidence, and shall not use to the competitive disadvantage of CMCC, Calgon or their respective Affiliates, any Confidential Information related to or arising out of the business conducted by CMCC. The foregoing covenants shall not apply with respect to information that is already known to a party or to others not bound by a duty of confidentiality or such information that becomes publicly available through no fault of such party, to the extent necessary or appropriate in making any filing or obtaining any Consent or Governmental Authorization required for the consummation of the Contemplated Transactions. If a party is compelled in any legal proceeding (other than between the parties hereto) or is requested by a Governmental Body having regulatory jurisdiction over the Contemplated Transactions to make any disclosure that is prohibited or otherwise constrained by this Section, such party shall provide the disclosing party with prompt notice of such compulsion or request so that it may seek an appropriate protective order or other appropriate remedy or waive compliance with the provisions of this Section. In the absence of a protective order or other remedy, the receiving party may disclose that portion (and only that portion) of the Confidential Information of the disclosing party that, based upon advice of the receiving party’s counsel, the receiving party is legally compelled to disclose or that has been requested by such Governmental Body, provided, however, that the receiving party shall use reasonable efforts to obtain reliable assurance that confidential treatment will be accorded by any person to whom any Confidential Information is so disclosed. The disclosing party is not waiving, and will not be deemed to have waived or diminished, any of its attorney work product protections, attorney-client privileges or similar protections and privileges as a result of disclosing its Confidential Information (including Confidential Information related to pending or Threatened litigation) to the receiving party, regardless of whether the disclosing party has asserted, or

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is or may be entitled to assert, such privileges and protections. The parties (1) share a common legal and commercial interest in all of the disclosing party’s Confidential Information that is subject to such privileges and protections; (2) are or may become joint defendants in proceedings to which the disclosing party’s Confidential Information covered by such protections and privileges relates; (3) intend that such privileges and protections remain intact should either party become subject to any actual or Threatened proceeding to which the disclosing party’s Confidential Information covered by such protections and privileges relates; and (4) intend that after the Closing the receiving party shall have the right to assert such protections and privileges. No receiving party shall admit, claim or contend, in proceedings involving either party or otherwise, that any disclosing party waived any of its attorney work-product protections, attorney-client privileges or similar protections and privileges with respect to any information, documents or other material not disclosed to a receiving party due to the disclosing party disclosing its Confidential Information (including Confidential Information related to pending or Threatened litigation) to the receiving party. The covenants contained in this Section are independent of any other provision of this Agreement and the existence of any claim that any Party may allege against any other Party, whether based on this Agreement or otherwise, shall not prevent the enforcement of this covenant. Each Party agrees that the remedies at law for any breach or threat of breach by any Party of the provisions of this Section will be inadequate, and that each Party shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Section and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which such Party may be entitled at law or equity. The provisions of this Section 7.11 shall supercede the Confidentiality Agreement, dated October 6, 2009, between Calgon and MCC.

7.12 Restrictive Covenants

CMCC has developed valuable proprietary confidential information, and due to MCC’s relationship with CMCC, the following covenants are necessary in order to protect such information:

(1)

In order to protect the intellectual property and know-how of CMCC (including without limitation such that is conveyed pursuant to the Intellectual Property Assignment Certifications), from and after the Closing Date for a period ending two (2) years after the Final Closing Date, neither MCC nor any of its affiliates will (i) directly or indirectly manage, operate or engage in the business of the manufacture, sale, distribution, or reactivation of activated carbon for any use or purpose, or research and development related to activated carbon, in Japan (the “Business”) or (ii) directly or indirectly acquire an ownership or other interest in any Person that manages, operates or engages in the Business in Japan. MCC’s ownership of an interest in KN Carbon Tech Co., Ltd. shall not be a violation of this Section 7.12(1).

(2)

From and after the Closing Date for a period ending two (2) years after the Final Closing Date, MCC will not license the “Mitsubishi” name or any other Mitsubishi Marks to KN Carbon Tech Co., Ltd. or any of its affiliates.

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(3)	MCC will not lease to KN Carbon Tech Co., Ltd. or any of its affiliates any employee that is or has previously been leased by MCC to CMCC (each a “Leased Employee”) during any period that such Leased Employee is working for CMCC and for a period of two (2) years from and after the date that such Leased Employee ceases to work for CMCC (the “Restricted Period”). MCC will prohibit KN Carbon Tech Co., Ltd. from (i) hiring or engaging to serve in any capacity, including without limitation, as a director, officer, consultant or agent, any Leased Employee during the Restricted Period or (ii) hiring or engaging to serve in any capacity, including without limitation, as a director, officer, consultant or agent, any individual who previously served as a director of CMCC during the Restricted Period.
(4)	From and after the Closing Date for a period ending two (2) years after the Final Closing Date, neither MCC nor any of its affiliates shall, directly or indirectly (i) solicit the business of any person who is or was during the year prior to the date of this Agreement a customer of CMCC or is a potential customer of CMCC as of the Closing Date; (ii) cause, induce or attempt to cause or induce any customer, supplier, licensee, licensor, franchisee, employee, consultant or other business relation of CMCC to cease doing business with CMCC or to materially reduce the amount of business such party conducts with CMCC, to deal with any competitor of CMCC or in any way interfere with its relationship with CMCC; or (iii) hire, retain or attempt to hire or retain any employee or independent contractor of CMCC or in any way interfere with the relationship between CMCC and any of its employees or independent contractors.
(5)	The restrictive covenants contained in this Section are independent of any other provision of this Agreement and the existence of any claim that MCC may allege against Calgon or CMCC, whether based on this Agreement or otherwise, shall not prevent the enforcement of this covenant. MCC agrees that CMCC’s and Calgon’s remedies at law for any breach or threat of breach by MCC of the provisions of this Section will be inadequate, and that Calgon or CMCC shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Section and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which Calgon or CMCC may be entitled at law or equity. In the event of litigation or arbitration regarding the covenant not to compete, the prevailing party in such proceeding shall, in addition to any other remedies the prevailing party may obtain in such proceeding, be entitled to recover from the other party its reasonable legal fees and out of pocket costs incurred by such party in enforcing or defending its rights hereunder. The length of time for which this covenant not to compete shall be in force shall be extended for a period of time equal to the period of violation or any other period required for litigation during which Calgon or CMCC seeks to enforce this covenant. Should any provision of this Section be adjudged to any extent invalid by any competent tribunal, such provision shall be deemed modified to the extent necessary to make it enforceable.

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7.13 Record Retention and Access

Upon reasonable advance written request of MCC, during normal business hours, and in accordance with a reasonable confidentiality agreement, Calgon shall cause CMCC to afford promptly to MCC and their agents reasonable access to CMCC’s properties, books and records relating to the Business of CMCC solely prior to the Final Closing Date, for purpose of preparing prosecution and defense of litigation and all other proper business purposes, provided, that in connection with such access MCC shall at all times comply with CMCC’s normal visitor safety and security procedures and requirements.

7.14 IT Systems

(1)

For a term of twelve (12) months after the Closing Date, MCC shall continue to allow and shall cause Ryoka Systems Inc. to continue to provide CMCC the use of its IT systems that are nominated by CMCC in the list as provided on Exhibit H under MCC’s network rules and the same terms and conditions as described in the IT Service Agreement dated October 1, 2002 executed between Ryoka Systems Inc. and CMCC.

(2)

For a term of twelve (12) months after the later of the Final Closing Date or the expiration of the initial twelve (12) month term in Section 7.14(1) above, MCC shall continue to allow and shall cause Ryoka Systems Inc. to continue to provide CMCC the use of its IT systems that are nominated by CMCC in the list as provided on Exhibit H under MCC’s network rules, the service rate for the third party and other terms and conditions as agreed between Ryoka Systems Inc. and CMCC.

7.15 Continuation of MCC Associated Agreements

(1)	Unless CMCC otherwise requests, for a term of one (1) year from the Closing Date, MCC shall continue to lease CMCC its buildings and facilities in Kurosaki Plant of MCC under the same terms and conditions as described in the Building and Facility Lease Agreement dated October 1, 2002 as amended executed between MCC and CMCC.
(2)	Unless CMCC otherwise requests, for a term of one (1) year from the Closing Date, MCC shall continue to provide CMCC certain utilities and service under the same terms and conditions as described in the Utilities Supply Agreement and the Services Agreement dated October 1, 2002 as amended executed between MCC and CMCC.
(3)	Unless CMCC otherwise requests, for a term of one (1) year from the Closing Date, MCC shall continue to lease CMCC its office in Osaka Branch Office of MCC under the same terms and conditions as described in the Office Lease Agreement dated June 1, 2008 executed between MCC and CMCC.

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7.16 Leased Employee Matters

(1)	For a period of one (1) year after the Acceptance Deadline (the “Leased Period”), MCC shall continue to lease the MCC Leased Employees (except the employees who transferred to CMCC) to CMCC under the same terms and conditions as described in the Personnel Lease Agreement dated October 1, 2002 executed between MCC and CMCC (the “Personnel Lease Agreement”).
(2)	At the sole and absolute discretion of CMCC, MCC shall extend the Leased Period for additional one (1) year periods or further extension periods as agreed by the Parties on the same terms and conditions in the Personnel Lease Agreement.
(3)	Once CMCC determines in its sole discretion that no MCC Leased Employees are necessary in order to operate the Business and gives MCC a written notice of termination to the Personnel Lease Agreement at least three (3) months prior to the date of such termination, Calgon shall cause CMCC to and MCC shall, enter into the termination agreement to terminate the Personnel Lease Agreement.

7.17 Co-owned Patents

(1)

MCC shall make reasonable efforts to enter into and cause Toyota Motor Corporation (“Toyota”) to, enter into a license agreement with CMCC providing CMCC with a worldwide, perpetual license, under all of the Toyota Co-owned Patents (the “Toyota License”) to make, have made, use, and sel the invention Toyota Co-owned Patents, prior to the Closing. In the event that such a license agreement is not entered into prior to Closing, MCC shall continue to make reasonable efforts to enter into and cause Toyota to enter into such a license agreement. Calgon and CMCC acknowledge that such license may require royalty payments for the benefit of Toyota and MCC. CMCC may transfer its rights the Toyata License to its sucessors and assigns, subject to Toyota’s consent.

(2)

MCC shall make reasonable efforts, and CMCC shall cooperate with MCC, to obtain consent from the co-owners of the Co-owned MCC Patents with respect to the transfer of the Co-owned MCC Patents to CMCC. In the event that consent is not obtained prior to Closing, MCC shall continue to make reasonable efforts to obtain such consent, and CMCC shall continue to cooperate with MCC.

7.18 Restrictions Regarding Second Purchase Shares

(1)

During the period beginning on the Closing Date and ending on the Final Closing Date (the “Share Restriction Period”), at any meeting of the shareholders of CMCC, or in connection with any written consent of the shareholders of CMCC, MCC shall, in each case to the fullest extent that MCC, as the holder of the Second Purchase Shares, is entitled to vote thereon or consent thereto, vote or deliver written consent in the same way as Calgon votes or delivers written consent.

(2)

During the Share Restriction Period, MCC shall not (i) sell, assign, transfer, pledge, encumber or otherwise dispose of any of the Second Purchase Shares, (ii) deposit

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any of the Second Purchase Shares into a voting trust or enter into a voting agreement or arrangement with respect to the Second Purchase Shares or grant any proxy or power of attorney with respect thereto (other than pursuant to this Agreement), or (iii) enter into any contract, option or other arrangement or undertaking with respect to the direct or indirect sale, assignment, transfer or other disposition of any of the Second Purchase Shares.

