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  <p style="border:none;font-weight:bold;margin:0in 0in .0001pt;padding:0in;text-align:justify;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></p>
  
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  <p style="margin:0in 0in .0001pt;text-align:center;"><font style="font-weight:bold;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;">UNITED STATES</font></b></font><font size="5" style="font-size:18.0pt;"><br>
  <font style="font-weight:bold;"><b>SECURITIES AND
  EXCHANGE COMMISSION</b></font></font></p>
  
  <p style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Washington, D.C. 20549</font></b></p>
  
  <p style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <div align="center" style="margin:0in 0in .0001pt;text-align:center;"><hr size="1" width="25%" noshade color="black" align="center"></div>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="font-weight:bold;margin:0in 0in .0001pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;">FORM&nbsp;8-K</font></b></p>
  
  <p style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="font-size:12.0pt;margin:0in 0in .0001pt;text-align:center;"><font style="font-weight:bold;"><b><font size="3" face="Times New Roman" style="font-size:12.0pt;">CURRENT REPORT</font></b></font><br>
  <font style="font-weight:bold;"><b>Pursuant to Section&nbsp;13
  or 15(d)&nbsp;of the Securities Exchange Act of 1934</b></font></p>
  
  <p style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Date
  of report (Date of earliest event reported):&#160;
  <font style="font-weight:bold;"><b>May&nbsp;23,
  2008</b></font></font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <div align="center" style="margin:0in 0in .0001pt;text-align:center;"><hr size="1" width="25%" noshade color="black" align="center"></div>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">Particle Drilling Technologies,
  Inc.</font></b></p>
  
  <p style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Exact
  Name of Registrant as Specified in Its Charter)</font></p>
  
  <p style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <div align="center">
  
  <table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
   <tr>
    <td width="100%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Nevada</font></b></p>
    </td>
   </tr>
   <tr>
    <td width="100%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(State or Other
    Jurisdiction of Incorporation)</font></p>
    </td>
   </tr>
   <tr>
    <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">000-30819</font></b></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
    </td>
    <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">20-1563395</font></b></p>
    </td>
   </tr>
   <tr>
    <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Commission File
    Number)</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(I.R.S. Employer
    Identification No.)</font></p>
    </td>
   </tr>
   <tr>
    <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">5611
    Baird Court</font></b></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
    </td>
    <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
    </td>
   </tr>
   <tr>
    <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Houston,
    Texas</font></b></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
    </td>
    <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">77041</font></b></p>
    </td>
   </tr>
   <tr>
    <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Address of Principal
    Executive Offices)</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.0%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="49%" valign="top" style="padding:0in 0in 0in 0in;width:49.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Zip Code)</font></p>
    </td>
   </tr>
  </table>
  
  </div>
  
  <p style="margin:0in 0in .0001pt;text-align:justify;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Registrant&#146;s
  telephone number, including area code: <b>(713) 223-3031</b></font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Check
  the appropriate box below if the Form&nbsp;8-K filing is intended to
  simultaneously satisfy the filing obligation of the registrant under any of the
  following provisions (see General Instruction A.2. below):</font></p>
  
  <p style="margin:0in 0in .0001pt;text-align:justify;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
   <tr>
    <td width="4%" valign="top" style="padding:0in 0in 0in 0in;width:4.34%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font></p>
    </td>
    <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.66%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="94%" valign="top" style="padding:0in 0in 0in 0in;width:94.0%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Written
    communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR
    230.425)</font></p>
    </td>
   </tr>
   <tr>
    <td width="4%" valign="top" style="padding:0in 0in 0in 0in;width:4.34%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.66%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="94%" valign="top" style="padding:0in 0in 0in 0in;width:94.0%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="4%" valign="top" style="padding:0in 0in 0in 0in;width:4.34%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font></p>
    </td>
    <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.66%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="94%" valign="top" style="padding:0in 0in 0in 0in;width:94.0%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Soliciting
    material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR
    240.14a-12)</font></p>
    </td>
   </tr>
   <tr>
    <td width="4%" valign="top" style="padding:0in 0in 0in 0in;width:4.34%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.66%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="94%" valign="top" style="padding:0in 0in 0in 0in;width:94.0%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="4%" valign="top" style="padding:0in 0in 0in 0in;width:4.34%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font></p>
    </td>
    <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.66%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="94%" valign="top" style="padding:0in 0in 0in 0in;width:94.0%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pre-commencement
    communications pursuant to Rule&nbsp;14d-2(b)&nbsp;under the Exchange Act (17
    CFR 240.14d-2(b))</font></p>
    </td>
   </tr>
   <tr>
    <td width="4%" valign="top" style="padding:0in 0in 0in 0in;width:4.34%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.66%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="94%" valign="top" style="padding:0in 0in 0in 0in;width:94.0%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="4%" valign="top" style="padding:0in 0in 0in 0in;width:4.34%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font></p>
    </td>
    <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.66%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="94%" valign="top" style="padding:0in 0in 0in 0in;width:94.0%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pre-commencement
    communications pursuant to Rule&nbsp;13e-4(c)&nbsp;under the Exchange Act (17
    CFR 240.13e-4(c))</font></p>
    </td>
   </tr>
  </table>
  
  <div style="border:none;border-bottom:double windowtext 6.0pt;padding:0in 0in 0in 0in;">
  
  <p align="left" style="border:none;margin:0in 0in .0001pt;padding:0in;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  </div>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <div align="left" style="margin:0in 0in .0001pt;text-align:left;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>
  
  </div>
  <!-- SEQ.=1,FOLIO='',FILE='C:\JMS\Vmeane\08-15110-1\task2957657\15110-1-ba.htm',USER='vmeane',CD='May 23 12:50 2008' -->
  
