Rights Agreement


 Exhibit 4.1 
 PETROHAWK ENERGY CORPORATION 
 AND 
 AMERICAN STOCK TRANSFER & TRUST COMPANY, RIGHTS AGENT 
 RIGHTS AGREEMENT

 DATED AS OF 
 October 14,
2008 






 TABLE OF CONTENTS 
  

			
	 Section 1. Certain Definitions
	  	1
	 Section 2. Appointment of Rights Agent
	  	5
	 Section 3. Issue of Right Certificates
	  	5
	 Section 4. Form of Right Certificates
	  	6
	 Section 5. Countersignature and Registration
	  	7
	 Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right
 Certificates
	  	7
	 Section 7. Exercise of Rights: Purchase Price; Final Expiration Date of Rights
	  	8
	 Section 8. Cancellation and Destruction of Right Certificates
	  	9
	 Section 9. Reservation and Availability of Shares of Preferred Stock
	  	9
	 Section 10. Preferred Stock Record Date
	  	10
	 Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights
	  	10
	 Section 12. Certificate of Adjusted Purchase Price or Number of Shares
	  	16
	 Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power
	  	16
	 Section 14. Fractional Rights and Fractional Shares
	  	19
	 Section 15. Rights of Action
	  	20
	 Section 16. Agreement of Right Holders
	  	20
	 Section 17. Right Certificate Holder Not Deemed a Stockholder
	  	20
	 Section 18. Concerning the Rights Agent
	  	21
	 Section 19. Merger or Consolidation or Change of Name of Rights Agent
	  	21
	 Section 20. Duties of Rights Agent
	  	22
	 Section 21. Change of Rights Agent
	  	24
	 Section 22. Issuance of New Right Certificates
	  	24
	 Section 23. Redemption
	  	24
	 Section 24. Exchange
	  	25
	 Section 25. Notice of Certain Events
	  	26
	 Section 26. Notices
	  	27
	 Section 27. Supplements and Amendments
	  	27
	 Section 28. Successors
	  	28
	 Section 29. Benefits of this Agreement
	  	28
	 Section 30. Severability
	  	28
	 Section 31. Governing Law
	  	28
	 Section 32. Counterparts
	  	28
	 Section 33. Descriptive Headings
	  	28
		
	 Exhibit A
	  	
	 Certificate of Designations
	  	
		
	 Exhibit B
	  	
	 Form of Right Certificate
	  	
	 Form of Assignment
	  	
	 Form of Election to Purchase
	  	
		
	 Exhibit C
	  	
	 Summary of Rights to Purchase Preferred Stock
	  	

  
  
  
  
  
  
  
  






 RIGHTS AGREEMENT 
 This RIGHTS AGREEMENT (this “Agreement”), dated as of October 14, 2008, is by and between PETROHAWK ENERGY CORPORATION, a Delaware corporation (the “Company”), and AMERICAN STOCK
TRANSFER & TRUST COMPANY, a New York corporation (the “Rights Agent”). 
 W I T N E S S E T H: 
 WHEREAS, on October 14, 2008, the Board of Directors of the Company authorized and declared a dividend distribution (the “Distribution”)
of one preferred share purchase right (a “Right”) for each share of the Common Stock, $.001 par value per share, of the Company outstanding at the close of business on October 25, 2008 (the “Record Date”), and authorized the
issuance of one Right in respect of each share of Common Stock of the Company issued between the Record Date and the earlier of the Distribution Date and the Final Expiration Date (as such terms are hereinafter defined) and under certain other
circumstances, each Right representing the right to purchase one one-thousandth (1/1,000th) of one share of Series A Junior Participating Preferred Stock of the Company having the rights and preferences set forth in the form of Certificate of
Designations attached hereto as Exhibit A, upon the terms and subject to the conditions hereinafter set forth; 
 NOW, THEREFORE, in
consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows: 
 Section 1. Certain
Definitions. For purposes of this Agreement, the following terms have the meanings indicated: 
 (a) “Acquiring Person” shall mean
any Person (as such term is hereinafter defined) who or which, together with all Affiliates (as such term is hereinafter defined) and Associates (as such term is hereinafter defined) of such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 15% or more of the shares of Common Stock of the Company then outstanding, but shall not include any employee benefit plan of the Company or of any Subsidiary (as such term is hereinafter defined) of the Company, or any
entity organized, appointed or established pursuant to the terms of any such plan, the Company or any Subsidiary of the Company or any Institutional Investor (as such term is hereinafter defined). Notwithstanding the foregoing, no Person shall
become an “Acquiring Person” as the result of an acquisition of Common Stock of the Company by the Company which, by reducing the number of such shares outstanding, increases the proportionate number of shares beneficially owned by such
Person to 15% or more of the Common Stock of the Company then outstanding; provided, however, that if a Person shall become the Beneficial Owner of 15% or more of the Common Stock of the Company then outstanding by reason of share purchases by the
Company and shall, after such share purchases by the Company, become the Beneficial Owner of any additional Common Stock of the Company (other than pursuant to a dividend or distribution paid or made by the Company on the outstanding shares of
Common Stock in shares of Common Stock or pursuant to a split or subdivision of the outstanding shares of Common Stock), then such Person shall be deemed to be an “Acquiring Person.” Notwithstanding the foregoing, if the Board of Directors
of the Company, within 10 days after the first date on which the Company shall 







 
become aware that any Person, together with all Affiliates and Associates of such Person, is the Beneficial Owner of shares of Common Stock of the Company
such that such person (but for this sentence) would be an Acquiring Person, determines in good faith that such Person has inadvertently exceeded the thresholds set forth in this definition of Acquiring Person, and such Person divests as promptly as
practicable a sufficient number of Common Shares of the Company so that such Person would no longer be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this definition, then such Person shall not be deemed to be an
“Acquiring Person” for any purposes in this Agreement. 
 (b) “Affiliate” and “Associate” shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 
 (c) A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “beneficially own” any securities: 
 (i) which such Person, or any of such Person’s Affiliates or Associates, beneficially owns, directly or indirectly; 
 (ii) which such Person or any of such Person’s Affiliates or Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering
of securities), or upon the exercise of conversion rights, exchange rights, rights (other than these Rights), warrants or options, or otherwise, provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or to
“beneficially own,” 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 (B) the
right to vote pursuant to any agreement, arrangement or understanding; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to “beneficially own,” any security under this clause (B) if the agreement,
arrangement or understanding to vote such security (1) arises solely from a revocable proxy given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations of the
Exchange Act and (2) is not then reportable on Schedule 13D under the Exchange Act (or any comparable or successor report); 
 (iii) which are beneficially owned, directly or indirectly, by any other Person with which such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a bona fide public offering of securities) for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in clause (B) of subparagraph
(ii) of this paragraph (c)) or disposing of any securities of the Company; or 
  

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 (iv) in respect of which such Person or any of such Person’s Affiliates or
Associates has a Synthetic Long Position (as hereinafter defined); provided, however, that a Person will not be deemed the Beneficial Owner of, or to beneficially own, any security if such beneficial ownership arises solely as a result of such
Person’s status as a “clearing agency,” as defined in Section 3(a)(23) of the Exchange Act; provided further, however, that nothing in this Section 1 will 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 an underwriting syndicate until the expiration of 40 calendar days after the date of such acquisition, or such
later date as the Board of Directors of the Company may determine in any specific case. 
 Notwithstanding anything in this definition of
Beneficial Ownership to the contrary, the phrase “then outstanding”, when used with reference to a Person’s Beneficial Ownership of Securities of the Company, shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and outstanding which such Person would be deemed to own beneficially hereunder. 
 (d) “Business Day” shall mean any day other than a Saturday, Sunday, or a day on which banking institutions in the State of New York or the State of Texas are authorized or obligated by law or executive
order to close. 
 (e) “close of business” on any given date shall mean 5:00 p.m., Houston, Texas time, on such date; provided,
however, that if such date is not a Business Day it shall mean 5:00 P.M., Houston, Texas time, on the next succeeding Business Day. 
 (f)
“Common Stock” when used with reference to the Company shall mean the Common Stock, $.001 par value per share (or as such par value may be changed from time to time), of the Company and, when used with reference to any Person other than
the Company, shall mean the capital stock (or equity interest) with the greatest voting power of such other Person or, if such other Person is a Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned
Person. 
 (g) “Final Expiration Date” shall have the meaning set forth in Section 7 hereof. 
 (h) “Institutional Investor” means a Person who is required to file, and has filed, a Schedule 13G with the Securities and Exchange
Commission pursuant to Rule 13d-1 of the General Rules and Regulations under the Exchange Act with respect to its holdings of shares of the Company’s Common Stock, so long as (i) such Person is principally engaged in the business of
managing investment funds for unaffiliated securities investors and, as part of such Person’s duties as agent for fully managed accounts, holds or exercises voting and/or dispositive power over shares of the Company’s Common Stock,
(ii) such Person acquires Beneficial Ownership of shares of the Company’s Common Stock pursuant to trading activities undertaken in the ordinary course of such Person’s business and not with the purpose nor the effect, either alone or
in concert with any other Person or Persons, of exercising the power to direct or cause 