(3)

MCC acknowledges and agrees that from and after the Closing Date its sole expectation of profits arising in connection with its ownership of the Second Purchase Shares is the payment of the Second Share Purchase Price to be made at the Final Closing, and that from and after the Closing Date, MCC shall not be entitled to any further dividends or other economic benefits with respect to the Second Purchase Shares.

7.19 Purchase activated carbon

MCC shall purchase activated carbon used to manufacture capacitor from CMCC, if and to the extent that CMCC is able to supply such activated carbon on prices, quality and other conditions not less favourable than those which MCC can obtain from the other companies.

8. CONDITIONS PRECEDENT TO CALGON’S OBLIGATION TO CLOSE

Calgon’s obligation to make the Equity Contribution, if applicable, and to take the other actions required to be taken by Calgon at the Closing and CMCC’s obligation to redeem the First Purchase Shares and take the other actions required to be taken by CMCC at the Closing are both subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived solely by Calgon, in whole or in part):

8.1 Accuracy of Representations

All of MCC’s representations and warranties in this Agreement (considered collectively), and each of these representations and warranties (considered individually), must have been accurate in all material respects as of the date of this Agreement, and must be accurate in all material respects as of the Closing Date as if made on the Closing Date, without giving effect to any supplement to the Disclosure Letter.

8.2 Performance

(1)

All of the covenants and obligations that MCC is required to perform or to comply with pursuant to this Agreement at or prior to the Closing (considered collectively), and each of these covenants and obligations (considered individually), must have been duly performed and complied with in all material respects. MCC must have delivered each of the documents required to be delivered by MCC pursuant to Section 2.6.

(2)

All of the covenants and obligations that CMCC is required to perform or to comply with pursuant to this Agreement at or prior to the Closing (considered

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collectively), and each of these covenants and obligations (considered individually), must have been duly performed and complied with in all material respects. CMCC must have delivered each of the documents required to be delivered by CMCC pursuant to Section 2.6 and must have made the cash payment required to be made by CMCC at Closing pursuant to Section 2.6.

8.3 No Proceedings

Since the date of this Agreement, there must not have been commenced or Threatened against Calgon or CMCC, or against any Person affiliated with Calgon or CMCC, any Proceeding (1) involving any challenge to, or seeking damages or other relief in connection with, any of the Contemplated Transactions, or (2) that may have the effect of preventing, delaying, making illegal, or otherwise interfering with any of the Contemplated Transactions.

8.4 No Prohibition

Neither the consummation nor the performance of any of the Contemplated Transactions will, directly or indirectly (with or without notice or lapse of time), materially contravene, or conflict with, or result in a material violation of, or cause Calgon, CMCC or any Person affiliated with Calgon or CMCC to suffer any material adverse consequence under, (1) any applicable Legal Requirement or Order, or (2) any Legal Requirement or Order that has been published, introduced, or otherwise proposed by or before any Governmental Body.

8.5 Trademark Use

MCC shall have obtained the approval of Mitsubishi Trademark Committee with respect to continued use of Mitsubishi Marks by CMCC after the Closing Date, in the manner and for the period, agreed on by CMCC and MCC.

8.6 MCC Co-owned Patents

MCC shall have obtained written consent from each of the co-owners of the Co-owned MCC Patents with respect to MCC’s transfer to CMCC of MCC’s interest in each of the respective Co-owned MCC Patents.

8.7 Financing Matters

CMCC shall have entered into the loan agreement with MCFA in Japanese language based on major terms and conditions identified on Exhibit G and the termination agreement in Japanese language to terminate the Loan Agreement dated October 1, 2002 executed between CMCC and MCFA.

8.8 Resignations; Certain Agreements

Each of the directors and statutory auditors of CMCC nominated by MCC shall have submitted signed resignations effective as of the Closing Date and shall have entered into

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confidentiality and non-compete agreements with CMCC on terms that are satisfactory to Calgon in its reasonable discretion.

8.9 Due Diligence

Calgon shall have completed to its satisfaction, in its reasonable discretion, its financial, business, and legal due diligence investigation of CMCC.

8.10 No Material Adverse Change

Between the date of this Agreement and the Closing Date, there shall have been no Material Adverse Change, regardless of insurance coverage.

8.11 Employees; Employment Violations

(1)	CMCC shall have received offers of acceptance for employment from the majority of MCC Leased Employees who are identified on Exhibit I as a key person of CMCC which are satisfactory to Calgon in its reasonable discretion.
(2)	CMCC shall have resolved any discrepancies and cured any and all violations of employment law set forth on Part 8.11(2) of the Disclosure Letter, in a manner which is acceptable to Calgon.

8.12 Office Lease

MCC shall obtain and deliver to Calgon the consent of the master landlord with respect to the office lease at CMCC’s office located in Osaka.

8.13 Assignment of Agreements

MCC shall assign to CMCC and/or novate, as necessary, the Contracts set forth on Part 8.13 of the Disclosure Letter.

8.14 Assignment of Security

MCC shall assign to CMCC all security deposits, including any interest thereon, obtained by MCC in connection with CMCC’s business, held by MCC for CMCC’s benefit or that are otherwise necessary to operate the CMCC’s business set forth on Part 8.14 of the Disclosure Letter.

8.15 Material Consents

MCC shall have caused CMCC to acquire from its other party the consents of continuance after the Closing Date regarding the agreements identified on Part 8.15 of the Disclosure Letter, and consents to the assignment and/or novation of the agreements identified on Part 8.13 of the Disclosure Letter.

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8.16 Exclusive Agreement

CMCC and KN Carbon Tech Co., Ltd. shall have entered into an exclusive reproduction service agreement with a term of at least four (4) years from the Closing Date with respect to reactivated carbon, coconut-based new carbon, and impregnated carbon.

9. CONDITIONS PRECEDENT TO MCC’S OBLIGATION TO CLOSE

MCC’s obligation to sell the First Purchase Shares and the Assigned Intellectual Property, to grant the Licensed Intellectual Property, and to take the other actions required to be taken by MCC at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by MCC, in whole or in part):

9.1 Accuracy of Representations

All of Calgon’s representations and warranties in this Agreement (considered collectively), and each of these representations and warranties (considered individually), must have been accurate in all material respects as of the date of this Agreement and must be accurate in all material respects as of the Closing Date as if made on the Closing Date.

9.2 Performance

(1)

All of the covenants and obligations that Calgon is required to perform or to comply with pursuant to this Agreement at or prior to the Closing (considered collectively), and each of these covenants and obligations (considered individually), must have been performed and complied with in all material respects. Calgon must have delivered each of the documents required to be delivered by Calgon pursuant to Section 2.6.

(2)

All of the covenants and obligations that CMCC is required to perform or to comply with pursuant to this Agreement at or prior to the Closing (considered collectively), and each of these covenants and obligations (considered individually), must have been duly performed and complied with in all material respects. CMCC must have delivered each of the documents required to be delivered by CMCC pursuant to Section 2.6 and must have made the cash payment required to be made by CMCC at Closing pursuant to Sections 2.6.

9.3 Financing Matters

MCFA shall have entered into the loan agreement with CMCC in Japanese language based on major terms and conditions identified on Exhibit G and the termination agreement in Japanese language to terminate the Loan Agreement dated October 1, 2002 executed between CMCC and MCFA.

9.4 No Injunction

There must not be in effect any Legal Requirement or any injunction or other Order that (1) prohibits the sale of the Shares or the Assigned Intellectual Property by MCC to CMCC,

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and the license of the Licensed Intellectual Property by MCC to CMCC and (2) has been adopted or issued, or has otherwise become effective, since the date of this Agreement.

10. TERMINATION

10.1 Termination of Events

This Agreement may, by notice given prior to or at the Closing, be terminated:

(1)	by either Calgon or MCC if a material Breach of any provision of this Agreement has been committed by the other party (and in cases where Calgon is the terminating party, breaches by CMCC) and such Breach has not been waived;
(2)	(i) by Calgon if any of the conditions in Section 8 has not been satisfied as of the Closing Date or if satisfaction of such a condition is or becomes impossible (other than through the failure of Calgon to comply with its obligations under this Agreement) and Calgon has not waived such condition on or before the Closing Date; or (ii) by MCC, if any of the conditions in Section 9 has not been satisfied of the Closing Date or if satisfaction of such a condition is or becomes impossible (other than through the failure of MCC or CMCC to comply with its obligations under this Agreement) and MCC has not waived such condition on or before the Closing Date;
(3)	by mutual consent of Calgon and MCC; or
(4)	by either Calgon or MCC if the Closing has not occurred (other than through the failure of the party seeking to terminate this Agreement (and in the case of MCC seeking to terminate, or through the failure of CMCC) to comply fully with its obligations under this Agreement) on or before March 31, 2010, or such later date as the parties may agree upon.

10.2 Effect of Termination

Each party’s right of termination under Section 10.1 is in addition to any other rights it may have under this Agreement or otherwise, and the exercise of a right of termination will not be an election of remedies. If this Agreement is terminated pursuant to Section 10.1, all further obligations of the parties under this Agreement will terminate, except that the obligations in Sections 7.11, 12.1, 12.2, 12.4, 12.6, and 12.14 will survive; provided, however, that if this Agreement is terminated by a party because of the Breach of the Agreement by the other party or because one (1) or more of the conditions to the terminating party’s obligations under this Agreement is not satisfied as a result of the other party’s failure to comply with its obligations under this Agreement, the terminating party’s right to pursue all legal remedies will survive such termination unimpaired.

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11. INDEMNIFICATION; REMEDIES

11.1 Survival; Right to Indemnification Not Affected by Knowledge

All representations, warranties, covenants, and obligations in this Agreement, the Disclosure Letter, the supplements to the Disclosure Letter, all Exhibits to this Agreement, the certificates delivered pursuant to Sections 2.6(1)(ii), 2.6(3)(ii), 2.7(1)(ii), and 2.7(2)(ii), the Intellectual Property Assignment Certifications, and any other certificate or document delivered pursuant to this Agreement will survive the Closing. The right to indemnification, payment of Damages or other remedy based on such representations, warranties, covenants, and obligations will not be affected by any investigation conducted with respect to, the ownership of equity securities in CMCC, or any Knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement or the Closing Date, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant, or obligation. The waiver of any condition based on the accuracy of any representation or warranty, or on the performance of or compliance with any covenant or obligation, will not affect the right to indemnification, payment of Damages, or other remedy based on such representations, warranties, covenants, and obligations.

