Magnum Hunter Resources DEF 14A Definitive proxy

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

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Magnum Hunter Resources Corporation

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Magnum Hunter Resources Corporation

Notice of Annual Meeting of Stockholders

to be held on October 27, 2010

and Proxy Statement

Table of Contents

Notice of Annual Meeting of Stockholders	3
PROXY STATEMENT	5
Questions and Answers	5
Proposal I – Classified Board	10
Proposal II – Election of Directors	12
Proposal III – Increase in Authorized Shares of Common Stock	15
Proposal IV – Increase in Authorized Shares of Preferred Stock	18
Proposal V – Approval of Stock Incentive Plan	20
Proposal VI – Ratification of Independent Public Registered Accounting Firm	27
Corporate Governance	29
Director Nomination Process	29
Director Independence	30
Boards’ Role in Risk Oversight	30
Board of Directors’ Leadership Structure	30
Code of Ethics and Ethics and Compliance Code	30
Stockholder Communications with the Board of Directors	31
Attendance at Meetings of Stockholders	31
Board Organization and Committees; Other Governance Provisions	31
Compensation of Executives	34
Executive Compensation Tables	37
Summary Compensation Tables	38
Compensation of Directors	39
Director Compensation Table	40
Beneficial Ownership Table	41
Section 16(a) Beneficial Ownership Reporting Compliance	43
Householding of Annual Meeting Materials	44
Proposals for 2011 Annual Meeting	44
Annual Report to Stockholders	44

MAGNUM HUNTER RESOURCES CORPORATION

777 Post Oak Blvd, Suite 910

Houston, Texas 77056

(832) 369-6986

Notice of Annual Meeting of Stockholders

Dear Common Stockholder:

You are cordially invited to attend the 2010 Annual Meeting of Stockholders (the “Annual Meeting”) of Magnum Hunter Resources Corporation (the “Company”). This is your notice for the Annual Meeting.

TIME AND DATE	3:00 p.m. Central Time on October 27, 2010

PLACE	The Omni Hotels & Resorts, Colonnad Ball Room, Four Riverway, Houston, Texas 77056

ITEMS OF BUSINESS	Proposal I: Approve an amendment to the Company’s Bylaws for purposes of establishing a classified board of directors with fixed terms, whereby one-third of directors are elected annually. Proposal II: Elect the nine (9) director nominees named in the Proxy Statement. If Proposal I is approved, the directors elected to Class I would serve for a term until the 2011 Annual Meeting of Stockholders, the directors elected to Class II would serve for a term until the 2012 Annual Meeting of Stockholders, and the directors elected to Class III would serve for a term until the 2013 Annual Meeting of Stockholders; or, if Proposal I is not approved, all nine (9) directors would serve until the 2011 Annual Meeting of Stockholders or until their respective successors are duly elected and qualified. Proposal III: Approve an amendment to the Company’s Certificate of Incorporation that will increase the Company’s authorized number of shares of Common Stock to One Hundred Fifty Million (150,000,000). Proposal IV: Approve an amendment to the Company’s Certificate of Incorporation that will increase the Company’s authorized number of shares of Preferred Stock to Fifty Million (50,000,000). Proposal V: Approve the Magnum Hunter Resources Corporation Stock Incentive Plan, an amendment and restatement of the Company’s 2006 Stock Incentive Plan, as described in the attached Proxy Statement. Proposal VI: Ratify the appointment of Hein & Associates LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2010. Conduct any other business as may properly come before the Annual Meeting.

RECORD DATE	The Company’s Board of Directors has fixed the close of business on September 2, 2010 as the record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting or any adjournment or postponement thereof.

PROXY VOTING	Each share of Common Stock entitles the holder to one vote. If you are a registered holder of our Common Stock, you may vote either by attending the Annual Meeting or by proxy. If you are not a registered holder of our Common Stock, but instead hold your shares in “street name” through a bank, broker or other nominee, please follow the instructions from your bank, broker or other nominee describing how to vote your shares. For specific voting information, please see the Questions and Answers beginning on page 5 of the Proxy Statement that follows. Even if you plan to attend the Annual Meeting, please sign, date and return the enclosed proxy card for registered holders of our Common Stock or submit your proxy usin g the telephone procedures described on your proxy card as promptly as possible.

	By Order of the Board of Directors,



	Gary C. Evans
	Chairman of the Board and Chief Executive Officer

Important Notice Regarding the Availability of Proxy Materials for the Annual

Meeting of Stockholders to be Held October 27, 2010

The proxy statement and annual report to stockholders are available at: www.magnumhunterresources.com

MAGNUM HUNTER RESOURCES CORPORATION

777 Post Oak Blvd, Suite 910

Houston, Texas 77056

(832) 369-6986

Notice of Annual Meeting of Stockholders

Dear Preferred Stockholder:

TIME AND DATE	3:00 p.m. Central Time on October 27, 2010

PLACE	The Omni Hotels & Resorts, Colonnad Ball Room, Four Riverway, Houston, Texas 77056

ITEMS OF BUSINESS	Proposal IV: Approve an amendment to the Company’s Certificate of Incorporation that will increase the Company’s authorized number of shares of Preferred Stock to Fifty Million (50,000,000). Conduct any other business as may properly come before the Annual Meeting.

RECORD DATE	The Company’s Board of Directors has fixed the close of business on September 2, 2010 as the record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting or any adjournment or postponement thereof.

PROXY VOTING	Each share of Preferred Stock entitles the holder to one vote. If you are a registered holder of our Preferred Stock, you may vote on Proposal IV either by attending the Annual Meeting or by proxy. If you are not a registered holder of our Preferred Stock, but instead hold your shares in “street name” through a bank, broker or other nominee, please follow the instructions from your bank, broker or other nominee describing how to vote your shares. For specific voting information, please see the Questions and Answers beginning on page 5 of the Proxy Statement that follows. Even if you plan to attend the Annual Meeting, please sign, date and return the enclosed proxy card for registered holders of our Preferred Stock or submit your proxy using the telephone procedures described on the proxy card as promptly as possible.

	By Order of the Board of Directors,



	Gary C. Evans
	Chairman of the Board and Chief Executive Officer

Important Notice Regarding the Availability of Proxy Materials for the Annual

Meeting of Stockholders to be Held October 27, 2010

The proxy statement and annual report to stockholders are available at: www.magnumhunterresources.com

MAGNUM HUNTER RESOURCES CORPORATION

777 Post Oak Blvd, Suite 910

Houston, Texas 77056

(832) 369-6986

Proxy Statement

Annual Meeting of Stockholders

We are furnishing this Proxy Statement to you on behalf of the Board of Directors (the “Board” or “Board of Directors”) of Magnum Hunter Resources Corporation, a Delaware corporation (the “Company” or “Magnum Hunter”), to solicit proxies for use at our 2010 Annual Meeting of Stockholders (the “Annual Meeting”) or any adjournment or postponement thereof. The Annual Meeting is scheduled to be held on October 27, 2010 at The Omni Hotels & Resorts, Colonnad Ball Room, Four Riverway, Houston, Texas 77056 at 3:00 p.m., local time.

This Proxy Statement is dated September 3, 2010. We are first mailing this Proxy Statement and the enclosed proxy card(s) on or about September 14, 2010.

QUESTIONS AND ANSWERS

When and where will the Annual Meeting be held?	The Annual Meeting is scheduled to be held on October 27, 2010 at The Omni Hotels & Resorts, Colonnad Ball Room, Four Riverway, Houston, Texas 77056 at 3:30 p.m., local time.

What matters will be voted on at the Annual Meeting?	Holders of our Common Stock are being asked to vote on the following matters, and holders of our Preferred Stock are being asked to vote on Proposal IV: Proposal I: The approval of an amendment to the Company’s Bylaws for purposes of establishing a classified board of directors with fixed terms, whereby one-third of directors are elected annually; Proposal II: The election of nine (9) directors nominated by the Board. If Proposal I is approved, the directors elected to Class I would serve for a term until the 2011 Annual Meeting of Stockholders, the directors elected to Class II would serve for a term until the 2012 Annual Meeting of Stockholders, and the directors elected to Class III would serve for a term until the 2013 Annual Meeting of Stockholders; or, if Proposal I is not approved, all nine (9) directors would serve until the 2011 Annual Meeting of Stockholders or until their respective successors are duly elected and qualified; Proposal III: The approval of an amendment to the Company’s Certificate of Incorporation that will increase the Company’s authorized number of shares of Common Stock to One Hundred Fifty Million (150,000,000); Proposal IV: The approval of an amendment to the Company’s Certificate of Incorporation that will increase the Company’s authorized number of shares of Preferred Stock to Fifty Million (50,000,000); Proposal V: The approval of the Magnum Hunter Resources Corporation Stock Incentive Plan, an amendment and restatement of the Company’s 2006 Stock Incentive Plan, as described in this Proxy Statement; and Proposal VI: The ratification of the appointment of Hein & Associates LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2010.

Who is entitled to vote at the Annual Meeting?	Our Board has set September 2, 2010 as the record date for the Annual Meeting (the “Record Date”). Holders of shares of Common Stock recorded in our stock register as of the close of business on the Record Date will be entitled to notice of and to vote on each of the proposals at the Annual Meeting or any postponement or adjournment thereof. Holders of shares of Preferred Stock recorded in our stock register as of the close of business on the Record Date will be entitled to notice of and to vote on Proposal IV at the Annual Meeting or any postponement or adjournment thereof. A list of such stockholders, arranged in alphabetical order and showing the address of and the number of shares registered in the name of each such stockholder, will be available for examination by any stockholder for any proper purpose relating to the Annual Meeting during ordinary business hours for a period of at least ten days prior to the Annual Meeting at the principal offices of the Company located at 777 Post Oak Boulevard, Suite 910, Houston, Texas 77056. As of the Record Date, there were 68,067,509 shares of our Common Stock and 862,604 shares of our Preferred Stock outstanding. All such outstanding shares of Preferred Stock consisted of shares of our 10.25% Series C Cumulative Perpetual Preferred Stock.

How many votes do I have?	Each common stockholder is entitled to one vote for each share of our Common Stock held as of the Record Date. Each holder of Preferred Stock is entitled to one vote for each share of our Preferred Stock held as of the Record Date.

What constitutes a quorum?	In order to carry on the business of the Annual Meeting, we must have a quorum. This means at least a majority of the shares of common stock outstanding as of the Record Date must be represented at the Annual Meeting, either by proxy or in person. Since Proposal IV also requires approval by the holders of our Preferred Stock, there must also be at least a majority of the shares of Preferred Stock outstanding as of the Record Date represented either by proxy or in person at the Annual Meeting in order to approve such proposal. Abstentions and broker non-votes, which are described in more detail below, are counted as shares present at the Annual Meeting for purposes of determining whether a quorum exists. Shares of capital stock owned by Magnum Hunter are not voted and do not count for this purpose.

What is the difference between holding shares as a “registered stockholder” and as a “beneficial owner”?	Registered Stockholder: A registered stockholder holds shares registered directly in his name with the Company’s transfer agent. As a registered stockholder, you have the right to grant your voting proxy directly to the Company or to vote in person at the Annual Meeting. Beneficial Owners: If your shares are held through a bank, broker or other nominee, you are the “beneficial owner” of shares held in “street name”, and these proxy materials are being forwarded to you by your bank, broker or other nominee which is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you have the right to direct your bank, broker or other nominee on how to vote by completing the instructions provided to you by your bank, broker or other nominee. However, since you are not a registered stockholder, you may not vote these shares in person at the Annual Meeting unless you obtain a valid proxy from your bank, broker or other nominee (who is a registered stockholder), giving you the right to vote the sh ares.

What is a broker non-vote?	Generally, a broker non-vote occurs when a bank, broker or other nominee that holds shares in “street name” for customers is precluded from exercising voting discretion on a particular proposal because (1) the beneficial owner has not instructed the bank, broker or other nominee how to vote, and (2) the bank, broker or other nominee lacks discretionary voting power to vote such shares. A bank, broker or other nominee does not have discretionary voting power with respect to the approval of “non-routine” matters absent specific voting instructions from the beneficial owners of such shares. Under applicable rules, Proposals I, II, III, IV, and V are considered “non-routine” matters which banks, brokers and other nominees are not allowed to vote unless they have received voting instructions from the beneficial owners of such shares. The proposal to ratify the appointment of Hein & Associates LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2010 (Proposal VI) is considered a routine matter on which banks, brokers and other nominees may vote in their discretion on behalf of beneficial owners who have not provided voting instructions. Your bank, broker or other nominee will send you instructions on how you can instruct them to vote on Proposal VI. If you do not provide voting instructions, your bank, broker or other nominee will have discretionary authority to vote your shares with respect to Proposal VI.

What vote is required to approve each of the proposals?	Proposal I: The approval of the amendment to the Company’s Bylaws for purposes of establishing a classified board of directors with fixed terms, whereby one-third of directors are elected annually requires the affirmative “FOR” vote of a majority of the shares of our Common Stock present in person or represented by proxy at the Annual Meeting. Abstentions and broker non-votes will be counted toward a quorum and considered shares present in person or by proxy and entitled to vote. Accordingly, abstentions and broker non-votes will have the effect of a vote “AGAINST” this proposal. Proposal II: The election of each of the directors requires the affirmative “FOR” vote of a plurality of the shares of our Common Stock cast at the Annual Meeting . You may vote “FOR” or “WITHHELD” with respect to election of directors. As the election of directors is a non-routine matter under applicable rules, your bank, broker or other nominee cannot vote without instructions from you. Therefore, although there may be broker non-votes on this proposal, only votes “FOR” or “WITHHELD” are counted in determining whether a plurality has been cast in favor of a director. Broker non-votes, if any, will not affect the outcome on the election of directors. Proposal III: The approval of the amendment to the Company’s Certificate of Incorporation that will increase the Company’s authorized number of shares of Common Stock to One Hundred Fifty Million (150,000,000) requires the affirmative vote of the holders of a majority of the outstanding shares of our Common Stock as of the Record Date. As a result, abstentions and broker non-votes will have the effect of a vote “AGAINST” this proposal. Proposal IV: The approval of the amendment to the Company’s Certificate of Incorporation that will increase the Company’s authorized number of shares of Preferred Stock to Fifty Million (50,000,000) requires the affirmative vote of both: (i) the holders of a majority of the outstanding shares of our Common Stock as of the Record Date; and (ii) the holders of a majority of the outstanding shares our 10.25% Series C Cumulative Perpetual Preferred Stock as of the Record Date. As a result, abstentions and broker non-votes will have the effect of a vote “AGAINST” this proposal. Proposal V: The approval of the Magnum Hunter Resources Corporation Stock Incentive Plan, an amendment and restatement of the Company’s 2006 Stock Incentive Plan, as described in this Proxy Statement, requires the affirmative “FOR” vote of a majority of the votes cast at the Annual Meeting under the NYSE Amex Rules. However, our Bylaws provide that this proposal must be approved by not less than a majority of the shares of our Common Stock present in person or represented by proxy at the Annual Meeting. Abstentions and broker non-votes will be counted toward a quorum and considered shares present in person or by proxy and entitled to vote. An abstention is a vote cast under current NYSE Amex Rules, and, as a result, a bstentions will have the effect of a vote “AGAINST” this proposal. A broker non-vote, however, is not a vote cast under current NYSE Amex Rules, and, as a result will have no effect on the outcome of this proposal for purposes of such rules, but will have the effect of a vote “AGAINST” this proposal under our above-described Bylaws voting standard.