  

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the direction of the management and policies of the Company or of otherwise changing or influencing the control of the Company, nor in connection with or as
a participant in any transaction having such purpose or effect, including any transaction subject to Rule 13d-3(b) of the General Rules and Regulations under the Exchange Act, and (iii) if such Person is a Person included in
Rule 13d-1(b)(1)(ii) of the General Rules and Regulations under the Exchange Act, such Person is not required to, has not and does not, file a Schedule 13D with respect to the securities of the Company. 
 (i) “Person” shall mean any individual, firm, limited liability company, corporation or other entity, and shall include any successor (by
merger or otherwise) of such entity. 
 (j) “Preferred Stock” shall mean the Series A Junior Participating Preferred Stock of the
Company having the rights and preferences set forth in the form of Certificate of Designations attached hereto as Exhibit A. 
 (k)
“Redemption Date” shall have the meaning set forth in Section 7 hereof. 
 (l) “Shares Acquisition Date” shall mean
the first date of public announcement by the Company or an Acquiring Person that an Acquiring Person has become such. 
 (m)
“Subsidiary” of a Person shall mean any corporation or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by such Person. 
 (n) “Synthetic Long Position” shall mean any option, warrant, convertible security, stock appreciation right or other contractual right,
whether or not presently exercisable, which has an exercise or conversion privilege or a settlement payment or mechanism at a price related to Common Stock or a value determined in whole or part with reference to, or derived in whole or in part
from, the market price or value of Common Stock, whether or not such right is subject to settlement in whole or in part in Common Stock, and which increases in value as the value of Common Stock increases or which provides to the holder of such
right an opportunity, directly or indirectly, to profit or share in any profit derived from any increase in the value of Common Stock, but shall not include: 
 (i) rights of a pledgee under a bona fide pledge of Common Stock; 
 (ii) rights of all holders of Common Stock to receive Common Stock pro rata, or obligations to dispose of Common Stock, as a result of a
merger, exchange offer, or consolidation involving the Company; 
 (iii) rights or obligations to surrender Common Stock, or
have Common Stock withheld, upon the receipt or exercise of a derivative security or the receipt or vesting of equity securities, in order to satisfy the exercise price or the tax withholding consequences of receipt, exercise or vesting; 

(iv) interests in broad-based index options, broad-based index futures, 

  

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and broad-based publicly traded market baskets of stocks approved for trading by the appropriate federal governmental authority; 
 (v) interests or rights to participate in employee benefit plans of the Company held by employees or former employees of the Company; or

 (vi) options granted to an underwriter in a registered public offering for the purpose of satisfying over-allotments in
such offering. 
 The shares of Common Stock in respect of which a Person has a Synthetic Long Position shall be the notional or other number of shares of
Common Stock specified in a filing by such Person or any of such Person’s Affiliates or Associates with the Securities and Exchange Commission in respect of which shares of Common Stock are the “subject security” or in the
documentation evidencing the Synthetic Long Position as being subject to be acquired upon the exercise or settlement of the applicable right or as the basis upon which the value or settlement amount of such right, or the opportunity of the holder of
such right to profit or share in any profit, is to be calculated in whole or in part or, if no such number of shares of Common Stock is specified in any filing or documentation, as determined by the Board of Directors of the Company in good faith to
be the number of shares of Common Stock to which the Synthetic Long Position relates. 
 Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Company and the holders of the Rights (who, in accordance with Section 3 hereof, shall prior to the Distribution Date also be the holders of the Common Stock) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-Rights Agents as it may deem necessary or desirable. 
 Section 3. Issue of Right Certificates. 
 (a) Until the earlier of (i) the tenth day after the Shares Acquisition Date or (ii) the tenth Business Day (or such later date as may be determined by action of the Board of Directors of the Company prior to such time as any
Person becomes an Acquiring Person) after the date of the commencement of, or first public announcement of the intent to commence, by any Person (other than the Company, any Subsidiary of the Company, or any employee benefit plan of the Company or
of any Subsidiary of the Company or any entity holding shares of Common Stock for or pursuant to the terms of any such plan), a tender or exchange offer the consummation of which would result in any Person becoming an Acquiring Person (including any
such date which is after the date of this Agreement and prior to the issuance of the Rights; the earlier of the dates in subsections (i) and (ii) hereof being herein referred to as the “Distribution Date”), (x) the Rights
will be evidenced by the certificates for the Common Stock registered in the names of the holders thereof (which certificates shall be deemed also to be Right Certificates) and not by separate Right Certificates, and (y) the right to receive
Right Certificates will be transferable only in connection with the transfer of the Common Stock. As soon as practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign, and the Company will send
or cause to be sent (and the Rights Agent will, if requested, send), by first class, insured, postage-prepaid mail, to each record holder of the 

  

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Common Stock as of the close of business on the Distribution Date, at the address of such holder shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit B hereto, evidencing one Right for each share of the Common Stock so held. As of the Distribution Date, the Rights will be evidenced solely by such Right Certificates. 
 (b) The Company will make available, as promptly as practicable following the Record Date, a copy of a Summary of Rights, in substantially the form
attached as Exhibit C, to any holder of Rights who may so request from time to time prior to the Final Expiration Date. With respect to certificates for the Common Stock outstanding as of the Record Date, or issued subsequent to the Record
Date, until the Distribution Date, the Rights will be evidenced by such certificates registered in the names of the holders thereof. Until the earlier of the Distribution Date or the Final Expiration Date, the surrender for transfer of any
certificate representing shares of Common Stock in respect of which Rights have been issued shall also constitute the transfer of the Rights associated with such shares of Common Stock. 
 (c) Certificates for the Common Stock issued after the Record Date but prior to the earliest of the Distribution Date, the Redemption Date and the Final
Expiration Date shall have impressed on, printed on, written on or otherwise affixed to them the following legend: 
 This certificate also
evidences and entitles the holder hereof to certain Rights as set forth in a Rights Agreement between PETROHAWK ENERGY CORPORATION and AMERICAN STOCK TRANSFER & TRUST COMPANY (the “Rights Agent”), dated as of October 14, 2008
(the “Rights Agreement”), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of PETROHAWK ENERGY CORPORATION. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate. The Rights Agent will mail to the holder of this certificate a copy of the Rights Agreement without charge after receipt of
a written request therefor. Under certain circumstances, as set forth in the Rights Agreement, Rights issued to any Person who becomes an Acquiring Person (as defined in the Rights Agreement) may become null and void. 
 With respect to such certificates containing the foregoing legend, until the Distribution Date, the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the surrender for transfer of any of such certificates shall also constitute the transfer of the Rights associated with the Common Stock represented by such certificates. In the event
that the Company purchases or acquires any shares of Common Stock after the Record Date but prior to the Distribution Date, any Rights associated with such shares of Common Stock shall be deemed cancelled and retired so that the Company shall not be
entitled to exercise any Rights associated with the shares of Common Stock which are no longer outstanding. 
 Section 4. Form of Right
Certificates. The Right Certificates (and the forms of election to purchase shares and of assignment to be printed on the reverse thereof) shall be substantially the same as Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and 
  

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as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange or automated quotations system on which the Rights may from time to time be listed, or to conform to usage. Subject to the provisions of Section 22 hereof, the Right
Certificates, in each case, on their face shall entitle the holders thereof to purchase such number of shares of the Preferred Stock as shall be set forth therein at the price per share set forth therein (the “Purchase Price”), but the
number of such shares and the Purchase Price shall be subject to adjustment as provided herein. 
 Section 5. Countersignature and
Registration. 
 (a) The Right Certificates shall be executed on behalf of the Company in the manner provided in the Bylaws of the Company
for Common Stock Certificates. The Right Certificates shall be manually countersigned by the Rights Agent and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent, issued and delivered
with the same force and effect as though the person who signed such Right Certificates had not ceased to be such officer of the Company; and any Right Certificate may be signed on behalf of the Company by any person who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution of this Rights Agreement any such person was not such an officer. 
 (b) Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its principal offices, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and the date of each of the Right
Certificates. 
 Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. 
 (a) Subject to the provisions of Section 14 hereof, at any time after the close of business on the Distribution Date,
and prior to the close of business on the earlier of the Redemption Date or the Final Expiration Date, any Right Certificate or Right Certificates (other than Right Certificates representing Rights that have become void pursuant to paragraph (a)(ii)
of Section 11 hereof or that have been exchanged pursuant to Section 24 hereof) may be transferred, split up, combined or exchanged for another Right Certificate or Right Certificates, entitling the registered holder to purchase a like
number of shares of the Preferred Stock as the Right Certificate or Right Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right Certificates to be transferred, split up, combined or exchanged at the principal office of the Rights Agent. Thereupon,
the Rights Agent shall countersign and deliver to the person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested. The Company may require payment of a sum sufficient to 

  

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cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Right Certificates.