11.2 Indemnification and Payment of Damages by MCC

(1) Except as provided in Section 11.2(2) below, MCC will indemnify and hold harmless Calgon, CMCC, and their respective Representatives, shareholders, controlling persons, officers, directors and affiliates (collectively, the “Calgon Indemnified Persons”) for, and will pay to the Calgon Indemnified Persons the amount of, any loss, liability, claim, damage (including incidental and consequential damages), expense (including costs of investigation and defense and reasonable attorneys’ fees), fines, penalties or diminution of value, whether or not involving a third-party claim (collectively, “Damages”), arising, directly or indirectly, from or in connection with:

(a)	any Breach of any representation or warranty made by MCC in this Agreement (without giving effect to any supplement to the Disclosure Letter), the Disclosure Letter, the supplements to the Disclosure Letter, the Exhibits to this Agreement, or any other certificate or document delivered by MCC pursuant to this Agreement;
(b)	any Breach by MCC of any covenant or obligation of MCC in this Agreement;
(c)	ownership and operation, or condition of the Kurosaki Facility at any time on or prior to the Share Acquisition Date;
(d)	claims for or allegations of: (i) infringement, (ii) past or future royalties, and (iii) any other fees and expenses, in each case, relating to the intellectual

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property covered by the Toyota Co-owned Patents, except for the royalty stipulated in 7.17 (1);

(e)	any matter disclosed or required to be disclosed on Part 4.23 of the Disclosure Letter; and
(f)	any claims, allegations, violations, breaches, penalties or fines, whether intentional or unintentional, known or unknown, enforced against, CMCC, Calgon or MCC by any Governmental Body related to any action or inaction on the part of MCC.

(2) Notwithstanding the provision of Section 11.2(1) above, MCC will indemnify and hold harmless the Calgon Indemnified Persons for, and will pay to the Calgon Indemnified Persons fifty-one percent (51%) of any Damages, arising, directly or indirectly, from or in connection with any Breach of any representation or warranty made by MCC under the provisions of Section 4 other than Sections 4.1, 4.2, 4.3, 4.14, 4.19 and 4.23.

11.3 Indemnification and Payment of Damages by MCC—Environmental Matters

In addition to the provisions of Section 11.2, from and after Closing, MCC will indemnify and hold harmless Calgon, CMCC and the other Calgon Indemnified Persons for, and will pay to Calgon, CMCC, and the other Calgon Indemnified Persons the amount of, any Damages (including costs of cleanup, containment, or other remediation) arising, directly or indirectly, from or in connection with:

(1)

any Environmental, Health, and Safety Liabilities arising out of or relating to: (i) the ownership, operation, or condition of the Kurosaki Facility or any other properties and assets (whether real, personal, or mixed and whether tangible or intangible) which MCC contributed to CMCC, or (ii) any Hazardous Materials or other contaminants that are or were present on the Kurosaki Facility or such other properties and assets at any time; or

(2)

any bodily injury (including illness, disability, and death, and regardless of when any such bodily injury occurred, was incurred, or manifested itself), personal injury, property damage (including trespass, nuisance, wrongful eviction, and deprivation of the use of real property), or other damage of or to any Person, including any employee or former employee of MCC or CMCC or any other Person for whose conduct they are or may be held responsible, in any way arising from or allegedly arising from any Hazardous Activity conducted or allegedly conducted with respect to the Kurosaki Facility, or from Hazardous Materials present or suspected to be present on or at the Kurosaki Facility (or present or suspected to be present on any other property, if such Hazardous Materials emanated or allegedly emanated from the Kurosaki Facility).

MCC will be entitled to control any cleanup, any related Proceeding, and, except as provided in the following sentence, any other Proceeding with respect to which indemnity

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may be sought under this Section 11.3. The procedure described in Section 11.9 will apply to any claim solely for monetary damages relating to a matter covered by this Section 11.3.

11.4 Indemnification and Payment of Damages by Calgon

(1) Calgon will indemnify and hold harmless MCC and its respective Representatives, shareholders, controlling persons, and affiliates (collectively, the “MCC Indemnified Persons”) for, and will pay to such MCC Indemnified Persons the amount of any Damages, arising, directly or indirectly, from or in connection with:

(a)	any Breach of any representation or warranty made by Calgon in this Agreement or any other certificate or document delivered by Calgon pursuant to this Agreement;
(b)	any Breach by Calgon of any covenant or obligation of Calgon in this Agreement; or
(c)	ownership and operation, or condition of the Fukui Facility at any time on or prior to the Share Acquisition Date.

(2) Calgon will indemnify and hold harmless the MCC Indemnified Persons for, and will pay to such MCC Indemnified Persons the amount of any Damages (excluding consequential damages) arising directly or indirectly from or in connection with acts or omissions of CMCC after the Closing Date; provided that Calgon will have no liability for indemnification with respect to any matter related to or arising in connection with a Breach of this Agreement or any Ancillary Agreement by MCC.

11.5 Indemnification and Payment of Damages by Calgon—Environmental Matters

In addition to the provisions of Section 11.4, from and after Closing, Calgon will indemnify and hold harmless MCC and the other MCC Indemnified Persons for, and will pay to MCC, and the other MCC Indemnified Persons the amount of, any Damages (including costs of cleanup, containment, or other remediation) arising, directly or indirectly, from or in connection with:

(1)

any Environmental, Health, and Safety Liabilities arising out of or relating to: (i) the ownership, operation, or condition of the Fukui Facility or any other properties and assets (whether real, personal, or mixed and whether tangible or intangible) which Calgon contributed to CMCC, or (ii) any Hazardous Materials or other contaminants that are or were present on the Fukui Facility or such other properties and assets at any time; or

(2)

any bodily injury (including illness, disability, and death, and regardless of when any such bodily injury occurred, was incurred, or manifested itself), personal injury, property damage (including trespass, nuisance, wrongful eviction, and deprivation of the use of real property), or other damage of or to any Person, including any employee or former employee of Calgon or CMCC or any other Person for whose conduct they are or may be held responsible, in any way arising

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from or allegedly arising from any Hazardous Activity conducted or allegedly conducted with respect to the Fukui Facility, or from Hazardous Materials present or suspected to be present on or at the Fukui Facility (or present or suspected to be present on any other property, if such Hazardous Material emanated or allegedly emanated from the Fukui Facility).

Calgon will be entitled to control any cleanup, any related Proceeding, and, except as provided in the following sentence, any other Proceeding with respect to which indemnity may be sought under this Section 11.5. The procedure described in Section 11.9 will apply to any claim solely for monetary damages relating to a matter covered by this Section 11.5.

11.6 Time Limitations

(1)

If the Closing occurs, MCC will have no liability (for indemnification or otherwise) with respect to any representation or warranty, or covenant or obligation to be performed and complied with prior to the Closing Date, other than those in Sections 3.4, 4.3, 4.14, 4.19 and 4.23, unless on or before the second anniversary of the Closing Date, Calgon notifies MCC of a claim, specifying the factual basis of that claim in reasonable detail to the extent then known by Calgon. A claim with respect to (A) Section 4.14 and 4.23, or a claim for indemnification or reimbursement not based upon any representation or warranty or any covenant or obligation to be performed and complied with prior to the Closing Date, may be made on or before the fifth anniversary of the Closing Date, and (B) Sections 3.4, 4.3, and 4.19 may be made at any time.

(2)

If the Closing occurs, Calgon will have no liability (for indemnification or otherwise) with respect to any representation or warranty, or covenant or obligation to be performed and complied with prior to the Final Closing Date unless on or before the second anniversary of the Closing Date, MCC notifies Calgon of a claim, specifying the factual basis of that claim in reasonable detail to the extent then known by MCC.

11.7 Limitations on Amount—MCC

MCC will have no liability (for indemnification) with respect to the matters described in clause (1)(a) other than Breaches of Sections 3.4, 4.3, 4.14, 4.19, and 4.23, clause (1)(b), clause (1)(d) or clause (2) of Section 11.2 until the total of all Damages with respect to such matters exceeds ¥30,000,000, and then only for the amount by which such Damages exceed ¥30,000,000 (the “MCC Basket”); provided, however, that MCC shall not be liable for such Damages in excess of 50% of the Share Purchase Price (the “MCC Cap”); provided, further, and notwithstanding anything to the contrary contained herein any Breaches of Sections 3.4, 4.3, 4.14, 4.19, and 4.23 shall not be subject to the MCC Basket or the MCC Cap in any respect. However, this Section 11.7 will not apply to any Breach of any of MCC’s representations and warranties of which MCC had Knowledge at any time prior to the date on which such representation and warranty is made or any intentional Breach by MCC of any covenant or obligation.

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11.8 Limitations on Amount—Calgon

Calgon will have no liability (for indemnification) with respect to the matters described in clause (1)(a), or clause (1)(b) of Section 11.4 until the total of all Damages with respect to such matters exceeds ¥30,000,000, and then only for the amount by which such Damages exceed ¥30,000,000; provided that Calgon shall not be liable for such Damages in excess of 50% of the Share Purchase Price. However, this Section 11.8 will not apply to any Breach of any of Calgon’s representations and warranties of which Calgon had Knowledge at any time prior to the date on which such representation and warranty is made or any intentional Breach by Calgon of any covenant or obligation, and Calgon will be liable for all Damages with respect to such Breaches.

11.9 Procedure for Indemnification—Third-Party Claims

(1)

Promptly after receipt by an indemnified party under Section 11.2, 11.3, 11.4, or 11.5 of notice of the commencement of any Proceeding against it, such indemnified party will, if a claim is to be made against an indemnifying party under such Section, give notice to the indemnifying party of the commencement of such claim, but the failure to notify the indemnifying party will not relieve the indemnifying party of any liability that it may have to any indemnified party, except to the extent that the indemnifying party demonstrates that the defense of such action is prejudiced by the indemnifying party’s failure to give such notice.

(2)

If any Proceeding referred to in Section 11.9(1) is brought against an indemnified party and it gives notice to the indemnifying party of the commencement of such Proceeding, the indemnifying party will, unless the claim involves Taxes, be entitled to participate in such Proceeding and, to the extent that it wishes (unless (i) the indemnifying party is also a party to such Proceeding and the indemnified party determines in good faith that joint representation would be inappropriate, or (ii) the indemnifying party fails to provide reasonable assurance to the indemnified party of its financial capacity to defend such Proceeding and provide indemnification with respect to such Proceeding), to assume the defense of such Proceeding with counsel satisfactory to the indemnified party and, after notice from the indemnifying party to the indemnified party of its election to assume the defense of such Proceeding, the indemnifying party will not, as long as it diligently conducts such defense, be liable to the indemnified party under this Section 11 for any fees of other counsel or any other expenses with respect to the defense of such Proceeding, in each case subsequently incurred by the indemnified party in connection with the defense of such Proceeding, other than reasonable costs of investigation. If the indemnifying party assumes the defense of a Proceeding, (i) it will be conclusively established for purposes of this Agreement that the claims made in that Proceeding are within the scope of and subject to indemnification; (ii) no compromise or settlement of such claims may be effected by the indemnifying party without the indemnified party’s consent unless (A) there is no finding or admission of any violation of Legal Requirements or any violation of the rights of any Person and no effect on any other claims that may be made against the indemnified party, and (B) the sole relief provided is monetary damages that are

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	paid in full by the indemnifying party; and (iii) the indemnified party will have no liability with respect to any compromise or settlement of such claims effected without its consent. If notice is given to an indemnifying party of the commencement of any Proceeding and the indemnifying party does not, within ten (10) days after the indemnified party’s notice is given, give notice to the indemnified party of its election to assume the defense of such Proceeding, the indemnifying party will be bound by any compromise or settlement effected by the indemnified party.
(3)	Notwithstanding the foregoing, if an indemnified party determines in good faith that there is a reasonable probability that a Proceeding may adversely affect it or its affiliates other than as a result of monetary damages for which it would be entitled to indemnification under this Agreement, the indemnified party may, by notice to the indemnifying party, assume the exclusive right to defend, compromise, or settle such Proceeding, but the indemnifying party will not be bound by any compromise or settlement effected without its consent (which may not be unreasonably withheld).
(4)	MCC hereby consents to the non-exclusive jurisdiction of any court in which a Proceeding is brought against any Indemnified Person for purposes of any claim that an Indemnified Person may have under this Agreement with respect to such Proceeding or the matters alleged therein, and agrees that process may be served on MCC with respect to such a claim anywhere in the world.