  
  <br clear="all" style="page-break-before:always;">
  
  
  <div>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item&nbsp;1.01
  Entry into a Material Definitive Agreement</font></b></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On May&nbsp;23, 2008, Particle Drilling Technologies,&nbsp;Inc. (the &#147;Company&#148;)
  issued a press release announcing the adoption of a stockholder rights plan. A
  copy of the press release is attached hereto as Exhibit&nbsp;99.1.</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The stockholder rights plan is embodied in the Rights Agreement dated
  as of May&nbsp;23, 2008 (the &#147;Rights Agreement&#148;), between the Company and Computershare
  Trust Company, N.A., as Rights Agent (the &#147;Rights Agent&#148;), which is attached
  hereto as Exhibit&nbsp;4.1. For a description of the material terms of the
  Rights Agreement and the rights to be issued pursuant thereto, please refer to
  Item&nbsp;3.03 of this Current Report on Form&nbsp;8-K, which is incorporated
  herein by reference.</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item&nbsp;3.03
  Material Modifications to Rights of Security Holders</font></b></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On May&nbsp;23, 2008, the Board of Directors of the Company declared a
  dividend of one preferred share purchase right (a &#147;Right&#148;) for each outstanding
  share of the Company&#146;s common stock, par value $0.001 per share (the &#147;Common
  Shares&#148;), and authorized the issuance of one Right for each Common Share which
  shall become outstanding between the Record Date (as hereinafter defined) and
  the earliest of the Distribution Date (as hereinafter defined), the redemption
  of the Rights, or the final expiration date of the Rights. The dividend is
  payable at the close of business on June&nbsp;3, 2008 (the &#147;Record Date&#148;) to
  the stockholders of record on that date. Each Right entitles the registered
  holder to purchase from the Company one one-thousandth (1/1000) of a share of Series&nbsp;A
  Junior Participating Preferred Stock, par value $0.001 (the &#147;Preferred Shares&#148;),
  of the Company at a price of $20.00 (the &#147;Purchase Price&#148;), subject to
  adjustment. The description and terms of the Rights are set forth in the Rights
  Agreement between the Company and the Rights Agent.</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Initially, the Rights will be attached to the Common Shares then
  outstanding, and no separate certificates evidencing the rights (&#147;Rights
  Certificates&#148;) will be issued. The Rights will separate from the Common Shares,
  Rights Certificates will be issued and the Rights will become exercisable on (i)&nbsp;the
  tenth day (the &#147;Distribution Date&#148;) after the public announcement by the
  Company or an Acquiring Person (as defined below) that such Acquiring Person
  has become an Acquiring Person, or such earlier date as a majority of the Board
  of Directors of the Company becomes aware of the existence of an Acquiring
  Person or (ii)&nbsp;ten business days after the date of commencement by any
  person or group of affiliated or associated persons of a tender or exchange
  offer the result of which would result in any person becoming an Acquiring
  Person. An &#147;Acquiring Person&#148; is a person that, together with its affiliates
  and associates, is the beneficial owner of 20% or more of the outstanding
  Common Shares. Certain persons, including the Company, any subsidiary of the
  Company, and Company benefit plan related holders are excluded from the
  definition of Acquiring Person. Moreover, a person or group of affiliated or
  associated persons who acquires the beneficial ownership of 20% or more of the
  Common Shares then outstanding either (i)&nbsp;by reason of share purchases by
  the Company reducing the number of Common Shares outstanding (provided such
  person or group does not acquire additional Common Shares), or (ii)&nbsp;inadvertently,
  if the Company&#146;s Board of Directors determines such 20% beneficial ownership
  was acquired inadvertently and as promptly as practicable such person </font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>
  
  <div align="left" style="margin:0in 0in .0001pt;text-align:left;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>
  
  </div>
  <!-- SEQ.=1,FOLIO='2',FILE='C:\JMS\Vmeane\08-15110-1\task2957657\15110-1-ba.htm',USER='vmeane',CD='May 23 12:50 2008' -->
  
  
  <br clear="all" style="page-break-before:always;">
  
  
  <div>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">or group divests
  itself of enough Common Shares so as to no longer to have the beneficial
  ownership of 20% of the outstanding Common Shares, will not be an Acquiring
  Person. Until the Distribution Date, the Rights will be evidenced, with respect
  to any of the Common Share certificates outstanding on or after the Record
  Date, by such Common Share certificates with a copy of the Summary of Rights
  (as defined in the Rights Agreement) attached thereto. The Rights Agreement
  provides that, until the Distribution Date, the Rights will be transferred with
  and only with the Common Shares. Until the Distribution Date (or earlier
  redemption, exchange or expiration of the Rights), new Common Share
  certificates issued after the Record Date, upon transfer or new issuance of
  Common Shares, will contain a notation incorporating the Rights Agreement by
  reference. Until the Distribution Date (or earlier redemption, exchange or
  expiration of the Rights), the surrender for transfer of any certificates for
  Common Shares outstanding as of the Record Date also will constitute the
  transfer of the Rights associated with the Common Shares represented by such
  certificate. As soon as practicable following the Distribution Date, separate
  Rights Certificates will be mailed to holders of record of the Common Shares as
  of the close of business on the Distribution Date and such separate Right
  Certificates alone will evidence the Rights.</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Rights are not exercisable until the Distribution Date. The Rights
  will expire on May&nbsp;23, 2011 (the &#147;Final Expiration Date&#148;), unless the
  Final Expiration Date is extended or unless the Rights are earlier redeemed or
  exchanged by the Company, in each case, as described below.</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Purchase Price payable, and the number of Preferred Shares or other
  securities or property issuable, upon exercise of the Rights, are subject to
  adjustment from time to time to prevent dilution (i)&nbsp;in the event of a
  stock dividend on, or a subdivision, combination or reclassification of, the
  Preferred Shares, (ii)&nbsp;upon the grant to holders of the Preferred Shares
  of certain rights, options or warrants to subscribe for or purchase Preferred
  Shares at a price, or securities convertible into Preferred Shares with a
  conversion price, less than the then current market price of the Preferred
  Shares, or (iii)&nbsp;upon the distribution to holders of the Preferred Shares
  of evidences of indebtedness or assets (excluding regular periodic cash
  dividends paid out of earnings or retained earnings or dividends payable in
  Preferred Shares) or of subscription rights or warrants (other than those
  referred to above). The number of interests in Preferred Shares or other
  securities or property issuable upon exercise of the Rights is also subject to
  adjustment from time to time to prevent dilution in the event of a stock dividend
  on, or a subdivision, combination or reclassification of, the Common Shares.</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">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 Preferred Shares (other than fractions which
  are integral multiples of one one-thousandth of a Preferred Share, which may,
  at the election of the Company, be evidenced by depositary receipts) will be
  issued, and in lieu thereof, an adjustment in cash will be made based on the
  market price of the Preferred Shares on the last trading day prior to the date
  of exercise.</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Preferred Shares will not be redeemable and will be, in ranking as to
  dividend and liquidation preferences, senior to the Common Shares. Each
  Preferred Share will be entitled to a minimum preferential quarterly dividend
  payment of the greater of (i)&nbsp;$1.00 per share, or (ii)&nbsp;1,000 times
  the aggregate per share amount of all cash dividends and 1,000 times the </font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3</font></p>
  
  <div align="left" style="margin:0in 0in .0001pt;text-align:left;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>
  
  </div>
  <!-- SEQ.=1,FOLIO='3',FILE='C:\JMS\Vmeane\08-15110-1\task2957657\15110-1-ba.htm',USER='vmeane',CD='May 23 12:50 2008' -->
  