 (b) Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in the case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the Company’s request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Company will make and deliver a new Right Certificate of like tenor to the Rights Agent for delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated. 
 Section 7. Exercise of Rights: Purchase Price; Final
Expiration Date of Rights. 
 (a) The registered holder of any Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the Distribution Date upon surrender of the Right Certificate, with the form of election to purchase on the reverse side thereof duly executed, to the Rights Agent at the offices of
the Rights Agent designated for such purpose, together with payment of the Purchase Price for each one one-thousandth of one share of the Preferred Stock as to which the Rights are exercised, at or prior to the earliest of (i) the close of
business on October 14, 2009 (the “Final Expiration Date”), or (ii) the time at which the Rights are redeemed as provided in Section 23 (“Redemption Date”), or (iii) the time at which such Rights are exchanged
as provided for in Section 24 hereof. 
 (b) The Purchase Price for each one one-thousandth of one share of the Preferred Stock pursuant
to the exercise of a Right shall initially be $60.00, shall be subject to adjustment from time to time as provided in Sections 11 and 13 hereof, and shall be payable in lawful money of the United States of America in accordance with paragraph
(c) below. 
 (c) Upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for shares to be purchased and an amount equal to any applicable transfer tax required to be paid by the holder of such Right Certificate in accordance with Section 9 hereof in cash, or by
certified check or cashier’s check payable to the order of the Company, the Rights Agent shall thereupon (i) (A) promptly requisition from any transfer agent of the Preferred Stock of the Company certificates for the number of shares
of the Preferred Stock to be purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) requisition from the depositary agent depositary receipts representing such number of one
one-thousandths of a share of Preferred Stock as are to be purchased (in which case certificates for the shares of Preferred Stock represented by such receipts shall be deposited by the transfer agent with the depositary agent) and the Company
hereby directs the depositary agent to comply with such request, (ii) when appropriate, promptly requisition from the Company the amount of cash to be paid in lieu of issuance of fractional shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates or depositary receipts, promptly cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be designated by such
holder, and (iv) when appropriate, after receipt, promptly deliver such cash to or upon the order of the registered holder of such Right Certificate. 
  

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 (d) In case the registered holder of any Right Certificate shall exercise less than all the Rights
evidenced thereby, a new Right Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof. 
 (e) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the
Company shall be obligated to undertake any action with respect to a registered holder of Rights or other securities upon the occurrence of any purported exercise as set forth in this Section 7 unless such registered holder shall have
(i) properly completed and signed the certificate contained in the form of election to purchase set forth on the reverse side of the Right Certificate surrendered for such exercise and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) thereof and of the Rights evidenced thereby and of the Affiliates and Associates of such Beneficial Owner (or former Beneficial Owner) as the Company or the Rights Agent shall reasonably request.

 Section 8. Cancellation and Destruction of Right Certificates. All Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Rights Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all cancelled Right Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case shall deliver a certificate of destruction thereof to the Company. 
 Section 9.
Reservation and Availability of Shares of Preferred Stock. 
 (a) The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Preferred Stock or its authorized and issued Preferred Stock held in its treasury, the number of shares of the Preferred Stock that will be sufficient to permit the exercise in full of all outstanding
Rights in accordance with Section 7 hereof. 
 (b) So long as the Preferred Stock issuable upon the exercise of Rights may be listed on
any national securities exchange or automated quotations system, the Company shall use its best efforts to cause, from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed or admitted for trading
on such exchange or automated quotations system upon official notice of issuance upon such exercise. 
 (c) The Company covenants and agrees
that it will take all such action as may be necessary to ensure that all shares of the Preferred Stock delivered upon exercise of Rights shall, at the time of delivery of the certificates for such (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable shares. 
  

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 (d) The Company further covenants and agrees that it will pay when due and payable any and all federal
and state transfer taxes and charges which may be payable in respect of the issuance or delivery of the Right Certificates or of any shares of the Preferred Stock upon the exercise of Rights. The Company shall not, however, be required (a) to
pay any transfer tax which may be payable in respect of any transfer involved in the transfer or delivery of Right Certificates or the issuance or delivery of certificates for the Preferred Stock in a name other than that of the registered holder of
the Right Certificate evidencing Rights surrendered for exercise or (b) to issue or deliver any certificates for shares of the Preferred Stock upon the exercise of any Rights until any such tax shall have been paid (any such tax being payable
by the holder of such Right Certificate at the time of surrender) or until it has been established to the Company’s satisfaction that no such tax is due. 
 Section 10. Preferred Stock Record Date. Each person in whose name any certificate for shares of the Preferred Stock is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of
record of the Preferred Stock represented thereby on, and such certificate shall be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any applicable transfer taxes)
was made; provided, however, that if the date of such surrender and payment is a date upon which the Preferred Stock transfer books of the Company are closed, such person shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the Preferred Stock transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any
rights of a stockholder of the Company with respect to shares for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except as provided herein. 
 Section 11. Adjustment of Purchase
Price, Number of Shares or Number of Rights. The Purchase Price, the number of shares of Preferred Stock covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.

 (a) (i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock
payable in Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares of Preferred Stock or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a), the
Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a
time when the Preferred Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, 

  

 10 







 
combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of Preferred Stock issuable upon exercise of one Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii). 
 (ii) Subject to Section 24 of this Agreement, in the event any Person becomes an Acquiring Person, each holder of a Right shall thereafter have a right to receive, upon exercise thereof at a price equal to the
then current Purchase Price multiplied by the number of one one-thousandths of a share of Preferred Stock for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of shares of Preferred Stock, such number of
shares of Common Stock as shall equal the result obtained by (x) multiplying the then current Purchase Price by the number of one one-thousandths of a share of Preferred Stock for which a Right is then exercisable and dividing that product by
(y) 50% of the then current per share market price of the Company’s Common Stock (determined pursuant to Section 11(d) hereof) on the date of the occurrence of such event; provided, however, that if the transaction that would
otherwise give rise to the adjustment is also subject to the provisions of Section 13, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). In the event that any Person
shall become an Acquiring Person and the Rights shall then be outstanding, the Company shall not take any action which would eliminate or diminish the benefits intended to be afforded by the Rights. 
 From and after the occurrence of such event, any Rights that are or were acquired or beneficially owned by any Acquiring Person (or any
Associate or Affiliate of such Acquiring Person) shall be null and void without any further action and any holder of such Rights shall thereafter have no right whatsoever with respect to such Rights under any provision of this Agreement. No Right
Certificate shall be issued pursuant to Section 3 that represents Rights beneficially owned by an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof; no Right Certificate shall
be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and
any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person or any Associate or Affiliate whose Rights would be void pursuant to the preceding sentence shall be cancelled. 
 (iii) In the event that there shall not be sufficient Common Stock issued but not outstanding or authorized but unissued to permit the
exercise in full of the Rights in accordance with the foregoing subparagraph (ii), the Company shall take all such action as may be necessary to authorize additional Common Stock for issuance upon exercise of the Rights. In the event the Company
shall, after 

  

 11 







 
good faith effort, be unable to take all such action as may be necessary to authorize such additional Common Stock, the Company shall substitute, for each
share of Common Stock that would otherwise be issuable upon exercise of a Right, a number of shares of Preferred Stock or fractions thereof such that the current per share market price of one share of Preferred Stock multiplied by such number or
fraction is equal to the current per share market price of one share of Common Stock as of the date of issuance of such shares of Preferred stock or fractions thereof. 
 (b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them (for a period expiring within 45 calendar days after such record date)
to subscribe for or purchase Preferred Stock (or shares having the same rights, privileges and preferences as the Preferred Stock (“equivalent preferred stock”)) or securities convertible into Preferred Stock or equivalent preferred stock
at a price per share of Preferred Stock or equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the current per share market price of the
Preferred Stock (as determined pursuant to Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of Preferred Stock outstanding on such record date plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or
equivalent preferred stock so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market price and the denominator of which shall be the number of shares of
Preferred Stock outstanding on such record date plus the number of additional shares of Preferred Stock and/or equivalent preferred stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are
initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of Preferred Stock issuable upon exercise of one Right. In case such
subscription price may be paid in consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent. Shares of Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. 
 (c) In case the Company shall fix a record date for the making of a distribution to all holders of Preferred Stock (including any such distribution made
in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than (i) a regular periodic cash dividend the record date for which occurs at a time when there is no
Acquiring Person or (ii) a regular periodic cash dividend, the record date for which occurs at a time when there is an Acquiring Person, at a rate not in excess of 125% of the rate of the last cash dividend theretofore paid or (iii) a
dividend payable in Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date shall be determined by multiplying the 

  

