Document:

exv10w1

Exhibit 10.1

BROWN-FORMAN CORPORATION

NON-EMPLOYEE DIRECTOR

DEFERRED STOCK UNIT PROGRAM

     1. General. This Brown-Forman Corporation Non-Employee Director Deferred Stock Unit
Program (the “Program”) is intended to more closely align board compensation at Brown-Forman
Corporation, a Delaware corporation (the “Company”) with the interests of the Company’s
shareholders, by making available to eligible participants tax-deferred investments in Company
stock as authorized by Article 10 of the Company’s 2004 Omnibus Plan, as amended (“Omnibus Plan”).
It is intended that the Program be in compliance with Code Section 409A and guidance issued
thereunder (“Section 409A”).

     2. Eligibility. All members of the Board of Directors of the Company who are not also
employees of the Company shall participate in this Program (referred to as the “Participants”).
This document shall constitute an Award Agreement under the Omnibus Plan.

     3. Account. The amount due to be paid or delivered to any Participant under this
Program shall be determined based on the Participant’s Account. The Company shall maintain a
bookkeeping account for each Participant, to which shall be credited (i) part of the annual
Director retainer which the Board determines to deliver in the form of equity pursuant to Section
4(a) or (b) below, plus (ii) that part of the annual retainer which is otherwise payable in cash,
that is electively deferred pursuant to Section 4(c) below, plus (iii) Dividend Equivalents as
described in Section 5 below (the “Account”). Equity and deferral portions of a retainer, and
Dividend Equivalents, to the extent denominated as cash, shall be converted into a number of whole
and fractional units (each, a “DSU”), equal to the cash so credited, divided by the Fair Market
Value (as defined in the Omnibus Plan) of a share of Class B common stock of the Company (“Stock”),
as of the date credited. All amounts credited to an Account shall be nonforfeitable as and when
provided in Section 7 below. The DSUs contemplated hereunder are granted pursuant to Sections 7.3
and 10.2 of the Omnibus Plan as market value units and for purposes of such plan, shall be
designated and treated as such.

     4. Contribution Amounts and Crediting Dates.

     (a) Non-Elective Company Contribution for 2011 Board Year. On September 23,
2010, the Company shall award and cause to be credited to a Participant’s Account (i)
$60,000 to each Participant that was elected director at the annual meeting of stockholders
held July 22, 2010; or (ii) $60,000, prorated based on the portion of the Board Year not yet
elapsed as of the date of the director’s election, to any Participant elected director after
the annual meeting of stockholders held July 22, 2010, but before the next annual meeting of
stockholders in 2011.

     (b) Non-Elective Company Contribution in Future Years. On the date of the
Company’s annual meeting of stockholders to be held in 2011, and on the date of the
Company’s annual meeting of stockholders in each year thereafter while this Program is in
effect, the Company shall award and cause to be credited to the Account of each Participant
who has not then experienced a Separation from Service, that part of the

 

 

annual retainer then in effect which the Board has determined shall be delivered in
equity, if any. With respect to a non-employee director who is elected for the first time other
than on an annual meeting date, the Company shall award and cause to be credited to such
Participant’s Account on the date of election that part of the annual retainer then in
effect which the Board has determined shall be delivered in equity, prorated based on the
portion of the Board Year not yet elapsed as of the date of the director’s election.

     (c) Participant Deferrals; Election Period. On the date of the Company’s
annual meeting of stockholders to be held in 2011 and on the date of the Company’s annual
meeting of stockholders in each year thereafter while this Program is in effect, each
Participant (provided he or she is then still a Director) shall have credited to his or her
Account an amount equal to all or part, in increments of 25%, (as elected by the Participant in accordance with
this Section) of the annual retainer which the Board has determined before that date would,
if not electively deferred hereunder, otherwise be payable in cash (the “Annual Cash
Retainer”), in one single credit, despite the fact that such amount would otherwise be paid
in installments over the period beginning at one annual meeting of stockholders and ending
at the next such meeting (the “Board Year”).

          A Participant’s election to defer all or a portion of the Annual Cash Retainer shall be
made in writing on a form approved for such purpose (the first of which is attached hereto
an Exhibit A but which may change from time to time as efficient administration may
require), submitted to the Company no later than December 31 of the calendar year before the
Board Year with respect to which the Annual Cash Retainer is payable, and shall be
irrevocable as of such December 31. A new election shall be required each year.
Notwithstanding the preceding sentences, a non-employee Director of the Company who is
elected for the first time after the effective date of this Program may make an election to
defer Annual Cash Retainer by submitting a written election form within the 30 day period
beginning on the date the Director is elected (a “new Participant”), which election may
apply only to the portion of such Annual Cash Retainer equal to the total due for the Board
Year, prorated based on the portion of the Board Year not yet elapsed at the date the
deferral election becomes irrevocable (on that 30th day of the election period).
The exception for a mid-year election for a new Participant shall not apply unless the
Participant can be treated as initially eligible in accordance with Treasury Regulation
Section 1.409A-2(a)(7), which generally provides that this special election period shall not
apply to Participants in this Program who were, prior to eligibility hereunder, made
eligible in any other plans of the Company (or its related companies) that must be
aggregated with this Plan under Code Section 409A, and shall not apply to a Participant
whose eligibility to defer under this Program started, then ceased, then was renewed again,
unless that Participant was not able to defer under this and all aggregated plans (if any)
for the previous 24 months or longer.

     5. Dividend Equivalent. Each Participant’s Account shall be credited on each
dividend payment date of the Company, with an amount equal to the cash dividends that would have
paid on the number of DSUs in their Account on the record date for such dividend, if such DSUs were
deemed to be outstanding shares of Stock (“Dividend Equivalents”). Such cash shall then be
converted to DSUs as provided in Section 3 above.