  
  <br clear="all" style="page-break-before:always;">
  
  
  <div>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">aggregate per
  share amount of all non-cash dividends and other distributions (other than
  dividends payable in Common Shares) declared per Common Share. In the event of
  a liquidation, the holders of the interests in Preferred Shares will be
  entitled to a minimum preferential liquidation payment of $1,000 per share plus
  any accrued and unpaid dividends, but will be entitled to an aggregate payment
  of 1,000 times the aggregate amount to be distributed per Common Share. Each
  Preferred Share will have 1,000 votes, voting together with the Common Shares.
  Finally, in the event of any merger, consolidation or other transaction in
  which Common Shares are exchanged, each Preferred Share will be entitled to
  receive 1,000 times the amount received per Common Share. The rights of the
  Preferred Shares as to dividends, liquidation and voting, and in the event of
  mergers and consolidations, are protected by customary antidilution provisions.</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In the event any person becomes an Acquiring Person, then each holder
  of a Right, other than Rights beneficially owned by the Acquiring Person and
  its affiliates and associates (which will thereafter be null and void for all
  purposes of the Rights Agreement and the holder thereof shall thereafter have
  no rights with respect to such Rights, whether under the Rights Agreement or
  otherwise), will thereafter have the right to receive upon exercise that number
  of Common Shares having a market value of two times the Purchase Price. Under
  some circumstances, in lieu of Common Shares, other equity and debt securities,
  property, cash or combinations thereof, including combinations with Common
  Shares, may be issued upon payment of the Purchase Price, of equal value to the
  number of Common Shares for which the Right is exercisable.</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In the event that after a person has become an Acquiring Person, the
  Company is acquired in a merger or other business combination transaction or
  50% or more of its consolidated assets or earning power is sold, proper
  provision will be made so that each holder of a Right (other than Rights
  beneficially owned by an Acquiring Person or affiliates or associates thereof)
  will thereafter generally have the right to receive, upon the exercise thereof
  at the then current Purchase Price, that number of shares of the senior voting
  stock of the acquiring company which at the time of such transaction will have
  a market value of two times the Purchase Price.</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">At any time prior to the date of a public announcement by the Company
  or an Acquiring Person that such Acquiring Person has become an Acquiring
  Person, or such earlier date as a majority of the Board of Directors of the
  Company shall become aware of the existence of an Acquiring Person (the &#147;Shares
  Acquisition Date&#148;), the Board of Directors of the Company may redeem the Rights
  in whole, but not in part, at the Redemption Price, which may be paid in cash
  or with Common Shares or any other form of consideration deemed appropriate by
  the Board of Directors of the Company. Immediately upon any redemption of the Rights,
  the right to exercise the Rights will terminate and the only right of the
  holders of Rights will be to receive the Redemption Price.</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">At any time prior to 5:00&nbsp;p.m. Houston,
  Texas time on the earlier of (i)&nbsp;the Shares Acquisition Date and (ii)&nbsp;the
  Final Expiration Date, the Board may redeem the Rights in whole, but not in
  part, at a price of $0.001 per Right (the &#147;Redemption Price&#148;).&#160; In addition, if a Qualified Offer (as
  described below) is made and the Board has not redeemed the outstanding Rights or
  exempted such offer from the terms of the Rights Agreement or has not called a
  special meeting of stockholders for the purpose of voting on whether or not to
  exempt such Qualified Offer from the </font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4</font></p>
  
  <div align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>
  
  </div>
  <!-- SEQ.=1,FOLIO='4',FILE='C:\JMS\Vmeane\08-15110-1\task2957657\15110-1-ba.htm',USER='vmeane',CD='May 23 12:50 2008' -->
  
  
  <br clear="all" style="page-break-before:always;">
  
  
  <div style="font-family:Times New Roman;">
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">terms
  of the Rights Agreement, in each case after 90 days from the commencement of
  the Qualified Offer, the record holders of 10% of the outstanding shares of
  Common Stock may direct the Board to submit to a vote of stockholders at a
  special meeting of the stockholders of the Company (a &#147;Special Meeting&#148;) a
  resolution exempting such Qualified Offer from the provisions of the Rights
  Agreement (the &#147;Qualified Offer Resolution&#148;).&#160;
  </font><font size="2" style="font-size:10.0pt;">If a Special
  Meeting is not held prior to the ninetieth day after such request or i</font><font size="2" style="font-size:10.0pt;">f at the
  Special Meeting the holders of a majority of the shares of Common Stock
  outstanding (other than shares held by the offeror and its affiliated and
  associated persons) vote in favor of the Qualified Offer Resolution, then the
  Board will exempt the Qualified Offer from the provisions of the Rights
  Agreement or take such other action as may be necessary to prevent the Rights
  from interfering with the consummation of the Qualified Offer.</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:10.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A &#147;Qualified Offer&#148; is an offer that is determined by a majority of
  independent directors of the Company to have (among others) the following
  characteristics:</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:67.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(i)&nbsp;a fully-financed, all-cash tender offer, or an exchange offer
  offering shares of common stock of the offeror, or a combination thereof, in
  each such case for all of the outstanding Common Shares at the same per-share
  consideration;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:67.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(ii)&nbsp;an offer that has commenced within the meaning of Rule&nbsp;14d-2(a)&nbsp;under
  the Exchange Act and is made by an offeror (including Affiliates and/or
  Associates of such offeror) that beneficially owns no more than 5% of the
  outstanding Common Stock as of the date of such commencement</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:67.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:67.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(iii)&nbsp;an offer whose per-share offer price is greater than the
  highest reported market price for the Common Shares in the immediately
  preceding 24&nbsp;months;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:67.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:67.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(iv)&nbsp;an offer with respect to which a nationally recognized
  investment banking firm retained by the Board of Directors of the Company does
  not render an opinion to the Board of Directors of the Company that the
  consideration being offered is either unfair or inadequate;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:67.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(v)&nbsp;an offer that is not subject to any financing, funding or
  similar conditions or any requirements with respect to the offeror or its
  agents being permitted any due diligence on the Company;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:67.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(vi)&nbsp;if the offer includes common stock of the offeror, the
  offeror must allow the Company&#146;s investment bank, legal counsel and accountants
  to perform appropriate due diligence on the offeror;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:67.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(vii)&nbsp;an offer pursuant to which the Company has received an
  irrevocable written commitment of the offeror that the offer will remain open
  for at least 120 business days and, if a Special Meeting Notice is given, for
  at least ten business days after the special stockholders meeting or, if no
  meeting is held within ninety business days following the Special Meeting
  Notice, for at least ten business days following such ninety business day
  period;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5</font></p>
  
  <div align="left" style="margin:0in 0in .0001pt;text-align:left;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>
  
  </div>
  <!-- SEQ.=1,FOLIO='5',FILE='C:\JMS\Vmeane\08-15110-1\task2957657\15110-1-ba.htm',USER='vmeane',CD='May 23 12:50 2008' -->
  