11.10 Procedure for Indemnification—Other Claims

A claim for indemnification for any matter not involving a third-party claim may be asserted by notice to the party from whom indemnification is sought.

12. GENERAL PROVISIONS

12.1 Expenses

Except as otherwise expressly provided in this Agreement, each Party will bear its respective expenses incurred in connection with the preparation, execution, and performance of this Agreement and the Contemplated Transactions, including all fees and expenses of agents, representatives, counsel, and accountants, provided, however, that the expenses paid to Mizuho Securities Co., Ltd. will be borne by MCC.

12.2 Public Announcements

Any public announcement or similar publicity with respect to this Agreement or the Contemplated Transactions will be issued, if at all, at such time and in such manner as Calgon determines. Unless consented to by Calgon in advance or required by Legal Requirements, prior to the Closing MCC shall, and shall cause CMCC to, keep this Agreement strictly confidential and may not make any disclosure of this Agreement to any Person. MCC and Calgon will consult with each other concerning the means by which CMCC’s employees, customers, and suppliers and others having dealings with CMCC will

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be informed of the Contemplated Transactions, and Calgon will have the right to be present for any such communication.

12.3 Termination of Joint Venture Agreement

MCC and Calgon acknowledge and agree that effective upon the Closing Date, the Joint Venture Agreement shall be terminated; provided that the confidentiality obligations set forth in Article 21 of the Joint Venture Agreement shall survive such termination.

12.4 Waiver and Release

MCC hereby waives any potential claims against and releases and forever discharges CMCC and Calgon and their respective directors, officers, representatives, agents and each of their respective successors and assigns from any and all claims, liabilities, damages and causes of action which MCC now has, has ever had or may hereafter have against such Persons arising in connection with the Toyota Co-owned Patents.

12.5 Notices

All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly given when (1) delivered by hand (with written confirmation of receipt), (2) sent by facsimile (with written confirmation of receipt), provided that a copy is mailed by registered mail, return receipt requested, or (3) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses and facsimile numbers set forth below (or to such other addresses and facsimile numbers as a party may designate by notice to the other parties):

MCC:	Mitsubishi Chemical Corporation
	14-1, Shiba 4-chome, Minato-ku, Tokyo, Japan
	Attention: General Manager,
	Performance Products Planning Department
	Telephone No.: +81-3-6414-3937
	Facsimile No.: +81-3-6414-3289
Calgon:	Calgon Carbon Corporation
	400 Calgon Carbon Drive, Pittsburgh, PA, USA
	Attention: General Counsel
	Telephone No.: 412-787-6786
	Facsimile No.: 412-787-4511
with a copy (not constituting notice) to:
	K&L Gates LLP
	Henry W. Oliver Building
	535 Smithfield Street, Pittsburgh, PA, USA
	Attention: David Grubman
	Telephone No.: 412-355-6527
	Facsimile No.: 412-355-6501

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	Anderson Mori & Tomotsune
	Izumi Garden Tower
	6-1, Roppongi 1-chome, Minato-ku, Tokyo, Japan
	Attention: James Minamoto
	Telephone No.: +81-3-6888-1056
	Facsimile No.: +81-3-6888-3056
CMCC:	Calgon Mitsubishi Chemical Corporation
	1-5, Kyobashi 1-chome, Chuo-ku, Tokyo, Japan
	Attention: Director of Administration Department
	Telephone No.: +81-3-5205-0666
	Facsimile No.: +81-3-5205-0660

12.6 Arbitration

Each Party shall use its reasonable commercial efforts to solve, through mutual consultation, without recourse to arbitration, any disputes or differences which might arise in connection with this Agreement. However, all disputes, controversies or differences which may arise between the parties hereto, out of or in relation to or in connection with this Agreement shall be finally settled by arbitration in New York City, New York, U.S.A. in accordance with the Rules of Arbitration of the International Chamber of Commerce, which rules are deemed to be incorporated by reference in this clause. The language of the arbitration shall be English. The arbitral award shall be final, binding and conclusive on the Parties, with no further rights of appeal. Judgment upon the award rendered may be entered in any court having jurisdiction or application may be made to such court for a judicial acceptance of the award and an order of enforcement, as the case may be. Notwithstanding the foregoing, the Parties are permitted to seek injunctive relief from a court having jurisdiction pursuant to the provisions of Sections 7.11, 7.12, 7.14, 7.15, 7.16, and 12.7, including without limitation, to enforce any interim award or award of injunctive relief by any arbitrator.

12.7 Further Assurances

The parties agree (1) to furnish upon request to each other such further information, (2) to execute and deliver to each other such other documents, and (3) to do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement and the documents referred to in this Agreement. Without limiting the generality of the foregoing sentence, MCC agrees that to the extent it is determined after the Closing Date that any Contracts that were used by CMCC in its business prior to the Closing Date are in the name of MCC or any of its affiliates, upon request, MCC shall take or cause such affiliate to take, as applicable, any and all actions necessary including the payment of money to assign such Contracts to CMCC.

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12.8 Waiver

The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay by any party in exercising any right, power, or privilege under this Agreement or the documents referred to in this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege. To the maximum extent permitted by applicable law, (1) no claim or right arising out of this Agreement or the documents referred to in this Agreement can be discharged by one (1) party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other party; (2) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (3) no notice to or demand on one (1) party will be deemed to be a waiver of any obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement or the documents referred to in this Agreement.

12.9 Entire Agreement and Modification

This Agreement supersedes all prior agreements between the parties with respect to its subject matter and constitutes (along with the documents referred to in this Agreement) a complete and exclusive statement of the terms of the agreement between the parties with respect to its subject matter. This Agreement may not be amended except by a written agreement executed by the party to be charged with the amendment.

12.10 Disclosure Letter

(1)	The disclosures in the Disclosure Letter, and those in any supplement thereto, must relate only to the representations and warranties in the Section of the Agreement to which they expressly relate and not to any other representation or warranty in this Agreement.
(2)	In the event of any inconsistency between the statements in the body of this Agreement and those in the Disclosure Letter (other than an exception expressly set forth as such in the Disclosure Letter with respect to a specifically identified representation or warranty), the statements in the body of this Agreement will control.

12.11 Assignments, Successors, and No Third-Party Rights

Neither party may assign any of its rights under this Agreement without the prior consent of the other parties, except that Calgon may assign any of its rights under this Agreement to any direct or indirect wholly owned subsidiary. Subject to the preceding sentence, this Agreement will apply to, be binding in all respects upon, and inure to the benefit of the successors and permitted assigns of the parties. Nothing expressed or referred to in this Agreement will be construed to give any Person other than the parties to this Agreement any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement. Except for the provisions in Section 11 relating to

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Calgon Indemnified Persons and MCC Indemnified Persons, this Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the parties to this Agreement and their successors and assigns.

12.12 Severability

If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

12.13 Section Headings, Construction

The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation. All references to “Section” or “Sections” refer to the corresponding Section or Sections of this Agreement. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Unless otherwise expressly provided, the word “including” does not limit the preceding words or terms.

12.14 Governing Law

This Agreement will be governed by the laws of Japan without regard to conflict of laws principles.

12.15 Counterparts

This Agreement may be executed in one (1) or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one (1) and the same agreement.

[SIGNATURE PAGE FOLLOWS]

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first written above.

CALGON MITSUBISHI CHEMICAL CORPORATION
By:	/s/ Hidenori Inami
	Name:	Hidenori Inami
	Title:	President

MITSUBISHI CHEMICAL CORPORATION
By:	/s/ Shigeru Tsuyuki
	Name:	Shigeru Tsuyuki
	Title:	Member of the Board Managing Exective Officer Chief Operation Officer of Performance Products Division

CALGON CARBON CORPORATION
By:	/s/ Leroy M. Ball
	Name:	Leroy M. Ball
	Title:	Vice President Chief Financial Officer

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EX-10.13

Exhibit 10.13

SEPARATION AGREEMENT AND RELEASE

WHEREAS, Calgon Carbon Corporation (“Calgon Carbon”) employed Dennis M. Sheedy (“Mr. Sheedy”); and

WHEREAS, Calgon Carbon and Mr. Sheedy wish to resolve any and all matters between them relating to Mr. Sheedy’s employment and the cessation of that employment;

NOW, THEREFORE, in consideration of the mutual undertakings set forth below, this Separation Agreement and Release (“SAR”) will govern Mr. Sheedy’s cessation of employment with Calgon Carbon and will resolve, finally and completely, any and all possible claims and disputes between Calgon Carbon and Mr. Sheedy arising from his employment and cessation of employment:

          1. Except as stated herein, this SAR will replace and supersede the August 1, 2007 Employment Agreement between Calgon Carbon and Mr. Sheedy (the “Existing Employment Agreement”), any rights of Mr. Sheedy under any Restricted Stock Agreement, Restricted Performance Stock Unit Agreement or Stock Option Agreement between Calgon Carbon and Mr. Sheedy (collectively, the “Equity Agreements”), and any other agreements pertaining to Mr. Sheedy’s employment by Calgon Carbon. Notwithstanding the foregoing, the rights and obligations of the parties under Section 17 of the Employment Agreement shall remain in effect.

          2. Calgon Carbon’s employment records will reflect that Mr. Sheedy’s employment with Calgon Carbon terminated on September 2, 2009 (“Termination Date”) by an involuntary termination by the Company without cause, under Section 4(b) of the Existing Employment Agreement.

          3. For purposes of this SAR, the Termination Date and the term “termination,” when used in the context of a condition to, or timing of, payment hereunder shall be interpreted to mean a “separation from service” as that term is used in Section 409A of the Internal Revenue Code of 1986, as amended.

          4. Without Mr. Sheedy entering into this SAR, Mr. Sheedy is not entitled to any of the taxable payments provided for in subsections 4(a) through 4(e), other than those set forth in Section 4(c), and he shall only obtain such payments upon his executing and not revoking the SAR. Mr. Sheedy is not being provided, directly or indirectly, with any election as to the taxable year of payments of any of the following payments. After timely receipt of a fully signed and dated copy of this SAR from Mr. Sheedy and assuming that Mr. Sheedy does not revoke the SAR under Section 15, Calgon Carbon agrees to:

a.	pay the COBRA (short for Consolidated Omnibus Budget Reconciliation Act) payments on Mr. Sheedy’s behalf for continued medical and dental coverage, in each case for a period of eighteen (18) months after the Termination Date, without regard to the residence of Mr. Sheedy during such 18 months, so long as his primary residence is within the 48 contiguous United States.
b.	extend the time within which Mr. Sheedy may exercise his already issued and vested stock options for thirteen thousand fifty (13,050) shares of Calgon Carbon stock until the later of (i) three (3) months from the date of this Agreement and (ii) thirty days after the Company publicly announces its earnings results for the third quarter of 2009, but in either case not beyond the original expiration date of such stock options. Mr. Sheedy understands that such stock options as extended will be non-statutory and not incentive stock options. The stock options and exercise price of such stock options are set forth on “Appendix D.”
c.	on the eighth (8th) day after timely receipt of a fully signed and dated copy of this SAR from Mr. Sheedy, pay to Mr. Sheedy $4,140.30, less deductions and other withholdings required by law, representing five (5) days of accrued but unused 2009 vacation and $9,936.72, less deductions and other withholdings required by law,

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	representing twelve (12) days of prorated 2010 vacation, all as accrued prior to the Termination Date.
d.	reimburse Mr. Sheedy for the reasonable costs of moving office furniture which is owned by him to a location within 50 miles of Pittsburgh, within fifteen (15) days of receipt from Mr. Sheedy of written evidence of such costs; provided, that such reimbursement must be made on or before March 14, 2010.
e.	within thirty (30) days after the date of this SAR, pay for life insurance coverage for Mr. Sheedy for a period of eighteen (18) months after the Termination Date.