 

 

     6. Changes in Stock. In the event of a stock dividend, stock split, reverse stock
split or similar change in capitalization affecting the Stock, The number of DSUs credited to each
Participant’s Account shall be adjusted by the Board of Directors in the same fashion as would a
share of Stock then outstanding. The adjustment by the Board of Directors shall be final, binding
and conclusive.

     7. Vesting and Distributions.

     (a) Vesting. DSUs awarded, created from deferrals, or credited based on
Dividend Equivalents related to such amounts in each Board Year hereunder shall be vested
and nonforfeitable on a pro rata basis over the entire Board Year. If a Director experiences
a Separation from Service before the end of a Board Year, the portion of his or her Account
related to that Board Year shall be debited for the unvested portion based on the number of
days left in the Board Year at such Separation, divided by the total days in the Board Year,
and all rights in such unvested portion shall lapse.

     (b) Time and Amount of Distribution. Following a Participant’s Separation from
Service, the Participant (or the beneficiary in the event of the Participant’s death) will
be paid the balance of the Participant’s Account (net of any forfeiture provided in Section
7(a) above) in either

	 	(i)	 	a single lump sum on the first February 1 that
is at least 6 months following the Director’s Separation from Service,
if and only if the Participant so elects in writing within 30 days
following September 23, 2010 (or, with respect to a new Participant, in
the 30 days after his election as a Director), or
	 
	 	(ii)	 	if not so elected, in 10 substantially equal
annual installments with the first payment made on the first February 1
that is at least 6 months following the Director’s Separation from
Service, with each subsequent installment made on successive
anniversaries of the date of the first payment.

Provided however, that, if, before the first payment date, the Participant has died or has
been determined to have incurred a Disability, payment shall be made at the applicable
February 1 in a single lump sum, even if installments were otherwise elected. In addition,
in the case of death after installment payments have begun, the next installment payment due
on the first February 1 after the date of death shall be a lump sum of all remaining amounts
in the Account.

     (c) Form of Distribution. All distributions shall be paid by delivery of whole shares of Stock equal to the whole DSUs in the Account, with any fractional DSUs paid in
cash, based on the Fair Market Value of the Stock on the last trading date before the date
of payment.

     8. Tax Withholding. If and to the extent at any time the Company has an obligation to
withhold and remit income or other taxes with respect to a Director’s annual retainer or Account,
the Company’s obligation to make any payments to any Participant is subject to and

 

 

conditioned on tax obligations being satisfied either by the Participant making a payment in
cash for such amounts, or, failing receipt of such cash prior to the date payment of all or part of
an Account is due hereunder, the Company shall deduct from the Stock to be issued in payment, the
tax withholdings due to be remitted, based on the Fair Market Value of the Stock on the last
trading day prior to the remittance date.

     9. Rights of Participants. Participation in the Program, and any actions taken
pursuant to the Program, shall not create or be deemed to create a trust or fiduciary relationship
of any kind between the Company and the Participant and shall not confer upon the Participant any
separate right to remain a member of the Company’s Board of Directors. The Company may, but shall
have no obligation to, establish any separate fund, reserve, or escrow or to provide security with
respect to any amounts deferred under the Program. Any assets of the Company which are set aside
in any separate fund, reserve or escrow shall continue for all purposes to be a part of the general
assets of the Company, with title to the beneficial ownership of any such assets remaining at all
times in the Company. No Participant, nor his legal representatives, nor any of his beneficiaries
shall have any right, other than the right of an unsecured general creditor of the Company, in
respect of the Account established hereunder, and such persons shall have no property interest
whatsoever in any specific assets of the Company. A Participant shall have no rights as a
stockholder of the Company, and shall not be entitled to vote, with respect to the DSUs credited to
his Account.

     10. Reporting. The Company shall provide statements to Participants showing the DSUs
standing to the credit of their Accounts no less frequently than once a year.

     11. Source of Shares. Shares of Stock reserved under the Company’s Omnibus Plan shall
be used to satisfy any obligations to distribute Stock under this Program.

     12. Claims Procedure.

     (a) All claims for benefits under this Program shall be filed in writing with the
Compensation Committee of the Board of Directors of the Company (the “Committee”) in
accordance with such procedures as the Committee shall reasonably establish.

     (b) The Committee shall, within 90 days (45 days for payment based on Disability) after
a submission of a claim, provide adequate notice in writing to any claimant whose claim for
benefits under the Program has been denied. Such notice shall contain the specific reason
or reasons for the denial and references to specific Program provisions on which the denial
is based. The Committee shall also provide the claimant with a description of any material
or information which is necessary in order for the claimant to perfect his claim and an
explanation of why such information is necessary. If special circumstances require an
extension of time for processing the claim, the Committee shall furnish the claimant a
written notice of such extension prior to the expiration of the 90-day period (30 days for a
Disability claim, and an additional 30 day extension is available). The extension notice
shall indicate the reasons for the extension and the expected date for a final decision,
which date shall not be more than 180 days (105 days for Disability) from the initial claim.

 

 

     (c) The Committee shall, upon written request by a claimant within 60 (180 for a
disability claim) days of receipt of the notice that his claim has been denied, afford a
reasonable opportunity to such claimant for a full and fair review by the Committee of the
decision denying the claim. The Committee will afford the claimant an opportunity to review
pertinent documents and submit issues and comments in writing. The claimant shall have the
right to be represented.

