EXHIBIT
4.1


 


DESCRIPTION
OF SECURITIES


REGISTERED
PURSUANT TO SECTION 12 OF


THE
SECURITIES EXCHANGE ACT OF 1934


 


The
following summary describes the common stock of U.S. Energy Corp., a Wyoming corporation (“U.S. Energy” or the “Company”),
which common stock is registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Only the Company’s common stock is registered under Section 12 of the Exchange Act.


 


Description
of Common Stock


 


The
following description of our common stock is a summary and is qualified in its entirety by reference to our Amended and Restated Articles
of Incorporation and our Amended and Restated Bylaws, which are incorporated by reference as exhibits to this Annual Report on Form 10-K,
and by applicable law (including the Wyoming Business Corporation Act). For purposes of this description, references to “U.S.
Energy,” “we,” “our” and “us” refer only to the Company and not to
its subsidiaries.


 


Authorized
Capitalization


 


Our
authorized capital stock consists of an unlimited number of shares of common stock with a $0.01 par value per share and 100,000 shares
of preferred stock, $0.01 par value per share.


 


The
terms of our preferred stock are not included herein as such preferred stock is not registered under Section 12 of the Exchange Act.


 


Common
Stock


 


Voting
Rights. Holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders,
except that cumulative voting in the election of directors is permitted (as discussed below).


 


The
presence of the persons entitled to vote a majority of the outstanding voting shares on a matter before the stockholders constitute the
quorum necessary for the consideration of the matter at a stockholders’ meeting.


 


Except
as otherwise required by law, the Amended and Restated Articles of Incorporation, or any certificate of designation, (i) at all meetings
of stockholders for the election of directors, a plurality of votes cast are sufficient to elect such directors; (ii) any other action
taken by stockholders are valid and binding upon the Company if the number of votes cast in favor of the action exceeds the number of
votes cast in opposition to the action, at a meeting at which a quorum is present; and (iii) broker non-votes and abstentions are considered
for purposes of establishing a quorum but not considered as votes cast for or against a proposal or director nominee.


 


In
all elections for directors, every holder of the common stock has the right to vote in person, by proxy or by voting trustee under any
voting trust, the number of shares of stock owned by him, her or it, for as many persons as there are directors to be elected, or to
cumulate such shares and to give one candidate as many votes equal to the number of directors multiplied by the number of his, her or
its shares of stock or to distribute them on the same principle among as many candidates as he, she or it desires.


 


Dividend
Rights. Holders are entitled to receive dividends when and as declared by the Board of Directors out of funds legally available
therefor. We may declare dividends in the future but we expect to retain most or all of our earnings and cash to fund investments and
business development.


 


Liquidation
and Dissolution Rights. Upon liquidation, dissolution or winding-up of the Company, and after payment to our creditors and preferred
stockholders, if any, our assets will be divided pro rata on a share-for-share basis among the holders of our common stock, subject to
the rights of any holders of preferred stock.


 




    	 



    	 



    

 


Consideration
for Shares. Shares of common stock may be issued for such consideration and on such terms as determined by the Board of Directors,
without stockholder approval.


 


Fully
Paid Status. All outstanding shares of the Company’s common stock are validly issued, fully paid and non-assessable.


 


Listing.
Our common stock is listed and traded on The Nasdaq Capital Market under the symbol “USEG”.


 


Other
Matters. No holder of any shares of our common stock has a preemptive right to subscribe for any of our securities, nor are any
shares of our common stock subject to redemption or convertible into other securities.


 


Anti-Takeover
Effects of our Amended and Restated Articles of Incorporation and Wyoming Law


 


Our
Amended and Restated Articles of Incorporation provide for the issuance of up to an unlimited number of shares of common stock, par value
$0.01 per share. Our authorized but unissued shares of common stock will be available for future issuance without stockholder approval.
These additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital,
corporate acquisitions and employee benefit plans. Our board has the authority to issue an unlimited additional number of shares. The
existence of unlimited authorized but unissued shares of common stock could render more difficult or discourage an attempt to obtain
control of a majority of our common stock by means of a proxy contest, tender offer, merger or otherwise.