     On the date that is one day after the six month anniversary of the Termination Date, Calgon Carbon agrees to:

x.	pay Mr. Sheedy $322,950.00, less deductions and other withholdings required by law, which is an amount equal to eighteen (18) months of pay at his base monthly rate as of the Termination Date.
y.	Pay Mr. Sheedy $118,250.00, less deductions and other withholdings required by law, which is an amount equal to one and one-half (1.5) of the average of the payments to him under the short term incentive plan for the years 2006, 2007 and 2008.

     Mr. Sheedy’s accrual of all other benefits and all other participation in Calgon Carbon’s 401(k) salary, pension, and all other benefit plans will terminate as of the Termination Date except as otherwise stated in this SAR.

     Mr. Sheedy understands and agrees that (i) except as provided herein he will not receive any shares or other payments under any option agreement, restricted stock agreement or restricted performance stock unit agreement and (ii) the options outlined

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in Section 4(b) are in full and final settlement and release of all possible legal claims by him, including without limitation claims under the Equity Agreements or related plans, and, in any event, they exceed anything to which he is otherwise entitled to receive from Calgon Carbon except under this SAR.

     Until the fourth (4^th) business day after the public announcement of third quarter earnings by Calgon Carbon, Mr. Sheedy shall be subject to the insider trading policy of Calgon Carbon. Among other things, this means Mr. Sheedy shall only sell shares of Calgon Carbon stock (including the restricted stock and stock obtained from the restricted performance stock units and the exercise of stock options received from Calgon Carbon) during any applicable Calgon Carbon trading windows. After such fourth (4^th) business day described above, Mr. Sheedy shall no longer be considered an insider under such insider trading policy and shall be free to sell his shares without being limited to a trading window, subject only to applicable law.

          5. Mr. Sheedy understands and agrees that neither Calgon Carbon, nor any successor or affiliate of Calgon Carbon, will be obligated in any way to provide him with future employment, compensation, or benefits for any reason, except for 401(k) and other pension plan payments due under the terms of such plans, payments and benefits specified in this SAR, and the right to convert to individual insurance coverage or other benefits to the extent required by law. Mr. Sheedy further agrees not to seek any such employment, re-employment compensation, or benefits.

          6. By entering into this SAR, Calgon Carbon expressly denies any unlawful or unfair conduct.

7. a. Except as otherwise required by law, including any necessary administrative filings, neither Mr. Sheedy— meaning him or anybody acting on his behalf — nor Calgon Carbon — meaning any member of its senior management with actual knowledge of this SAR and who is acting on Calgon Carbon’s behalf — will engage, directly or indirectly, in any publicity or other action or activity to or with any person or entity that reflects adversely upon Mr. Sheedy or his work performance with Calgon Carbon or adversely

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	affects or reflects upon Calgon Carbon, its board, officers, employees, agents, and business, including any successor or affiliate of Calgon Carbon. Mr. Sheedy understands and agrees that this includes, without limit, any conversation or activity that could or would foster conflict, negativism, low morale, or an anti-management posture among Calgon Carbon’s employees and/or the public, as well as any untruthful, defamatory, harassing or disparaging communications about Calgon Carbon, its board, officers, employees, agents, and business, including any successor or affiliate of Calgon Carbon. This would apply, for instance, to any modification to Calgon Carbon’s strategic plan or management structure. Mr. Sheedy and Calgon Carbon further agree that these obligations will continue, without termination or expiration, despite the termination or expiration of any other obligation in this SAR.
b.	Mr. Sheedy agrees to keep confidential any proprietary information and other knowledge acquired or otherwise learned from or on behalf of Calgon Carbon during his employment to the extent such information or knowledge has not been published, has not been disseminated, or is not otherwise a matter of general public knowledge.
c.	Except as otherwise required by law, Mr. Sheedy and Calgon Carbon agree to keep confidential and not disclose the terms of this SAR to any person, with the exception of attorneys or other individuals consulted by Mr. Sheedy and Calgon Carbon to understand the interpretation, application, or legal or financial effect of this SAR or to implement any portion of it, so long as, as a precondition of receipt of this SAR or any information contained in it, any such person pledges to strictly maintain such confidentiality.

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8.	a.	Mr. Sheedy agrees to continue to fully comply with the covenants previously made by him under Stock Option Agreements with Calgon Carbon and in Sections 7, 8 and 9 of the Existing Employment Agreement. The applicable provisions of the Stock Option Agreements are attached and incorporated here as “Appendix A.”
	b.	In addition, Calgon Carbon and Mr. Sheedy restate Section 17 of the Existing Employment Agreement as follows:

[17] Indemnification and Insurance.

     The Company shall defend and hold Employee harmless to the fullest extent permitted by applicable law in connection with any claim, action, suit, investigation or proceeding arising out of or relating to performance by Employee of services for, or action of Employee as a director, officer or employee of the Company, or of any other person or enterprise at the request of the Company. Expenses incurred by Employee in defending a claim, action, suit or investigation or criminal proceeding shall be paid by the Company in advance of the final disposition thereof upon the receipt by the Company of an undertaking by or on behalf of the Executive to repay said amount unless it shall ultimately be determined that Employee is entitled to be indemnified hereunder. The foregoing shall be in addition to any indemnification rights Employee may have by law, contract, charter, by-law or otherwise. Employee shall be covered under any director and officer liability insurance purchased or maintained by the Company on a basis no less favorable than the Company makes available to peer executives. After the occurrence of a Change of Control, the Company shall maintain in effect and shall provide to Employee director and officer liability insurance coverage that is no less favorable to Employee than that coverage in effect immediately prior to such Change of Control.

          9. Mr. Sheedy agrees to immediately return any and all Calgon Carbon documents or other materials — whether in “hard copy,” electronic or other form — including, without limit, all strategic plans, budgets, pricing, and other financial and business information, customer lists and all other customer information, files, software, policy manuals, office supplies, keys, name tags, and all other Calgon Carbon property and equipment in his possession or under his control, irrespective of whether such information is considered and kept confidential by and for Calgon Carbon, except to the extent any of the same is needed by Mr. Sheedy to perform consulting services to Calgon Carbon, in which case the same shall be returned at the conclusion of such consulting services.

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          10. Mr. Sheedy agrees to cooperate fully with Calgon Carbon in the defense of any claims made by or against Calgon Carbon by, among other things, making himself periodically available to Calgon Carbon and its representatives, at reasonable times and on reasonable notice, consistent with Mr. Sheedy’s scheduled professional responsibilities, to discuss and provide assistance concerning such claims to the extent that they relate to services performed by him for Calgon Carbon or its clients, information known by him, or any alleged act or omission by him. Beyond this, Mr. Sheedy will remain fully supportive of Calgon Carbon in all matters, including litigation matters. Nothing in this Section, however, will be interpreted to obligate Mr. Sheedy to violate the law or any legal obligation. Mr. Sheedy further agrees to cooperate in authorizing and processing any documentation needed by Calgon Carbon for any other business—related matter and by providing reasonable consulting assistance to his successor at Calgon Carbon. Calgon Carbon will reimburse Mr. Sheedy for his reasonable, out-of-pocket expenses associated with such cooperation, including reasonable travel expenses. All reimbursement payments with respect to expenses incurred within a particular year shall be made within fifteen (15) days of receipt from Mr. Sheedy of evidence of such expenses, and in any event no later than the end of Mr. Sheedy’s taxable year following the taxable year in which the expense was incurred. The amount of reimbursable expenses incurred in one taxable year of Mr. Sheedy shall not affect the amount of reimbursable expenses in a different taxable year and such reimbursement shall not be subject to liquidation of exchange for another benefit.

          11. Mr. Sheedy and Calgon Carbon understand and agree that the terms and conditions of this SAR constitute the full and complete understandings, agreements, and promises of the parties, and that there are no oral or written understandings, agreements, promises or inducements made or offered with respect to the matters covered hereby other than those set forth in this SAR. Any amendment to this SAR must be in writing and signed by Mr. Sheedy and Calgon Carbon to be effective.

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          12. In exchange for Calgon Carbon’s promises contained in this SAR, and other good and sufficient consideration, and intending to be legally bound, Mr. Sheedy has executed the Release attached and incorporated herein as “Appendix B-1.” If, contrary to this Release and SAR, a lawsuit is filed by or on behalf of Mr. Sheedy, or Mr. Sheedy otherwise commits a material breach of this SAR, Calgon Carbon will have the right, without affecting the continued validity and enforceability of this SAR, and in addition to its other legal and equitable remedies, to discontinue all further payments and benefits due under this SAR and to seek damages and other redress at law for any and all damages, costs and fees until full and final resolution of the alleged breach. Mr. Sheedy understands and agrees that the consideration outlined in this SAR, including, without limit, the options, benefits, and payments in Section 4 are provided by Calgon Carbon with the expectation of and in reliance upon Mr. Sheedy’s full and final settlement of all possible legal claims, as well as his pledge to fully comply with the terms of this SAR, specifically including the promises in Sections 7, 8 and 9. Calgon Carbon has executed the Release attached and incorporated herein as “Appendix B-2.”

          13. Mr. Sheedy acknowledges receipt of Calgon Carbon’s letter outlining possible legal rights under the federal Older Workers Benefit Protection Act (“OWBPA”) and urging him to consult with an attorney, that he has had at least a twenty-one (21) day opportunity — an opportunity he is free to use in whole or in part — to consider the terms of this SAR, and that he has agreed to and signed this SAR voluntarily after such twenty-one (21) day opportunity. Attached as “Appendix C” is a true and correct copy of that letter.

          14. Mr. Sheedy and Calgon Carbon swear that they have read this SAR carefully, understand it fully, and intend to be legally bound by its terms. Mr. Sheedy further swears that he has had a full and fair opportunity to consult with an attorney to help him fully understand and appreciate the interpretation, application, and full legal effect of this SAR and that he has agreed to and signed this SAR voluntarily following good faith bargaining over its terms.

          15. This SAR will become legally effective and enforceable on the eighth (8th) calendar day following Mr. Sheedy’s timely execution of this SAR unless,

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during the intervening seven (7) days, Mr. Sheedy has revoked his agreement to this SAR in writing and delivered such revocation to Calgon Carbon.

          16. Mr. Sheedy is solely responsible for all tax liabilities and other consequences beyond the deductions made by Calgon Carbon from amounts payable under this SAR. Mr. Sheedy agrees that Calgon Carbon has no such responsibility, and Mr. Sheedy will indemnify and hold Calgon Carbon harmless from any such tax liabilities or other consequences, with no requirement to pay any further sum to him for any reason, including, without limit, unanticipated tax liabilities or other consequences.

