exh1010.htm


    Exhibit
10.10 

     

    
      CARRIZO
OIL & GAS, INC.

      CASH-SETTLED
STOCK APPRECIATION RIGHTS PLAN

       

      (As
Established Effective June 3, 2009)

       

      1. Plan. This Carrizo Oil &
Gas, Inc. Cash-Settled Stock Appreciation Rights Plan (the “Plan”) was adopted
by Carrizo Oil & Gas, Inc. to reward certain corporate officers and key
employees of Carrizo Oil & Gas, Inc. and certain independent consultants by
enabling them to share in the appreciation of the common stock of Carrizo Oil
& Gas, Inc.

       

      2. Objectives. This Plan is
designed to attract and retain key employees of the Company and its Subsidiaries
(as hereinafter defined), to attract and retain consultants and other
independent contractors, to encourage the sense of proprietorship of such
employees and independent contractors and to stimulate the active interest of
such persons in the development and financial success of the Company and its
Subsidiaries. These objectives are to be accomplished by making Awards (as
hereinafter defined) under this Plan and thereby providing Participants (as
hereinafter defined) with a proprietary interest in the growth and performance
of the Company and its Subsidiaries.

       

      3. Definitions. As used herein,
the terms set forth below shall have the following respective
meanings:

       

      “Authorized
Officer” means the Chairman of the Board or the Chief Executive Officer of the
Company (or any other senior officer of the Company to whom either of them shall
delegate the authority to execute any Award Agreement).

       

      “Award”
means the grant of any SAR, whether granted singly, in combination or in tandem,
to a Participant pursuant to such applicable terms, conditions and limitations
as the Committee may establish in order to fulfill the objectives of the
Plan.

       

      “Award
Agreement” means a written agreement between the Company and a Participant
setting forth the terms, conditions and limitations applicable to an
Award.

       

      “Board”
means the Board of Directors of the Company.

       

      “Change
in Control” is defined in Attachment A.

       

      “Code”
means the Internal Revenue Code of 1986, as amended from time to
time.

       

      “Committee”
means (i) the Compensation Committee of the Board or (ii) such other committee
of the Board as is designated by the Board to administer the Plan or (iii) to
the extent contemplated hereby, the Board.

       

      “Common
Stock” means the Common Stock, par value $.01 per share, of the
Company.

       

      “Company”
means Carrizo Oil & Gas, Inc., a Texas corporation.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      “Employee”
means an employee of the Company or any of its Subsidiaries and an individual
who has agreed to become an Employee of the Company or any of its Subsidiaries
and is expected to become such an Employee within the following six
months.

       

      “Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to
time.

       

      “Fair
Market Value” of a share of Common Stock means, as of a particular date, (i) if
shares of Common Stock are listed or quoted on a national securities exchange
(including the Nasdaq Global Select Market), the mean between the highest and
lowest sales price per share of Common Stock on the consolidated transaction
reporting system for the principal national securities exchange on which shares
of Common Stock are listed or quoted on that date, or, if there shall have been
no such sale so reported on that date, on the last preceding date on which such
a sale was so reported, (ii) if the Common Stock is not so listed or quoted, the
mean between the closing bid and asked price on that date, or, if there are no
quotations available for such date, on the last preceding date on which such
quotations shall be available, as reported by the Nasdaq Stock Market, or, if
not reported by the Nasdaq Stock Market, by the National Quotation Bureau
Incorporated or (iii) if shares of Common Stock are not publicly traded, the
most recent value determined by an independent appraiser appointed by the
Company for such purpose.

       

      “Independent
Contractor” means a person providing services to the Company or any of its
Subsidiaries, other than an Employee.

       

       “Participant”
means an Employee or Independent Contractor to whom an Award has been made under
this Plan.

       

      “Rule
16b-3” means Rule 16b-3 promulgated under the Exchange Act, or any successor
rule.