     (d) The Committee shall, within 60 days (45 days for a disability claim) of receipt of
a request for a review, render a written decision on its review. If special circumstances
require extra time for the Committee to review its decision, the Committee will attempt to
make its decision as soon as practicable, and in no event will the Committee take more than
120 days (105 days for Disability claims) to send the claimant a written notice of its
decision.

     13. Beneficiary. If a Participant dies before he has received full payment of the
amount credited to his Account, such unpaid portion shall be paid to the Participant’s primary or
contingent beneficiary as last designated by the Participant in writing on a form provided by the
Company for that purpose (a sample of which is attached hereto as Exhibit B but which may
be changed from time to time.) Each designation received by the Company prior to a Participant’s
death will, upon receipt, revoke any prior designations. If no beneficiary has been designated or
if a designated beneficiary has predeceased the Participant, such unpaid portion shall be paid to
the Participant’s spouse, or, if there is no spouse, to the Participant’s children per stirpes, or,
if there is no spouse or children, to the Participant’s estate.

     14. No Assignment or Alienation. Neither the deferred compensation payable under this
Program, nor Stock distributable upon distribution hereunder, shall be subject to alienation,
assignment, garnishment, execution, security interest or levy of any kind, and any attempt to cause
any such amounts or Stock to be so subjected shall not be recognized.

     15. Miscellaneous.

     (a) All expenses incurred in the establishment and maintenance of or attributable to a
Participant’s Account shall be borne by the Company and shall not reduce the amount credited
to such Account.

     (b) This Program may be amended in any way or may be terminated, in whole or in part,
at any time, and from time to time, by the Board of Directors of the Company. The foregoing
provisions of this paragraph notwithstanding, no amendment or termination of the Program
shall adversely reduce the number of DSUs credited to the Accounts prior to the effective
date of such amendment or termination, or accelerate the timing of payment from the
Accounts, except as allowed under Section 409A upon Program termination. Notwithstanding
the foregoing, the Board of Directors of the Company specifically reserves the right to
amend the Program as necessary to comply with Section 409A.

     (c) The Committee shall have the exclusive discretionary authority to determine the
amounts of benefits under the Program, make factual determinations, construe and interpret
terms of the Program, supply omissions and determine any

 

 

questions which may arise in connection with its operation and administration. Its
decisions or actions in respect thereof, including any determination of any amount credited
or charged to the Participants’ Accounts or the amount or recipient of any payment to be
made therefrom, shall be conclusive and binding for all purposes upon the Company and upon
any and all Participants, their beneficiaries, and their respective heirs, distributees,
executors, administrators and assignees.

     (d) The terms of this Program shall be binding upon and shall inure to the benefit of
the Company and its successors or assigns and each Participant and his beneficiaries, heirs,
executors, and administrators.

     (e) Subject to its obligation to pay the amount credited to the Participant’s Account
at the time distribution is required pursuant to Section 8, neither the Company, any person
acting on behalf of the Company, the Board of Directors, nor the Board of Directors shall be
liable for any act performed or the failure to perform any act with respect to the terms of
the Program, except in the event that there has been a judicial determination of willful
misconduct on the part of the Company, such person, the Board of Directors or the Board of
Directors.

     (f) This Program, and all actions taken hereunder, shall be governed by and construed
in accordance with the laws of the State of Delaware, except as such laws may be superseded
by any applicable Federal laws.

     (g) This Program is subject to the terms of the Omnibus Plan and Administrative
Guidelines promulgated under it from time to time. In the event of a conflict between this
Program and the Omnibus Plan, the Omnibus Plan document as well as any determinations made
by the Board of Directors as authorized by the Omnibus Plan document shall govern.

     16. Effective Date and Term. This Program shall be effective as of September 23, 2010
and contributions hereunder shall continue until no further Awards can be made under the Omnibus
Plan (July 22, 2014) and shall continue to maintain Accounts hereunder until all Accounts are
distributed.

     17. Definitions. Terms capitalized herein and not defined in the context in which used
or in the Omnibus Plan, shall have the meanings set forth below.

     (a) “Code” means the Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder.

     (b) “Disability” occurs when a Participant is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment which
can be expected to result in death or can be expected to last for a continuous period of not
less than 12 months.

     (c) “Separation from Service” means the date the Participant’s term as a Director
expires, the Participant resigns as a Director, or the Participant is removed as a Director,
provided that the Company and Participant in good faith believe at that time

 

 

that the Participant’s status as a Director of the Company will not be renewed and that
no other service relationship (as an employee or independent contractor) with the Related
Group will continue or be begun. If the parties anticipate that some service relationship
within the Related Group will continue after a Participant’s term as a Director expires and
is not renewed, in all events the “Separation from Service” is deemed to occur 12 months
after the date on which a Participant ceases to serve as a member of the Board of Directors,
as long as the Participant does not actually perform services for the Related Group (as a
director, employee or independent contractor) during such 12 month period, as provided under
Treasury Regulation §1.409A-1(h)(2)(ii). “Related Group” for this purpose means the Company
and all other companies or other organizations that are deemed to be a part of a controlled
group of corporations that includes the Company or under common control with the Company
within the meaning s given those phrases in Section 414 of the Code

The undersigned Secretary of the Company hereby certifies that this Program was adopted by and
became an action of the Board of Directors on the date set forth below.