          17. This SAR will be governed by Pennsylvania law, except as preempted by federal law.

          18. Mr. Sheedy and Calgon Carbon waive any right to a court (including jury) proceeding and instead agree to submit any dispute over the application, interpretation, validity, or any other aspect of the SAR to final and binding arbitration consistent with the application of the Federal Arbitration Act and the employment or comparable procedural rules of the American Arbitration Association (“AAA”) before an arbitrator who is a member of the National Academy of Arbitrators (“NAA”) out of an NAA panel of eleven (11) arbitrators to be supplied by the AAA. Only true neutrals will be eligible for consideration as arbitrators and under no circumstances will AAA furnish the names of individuals who represent employees, unions, or employers.

          19. If a court, arbitrator, or other authority determines that any term, condition, clause, or other provision of this SAR is void or invalid, it, he, or she will have discretion to modify such term, condition, clause, or other provision of this SAR to make it valid. Alternatively, if it, he, or she declines to make such a modification and rules it invalid, the remaining portions of this SAR will remain in full force and effect.

          20. Nothing in this SAR will prevent or otherwise hinder Mr. Sheedy’s access to the Federal Equal Employment Opportunity Commission. But the Release in Appendix B-1, as stated, will bar Mr. Sheedy from any remedy.

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          21. All notices required or permitted under this SAR will be in writing and considered delivered when delivered in person or deposited in the United States mail, with postage prepaid and addressed as follows:

To: Dennis M. Sheedy
        109 Wesport Drive
        Pittsburgh, PA 15238

To: William Gerak
        Director of Human Resources
        Calgon Carbon Corporation
        P.O. Box 717
        Pittsburgh, PA 15230

These addresses may be changed by either party by written notice to the other party as stated.

[Remainder of page left blank intentionally]

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This SAR is signed on the dates set forth below to be effective as of the 14^th day of October, 2009.

AGREED:		Dated: October 6, 2009
/s/ Dennis M. Sheedy
Dennis M. Sheedy
For Myself, My Heirs, Personal Representative and Assigns
CALGON CARBON CORPORATION		Dated: October 6, 2009
By:	/s/ John S. Stanik
	John S. Stanik
Title:
	Chairman & CEO

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APPENDIX A

ATTACHMENT

(This attachment is attached to and constitutes part of the Stock Option Agreement, and the provisions hereof are binding on the Optionee.)

     1. Confidential Information, etc.

          (a) Optionee recognizes and acknowledges that: (i) in the course of Optionee’s employment by the Company it will be necessary for Optionee to acquire information which could include, in whole or in part, information concerning the Company’s sales, sales volume, sales methods, sales proposals, customers and prospective customers, identity of customers and prospective customers, identity of key purchasing personnel in the employ of customers and prospective customers, amount or kind of customers’ purchases from the Company, the Company’s sources of supply, computer programs, system documentation, special hardware, product hardware, related software development, manuals, formulae, processes, methods, machines, compositions, ideas, improvements, inventions or other confidential or proprietary information belonging to the Company or relating to the Company’s affairs (collectively referred to herein as the “Confidential Information”); (ii) the Confidential Information is the property of the Company; (iii) the use, misappropriation or disclosure of the Confidential Information would constitute a breach of trust and could cause irreparable injury to the Company; and (iv) it is essential to the protection of the Company’s good will and to the maintenance of the Company’s competitive position that the Confidential Information be kept secret and that Optionee not disclose the Confidential Information to others or use the Confidential Information to Optionee’s own advantage or the advantage of others.

          (b) Optionee further recognizes and acknowledges that it is essential for the proper protection of the business of the Company that Optionee be restrained (i) from soliciting of inducing any Optionee of the Company or of any subsidiary of the Company (collectively, the “Company”) to leave the employ of the Company, (ii) from hiring or attempting to hire any Optionee of the Company, (iii) from soliciting the trade of or trading with the customers and suppliers of the Company for any business purpose, and (iv) from competing against the Company for a reasonable period.

          (c) Optionee agrees to hold and safeguard the Confidential Information in trust for the Company, its successors and assigns and agrees that he or she shall not, without the prior written consent of the Company, disclose or make available to anyone for use outside the Company at any time, either during his or her employment by the Company or subsequent to the termination of his or her employment by the Company for any reason, including without limitation termination by the Company in a termination for cause or otherwise, any of the Confidential Information, whether or not developed by the Optionee, except as required in the performance of Optionee’s duties to the Company.

          (d) Upon the termination of Optionee’s employment by the Company or by Optionee for any reason, including without limitation termination by the Company in a termination for cause or otherwise, Optionee shall promptly deliver to the Company all

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originals and copies of correspondence, drawings, blueprints, financial and business records, marketing and publicity materials, manuals, letters, notes, notebooks, reports, flow-charts, programs, proposals and any documents concerning the Company’s customers or concerning products or processes used by the Company and, without limiting the foregoing, shall promptly deliver to the Company any and all other documents or materials containing or constituting Confidential Information.

     2. Non-Solicit; Non-compete

          (a) Optionee agrees that during his or her employment by the Company he or she shall not, directly or indirectly, solicit the trade of, or trade with, any customer, prospective customer or supplier of the Company for any business purpose other than for the benefit of the Company. Optionee further agrees that for a period of two years after termination of employment, Optionee shall not, directly or indirectly, solicit the trade of, or trade with, any customers or suppliers, or prospective customers or suppliers, of the Company, or solicit or induce, or attempt to solicit or induce, any employee of the Company to leave the Company for any reason whatsoever or hire any employee of the Company.

          (b) Optionee covenants and agrees that during the period of Optionee’s employment hereunder and for a period of two (2) years after termination of employment Optionee shall not, in any Competitive Territory, engage, directly or indirectly, whether as principal or as agent, officer, director, employee, consultant, shareholder or otherwise, alone or in association with any other person, corporation or other entity, in any Competing Business. For purposes of this Agreement, (i) the term “Competing Business” shall mean any person, corporation or other entity which sells or attempts to sell any products or services which are the same as or similar to the products and services sold by the Company at any time and from time to time during the last two years prior to the termination of Optionee’s employment, and (ii) the term “Competitive Territory” shall mean the United States of America, Great Britain, Belgium, Germany, Japan and any other nation in which, to the knowledge of Optionee, the Company has made or considered making such sales, either itself or through a subsidiary, affiliate or joint venture partner, during the last two years prior to the termination of Optionee’s employment.

          (c) Prior to accepting employment during the non-compete period referred to herein, Optionee shall notify the Company in order to determine if the position the Optionee is seeking violates this Agreement.

     3. Injunctive and other relief.

          (a) Optionee represents that his or her experience and capabilities are such that the provisions of paragraphs 1 and 2 herein will not prevent him or her from earning his or her livelihood, and acknowledges that it would cause the Company serious and irreparable injury and cost if Optionee were to use his or her ability and knowledge in competition with the Company or to otherwise breach the obligations contained in said paragraphs.

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          (b) In the event of a breach by Optionee of the terms of this Agreement, the Company shall be entitled, if it shall so elect, to institute legal proceedings to obtain damages for any such breach, or to enforce the specific performance of this Agreement by Optionee and to enjoin Optionee from any further violation of this Agreement and to exercise such remedies cumulatively or in conjunction with all other rights and remedies provided by law. Optionee acknowledges, however, that the remedies at law for any breach by him or her of the provisions of this Agreement may be inadequate and that the Company shall be entitled to injunctive relief against him or her in the event of any breach whether or not the Company may also be entitled to recover damages hereunder.

          (c) It is the intention of the parties that the provisions of paragraphs 1 and 2 hereof shall be enforceable to the fullest extent permissible under applicable law, but that the unenforceability (or modification to conform to such law) of any provision or provisions hereof shall not render unenforceable, or impair, the remainder thereof. If any provision of provisions hereof shall be deemed invalid or unenforceable, either in whole or in part, this Agreement shall be deemed amended to delete or modify, as necessary, the offending provision or provisions and to alter the bounds thereof in order to render it valid and enforceable.

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APPENDIX B-1

RELEASE

I, Dennis M. Sheedy, in exchange for the promises contained in the attached Separation Agreement, unconditionally release Calgon Carbon Corporation, its subsidiaries and affiliates, their board officers, directors, employees, shareholders, agents, successors and/or assigns (collectively called “Company”), from any and all claims, issues, or causes of action, known or unknown, arising out of my Company employment and cessation of that employment, including the federal Age Discrimination in Employment Act, Retirement Income Security Act of 1974, Civil Rights Act of 1964, Civil Rights Act of 1991, Rehabilitation Act of 1973, Americans with Disabilities Act, Family and Medical Leave Act of 1993, Older Workers Benefit Protection Act, Equal Pay Act; the Pennsylvania Human Relations Act; federal, state and local wrongful discharge laws; and any and all other federal, state, and/or local employment and other legal claims, such as whistleblower claims and claims for possible attorneys’ fees and costs. To the extent, however, that any entity or person sues on my behalf concerning any possible claim, I agree that this Separation Agreement and Release (“SAR”) has fully and finally satisfied any and all possible claims, and I agree to waive and otherwise relinquish eligibility for any recovery beyond what I received in this SAR, even if I participate or otherwise assist in such litigation.

I have read this Release.

I understand this Release.

I execute this Release voluntarily and without coercion.

I understand I have the right to consult with an attorney.

I intend to be legally bound by this Release.

/s/ Dennis M. Sheedy
Signature
Dennis M. Sheedy
Print Name
SWORN TO and subscribed before me this 6th day of October, 2009.
/s/ Joyce L. Shipley
	Notary Public
My Commission Expires: (Seal)

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APPENDIX B-2

RELEASE

In exchange for the promises contained in the attached Separation Agreement, Calgon Carbon Corporation (the “Company”) unconditionally releases Dennis M. Sheedy from any and all known claims, issues, or causes of action, arising out of his Company employment and cessation of that employment; provided, however, that such release shall not be valid with respect to and the Company shall retain any claim of the Company against Mr. Sheedy which is unknown to the Company at the time this Release is executed.

Calgon Carbon Corporation
By:	/s/ John S. Stanik
	Title: Chairman, President & CEO

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APPENDIX C

September 2, 2009

VIA HAND DELIVERY TO:

Dennis M. Sheedy, Esq.

RE:      Your Rights Under The Older Workers Benefit Protection Act/Age
            Discrimination and Employment Act

Dear Dennis:

     Before you agree to resolve your separation from employment and execute a separation agreement and release, we direct your attention to a federal law called the Older Workers Benefit Protection Act (“OWBPA”), a law that amended the Federal Age Discrimination and Employment Act.

     Among other rights, you have the right to consult with an attorney prior to executing any agreement which resolves your separation from employment, including, without limitation, an agreement in which you release all possible legal claims against Calgon Carbon Corporation and its subsidiaries and affiliates.

     Under OWBPA, for instance, you have 21 days after receipt of a proposed separation agreement and release to decide whether to release your possible legal claims against Calgon Carbon Corporation. Whether you use all or part of the 21 day opportunity is your choice and your choice alone. In addition, under OWBPA, you have seven days following the execution of any such agreement to revoke it so that it has no continuing or past legal effects. Only upon expiration of seven days following your signing of any such agreement would the agreement become effective and otherwise enforceable.

     This letter does not contain all of the rights for which you may be eligible under OWBPA. That is why Calgon Carbon Corporation and I strongly advise you to consult with an attorney. In that way, you can understand your full legal rights under OWBPA and other laws, you can proceed with a clearer understanding of your rights and responsibilities and Calgon Carbon Corporation’s rights and responsibilities, and together we can reach a fair, equitable, binding resolution of your cessation of your employment.