       

      “SAR”
means a right to receive a payment in cash equal to the excess of the Fair
Market Value or other specified valuation of a specified number of shares of
Common Stock on the date the right is exercised over a specified strike price,
in each case, as determined by the Committee.

       

      “Subsidiary”
means (i) in the case of a corporation, any corporation of which the Company
directly or indirectly owns shares representing more than 50% of the combined
voting power of the shares of all classes or series of capital stock of such
corporation which have the right to vote generally on matters submitted to a
vote of the stockholders of such corporation and (ii) in the case of a
partnership or other business entity not organized as a corporation, any such
business entity of which the Company directly or indirectly owns more than 50%
of the voting, capital or profits interests (whether in the form of partnership
interests, membership interests or otherwise).

       

      4. Eligibility.

       

      (a)
Employees.  Key Employees eligible for Awards under this
Plan are those who hold positions of responsibility and whose performance, in
the judgment of the

       

      
        
           

        

        
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      Committee,
can have a significant effect on the success of the Company and its
Subsidiaries.

       

      (b) Independent
Contractors.  Independent Contractors eligible for Awards under
this Plan are those Independent Contractors providing services to, or who will
provide services to, the Company or any of its Subsidiaries.

       

      5. Administration.

       

      (a) This Plan
shall be administered by the Committee.  To the extent required in
order for Awards to be exempt from Section 16 of the Exchange Act by virtue of
the provisions of Rule 16b-3, (i) the Committee shall consist of at least two
members of the Board who meet the requirements of the definition of
“non-employee director” set forth in Rule 16b-3(b)(3)(i) promulgated under the
Exchange Act or (ii) Awards may be granted by, and the Plan may be administered
by, the Board.

       

      (b) Subject
to the provisions hereof, the Committee shall have full and exclusive power and
authority to administer this Plan and to take all actions that are specifically
contemplated hereby or are necessary or appropriate in connection with the
administration hereof. The Committee shall also have full and exclusive power to
interpret this Plan and to adopt such rules, regulations and guidelines for
carrying out this Plan as it may deem necessary or proper, all of which powers
shall be exercised in the best interests of the Company and in keeping with the
objectives of this Plan. The Committee may, in its discretion, provide for the
extension of the exercisability of an Award, accelerate the vesting or
exercisability of an Award, eliminate or make less restrictive any restrictions
contained in an Award, waive any restriction or other provision of this Plan or
an Award or otherwise amend or modify an Award in any manner that is either (i)
not adverse to the Participant to whom such Award was granted or (ii) consented
to by such Participant.  The Committee may make an award to an
individual who it expects to become an Employee of the Company or any of its
Subsidiaries within the next six months, with such award being subject to the
individual's actually becoming an Employee within such time period, and subject
to such other terms and conditions as may be established by the Committee. The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in this Plan or in any Award in the manner and to the extent the
Committee deems necessary or desirable to further the Plan purposes. Any
decision of the Committee in the interpretation and administration of this Plan
shall lie within its sole and absolute discretion and shall be final, conclusive
and binding on all parties concerned.

       

      (c) No member
of the Committee or officer of the Company to whom the Committee has delegated
authority in accordance with the provisions of Section 6 of this Plan shall be
liable for anything done or omitted to be done by him or her, by any member of
the Committee or by any officer of the Company in connection with the
performance of any duties under this Plan, except for his or her own willful
misconduct or as expressly provided by statute.

       

      
        
           

        

        
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      6. Delegation of
Authority.  The Committee may delegate to the Chief Executive
Officer and to other senior officers of the Company its duties under this Plan
pursuant to such conditions or limitations as the Committee may establish,
except that the Committee may not delegate to any person the authority to grant
Awards to, or take other action with respect to, Participants who are subject to
Section 16 of the Exchange Act.