 12 







 
Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the current per share market price of the
Preferred Stock (as determined pursuant to Section 11(d)) on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with
the Rights Agent) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one share of Preferred Stock and the denominator of which shall be such current per share
market price of the Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of Preferred Stock issuable upon exercise of one Right.
Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed. 
 (d) (i) For the purpose of any computation hereunder, the “current market price per share” of any
security (a “Security”) on any date shall be deemed to be the average of the daily closing prices per share of such Security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date;
provided, however, that in the event that the current market price per share of the Security is determined during the period following the announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in
shares of such Security or securities convertible into shares of such Security, or (B) any sub-division, combination or reclassification of such Security, and prior to the expiration of 30 Trading Days after the ex- dividend date for such
dividend or distribution, or the record date for such sub-division, combination or reclassification, then, and in each such case, the current market price per share shall be appropriately adjusted to take into account ex- dividend trading. The
closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Security is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal national securities exchange on which the Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported on the Nasdaq Stock Market (“NASDAQ”) or such other system then in use, or, if on any such
date the Security is not quoted by such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of Directors of the Company. The term
“Trading Day” shall mean a day on which the principal national securities exchange on which the Security is listed or admitted to trading is open for the transaction of business or, if the Security is not listed or admitted to trading on
any national securities exchange, a Business Day. 
 (ii) For the purpose of any computation hereunder, the “current
market 

  

 13 







 
price” per share of Preferred Stock shall be determined in the same manner as set forth above for Common Stock in clause (i) of this
Section 11(d). If the Preferred Stock is not publicly traded or if the current market price per share of Preferred Stock cannot be determined in the manner provided above, the “current market price” per share of Preferred Stock shall
be conclusively deemed to be the current market price per share of Common Stock (appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof), multiplied by one thousand. If neither the
Common Stock nor the Preferred Stock is publicly held or so listed or traded, “current market price” shall mean the fair value per share as determined in good faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent. 
 (e) No adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest ten-thousandth of a share of Common Stock or other share (other than Preferred Stock) or one-millionth of a share of Preferred
stock, as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (A) three years from the date of the transaction which mandates
such adjustment or (B) the date of the expiration of the right to exercise any Rights. 
 (f) If as a result of an adjustment made
pursuant to Section 11(a), the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than shares of the Preferred Stock, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the shares contained in Section 11(a) through (c), inclusive,
and the provisions of Sections 7, 9, 10 and 13 with respect to the shares of the Preferred Stock shall apply on like terms to any such other shares. 
 (g) All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of one one-thousandths
of a share of the Preferred Stock purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein. 
 (h) Unless the Company shall have exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price per one one-thousandths of a share of Preferred Stock, that number of one one-thousandths of a share of
Preferred Stock (calculated to the nearest one-millionth) obtained by (i) multiplying (x) the number of one one-thousandths of a share of Preferred Stock covered by a Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment 

  

 14 







 
of the Purchase Price and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price.

 (i) The Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights, in substitution for
any adjustment in the number of one one-thousandths of a share of the Preferred Stock purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of one
one-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the
nearest one-millionth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after the adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the record date for the adjustment to be made and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at least 10 days later than the date of the public announcement. If Right Certificates have been issued, upon each adjustment of the number of Rights pursuant
to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14 hereof, the additional Rights
to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior
to the date of adjustment, and upon surrender thereof, if required by the Company, new Right Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment. Right Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for herein and shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement. 
 (j) Irrespective of any adjustment or change in the Purchase Price or the number of one one-thousandths of a share of the Preferred Stock issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price per one one-thousandth of a share of Preferred Stock and the number of one one-thousandths of a share which were
expressed in the initial Right Certificates issued hereunder. 
 (k) Before taking any action that would cause an adjustment reducing the
Purchase Price below one one-thousandth of the then par value, if any, of the shares of the Preferred Stock issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and nonassessable shares of such Preferred Stock at such adjusted Purchase Price. 
 (l) In any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the issuing
to the holder of any Right exercised after such record date the shares of Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the shares of the Preferred Stock 

  

 15 







 
and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares upon the occurrence of the event requiring such adjustment.

 (m) Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it in its sole discretion shall determine to be advisable in order that any consolidation or subdivision of the Preferred Stock,
issuance wholly for cash of any shares of the Preferred Stock at less than the current market price, issuance wholly for cash of any shares of the Preferred Stock or securities which by their terms are convertible into or exchangeable for Preferred
Stock, dividends on the Preferred Stock payable in Preferred Stock or issuance of rights, options or warrants referred to hereinabove in this Section 11, hereafter made by the Company to holders of its Preferred Stock shall not be taxable to
such stockholders. 
 (n) In the event that at any time after the date of this Agreement and prior to the Distribution Date, the Company
shall (i) declare or pay any dividend on the Common Stock payable in Common Stock or (ii) effect a subdivision, combination or consolidation of the Common Stock (by reclassification or otherwise than by payment of dividends in Common
Stock) into a greater or lesser number of shares of Common Stock, then in any such case (i) the number of one one-thousandths of a share of Preferred Stock purchasable after such event upon proper exercise of each Right shall be determined by
multiplying the number of one one- thousandths of a share of Preferred Stock so purchasable immediately prior to such event by a fraction, the numerator of which is the number of Common Stock outstanding immediately before such event and the
denominator of which is the number of Common Stock outstanding immediately after such event, and (ii) each share of Common Stock outstanding immediately after such event shall have issued with respect to it that number of Rights which each
share of Common Stock outstanding immediately prior to such event had issued with respect to it. The adjustments provided for in this Section 11(n) shall be made successively whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected. If an event occurs which would require an adjustment under Section 11(a)(ii) and this Section 11(n), the adjustments provided for in this Section 11(n) shall be in addition and prior to any
adjustment required pursuant to Section 11(a)(ii). 
 Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever
an adjustment is made as provided in Sections 11 and 13 hereof, the Company shall (a) promptly prepare a certificate setting forth such adjustment, and a brief statement of the facts accounting for such adjustment, (b) promptly file with
the Rights Agent and with each transfer agent for the Common Stock and the Preferred Stock a copy of such certificate and (c) mail a brief summary thereof to each holder of a Right Certificate in accordance with Section 25 hereof.

 Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. 
 (a) In the event that, following the Distribution Date, directly or indirectly, (x) the Company shall consolidate with, or merge with and into, any
other Person, (y) any Person 

  

 16 







 
shall consolidate with or merge with and into the Company and the Company shall be the continuing or surviving corporation of such merger and, in connection
with such merger, all or part of the Common Stock shall be changed into or exchanged for stock or other securities of any other Person (or the Company) or cash or any other property, or (z) the Company shall sell or otherwise transfer (or one
or more of its subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning power aggregating more than 50% of the assets or earning power of the Company and its subsidiaries (taken as a whole) to any other Person
(other than the Company or one or more of its wholly-owned subsidiaries), then, and in each such case, proper provision shall be made so that (i) each holder of a Right (except as otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof at the then-current Purchase Price multiplied by the number of one one-thousandths of a share of Preferred Stock for which a right is then exercisable, in accordance with the terms of this Agreement and in lieu of
shares of Preferred Stock, such number of shares of validly issued, fully paid, non-assessable and freely tradable Common Stock of the Principal Party (as hereinafter defined) (including the Company as successor thereto or as the surviving
corporation), unencumbered and not subject to any liens, encumbrances, rights of call or first refusal or other adverse claims, as shall be equal to the result obtained by (A) multiplying the then current Purchase Price by the then number of
one one-thousandths of share of Preferred Stock for which a Right is then exercisable and dividing that Product by (B) 50% of the current market price per share of the Common Stock of such Principal Party (determined in the manner described in
Section 11(d)) on the date of consummation of such consolidation, merger, sale or transfer; (ii) the Principal Party shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the term “Company” shall thereafter be deemed to refer to such Principal Party, it being specifically intended that the provisions of Section 11 hereof shall
apply to such Principal Party following the occurrence of such consolidation, merger, sale or transfer; and (iv) such Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient number of shares of its
Common Stock in accordance with Section 9) in connection with such consummation as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the shares of its Common
Stock thereafter deliverable upon the exercise of the Rights. 
 (b) “Principal Party” shall mean 
  

	 	(1)	In the case of any transaction described in (x) or (y) of the first sentence of Section 13(a), the Person that is the issuer of any securities into which shares of
Common Stock of the Company are converted in such merger or consolidation, and if no securities are so issued, the Person that is the other party to the merger or consolidation; and 

  

	 	(2)	in the case of any transaction described in (z) of the first sentence in this Section 13(a), the Person that is the other party to such transaction or, if more than one,
the Person that is the party receiving the greatest portion of the assets or earning power transferred pursuant to such transaction; 

  