     We look forward to hearing from you either directly or through your attorney.

Yours very truly,

Gail A. Gerono

Vice President of Human Resources
 

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APPENDIX D

STOCK OPTIONS

	Option		Vested
Option Grant Date:	Price		Options
July 1, 2006	$	5.85		4,300
March 31, 2007	$	8.37		6,100
February 28, 2008	$	17.75		2,650
				13,050

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EX-10.14

Exhibit 10.14

ADDENDUM

1. Stock Option Agreement: Stock options in the amount of 30,000 shares of Calgon Carbon Corporation’s common shares vesting in increments of 10,000 shares. On or after January 2, 2001, you may purchase the stock granted as follows:

Purchase Date	Number of Shares
On or after January 2, 2001		10,000
On or after January 2, 2002		10,000
On or after January 2, 2003		10,000

The option may be exercised in accordance with the above schedule in whole or in part at any time to and including January 1, 2010. The details of the option grant will be included in the Stock Option Agreement between the Company and you.

The stock options that you will be granted when employment begins will continue to be exercisable, per the vesting schedule in the stock option agreement, if you are terminated without cause.

2. Your relocation will be provided for per the Company’s Employee Relocation Policy. The policy includes:

• Transport of your household goods

• Transportation, meals, and lodging for you and your family including packing and unpacking of goods

• Reimbursement for your spouse’s trips for locating a new residence, limited to six days

• Reimbursement for standard and usual costs associated with selling your current residence, not including sale price

• Reimbursement for standard and usual costs of purchasing a new residence, not including purchase price

• Reimbursement for temporary housing for up to 180 days from your date of employment

3.	You will be provided with a company car per the conditions of the Company’s Car Policy.
4.	The Company shall support you in obtaining a non-residence status in Belgium.
5.	The Company will discuss methods to enhance the pension and disability plan provisions available to you provided that such enhancements comply with appropriate labor laws and do not require amendment of Plans to include all participants.
6.	Termination of the employment contract: The parties acknowledge that the annual pay at the time of entering into employment is at least equal to BEF 1,912,000 gross and therefore agree to fix the notice period to be observed by the Company in the event of termination of the employment contract without serious reason according to the following formula (current Claeys formula):

               N= 0.89 x (Sen) + 0.08 x (A) + 0.0013 x (S) — 2

          Whereby:

               N = notice period in months

               Sen = seniority in years and in parts of years

               A = age in years and part years

               S =salary expressed in plurals of BEF 1,000 reduced by the index at the time of the calculation of the Claeys formula

          However, the parties expressly agree that the notice period to be observed by the Company is fixed at minimum 18 months.

EX-10.15

Exhibit 10.15

ADDENDUM
TO
EMPLOYMENT AGREEMENT

     This Addendum to Employment Agreement, made as of this            day of January, 2004, by and between Calgon Carbon Corporation, having its principal office at 400 Calgon Carbon Drive, Pittsburgh, Pennsylvania, U.S.A., 15205 (the “Company’) and C. H. S. Majoor, residing at Sparrenlaan 14, 3090 Overijse, Belgium (the “Employee”).

     Whereas, the Company and the Employee entered into a certain employment agreement dated December 21, 2000 (collectively referred to with all amendments and addenda thereto as the “Agreement”).

     Whereas, the Company and the Employee desire to amend the Agreement to provide reasonable protection to the Employee in the event of a Change of Control of the Company.

     NOW, THEREFORE, intending to be legally bound thereby, the Company and Employee agree to amend the Agreement by adding the following provisions.

     1. Change of Control Severance Payments.

     In order to protect the Employee if a Change of Control occurs, the following is provided:

     (a) For all purposes of the Agreement, a Change of Control shall be deemed to have occurred when (i) the Company is merged or consolidated with another corporation which is not then controlled by the Company, or (ii) a majority of the Company’s assets are sold or otherwise transferred to another such corporation or to a partnership, firm or one or more individuals not so controlled, or (iii) a majority of the members of the Company’s Board of Directors consists of persons who were not nominated for election as directors by or on behalf of the Board of Directors itself or with the express concurrence of the Board of Directors, or (iv) a single person, or a group of persons acting in concert, obtains the power to cause the nominees of such person or group to be elected as a majority of the directors of the Company.

     (b) In the event of a Change of Control: (1) the Employee shall be paid in a lump sum immediately upon the occurrence of one or more of the events described subparagraph (1)(c), below, an amount equal to: (i) three years of the Employee’s then current base salary plus; (ii) the Employee’s average annual bonus payable with respect to the most recent three full bonus plan years ending prior to the date of a Change of Control in a lump sum; (Change of Control Severance Compensation); (2) the Employee will be provided his normal benefits during the three year period following the occurrence of a Change of Control including, but not limited to, health, dental and life insurance benefits the Employee was receiving prior to the Change of Control (Severance Benefits) upon the occurrence of one or more of the events described in subparagraph (1)(c), below; and (3) the Employee shall be entitled to exercise all stock options and stock appreciation rights previously granted to Employee by the Company regardless of any deferred vesting or deferred exercise provisions of such stock options or stock appreciation rights.

     (c) Change of Control Severance Compensation pursuant to a Change of Control hereunder shall only be payable to the Employee and Severance Benefits shall only be provided to the Employee under the following conditions:

1.	If the Employee terminates his employment during the period beginning on the first anniversary of a Change of Control and ending on or before ninety days following the first anniversary of the Change of Control by giving the Company not less than thirty (30) days notice of the Employee’s intention to terminate employment with the Company.
2.	If the Employment of the Employee is terminated by the Company other than for a Termination for Cause during the three-year period after a Change of Control. A Termination for Cause shall be defined as a termination by the Company at any time, without notice, for Employee’s (i) willful misconduct in the performance of his or her duties (other than for disability); (ii) dishonesty or breach of trust by the Employee which is demonstrably injurious to the Company or its subsidiaries; or (iii) conviction or plea of nolo contendere to a felony.
3.	If the Employee terminates his employment for Good Reason during the three-year period after a Change of Control. Good Reason shall mean, without the Employee’s express written consent, the occurrence of any one or more of the following: (i) a material diminution of the Employee’s authorities, duties, responsibilities, and status (including offices, titles, and reporting requirements) as an employee of the Company from those in effect as of one hundred eighty days prior to the Change of Control; (ii) the Company’s requiring the Employee to be based at a location in excess of thirty-five miles from the location of the Employee’s principal job location or office immediately prior to the Change of Control; (iii) a reduction in the Employee’s base salary or any material reduction by the Company of the Employee’s other compensation or benefits from that in effect immediately before the Change of Control occurred; (iv) the failure of the Company to obtain a satisfactory agreement from any successor to the Company to assume and agree to perform the Company’s obligations under this Agreement, as contemplated in paragraph 2, below; and (v) any purported termination by the Company of the Employee’s employment that is not effected pursuant to a notice of termination in writing which shall indicate the specific termination provision in this Agreement relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Employee’s employment under the provision so indicated, and for purposes of this Agreement, no such purported termination shall be effective.

     (d) No Change of Controls Severance Compensation will be made nor will Severance Benefits be provided to Employee upon termination of the employment of the Employee in a Termination for Cause after a Change of Control occurs.

     2. Assignment. The rights and duties of the Company under the Agreement may be transferred to, and shall be binding upon, any person or company which acquires or is a successor to the Company, its business or a significant portion of the assets of the Company by merger, purchase or otherwise, and the Company shall require any such acquirer or successor by agreement in form and substance satisfactory to the Employee, expressly to assume and agree to

perform this Agreement in the same manner and to the same extent that the Company, as the case may be, would be required to perform if no such acquisition or succession had taken place. Regardless of whether such agreement is executed, this Agreement shall be binding upon any acquirer or successor in accordance with the operation of law and such acquirer or successor shall be deemed the “Company”, as the case may be, for purposes of this Agreement. Except as otherwise provided in this paragraph 2, neither the Company nor Employee may transfer any of their respective rights and duties hereunder except with the written consent of the other party hereto.

WITNESS the due signing hereof as of the date first written above.

Attest:	CALGON CARBON CORPORATION
/s/ Michael J. Mocniak	By	/s/ John S. Stanik
[Corporate Seal]		John S. Stanik, President & Chief Executive Officer
Witness:
/s/ Reinier Keijzer		/s/ C.H.S. Majoor
Reinier Keijzer		C. H. S. Majoor

EX-10.16

Exhibit 10.16
Final

ADDENDUM “CHANGE OF CONTROL” TO EMPLOYMENT AGREEMENT

     THIS ADDENDUM TO EMPLOYMENT AGREEMENT (the “Addendum”), made as of December 15, 2008, between CALGON CARBON CORPORATION, the parent of Chemviron Carbon (together referred to herein as the “Company”), and C.H.S. Majoor (“Employee”), presently residing in or near Brussels, Belgium.

WITNESSETH:

     WHEREAS, Employee is presently employed as Senior Vice President, Europe and Asia, of the Company, in which capacity he has contributed materially to the Company’s success, pursuant to the terms of an employment agreement, and an addendum thereto, each dated as of December 21, 2000, between Employee and Chemviron Carbon (together, the “Original Agreement”), as amended by an addendum dated January 1, 2004 with regard to change of control payments (the “Existing Addendum”);

     WHEREAS, after the execution of this Addendum, (i) the Original Agreement dated December 21, 2000 as well as its original addendum of the same date shall remain in effect, and (ii) the Existing Addendum dated January 1, 2004 shall be replaced in its entirety by this Addendum; and

     WHEREAS, the Board of Directors of the Company (the “Board”), has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication of Employee, notwithstanding any possibility, threat or occurrence of a Change of Control (as defined herein), and the Board believes it is imperative to diminish the inevitable distraction of Employee by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage Employee’s full attention and dedication to the current Company in the event of any threatened or pending Change of Control, and to provide Employee with compensation and benefits arrangements upon a Change of Control that ensure that the compensation and benefits expectations of Employee will be satisfied and that are competitive with those of other corporations;

     NOW, THEREFORE, intending to be legally bound hereby, the parties hereto agree as follows:

1. Change of Control Payments.

     (a) For all purposes of this Agreement, a “Change of Control” shall be deemed to have occurred upon first to occur of:

          (i) The acquisition by any individual, entity or group (a “Person”) (within the meaning of Section 13(d) (3) or 14(d) (2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that, for purposes of this Section 5(a), the following acquisitions shall not constitute a Change of Control: (x) any acquisition directly from the Company, (y) any acquisition by the Company or (z) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company;

          (ii) Any time at which individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least two-thirds (2/3) of the

Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, provided, that for this purpose, the Incumbent Board shall not include any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board (any individual not included in the Incumbent Board by reason of this proviso shall be excluded permanently for purposes of determining whether the Incumbent Board has at any time ceased for any reason to constitute at least two-thirds (2/3) of the Board);

          (iii) Consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries (each, a “Business Combination”), in each case unless, following such Business Combination, (A) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (C) at least two-thirds (2/3) of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or

          (iv) Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

     (b) In the event of a Covered Change of Control Event (as defined below), then Employee shall receive the following: (i) Employee shall be paid in a lump sum on the date which is the tenth day following the date of the Covered Change of Control Event, an amount equal to the sum of: (A) two years of Employee’s then current base compensation and (B) two times the Change of Control Bonus Amount (as hereinafter defined); provided, however, that the Employee shall only be provided (x) eighteen months (not two years) of base compensation under subsection 1(b)(i)(A) above and (y) 1.5 times (not two times) the Change of Control Bonus Amount under subsection 1(b)(i)(B) above, if the applicable Covered Change in Control Event is made under Section 1(c)(i); with the understanding that from the amounts payable under this subsection 1(b)(i) there shall be no deduction of or compensation whatsoever with any statutory compensation in lieu of notice in advance which maybe due to Employee under Belgian law; and (ii) Employee shall be entitled to exercise all stock options and stock appreciation rights previously granted to Employee by the Company, and shall be fully vested in all restricted stock, stock units

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and similar stock-based or incentive awards (assuming “maximum” satisfaction of any applicable performance conditions) previously granted to Employee by the Company, regardless of any deferred vesting or deferred exercise provisions of such arrangements. As used herein “Change of Control Bonus Amount” shall mean the greater of (x) the current “target” amount of any cash bonus or short term cash incentive plan in effect for Employee or (y) the average of the last three annual cash bonuses paid by Company to Employee.