       

      7. Awards.  The
Committee shall determine the Awards to be made under this Plan and shall
designate from time to time the Employees or Independent Contractors who are to
be the recipients of such Awards. Each Award may be embodied in an Award
Agreement, which shall contain such terms, conditions and limitations as shall
be determined by the Committee in its sole discretion and shall be signed by the
Participant to whom the Award is made and by an Authorized Officer for and on
behalf of the Company. Awards may be granted singly, in combination or in
tandem. Awards may also be made in combination or in tandem with, in replacement
of, or as alternatives to, grants or rights under this Plan or any other
employee plan of the Company or any of its Subsidiaries, including the plan of
any acquired entity. An Award may provide for the grant or issuance of
additional, replacement or alternative Awards upon the occurrence of specified
events, including the exercise of the original Award granted to a
Participant.  All or part of an Award may be subject to conditions
established by the Committee, which may include, but are not limited to,
continuous service with the Company and its Subsidiaries, achievement of
specific business objectives, increases in specified indices, attainment of
specified growth rates and other comparable measurements of performance. Upon
the termination of employment by a Participant who is an Employee, any
unexercised, deferred, unvested or unpaid Awards shall be treated as set forth
in the applicable Award Agreement.

       

      An Award
shall be in the form of a SAR. The strike price for a SAR shall be not less than
the Fair Market Value of the Common Stock on the date on which the SAR is
granted. The terms, conditions and limitations applicable to any SARs awarded
pursuant to this Plan, including the term of any SARs and the date or dates upon
which they become exercisable, shall be determined by the
Committee.

       

      8. Payment of
Awards.  Payment to a Participant upon exercise of an Award
shall be made in the form of cash.

       

      9. Taxes.  The Company
shall have the right to deduct applicable taxes from any Award payment and
withhold, at the time of delivery of cash under this Plan, an appropriate amount
of cash for payment of taxes required by law or to take such other action as may
be necessary in the opinion of the Company to satisfy all obligations for
withholding of such taxes.  To the extent allowed by law, the
Committee may provide for loans, on either a short term or demand basis, from
the Company to a Participant who is an Employee or Independent Contractor to
permit the payment of taxes required by law.

       

      10. Amendment, Modification, Suspension
or Termination.  The Board may amend, modify, suspend or
terminate this Plan for the purpose of meeting or addressing any changes in
legal requirements or for any other purpose permitted by law, except that no
amendment or alteration that would adversely affect the rights of any
Participant under any Award previously granted to such Participant shall be made
without the consent of such Participant.

       

      
        
           

        

        
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      11. Assignability.  Unless
otherwise determined by the Committee and provided in the Award Agreement, no
Award or any other benefit under this Plan constituting a derivative security
within the meaning of Rule 16a-1(c) under the Exchange Act shall be assignable
or otherwise transferable except by will or the laws of descent and distribution
or pursuant to a qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act, or the rules thereunder.
The Committee may prescribe and include in applicable Award Agreements other
restrictions on transfer. Any attempted assignment of an Award or any other
benefit under this Plan in violation of this Section 11 shall be null and
void.

       

      12. Adjustments.

       

      (a) The
existence of outstanding Awards shall not affect in any manner the right or
power of the Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in the capital
stock of the Company or its business or any merger or consolidation of the
Company, or any issue of bonds, debentures, preferred or prior preference stock
(whether or not such issue is prior to, on a parity with or junior to the Common
Stock) or the dissolution or liquidation of the Company, or any sale or transfer
of all or any part of its assets or business, or any other corporate act or
proceeding of any kind, whether or not of a character similar to that of the
acts or proceedings enumerated above.

       