  
  <br clear="all" style="page-break-before:always;">
  
  
  <div>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:67.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(viii)&nbsp;an offer pursuant to which the Company has received an
  irrevocable written commitment by the offeror that the offer, if it is
  otherwise to expire prior thereto, will be extended for at least 20 business
  days after any increase in the consideration offered or after any bona fide
  alternative offer is commenced;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:67.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(ix)&nbsp;an offer that is conditioned on a minimum of at least two-thirds
  of the outstanding Common Shares not held by the person or entity making such
  offer (and its affiliates and associates) being tendered and not withdrawn as
  of the offer&#146;s expiration date, which condition shall not be waivable;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:67.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(x)&nbsp;an offer pursuant to which the Company has received an
  irrevocable written commitment of the offeror to consummate, as promptly as
  practicable upon successful completion of the offer, a second step transaction
  whereby all Common Shares not tendered into the offer will be acquired at the
  same consideration per share actually paid pursuant to the offer, subject to
  any stockholders&#146; statutory appraisal rights;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:67.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(xi)&nbsp;an offer pursuant to which the Company and its stockholders
  have received an irrevocable written commitment of the offeror that no
  amendments will be made to the offer to reduce the consideration being offered
  or to otherwise change the terms of the offer in a way that is adverse to a
  tendering stockholder;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:67.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(xii)&nbsp;an offer (other than an offer consisting solely of cash
  consideration) pursuant to which the Company has received the written
  representation and certification of the offeror and its CEO and CFO that all
  material facts about the offeror have been fully and accurately disclosed and
  all new facts will be fully and accurately disclosed on a prompt basis while
  the offer remains open, and all required Exchange Act reports will be filed by
  the offeror in a timely manner during such period; and</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:67.5pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(xiii)&nbsp;if the offer includes non-cash consideration, (A)&nbsp;the
  non-cash portion of the consideration offered must consist solely of common
  stock of a Person that is a publicly-owned United States corporation, (B)&nbsp;such
  common stock must be freely tradable and listed or admitted to trading on
  either the NYSE or NASDAQ, (C)&nbsp;no stockholder approval of the issuer of
  such common stock is required to issue such common stock, or, if such approval
  required, such approval has already been obtained, (D)&nbsp;no person or entity
  (including its affiliates and associates) beneficially owns more than 20% of
  the voting stock of the issuer of such common stock at the commencement of the
  offer or at any time during the offer, (E)&nbsp;no other class of voting stock
  of the issuer of such common stock is outstanding and (F)&nbsp;the issuer of
  such common stock meets the registrant eligibility requirements for use of Form&nbsp;S-3
  for registering securities under the Securities Act.</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A committee of independent directors of the Company will review and
  evaluate the Rights Agreement at least annually in order to consider whether
  the maintenance of the Rights Agreement continues to be in the best interests
  of the Company and its stockholders. Following each such review, the committee
  shall communicate its conclusions to the full Board of Directors of the
  Company, including any recommendation in light thereof as to whether the Rights
  Agreement should be modified or the Rights should be redeemed.</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6</font></p>
  
  <div align="left" style="margin:0in 0in .0001pt;text-align:left;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>
  
  </div>
  <!-- SEQ.=1,FOLIO='6',FILE='C:\JMS\Vmeane\08-15110-1\task2957657\15110-1-ba.htm',USER='vmeane',CD='May 23 12:50 2008' -->
  
  
  <br clear="all" style="page-break-before:always;">
  
  
  <div>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Under certain circumstances, after a person or group has become an
  Acquiring Person but prior to the acquisition by such person or group of 50% or
  more of the outstanding Common Shares, the Board of Directors of the Company
  may exchange the Rights (other than Rights that were or are beneficially owned
  by an Acquiring Person or its affiliates and associates), in whole or in part,
  at an exchange ratio of one Common Share per Right (subject to adjustment).</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">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.</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Except as otherwise provided in the Rights Agreement, for so long as
  the Rights are then redeemable, the Company may, in its sole and absolute
  discretion, amend or supplement the Rights Agreement in any respect without the
  consent of the holders of Rights. At any time after the Rights are no longer
  redeemable, the Company may supplement or amend the Rights Agreement without
  the consent of the holders of the Rights at any time to cure any ambiguity or
  to correct or supplement any defective or inconsistent provisions, provided,
  that the Rights Agreement may not be amended in any manner that would adversely
  affect the interests of the holders of the Rights (which may not be an
  Acquiring Person or its affiliates and associates in whose hands Rights are
  void) or to cause the Rights to again become redeemable.</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Rights have certain anti-takeover effects. The Rights will cause
  substantial dilution to a person or group that attempts to acquire the Company
  without conditioning the offer on the redemption of the Rights by the Board of
  Directors of the Company. The Rights should not interfere with any merger or
  other business combination that is in the best interests of the Company and its
  stockholders because the Board of Directors may, at its option, at any time
  prior to the Shares Acquisition Date, redeem all but not less than all the then
  outstanding Rights at the Redemption Price and the Company&#146;s stockholders may
  take certain actions to permit a stockholder vote on whether to redeem the
  Rights in cases of a &#147;Qualified Offer,&#148; as described above.</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A copy of the Rights Agreement is attached as Exhibit&nbsp;4.1 to this
  Current Report on Form&nbsp;8-K. 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 incorporated herein by reference.</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item&nbsp;5.03
  Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year</font></b></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On May&nbsp;23, 2008, the Company filed a Certificate of Designation
  (the &#147;Certificate of Designation&#148;) of Series&nbsp;A Junior Participating
  Preferred Stock (the &#147;Series&nbsp;A Preferred Stock&#148;) with the Secretary of
  State of the State of Nevada, designating 100,000 shares of Series&nbsp;A
  Preferred Stock. The creation of the Series&nbsp;A Preferred Stock was
  authorized by the Company&#146;s board of directors on May&nbsp;23, 2008 in
  connection with the adoption of the Company&#146;s stockholder rights plan, which is
  described in Item 1.01 of this Current Report and attached hereto as Exhibit&nbsp;4.1.
  A copy of the Certificate of Designation is attached hereto as Exhibit&nbsp;3.1
  and incorporated herein by reference.</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7</font></p>
  
  <div align="left" style="margin:0in 0in .0001pt;text-align:left;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>
  
  </div>
  <!-- SEQ.=1,FOLIO='7',FILE='C:\JMS\Vmeane\08-15110-1\task2957657\15110-1-ba.htm',USER='vmeane',CD='May 23 12:50 2008' -->
  
  
  <br clear="all" style="page-break-before:always;">
  
  
  <div style="font-family:Times New Roman;">
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item&nbsp;9.01.
  Financial Statements and Exhibits</font></b></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Exhibits</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.1</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Certificate of
  Designation of Series&nbsp;A Junior Participating Preferred Stock.</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt .5in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.1</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Rights Agreement, dated as of May&nbsp;23,
  2008, between Particle Drilling Technologies,&nbsp;Inc. and Computershare Trust
  Company, N.A., as Rights Agent, including the form of Certificate of Designation
  of Series&nbsp;A Junior Participating Preferred Stock, the forms of Right
  Certificate, Assignment and Election to Purchase, and the Summary of Rights
  attached thereto as Exhibits A, B and C, respectively.</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt .5in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">99.1</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Particle Drilling Technologies,&nbsp;Inc.
  Press Release dated May&nbsp;23, 2008.</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8</font></p>
  