	 	 	 	 	 
	BROWN-FORMAN CORPORATION

 	 	 
	By:  	/s/ Matthew E. Hamel,
 	 	 
	 	its Secretary 	 	 

Date: September 23, 2010

 

 

EXHIBIT A

BROWN-FORMAN CORPORATION

NON-EMPLOYEE DIRECTOR DEFERRED STOCK UNIT PROGRAM

ANNUAL CASH RETAINER DEFERRAL ELECTION

The
undersigned Director hereby elects, pursuant to Section 4(c) of the Brown-Forman Corporation
Non-Employee Director Deferred Stock Unit Program, (the “Program”) to defer the following amount of
Annual Cash Retainer to be paid in the Board Year which begins in 20__1 (complete the
  % deferral lines below)

___0%   

___25%  

___50% 

___75% 

___100%

I understand that the amount of Annual Cash Retainer not so deferred will be paid in cash in 6
substantially equal installments, provided that such cash amounts will not be paid if my service as
a Director ends before any cash payment date.

I acknowledge having received and read a copy of the Program’s terms, and understand that the
election above becomes irrevocable in accordance with the terms of the Program, and that payment to
me of the amounts deferred, plus earnings or losses thereon based on their deemed conversion into
units of Class B common stock of the Company, will not begin until after my service on the Board
has ceased.

______________________________________________________

signature

Name: ________________________________________________

(please print)

Date: ________________________________________________

 

			
	1	 	Must be submitted by the December 31 of the
calendar year before the Board year will begin, except in the case of new
participants, who have 30 days to submit, and is irrevocable when election
period expires.

 

 

EXHIBIT B

BROWN-FORMAN CORPORATION

NON-EMPLOYEE DIRECTOR DEFERRED STOCK UNIT PROGRAM

BENEFICIARY DESIGNATION

Pursuant
to Section 13 of the Brown-Forman Corporation Non-Employee Director Deferred Stock
Unit Program, (the “Program”), the undersigned Participant hereby designates the following as the
Participant’s beneficiary to receive any Stock still to be delivered in payment for an Account
accumulated under the Program’s terms, in a single lump sum at the next payment date after my date
of death:

Primary Beneficiary(ies)*

 

	*	 	Note, if you reside in a community property state, spousal consent will be required
for you to validly designate a primary beneficiary other than your spouse; if one or more
primary beneficiaries designated below does not survive the participant, the percentage
indicated will be adjusted for those remaining to equal 100%, unless “per stirpes” is
specified, in which case the deceased beneficiary’s share will be divided among that
beneficiary’s issue

	 	 	 	 	 
	Name and current address	 	Relationship	 	% Share
	 
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 
	 	 

Contingent Beneficiary(ies)

 

     to be paid if no Primary Beneficiary survives

	 	 	 	 	 
	Name and current address	 	Relationship	 	% Share
	 
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 

	 	 
	 	 

This designation of beneficiary may be revoked or amended by the Participant at any time
without the consent of a previously-designated beneficiary. The last written beneficiary
designation on file with the Company prior to a Participant’s death will control payment of an
Account. If all beneficiaries predecease the Participant, or no beneficiary is designated the
terms of the Program will dictate to whom the Account is paid.

	 	 	 	 	 
	 	 	 
	 	Signature

 	 
	 	By:  	 	 
	 	 	(print name and signing capacity) 	 
	 
	 	Date:exv4w1

Exhibit 4.1

CERTIFICATE OF DESIGNATIONS

OF

SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK

OF

POSTROCK ENERGY CORPORATION

     POSTROCK ENERGY CORPORATION, a corporation organized and existing under the General
Corporation Law of the State of Delaware (the “Corporation”), in accordance with the
provisions of Sections 103 and 151 thereof, DOES HEREBY CERTIFY:

     The board of directors of the Corporation (the “Board of Directors”), in accordance
with the provisions of the certificate of incorporation and the Bylaws of the Corporation and
applicable law, at a meeting duly called and held on September 1, 2010, adopted the following
resolution creating a series of 6,000 shares of Preferred Stock of the Corporation designated as
“Series A Cumulative Redeemable Preferred Stock”:

     RESOLVED, that pursuant to the authority vested in the Board of Directors and in accordance
with the provisions of the certificate of incorporation of the Corporation and applicable law, a
series of Preferred Stock, par value $0.01 per share, of the Corporation be and hereby is created,
and that the designation and number of shares of such series, and the voting and other powers,
preferences and relative, participating, optional or other rights, and the qualifications,
limitations and restrictions thereof (in addition to those set forth in the certificate of
incorporation of the Corporation that are applicable to Preferred Stock of all series), of the
shares of such series, are as follows:

     Section 1. Designation. The distinctive serial designation of such series of Preferred Stock
is “Series A Cumulative Redeemable Preferred Stock” (“Series A”). Each share of
Series A shall be identical in all respects to every other share of Series A.

     Section 2. Number of Shares. The authorized number of shares of Series A shall be 6,000.
Shares of Series A that are redeemed, purchased or otherwise acquired by the Corporation, or
converted into another series of Preferred Stock, shall be cancelled and retired and revert to
authorized but unissued shares of Preferred Stock (provided that any such cancelled shares of
Series A may be reissued only as shares of any series other than Series A).

	 	 	Section 3. Definitions. As used herein with respect to Series A:

          (a) “Additional Directors” has the meaning set forth in Section 10.

          (b) “Borrowing Base Facility” means the Second Amended and Restated Credit Agreement,
dated September 21, 2010, among PostRock Energy Services Corporation,
PostRock Midcontinent Production, LLC, Royal Bank of Canada (as Administrative Agent and
Collateral Agent) and the lenders party thereto.

 

 

          (c) “Bylaws” means the bylaws of the Corporation, as they may be amended from time to
time.

          (d) “Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or
Friday and is not a day on which banking institutions in Oklahoma City, Oklahoma or New York, New
York generally are authorized or obligated by law, regulation or executive order to close.