     (c) “Covered Change of Control Event” shall mean (i) Employee’s cessation of his employment with the Company without Good Reason (as defined below) during the period beginning on the first anniversary of a Change of Control and ending on the ninetieth (90^th) day following the first anniversary of the Change of Control by giving the Company written notice of Employee’s intention to cease employment with the Company at any time within such 90-day period, (ii) the cessation of Employee’s employment by the Company other than for cause (serious reason) during the three-year period after a Change of Control or (iii) the cessation of Employee’s employment by Employee with Good Reason during the three-year period after a Change of Control. As used herein, “Good Reason” shall mean without Employee’s express written consent, the occurrence of any one or more of the following: (i) a material diminution of Employee’s authorities, duties, responsibilities, and status (including offices, titles, and reporting requirements) as an employee of the Company (any such diminution occurring as a result of the Company’s ceasing to be a publicly traded entity shall be deemed material for purposes of the foregoing); (ii) the Company’s requiring Employee to be based at a location in excess of thirty-five miles from the location of Employee’s principal job location or office immediately prior to such change; (iii) a reduction in Employee’s base salary or any material reduction by the Company of Employee’s other compensation or benefits; (iv) the failure of the Company to obtain a satisfactory agreement from any successor to the Company to assume and agree to perform the Company’s obligations under this Addendum, as contemplated in Section 3 herein; (v) any purported termination by the Company of Employee’s employment that is not effected pursuant to a notice of termination in writing which shall indicate the specific termination provision relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Employee’s employment under the provision so indicated, and (vi) a material breach of the Original Agreement or this Addendum by the Company.

     2. Certain Additional Payments by the Company.

     (a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any economic benefit or payment or distribution by the Company to or for the benefit of Employee, whether paid or payable or distributed or distributable pursuant to the terms of the Agreement or otherwise (“Payment”), would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986 (“Code”) or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then Employee shall be entitled to receive an additional payment (“Gross-Up-Payment”) in an amount such that after payment by Employee of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax imposed upon the Gross-Up Payment, Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments; provided, however, that the Employee’s agreement to, and compliance with, the provisions of any confidentiality or non compete provisions in favor of the Company shall constitute personal services to be rendered on or after the date of a change in ownership or control (as those terms are used in treasury regulations promulgated under Code Section 280G) by the Employee for purposes of determining whether or not an Excise Tax will be incurred, and the amount of the Payments under this Agreement that are treated as reasonable compensation for such services shall in no event be deemed to be less than the base salary earned by Employee at the time of his or her termination.

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     (b) Subject to the provisions of Section 2(c), all determinations required to be made under this Article 2, including the amount of any Payment which shall be attributable to personal services in accordance with the proviso to Section 2(a), whether a Gross-Up Payment is required, the amount of such Gross-Up Payment and the assumptions to be used in arriving at such determinations, shall be made by the Company’s regular outside independent public accounting firm, or, if such firm will not agree to comply with the obligations imposed on it pursuant to this Section 2(b), such other outside independent accounting firm as the Company shall designate with Employee’s consent, which consent shall not be unreasonably withheld (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and Employee within fifteen (15) business days of the effective date of termination, if applicable, or such earlier time as is requested by the Company. In the event that the Accounting Firm has at any time served as accountant or auditor for the individual, entity or group affecting the Change of Control, Employee may appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). The initial Gross-Up Payment, if any, as determined pursuant to this Section 2(b), shall be paid to Employee on the date which is the first day following the six (6) month anniversary of the date of termination, at the same time as the payment of the separation pay. If the Accounting Firm determines that no Excise Tax is payable by Employee, it shall furnish Employee with an opinion that he or she has substantial authority not to report any Excise Tax on his or her federal income tax return. Any determination by the Accounting Firm shall be binding upon the Company and Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 2(c) and Employee thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be immediately paid by the Company to or for the benefit of Employee. Neither the Company nor Employee shall have any right to request a redetermination of the amount of any Underpayment by the Accounting Firm. All fees and expenses of the Accounting Firm incurred pursuant to this Section 2(b) shall be paid by the Company.

     (c) Employee shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than thirty (30) business days after the later of either (i) the date Employee has actual knowledge of such claim, or (ii) thirty (30) business days after Employee receives from the Internal Revenue Service either a written report proposing imposition of the Excise Tax or a statutory notice of deficiency with respect thereto, and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. Employee shall not pay such claim prior to the expiration of the thirty-day period following the date on which he gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Employee in writing prior to the expiration of such period that it desires to contest such claim, Employee shall: (i) give the Company any information reasonably requested by the Company relating to such claim, (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, (iii) cooperate with the Company in good faith in order effectively to contest such claim, (iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Employee harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs and expenses. Without limitation of the foregoing provisions of this

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Section 2(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Employee to request or accede to a request for an extension of the statute of limitations with respect only to the tax claimed, or pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Employee agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs Employee to pay such claim and sue for a refund, the Company shall advance the amount of such payment to Employee, on an interest-free basis and shall indemnify and hold Employee harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties with respect thereto, imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations requested or acceded to by Employee at the Company’s request and relating to payment of taxes for the taxable year of Employee with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Employee shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

     (d) If, after the receipt by Employee of an amount advanced by the Company pursuant to Article 2, Employee becomes entitled to receive any refund with respect to such claim, Employee shall (subject to the Company’s complying with the requirements of Article 2(c)) immediately thereafter pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by Employee of an amount advanced by the Company pursuant to Section 2(c), a determination is made that Employee shall not be entitled to any refund with respect to such claim and the Company does not notify Employee in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

     (e) In the event that any state or municipality or subdivision thereof in the United States shall subject any Payment to any special tax which shall be in addition to the generally applicable income tax imposed by such state, municipality, or subdivision with respect to receipt of such Payment, the foregoing provisions of this Article 2 shall apply, mutatis mutandis, with respect to such special tax.

     (f) In the event that Employee is ever subject in Belgium to a tax which is substantially similar to the above described Excise Tax (that is, in the nature of a tax to be paid in addition to any normal taxes, which additional tax is being imposed solely due to what is deemed to be an excessive amount of Payments being made to Employee in connection with a Covered Change in Control Event), then Employee shall be entitled to receive a Gross-Up Payment with respect thereto in accordance with the terms of this Section 2.

3. Amendments, waivers, etc.

     No amendment of any provision of this Addendum, and no postponement or waiver of any such provision or of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be valid unless such amendment, postponement or waiver is in writing and signed by or on behalf of the Company and Employee. No such amendment, postponement or waiver shall be deemed to extend to any prior or subsequent matter, whether or not similar to the subject matter of such amendment, postponement or waiver.

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No failure or delay on the part of the Company or Employee in exercising any right, power or privilege under this Addendum shall operate as a waiver thereof nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

4. Assignment.

     The rights and duties of the Company under this Addendum may be transferred to, and shall be binding upon, any person or company which acquires or is a successor to the Company, its business or a significant portion of the assets of the Company by merger, purchase or otherwise, and the Company shall require any such acquirer or successor by Addendum in form and substance reasonably satisfactory to Employee, expressly to assume and agree to perform this Addendum in the same manner and to the same extent that the Company, as the case may be, would be required to perform if no such acquisition or succession had taken place. Regardless of whether such Addendum is executed, this Addendum shall be binding upon any acquirer or successor in accordance with the operation of law and such acquirer or successor shall be deemed the “Company”, as the case may be, for purposes of this Addendum. Except as otherwise provided in this Section 4, neither the Company nor Employee may transfer any of their respective rights and duties hereunder except with the written consent of the other party hereto.

5. Integration; counterparts.

     This Addendum, along with the Original Agreement dated December 21, 2000 and its addendum of the same date, constitutes the entire agreement among the parties and supersedes any prior understandings, agreements, Addendums or representations by or among the parties, written or oral, to the extent they relate to the subject matter hereof, and shall have the effect described in the second recital hereto. This Addendum may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

     WITNESS the due execution hereof as of the date first above written.

Attest:	CALGON CARBON CORPORATION
/s/ Gail A. Gerono	By:	/s/ John S. Stanik
		Title:	President & CEO
Witness:
/s/ Reinier Keijzer	By:	/s/ C.H.S. Majoor
Reinier Keijzer		C.H.S. Majoor

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EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements No. 333-34019, 333-01019, 333-52199, and 333-133391 on Form S-8 of our reports dated February 26, 2010, relating to the financial statements (which report expresses an unqualified opinion and includes an explanatory paragraph regarding the Company’s adoption of new accounting standards), financial statement schedule of Calgon Carbon Corporation and subsidiaries, and the effectiveness of Calgon Carbon Corporation and subsidiaries’ internal control over financial reporting, appearing in the Annual Report on Form 10-K of Calgon Carbon Corporation and subsidiaries for the year ended December 31, 2009.

/s/ Deloitte & Touche LLP
Pittsburgh, Pennsylvania
February 26, 2010

EX-31.1

Exhibit 31.1 Rule 13a-14(a) Certification

CERTIFICATION

I, John S. Stanik, certify that:

1. I have reviewed this annual report on Form 10-K of Calgon Carbon Corporation.

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-15e and 15d-15e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15f and 15d-15f) for the registrant and we 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 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: February 26, 2010

/s/ John S. Stanik
Name:	John S. Stanik
Title:	Chief Executive Officer

EX-31.2

Exhibit 31.2 Rule 13a-14(a) Certification

CERTIFICATION

I, Leroy M. Ball, certify that:

1. I have reviewed this annual report on Form 10-K of Calgon Carbon Corporation.

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-15e and 15d-15e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15f and 15d-15f) for the registrant and we 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 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: February 26, 2010

/s/ Leroy M. Ball
Name:	Leroy M. Ball
Title:	Chief Financial Officer

EX-32.1

Exhibit 32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

In connection with the Annual Report of Calgon Carbon Corporation (the “Company”) on Form 10-K for the year ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John S. Stanik, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company for the periods presented therein.

/s/ John S. Stanik  

Chief Executive Officer 

February 26, 2010 

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

EX-32.2

Exhibit 32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

In connection with the Annual Report of Calgon Carbon Corporation (the “Company”) on Form 10-K for the year ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Leroy M. Ball, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company for the periods presented therein.

/s/ Leroy M. Ball  

Chief Financial Officer 

February 26, 2010

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.