      (b) In the
event of any subdivision or consolidation of outstanding shares of Common Stock,
declaration of a dividend payable in shares of Common Stock or other stock
split, then (i) the number of shares of Common Stock covered by outstanding
Awards, (ii) the exercise or other price in respect of such Awards, and (iii)
the appropriate Fair Market Value and other price determinations for such Awards
shall each be proportionately adjusted by the Board to reflect such transaction.
In the event of any other recapitalization or capital reorganization of the
Company, any consolidation or merger of the Company with another corporation or
entity, the adoption by the Company of any plan of exchange affecting the Common
Stock or any distribution to holders of Common Stock of securities or property
(other than normal cash dividends or dividends payable in Common Stock), the
Board shall make appropriate adjustments to (i) the number of shares of Common
Stock covered by Awards, (ii) the exercise or other price in respect of such
Awards, and (iii) the appropriate Fair Market Value and other price
determinations for such Awards shall each be proportionately adjusted by the
Board to reflect such transaction; provided that such adjustments shall only be
such as are necessary to maintain the proportionate interest of the holders of
the Awards and preserve, without exceeding, the value of such Awards. In the
event of a corporate merger, consolidation, acquisition of property or stock,
separation, reorganization or liquidation, the Board shall be authorized to
issue or assume Awards by means of substitution of new Awards, as appropriate,
for previously issued Awards or to assume previously issued Awards as part of
such adjustment.

       

      (c) In
the event of a corporate merger, consolidation, acquisition of property or
stock, separation, reorganization or liquidation, the Board may make such
adjustments to outstanding Awards or other provisions for the disposition of
outstanding Awards as it deems equitable, and shall be authorized, in its
discretion, (i) to provide for the

       

      
        
           

        

        
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      substitution
of a new Award or other arrangement (which, if applicable, may be exercisable
for such property or stock as the Board determines) for an outstanding Award or
the assumption of an outstanding Award, regardless of whether in a transaction
to which Section 424(a) of the Code applies, (ii) to provide, prior to the
transaction, for the acceleration of the vesting and exercisability of, or lapse
of restrictions with respect to, the outstanding Award and, if the transaction
is a cash merger, to provide for the termination of any portion of the Award
that remains unexercised at the time of such transaction or (iii) to provide for
the acceleration of the vesting and exercisability of an outstanding Award and
the cancellation thereof in exchange for such payment as shall be determined by
the Board in its sole discretion.

       

      13. Restrictions.  No
cash shall be issued with respect to any Award unless the Company shall be
satisfied based on the advice of its counsel that such issuance will be in
compliance with applicable federal and state securities laws. It is the intent
of the Company that grants of Awards under this Plan comply with Rule 16b-3 with
respect to persons subject to Section 16 of the Exchange Act unless otherwise
provided herein or in an Award Agreement and that any ambiguities or
inconsistencies in the construction of such an Award or this Plan be interpreted
to give effect to such intention.

       

      14. Unfunded
Plan.  Insofar as it provides for Awards of cash or rights
thereto, this Plan shall be unfunded. Although bookkeeping accounts may be
established with respect to Participants who are entitled to cash or rights
thereto under this Plan, any such accounts shall be used merely as a bookkeeping
convenience. The Company shall not be required to segregate any assets that may
at any time be represented by cash or rights thereto, nor shall this Plan be
construed as providing for such segregation, nor shall the Company, the Board or
the Committee be deemed to be a trustee of any cash or rights thereto to be
granted under this Plan. Any liability or obligation of the Company to any
Participant with respect to an Award of cash or rights thereto under this Plan
shall be based solely upon any contractual obligations that may be created by
this Plan and any Award Agreement, and no such liability or obligation of the
Company shall be deemed to be secured by any pledge or other encumbrance on any
property of the Company. Neither the Company nor the Board nor the Committee
shall be required to give any security or bond for the performance of any
obligation that may be created by this Plan.

       

      15. Section 409A of the
Code.  All Awards under this Plan are intended either to be
exempt from, or to comply with the requirements of Section 409A, and this Plan
and all Awards shall be interpreted and operated in a manner consistent with
that intention.  Notwithstanding anything in this Plan to the
contrary, if any Plan provision or Award under this Plan would result in the
imposition of an applicable tax under Section 409A, that Plan provision or Award
shall be reformed to avoid imposition of the applicable tax and no such action
shall be deemed to adversely affect the Participant’s rights to an
Award.

       

      16. Governing
Law.  This Plan and all determinations made and actions taken
pursuant hereto, to the extent not otherwise governed by mandatory provisions of
the Code or the securities laws of the United States, shall be governed by and
construed in accordance with the laws of the State of Texas.