  <div align="left" style="margin:0in 0in .0001pt;text-align:left;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>
  
  </div>
  <!-- SEQ.=1,FOLIO='8',FILE='C:\JMS\Vmeane\08-15110-1\task2957657\15110-1-ba.htm',USER='vmeane',CD='May 23 12:50 2008' -->
  
  
  <br clear="all" style="page-break-before:always;">
  
  
  <div>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="font-weight:bold;margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">SIGNATURES</font></b></p>
  
  <p style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pursuant to the
  requirements of the Securities Exchange Act of 1934, the registrant has duly
  caused this report to be signed on its behalf by the undersigned hereunto duly
  authorized.</font></p>
  
  <p style="margin:0in 0in .0001pt;text-align:justify;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
   <tr>
    <td width="35%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:35.16%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
    </td>
    <td width="64%" colspan="4" valign="top" style="padding:0in 0in 0in 0in;width:64.84%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">PARTICLE DRILLING TECHNOLOGIES,
    INC.</font></b></p>
    </td>
   </tr>
   <tr>
    <td width="35%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:35.16%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="5%" valign="top" style="padding:0in 0in 0in 0in;width:5.68%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.08%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="56%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:56.08%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="35%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:35.16%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="5%" valign="top" style="padding:0in 0in 0in 0in;width:5.68%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.08%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="56%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:56.08%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="6%" valign="top" style="padding:0in 0in 0in 0in;width:6.66%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Date:</font></p>
    </td>
    <td width="34%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:34.18%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">May 23, 2008</font></p>
    </td>
    <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.08%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
    </td>
    <td width="56%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:56.08%;">
    <p align="left" style="margin:0in 0in .0001pt 30.0pt;text-align:left;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ J. CHRIS BOSWELL</font></p>
    </td>
   </tr>
   <tr>
    <td width="35%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:35.16%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="5%" valign="top" style="padding:0in 0in 0in 0in;width:5.68%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.08%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="8%" valign="top" style="border:none;padding:0in 0in 0in 0in;width:8.84%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name:</font></p>
    </td>
    <td width="47%" valign="top" style="border:none;border-top:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:47.26%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">J. Christopher Boswell</font></p>
    </td>
   </tr>
   <tr>
    <td width="35%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:35.16%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="5%" valign="top" style="padding:0in 0in 0in 0in;width:5.68%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.08%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.84%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title:</font></p>
    </td>
    <td width="47%" valign="top" style="padding:0in 0in 0in 0in;width:47.26%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Senior Vice President
    and Chief Financial</font></p>
    </td>
   </tr>
   <tr>
    <td width="35%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:35.16%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="5%" valign="top" style="padding:0in 0in 0in 0in;width:5.68%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.08%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="8%" valign="top" style="padding:0in 0in 0in 0in;width:8.84%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="47%" valign="top" style="padding:0in 0in 0in 0in;width:47.26%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Officer</font></p>
    </td>
   </tr>
   <tr height="0">
    <td width="50" style="border:none;"></td>
    <td width="213" style="border:none;"></td>
    <td width="42" style="border:none;"></td>
    <td width="23" style="border:none;"></td>
    <td width="66" style="border:none;"></td>
    <td width="353" style="border:none;"></td>
   </tr>
  </table>
  
  <p style="margin:0in 0in .0001pt;text-align:justify;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9</font></p>
  
  <div align="left" style="margin:0in 0in .0001pt;text-align:left;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>
  
  </div>
  <!-- SEQ.=1,FOLIO='9',FILE='C:\JMS\Vmeane\08-15110-1\task2957657\15110-1-ba.htm',USER='vmeane',CD='May 23 12:50 2008' -->
  
  
  <br clear="all" style="page-break-before:always;">
  
  
  <div>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">EXHIBIT INDEX</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <table border="0" cellspacing="0" cellpadding="0" width="95%" style="border-collapse:collapse;margin-left:10.35pt;width:95.0%;">
   <tr>
    <td width="6%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:6.58%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Exhibit<br>
    Number</font></b></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.64%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
    </td>
    <td width="90%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:90.78%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Description</font></b></p>
    </td>
   </tr>
   <tr>
    <td width="6%" valign="top" style="border:none;padding:0in 0in 0in 0in;width:6.58%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.64%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="90%" valign="top" style="border:none;padding:0in 0in 0in 0in;width:90.78%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="6%" valign="top" style="padding:0in 0in 0in 0in;width:6.58%;">
    <p align="left" style="margin:0in 0in .0001pt 20.0pt;text-align:left;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.1</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.64%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="90%" valign="top" style="padding:0in 0in 0in 0in;width:90.78%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Certificate of
    Designation of Series&nbsp;A Junior Participating Preferred Stock.</font></p>
    </td>
   </tr>
   <tr>
    <td width="6%" valign="top" style="padding:0in 0in 0in 0in;width:6.58%;">
    <p align="left" style="margin:0in 0in .0001pt 20.0pt;text-align:left;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.64%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="90%" valign="top" style="padding:0in 0in 0in 0in;width:90.78%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="6%" valign="top" style="padding:0in 0in 0in 0in;width:6.58%;">
    <p align="left" style="margin:0in 0in .0001pt 20.0pt;text-align:left;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.1</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.64%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="90%" valign="top" style="padding:0in 0in 0in 0in;width:90.78%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Rights
    Agreement, dated as of May&nbsp;23, 2008, between Particle Drilling
    Technologies,&nbsp;Inc. and Computershare Trust Company, N.A., as Rights
    Agent, including the form of Certificate of Designation of Series&nbsp;A
    Junior Participating Preferred Stock, the forms of Right Certificate,
    Assignment and Election to Purchase, and the Summary of Rights attached
    thereto as Exhibits A, B and C, respectively.</font></p>
    </td>
   </tr>
   <tr>
    <td width="6%" valign="top" style="padding:0in 0in 0in 0in;width:6.58%;">
    <p align="left" style="margin:0in 0in .0001pt 20.0pt;text-align:left;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.64%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="90%" valign="top" style="padding:0in 0in 0in 0in;width:90.78%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="6%" valign="top" style="padding:0in 0in 0in 0in;width:6.58%;">
    <p align="left" style="margin:0in 0in .0001pt 20.0pt;text-align:left;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">99.1</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in 0in 0in 0in;width:2.64%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="90%" valign="top" style="padding:0in 0in 0in 0in;width:90.78%;">
    <p align="left" style="margin:0in 0in .0001pt;text-align:left;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Particle
    Drilling Technologies,&nbsp;Inc. Press Release dated May&nbsp;23, 2008.</font></p>
    </td>
   </tr>
  </table>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">10</font></p>
  