 17 







 provided, however, that in any such case, (x) if the Common Stock of such Person is not at such time and has not
been continuously over the preceding 12-month period registered under Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary of another Person the Common Stock of which is and has been so registered, “Principal
Party” shall refer to such other Person; (y) in case such Person is a subsidiary, directly or indirectly, of more than one Person, the Common Stocks of all of which are and have been so registered, “Principal Party” shall refer
to whichever of such Persons is the issuer of the Common Stock having the greatest aggregate market value of shares held by the public, and (z) in case such Person is owned, directly or indirectly, by a joint venture formed by two or more
Persons that are not owned, directly or indirectly, by the same Person, the rules set forth in (x) and (y) above shall apply to each of the chains of ownership having an interest in such joint venture as if such party were a
“Subsidiary” of both or all of such joint venturers and the Principal Parties in each such chain shall bear the obligations set forth in this Section 13 in the same ratio as their direct or indirect interests in such Person bear to
the total of such interests. 
 (c) The Company shall not consummate any such consolidation, merger, sale or transfer unless prior thereto
the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing for the terms set forth in paragraphs (a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any consolidation, merger or sale or transfer of assets mentioned in paragraph (a) of this Section 13, the Principal Party will 
 (i) prepare and file a registration statement under the Securities Act of 1933, as amended (the “Act”) with respect to the
Rights and the securities purchasable upon exercise of the Rights on an appropriate form, will use its best efforts (A) to cause such registration statement to become effective as soon as practicable after such filing, (B) to cause such
registration statement to remain effective (with a prospectus at all times meeting the requirements of the Act) until the date of expiration of the Rights, and (C) to similarly comply with applicable state securities laws, and use its best
efforts to list (or continue the listing of) the rights and the securities purchasable upon exercise of the rights on a national securities exchange; and 
 (ii) will deliver to holders of the Rights historical financial statements for the Principal Party and each of its Affiliates which comply in all respects with the requirements for registration on Form 10 (or any
successor form) under the Exchange Act. 
 The Company shall not enter into any transaction of the kind referred to in this Section 13 if at the time of
such transaction there are any rights, warrants, instruments or securities outstanding or any agreements or arrangements which, as a result of the consummation of such transaction, would eliminate or substantially diminish the benefits intended to
be afforded by the Rights. The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers. 
  

 18 







 Section 14. Fractional Rights and Fractional Shares. 
 (a) The Company shall not be required to issue fractions of Rights or to distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Right Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise
issuable. The closing price for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Rights are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading or, if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported on the NASDAQ or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights, selected by the Board of Directors of the Company. If on any such date no such market maker
is making a market in the Rights the fair market value of the Rights on such date as determined in good faith by the Board of Directors of the Company shall be used. 
 (b) The Company shall not be required to issue fractions of shares of Preferred Stock (other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock) upon exercise of the Rights
or to distribute certificates which evidence fractional shares of Preferred Stock (other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock). Fractions of shares of Preferred Stock in integral multiples
of one one-thousandth of a share of Preferred Stock may, at the election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it, provided that such agreement
shall provide that the holders of such depositary receipts shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of shares of Preferred Stock. In lieu of fractional shares that are not integral
multiples of one one-thousandth of a share of Preferred Stock, the Company may pay to the registered holders of Right Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current
market value of a share of the Preferred Stock. For purposes of this Section 14(b), the current market value of a share of the Preferred Stock shall be the closing price of a share of the Preferred Stock (as determined pursuant to the second
sentence of Section 11(d)(i) for the Trading Day immediately prior to the date of such exercise. 
 (c) The holder of a Right by the
acceptance of the Right expressly waives his right to receive any fractional Rights or any fractional shares upon exercise of a Right (except as above provided). 
  

 19 







 Section 15. Rights of Action. All rights of action in respect of this Agreement are vested in the
respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Stock); and any registered holder of any Right Certificate (or, prior to the Distribution Date, of the Common Stock),
without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution Date, of the Common Stock), may, in his own behalf and for his own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in respect of, his right to exercise the Rights evidenced by such Right Certificate in the manner provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations of, the obligations of any Person subject to this Agreement. 
 Section 16. Agreement of Right Holders. Every holder of a Right by accepting the same consents and agrees with the Company and the Rights Agent and with every other holder of a Right that: 
 (a) prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of the Common Stock; 
 (b) after the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights Agent if surrendered at the principal
office of the Rights Agent, duly endorsed or accompanied by a proper instrument of transfer; and 
 (c) the Company and the Rights Agent may
deem and treat the Person in whose name the Right Certificate (or, prior to the Distribution Date, the associated Common Stock certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificates or the associated Common Stock certificates made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary. 
 Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right
Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the Preferred Stock or any other securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in Section 25), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate shall have been exercised in accordance with the provisions hereof. 
  

 20 







 Section 18. Concerning the Rights Agent. 
 (a) The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the administration and execution of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, or expense, incurred without negligence, bad faith or willful misconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and expenses of defending against any claim of liability in the premises. 
 (b) The Rights Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Stock or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement; or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper person or persons or otherwise upon the advice of counsel as set forth in Section 20 hereof. In no case shall the Rights Agent
be liable for special, indirect, incidental or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Rights Agent has been advised of the possibility of such loss or damage. 
 Section 19. Merger or Consolidation or Change of Name of Rights Agent. 
 (a) Any Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the shareholder services business of the Rights Agent or any successor Rights Agent shall be the successor to the Rights Agent under this Agreement without the execution or filing
of any paper or any further act on the part of any of the parties hereto, provided that such Person would be eligible for appointment as a successor Rights Agent under the provisions of Section 21. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent
or in the name of the successor Rights Agent; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement. 
 (b) In case at any time the name of the Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name 

  

 21 







 
or in its changed name; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement.

 Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following
terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound: 
 (a)
The Rights Agent may consult with the legal counsel (who may be legal counsel for the Company), and the opinion of such counsel shall be full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in
good faith and in accordance with such opinion. 
 (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed by any one of the Chairman of the Board, the President, any Vice President, the Treasurer or the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate. 
 (c) The Rights Agent shall be liable hereunder only for its own negligence, bad faith or willful misconduct. 
 (d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only. 
 (e) The Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in
this Agreement or in any Right Certificate; nor shall it be responsible for any change in the exercisability of Rights (including any Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Section 3, 11, 13, 23, or 24 hereof, or the ascertaining of the existence of facts that would require any such change or adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice that such change or adjustment is required); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of the Preferred
Stock to be issued pursuant to this Agreement or any Right Certificate or as to whether any shares of the Preferred Stock will, when issued, be validly authorized and issued, fully paid and nonassessable. 
 (f) The Company agrees that it will perform, execute, acknowledge and 

  

 22 







 
deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement. 
 (g) The Rights
Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any one of the Chairman of the Board, the President, any Vice President, the Secretary or the Treasurer of the Company, and
to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered to be taken by it in good faith in accordance with instructions of any such officer or for any delay in
acting while waiting for those instructions. 
 (h) The Rights Agent and any stockholder, director, officer or employee of the Rights Agent
may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend interested money to the Company or otherwise act as
fully and freely as though it were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other legal entity. 
 (i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection and continued employment thereof. 
 (j) If, with respect to any Right
Certificate surrendered to the Rights Agent for exercise or transfer, the certificate attached to the form of assignment or form of election to purchase, as the case may be, has either not been completed or indicates that the Rights are beneficially
owned by an Acquiring Person or an Affiliate or Associate thereof, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with the Company. 
 (k) The Rights Agent shall have no responsibility to the Company, any holders of Rights or any holders of shares of Preferred Stock or other securities
for interest or earnings on any monies held by the Rights Agent pursuant to this Agreement, except as otherwise specifically agreed in a separate writing by the Company and the Rights Agent. 
 (l) The Rights Agent shall not be required to take notice or be deemed to have notice of any event or condition hereunder, including, but not limited to,
a Distribution Date, a Redemption Date, any adjustment of the Purchase Price of the Preferred Stock, the existence of an Acquiring Person or any other event or condition that may require action by the Rights Agent, unless the Rights Agent shall be
specifically notified in writing of such event or condition by the Company, and all notices or other instruments required by this Agreement to be delivered to the Rights Agent must, in order to be effective, be received by the Rights Agent as
specified in Section 26 hereof, and in the absence of such notice so delivered, the Rights Agent may conclusively assume no such event or condition exists. 
  