       

      
        
           

        

        
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      17. No Right to
Employment.  Nothing in this Plan or an Award Agreement shall
interfere with or limit in any way the right of the Company or a Subsidiary to
terminate any Participant’s employment or other service relationship at any
time, nor confer upon any Participant any right to continue in the capacity in
which he or she is employed or otherwise serves the Company or any
Subsidiary.

       

      18. Successors.  All
obligations of the Company under this Plan with respect to Awards granted
hereunder shall be binding on any successor to the Company by merger,
consolidation or otherwise.

       

      19. Effectiveness.  This
Plan is effective June 3, 2009.

       

      
        
           

        

        
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      IN
WITNESS WHEREOF, the Company has caused this Plan to be executed by its duly
authorized officer on the date first written above.

       

      


      CARRIZO
OIL & GAS, INC.

      


      By:   
                                                    

       

      Title: 
___________________________

       

      


      
        
           

        

        
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        ATTACHMENT
A

         

        “CHANGE
IN CONTROL”

         

        The
following definitions apply regarding Change in Control provisions of the
foregoing Plan:

         

        “Affiliate”
shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act, as in effect on the date of this
Agreement.

         

        “Associate”
shall mean, with reference to any Person, (a) any corporation, firm,
partnership, association, unincorporated organization or other entity (other
than the Company or a subsidiary of the Company) of which such Person is an
officer or general partner (or officer or general partner of a general partner)
or is, directly or indirectly, the Beneficial Owner of 10% or more of any class
of equity securities, (b) any trust or other estate in which such Person has a
substantial beneficial interest or as to which such Person serves as trustee or
in a similar fiduciary capacity and (c) any relative or spouse of such Person,
or any relative of such spouse, who has the same home as such
Person.

         

        “Beneficial
Owner” shall mean, with reference to any securities, any Person if:

         

        (a) such Person or any of such Person’s
Affiliates and Associates, directly or indirectly, is the “beneficial owner” of
(as determined pursuant to Rule 13d-3 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Agreement) such securities or
otherwise has the right to vote or dispose of such securities, including
pursuant to any agreement, arrangement or understanding (whether or not in
writing); provided, however, that a Person shall not be deemed the “Beneficial
Owner” of, or to “beneficially own,” any security under this subsection (a) as a
result of an agreement, arrangement or understanding to vote such security if
such agreement, arrangement or understanding: (i) arises solely from a revocable
proxy or consent given in response to a public (i.e., not including a
solicitation exempted by Rule 14a-2(b)(2) of the General Rules and Regulations
under the Exchange Act) proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General Rules and Regulations
under the Exchange Act and (ii) is not then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report);

         

        (b) such Person or any of such Person’s
Affiliates and Associates, directly or indirectly, has the right or obligation
to acquire such securities (whether such right or obligation is exercisable or
effective immediately or only after the passage of time or the occurrence of an
event) pursuant to any agreement, arrangement or understanding (whether or not
in writing) or upon the exercise of conversion rights, exchange rights, other
rights, warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to “beneficially own,” (i)
securities tendered pursuant to a tender or exchange offer made by such Person
or any of such Person’s Affiliates or Associates until such tendered securities
are accepted for purchase or exchange or (ii) securities issuable upon exercise
of Exempt Rights; or

         

        (c) such Person or any such Person’s
Affiliates or Associates (i) has any agreement, arrangement or understanding
(whether or not in writing) with any other Person (or any Affiliate or Associate
thereof) that beneficially owns such securities for the purpose of acquiring,
holding, voting (except as set forth in the proviso to subsection (a) of this
definition) or disposing of such

         

        
          
             

          

          
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      securities
or (ii) is a member of a group (as that term is used in Rule 13d-5(b) of the
General Rules and Regulations under the Exchange Act) that includes any other
Person that beneficially owns such securities;