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  </div>
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metadata_documents: [{"type": "8-K", "sequence": "1", "filename": "a08-15110_18k.htm", "description": "8-K", "secsgml_size_bytes": 74298}]
metadata_filer: {"company-data": {"conformed-name": "PARTICLE DRILLING TECHNOLOGIES INC/NV", "cik": "0000759153", "assigned-sic": "1389", "irs-number": "112647209", "state-of-incorporation": "NV", "fiscal-year-end": "0930"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-30819", "film-number": "08858194"}, "business-address": {"street1": "11757 KATY FREEWAY, SUITE 1300", "city": "HOUSTON", "state": "TX", "zip": "77002", "phone": "713-223-3031"}, "mail-address": {"street1": "11757 KATY FREEWAY, SUITE 1300", "city": "HOUSTON", "state": "TX", "zip": "77002"}, "former-company": [{"former-conformed-name": "MEDXLINK CORP", "date-changed": "20020829"}, {"former-conformed-name": "NTC HOLDINGS INC", "date-changed": "19980501"}]}
text: UNITED STATES
  SECURITIES AND
  EXCHANGE COMMISSION
  Washington, D.C. 20549
  FORM 8-K
  CURRENT REPORT
  Pursuant to Section 13
  or 15(d) of the Securities Exchange Act of 1934
  Date
  of report (Date of earliest event reported):
  May 23,
  2008
  Particle Drilling Technologies,
  Inc.
  (Exact
  Name of Registrant as Specified in Its Charter)
  Nevada
  (State or Other
    Jurisdiction of Incorporation)
  000-30819
  20-1563395
  (Commission File
    Number)
  (I.R.S. Employer
    Identification No.)
  5611
    Baird Court
  Houston,
    Texas
  77041
  (Address of Principal
    Executive Offices)
  (Zip Code)
  Registrant's
  telephone number, including area code:
  (713) 223-3031
  Check
  the appropriate box below if the Form 8-K filing is intended to
  simultaneously satisfy the filing obligation of the registrant under any of the
  following provisions (see General Instruction A.2. below):
  o
  Written
    communications pursuant to Rule 425 under the Securities Act (17 CFR
    230.425)
  o
  Soliciting
    material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
    240.14a-12)
  o
  Pre-commencement
    communications pursuant to Rule 14d-2(b) under the Exchange Act (17
    CFR 240.14d-2(b))
  o
  Pre-commencement
    communications pursuant to Rule 13e-4(c) under the Exchange Act (17
    CFR 240.13e-4(c))
  Item 1.01
  Entry into a Material Definitive Agreement
  On May 23, 2008, Particle Drilling Technologies, Inc. (the "Company")
  issued a press release announcing the adoption of a stockholder rights plan. A
  copy of the press release is attached hereto as Exhibit 99.1.
  The stockholder rights plan is embodied in the Rights Agreement dated
  as of May 23, 2008 (the "Rights Agreement"), between the Company and Computershare
  Trust Company, N.A., as Rights Agent (the "Rights Agent"), which is attached
  hereto as Exhibit 4.1. For a description of the material terms of the
  Rights Agreement and the rights to be issued pursuant thereto, please refer to
  Item 3.03 of this Current Report on Form 8-K, which is incorporated
  herein by reference.
  Item 3.03
  Material Modifications to Rights of Security Holders
  On May 23, 2008, the Board of Directors of the Company declared a
  dividend of one preferred share purchase right (a "Right") for each outstanding
  share of the Company's common stock, par value $0.001 per share (the "Common
  Shares"), and authorized the issuance of one Right for each Common Share which
  shall become outstanding between the Record Date (as hereinafter defined) and
  the earliest of the Distribution Date (as hereinafter defined), the redemption
  of the Rights, or the final expiration date of the Rights. The dividend is
  payable at the close of business on June 3, 2008 (the "Record Date") to
  the stockholders of record on that date. Each Right entitles the registered
  holder to purchase from the Company one one-thousandth (1/1000) of a share of Series A
  Junior Participating Preferred Stock, par value $0.001 (the "Preferred Shares"),
  of the Company at a price of $20.00 (the "Purchase Price"), subject to
  adjustment. The description and terms of the Rights are set forth in the Rights
  Agreement between the Company and the Rights Agent.
  Initially, the Rights will be attached to the Common Shares then
  outstanding, and no separate certificates evidencing the rights ("Rights
  Certificates") will be issued. The Rights will separate from the Common Shares,
  Rights Certificates will be issued and the Rights will become exercisable on (i) the
  tenth day (the "Distribution Date") after the public announcement by the
  Company or an Acquiring Person (as defined below) that such Acquiring Person
  has become an Acquiring Person, or such earlier date as a majority of the Board
  of Directors of the Company becomes aware of the existence of an Acquiring
  Person or (ii) ten business days after the date of commencement by any
  person or group of affiliated or associated persons of a tender or exchange
  offer the result of which would result in any person becoming an Acquiring
  Person. An "Acquiring Person" is a person that, together with its affiliates
  and associates, is the beneficial owner of 20% or more of the outstanding
  Common Shares. Certain persons, including the Company, any subsidiary of the
  Company, and Company benefit plan related holders are excluded from the
  definition of Acquiring Person. Moreover, a person or group of affiliated or
  associated persons who acquires the beneficial ownership of 20% or more of the
  Common Shares then outstanding either (i) by reason of share purchases by
  the Company reducing the number of Common Shares outstanding (provided such
  person or group does not acquire additional Common Shares), or (ii) inadvertently,
  if the Company's Board of Directors determines such 20% beneficial ownership
  was acquired inadvertently and as promptly as practicable such person
  2
  or group divests
  itself of enough Common Shares so as to no longer to have the beneficial
  ownership of 20% of the outstanding Common Shares, will not be an Acquiring
  Person. Until the Distribution Date, the Rights will be evidenced, with respect
  to any of the Common Share certificates outstanding on or after the Record
  Date, by such Common Share certificates with a copy of the Summary of Rights
  (as defined in the Rights Agreement) attached thereto. The Rights Agreement
  provides that, until the Distribution Date, the Rights will be transferred with
  and only with the Common Shares. Until the Distribution Date (or earlier
  redemption, exchange or expiration of the Rights), new Common Share
  certificates issued after the Record Date, upon transfer or new issuance of
  Common Shares, will contain a notation incorporating the Rights Agreement by
  reference. Until the Distribution Date (or earlier redemption, exchange or
  expiration of the Rights), the surrender for transfer of any certificates for
  Common Shares outstanding as of the Record Date also will constitute the
  transfer of the Rights associated with the Common Shares represented by such
  certificate. As soon as practicable following the Distribution Date, separate
  Rights Certificates will be mailed to holders of record of the Common Shares 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 May 23, 2011 (the "Final Expiration Date"), unless the
  Final Expiration Date is extended or unless the Rights are earlier redeemed or
  exchanged by the Company, in each case, as described below.
  The Purchase Price payable, and the number of Preferred Shares 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 Shares, (ii) upon the grant to holders of the Preferred Shares
  of certain rights, options or warrants to subscribe for or purchase Preferred
  Shares at a price, or securities convertible into Preferred Shares with a
  conversion price, less than the then current market price of the Preferred
  Shares, or (iii) upon the distribution to holders of the Preferred Shares
  of evidences of indebtedness or assets (excluding regular periodic cash