 23 







 Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon 30 days’ notice in writing mailed to the Company and to each transfer agent of the Common Stock and the Preferred Stock by registered or certified mail, and to the holders of the Right
Certificates by first class mail. The Company may remove the Rights Agent or any successor Rights Agent upon 30 days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock and the Preferred Stock by registered or certified mail, and to the holders of the Rights Certificates by first class mail. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of 30 days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with such notice, submit his Right Certificate for inspection by the Company), then the registered holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be a Person (or an affiliate of such Person) organized and doing business under the laws of the United
States or of the State of Texas or New York, in good standing, having a principal office in the State of Texas or the State of New York, which is authorized under such laws to exercise corporate trust powers or stock transfer powers and is subject
to supervision or examination by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50 million. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment the Company shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Stock or Preferred Stock, and mail a notice thereof in writing to the registered holders of the Rights Certificates. Failure to give any notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be. 
 Section 22. Issuance of New Right Certificates. Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company, at its option, may issue new Right Certificates evidencing Rights
in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Purchase Price per share and the number or kind or class of shares or other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. 
 Section 23. Redemption. 
 (a) The Board of Directors of the Company may, at its option, at any time prior to 5:00 P.M., Houston, Texas time, on the earliest of (x) the Shares
Acquisition Date, (y) the tenth business day (or such later date as may be determined by action of the Board of Directors of the Company prior to such time as any Person becomes an Acquiring Person) after the date of the commencement of, or
first public announcement of the intent to commence, by 

  

 24 







 
any Person (other than the Company, any wholly-owned subsidiary of the Company, or any employee benefit plan of the Company or any Subsidiary of the Company
or any entity holding shares of Common Stock for or pursuant to the terms of any such plan) a tender offer or exchange offer the consummation of which would result in any Person becoming an Acquiring Person (including any such date which is after
the date of this Agreement and prior to the issuance of the Rights), or (z) the Final Expiration Date, redeem all but not less than all of the then outstanding Rights at a redemption price of $.001 per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the “Redemption Price”). 
 (b) Immediately upon the action of the Board of Directors of the Company ordering the redemption of the Rights pursuant to paragraph (a) of this
Section 23 and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price. The Company shall promptly give
public notice of any such redemption; provided, however, that the failure to give, or any defect in, any such notice shall not affect the validity of such redemption. Within 10 days after such action of the Board of Directors ordering the redemption
of the Rights, the Company shall mail a notice of redemption to all the holders of the then outstanding Rights at their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the Company nor any of its Affiliates or Associates may redeem, acquire or purchase for value any Rights at any time in any manner other than that specifically set forth in this Section 23
or in Section 24 hereof, and other than in connection with the repurchase of Common Stock prior to the Distribution Date. 
 Section 24.
Exchange. 
 (a) The Board of Directors of the Company may, at its option, at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become null and void pursuant to the provisions of Section 11(a)(ii) hereof) for shares of Common Stock at an exchange ratio of one share of
Common Stock per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such exchange ratio being hereinafter referred to as the “Exchange Ratio”). Notwithstanding
the foregoing, the Board of Directors shall not be empowered to effect such exchange at any time after any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any such Subsidiary, or any Person
holding shares of Common Stock for or pursuant to the terms of any such plan), together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or more of the voting power of the shares of Common Stock then
outstanding. 
 (b) Immediately upon the action of the Board of Directors of the Company ordering the exchange of any Rights pursuant to
paragraph (a) of this Section 24 and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of shares of


  

 25 







 
Common Stock equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of any
such exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Company promptly shall mail a notice of any such exchange by first class mail to all of the holders of such
Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of Common Stock for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of
Rights (other than Rights which have become null and void pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of Rights. 
 (c) In the event that there shall not be sufficient Common Stock issued but not outstanding or authorized but unissued to permit any exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional shares of Common Stock for issuance upon exchange of the Rights. In the event the Company shall, after good faith effort, be unable to take all such action as may be
necessary to authorize such additional shares of Common Stock, the Company shall substitute, for each share of Common Stock that would otherwise be issuable upon exchange of a Right, a number of shares of Preferred Stock or fraction thereof such
that the current per share market price of one share of Preferred Stock multiplied by such number or fraction is equal to the current per share market price of one share of Common Stock as of the date of issuance of such shares of Preferred Stock or
fraction thereof. 
 (d) The Company shall not be required to issue fractions of shares of Common Stock or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of such fractional shares, the Company shall pay to the registered holders of the Right Certificates with regard to which such fractional shares would otherwise be issuable an amount in cash equal
to the same fraction of the current market value of a whole share of Common Stock. For purposes of this paragraph (d), the current market value of a whole share of Common Stock shall be the closing price of a share of Common Stock (as determined
pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange pursuant to this Section 24. 
 Section 25. Notice of Certain Events. In case the Company shall propose at any time following the Distribution Date (a) to pay any dividend payable in stock of any class to the holders of its Preferred Stock or
to make any other distribution to the holders of its Preferred Stock (other than a regular periodic cash dividend at a rate not in excess of 125% of the rate of the last cash dividend theretofore paid), or (b) to offer to the holders of its
Preferred Stock rights or warrants to subscribe for or to purchase any additional shares of the Preferred Stock or shares of stock of any class or any other securities, rights or options, or (c) to effect any reclassification of its Preferred
Stock (other than a reclassification involving only the subdivision of outstanding Preferred Stock), or (d) to effect any consolidation or merger into or with, or to effect any sale or other transfer (or to permit one or more of its
subsidiaries to effect any sale or other transfer), in one or more transactions, of more than 50% of the assets or earning power of the Company and its subsidiaries (taken as a whole) to, any other Person, (e) to effect the liquidation,
dissolution or 
  

 26 







 
winding up of the Company, or (f) to declare or pay any dividend on the shares of Common Stock payable in shares of Common Stock or to the effect a
subdivision, combination or consolidation of the shares of Common Stock (by reclassification or otherwise than by payment of dividends in shares of Common Stock), then, in each such case, the Company shall give to each holder of a Right Certificate,
in accordance with Section 26, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, distribution of rights or warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein by the holders of the Common Stock and/or the Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (a) or (b) above at least ten days prior to the record date for determining holders of the Preferred Stock for purposes of such action, and in the case of any such other action, at least ten days prior
to the date of the taking of such proposed action or the date of participation therein by the holders of the Common Stock and/or the Preferred Stock, whichever shall be the earlier. In case the event set forth in Section 11(a)(ii) of this
Agreement shall occur, then, the Company shall as soon as practicable thereafter give to each holder of a Right, in accordance with Section 26, a notice of the occurrence of such event, which shall specify the event and the consequences of the
event to holders of Rights under Section 11(a)(ii). 
 Section 26. Notices. Notices or demands authorized by this Agreement to be given
or made by the Rights Agent or by the holder of any Right Certificate to or on the Company shall be sufficiently given or made if sent by first class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent)
as follows: 
 Petrohawk Energy Corporation 
 1000 Louisiana, Suite 5600 
 Houston, Texas 77002 
 Attention: David S. Elkouri 
 Subject to the provisions of
Section 21 hereof, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Right Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first class mail, postage
prepaid, addressed (until another address is filed in writing with the Company) as follows: 
 American Stock Transfer & Trust
Company 
 59 Maiden Lane 
 New
York, New York 10038 
 Attention: Corporate Trust 
 Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if sent by first class mail, postage prepaid, addressed to
such holder at the address of such holder as shown on the registry books of the Company. 
 Section 27. Supplements and Amendments. The
Company and the Rights Agent may from time to time supplement or amend this Agreement without the approval of any holders of Right Certificates in order (i) to cure any ambiguity, or (ii) to correct or supplement any 
  

 27 







 
provision contained herein which may be defective or inconsistent with any other provisions herein, or (iii) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable, any such supplement or amendment to be evidenced by a writing signed by the Company and the Rights Agent; provided, however, that from and after such time as any Person
becomes an Acquiring Person, this Agreement shall not be changed or supplemented in any manner which would adversely affect the interests of the holders of Right Certificates in any way (other than pursuant to clauses (i) and (ii) above).
Upon the delivery of a certificate from an appropriate officer of the Company which states that the proposed supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or
amendment. 
 Section 28. Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. 
 Section 29. Benefits of this Agreement.
Nothing in this, Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Stock) any
legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution
Date, the registered holders of the Common Stock). 
 Section 30. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated. 
 Section 31. Governing Law. This Agreement and each Right Certificate issued hereunder shall
be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely within such State.

 Section 32. Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. 
 Section 33.
Descriptive Headings. Descriptive headings of the several Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. 
 [Signature page follows.] 
  

 28 







 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and
year first above written. 
  