	Proposal VI: The ratification of the appointment of Hein & Associates LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2010 requires the affirmative “FOR” vote of a majority of the shares of our Common Stock present in person or represented by proxy at the Annual Meeting. Abstentions and broker non-votes will be counted toward a quorum and considered shares present in person or by proxy and entitled to vote. Accordingly, abstentions and broker non-votes will have the effect of a vote “AGAINST” this proposal, however banks, brokers and other nominees have discretionary authority to vote on the ratification of an independent registered public accounting firm, so no broker non-votes are expected to exi st in connection with this proposal.

How does the Board recommend I vote on the proposals?	A description of each item to be voted on and the Board’s recommendations are set forth in this Proxy Statement. In summary, the Board and, with respect to the ratification of the independent auditors, the Audit Committee, unanimously recommends that you vote your shares as follows:

●

FOR the approval of an amendment to the Company’s Bylaws establishing a classified structure of our Board of Directors with fixed terms, whereby one-third of the directors are elected annually;

●

FOR the election of nine (9) directors nominated by the Board. If Proposal I is approved, the directors elected to Class I would serve for a term until the 2011 Annual Meeting of Stockholders, the directors elected to Class II would serve for a term until the 2012 Annual Meeting of Stockholders, and the directors elected to Class III would serve for a term until the 2013 Annual Meeting of Stockholders; or, if Proposal I is not approved, all nine (9) directors would serve until the 2011 Annual Meeting of Stockholders or until their respective successors are duly elected and qualified;

●

FOR the approval of an amendment to the Company’s Certificate of Incorporation increasing the authorized number of shares of Common Stock to One Hundred Fifty Million (150,000,000);

●

FOR the approval of an amendment to the Company’s Certificate of Incorporation increasing the authorized number of shares of Preferred Stock to Fifty Million (50,000,000);

●

FOR the approval of the Magnum Hunter Resources Corporation Stock Incentive Plan, an amendment and restatement of the Company’s 2006 Stock Incentive Plan, as described in this Proxy Statement; and

●

FOR the ratification of the appointment of Hein & Associates LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2010.

How do I cast my vote?

Your vote is very important. If you are a registered holder of our Common Stock or a registered holder of our Preferred Stock, you may vote in person at the Annual Meeting. If you are both a registered holder of our Common Stock and a registered holder of our Preferred Stock, you will receive two separate proxy cards in this Proxy Statement, one for registered holders of our Common Stock and one for registered holders of our Preferred Stock. If you are a registered holder of our Common Stock or a registered holder of our Preferred Stock but not both, you received in this Proxy Statement the proxy card for holders of our Common Stock or holders of our Preferred Stock, as applicable. If you wish to vote by proxy you should return each proxy card enclosed in this Proxy Statement. 60; To ensure that your shares are represented at the Annual Meeting, you are recommended to vote promptly by proxy by taking any of the following steps, even if you plan to attend the Annual Meeting in person:

By Mail: Mark your vote, sign and date your proxy card(s) and return it in the pre-addressed postage-paid envelope provided. If you received more than one proxy card (which means that you either have shares in more than one account or you are registered holder of our Common Stock and a registered holder of our Preferred Stock), you must mark, sign, date and return each proxy card or use an alternative voting method. Any proxy card mailed must actually be received prior to the Annual Meeting; or

By telephone: Call the toll-free telephone number shown on your proxy card and follow the instructions.

	If you vote by telephone, your voting instructions must be received by 11:59 p.m., Central Daylight Savings Time, on October 26, 2010. If you are not a registered stockholder, but instead hold your shares in “street name” through a bank, broker or other nominee, please follow the instructions from your bank, broker or other nominee describing how to vote your shares.

How will my proxy be voted?	All properly executed proxies, unless revoked as described below, will be voted at the Annual Meeting or any adjournments or postponements thereof in accordance with your directions on the proxy. With respect to the election of directors, you may vote “FOR” all nominees, withhold your vote for all nominees, or withhold your vote as to one or more specific nominees. If a properly executed proxy does not provide instructions, the shares of Common Stock (or Preferred Stock in the case of Proposal IV) represented by your proxy will be voted in accordance with the Board’s recommendations for each proposal and at the discretion of the proxy holders with regard to any other matter that is properly presented at the Annual Meeting.

Can I revoke my proxy?	Yes. If you hold your shares as the registered stockholder, you may revoke your proxy at any time prior to the vote at the Annual Meeting by: (i) delivering a written notice revoking your proxy to Mr. David Lipp, Assistant Corporate Secretary, at Magnum Hunter’s address shown above; (ii) delivering a new proxy bearing a date after the date of the proxy being revoked; (iii) voting later by telephone (prior to 11:59 p.m., Central Daylight Savings Time on October 26, 2010), if you previously voted by telephone or by proxy; or (iv) voting in person at the Annual Meeting. Attending the Annual Meeting alone will not revoke your proxy. If you are not a registered stockholder, but instead hold your shares in “street name” through a bank, broker or other nominee, the above-described options for revoking your proxy do not apply. Instead, you will need to follow the instructions provided to you by your bank, broker or other nominee in order to revoke your proxy and submit new voting instructions.

Do I need a ticket to attend the meeting?	Proof of identification and proof of ownership of our Common Stock or Preferred Stock are needed for you to be admitted to the Annual Meeting. If you plan to attend the Annual Meeting and your shares are held in “street name” through a bank, broker or other nominee, you will need to provide proof of ownership. Examples of proof of ownership include a recent brokerage statement or letter from your bank, broker or other nominee.

Where can I find the voting results of the Annual Meeting?	The preliminary voting results will be announced at the Annual Meeting. The Company will publish final voting results of the Annual Meeting in a Current Report on Form 8-K within four (4) business days after the Annual Meeting.

Who is soliciting this proxy? Who will bear the cost?

The Board is soliciting this proxy. We will bear the cost of the solicitation. In addition to the use of mail, our directors, officers and employees, without additional compensation, may solicit proxies by personal interview, telephone, telegram, electronic mail or otherwise. We may also make arrangements with brokerage firms and other custodians, nominees and fiduciaries for the forwarding of soliciting material to the beneficial owners of Common Stock and Preferred Stock held of record by those owners. We will reimburse those brokers, custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses incurred in connection with that service.

PROPOSAL I – APPROVAL OF AN AMENDMENT TO THE COMPANY’S BYLAWS FOR PURPOSES OF ESTABLISHING A CLASSIFIED BOARD OF DIRECTORS		The Company’s Board of Directors has approved and recommended that the stockholders of the Company approve an amendment to the Company’s Bylaws to provide for the classification of the Board of Directors into three (3) classes of directors with staggered terms of office. At present, the Company’s Board of Directors is comprised of a single class of nine (9) directors, all of whom are elected at each Annual Meeting of Stockholders. Delaware law permits the Company to amend its Bylaws to provide for a classified board of directors. The proposed classified board amendment to the Company’s Bylaws would provide that directors will be classified into three (3) classes, as nearly equal in number as possible. One class would hold office initially for a term expiring at the 2011 Annual Meeting of Stockholders; a second class would hold office initially for a term expiring at the 2012 Annual Meeting of Stockholders; and a third class would hold office initially for a term expiring at the 2013 Annual Meeting of Stockholders. At each Annual Meeting following this initial classification and election, the successors to the class of directors whose terms expire at that meeting would be elected for a term of office to expire at the third succeeding Annual Meeting of Stockholders after their election, and until their successors have been duly elected and qualified. Directors chosen to fill vacancies on the classified board would hold office for the remainder of the term of the class of directors in which the vacancy occurred and until each such director’s successor is duly elected and qualified. Members in each class would be elected at the Annual Meeting. Directors initially elected in Class I, i.e. Messrs. W. Hall, Bynum and Bailes, would serve until the 2011 Annual Meeting of Stockholders; directors initially elected in Class II, i.e. Messrs. Ormand, Pfeifer and Swanson, would serve until the 2012 Annual Meeting of Stockholders; and directors initially elected in Class III, i.e. Messrs. Evans, G. Hall and McClaugherty, would serve until the 2013 Annual Meeting of Stockholders. See Proposal II – Election of Directors for information regarding the nominees for directors and the composition of each class of directors if this proposal is adopted by the stockholders. If this proposal is not approved, the nine (9) director nominees, if elected, will serve a one-year term until the 2011 Annual Meeting of Stockholders and until their successors are duly elected and qualified. Stockholders should be aware that the proposed classified board will extend the time required to effect a change in control of the Board of Directors and may discourage hostile takeover bids for the Company. If the Company implements a classified board of directors, it will take at least three (3) Annual Meetings for a majority of stockholders to make a complete change in composition of the Board of Directors because only one-third of the directors will be elected at each Annual Meeting.

Advantages		The Board of Directors has observed that certain tactics, including the accumulation of substantial stock positions as a prelude to an attempted takeover or significant corporate restructuring, have become relatively common in corporate takeover practice. The Board of Directors is of the opinion that such tactics can be highly disruptive to a company and can result in dissimilar treatment of a company’s stockholders. The Board of Directors believes that the classified board proposal will assist the Board of Directors in protecting the interests of the Company’s stockholders in the event of an unsolicited offer to acquire control of the Company. The classified board proposal is also designed to assure continuity and stability in the Board of Directors’ leadership and policies. Although the Board may review other possible anti-takeover pro grams, with the exception of the proposed increase in the Company’s authorized Common Stock and Preferred Stock as described in Proposals III and IV, the Board has no present intention of proposing additional amendments to the Certificate of Incorporation or Bylaws that would affect the ability of a third party to implement a change in control of the Company.

Disadvantages		Because of the additional time required to implement a change in control of the Board of Directors, the classified board proposal will tend to perpetuate present management. In addition, because this proposal will increase the amount of time required for a takeover bidder to obtain control of the Company without the cooperation of the Board of Directors, even if the takeover bidder were to acquire a majority of the Company’s outstanding stock, it will tend to discourage certain tender offers, including some tender offers that stockholders may feel would be in their best interests. However, this proposal is not intended as a takeover-resistive measure in response to a specific threat. This proposal will also make it more difficult for the Company’s stockholders to change the composition of the Board of Directors even if the stockholders believe that such a change would be desirable.

Proposed Amendment to Bylaws		The proposed amendment to the Company’s Bylaws is as follows: The entire paragraph entitled “Section 3.2. Number and Term of Office” in “Article III – Board of Directors” in the Bylaws shall be deleted in its entirety and shall be replaced with the following: “The number of directors of the Corporation shall be no less than one or such other minimum number as is required by law. The directors shall be divided into three (3) classes designated as Class I, Class II, and Class III, respectively. At any meeting of stockholders at which Directors are to be elected, the number of Directors elected may not exceed the greatest number of Directors then in office in any class of Directors. The Directors first appointed to Class I will hold office for a term expiring at the annual meeting of stockholders to be held in 2011; the Directors first appointed to Class II will hold office for a term expiring at the annual meeting of stockholders to be held in 2012; and the Directors first appointed to Class III will hold office for a term expiring at the annual meeting of stockholders to be held in 2013, with the members of each class to hold office until their successors are duly elected and qualified. At each subsequent annual meeting of the stockholders of the Corporation, the successors to the class of Directors whose term expires at that meeting of stockholders will be elected to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election.” The entire paragraph entitled “Section 3.3. Election of Directors” in “Article III – Board of Directors” in the Bylaws shall be deleted in its entirety and shall be replaced with the following: “At each annual meeting of the stockholders of the corporation, the successors to the class of Directors whose term expires at that meeting of stockholders will be elected by plurality vote of all votes cast at such meeting to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election. Directors may be elected by the stockholders only at an annual meeting of stockholders.”

Required Vote		The approval of the amendment to the Company’s Bylaws for purposes of establishing a classified board of directors with fixed terms, whereby one-third of directors are elected annually, requires the affirmative “FOR” vote of a majority of the shares of our Common Stock present in person or represented by proxy at the Annual Meeting. Abstentions and broker non-votes will be counted toward a quorum and considered shares present in person or by proxy and entitled to vote. Accordingly, abstentions and broker non-votes will have the effect of a vote “AGAINST” this proposal.

Board Recommendation		THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE PROPOSED AMENDMENT TO THE COMPANY’S BYLAWS TO CREATE A CLASSIFIED BOARD OF DIRECTORS.

PROPOSAL II – ELECTION OF DIRECTORS		As set forth above (see, Proposal I), the Board of Directors is proposing to stagger the terms of the directors of the Company by classifying the Board into three separate classes. One class would hold office initially for a term expiring at the 2011 Annual Meeting of Stockholders; a second class would hold office initially for a term expiring at the 2012 Annual Meeting of Stockholders; and a third class would hold office initially for a term expiring at the 2013 Annual Meeting of Stockholders. At each Annual Meeting of Stockholders following this initial classification and election, the successors to the class of directors whose terms expire at that meeting would be elected for a term of office to expire at the third succeeding Annua l Meeting of Stockholders after their election, and until their successors have been duly elected and qualified. Directors chosen to fill vacancies on the classified board would hold office for the remainder of the term of the class of directors in which the vacancy occurred and until such director’s successor is elected and qualified. Vacancies on the Board of Directors may be filled by persons elected by a majority of the total number of directors then in office. If Proposal I is not approved, the nine (9) director nominees, if elected, will serve a one-year term until the 2011 Annual Meeting of Stockholders and until their successors are duly elected and qualified. If any nominee becomes unable or unwilling to stand for election, which is not currently anticipated, the Board of Directors can name a substitute nominee, and the shares represented by proxies will be voted for the substitute nominee pursuant to discretionary authority, unless withheld.

Information About Directors		Upon recommendation of the Compensation and Nominating Committee, the Board nominated incumbent directors Wayne P. Hall, Brad Bynum, J. Raleigh Bailes, Sr., Ronald D. Ormand, Stephen A. Pfeifer, Jeff Swanson, Gary C. Evans, Gary L. Hall, and Joe L. McClaugherty to be re-elected by our stockholders entitled to vote at the Annual Meeting. Under the terms of his employment agreement, Mr. Evans is entitled to nominate one member to the Board of Directors. He nominated Jeff Swanson whose nomination was unanimously approved by the Board. All of the director nominees have each indicated a willingness to serve as a director if elected. Listed below are the biographies of the director nominees of the Company. The biographies include information regarding each individual’s service as a director of the Company, business experience, director positions at public companies held currently or at any time during the last five years, and the experiences, qualifications, attributes or skills that caused the Company’s Board of Directors to determine that the person should serve as a director for the Company. The current terms of the directors are scheduled to expire at the Annual Meeting.