  dividends paid out of earnings or retained earnings or dividends payable in
  Preferred Shares) or of subscription rights or warrants (other than those
  referred to above). The number of interests in Preferred Shares or other
  securities or property issuable upon exercise of the Rights is also subject to
  adjustment from time to time to prevent dilution in the event of a stock dividend
  on, or a subdivision, combination or reclassification of, the Common Shares.
  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 Preferred Shares (other than fractions which
  are integral multiples of one one-thousandth of a Preferred Share, which may,
  at the election of the Company, be evidenced by depositary receipts) will be
  issued, and in lieu thereof, an adjustment in cash will be made based on the
  market price of the Preferred Shares on the last trading day prior to the date
  of exercise.
  Preferred Shares will not be redeemable and will be, in ranking as to
  dividend and liquidation preferences, senior to the Common Shares. Each
  Preferred Share will be entitled to a minimum preferential quarterly dividend
  payment of the greater of (i) $1.00 per share, or (ii) 1,000 times
  the aggregate per share amount of all cash dividends and 1,000 times the
  3
  aggregate per
  share amount of all non-cash dividends and other distributions (other than
  dividends payable in Common Shares) declared per Common Share. In the event of
  a liquidation, the holders of the interests in Preferred Shares will be
  entitled to a minimum preferential liquidation payment of $1,000 per share plus
  any accrued and unpaid dividends, but will be entitled to an aggregate payment
  of 1,000 times the aggregate amount to be distributed per Common Share. Each
  Preferred Share will have 1,000 votes, voting together with the Common Shares.
  Finally, in the event of any merger, consolidation or other transaction in
  which Common Shares are exchanged, each Preferred Share will be entitled to
  receive 1,000 times the amount received per Common Share. The rights of the
  Preferred Shares as to dividends, liquidation and voting, and in the event of
  mergers and consolidations, are protected by customary antidilution provisions.
  In the event any person becomes an Acquiring Person, then each holder
  of a Right, other than Rights beneficially owned by the Acquiring Person and
  its affiliates and associates (which will thereafter be null and void for all
  purposes of the Rights Agreement and the holder thereof shall thereafter have
  no rights with respect to such Rights, whether under the Rights Agreement or
  otherwise), will thereafter have the right to receive upon exercise that number
  of Common Shares having a market value of two times the Purchase Price. Under
  some circumstances, in lieu of Common Shares, other equity and debt securities,
  property, cash or combinations thereof, including combinations with Common
  Shares, may be issued upon payment of the Purchase Price, of equal value to the
  number of Common Shares for which the Right is exercisable.
  In the event that after a person has become an Acquiring Person, the
  Company is acquired in a merger or other business combination transaction or
  50% or more of its consolidated assets or earning power is sold, proper
  provision will be made so that each holder of a Right (other than Rights
  beneficially owned by an Acquiring Person or affiliates or associates thereof)
  will thereafter generally have the right to receive, upon the exercise thereof
  at the then current Purchase Price, that number of shares of the senior voting
  stock of the acquiring company which at the time of such transaction will have
  a market value of two times the Purchase Price.
  At any time prior to the date of a public announcement by the Company
  or an Acquiring Person that such Acquiring Person has become an Acquiring
  Person, or such earlier date as a majority of the Board of Directors of the
  Company shall become aware of the existence of an Acquiring Person (the "Shares
  Acquisition Date"), the Board of Directors of the Company may redeem the Rights
  in whole, but not in part, at the Redemption Price, which may be paid in cash
  or with Common Shares or any other form of consideration deemed appropriate by
  the Board of Directors of the Company. Immediately upon any redemption of the Rights,
  the right to exercise the Rights will terminate and the only right of the
  holders of Rights will be to receive the Redemption Price.
  At any time prior to 5:00 p.m. Houston,
  Texas time on the earlier of (i) the Shares Acquisition Date and (ii) the
  Final Expiration Date, the Board may redeem the Rights in whole, but not in
  part, at a price of $0.001 per Right (the "Redemption Price").  In addition, if a Qualified Offer (as
  described below) is made and the Board has not redeemed the outstanding Rights or
  exempted such offer from the terms of the Rights Agreement or has not called a
  special meeting of stockholders for the purpose of voting on whether or not to
  exempt such Qualified Offer from the
  4
  terms
  of the Rights Agreement, in each case after 90 days from the commencement of
  the Qualified Offer, the record holders of 10% of the outstanding shares of
  Common Stock may direct the Board to submit to a vote of stockholders at a
  special meeting of the stockholders of the Company (a "Special Meeting") a
  resolution exempting such Qualified Offer from the provisions of the Rights
  Agreement (the "Qualified Offer Resolution").
  If a Special
  Meeting is not held prior to the ninetieth day after such request or i
  f at the
  Special Meeting the holders of a majority of the shares of Common Stock
  outstanding (other than shares held by the offeror and its affiliated and
  associated persons) vote in favor of the Qualified Offer Resolution, then the
  Board will exempt the Qualified Offer from the provisions of the Rights
  Agreement or take such other action as may be necessary to prevent the Rights
  from interfering with the consummation of the Qualified Offer.
  A "Qualified Offer" is an offer that is determined by a majority of
  independent directors of the Company to have (among others) the following
  characteristics:
  (i) a fully-financed, all-cash tender offer, or an exchange offer
  offering shares of common stock of the offeror, or a combination thereof, in
  each such case for all of the outstanding Common Shares at the same per-share
  consideration;
  (ii) an offer that has commenced within the meaning of Rule 14d-2(a) under
  the Exchange Act and is made by an offeror (including Affiliates and/or
  Associates of such offeror) that beneficially owns no more than 5% of the
  outstanding Common Stock as of the date of such commencement
  (iii) an offer whose per-share offer price is greater than the
  highest reported market price for the Common Shares in the immediately
  preceding 24 months;
  (iv) an offer with respect to which a nationally recognized
  investment banking firm retained by the Board of Directors of the Company does
  not render an opinion to the Board of Directors of the Company that the
  consideration being offered is either unfair or inadequate;
  (v) an offer that is not subject to any financing, funding or
  similar conditions or any requirements with respect to the offeror or its
  agents being permitted any due diligence on the Company;
  (vi) if the offer includes common stock of the offeror, the
  offeror must allow the Company's investment bank, legal counsel and accountants
  to perform appropriate due diligence on the offeror;
  (vii) an offer pursuant to which the Company has received an
  irrevocable written commitment of the offeror that the offer will remain open
  for at least 120 business days and, if a Special Meeting Notice is given, for
  at least ten business days after the special stockholders meeting or, if no
  meeting is held within ninety business days following the Special Meeting
  Notice, for at least ten business days following such ninety business day
  period;
  5
  (viii) an offer pursuant to which the Company has received an