 


We
may be or in the future we may become subject to Wyoming’s control share law. The law focuses on the acquisition of a “controlling
interest” which means the ownership of outstanding voting shares sufficient, but for the control share law, to enable the acquiring
person to exercise the following proportions of the voting power of the corporation in the election of directors: (i) one-fifth or more
but less than one-third, (ii) one-third or more but less than a majority, or (iii) a majority or more. The ability to exercise such voting
power may be direct or indirect, as well as individual or in association with others. The effect of the control share law is that the
acquiring person, and those acting in association with it, obtains only such voting rights in the control shares as are conferred by
a resolution of the stockholders of the corporation, approved at a special or annual meeting of stockholders. The control share law contemplates
that voting rights will be considered only once by the other stockholders. Thus, there is no authority to strip voting rights from the
control shares of an acquiring person once those rights have been approved. If the stockholders do not grant voting rights to the control
shares acquired by an acquiring person, those shares do not become permanent non-voting shares. The acquiring person is free to sell
its shares to others. If the buyers of those shares themselves do not acquire a controlling interest, their shares do not become governed
by the control share law. If control shares are accorded full voting rights and the acquiring person has acquired control shares with
a majority or more of the voting power, any stockholder of record, other than an acquiring person, who has not voted in favor of approval
of voting rights is entitled to demand fair value for such stockholder’s shares.


 


Wyoming’s
control share law may have the effect of discouraging takeovers of the corporation. In addition to the control share law, Wyoming has
a business combination law which prohibits certain business combinations between Wyoming corporations and “interested stockholders”
for three years after the “interested stockholder” first becomes an “interested stockholder,” unless
the corporation’s Board of Directors approves the combination in advance. For purposes of Wyoming law, an “interested
stockholder” is any person who is (i) the beneficial owner, directly or indirectly, of ten percent or more of the voting power
of the outstanding voting shares of the corporation, or (ii) an affiliate or associate of the corporation and at any time within the
three previous years was the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the then outstanding
shares of the corporation. The definition of the term “business combination” is sufficiently broad to cover virtually
any kind of transaction that would allow a potential acquiror to use the corporation’s assets to finance the acquisition or otherwise
to benefit its own interests rather than the interests of the corporation and its other stockholders. The effect of Wyoming’s business
combination law is to potentially discourage parties interested in taking control of the Company from doing so if it cannot obtain the
approval of our Board of Directors.


 


Separately,
our authorized but unissued shares of common stock and preferred stock are available for future issuance without stockholder approval,
subject to any limitations imposed by the listing standards of The NASDAQ Capital Market. These additional shares may be used for a variety
of corporate finance transactions, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common
stock and preferred stock could make more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender
offer, merger or otherwise.


 




    	 



    	 



    

 


Anti-Takeover
Effects of Our Amended and Restated Articles of Incorporation and Amended and Restated Bylaws


 


The
following provisions of our Amended and Restated Articles of Incorporation, as amended, and Amended and Restated Bylaws could have the
effect of delaying or discouraging another party from acquiring control of us and could encourage persons seeking to acquire control
of us to first negotiate with our Board of Directors:


 


	 	●	cumulative
    voting in the election of directors, which gives majority shareholders a disproportionate ability to elect director candidates;
	 	 	 
	 	●	the
    right of our Board of Directors to elect a director to fill a vacancy created by the expansion of the Board of Directors or the resignation,
    death or removal of a director, with our shareholders only allowed to fill such a vacancy if not filled by the board;
	 	 	 
	 	●	the
    ability of our Board of Directors to alter our bylaws without obtaining shareholder approval; and
	 	 	 
	 	●	the
    requirement that a special meeting of shareholders may be called only by (i) the President, (ii) the Board, or (iii) one or more
    written demands of the holders of twenty-five percent (25%) of all the votes entitled to be cast at the proposed special meeting.