       

      provided,
however, that nothing in this definition shall cause a Person engaged in
business as an underwriter of securities to be the Beneficial Owner of, or to
“beneficially own,” any securities acquired through such Person’s participation
in good faith in a firm commitment underwriting until the expiration of 40 days
after the date of such acquisition. For purposes hereof, “voting” a security
shall include voting, granting a proxy, consenting or making a request or demand
relating to corporate action (including, without limitation, a demand for
stockholder list, to call a stockholder meeting or to inspect corporate books
and records) or otherwise giving an authorization (within the meaning of Section
14(a) of the Exchange Act) in respect of such security.

       

      The terms
“beneficially own” and “beneficially owning” shall have meanings that are
correlative to this definition of the term “Beneficial Owner”.

       

      “Change
of Control” shall mean any of the following:

       

      (a) any Person (other than an Exempt
Person) shall become the Beneficial Owner of 40% or more of the shares of Common
Stock then outstanding or 40% or more of the combined voting power of the Voting
Stock of the Company then outstanding; provided, however, that no Change of
Control shall be deemed to occur for purposes of this subsection (a) if such
Person shall become a Beneficial Owner of 40% or more of the shares of Common
Stock or 40% or more of the combined voting power of the Voting Stock of the
Company solely as a result of (i) an Exempt Transaction or (ii) an acquisition
by a Person pursuant to a reorganization, merger or consolidation, if, following
such reorganization, merger or consolidation, the conditions described in
clauses (i), (ii) and (iii) of subsection (c) of this definition are satisfied;
or

       

      (b) individuals who, as of June 3,
2009, constitute the Board (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to June 3, 2009 whose election, or
nomination for election by the Company’s shareholders, 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, further, that there shall be excluded, for this purpose, any such
individual whose initial assumption of office occurs as a result of any actual
or  threatened election contest; or

       

      (c) the Company engages in and
completes a reorganization, merger or consolidation, in each case, unless,
following such reorganization, merger or consolidation, (i) more than 85% of the
then outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of the
then outstanding Voting Stock of such corporation beneficially owned, directly
or indirectly, by all or substantially all of the Persons who were the
Beneficial Owners of the outstanding Common Stock immediately prior to such
reorganization, merger, or consolidation in substantially the same proportions
as their ownership, immediately prior to such reorganization, merger or
consolidation, of the outstanding Common Stock, (ii) no Person (excluding any
Exempt Person

    

     

    
      
         

      

      
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      or any
Person beneficially owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 40% or more of the Common Stock then
outstanding or 40% or more of the combined voting power of the Voting Stock of
the Company then outstanding) beneficially owns, directly or indirectly, 40% or
more of the then outstanding shares of common stock of the corporation resulting
from such reorganization, merger or consolidation or the combined voting power
of the then outstanding Voting Stock of such corporation and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such reorganization, merger or consolidation were members of the Incumbent
Board at the time of the execution of the initial agreement or initial action by
the Board providing for such reorganization, merger or consolidation;
or

       

      (d) the Company engages in and
completes (i) a complete liquidation or dissolution of the Company unless such
liquidation or dissolution is approved as part of a plan of liquidation and
dissolution involving a sale or disposition of all or substantially all of the
assets of the Company to a corporation with respect to which, following such
sale or other disposition, all of the requirements of clauses (ii) (A), (B) and
(C) of this subsection (d) are satisfied, or (ii) the sale or other disposition
of all or substantially all of the assets of the Company, other than to a
corporation, with respect to which, following such sale or other disposition,
(A) more than 85% of the then outstanding shares of common stock or such
corporation and the combined voting power of the Voting Stock of such
corporation is then beneficially owned, directly or indirectly, by all or
substantially all of the Persons who were the Beneficial Owners of the
outstanding Common Stock immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately prior to such
sale or other disposition, of the outstanding Common Stock, (B) no Person
(excluding any Exempt Person and any Person beneficially owning, immediately
prior to such sale or other disposition, directly or indirectly, 40% or more of
the Common Stock then outstanding or 40% or more of the combined voting power of
the Voting Stock of the Company then outstanding) beneficially owns, directly or
indirectly, 40% or more of the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding Voting Stock
of such corporation and (C) at least a majority of the members of the board of
directors of such corporation were members of the Incumbent Board at the time of
the execution of the initial agreement or initial action of the Board providing
for such sale or other disposition of assets of the Company.