			
	PETROHAWK ENERGY CORPORATION
		
	By:	 	/s/ David S. Elkouri
		 	 Name: David S. Elkouri
 Title: Executive Vice
President,
            General Counsel and
            Secretary



  

			
	Attest:
		
	By:	 	/s/ Deborah G. Brown
	Title: 	 	Executive Assistant
		 	

  

			
	AMERICAN STOCK TRANSFER & TRUST COMPANY
		
	By:	 	/s/ Geraldine Zarbo
		 	 Name: Geraldine Zarbo
 Title: Senior Vice President




  

			
	Attest:
		
	By:	 	/s/ Gail Domeneck
	Title: 	 	Manager Proxy Services
		 	

  

 29 







 Exhibit A 
 CERTIFICATE OF DESIGNATIONS 
 of 
 SERIES A JUNIOR PARTICIPATING PREFERRED STOCK 
 of 
 PETROHAWK ENERGY CORPORATION 
 It is hereby certified that: 
 1. The name of the corporation (hereinafter called the “Corporation”) is Petrohawk Energy Corporation. 
 2. The following resolution was duly adopted on October 14, 2008 by the Board of Directors of the Corporation pursuant to Section 151 of the
General Corporation Law of the State of Delaware and in accordance with Article FOURTH of the Corporation’s Certificate of Incorporation, as amended: 
 RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of this Corporation (hereinafter called the “Board of Directors” or the “Board”) in accordance with the
provisions of the Corporation’s Certificate of Incorporation, as amended (the “Certificate of Incorporation”), the Board of Directors hereby creates a series of Preferred Stock of the Corporation and hereby states the designation and
number of shares, and fixes the relative rights and preferences thereof (in addition to the provisions set forth in the Certificate of Incorporation which are applicable to the Preferred Stock of all classes and series) as follows: 
 SERIES A JUNIOR PARTICIPATING PREFERRED STOCK 
 I. Designation and Amount. The shares of such series shall be designated as “Series A Junior Participating Preferred Stock” (the “Series A Preferred Stock”) and the number of shares constituting such series shall be
300,000. Such number of shares may be increased or decreased by resolution of the Board of Directors, provided, that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than that of the shares then outstanding
plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into Series A Preferred Stock. 
 II. Dividends and Distributions. 
 (A) Subject to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series A Preferred Stock and with respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of Common Stock, par value $.001 per share (or as such par value may be changed from time to time), of the Corporation (the “Common Stock”) and of any other junior stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the last day of January, April, July and October in each year (each such date being referred to herein
as a “Quarterly Dividend Payment Date”), 







 
commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Preferred Stock, in an amount
per share (rounded to the nearest cent) equal to: subject to the provision for adjustment hereinafter set forth, 1,000 times the aggregate per share amount of all cash dividends, and 1,000 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately
preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock. In the event the Corporation shall at any time on or
after the Distribution Date (as such term is defined in the Rights Agreement dated as of October 14, 2008 between the Corporation and American Stock Transfer & Trust Company, as Rights Agent) declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately
prior to such event. 
 (B) The Corporation shall declare a dividend or distribution on the Series A Preferred Stock as
provided in paragraph (A) of this Section immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock). 
 (C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60
days prior to the date fixed for the payment thereof. 
  

 2 







 III. Voting Rights. The holders of shares of Series A Preferred Stock shall have the following voting
rights: 
 (A) Subject to the provision for adjustment hereinafter set forth, each share of Series A Preferred Stock shall
entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time on or after the Distribution Date declare or pay any dividend on Common Stock payable
in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 
 (B) Except as otherwise provided herein, in the Certificate of Incorporation, in any other Certificate of Designations creating a series
of Preferred Stock, or by law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation. 
 (C) Except as set forth herein, holders of Series A Preferred Stock
shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. 
 IV. Certain Restrictions. 
 (A) Whenever quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in Section II are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Corporation shall not: 
 (i)
declare or pay dividends on or make any other distributions on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock; 
 (ii) declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled; 
  

 3 







 (iii) redeem or purchase or otherwise acquire for consideration shares of any stock
ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange
for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Preferred Stock; or 
 (iv) redeem or purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

 (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section IV, purchase or otherwise acquire such shares at such time and in such manner. 
 V. Reacquired Shares. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired
and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the Certificate of Incorporation, or in any other Certificate of Designations creating a series of Preferred Stock or any similar stock or as otherwise required by law. 
 VI. Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the Corporation, no distribution shall be made (1) to
the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of Series A Preferred Stock-shall have received an
amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, provided that the holders of shares of Series A Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1,000 times the aggregate amount to be distributed per share to holders of Common Stock, or (2) to the holders of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock, except distributions made ratably on the Series A Preferred Stock and all other such parity stock in proportion to the total amounts to which the holders of all such shares
are entitled upon such liquidation, dissolution or winding up. In the event the Corporation shall at any time declare or pay any dividend on Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common 

  

 4 







 
Stock, then in each such case the aggregate amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under
the proviso in clause (1) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately prior to such event. 
 VII. Consolidation, Merger, etc. In case
the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the
shares of Series A Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 1,000 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time declare or pay any dividend on Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 
 VIII. No Redemption. The shares of Series A Preferred Stock shall not be redeemable. 
 IX. Rank. The Series A Preferred Stock shall rank, with respect to the payment of dividends and the distribution of assets, junior to all other series of
the Preferred Stock unless the terms of any such series shall provide otherwise. 
 X. Amendment. The Certificate of Incorporation shall not
be amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Preferred Stock so as to affect them adversely without the affirmative vote of the holders of two-thirds of the outstanding
shares of Series A Preferred Stock, voting together as a single series. 
 3. The Certificate of Incorporation of the Corporation is amended
so that the designation and number of shares of the class and series acted upon in the foregoing resolution, and the relative rights and preferences of such class and series, are as stated in the resolution. 
  

 5 







 IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the Corporation by its
undersigned officer as of October 14, 2008. 
  

			
	PETROHAWK ENERGY CORPORATION
		
	By:	 	 
		 	 David S. Elkouri,
 Executive Vice
President,
 General Counsel and Secretary



  

			
	ATTEST:
		
	By:	 	 


			
		
	Title:	 	 

  

 6 







 Exhibit B 
 [Form of Right Certificate] 
  

			
	Certificate No. R-	 	                     Rights

 NOT EXERCISABLE AFTER OCTOBER 14, 2009 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE
SUBJECT, AT THE OPTION OF THE COMPANY, TO REDEMPTION AT $0.001 PER RIGHT OR TO EXCHANGE, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY ACQUIRING
PERSONS (AS DEFINED IN SECTION 1 OF THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. 
 Right
Certificate 
 PETROHAWK ENERGY CORPORATION 
 This certifies that                      or registered assigns, is the registered owner of the number of
Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement dated as of October 14, 2008 (the “Rights Agreement”) between PETROHAWK ENERGY CORPORATION, a
Delaware corporation (the “Company”), and AMERICAN STOCK TRANSFER & TRUST COMPANY a New York corporation (the “Rights Agent”), to purchase from the Company at any time after the Distribution Date (as such term is defined
in the Rights Agreement) and prior to 5:00 P.M. Houston, Texas time on October 14, 2009 at the office of the Rights Agent, or its successors as Rights Agent, one one-thousandth of one fully paid and non-assessable share of the Series A Junior
Participating Preferred Stock (the “Preferred Stock”) of the Company, at a purchase price of $60.00 per one one-thousandth of one share (the “Purchase Price”), upon presentation and surrender of this Right Certificate with the
Form of Election to Purchase duly executed. The number of Rights evidenced by this Right Certificate (and the number of one one-thousandths of a share of Preferred Stock which may be purchased upon exercise thereof) set forth above, and the Purchase
Price per share set forth above, are the number and Purchase Price as of October 14, 2008, based on the shares of the Preferred Stock of the Company as constituted at such date. 
 As provided in the Rights Agreement, the Purchase Price and the number of one one-thousandths of a share of the Preferred Stock which may be purchased
upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events. 
 This Right Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and
to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder 







 
of the Rights Agent, the Company and the holders of the Right Certificates. Copies of the Rights Agreement are on file at the principal executive offices of
the Company and the above-mentioned office of the Rights Agent. 
 This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of shares of the Preferred
Stock as the Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof
another Right Certificate or Right Certificates for the number of whole Rights not exercised. 
 Subject to the provisions of the Rights
Agreement, the Rights evidenced by this Certificate may, but are not required to, be (i) redeemed by the Company at its option at a redemption price of $.001 per Right or (ii) may be exchanged by the Company in whole or in part for shares
of Preferred Stock or Common Stock, $.001 par value, of the Company. 
 No fractional shares of the Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are integral multiples of one one-thousandth of one share of Preferred Stock, which may, at the election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement. 
 No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred Stock or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced
by this Right Certificate shall have been exercised as provided in the Rights Agreement. 
 This Right Certificate shall not be valid or
obligatory for any purpose until it shall have been countersigned by the Rights Agent. 
  

 2 







 WITNESS the facsimile signature of the proper officers of the Company and its corporate seal. 

Dated as of                     . 
  

							
	ATTEST:	 		 	 PETROHAWK ENERGY
 CORPORATION

				
		 		 	By:	 	 
		 		 	Name:	 	Floyd C. Wilson
		 		 	Title:	 	Chairman of the Board of Directors, President and Chief Executive Officer

  

			
	Countersigned:
	
	 
		
	By:	 	 
		 	Authorized Signature

  

 3 







 [Form of Reverse Side of Right Certificate] 
 FORM OF ASSIGNMENT 
 (To be executed by the registered holder if such 
 holder desires to transfer the Right Certificate.) 
 FOR VALUE RECEIVED
                                         
                                         
                                         
                                      
 hereby sells, assigns and transfers unto
                                         
                                         
                                         
                      
  
  
 (Please print name and address of transferee)

 this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint
                     Attorney, to transfer the within right Certificate on the books of the within- named Company, with full power of
substitution. 
 Dated:
                        ,
                 
  

	
	
	  
	 Signature
  
 (Signature must conform in all respects to the name of holder as written upon the face of this Right Certificate, without alteration or enlargement or any change whatsoever.)