Nominees for Directors		If Proposal I is approved, the directors elected to Class I would serve for a term until the 2011 Annual Meeting of Stockholders, the directors elected to Class II would serve for a term until the 2012 Annual Meeting of Stockholders, and the directors elected to Class III would serve for a term until the 2013 Annual Meeting of Stockholders; or, if Proposal I is not approved, all nine (9) director nominees, if elected, would serve until the 2011 Annual Meeting of Stockholders or until their respective successors are duly elected and qualified. The director nominees for election at the Annual Meeting are listed below.

Board Recommendation		THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE BOARD’S NINE DIRECTOR NOMINEES LISTED BELOW.

Class I		Class I – Term Expiring at 2011 Annual Meeting

		Wayne P. Hall, age 62, has been a director of the Company since 2005. Mr. Hall served as our Chairman of the Board and our Chief Executive Officer from April 1, 2005 until May 23, 2009. Mr. Hall was appointed Vice Chairman of the Board on May 23, 2009. Between January 2004 and April 2005, Mr. Hall managed his family investments in securities and oil and gas interests. From January 2002 until January 2004, Mr. Hall served as senior advisor to Energy Partners, Ltd., an oil and gas exploration and production company. Mr. Hall served as President and Director of Hall-Houston Oil Company, a privately-owned exploration and production concern he co-founded, from October 1983 until January 2002. Mr. Wayne Hall is the brother of Mr . Gary Hall, who is also a director. Mr. Hall’s industry experience and familiarity with the Company were taken into consideration during the nomination process.

		Brad Bynum, age 40, has served as a member of our Board since March 1, 2006. Mr. Bynum is currently Chief Financial Officer of Hall-Houston Exploration Partners, L.L.C., a privately-held oil and gas exploration and development company, a position he has held since February 2005. Between 1997 and February 2005, Mr. Bynum was employed at Merrill Lynch Pierce Fenner & Smith, most recently as a Director of Investment Banking in Merrill Lynch’s Global Energy and Power Investment Banking Group, in Houston, Texas. Mr. Bynum’s industry experience, industry and investment banking contacts, and financial expertise were taken into consideration during the nomina tion process. J. Raleigh Bailes, Sr., age 61, has served as a member of our Board since March 1, 2006. Mr. Bailes has been a partner of Bailes, Bates & Associates, LLP, a tax and accounting firm, since March 2003. Between November 1999 and March 2003, Mr. Bailes owned and managed J. Raleigh Bailes, CPA, a tax and accounting firm. Mr. Bailes is admitted to practice before the U.S. Tax Court and is licensed by the State of Texas as a certified public accountant. The Company’s anticipated status as an “accelerated filer” under applicable Securities and Exchange Commission rules and its increased subjectivity to Sarbanes-Oxley Act compliance were factors taken into account by the Board in determining that Mr. Baile s’ tax, accounting and industry experience would benefit the Company.

Class II

Class II – Term Expiring at 2012 Annual Meeting (unless Proposal I is not approved)

Ronald D. Ormand, age 52, has served as a director of the Company since 2009. Mr. Ormand was appointed as Chief Financial Officer and Executive Vice President on May 22, 2009 and as a Director on May 23, 2009. Mr. Ormand was a member of the Board of Directors of Tremisis Energy Acquisition Corporation II, a NYSE Amex listed special purpose acquisition corporation, and served as President and Chief Financial Officer of Tremisis from November 2007 to March 2009. Mr. Ormand currently serves on the Board of Directors of GreenHunter Energy, Inc. Mr. Ormand has over twenty-five years of investment and commercial banking experience in the energy industry.& #160; From April 2005 to October 2007, he served as a Managing Director with West LB, where he served as Head of the North American Oil and Gas Investment Banking Group. From 1988 until December 2004, Mr. Ormand was with CIBC World Markets and Oppenheimer & Co., which CIBC acquired in 1997. From 1997 to 2004, Mr. Ormand served as Managing Director and Head of CIBC World Markets’ U.S. Oil and Gas Investment Banking Group and a member of the firm’s Investment Banking Management Committee. Prior to joining CIBC World Markets in 1988, Mr. Ormand worked in various investment banking positions. Mr. Ormand received a B.A. and an M.B.A. from the University of California at Los Angeles and attended Cambridge University in Cambridge, England where he studied Economics. In particular, the Board believes Mr. Ormand’s extensive investment banking and commercial banking experience and related industry contacts will facilitate the Company’s possible acquisition and fin ancing activities.

		Steven A. Pfeifer, age 47, has served as a member of our Board since May 5, 2006. Since January 2005, Mr. Pfeifer has served as the Managing Member of P.O. & G. Resources - Texas, LLC, a privately held oil and gas exploration and production company. From September 1999 to September 2004, Mr. Pfeifer was employed as an oil and gas analyst by Merrill Lynch Pierce Fenner & Smith, most recently as First Vice President in charge of Merrill Lynch’s Global Energy Research team. From October 2004 to December 2004, Mr. Pfeifer managed his family investments. Mr. Pfeifer’s industry experience, financial expertise and technical background were taken i nto consideration during the nomination process. Jeff Swanson, age 54, has served as a director of the Company since 2009. Mr. Swanson currently serves as the President and Chief Executive Officer of two privately held companies, GrailQuest Corp. and Durango Resources Corp. He has been actively engaged in the exploration and production sectors of the oil and gas industry for over 30 years. Mr. Swanson co-founded Stratamodel, Inc., the first commercially available 3-D geocellular technology which today is a standard workflow tool in the oil and gas industry. He is co-author of two patents including ReservoirGrail, an increasingly used reservoir volumetric material balancing simulator. Mr. Swanson received his B.B.A. from Southern Methodist University and is a member of the Society of Petroleum Engineers (SPE), Association of Petroleum Geologists (AAPG), Houston Geological Society (HGS), Independent Petroleum Association of America (IPAA) and the National Stripper Well Association (NSWA). He is an individual trustee of TEL Offshore Trust (NasdaqCM: TELOZ). Mr. Swanson is a published author on several papers and articles regarding various technologies and methodologies used for enhancing and increasing the value of mature oil and gas fields. In nominating Mr. Swanson, the Board took into account both Mr. Swanson’s experience as a chief executive officer and his oil and gas industry expertise, particularly his technical expertise with respect to oilfield and reserve estimation technology.

Class III		Class III – Terms Expiring at 2013 Annual Meeting (unless Proposal I is not approved) Gary C. Evans, age 54, has served as a director of the Company since 2009. Mr. Evans was appointed Chief Executive Officer of the Company on May 22, 2009 and our Chairman of the Board on May 23, 2009. Mr. Evans founded and served as the Chairman and Chief Executive Officer of Magnum Hunter Resources, Inc. (MHRI), a NYSE listed company unrelated to the Company, for twenty years before selling MHRI to Cimarex Energy for approximately $2.2 billion in June 2005. In 2005, Mr. Evans formed Wind Energy, LLC, a renewable energy company which was subsequently acquired in December 2006 by GreenHunter Energy, Inc., a NYSE Amex listed renewable energ y company focusing on biodiesel, wind and biomass power. Mr. Evans has served as Chairman and Chief Executive Officer of GreenHunter Energy, Inc. since December 2006. Mr. Evans serves as an Individual Trustee of TEL Offshore Trust, a NASDAQ listed oil and gas trust, and is the Lead Director of Novavax Inc., a NASDAQ listed clinical-stage vaccine biotechnology company. Mr. Evans was recognized by Ernst and Young as the Southwest Area 2004 Entrepreneur of the Year for the Energy Sector and was subsequently inducted into the World Hall of Fame for Ernst & Young Entrepreneurs. In nominating Mr. Evans, the Board concluded the Company would benefit from Mr. Evans’ extensive oil and gas industry expertise; his expertise as a chief executive officer with publicly held energy companies; and his industry, investment banking and commercial lending contacts.

		Gary L. Hall, age 61, has served as a member of our Board since March 1, 2006. Hr. Hall is currently President of Hall-Houston Exploration Partners, L.L.C., an oil and gas exploration and production company, a position he has held since December 2004. Between March 2004 and December 2004, Mr. Hall managed his family investments. Between January 2002 and March 2004, Mr. Hall was Vice Chairman of the Board of Directors of Energy Partners Ltd., an oil and gas exploration and production company. From 1983 to January 2002, Mr. Hall was the Chairman and Chief Executive Officer of Hall-Houston Oil Company, an oil and gas exploration and production company. Mr. Gary Hall is the brother of our Vice Chairman of the Board, Mr. Wayne Hall. Mr. Hall’s industry experience, familiarity with the Company and technical expertise were taken into consideration during the nomination process. Joe L. McClaugherty, age 59, has served as a member of our Board since April 13, 2006. For the past fifteen years, Mr. McClaugherty has been a Senior Partner of McClaugherty & Silver, P.C., a full service firm engaged in the practice of civil law located in Santa Fe, New Mexico. Mr. McClaugherty is admitted to the state bars of New Mexico, Texas and Colorado. In nominating Mr. McClaugherty, the Board considered his approximately 34 years of legal experience in a broad-based civil practice as well as his extensive experience on boards of both international and domestic companies.

Required Vote		The election of each of the directors requires the affirmative “FOR” vote of a plurality of the shares of our Common Stock cast at the Annual Meeting . You may vote “FOR” or “WITHHELD” with respect to election of directors. As the election of directors is a non-routine matter under applicable rules, your bank, broker or other nominee cannot vote without instructions from you. Therefore, although there may be broker non-votes on this proposal, only votes “FOR” or “WITHHELD” are counted in determining whether a plurality has been cast in favor of a director. Broker non-votes, if any, will not affect the outcome on the election of dire ctors.

Board Recommendation		THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE FOREGOING DIRECTOR NOMINEES.

PROPOSAL III – Approve an Amendment to Certificate of Incorporation to Increase the Company’s Authorized Number of Shares of Common Stock to One Hundred Fifty Million (150,000,000)		Background: Our Restated Certificate of Incorporation (the “Certificate of Incorporation”) currently authorizes the Company to issue a total of 100,000,000 shares of Common Stock, par value $0.01 per share. In May 2010, the Board of Directors approved an amendment to the Certificate of Incorporation to authorize an additional 50,000,000 shares of Common Stock, par value $0.01 per share, subject to stockholder approval.

		Proposed Amendment: The Board of Directors is proposing to amend the Certificate of Incorporation to increase the number of authorized shares of Common Stock, $0.01 par value per share, from 100,000,000 shares to 150,000,000 shares, as more fully described below. Other than the proposed increase in the number of authorized shares of Common Stock, the proposed amendment is not intended to modify the rights of existing stockholders in any material respect. The Board of Directors approved the proposed increase in the number of authorized shares of Common Stock and unanimously recommends the approval of the amendment to the Certificate of Incorporation. Upon approval of the amendment by our stockholders, we will file the amendment with the Delaware Secretary of State promptly after the Annual Meeting. If the amendment is not approved by our stockholders, the Certificate of Incorporation will not be amended in this respect and our authorized Common Stock will remain the same.

		Under Delaware law, we are only permitted to issue shares of our capital stock to the extent such shares have been authorized for issuance under the Certificate of Incorporation. The Certificate of Incorporation currently authorizes the issuance of up to 100,000,000 shares of Common Stock, $0.01 par value per share, and up to 10,000,000 shares of Preferred Stock, $0.01 par value per share. As of September 2, 2010, we had 68,067,509 shares of Common Stock outstanding and 862,604 shares of Preferred Stock outstanding. All such outstanding shares of Preferred Stock consisted of shares of our 10.25% Series C Cumulative Perpetual Preferred Stock. Reasons for the Proposed Amendment: The Board of Directors believes it is desirable to increase the number of authorized shares of Common Stock in order to provide us with adequate flexibility in corporate planning and strategies. The availability of additional authorized shares of Common Stock could be used for a number of purposes, including corporate financing, public or private offerings of Common Stock, future acquisitions, stock dividends, stock splits, strategic relationships with corporate partners, stock options, and other stock-based compensation. The availability of additional authorized shares of Common Stock is particularly important in the event that the Board of Directors needs to undertake any of the foregoing actions on an expedited basis and thus to avoid the time and expense of seeking stockholder approval in connection with the contemplated issuance of Common Stock. We are pursuing additional sales of shares of our Common Stock in order to obtain additional equity capital. However, there are currently no plans, agreements or understandings regarding the issuance of any of the additional shares of Common Stock that would be available only if this proposal is approved. Such additional authorized shares may be issued for such purposes and for such consideration as the Board of Directors may determine without further stockholder approval, unless stockholder approval is required by applicable law or the rules of the NYSE Amex or any stock exchange on which our securities may be listed. Effects of the Authorization of Additional Common Stock on Holders of Common Stock: The increase in authorized shares of Common Stock will not have any immediate effect on the rights of our stockholders. Although the additional authorized shares of Common Stock will not change the voting rights, dividend rights, liquidation rights or any other stockholder rights, our Board of Directors will have the authority to issue additional shares of Common Stock without requiring future stockholder approval of such issuances, except as may be required by applicable law or the rules of the NYSE Amex or any stock exchange on which our securities may be listed. The issuance of additional shares of our Common Stock will decrease the relative percentage equity ownership of our stockholders and, depending on the price at which they are issued, may be dilutive to the existing stockholders. The holders of our Common Stock have no preemptive rights and our Board of Directors has no plans to grant such rights with respect to any such shares. The authorization of additional shares of Common Stock could also have a anti-takeover effect, in that additional shares could be issued in one or more transactions that could make a change in control or takeover of the Company more difficult or by the issuance of additional shares to certain person allied with the Company’s management that could make it more difficult to remove such persons.

Proposed Amendment to Certificate of Incorporation		Assuming Proposal IV is duly adopted by our stockholders at the Annual Meeting, the proposed amendment to the Company’s Certificate of Incorporation will be as follows: The entire “Article IV – Authorized Capital Stock” in the Certificate of Incorporation shall be deleted in its entirety and shall be replaced with the following:

		“This corporation is authorized to issue two classes of shares designated, respectively, “Common Stock” and “Preferred Stock” and referred to herein as Common Stock or Common Shares and Preferred Stock or Preferred Shares, respectively. The total number of shares of Common Stock this corporation is authorized to issue is 150,000,000 and each such share shall have a par value of $0.01, and the total number of shares of Preferred Stock this corporation is authorized to issue is 50,000,000 and each such share shall have a par value of $0.01. The Preferred Shares may be issued from time to time in one or more series. The board of directors is authorized to fix the number of shares of any series of Preferred Shares and to determine the designation of any such series. The board of directors is also authorized to determine or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Shares and, within the limits and restrictions stated in any resolution or resolutions of the board of directors originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any series subsequent to the issuance of shares of that series.” If Proposal IV is not duly adopted by the our stockholders at the Annual Meeting, the proposed amendment to the Company’s Certificate of Incorporation will be as follows: The entire “Article IV – Authorized Capital Stock” in the Certificate of Incorporation shall be deleted in its entirety and shall be replaced with the following: “This corporation is authorized to issue two classes of shares designated, respectively, “Common Stock” and “Preferred Stock” and referred to herein as Common Stock or Common Shares and Preferred Stock or Preferred Shares, respectively. The total number of shares of Common Stock this corporation is authorized to issue is 150,000,000 and each such share shall have a par value of $0.01, and the total number of shares of Preferred Stock this corporation is authorized to issue is 10,000,000 and each such share shall have a par value of $0.01. The Preferred Shares may be issued from time to time in one or more series. The board of directors is authorized to fix the number of shares of any series of Preferred Shares and to determine the designation of any such series. The board of direc tors is also authorized to determine or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Shares and, within the limits and restrictions stated in any resolution or resolutions of the board of directors originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any series subsequent to the issuance of shares of that series.”