       

      Notwithstanding the foregoing, no
Change of Control shall be deemed to have occurred pursuant to subsections (a),
(c) or (d) of this definition as a result of (i) any Person that is currently
party to the Shareholders Agreement dated as of December 15, 1999 among the
Company, C.B. Capital Investors, L.P. (now J.P. Morgan Partners (23A SBIC),
LLC), S.P. Johnson IV, Frank A. Wojtek, Steven A. Webster and Mellon Ventures,
L.P., as amended from time to time, or the Shareholders Agreement dated as of
February 20, 2002 among the Company, Mellon Ventures, L.P., S.P. Johnson IV,
Frank A. Wojtek and Steven A. Webster, as amended from time to time
(collectively, the “Shareholders Agreements”), becoming the Beneficial Owner at
any time of 40% or more of the shares of Common Stock or 40% or more of the
combined voting power of the Voting Stock of the Company, or (ii) any other
Person becoming the Beneficial Owner at any time of 40% or more of the shares of
Common Stock or 40% or more of the combined voting power of the Voting Stock of
the Company to the extent caused by the attribution to that other Person of the
beneficial ownership of the Common Stock or Voting Stock of a Person who is
listed in clause (i) above and is a member of a group with such
other

       

      
        
           

        

        
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      Person
solely because of a voting agreement, tag-along rights or other rights
substantially similar to the rights set forth in the Shareholders
Agreements.

       

      “Exempt
Person” shall mean the Company, any subsidiary of the Company, any employee
benefit plan of the Company or any subsidiary of the Company, and any Person
organized, appointed or established by the Company for or pursuant to the terms
of any such plan.

       

      “Exempt
Rights” shall mean any rights to purchase shares of Common Stock or other Voting
Stock of the Company if at the time of the issuance thereof such rights are not
separable from such Common Stock or other Voting Stock (i.e., are not
transferable otherwise than in connection with a transfer of the underlying
Common Stock or other Voting Stock) except upon the occurrence of a contingency,
whether such rights exist as of June 3, 2009 or are thereafter issued by the
Company as a dividend on shares of Common Stock or other Voting Securities or
otherwise.

       

      “Exempt
Transaction” shall mean an increase in the percentage of the outstanding shares
of Common Stock or the percentage of the combined voting power of the
outstanding Voting Stock of the Company beneficially owned by any Person solely
as a result of a reduction in the number of shares of Common Stock then
outstanding due to the repurchase of Common Stock or Voting Stock by the
Company, unless and until such time as (a) such Person or any Affiliate or
Associate of such Person shall purchase or otherwise become the Beneficial Owner
of additional shares of Common Stock constituting 1% or more of the then
outstanding shares of Common Stock or additional Voting Stock representing 1% or
more of the combined voting power of the then outstanding Voting Stock, or (b)
any other Person (or Persons) who is (or collectively are) the Beneficial Owner
of shares of Common Stock constituting 1% or more of the then outstanding shares
of Common Stock or Voting Stock representing 1% or more of the combined voting
power of the then outstanding Voting Stock shall become an Affiliate or
Associate of such Person.

       

      “Person”
shall mean any individual, firm, corporation, partnership, association, trust,
unincorporated organization or other entity.

       

      “Voting
Stock” shall mean, with respect to a corporation, all securities of such
corporation of any class or series that are entitled to vote generally in the
election of directors of such corporation (excluding any class or series that
would be entitled so to vote by reason of the occurrence of any contingency, so
long as such contingency has not occurred).

       

      
        
           

        

        
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