          (e) “Certificate of Designations” means this Certificate of Designations relating to
the Series A, as it may be amended from time to time.

          (f) “Certification of Incorporation” means the certificate of incorporation of the
Corporation, as it may be amended from time to time, and shall include this Certificate of
Designations.

          (g) “Change of Control” means the occurrence of any of the following events:

               (i) the sale, lease or transfer, in one transaction or a series of related transactions, of
all or substantially all of the Corporation’s assets (determined on a consolidated basis) to any
“person” or “group” (as such terms are used in Section 13(d)(3) of the Exchange Act) other than a
Wholly Owned Subsidiary; provided, however, that a transaction covered by this clause (i) shall not
be a Change of Control if a Specified Person is a party in the transaction; or

               (ii) the consolidation or merger of the Corporation with or into any other Person or the
merger of another Person with or into the Corporation, pursuant to which the holders of 100% of the
total voting power of the total outstanding capital stock of the Corporation immediately prior to
the consummation of such consolidation or merger do not beneficially own (within the meaning of
Rule 13d-3 of the Exchange Act) in the aggregate more than 50% of the total voting power of the
total outstanding capital stock of the continuing or surviving Person immediately after such
transaction; provided, however, that a transaction covered by this clause (ii) shall not be a
Change of Control if the parties to such transaction include a Specified Person; or

               (iii) the acquisition, directly or indirectly, by any “person” or “group” (as such terms are
used in Section 13(d)(3) of the Exchange Act), other than White Deer Energy, L.P. or its
affiliates, of beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of more than
20% of the total voting power of the total outstanding capital stock of the Corporation; provided,
however, that a transaction covered by this clause (iii) shall not be a Change of Control if the
party from whom such stock is acquired in such acquisition is a Specified Person or if a Specified
Person has in the aggregate beneficial ownership, immediately prior to such acquisition, of a
percentage of the total outstanding capital stock of the Corporation greater than 25%; or

               (iv) the first day on which a majority of the individuals who constitute the entire Board of
Directors (excluding any Additional Directors) shall not be Continuing Directors.

          (h) “Change of Control Payment Date” has the meaning set forth in Section 7(b)(ii).

2

 

          (i) “Change of Control Price” has the meaning set forth in Section 7(f).

          (j) “Common Stock” means the common stock, par value $0.01 per share, of the
Corporation.

          (k) “Continuing Directors” means individuals (i) who are directors of the Corporation
on the Original Issue Date (“Incumbent Directors”), (ii) whose nomination for election or
election to the Board of Directors was approved by a majority of the Incumbent Directors then still
in office, or (iii) whose nomination for election or election to the Board of Directors was
approved by a majority of the Incumbent Directors and the directors approved pursuant to clause
(ii) then still in office.

          (l) “Default” means (i) after July 1, 2013, the Corporation’s failure to pay in cash
any dividend on the applicable Dividend Payment Date in accordance with Section 4 of this
Certificate of Designations or (ii) any action or failure to act by the Corporation in violation of
Section 6(a), Section 7 or Section 9.

          (m) “Dividend Payment Date” means each September 30, December 31, March 31 and June
30, commencing on December 31, 2010.

          (n) “Dividend Period” has the meaning set forth in Section 4(a).

          (o) “Dividend Record Date” has the meaning set forth in Section 4(a).

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

          (q) “Junior Stock” means the Common Stock, Series B and any other class or series of
stock of the Corporation (other than Series A) that ranks junior to Series A either or both as to
the payment of dividends and/or as to the distribution of assets on any liquidation, dissolution or
winding up of the Corporation.

          (r) “Liquidation Preference” means, with respect to each share of Series A, on any
date of determination, the sum of (i) $10,000 and (ii) the accrued and unpaid dividends thereon
(including, if applicable as provided in Section 4(a), dividends on such amount), whether or not
declared, to such date.

          (s) “Original Issue Date” means September 21, 2010.

          (t) “Person” means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust, unincorporated organization,
or government or any agency or political subdivision thereof.

          (u) “Preferred Stock” means any and all series of preferred stock, par value $0.01 per
share, of the Corporation, including the Series A and Series B.

          (v) Purchase Agreement” means the Securities Purchase Agreement, dated as of September
2, 2010, as amended from time to time, between the Corporation, White Deer Energy

3

 

L.P., White Deer Energy TE L.P. and White Deer Energy FI L.P., including all schedules and exhibits
thereto.

          (w) “QER Loan” means the Third Amended and Restated Credit Agreement, dated September
21, 2010, among Quest Eastern Resource, LLC, Royal Bank of Canada (as Administrative Agent and
Collateral Agent) and Royal Bank of Canada, as Lender.

          (x) “Secured Pipeline Loan” means the Second Amended and Restated Credit Agreement,
dated September 21, 2010, among PostRock KPC Pipeline, LLC, PostRock Energy Services Corporation,
Royal Bank of Canada (as Administrative and Collateral Agent) and the lenders party thereto.

          (y) “Series B” means the Corporation’s Preferred Stock designated as “Series B Voting
Preferred Stock.”

          (z) “Series B Certificate” means the Certificate of Designations of Series B Voting
Preferred Stock relating to the Series B, as it may be amended from time to time.

          (aa) “Specified Person” means White Deer Energy L.P. or any of its affiliates.

          (bb) “Warrants” means the Warrants to purchase shares of Common Stock, issued
pursuant to the Purchase Agreement, including Section 1.4 thereof.