Required Vote		Approval of the amendment to the Certificate of Incorporation to increase the number of authorized shares of Common Stock, $0.01 par value per share, from 100,000,000 shares to 150,000,000 shares requires the affirmative vote of the holders of a majority of the outstanding shares of our Common Stock as of the Record Date. As a result, abstentions and broker non-votes will have the same effect as a vote “AGAINST” this proposal.

Board Recommendation		THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE PROPOSED AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO INCREASE THE COMPANY’S AUTHORIZED NUMBER OF SHARES OF COMMON STOCK TO ONE HUNDRED FIFTY MILLION (150,000,000).

PROPOSAL IV –

Approve Amendment to Certificate of Incorporation to Increase the Company’s authorized number of shares of Preferred Stock to Fifty Million (50,000,000)

Background: The Certificate of Incorporation currently authorizes the Company to issue a total of 10,000,000 shares of Preferred Stock, par value $0.01 per share. In May 2010, the Board of Directors approved an amendment to the Certificate of Incorporation to authorize an additional 40,000,000 shares of Preferred Stock, par value $0.01 per share, subject to stockholder approval.

Proposed Amendment: The Board of Directors is proposing to amend the Certificate of Incorporation to increase the number of authorized shares of Preferred Stock from 10,000,000 shares to 50,000,000 shares, as more fully described below. Other than the proposed increase in the number of authorized shares of Preferred Stock, the proposed amendment is not intended to modify the rights of existing stockholders in any material respect. The Board of Directors has approved the proposed increase in the number of authorized shares of Preferred Stock and recommends the approval of the amendment to the Certificate of Incorporation.

Upon approval of the amendment by both: (i) the holders of a majority of the outstanding shares of our Common Stock as of the Record Date; and (ii) the holders of a majority of the outstanding shares of our 10.25% Series C Cumulative Perpetual Preferred Stock as of the Record Date, we will file the amendment with the Delaware Secretary of State promptly after the Annual Meeting. If the amendment is not so approved by such stockholders, the Certificate of Incorporation will not be amended in this respect and our authorized Preferred Stock will remain the same.

Under Delaware law, we are only permitted to issue shares of our capital stock to the extent such shares have been authorized for issuance under the Certificate of Incorporation. The Certificate of Incorporation currently authorizes the issuance of up to 100,000,000 shares of Common Stock, $0.01 par value, and up to 10,000,000 shares of Preferred Stock, $0.01 par value.

As of September 2, 2010, we had 68,067,509 shares of Common Stock outstanding and 862,604 shares of Preferred Stock outstanding. All such outstanding shares of Preferred Stock consisted of shares of our 10.25% Series C Cumulative Perpetual Preferred Stock.

Reasons for the Proposed Amendment: The Board of Directors believes it is desirable to increase the number of authorized shares of Preferred Stock in order to provide us with adequate flexibility in corporate planning and strategies. The availability of additional authorized shares of Preferred Stock could be used for a number of purposes, including corporate financing, public or private offerings of Preferred Stock, future acquisitions, stock dividends, stock splits, strategic relationships with corporate partners, stock options, and other stock-based compensation. The availability of additional authorized shares of Preferred Stock is particularly important in the event that the Board of Directors needs to undertake any of the foregoing actions on an expedited basis and thus to avoid the time and expense of seeking stockholder approval in connection with the contemplated issuance of Preferred Stock. We are pursuing additional sales of shares of our Preferred Stock in order to obtain additional equity capital. However, there are currently no plans, agreements or understandings regarding the issuance of any of the additional shares of Preferred Stock that would be available only if this proposal is approved. Such additional authorized shares may be issued for such purposes and for such consideration as the Board of Directors may determine without further stockholder approval, unless stockholder approval is required by applicable law or the rules of the NYSE Amex or any stock exchange on which our securities may be listed.

		Effects of the Authorization of Additional Preferred Stock on Holders of Preferred Stock: The increase in authorized shares of Preferred Stock will not have any immediate effect on the rights of our stockholders. Although the additional authorized shares of Preferred Stock will not change the voting rights, dividend rights, liquidation rights or any other stockholder rights, the Board of Directors will have the authority to issue additional shares of Preferred Stock without requiring future stockholder approval of such issuances, except as may be required by applicable law or the rules of the NYSE Amex or any stock exchange on which our securities may be listed. The issuance of additional shares will decrease the relative percentage equity ownership of our stockholders and, depending on the price at which they are issued, may be dilutive to the existing stockholders.

Proposed Amendment to Certificate of Incorporation		Assuming Proposal III is duly adopted by our stockholders at the Annual Meeting, the proposed amendment to the Certificate of Incorporation will be as follows: The entire “Article IV – Authorized Capital Stock” in the Certificate of Incorporation shall be deleted in its entirety and shall be replaced with the following: “This corporation is authorized to issue two classes of shares designated, respectively, “Common Stock” and “Preferred Stock” and referred to herein as Common Stock or Common Shares and Preferred Stock or Preferred Shares, respectively. The total number of shares of Common Stock this corporation is authorized to issue is 150,000,000 and each such share shall have a par value of $0.01, and the total number of shares of Preferred Stock this corporation is authorized to issue is 50,000,000 and each such share shall have a par value of $0.01. The Preferred Shares may be issued from time to time in one or more series. The board of directors is authorized to fix the number of shares of any series of Preferred Share s and to determine the designation of any such series. The board of directors is also authorized to determine or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Shares and, within the limits and restrictions stated in any resolution or resolutions of the board of directors originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any series subsequent to the issuance of shares of that series.” If Proposal III is not duly adopted by our stockholders at the Annual Meeting, the proposed amendment to the Certificate of Incorporation will be as follows: The entire “Article IV – Authorized Capital Stock” in the Certificate of Incorporation shall be deleted in its entirety and shall be replaced with the following: “This corporation is authorized to issue two classes of shares designated, respectively, “Common Stock” and “Preferred Stock” and referred to herein as Common Stock or Common Shares and Preferred Stock or Preferred Shares, respectively. The total number of shares of Common Stock this corporation is authorized to issue is 100,000,000 and each such share shall have a par value of $0.01, and the total number of shares of Preferred Stock this corporation is authorized to issue is 50,000,000 and each such share shall have a par value of $0.01. The Preferred Shares may be issued from time to time in one or more series. The board of directors is authorized to fix the number of shares of any series of Preferred Shares and to determine the designation of any such series. The board of direc tors is also authorized to determine or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Shares and, within the limits and restrictions stated in any resolution or resolutions of the board of directors originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any series subsequent to the issuance of shares of that series.”

Required Vote		Approval of the amendment to the Company’s Certificate of Incorporation to increase the number of authorized shares of Preferred Stock, $0.01 par value per share, from 10,000,000 shares to 50,000,000 shares requires the affirmative vote of both: (i) the holders of a majority of the outstanding shares of our Common Stock as of the Record Date; and (ii) the holders of a majority of the outstanding shares of our 10.25% Series C Cumulative Perpetual Preferred Stock as of the Record Date. As a result, abstentions and broker non-votes will have the same effect as a vote “AGAINST” this proposal.

Board Recommendation		THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE PROPOSED AMENDMENT TO THE COMPANY’S CERTIFICATE OF INCORPORATION TO INCREASE THE COMPANY’S AUTHORIZED NUMBER OF SHARES OF PREFERRED STOCK TO FIFTY MILLION (50,000,000).

PROPOSAL V – Approve the Magnum Hunter Resources Corporation Stock Incentive Plan, an amendment and restatement of the Company’s 2006 Stock Incentive Plan		On August 12, 2010, our Board of Directors adopted the Magnum Hunter Resources Corporation Stock Incentive Plan (the “Restated Plan”) which is an amendment and restatement of our 2006 Stock Incentive Plan (the “Existing Plan”), subject to approval by our stockholders at the annual meeting. The Existing Plan and the Restated Plan are collectively referred to as the Plan, and statements made referring to “the Plan” apply to each of the Existing Plan and the Restated Plan. If approved by stockholders, the amendment and restatement would (i) increase the maximum number of shares of our Common Stock that may be issued under the Plan to 15,000,000 shares from 6,000,000 shares (an increase of 9,000,000 shares), (ii) allow the Compensation Committee of our Board of Directors to grant performance-based awar ds under the Plan that qualify for exemption from the deduction limitations of Section 162(m) of the Internal Revenue Code of 1986 (the “Code”), (iii) allow the Committee to grant stock appreciation rights, and (iv) make certain clarifying changes. If stockholders do not approve the Restated Plan, the Existing Plan would remain in effect.

Rationale for Amendments to the Plan		The Plan allows us to grant equity-based compensation awards to eligible employees, officers, directors, consultants and advisors. As of August 10, 2010, the combined total of the number of shares of our Common Stock that had been issued under the Existing Plan and that were covered by outstanding awards granted under the Existing Plan was 6,232,243 shares. Although this combined total exceeds the shares available for issuance under the Existing Plan, additional shares will become available under the Existing Plan as a result of forfeiture of awards due to normal attrition and plan participants’ failure to meet vesting criteria. In addition, more recent awards under the Existing Plan were conditioned on the availabil ity of shares. However, if all of the shares covered by outstanding awards are issued or become vested, then, in the absence of the proposed amendment and restatement, we would not be able to issue any additional shares under the Existing Plan. Our Board believes the additional shares contemplated by the Restated Plan are necessary to facilitate the Company’s anticipated future growth by enabling it to attract and retain qualified employees, officers and directors through equity participation in the Company.

		The Plan is the only compensation plan under which we are authorized to issue shares of our Common Stock to eligible employees and other personnel, although we are currently working to implement a 401(k)/employee stock ownership plan under which our employees may acquire shares of our Common Stock. Our Board of Directors believes that the Plan is a material element of our overall compensation program and that its continuing viability is important to our future financial and operational success. If the Restated Plan is not approved, our ability to provide equity-based compensation incentives in order to attract, motivate, and retain key personnel will be severely limited. On the other hand, if the Restated Plan is approved, it is anticipated that the number of shares available under the Plan will be sufficient to cover awar ds for the next five years.

		Section 162(m) of the Code imposes a $1 million limit on the amount of annual compensation that may be deducted by the Company with respect to any single executive – generally the named executive officers. Certain performance-based compensation is exempt from the deduction limitation. In order to qualify for the performance based compensation exemption, a plan must meet certain requirements, including the implementation of objective performance goals based upon performance criteria approved by a Company’s stockholders. Awards made under the Existing Plan would not meet the conditions for the performance-based compensation exemption from the section 162(m) deduction limitations. Our Board of Directors believes it is desirable to enable the Committee to grant incentive awards under the Plan that are deductible by the Company for federal income t ax purposes. If approved, the Restated Plan will facilitate that objective. If the Restated Plan is not approved, the Committee will not be able to grant fully deductible incentive compensation awards under the Plan to named executive officers to the extent their compensation exceeds $1 million.

Material Features of the Plan		A summary of the Plan, as it would be amended and restated, is provided below and is qualified in its entirety by reference to the full text of the Restated Plan. A copy of the Restated Plan, marked to show changes from the Existing Plan, is attached to this Proxy Statement as Appendix A. As of September 2, 2010, the closing price of our outstanding Common Stock was $3.75 per share. The Plan provides for the grant of stock options, shares of restricted stock, unrestricted shares of stock and performance stock, and the Restated Plan will also provide for performance-based awards deductible under Section 162(m) of the Code and stock appreciation rights. Awards under the Plan may be made to any employee, officer, or director of the Company or any subsidiary or to consultants and advisors to the Company or any subsidiary. There are currently approximately 148 employees of the Company who may be eligible to receive awards under the Plan, and there are six non-employee directors who may be eligible to receive awards under the Plan. Term of the Plan. Unless sooner terminated, the Restated Plan will expire on August 12, 2020. Any awards outstanding at the expiration of the term of the Plan will continue in accordance with their terms. Types of Awards. The Plan authorizes the grant of several types of stock-based awards, including incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”), restricted stock, unrestricted shares of stock and performance-based share awards, and the Restated Plan authorizes the grant of stock appreciation rights. The Compensation Committee has broad discretion with respect to the types of awards it may grant under the Plan. No Discount Stock Options. The Restated Plan prohibits the grant of a stock option with an exercise price less than the fair market value of the Company’s stock on the date of grant. Share and Award Limitations. Currently, we may issue up to 6,000,000 shares of our Common Stock under the Existing Plan, subject to adjustment for changes in our capital structure or a reorganization of the Company. If the Restated Plan is approved, the number of shares that may be issued under the Restated Plan will be 15,000,000 and the number of shares that may be the subject of awards that are not options or stock appreciation rights will be limited to 11,250,000 shares. The number of share available for ISOs will be limited to 7,500,000. Shares issued under the Plan may be authorized and unissued shares, treasury shares or any combination of the two. Any shares subject to an award under the Plan that are forfeited, settled for cash, repurchased, expire, or otherwise are terminated or settled without the issuance of such shares, are available for awards under the Plan. No more than 3,750,000 shares of Common Stock may be covered by stock-based awards granted to any participant under the Restated Plan in a calendar year.

		Administration. Unless and until our Board of Directors determines otherwise, the Plan will be administered by our Compensation Committee. Determinations of the Compensation Committee will be final, conclusive, and binding on any interested person. Such determinations include such matters as selecting participants, determining the awards that will be made under the Plan, interpreting Plan provisions, and deciding the terms and conditions of any award. Amendment. The Plan may be amended by the Board of Directors. Amendments will be subject to stockholder approval if and to the extent required by applicable law, regulation, or rule. Any amendment that would increase the aggregate number of shares of stock that may be issued under the Plan must be approved by our stockholders. Antidilution. In the event of (a) any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, extraordinary dividend or divestiture (including a spin off) or any other change in corporate structure or shares; (b) any purchase, acquisition, sale, disposition or write-down of a significant amount of assets or a significant business; (c) any change in accounting principles or practices, tax laws or other such laws or provisions affecting reported results; or (d) any other similar change, in each case with respect to the Company or any other entity whose performance is re levant to the grant, vesting, or payment of an award, the Committee may, without the consent of any affected participant, amend or modify the vesting or payment criteria (including performance criteria) of any outstanding award that is based in whole or in part on the financial performance of the Company (or any subsidiary or division or other subunit thereof) or such other entity so as equitably to reflect such event, with the desired result that the criteria for evaluating such financial performance of the Company or such other entity will be substantially the same (in the sole discretion of the Committee) following such event as prior to such event and make any such other adjustments to any outstanding awards that the Committee deems appropriate, including, without limitation, accelerating vesting, substituting awards, or assuming awards; provided, however, that the amended or modified terms are permitted by the Plan as then in effect and that the amended or modified terms do not violate the provisions of Sections 162(m), 409A, or, to the extent applicable, 424 of the Code. Persons Eligible for Grants. Any employee, officer, consultant, advisor or non-employee director will be eligible to be selected as a participant under the Plan by the Compensation Committee, acting in its discretion. However, ISOs will be granted only to participants who are employees of the Company or a subsidiary.