 Signature Guaranteed: 
 Signatures must be guaranteed by a member firm of a registered national securities exchange, a member of the Financial Industry Regulatory Authority, Inc., or a commercial bank or trust company having an office or
correspondent in the United States. 
  
  
  
 (to be completed if applicable) 
 The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement). 

	
	
	  
	


  

 4 







 FORM OF ELECTION TO PURCHASE 
 (To be executed by the registered holder if such holder desires to exercise the Right Certificate.) 
  

	TO:	PETROHAWK ENERGY CORPORATION 

 The undersigned hereby irrevocably elects
to exercise                          Rights represented by this Right Certificate to purchase the shares of the Preferred
Stock issuable upon the exercise of such Rights and requests that certificates for such shares be issued in the name of: 
  

			
	 [Please insert social security
 or other identifying
number]
	 	  

  
  
 (Please print name and address) 
                                        
                                         
                                         
                    If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance
remaining of such Rights shall be registered in the name of and delivered to: 
  

			
	 [Please insert social security
 or other identifying
number]
	 	  

  
  
 (Please print name and address) 
 Dated:
                                ,
                 

	
	
	  
	 Signature
  
 (Signature must conform in all respects to the name of holder as written on the face of this Right Certificate, without alteration or enlargement or any change whatsoever.)



  

 5 







 Signature Guaranteed: 
 Signatures must be guaranteed by a member firm of a registered national securities exchange, a member of the FINRA, or a commercial bank or trust company having an office or correspondent in the United States.

  
  
  
 (to be completed if applicable) 
 The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement). 

	
	
	  
	Signature


  

 6 







 Exhibit C 
 SUMMARY OF RIGHTS TO PURCHASE 
 PREFERRED STOCK 
 On October 14, 2008, the Board of Directors of PETROHAWK ENERGY CORPORATION (the “Company”) declared a dividend distribution of one
preferred stock purchase right (a “Right”) for each outstanding share of Common Stock, $0.001 par value per share (the “Common Stock”), of the Company. The distribution is payable to the stockholders of record on October 25,
2008. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of the Company’s Series A Junior Participating Preferred Stock (the “Preferred Stock”) at a price of $60.00 per one
one-thousandth of a share of Preferred Stock (the “Purchase Price”), subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement (the “Rights Agreement”) between the Company and American
Stock Transfer & Trust Company, as Rights Agent (the “Rights Agent”). 
 Until the earlier to occur of (i) the tenth
day following a public announcement that a person or group of affiliated or associated persons (an “Acquiring Person”) acquired beneficial ownership of 15% or more of the outstanding shares of the Common Stock (the “Shares Acquisition
Date”) or (ii) the tenth business day (or such later date as may be determined by action of the Board of Directors prior to such time as any person or group of affiliated or associated persons becomes an Acquiring Person) after the
commencement of, or announcement of an intention to commence, a tender offer or exchange offer the consummation which would result in any person becoming an Acquiring Person (the earlier of such dates being called the “Distribution Date”),
the Rights will be evidenced, with respect to any of the Common Stock outstanding as of October 25, 2008, by such Common Stock certificate containing a notation incorporating the Rights Agreement by reference. 
 The Rights Agreement provides that, until the Distribution Date (or earlier redemption or expiration of the Rights), the Rights will be transferred with
and only with the Common Stock. Until the Distribution Date (or earlier redemption or expiration of the Rights), the surrender for transfer of any of the Common Stock certificates outstanding as of October 25, 2008, will also constitute the
transfer of the Rights associated with the Common Stock represented by such certificate. As soon as practicable following the Distribution Date, separate certificates evidencing the Rights (“Right Certificates”) will be mailed to holders
of record of the Common Stock as of the close of business on the Distribution Date and such separate Right Certificates alone will evidence the Rights. 
 The Rights are not exercisable until the Distribution Date. The Rights will expire on October 14, 2009, (the “Final Expiration Date”), unless the Final Expiration Date is extended or unless earlier
redeemed or exchanged by the Company, in each case, as described below. 
 Shares of Preferred Stock purchasable upon exercise of the Rights
will not be redeemable. Each share of Preferred Stock will be entitled to an aggregate dividend of 1,000 times the dividend declared on one share of the Common Stock. In the event of liquidation, the holders of the Preferred Stock will be entitled
to receive an aggregate liquidation payment equal 







 
to 1,000 times the payment made on one share of Common Stock. Each share of Preferred Stock will have 1,000 votes voting together with the Common Stock.
Finally, in the event of any merger, consolidation or other transaction in which shares of Common Stock are exchanged, each share of Preferred Stock will be entitled to receive 1,000 times the amount received per one share of Common Stock. The
Rights are protected by customary anti-dilution provisions. Because of the nature of the Preferred Stock dividend, liquidation and voting rights, the value of the one one-thousandth interest in a share of Preferred Stock purchasable upon exercise of
each Right should approximate the value of one share of Common Stock. 
 The Purchase Price payable, and the number of shares of the
Preferred Stock or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of
the Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights or warrants to subscribe for shares of the Preferred Stock or convertible securities at less than the then-current market price of the Preferred Stock
or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding regular periodic cash dividends out of earnings or retained earnings at a rate not in excess of 125% of the rate of the last cash
dividend theretofore paid or dividends payable in the Preferred Stock) or of subscription rights or warrants (other than those referred to above). 
 The number of outstanding Rights and the number of one one-thousandths of a share of Preferred Stock issuable upon exercise of each Right are also subject to adjustment in the event of a stock split of the Common Stock or a stock dividend
on the Common Stock payable in shares of Common Stock or subdivisions, consolidations or combinations as of the Common Stock occurring, in any such case, prior to the Distribution Date. 
 In the event that the Company is acquired in a merger or other business combination transaction or that 50% or more of its assets or earning power are
sold after a person or group has become an Acquiring Person, proper provision will be made so that each holder of a Right will thereafter have the right to receive, upon the exercise thereof at the then current exercise price of the Right, that
number of shares of common stock of the acquiring company which at the time of such transaction would have a market value of two times the exercise price of the Right. Subject to certain exchange rights that may be exercised by the Board, in the
event that any person or group of affiliated or associated person becomes an Acquiring Person, proper provision will be made so that each holder of a Right, other than Rights that were or are beneficially owned by the Acquiring Person (which will
thereafter be void), will thereafter have the right to receive upon exercise that number of shares of the Common Stock having a market value of two times the exercise price of the Right. 
 With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment of at least 1% in such
Purchase Price. No fractional shares of Preferred Stock will be issued (other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock, which may, at the election of the Company, be evidenced by depositary
receipts) and, in lieu thereof, an adjustment in cash will be made based on the market price of the Preferred Stock on the last trading date prior to the date of exercise. 
  


 2 







 At any time after any person or group becomes an Acquiring Person and prior to the acquisition by such
person or group of 50% or more of the outstanding shares of Common Stock, the Board of Directors of the Company may exchange the Rights (other than Rights owned by such person or group which will have become void) in whole or in part, at an exchange
ratio of one share of Common Stock, or one one-thousandth of a Preferred Share per Right (subject to adjustment) (the “Exchange Right”). Notwithstanding the above, the Board of Directors may not exercise the Exchange Rights after any
person, together with any associate or affiliate of such person, has become the beneficial owner of 50% or more of the voting power of the shares of Common Stock. 
 At any time prior to 5:00 P.M. Houston, Texas time on the earliest of (i) the Shares Acquisition Date, (ii) the tenth business day (or such later date as may be determined by action of the Board of Directors
prior to such time as any person or group of affiliated or associated persons becomes an Acquiring Person) after the commencement of, or announcement of an intention to commence, a tender offer or exchange offer the consummation of which would
result in any person becoming an Acquiring Person, or (iii) the Final Expiration Date, the Board of Directors of the Company may redeem the Rights in whole, but not in part, at a price of $.001 per Right (the “Redemption Price”).

 Immediately upon the action of the Board of Directors of the Company electing to redeem or exchange the Rights, the Company shall make
announcement thereof, and upon such election, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price, or the shares of Common Stock or Preferred Stock exchangeable for the
Rights, as applicable. 
 The terms of the Rights may be amended by the Board of Directors of the Company without the consent of the holders
of the Rights, except that from and after such time as any person or group becomes an Acquiring Person, no such amendment may adversely affect the interests of the holders of the Rights. 
 Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to
vote or to receive dividends. 
 A copy of the Rights Agreement is available free of charge from the Rights Agent, American Stock
Transfer & Trust Company. This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement, which is hereby incorporated herein by reference. 
  

 3