          (cc) “Wholly Owned Subsidiary” means any subsidiary of the Corporation to the extent
that all of the securities of any class or classes of capital stock of such subsidiary entitling
the holders thereof (whether at all times or at the times that such class of capital stock has
voting power by reason of the happening of any contingency) to vote in the election of members of
the board of directors or comparable body of such subsidiary are owned directly or indirectly by
the Corporation.

     Section 4. Dividends.

          (a) Rate. Holders of Series A shall be entitled to receive, on each share of Series A, out of
funds legally available for the payment of dividends under Delaware law, cumulative cash dividends
at a per annum rate of 12% on the Liquidation Preference. Such dividends shall begin to accrue and
be cumulative from the Original Issue Date, shall compound on each Dividend Payment Date (i.e., no
dividends shall accrue on other dividends unless and until the first Dividend Payment Date for such
other dividends has passed without such other dividends having been paid on such date), and shall
be payable in arrears (as provided in this Section 4(a)). Prior to July 1, 2013, dividends shall be
payable only when, as and if declared by the Board of Directors. Thereafter, the Board of Directors
shall declare dividends, payable on each Dividend Payment Date, subject only to the legal
availability of funds for declaration and payment thereof. If any such Dividend Payment Date would
otherwise occur on a day that is not a Business Day, such Dividend Payment Date shall instead be
(and any dividend payable on Series A on such Dividend Payment Date shall instead be payable on)
the immediately succeeding
Business Day with the same force and effect as if made on such Dividend Payment Date. The
amount of dividends payable on the Series A shall be computed on the basis of a 360-day year
consisting of

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twelve 30-day months, and with respect to any date of determination that is not a Dividend Payment
Date, actual days elapsed over a 30-day month.

     Dividends that are payable on Series A on any Dividend Payment Date shall be payable to
holders of record of Series A as they appear on the stock register of the Corporation on the
applicable record date, which shall be the 15th calendar day before such Dividend Payment Date (as
originally scheduled) or such other record date fixed by the Board of Directors that is not more
than 60 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record
Date”). Any such day that is a Dividend Record Date shall be a Dividend Record Date whether or
not such day is a Business Day.

     Each dividend period (a “Dividend Period”) shall commence on the calendar day
immediately following a Dividend Payment Date (other than the initial Dividend Period, which shall
commence on and include the Original Issue Date of the Series A) and shall end on and include the
next Dividend Payment Date. Dividends payable in respect of a Dividend Period shall be payable in
arrears on the Dividend Payment Date ending such Dividend Period.

          (b) Priority of Dividends. When dividends are not paid (or declared and a sum sufficient for
payment thereof set aside for the benefit of the holders thereof on the applicable Dividend Record
Date) on any Dividend Payment Date in full upon the Series A, all dividends declared on the Series
A and payable on such Dividend Payment Date shall be declared pro rata so that the respective
amounts of such dividends declared shall bear the same ratio to each other as all accrued and
unpaid dividends per share on the Series A (including, if applicable as provided in Section 4(a)
above, dividends on such amount) bear to each other.

     Section 5. Liquidation Rights.

          (a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or involuntary, holders of Series A
shall be entitled to receive for each share of Series A, out of the assets of the Corporation or
proceeds thereof (whether capital or surplus) available for distribution to stockholders of the
Corporation, and after satisfaction of all liabilities and obligations to creditors of the
Corporation, before any distribution of such assets or proceeds is made to or set aside for the
holders of Common Stock and any other Junior Stock, payment in full in an amount equal to the
Liquidation Preference of such share.

          (b) Partial Payment. If in any distribution described in Section 5(a) above, the assets of the
Corporation or proceeds thereof are not sufficient to pay the Liquidation Preferences in full to
all holders of Series A as to such distribution, the amounts paid to the holders of Series A shall
be paid pro rata in accordance with the respective aggregate Liquidation Preferences of the holders
of Series A.

          (c) Residual Distributions. If the Liquidation Preference has been paid in full to all holders
of Series A, the holders of other stock of the Corporation shall be entitled to receive all
remaining assets of the Corporation (or proceeds thereof) according to their respective rights and
preferences.

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          (d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 5,
the merger or consolidation of the Corporation with any other corporation or other entity,
including a merger or consolidation in which the holders of Series A receive cash, securities or
other property for their shares, or the sale, lease or exchange (for cash, securities or other
property) of all or substantially all of the assets of the Corporation, shall not constitute a
liquidation, dissolution or winding up of the Corporation, but shall be governed by Section 7.

     Section 6. Redemption.

          (a) Mandatory Redemption. On March 21, 2018, the Corporation shall redeem, in whole, the
shares of Series A at the time outstanding, upon notice given as provided in Section 6(c) below, at
a redemption price per share equal to 100% of the Liquidation Preference of such share as of the
redemption date. The redemption price for any shares of Series A shall be payable on the
redemption date to the holder of such shares against surrender of the certificate(s) evidencing
such shares to the Corporation or its agent.

          (b) Optional Redemption. From and after one year from the Original Issue Date until March 21,
2018, the Corporation, at its option, may redeem, in whole at any time or in part from time to
time, the shares of Series A at the time outstanding, upon notice given as provided in Section 6(c)
below, at a redemption price per share equal to 110% of the Liquidation Preference of such share as
of the redemption date, provided that the minimum number of shares of Series A redeemable at any
time is the lesser of (i) 500 shares of Series A and (ii) the number of shares of Series A
outstanding. The redemption price for any shares of Series A shall be payable on the redemption
date to the holder of such shares against surrender of the certificate(s) evidencing such shares to
the Corporation or its agent.