Types of Awards		Options. ISOs and NSOs are both stock options allowing the recipient to purchase a fixed number of shares of Common Stock at a fixed price (which, under the Restated Plan, may not be less than the fair market value of the Common Stock on the option grant date as determined under the Plan). Each award agreement will state the time or periods in which, or the conditions upon satisfaction of which, the right to exercise the ISO or NSO or a portion thereof will vest and the number of shares of Common Stock for which the right to exercise the option will vest at each such time, period, or fulfillment of condition. The Restated Plan permits the Compensation Committee to include various terms in the options in order to enhance the linkage between stockholder and management interests. The se include permitting participants to deliver cash, shares or other consideration (including, where permitted by law and the Compensation Committee, awards) in payment of the exercise price and making the exercise or vesting of options contingent upon the satisfaction of performance criteria. The Plan also provides for cashless exercise through broker-assisted exercise or through the withholding of shares equal to the exercise price through net-share payment. The Plan provides that the term of any option granted may not exceed ten years and that each option may be exercised for such period as may be specified by the Compensation Committee in the grant of the option.

Restricted Stock Awards. The Compensation Committee may also make awards of restricted shares of our stock. The vesting and number of restricted shares of our stock may be conditioned upon the lapse of time and/or the satisfaction of other factors determined by the Compensation Committee. The recipient of restricted shares will generally have the rights and privileges of a stockholder with respect to the right to receive dividends and the right to vote the shares. None of the restricted shares may be sold, transferred or pledged during the restricted period, and all restricted shares shall be forfeited, and, except as otherwise determined by the Committee, all rights to the shares will terminate, if the recipient ceases to be an employee, consultant or director of us or any of our subsidiaries before the expiration or termination of the restricted period and satisfaction of any other conditions prescribed by us with respect to the shares.

Unrestricted Stock Awards. Under the Restated Plan, the Compensation Committee may grant awards of unrestricted stock to any eligible participant. The Existing Plan does not clearly contemplate grants of unrestricted stock, although the Committee has interpreted the Existing Plan as permitting such grants.

Performance Stock Awards. Under the Restated Plan, the Committee will be able to establish vesting and other conditions based on the achievement of performance measures for awards that are intended to qualify for the performance-based exception from the tax deductibility limitation imposed by Section 162(m) of the Code. The performance measures may be based on Company-wide performance or performance of a business unit, division, and/or subsidiary of the Company. The performance measures may be absolute or relative. The performance measures that may be used under the Plan include: (a) net income measures (including but not limited to earnings, net earnings, operating earnings, earnings before taxes, EBIT (earnings before interest and taxes), EBITA (earnings before interest, taxes, and amortization) EBITDA (earnings before interest, taxes, depreciation, and amortization), and earnings per share); (b) stock price measures (including but not limited to growth measures and total stockholder return (stock price plus reinvested dividends) relative to a defined comparison group or target and price-earnings multiples); (c) cash flow measures (including but not limited to net cash flow, net cash flow before financing activities, economic value added (or equivalent metric), debt reduction, debt to equity ratio, or establishment or material modification of a credit facility); (d) return measures (including but not limited to return on equity, return on average assets, return on capital, risk-adjusted return on capital, return on investors’ capital and return on average equity); (e) operating measures (including operating income, funds from operations, cash from operations, af ter-tax operating income, sales volumes, production volumes, and production efficiency); (f) expense measures (including but not limited to finding, development, and lifting costs, overhead cost and general and administrative expense); (g) asset measures (including but not limited to a specified target, or target growth in gas, oil, or mineral reserves or gas, oil, or mineral reserves per share, reserve additions, reserve replacement ratio, market capitalization or market value, proceeds from dispositions, strategic acquisitions, or raising capital); (h) relative performance measures (including but not limited to relative performance to a comparison group or index designated by the Committee or market share); (i) corporate values measures (including but not limited to ethics, environmental, legal, regulatory, and safety); and (j) any combination of the above. Approval of the Restated Plan, in relation to performance based awards, is intended to satisfy the stockholder approval requireme nt of Section 162(m) of the Code. In general, this means that the Company will be able to grant performance-based awards under the Restated Plan that would qualify for exemption from the deduction limitations of Section 162(m) for up to five years before stockholder re-approval would be needed. Our Board of Directors believes it is in the Company’s best interests to be able to qualify for tax deductibility by the Company of performance-based compensation paid under the Plan. These performance criteria can be included as criteria in the grant of any type of award under the Restated Plan other than unrestricted stock awards.

		Stock Appreciation Rights. Under the Restated Plan, the Compensation Committee may grant stock appreciation rights to any eligible recipient. The Existing Plan does not contemplate grants of stock appreciation rights. Each award agreement under the Restated Plan will state the time or periods in which or the conditions upon satisfaction of which, the right to exercise the stock appreciation right or a portion thereof will vest, the number of shares of Common Stock upon which the stock appreciation right is based for each time, period, or fulfillment of condition, and the base price of the stock appreciation right, which may not be less than the fair market value of the Company’s Common Stock on the date of grant. The Restated Plan permits the Compensati on Committee to include various terms in the stock appreciation rights in order to enhance the linkage between stockholder and management interests, including the fulfillment of performance criteria. Upon the exercise of a stock appreciation right, a participant will be paid the difference between the fair market value of the Company’s Common Stock on the date of exercise and the base price established in the participant’s award agreement. Payment in satisfaction of a stock appreciation right may be made in shares of Company stock or cash, subject to the Committee’s discretion.

Material Federal Income Tax Consequences of the Plan		The following is a summary of the material United States federal income tax consequences associated with awards granted under the Restated Plan. This summary is based upon present federal income tax laws and regulations and does not purport to be a complete description of the federal income tax consequences applicable to a participant or the Company. This summary does not cover any federal employment tax consequences or any foreign, state, local, estate and gift, or other tax consequences. Incentive Stock Options. A participant will generally not recognize any taxable income upon either the grant or exercise of an ISO. However, for purposes of the alternative minimum tax, upon the exercise of an ISO, a participant is required to include the difference between the option exercise price and the fair market value of the Common Stock received in alternative minimum taxable income for purposes of calculating the alternative minimum tax. If a participant sells or otherwise disposes of the Common Stock acquired pursuant to the exercise of an ISO within either two years from the date of grant or one year from the date of exercise of the option (an “Early Dispositio n”), the participant will recognize ordinary income at the time of the Early Disposition in an amount equal to the lesser of (i) the excess of the amount realized by the participant on the Early Disposition over the exercise price of the option, or (ii) the excess of the fair market value of the Common Stock on the date of exercise over the exercise price of the option. The excess, if any, of the amount realized by the participant on the Early Disposition over the fair market value of the Common Stock on the date of exercise will be capital gain, and will either be short term (taxable at ordinary income tax rates) or long term gain, depending on the participant’s holding period. If a participant sells shares acquired by the exercise of an ISO after meeting the two-year and one-year holding period conditions described above, all of the gain or loss realized on the sale will be long-term capital gain or loss. Nonqualified Stock Options. A participant will not recognize any taxable income upon the grant of an NSO. In general, a participant will recognize ordinary income upon the exercise of an NSO in an amount equal to the difference between the fair market value of the Common Stock received on the date of exercise and the exercise price paid for the stock.

		Common Stock Subject to a Substantial Risk of Forfeiture. If a participant receives Common Stock that is subject to a substantial risk of forfeiture (whether pursuant to an award of restricted stock or a performance-based award), unless the participant files an early income recognition election under Section 83(b) of the Code (discussed below), the participant will not recognize any income at the time of receipt of the stock, but will recognize ordinary income when the restrictions on the shares lapse, in an amount equal to the difference between the fair market value of the stock at the time the restrictions lapse and the amount paid, if any, for the stock. However, a particip ant who receives Common Stock that is subject to a substantial risk of forfeiture may elect to include the fair market value of the stock in income at the time of its receipt by filing an election with the Internal Revenue Service under Section 83(b) of the Code within 30 days after the date of such receipt. Unrestricted Stock Awards. A participant will recognize ordinary income in the year an unrestricted stock award is granted in an amount equal to the fair market value of the stock at the time of its receipt. Stock Appreciation Rights. A participant will recognize ordinary income in the year a stock appreciation right is exercised in an amount equal to the entire amount received by virtue of the exercise of the right. Availability of Tax Deduction for the Company. When ordinary income is recognized by a participant in connection with the receipt or exercise of an award under the Restated Plan (including the filing of an election under Section 83(b) of the Code), the Company will generally be entitled to a deduction for federal income tax purposes at the same time and in the same amount, assuming the requisite withholding requirements are met. However, compensation paid by the Company to its named executive officers is generally subject to the $1 million annual deduction limits of Section 162(m). These limits do not apply to performance-based compensation that meets certain requirements, incl uding a stockholder approval requirement. Tax Withholding. Our obligation to make payments or issue shares in connection with any award will be subject to and conditioned upon the satisfaction of applicable tax withholding obligations. The Committee may allow a participant to satisfy a withholding tax obligation in whole or in part by having us withhold shares that would otherwise be issued to the participant, or by having the participant deliver shares to us, in either case with a value equal to the minimum amount of the withholding obligation. Excise Tax on Parachute Payments. The Code imposes a 20% excise tax on the recipient of “excess parachute payments,” as defined in the Code, and denies tax deductibility to the Company on excess parachute payments. Generally, parachute payments are payments in the nature of compensation to employees of a company who are officers, stockholders, or highly-compensated individuals, which payments are contingent upon a change in ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company. For example, acceleration of the exercisability of options or the vesting of restricted stock awards upon a chang e in control of the Company may constitute parachute payments, and in certain cases, “excess parachute payments.”

Change in Control Provisions		In the event a “change in control” of the Company occurs, then, if approved by the Committee (either at the time of the grant of the award or at any time thereafter), (a) all options and stock appreciation rights that have been outstanding for at least six months will become immediately exercisable in full and will remain exercisable for the remainder of their terms; (b) all outstanding restricted stock awards that have been outstanding for at least six months will become immediately fully vested and non-forfeitable; and (c) any conditions to the issuance of shares pursuant to performance stock awards that have been outstanding for at least six months will lapse. The Committee may also determine that some or all participants holding outstanding options or stock appreciation rights will receive shares or a cash payment equal to the e xcess of the fair market value of the shares subject to the award immediately prior to the effective date of the change in control over the exercise price per share of the options or base price of the stock appreciation rights (or, if there is no excess, that these options and stock appreciation rights will be terminated).

		For purposes of the Restated Plan a “change in control” of the Company generally occurs if (a) all or substantially all of our assets are sold, leased, exchanged or transferred to any successor; (b) our stockholders approve any plan or proposal to liquidate or dissolve the Company; (c) any successor other than a bona fide underwriter becomes the beneficial owner of (i) 20% or more, but less than 50%, of the combined voting power of the Company’s outstanding securities, unless the transaction resulting in such ownership has been approved in advance by the continuity directors, or (ii) 50% or more of the combined voting power of the Company’s outstanding securities (regardless of any approval by the continuity directors); (d) we are party to a merger or consolidation (a “transaction”) if the Company’s stockholders i mmediately prior to the effective date of the transaction have beneficial ownership of securities of the surviving corporation immediately following the effective date of the transaction representing (i) 50% or more, but not more than 80%, of the combined voting power of the surviving corporation’s then outstanding securities, unless the transaction has been approved in advance by the continuity directors, or (ii) less than 50% of the combined voting power of the surviving corporation’s then outstanding securities (regardless of any approval by the continuity directors); or (e) the continuity directors cease to constitute at least a majority of our Board. The continuity directors are any individuals who were members of the Board on March 1, 2006, and any individual who subsequently becomes a member of the Board whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the continuity directors (either by specific vot e or by approval of the Company’s proxy statement in which such individual is named as a nominee for director without objection to such nomination); provided, however, that any individual whose initial assumption of office occurs as a result of either an actual or threatened election contest or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board, a default on any financial instrument, or a default on any dividends will not be considered a continuity director.

New Plan Benefits		The future awards that may be made to eligible participants under the Plan are subject to the discretion of the Committee, and, therefore, cannot be determined with certainty at this time.

Required Vote		The approval of the Restated Plan requires the affirmative “FOR” vote of a majority of the votes cast at the Annual Meeting under the NYSE Amex Rules. However, our Bylaws provide that this proposal must be approved by not less than a majority of the shares of our Common Stock present in person or represented by proxy at the Annual Meeting. Abstentions and broker non-votes will be counted toward a quorum and considered shares present in person or by proxy and entitled to vote. An abstention is a vote cast under current NYSE Amex Rules, and, as a result, abstentions will have the effect of a vote “AGAINST” this proposal. A broker non-vote, however, is not a vote cast under current NYSE Amex Rules, and, as a r esult will have no effect on the outcome of this proposal for purposes of such rules, but will have the effect of a vote “AGAINST” this proposal under our above-described Bylaws voting standard.

Board Recommendation		THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE MAGNUM HUNTER RESOURCES CORPORATION STOCK INCENTIVE PLAN, AN AMENDMENT AND RESTATEMENT OF THE COMPANY’S 2006 STOCK INCENTIVE PLAN.

PROPOSAL VI – Ratification of the appointment of Hein & Associates LLP as our independent registered public accounting for the fiscal year ending December 31, 2010		It is the recommendation of our Audit Committee to appoint the firm of Hein & Associates LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2010, and the Board is submitting such selection to the Company’s stockholders for their ratification. The Board recommends that such appointment be ratified by the stockholders entitled to vote on such proposal. Although the Company is not required to obtain stockholder ratification of the appointment of Hein & Associates LLP, the Board of Directors considers the selection of an independent registered public accounting firm to be an important matter to stockholders and considers a proposal for stockholders to ratify such appointment to be an opportunity for stockholders to provide input to the Audit Committee and the Board of Directors on a key corporate governance issue. The Audit Committee believes it to be in the best interests of our stockholders to retain Hein & Associates LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2010. If the stockholders fail to ratify the selection, the Audit Committee may reconsider whether or not to retain Hein & Associates LLP. Even if the selection is ratified, the Audit Committee in its discretion may appoint a different independent public accounting firm at any time during the year if it determines that such a change would be in our best interests and those of our stockholders.

Required Vote		The affirmative vote of a majority of the shares of Common Stock present in person or represented by proxy and entitled to vote at the Annual Meeting is required to ratify the appointment of Hein & Associates LLP. Abstentions and broker non-votes will be counted toward a quorum and considered shares present in person or by proxy and entitled to vote. Accordingly, abstentions and broker non-votes will have the effect of a vote “AGAINST” this proposal, however banks, brokers and other nominees may vote on the ratification of an independent registered public accounting firm, so no broker non-votes are expected to exist in connection with this proposal.

Other Information		A representative of Hein & Associates LLP is expected to be present at the Annual Meeting, will have the opportunity to make a statement if he or she desires to do so and is expected to be available to respond to appropriate questions.