  irrevocable written commitment by the offeror that the offer, if it is
  otherwise to expire prior thereto, will be extended for at least 20 business
  days after any increase in the consideration offered or after any bona fide
  alternative offer is commenced;
  (ix) an offer that is conditioned on a minimum of at least two-thirds
  of the outstanding Common Shares not held by the person or entity making such
  offer (and its affiliates and associates) being tendered and not withdrawn as
  of the offer's expiration date, which condition shall not be waivable;
  (x) an offer pursuant to which the Company has received an
  irrevocable written commitment of the offeror to consummate, as promptly as
  practicable upon successful completion of the offer, a second step transaction
  whereby all Common Shares not tendered into the offer will be acquired at the
  same consideration per share actually paid pursuant to the offer, subject to
  any stockholders' statutory appraisal rights;
  (xi) an offer pursuant to which the Company and its stockholders
  have received an irrevocable written commitment of the offeror that no
  amendments will be made to the offer to reduce the consideration being offered
  or to otherwise change the terms of the offer in a way that is adverse to a
  tendering stockholder;
  (xii) an offer (other than an offer consisting solely of cash
  consideration) pursuant to which the Company has received the written
  representation and certification of the offeror and its CEO and CFO that all
  material facts about the offeror have been fully and accurately disclosed and
  all new facts will be fully and accurately disclosed on a prompt basis while
  the offer remains open, and all required Exchange Act reports will be filed by
  the offeror in a timely manner during such period; and
  (xiii) if the offer includes non-cash consideration, (A) the
  non-cash portion of the consideration offered must consist solely of common
  stock of a Person that is a publicly-owned United States corporation, (B) such
  common stock must be freely tradable and listed or admitted to trading on
  either the NYSE or NASDAQ, (C) no stockholder approval of the issuer of
  such common stock is required to issue such common stock, or, if such approval
  required, such approval has already been obtained, (D) no person or entity
  (including its affiliates and associates) beneficially owns more than 20% of
  the voting stock of the issuer of such common stock at the commencement of the
  offer or at any time during the offer, (E) no other class of voting stock
  of the issuer of such common stock is outstanding and (F) the issuer of
  such common stock meets the registrant eligibility requirements for use of Form S-3
  for registering securities under the Securities Act.
  A committee of independent directors of the Company will review and
  evaluate the Rights Agreement at least annually in order to consider whether
  the maintenance of the Rights Agreement continues to be in the best interests
  of the Company and its stockholders. Following each such review, the committee
  shall communicate its conclusions to the full Board of Directors of the
  Company, including any recommendation in light thereof as to whether the Rights
  Agreement should be modified or the Rights should be redeemed.
  6
  Under certain circumstances, after a person or group has become an
  Acquiring Person but prior to the acquisition by such person or group of 50% or
  more of the outstanding Common Shares, the Board of Directors of the Company
  may exchange the Rights (other than Rights that were or are beneficially owned
  by an Acquiring Person or its affiliates and associates), in whole or in part,
  at an exchange ratio of one Common Share per Right (subject to adjustment).
  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.
  Except as otherwise provided in the Rights Agreement, for so long as
  the Rights are then redeemable, the Company may, in its sole and absolute
  discretion, amend or supplement the Rights Agreement in any respect without the
  consent of the holders of Rights. At any time after the Rights are no longer
  redeemable, the Company may supplement or amend the Rights Agreement without
  the consent of the holders of the Rights at any time to cure any ambiguity or
  to correct or supplement any defective or inconsistent provisions, provided,
  that the Rights Agreement may not be amended in any manner that would adversely
  affect the interests of the holders of the Rights (which may not be an
  Acquiring Person or its affiliates and associates in whose hands Rights are
  void) or to cause the Rights to again become redeemable.
  The Rights have certain anti-takeover effects. The Rights will cause
  substantial dilution to a person or group that attempts to acquire the Company
  without conditioning the offer on the redemption of the Rights by the Board of
  Directors of the Company. The Rights should not interfere with any merger or
  other business combination that is in the best interests of the Company and its
  stockholders because the Board of Directors may, at its option, at any time
  prior to the Shares Acquisition Date, redeem all but not less than all the then
  outstanding Rights at the Redemption Price and the Company's stockholders may
  take certain actions to permit a stockholder vote on whether to redeem the
  Rights in cases of a "Qualified Offer," as described above.
  A copy of the Rights Agreement is attached as Exhibit 4.1 to this
  Current Report on Form 8-K. 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 incorporated herein by reference.
  Item 5.03
  Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
  On May 23, 2008, the Company filed a Certificate of Designation
  (the "Certificate of Designation") of Series A Junior Participating
  Preferred Stock (the "Series A Preferred Stock") with the Secretary of
  State of the State of Nevada, designating 100,000 shares of Series A
  Preferred Stock. The creation of the Series A Preferred Stock was
  authorized by the Company's board of directors on May 23, 2008 in
  connection with the adoption of the Company's stockholder rights plan, which is
  described in Item 1.01 of this Current Report and attached hereto as Exhibit 4.1.
  A copy of the Certificate of Designation is attached hereto as Exhibit 3.1
  and incorporated herein by reference.
  7
  Item 9.01.
  Financial Statements and Exhibits
  (d)
  Exhibits
  3.1
  Certificate of
  Designation of Series A Junior Participating Preferred Stock.
  4.1
  Rights Agreement, dated as of May 23,
  2008, between Particle Drilling Technologies, Inc. and Computershare Trust
  Company, N.A., as Rights Agent, including the form of Certificate of Designation
  of Series A Junior Participating Preferred Stock, the forms of Right
  Certificate, Assignment and Election to Purchase, and the Summary of Rights
  attached thereto as Exhibits A, B and C, respectively.
  99.1
  Particle Drilling Technologies, Inc.
  Press Release dated May 23, 2008.
  8
  SIGNATURES
  Pursuant to the
  requirements of the Securities Exchange Act of 1934, the registrant has duly
  caused this report to be signed on its behalf by the undersigned hereunto duly
  authorized.
  PARTICLE DRILLING TECHNOLOGIES,
    INC.
  Date:
  May 23, 2008
  By:
  /s/ J. CHRIS BOSWELL
  Name:
  J. Christopher Boswell
  Title:
  Senior Vice President
    and Chief Financial
  Officer
  9
  EXHIBIT INDEX
  Exhibit
  Number
  Description
  3.1
  Certificate of
    Designation of Series A Junior Participating Preferred Stock.
  4.1
  Rights
    Agreement, dated as of May 23, 2008, between Particle Drilling
    Technologies, Inc. and Computershare Trust Company, N.A., as Rights
    Agent, including the form of Certificate of Designation of Series A
    Junior Participating Preferred Stock, the forms of Right Certificate,
    Assignment and Election to Purchase, and the Summary of Rights attached
    thereto as Exhibits A, B and C, respectively.
  99.1
  Particle
    Drilling Technologies, Inc. Press Release dated May 23, 2008.
  10