          (c) Notice of Redemption. Notice of every redemption of shares of Series A shall be given to
the holders of record of the shares to be redeemed at their respective last addresses appearing on
the books of the Corporation. Such mailing shall be at least 30 days and not more than 60 days
before the date fixed for redemption. Any notice mailed as provided in this Subsection shall be
conclusively presumed to have been duly given, whether or not the holder receives such notice, but
failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof,
to any holder of shares of Series A designated for redemption shall not affect the validity of the
proceedings for the redemption of any other shares of Series A. Each notice of redemption given to
a holder shall state: (1) the redemption date; (2) the number of shares of Series A to be redeemed
and, if less than all the shares held by such holder are to be redeemed, the number of such shares
to be redeemed from such holder; (3) the redemption price; and (4) the place or places where
certificates for such shares are to be surrendered for payment of the redemption price.

          (d) Partial Redemption. In case of any redemption of part of the shares of Series A at the
time outstanding, the shares to be redeemed shall be selected pro rata among holders of the Series
A. If fewer than all the shares represented by any certificate are
redeemed, a new certificate shall be issued representing the unredeemed shares without charge
to the holder thereof.

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          (e) Effectiveness of Redemption. If notice of redemption has been duly given and if on or
before the redemption date specified in the notice all funds necessary for the redemption have been
deposited by the Corporation, in trust for the pro rata benefit of the holders of the shares called
for redemption, with a bank or trust company doing business in the Borough of Manhattan, The City
of New York, and having a capital and surplus of at least $500 million and selected by the Board of
Directors, so as to be and continue to be available solely therefor, then, notwithstanding that any
certificate for any share so called for redemption has not been surrendered for cancellation, on
and after the redemption date dividends shall cease to accrue on all shares so called for
redemption, all shares so called for redemption shall no longer be deemed outstanding and all
rights with respect to such shares shall forthwith on such redemption date cease and terminate,
except only the right of the holders thereof to receive the amount payable on such redemption from
such bank or trust company, without interest. Any funds unclaimed at the end of three years from
the redemption date shall, to the extent permitted by law, be released to the Corporation, after
which time the holders of the shares so called for redemption shall look only to the Corporation
for payment of the redemption price of such shares.

     Section 7. Offer to Purchase Upon a Change of Control.

          (a) In connection with the occurrence of a Change of Control, the Corporation shall make an
offer to purchase all of the shares of Series A outstanding (a “Change of Control Offer”)
on the terms set forth in this Section 7. The Change of Control Offer shall be made in compliance
with all applicable laws, including, without limitation (if applicable), Regulation 14E and 14D
under the Exchange Act and the rules thereunder and all other applicable Federal and state
securities laws. To the extent that the provisions of any securities laws or regulations conflict
with the provisions of this Section 7, the Corporation shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations under this Section 7
by virtue thereof.

          (b) No sooner than fifteen (15) days and within that time period, as soon as reasonably
practicable, prior to the consummation, or anticipated consummation, of a Change of Control, the
Corporation shall commence the Change of Control Offer by mailing to each holder of shares of
Series A a notice, which shall govern the terms of the Change of Control Offer, and shall state:

               (i) that the Change of Control Offer is being made pursuant to this Section 7 and that all
shares of Series A tendered will be accepted for payment subject to the consummation of the Change
of Control;

               (ii) the Change of Control Price (as defined below) and the date until which the Corporation
may accept for payment shares of Series A (the “Change of Control Payment Date”), which
shall be (subject to consummation of the Change of Control) no later than forty-five (45) days
after the date the Change of Control occurs;

               (iii) that any shares of Series A not tendered for payment pursuant to the Change of Control
Offer shall continue to accrue dividends and be redeemable in accordance with the terms hereof;

7

 

               (iv) that, unless the Corporation defaults in the payment of the Change of Control Price, all
shares of Series A accepted for payment pursuant to the Change of Control Offer shall cease to
accrue dividends on the Change of Control Payment Date;

               (v) that any holder electing to have certificates representing shares of Series A pursuant to
a Change of Control Offer shall be required to surrender such certificates representing shares of
Series A to the Corporation or its designated agent at the address specified in the notice prior to
the close of business on the Change of Control Payment Date;

               (vi) that any holder of a share of Series A shall be entitled to withdraw such election if the
Corporation or its designated agent receives, not later than the close of business on the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of
the holder of such shares of Series A, the number of shares of Series A such holder delivered for
purchase, and a statement that such holder is withdrawing its election to have such shares of
Series A purchased;

               (vii) that a holder whose shares of Series A are being purchased only in part shall be issued
new shares of Series A for the unpurchased shares of Series A represented by any certificate
surrendered;

               (viii) the instructions that holders must follow in order to tender their shares of Series A;
and

               (ix) the circumstances and relevant facts regarding such Change of Control.

          (c) On the Change of Control Payment Date, the Corporation shall, to the extent of funds
legally available therefore and otherwise lawful, accept for payment the shares of Series A
tendered and not withdrawn pursuant to the Change of Control Offer. The Corporation shall promptly
mail to each holder of shares of Series A so accepted payment (or pay in person any holder
presenting itself at the Corporation) in an amount equal to the purchase price for such shares, and
the unpurchased shares of Series A surrendered, if any.

          (d) The Corporation shall make a public announcement of the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment Date.

          (e) The Corporation shall not enter into any agreement providing for a Change of Control
unless the agreement permits the Corporation or any successor entity to comply with the provisions
hereof.

          (f) “Change of Control Price” means an amount of cash per share of Series A equal to
110% of the Liquidation Price of such share as of the date of acceptance for payment.

     Section 8. Conversion. Holders of Series A shares shall have no right to exchange or convert
such shares into any other securities.

     Section 9. Voting Rights.