Board Recommendation		THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE RATIFICATION OF HEIN & ASSOCIATES LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2010.

Principal Accounting Fees and Services

	2009		2008
Audit Fees (1)	$	283,698	$	170,550
Tax Fees (2)	$	-	$	7,500
Audit Related Fees	$	-	$	-
All Other Fees (3)	$	9,950	$	-
	$	293,648	$	178,050

(1) In 2009, Magnum Hunter Resources changed audit firms from Malone & Bailey, PC to Hein & Associates LLP. Audit related fees include the three quarterly reviews conducted by Malone & Bailey, PC for our Form 10-Q's and the annual review conducted by Hein & Associates LLP for our Form 10-K.

(2) Tax Fees were for the preparation of our Form 1120 tax return.

(3) Other fees include costs associated with the issuance of comfort letters and consent letters throughout 2009.

Audit Fees		The Audit Fees for the years ended December 31, 2009 and 2008, which totaled $283,698 and $170,550, respectively, were for professional services rendered for the audit of our consolidated financial statements for the fiscal years ended December 31, 2009 and 2008, and for the review of our consolidated financial statements included in our quarterly reports on Form 10-Q for fiscal 2009 and 2008.

Audit Related Fees		There were no Audit Related Fees for either the fiscal year ended December 31, 2009 or December 31, 2008.

Tax Fees		There were no Tax Fees for the fiscal year ended December 31, 2009. For the fiscal year ended December 31, 2008, there were Tax Fees in the amount of $7,500, which were incurred in connection with the preparation of our Form 1120 tax return.

All Other Fees		For the fiscal year ended December 31, 2009, All Other Fees totaled $9,950. These fees were mainly associated with work relating to the review of the acquisition of privately held Triad Energy Corporation and certain of its affiliated entities that was completed on February 12, 2010. There were no fees includable as “All Other Fees” for the fiscal year ended December 31, 2008.

Audit Committee Pre-Approval Policy and Procedures		The Audit Committee selects and approves our independent registered public accounting firm, reviews the independence of such accountants, approves the scope of the annual audit, approves the rendering of any material non-audit services by the independent accountants, approves the fee payable to the independent accountants and reviews the audit results. The Audit Committee approves all fees paid to our principal accountants. The Audit Committee has considered whether the non-audit services provided by Hein & Associates LLP are compatible with maintaining Hein & Associates LLP’s independence and has determined that the nature and substance of any non-audit services did not impair the status of Hein & Associa tes LLP as the Company’s independent registered public accounting firm.

CORPORATE GOVERNANCE		The business, property and affairs of the Company are managed by the Chief Executive Officer under the direction of the Board of Directors. The Board has the responsibility for establishing broad corporate policies and for overall performance and direction of the Company, but is not involved in day-to-day operations. Members of the Board keep informed of the Company’s business by participating in Board and committee meetings, by reviewing analyses and reports sent to them regularly, and through discussions with the Chief Executive Officer and other executive officers. The Board has adopted corporate governance guidelines that address significant issues of corporate governance and set forth the procedures by which the Board carries out its responsibilities. Among the areas addressed by the guidelines are director qualifications and responsibilities, Board committee responsibilities, selection and election of directors, director compensation and tenure, director orientation and continuing education, access to management and independent advisors, succession planning and management development, Board meetings and Board and committee performance evaluations. The Board is responsible for assessing and periodically reviewing the adequacy of these guidelines.

Director Nomination Process		In assessing the qualifications of candidates for nomination as director, the Compensation and Nominating Committee and the Board consider, in addition to qualifications set forth in our Bylaws, each potential nominee’s: ● personal and professional integrity, experience, reputation and skills; ● ability and willingness to devote the time and effort necessary to be an effective Board member; and ● commitment to act in the best interests of Magnum Hunter and its stockholders. Consideration is also given to the requirements under the listing standards of the NYSE Amex for a majority of independent directors, as well as qualifications applicable to membership on Board committees under the listing standards and various regulations. In addition, the Board takes into account the desire that the directors possess a broad range of business experience, diversity (“diversity” being broadly construed to mean a variety of opinions, perspectives, experiences and backgrounds, such as gender, race and ethnicity differences, as well as other differentiating characteristics, all in the context of the requirements of our Board at that point in time), professional skills, geographic representation and other qualities they consider important in light of our business plan. The Board evaluates the makeup of its membership in the context of the Board as a whole, with the objective of recommending a group that can effectively work together using its diversity of experie nce to see that the Company is well-managed and represents the interests of the Company and its stockholders. Under the terms of his employment agreement, Mr. Evans is entitled to nominate one member to the Board of Directors. He nominated Mr. Jeff Swanson whose nomination was unanimously approved by the Board. Stockholders may submit the names and other information regarding individuals they wish to be considered for nomination as directors by writing to the Corporate Secretary at the address indicated on the first page of this Proxy Statement. In order to be considered for nomination by the Board of Directors for the 2011 Annual Meeting of Stockholders, submissions of potential nominees should be made no later than May 18, 2011. See the section of this Proxy Statement entitled “Proposals for the 2011 Annual Meeting of Stockholders” for more information regarding the procedures and requirements for nominating a director for the 2011 Annual Meeting of Stockholders.

Director Independence		As of the date of this Proxy Statement, the Board of Directors has concluded that Messrs. J. Raleigh Bailes, Sr., Brad Bynum, Joe L. McClaugherty, Steven A. Pfeifer and Jeff Swanson are independent, as defined in Section 803A(2) of the NYSE Amex Company Guide. Under the listing standards, a majority of our directors must be independent, and the Audit and Compensation and Nominating Committees are each required to be composed solely of independent directors. The standards for audit committee membership include additional requirements under the rules and regulations of the Securities and Exchange Commission. The Board has determined that all of the members of these two committees meet the applicable independence requirements. The l isting standards relating to general independence consist of both a requirement for a Board determination that the director has no material relationship with the Company and a listing of several specific relationships that preclude independence.

Boards’ Role in Risk Oversight		The Board is actively involved in oversight of risks that could affect the Company. Management is responsible for the day-to-day management of risks the Company faces, while the Board, as a whole and through its committees, has responsibility for the oversight of risk management. The Audit Committee of the Board is charged by its charter with the responsibility to review the financial, investment and risk management policies followed by the Company in operating its business activities. The Audit Committee is to regularly update the Board about the Committee's activities and make appropriate recommendations. Additionally, at Audit Committee meetings, Company management may present a particular area of risk, either independently as a result of its assessment of materiality or at the request of the Audit Committee. The Audit Committee works with management in addressing its policies strengths and weaknesses in each area presented or separately assessed. In addition to the formal compliance program, the Board and the Audit Committee encourage management to promote a corporate culture that understands risk management and incorporates it into the overall corporate strategy and day-to-day business operations.

Board of Directors’ Leadership Structure		Mr. Evans currently serves as Chairman of the Board of Directors in addition to his role as the Company’s Chief Executive Officer. The Board of Directors believes that the Company’s Chief Executive Officer is currently best situated to serve as Chairman because he is the director most familiar with the Company’s business and most capable of effectively identifying strategic priorities and leading the discussion and execution of strategy. The Company’s independent directors bring experience, oversight and expertise from outside the Company, while the Chief Executive Officer brings company-specific experience and expertise. The Board of Directors believes that the combined role of Chairman and Chief Exec utive Officer facilitates information flow between management and the Board of Directors. The Company does not presently have a lead independent director and believes this leadership structure is in the best interest of our stockholders at this time.

Code of Ethics and Ethics and Compliance Code		The Company has a code of conduct and ethics that applies to its officers, employees and directors, including the Company’s principal executive officer, principal financial officer and principal accounting officer. This code assists employees in resolving ethical issues that may arise in complying with its policies. The purpose of this code is to promote, among other things:

		● Ethical handling of actual or apparent conflicts of interest;

		● Full, fair, accurate and timely disclosure in filings with the Securities and Exchange Commission and other public disclosures; ● Compliance with laws and regulations; ● Protection of the Company’s assets; ● Insider trading policies; and ● Prompt internal reporting of any violation of the code.
		This code is available on our website at www.magnumhunterresources.com. We will provide this code free of charge to stockholders who request it. We will post information regarding any amendments to, or waivers of, the provisions of this code on our website.

Stockholder Communications with the Board of Directors		Interested parties who wish to make concerns known to the non-management directors may communicate directly with the non-management directors by making a submission in writing to “Board of Directors (independent members)” in care of our Corporate Secretary at the address indicated on the first page of this Proxy Statement. Aside from this procedure for communications with the non-management directors, the entire Board of Directors will receive communications in writing from stockholders. Any such communications should be addressed to the Board of Directors in care of the Corporate Secretary at the same address.

Attendance at Meetings of Stockholders		Directors are expected to attend Annual Meetings of Stockholders. All of our directors attended last year's Annual Meeting of Stockholders. The Board of Directors oversees the management of the business and affairs of our Company. The Board has two standing committees: an Audit Committee and a Compensation and Nominating Committee, each of which is described below. Each committee operates under a written charter adopted by the Board. Last year, the Board met nine times, the Audit Committee met five times, and the Compensation and Nominating Committee met 20 times. Each director attended more than 75% of the meetings of the Board of Directors and the committees on which he served. The following table sets forth the committees of the Board and their members as of the date of this Proxy Statement, as well as the number of meetings each committee held during 2009:

	Audit	Compensation and Nominating
Director	Committee	Committee
J. Raleigh Bailes, Sr.	+
Brad Bynum	•	•
Joe L. McClaugherty	•	+
Steven A. Pfeifer		•
Jeff Swanson		•
Number of Meetings Held in 2009	5	20

(+)

Denotes Chair.

Website Availability of Documents

Magnum Hunter’s Annual Report on Form 10-K, as amended, and the charters of the Audit Committee and Compensation and Nominating Committee, can be found on our website at www.magnumhunterresources.com. The committee charters are located under the “Corporate Governance” link under the “Investors” tab. Unless specifically stated herein, documents and information on our website are not incorporated by reference in this Proxy Statement.

Audit Committee		Our Audit Committee assists the Board in fulfilling its oversight responsibilities by reviewing the financial information that will be provided to the stockholders and others; reviewing the systems of internal controls that management and the Board have established; appointing, retaining and overseeing the performance of independent accountants; and overseeing our accounting and financial reporting processes and the audits of our financial statements. Our Audit Committee also consults with our management and our independent registered public accounting firm prior to the presentation of financial statements to stockholders and related press releases and, as appropriate, initiates inquiries into aspects of our financial affairs. 0; Our Audit Committee is responsible for establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters, and for the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters. In addition, our Audit Committee is directly responsible for the appointment, retention, compensation and oversight of the work of our independent auditors, including approving services and fee arrangements. All related party transactions will be approved by our Audit Committee before we enter into them. The current members of our Audit Committee are J. Raleigh Bailes, Sr., Brad Bynum and Joe L. McClaugherty. Mr. Bailes serves as chairman of the Audit Committee. Our Audit Committee includes at least one member who has been determined by our Board to meet the qualifications of an Audit Committee financial expert in accordance with SEC rules. Mr. Bailes is the independent director whom we have identified as the Audit Committee financial expert. Mr. Bailes is a certified public accountant and has been engaged in a public accounting and tax practice for the last 37 years. Each of the members of our Audit Committee is independent, as independence for Audit Committee members is defined in Section 803B of the NYSE Amex Company Guide. In addition, Mr. Bynum and Mr. McClaugherty have an understanding of fundamental financial statements. Since its formation in April 2006, the Audit Committee approves all audit fees, audit-related fees, tax fees and special engagement fees. The Audit Committee approved 100% of such fees for the year ended December 31, 2009. The following is the report of the Audit Committee for the year ended December 31, 2009.
		The Audit Committee reviewed and discussed Magnum Hunter’s audited financial statements for the year ended December 31, 2009 with our management. The Audit Committee discussed with Hein & Associates LLP, Magnum Hunter’s independent registered public accounting firm, the matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees) as amended by Statement on Auditing Standards No. 90 (Audit Committee Communications). The Audit Committee also received the written disclosures and the letter from Hein & Associates LLP required by Independence Standards Board Standard No. 1 (Independence Discussion with Audit Commi ttees), and the Audit Committee has discussed the independence of Hein & Associates LLP with them. Based on the Audit Committee’s review and discussions noted above, the Audit Committee recommended to our Board of Directors that Magnum Hunter’s audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2009 for filing with the SEC. The Audit Committee has selected and engaged Hein & Associates LLP as the Company’s independent registered public accounting firm to audit and report to the Company’s stockholders on the Company’s financial statements for fiscal 2010.
		THE AUDIT COMMITTEE J. Raleigh Bailes, Sr. Brad Bynum Joe L. McClaugherty

Compensation and Nominating Committee

The Compensation and Nominating Committee of our Board of Directors (i) discharges the Board’s responsibilities relating to the compensation of our directors and officers; and (ii) recommends candidates for election to our Board of Directors and oversees the director nomination process. The committee has the overall responsibility for approving and evaluating the director and officer compensation plans, policies and programs of our Company, including, among other things, annual salaries, bonuses, stock options and other incentive compensation arrangements. In addition, our Compensation and Nominating Committee administers our stock incentive plans, including reviewing and granting stock options and other shar e-based awards, with respect to our directors, officers and our other employees.

Our Compensation and Nominating Committee will establish procedures for the nomination process and lead the search for, select and recommend candidates for election to our Board of Directors, subject to legal rights, if any, of third parties to nominate or appoint directors. Consideration of new director candidates typically will involve a series of committee discussions, review of information concerning candidates and interviews with selected candidates. Candidates for nomination to our Board of Directors typically have been suggested by other members of our Board of Directors or by our executive officers. From time to time, our Compensation and Nominating Committee may engage the services of a third-pa rty search firm to identify director candidates. Our Compensation and Nominating Committee will select the candidates for election to our Board of Directors. Candidates proposed by stockholders will be evaluated by our Compensation and Nominating Committee using the same criteria as for all other candidates.

The Board will consider recommendations of director nominees from stockholders that are submitted in accordance with the procedures for nominations set forth under the section entitled “Proposals for the 2011 Annual Meeting of Stockholders” in this Proxy Statement. In addition, such recommendations should be accompanied by the candidate’s name, biographical data and qualifications and a written statement from the individual evidencing his or her consent to be named as a candidate and, if nominated and elected, to serve as a director. Other than as stated herein, we do not have a formal policy with respect to consideration of director candidates recommended by stockholders, as the Board believes that each can didate, regardless of the source of the recommendation, should be evaluated in light of all relevant facts and circumstances.

Nominees for director are selected on the basis of, among other things, independence, experience, knowledge, skills, expertise, integrity, ability to make independent analytical inquiries, understanding of the Company’s business environment, ability to devote adequate time and effort to Board responsibilities and commitments to other public company boards. Other criteria for director candidates considered by the Compensation and Nominating Committee and by the full Board include age, diversity (“diversity” being broadly construed to mean a variety of opinions, perspectives, experiences and backgrounds, such as gender, race and ethnicity differences, as well as other differentiating characteristics, all in the context of the requirements of our Board at that point in time), whether the candidate has any conflicts of interest, whether the candidate has the requisite independence and skills for Board and committee service under applicable SEC and NYSE Amex rules, what the candidate’s skills and experience add to the overall competencies of the Board, and whether the candidate has any special background relevant to Magnum Hunter’s business.