8

 

          (a) General. The holders of Series A shall not have any voting rights except as set forth
below or as otherwise from time to time required by law.

          (b) Voting Rights as to Particular Matters.

               (i) So long as any shares of Series A are outstanding, in addition to any other vote or
consent of stockholders required by law or by the Certificate of Incorporation, the vote or consent
of the holders of a majority of the shares of Series A at the time outstanding and entitled to vote
thereon, given in person or by proxy, either in writing without a meeting or by vote at any meeting
called for the purpose, shall be necessary for effecting or validating:

                    (A) Any amendment, alteration or repeal of any provision of the Certificate of Incorporation
so as to change the rights, preferences, privileges or voting powers of the Series A;

                    (B) Any amendment or alteration of the Certificate of Incorporation to authorize or create, or
increase or decrease the authorized amount of, any shares of Series A, or the issuance of any
shares of Series A;

                    (C) Any amendment or alteration of the Certificate of Incorporation to authorize or create, or
increase the authorized amount of, any shares of any class or series of capital stock of the
Corporation ranking pari passu with or senior to the Series A with respect to either or both the
payment of dividends or the distribution of assets on any liquidation, dissolution or winding up of
the Corporation;

                    (D) Any amendment, alteration or repeal of any provision of the Certificate of Incorporation
or Bylaws so as to adversely affect the special rights, preferences, privileges or voting powers of
the Series A;

                    (E) Any declaration or payment of cash dividends on any Common Stock or other Junior Stock;

                    (F) Any redemption or repurchase of any shares of any class or series of capital stock of the
Corporation, other than the Series A and any shares of Common Stock withheld by the Corporation to
pay taxes upon the granting or vesting of awards to any of its employees under any equity
compensation plan of the Corporation;

                    (G) Any increase in the size of the Board of Directors, except as set forth in Section 10(i);

                    (H) Any renewal, extension or refinancing of the Secured Pipeline Loan or QER Loan, or
increase of the borrowing base under the Borrowing Base Facility; or

                    (I) Any material change in the Corporation’s business as conducted on the Original Issue Date;

provided, however, that the transactions contemplated in the Series B Certificate and the Warrant
shall be permitted without any vote or consent of the holders of shares of Series A.

9

 

          (c) Procedures for Voting and Consents. The rules and procedures for calling and conducting
any meeting of the holders of Series A (including, without limitation, the fixing of a record date
in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of
written consents and any other aspect or matter with regard to such a meeting or such consents
shall be governed by any rules of the Board of Directors, in its discretion, may adopt from time to
time, which rules and procedures shall conform to the requirements of the Certificate of
Incorporation, the Bylaws, and applicable law and the rules of any national securities exchange or
other trading facility on which the Series A is listed or traded at the time. Whether the vote or
consent of the holders of a plurality, majority or other portion of the shares of Series A has been
cast or given on any matter on which the holders of shares of Series A are entitled to vote shall
be determined by the Corporation by reference to the Liquidation Preference of the shares voted or
covered by the consent.

     Section 10. Default. Upon the occurrence of a Default, if such Default shall not have been
cured within thirty (30) days after the date on which the holders of a majority of the Series A
give written notice of such Default to the Corporation:

                         (i) the holders of a majority of the Series A shall have the right to elect two additional
directors to the Board of Directors (the “Additional Directors”) to serve until the date on which
such Default is cured or waived by the holders of Series A; provided that the number of any
Additional Directors shall not exceed two at any time regardless of the occurrence of one or more
Defaults; and

                         (ii) the dividend rate shall increase by 2.00% from and including the date on which the
Default occurred and be continuing through but excluding the date on which the Default is cured or
waived by the holders of Series A; provided that any increase in the dividend rate shall not exceed
2.00% at any time, regardless of the number of Defaults.

     Section 11. Record Holders. To the fullest extent permitted by applicable law, the
Corporation may deem and treat the record holder of any share of Series A as the true and lawful
owner thereof for all purposes, and the Corporation shall not be affected by any notice to the
contrary.

     Section 12. Notices. All notices or communications in respect of Series A shall be
sufficiently given if given in writing and delivered in person or by fax, overnight or certified
mail, or if given in such other manner as may be permitted in this Certificate of Designations, in
the Certificate of Incorporation or Bylaws or by applicable law.

     Section 13. No Preemptive Rights. No share of Series A shall have any rights of preemption
whatsoever as to any securities of the Corporation, or any warrants, rights or options issued or
granted with respect thereto, regardless of how such securities, or such warrants, rights or
options, may be designated, issued or granted.

     Section 14. Replacement Certificates. The Corporation shall replace any mutilated certificate
at the holder’s expense upon surrender of that certificate to the Corporation. The Corporation
shall replace certificates that become destroyed, stolen or lost at the holder’s expense upon
delivery to the Corporation of reasonably satisfactory evidence that the certificate

10

 

has been destroyed, stolen or lost, together with any indemnity that may be reasonably required by
the Corporation.

     Section 15. Other Rights. The shares of Series A shall not have any rights, preferences,
privileges or voting powers or relative, participating, optional or other special rights, or
qualifications, limitations or restrictions thereof, other than as set forth herein or in the
Certificate of Incorporation or as provided by applicable law.

[Signature Page Follows.]

11

 

     In Witness Whereof, POSTROCK ENERGY CORPORATION has caused this certificate to be signed this
17th day of September, 2010.

	 	 	 	 	 
	 	POSTROCK ENERGY CORPORATION

 	 
	 	By:  	
/s/  David C. Lawler	 
	 	 	David C. Lawler 
Chief Executive Officer

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