		The current members of our Compensation and Nominating Committee are Messrs. Joe L. McClaugherty, Brad Bynum, Steven A. Pfeifer and Jeff Swanson. Mr. McClaugherty serves as chairman of the Compensation and Nominating Committee. The members of our Compensation and Nominating Committee are independent, as independence for directors is defined in Section 803A(2) of the NYSE Amex Company Guide. Our Compensation and Nominating Committee has recommended Gary C. Evans, Wayne P. Hall, J. Raleigh Bailes, Sr., Brad Bynum, Gary L. Hall, Joe L. McClaugherty, Ronald D. Ormand, Steven A. Pfeifer and Jeff Swanson as nominees for election to our Board of Directors at the Annual Meeting. The Compensation and Nominating Committee has also recommended the approval by the Board and stockholders of the Magnum Hunter Resources Corporation Stock Incentive Plan, an amendment and restatement of the Company’s 2006 Stock Incentive Plan, as described in this Proxy Statement.

Committee Interlocks and Insider Participation		Two of our directors, Gary C. Evans and Ronald D. Ormand, also serve as executive officers of the Company, and Wayne P. Hall is an employee of the Company. None of Mr. Evans, Mr. Ormand or Mr. Wayne Hall serve on the Company’s Compensation and Nominating Committee. No other member of our Board is employed by Magnum Hunter Resources Corporation or our subsidiaries. Other than Messrs. Evans and Ormand, who both serve on the board of directors of GreenHunter Energy Inc., none of our executive officers serve on the board of directors of another entity, whose executive officers serve on our Board. Mr. Evans is the Chairman and Chief Executive Officer of both GreenHunter Energy, Inc. and the Company, and David S. Krueger is the principal accounting officer of the Company and the Chief Financial Officer of GreenHunter Energy, Inc. 0; No officer or employee of Magnum Hunter participated in deliberations of our Board concerning executive officer compensation.

Compensation of Executives		The objective of Magnum Hunter’s executive compensation program is to enable us to recruit and retain highly qualified managerial talent by providing market-based levels of compensation. We also seek to motivate our executives to achieve individual and business performance objectives by varying their compensation in accordance with the success of our business. To achieve our objective, we believe that our executive compensation program must be competitive with that of our peer companies and other likely competitors for executive talent. To help ensure market-based levels of compensation, we measure the major elements of compensation annually for a job against available data for similar positions in our peer and other competitors. We believe annual measurement is generally appropriate, because the market itself is subject to variations over time as a result of changes within peer companies and the supply and demand for experienced executives. Once the market value for a position is determined, we compare the compensation levels of individual incumbents to these market values. The salary level and short term and long term incentive target percentages for each named executive officer are based on market data for the officer’s position. Compensation levels can vary compar ed to the market due to a variety of factors such as experience, tenure and individual performance. In light of our focus on determining market value for each position, we do not employ analyses that compare compensation levels of our named executive officers with each other or with other employees within the Company. We believe compensation programs can drive the behavior of employees covered by the programs, and accordingly we seek to design our executive compensation program to align compensation with current and desired corporate performance and stockholder interests. Actual compensation in a given year will vary based on Magnum Hunter’s performance, and to a lesser extent, on subjective appraisals of individual performance. In other words, while compensation targets will to a large extent reflect the market, actual compensation will reflect Magnum Hunter’s attainment of (or failure to attain) financial and operational performance objectives.

		We maintain competitive benefit programs for our employees, including our named executive officers, with the objective of retaining their services. Our benefits reflect competitive practices at the time the benefit programs were implemented and, in some cases, reflect our desire to maintain similar benefits treatment for all employees in similar positions. To the extent possible, we structure these programs to deliver benefits in a manner that is tax efficient to both the recipient and Magnum Hunter.

Compensation Philosophy		As indicated above, we seek to provide compensation that is competitive, both in total level and in individual components, with the companies we believe are our peers and other likely competitors for executive talent. By competitive, we mean that total compensation and each element of compensation corresponds to a market-determined range. Competitive compensation is normally sufficient to attract executive talent to the Company. Competitive compensation also makes it less likely that executive talent will be lured away by higher compensation to perform a similar role with a similarly-sized competitor. We also believe that a substantial portion of compensation for executives should be “at risk,” meaning that the executives will receive a certain percentage of their total compensation only to the extent Magnum Hunter and the executive accomplish goals established by our Compensation and Nominating Committee. We expect senior level executives, including the named executive officers, to have a higher percentage of their total compensation at risk. By this means, we seek to align each of our named executive officers with the short and long term performance objectives of Magnum Hunter and with the interests of our stockholders.

Base Salary		Base salary is the foundation of total compensation. Base salary recognizes the job being performed and the value of that job in the competitive market. Base salary must be sufficient to attract and retain the talent necessary for our continued success and provides an element of compensation that is not at risk in order to avoid fluctuations in compensation that could distract the executives from the performance of their responsibilities. Adjustments to base salary primarily reflect either changes or responses to changes in market data or increased experience and individual contribution of the employee.

Short Term Incentives		Our short term incentive plan, or bonus plan, provides an annual cash and/or stock award that is designed to link each employee’s annual compensation to the achievement of annual performance objectives for Magnum Hunter, as well as to recognize the employee’s performance during the year. The target for each employee is expressed as a percentage of base salary earned during the year and classified as a bonus. Approximately 50% of this award is based upon short term goals and the remaining portion of the bonus is based upon the discretion of the Compensation and Nominating Committee. The Compensation and Nominating Committee retains the ability to exercise discretion in determining all distributions under our short term incentive p lan. The Compensation and Nominating Committee establishes and approves the specific performance objectives based on possible objectives at the beginning of each new fiscal year. Performance objectives are based on Company financial and operational factors determined to be critical to achieving our desired business plans. Performance objectives are designed to reflect goals and objectives to be accomplished over a specific period; therefore, incentive opportunities under the plan are not impacted by compensation amounts earned in prior years.

		Performance objectives for each of the named executive officers were based on a matrix of performance objectives for the Company as a whole. Examples of performance objectives include (i) achieving specified levels of volume weighted average stock price, (ii) achieving specified levels of production, (iii) acquisition activities, and (iv) other operational performance objectives.

Long Term Incentives		We provide a long term incentive plan, namely, our 2006 Stock Incentive Plan, in which each of our executive officers, including our named executive officers, and certain other management-level employees participate. Our 2006 Stock Incentive Plan is designed to reward participants for sustained improvements in Magnum Hunter’s financial performance and increases in the value of our Common Stock over an extended period. The Compensation and Nominating Committee authorizes grants throughout the year depending upon the Company’s activities during that time period. Grants can be made from a variety of award types authorized under our long term incentive plan. We have granted awards that vest based on continued service as well as performance-based options and restricted stock grants. Our stock and option awards vest based on continued service over three or four-year periods and, in some cases, satisfaction of performance based vesting hurdles. Our performance period can vary in lengths of time given the rate at which Magnum Hunter is growing.

Risks Related to Compensation Policies and Practices		As part of its oversight of the Company's executive and non-executive compensation programs, the Compensation and Nominating Committee considers the impact of the Company's compensation programs, and the incentives created by the compensation awards that it administers, on the Company's risk profile. In addition, the Company reviews all of its compensation policies and procedures, including the incentives that they create and factors that may reduce the likelihood of excessive risk taking, to determine whether they present a significant risk to the Company. Based on this review, the Company has concluded that its compensation policies and procedures are not reasonably likely to have a material adverse effect on the Company. As a result of th is analysis, the Compensation Committee identified the following risk mitigating factors:
		● Use of long-term incentive compensation; ● Vesting periods for equity compensation awards that encourage executives and other key employees to focus on sustained stock price appreciation; ● The Compensation and Nominating Committee’s discretionary authority to adjust annual incentive awards, which helps mitigate any business risks associated with such awards; ● The Company's internal control over financial reporting and other financial, operational and compliance policies and practices currently in place; ● Base salaries consistent with executives’ responsibilities so that they are not motivated to take excessive risks to achieve a reasonable level of financial security; and ● Design of long-term compensation to reward executives and other key employees for driving sustainable, profitable, growth for stockholders.
		As a result of the above assessment, the Compensation and Nominating Committee determined that the Company’s policies and procedures largely achieve a proper balance between competitive compensation and prudent business risk.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth all outstanding equity awards to named executive officers of the Company as of December 31, 2009.

	Option Awards							Stock Awards
Name and Principal Position	Number of Securities Underlying Unexercised Options Exercisable (#)		Number of Securities Underlying Unexercised Options Unexercisable (#)		Option Exercise Price ($)		Option Expiration Date	Number of Shares That Have Not Vested (#)		Market Value of Shares That Have Not Vested ($) (1)

Gary C. Evans, Chairman and CEO (a)		2,062,500		687,500	$	0.37	5/22/2014		437,500	$	678,125

Ronald D. Ormand, Executive Vice President and CFO (b)		1,437,500		312,500	$	0.37	5/22/2014		187,500	$	290,625

James W. Denny III, Chief Operating Officer (c)		50,000		50,000	$	1.69	3/1/2013
		12,500		37,500	$	1.17	9/30/2014		60,000	$	93,000
		50,000		200,000	$	1.69	10/23/2019

H.C. "Kip" Ferguson, Executive Vice President Exploration (d)		50,000		150,000	$	1.17	9/30/2014		-	$	-

Donald L. Kirkendall, Senior Vice President Administration and Product Marketing (e)		100,000		100,000	$	2.00	1/9/2013		50,000	$	77,500

(1) The dollar amounts are based on the market value of the shares as of December 31, 2009 using the last sale price on that date of $1.55 per share as reported on the NYSE Amex.

(a) In May 2009, we entered into a Stock Option Agreement with Mr. Evans, granting him an option to purchase up to 2,750,000 shares of our Common Stock at an exercise price of $0.37 per share over a five year period ending on May 22, 2014. The option vests pursuant to certain performance conditions set forth in Mr. Evans' Stock Option Agreement. We also entered into a Restricted Stock Agreement with Mr. Evans in May 2009, granting him 2,750,000 shares of our restricted Common Stock that vest over a three year period pursuant to certain conditions set forth in Mr. Evans' Restricted Stock Agreement. In 2009, pursuant to certain conditions set out in Mr. Evans' Stock Option Agreement and Restricted Stock Agreement, Mr. Evans vested in the option with respect to 2,062,500 shares of our Common Stock and ve sted in 2,312,500 shares of our restricted Common Stock. As of December 31, 2009, Mr. Evans had 687,500 option shares and 437,500 shares of our restricted Common Stock that had not vested.

(b) In May 2009, we entered into a Stock Option Agreement with Mr. Ormand, granting him an option to purchase up to 1,250,000 shares of our Common Stock at an exercise price of $0.37 per share over a five year period ending on May 22, 2014. The option vests pursuant to certain performance conditions set forth in Mr. Ormand's Stock Option Agreement. We also entered into a Restricted Stock Agreement with Mr. Ormand in May 2009, granting him 1,250,000 shares of our restricted Common Stock that vest over a three year period pursuant to certain conditions set forth in Mr. Ormand's Restricted Stock Agreement. In 2009, pursuant to certain conditions set out in Mr. Ormand's Stock Option Agreement and Restricted Stock Agreement, Mr. Ormand vested in the option with respect to 1,437,500 shares of our Common Sto ck and vested in 1,062,500 shares of our restricted Common Stock. As of December 31, 2009, Mr. Ormand had 312,500 option shares and 187,500 shares of our restricted Common Stock that had not vested.

(c) In March 2008, we granted Mr. Denny an option to purchase up to 100,000 shares of our Common Stock at an exercise price of $1.69 per share, of which 50,000 option shares had vested as of December 31, 2009. The remaining 50,000 option shares vest, subject to his continued employment, in 25,000 share increments on March 1, 2010 and 2011. In September 2009, we granted Mr. Denny an option to purchase 50,000 shares of our Common Stock at an exercise price of $1.17 per share, of which 12,500 option shares vested on the date of grant. The remaining 37,500 option shares vest, subject to his continued employment, in 12,500 share increments on September 30, 2010, 2011, and 2012. In October 2009, we granted Mr. Denny an option to purchase up to 250,000 shares of our Common Stock, based on performance objectives, at an exerc ise price of $1.69 per share, of which 50,000 option shares vested in 2009. In March 2008, we awarded Mr. Denny 130,000 shares of our restricted Common Stock, of which 70,000 shares had vested as of December 31, 2009. The remaining 60,000 shares vest and will be issued, subject to his continued employment, in 30,000 share increments on March 1, 2010 and 2011.

(d) In September 2009, we awarded Mr. Ferguson an option to purchase up to 200,000 shares of our Common stock at an exercise price of $1.17 per share, of which 50,000 option shares vested on the date of grant and the remaining 150,000 option shares vest in 50,000 share increments on September 30, 2010, 2011, and 2012.

(e) In November 2005, we issued to Mr. Kirkendall a warrant to purchase up to 43,750 shares of our Common Stock for services provided to us prior to his employment. Mr. Kirkendall subsequently transferred 13,750 of those warrants to a third party. In January 2008, we granted Mr. Kirkendall an option to purchase up to 200,000 shares of our Common Stock at an exercise price of $2.00 per share, of which 100,000 option shares had vested as of December 31, 2009. The remaining 100,000 option shares vest, subject to his continued employment, in 50,000 share increments on January 10, 2010 and 2011. In January 2008, we awarded Mr. Kirkendall 100,000 shares of our restricted Common Stock, of which 50,000 shares had vested as of December 31, 2009. The remaining 50,000 shares vest and will be issued, subject to his continued emp loyment, in 25,000 share increments on January 10, 2010 and 2011.

The following table sets forth all compensation for the fiscal years ended 2009 and 2008 awarded to, earned by or paid to the named executive officers of the Company.

SUMMARY COMPENSATION TABLE

Name and Principal Position	Year	Salary ($)			Bonus ($)			Stock Awards ($)(1)			Option Awards ($)(1)			Total Compensation ($)
Gary C. Evans, Chairman and CEO	2009	$	153,865	(a)	$	505,400		$	857,182	(e)	$	581,670	(e)	$	2,098,117
	2008	$	-		$	-		$	-		$	-		$	-

Ronald D. Ormand,	2009	$	109,038	(b)	$	176,200		$	392,363	(f)	$	264,395	(f)	$	941,996
Executive Vice President and CFO	2008	$	-		$	-		$	-		$	-		$	-

James W. Denny III,	2009	$	180,000		$	214,200	(d)	$	-		$	326,193	(g)	$	720,393
Chief Operating Officer	2008	$	150,000		$	-		$	221,000	(g)	$	112,381	(g)	$	483,381

H.C. "Kip" Ferguson,	2009	$	45,000	(c)	$	148,000		$	-		$	176,743	(h)	$	369,743
Executive Vice President Exploration	2008	$	-		$	-		$	-		$	-		$	-

Donald L. Kirkendall,	2009	$	150,000		$	128,500	(d)	$	-		$	-		$	278,500
Senior Vice President Administration and Product Marketing	2008	$	150,000		$	79,167		$	215,000	(i)	$	293,364	(i)	$	737,531

_______________________

(1) Represents the aggregate grant date fair value, in accordance with Accounting Standards Codification 718 (“ASC 718”), “Stock Compensation” (formerly FASB Statement No. 123(R)) (except no assumptions for forfeitures were included), with respect to (a) shares of restricted stock (under the Stock Awards column), and (b) stock options (under the Option Awards column). See Notes 2 and 3 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2009, filed with the Securities and Exchange Commission on March 31, 2010, as amended, for information regarding the assumptions made in determining these values.

(a) Mr. Evans did not become employed by Magnum Hunter until May 22, 2009. Mr. Evans' annual salary for 2009 was $254,000.

(b) Mr. Ormand did not become employed by Magnum Hunter until May 22, 2009. Mr. Ormand's annual salary for 2009 was $180,000.

(c) Mr. Ferguson did not become employed by Magnum Hunter until September 30, 2009. Mr. Ferguson's annual salary for 2009 was $180,000.

(d) Includes cash bonuses awarded to Messrs. Denny and Kirkendall in July 2009 with consideration based on individual performances for the fiscal year ended December 31, 2008.

(e) In May 2009, we entered into a Stock Option Agreement with Mr. Evans, granting him an option to purchase up to 2,750,000 shares of our Common Stock at an exercise price of $0.37 per share over a five year period ending on May 22, 2014. The option vests pursuant to certain performance conditions set forth in Mr. Evans' Stock Option Agreement. We also entered into a Restricted Stock Agreement with Mr. Evans in May 2009, granting him 2,750,000 shares of our restricted Common Stock that vest over a three-year period pursuant to certain conditions set forth in Mr. Evans' Restricted Stock Agreement. In 2009, pursuant to certain conditions set out in Mr. Evans' Stock Option Agreement and Restricted Stock Agreement, Mr. Evans vested in the option with respect to 2,062,500 shares of our Common Stock and vested in 2,312,50 0 shares of our restricted Common Stock.

(f) In May 2009, we entered into a Stock Option Agreement with Mr. Ormand, granting him an option to purchase up to 1,250,000 shares of our Common Stock at an exercise price of $0.37 per share over a five-year period ending on May 22, 2014. The option vests pursuant to certain performance conditions set forth in Mr. Ormand's Stock Option Agreement. We also entered into a Restricted Stock Agreement with Mr. Ormand in May 2009, granting him 1,250,000 shares of our restricted Common Stock that vest over a three year period pursuant to certain conditions set forth in Mr. Ormand's Restricted Stock Agreement. In 2009, pursuant to certain conditions set out in Mr. Ormand's Stock Option Agreement and Restricted Stock Agreement, Mr. Ormand vested in the option with respect to 1,437,500 shares of our Common Stock an d vested in 1,062,500 shares of our restricted Common Stock.

(g) In March 2008, we entered into a Restricted Stock Agreement with Mr. Denny granting him 130,000 shares of our restricted Common Stock, vesting over a four year period, of which 40,000 shares vested in 2008. In March 2009, (i) Mr. Denny vested in an additional 30,000 shares of our Common Stock pursuant to this Restricted Stock Agreement and (ii) Mr. Denny vested in 25,000 option shares, at an exercise price of $1.69 per share, pursuant to his Non-Statutory Stock Option Agreement dated March 1, 2008. In September 2009, we granted Mr. Denny an option to purchase up to 50,000 shares of our Common Stock at an exercise price of $1.17 per share, of which 12,500 option shares vested on the date of grant, and the remaining 37,500 option shares vest in 12,500 share increments on September 30, 2010, 2011, and 2012. In October 2009, we granted Mr. Denny an option to purchase up to 250,000 shares of our Common Stock, based on performance objectives, at an exercise price of $1.69 per share, 50,000 of which vested in 2009.

(h) In September 2009, we awarded Mr. Ferguson an option to purchase up to 200,000 shares of our Common Stock at an exercise price of $1.17 per share, of which 50,000 option shares vested on the date of grant and the remaining 150,000 option shares vest in 50,000 share increments on September 30, 2010, 2011, and 2012.

(i) In January 2008 we entered into a Restricted Stock Agreement with Mr. Kirkendall, granting him 100,000 shares of our restricted Common Stock that vest over a four year period. In each of 2008 and 2009, Mr. Kirkendall vested in 25,000 shares of this restricted Common Stock. The remaining 50,000 shares vest, subject to his continued employment, in 25,000 share increments on January 10, 2010 and 2011. In January 2008, we also entered into a Non-Statutory Stock Option Agreement with Mr. Kirkendall, granting him an option to purchase up to 200,000 shares of our Common Stock at an exercise price of $2.00 per share. In each of 2008 and 2009, Mr. Kirkendall vested in 50,000 of these option shares and the remaining 100,000 shares vest in 50,000 share increments on January 10, 2010 and 2011.

Compensation of Directors		The Compensation and Nominating Committee approves fees and other compensation for Magnum Hunter’s non-employee directors. Directors receive fees payable in cash or Common Stock for attending meetings of the Board and its committees and for chairing Board committees and are eligible to receive annual grants of Common Stock and options to purchase Common Stock under the 2006 Stock Incentive Plan.

Meeting Fees		For 2009, fees for attending meetings of the Board and its committees were set at $1,000 per day. Fees earned or paid in 2009 are set forth in the Director Compensation Table below. In May 2010, the Board’s fees were changed to a meeting fee of $1,500 per Board meeting and $1,000 per committee meeting and a $10,000 annual retainer for the chairman of each Board committee. All Board fees are payable in cash or Common Stock, at the election of the director.

Committee Interlocks and Insider Participation		Two of our directors, Gary C. Evans and Ronald D. Ormand, also serve as executive officers of the Company, and Wayne P. Hall is an employee of the Company. None of Mr. Evans, Mr. Ormand or Mr. Wayne Hall serve on the Company’s Compensation and Nominating Committee. No other member of our Board is employed by Magnum Hunter Resources Corporation or our subsidiaries. Other than Messrs. Evans and Ormand, who both serve on the board of directors of GreenHunter Energy Inc., none of our executive officers serve on the board of directors of another entity, whose executive officers serves on our Board. Mr. Evans is the Chairman and Chief Executive Officer of both GreenHunter Energy, Inc. and the Company, and David S. Krueger is the principal accounting officer of the Company and the Chief Financial Officer of GreenHunter Energy, Inc. 60; No officer or employee of Magnum Hunter participated in deliberations of our Board, or the Compensation Committee concerning executive officer compensation.

Name	Fees Earned or Paid in Cash ($)		Option Awards ($) (1) (2)		Stock Awards ($) (1) (3)		All Other Compensation ($)		Total ($)
J. Raleigh Bailes, Sr.	$	14,000	$	43,196			$	-	$	57,196
Brad Bynum	$	14,000	$	43,196	$	15,000	$	-	$	72,196
Gary L. Hall	$	9,000	$	43,196			$	-	$	52,196
Joe L. McClaugherty	$	6,000	$	56,154	$	15,000	$	-	$	77,154
Steven A. Pfeifer	$	9,000	$	56,154	$	15,000	$	-	$	80,154
Jeff Swanson	$	3,000	$	88,285			$	-	$	91,285

__________________

(1) Represents the aggregate grant date fair value, in accordance with Accounting Standards Codification 718 (“ASC 718”), “Stock Compensation” (formerly FASB Statement No. 123(R)) (except no assumptions for forfeitures were included), with respect to (a) shares of Common Stock (under the Stock Awards column), and (b) stock options (under the Option Awards column). See Notes 2 and 3 to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2009, filed with the Securities and Exchange Commission on March 31, 2010, as amended, for information regarding the assumptions made in determining these values.

(2) In June 2009, Messrs. Bailes, Bynum and Gary L. Hall were each granted an option to purchase up to 100,000 shares of our Common Stock at an exercise price of $0.51 per share with a ten year expiration date; in June 2009, Messrs. McClaugherty and Pfeifer were each granted an option to purchase up to 130,000 shares of our Common Stock at an exercise price of $0.51 per share with a ten year expiration date; and in August 2009, Mr. Swanson was granted an option to purchase up to 100,000 shares of our Common Stock at an exercise price of $1.03 per share with a ten year expiration date.

(3) From time to time, Board members are issued Common Stock in lieu of cash for past participation in Board and committee meetings.

Stock Ownership

The following table sets forth information regarding beneficial ownership of Magnum Hunter’s Common Stock and Preferred Stock as of September 2, 2010 held by (i) each of Magnum Hunter’s directors and executive officers; (ii) all directors and executive officers as a group; and (iii) any person (or group) who is known to Magnum Hunter to be the beneficial owner of more than 5% of any class of its stock. Beneficial ownership is determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, and, except as otherwise indicated, the respective holders have sole voting and investment powers over such shares. To the knowledge of the Company, there are no single holders of 5% or more of the Series C Preferre d Stock.

Unless otherwise specified, the address of each of the persons set forth below is in care of Magnum Hunter Resources Corporation, 777 Post Oak Boulevard, Suite 910, Houston, Texas 77056.

Title of Class	Name of Beneficial Owner	Amount and Nature of Beneficial Ownership (1)		Percent of Class (%)
Common Stock	Gary C. Evans (a)		5,798,410	8%
Common Stock	Ronald D. Ormand (b)		2,619,360	4%
Common Stock	David S. Krueger (c)		42,500	*
Common Stock	H.C. "Kip" Ferguson, III (d)		127,340	*
Common Stock	Brian G. Burgher (e)		65,000	*
Common Stock	M. Bradley Davis (g)		235,000	*
Common Stock	Wayne P. Hall (h)		2,613,010	4%
Common Stock	Donald L. Kirkendall (i)		400,109	*
Common Stock	James W. Denny, III (j)		317,500	*
Common Stock	J. Raleigh Bailes, Sr. (k) (f)		377,986	*
Common Stock	Brad Bynum (k) (l)		537,933	*
Common Stock	Gary L. Hall (k) (m)		406,757	*
Common Stock	Joe L. McClaugherty (n) (q)		659,070	1%
Common Stock	Steven A. Pfeifer (n)		398,733	*
Common Stock	Jeff Swanson (o)		172,672	*
Common Stock	Eagle Operating, Inc. (p)		3,144,655	5%
Common Stock	Directors and executive officers as a group (15 persons named above)		14,771,380	21%

Series C Preferred Stock	Gary C. Evans		10,000	*
Series C Preferred Stock	Wayne P. Hall		12,000	*
Series C Preferred Stock	Directors and executive officers as a group (2 persons named above)		22,000	3%

* Less than one percent.
(1) Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities.
(a) Includes 2,750,000 shares of restricted Common Stock, all of which have vested; 86,705 shares of Common Stock; an option to purchase 2,750,000 shares of Common Stock, which has vested; and 211,705 shares underlying presently exercisable warrants, of which 125,000 shares are held in an account under the name of Mr. Evans’ children and Mr. Evans’ Special Inheritance Account.
(b) Includes 1,250,000 shares of restricted Common Stock, all of which have vested; options to purchase 1,300,000 shares of Common Stock, all of which have vested; 11,560 shares underlying presently exercisable warrants; and 57,800 shares held in a private investment company controlled by Mr. Ormand.
(c) Includes 42,500 shares of Common Stock underlying a presently exercisable option.
(d) Includes 110,000 shares of Common Stock underlying a presently exercisable option; and 2,890 shares of Common Stock underlying presently exercisable warrants.
(e) Includes 65,000 shares of Common Stock underlying a presently exercisable option.
(f) Includes 5,780 shares of Common Stock underlying presently exercisable warrants.
(g) Includes 235,000 shares of Common Stock underlying a presently exercisable option.
(h) Includes 2,351,450 shares of Common Stock, of which 1,314,975 are held by Mr. Hall's private investment company; 250,000 shares of Common Stock underlying a presently exercisable option; and 11,560 shares of Common Stock underlying presently exercisable warrants.

(i) Includes 160,000 shares of Common Stock underlying a presently exercisable option.
(j) Includes 207,500 shares of Common Stock underlying a presently exercisable option.
(k) The share amounts for each of Messrs. Bailes, Bynum and Gary L. Hall include 335,000 shares of Common Stock underlying presently exercisable options.
(l) Includes 50,000 shares of Common Stock underlying presently exercisable warrants.
(m) Includes 11,560 shares of Common Stock underlying presently exercisable warrants.
(n) The share amounts for each of Messrs. McClaugherty and Pfeifer include 165,000 shares of Common Stock underlying a presently exercisable option.
(o) Includes 2,890 shares of Common Stock underlying presently exercisable warrants; and 135,000 shares of Common Stock underlying a presently exercisable option.
(p) Pursuant to a Purchase and Sale Agreement between the Company and Eagle Operating, Inc. dated December 11, 2006, Eagle received 3,144,655 shares of Common Stock. It is the Company's belief that Eagle has not sold any of these shares. Eagle's address of principal business office is 1222 N Central Ave, Kenmare, ND 58746.
(q) Includes 2,890 shares of Common Stock underlying presently exercisable warrants.

Certain Relationships and Related Transactions

During 2009, we rented an airplane for business use at various times from Pilatus Hunter, LLC, an entity 100% owned by Mr. Evans, our Chairman of the Board of Directors and Chief Executive Officer. Airplane rental expenses totaled $161,000 and $0 for the years ended December 31, 2009 and 2008, respectively.

During 2009, we obtained accounting services from GreenHunter Energy, Inc., an entity for which Mr. Evans is an officer and major shareholder. Professional services expenses totaled $30,000 and $0 for the years ended December 31, 2009 and 2008, respectively.

Review, Approval or Ratification of Transactions with Related Persons		Our Board has established an Audit Committee and its charter sets forth in writing, among other things, (i) that our Audit Committee will be comprised exclusively of members of our Board who satisfy the independence requirements of Section 803(A)(2) of the NYSE Amex and (ii) that the Audit Committee is responsible for approving all related party transactions, as defined by the rules of the NYSE Amex, to which our Company is a party. The Company currently does not have a written, stand-alone policy for evaluating related party transactions. The Board’s review procedures include evaluating the following:
		● the nature of the relationships among the parties; ● the materiality of the transaction to the Company; ● the related person’s interest in the transaction; and ● the benefit of the transaction to the related person and to the Company.
		Additionally, in cases of transactions in which a director or executive officer may have an interest, the Board also will evaluate the effect of the transaction on such individual’s willingness or ability to properly perform his or her duties at the Company.

Director Independence		The Board determined that Messrs. J. Raleigh Bailes, Sr., Brad Bynum, Joe L. McClaugherty, Steven A. Pfeifer and Jeff Swanson are independent, as defined in Section 803A(2) of the NYSE Amex Company Guide. Under the listing standards, a majority of our directors must be independent, and the Audit Committee and Compensation and the Nominating Committee are each required to be composed solely of independent directors. The standards for audit committee membership include additional requirements under rules of the Securities and Exchange Commission. The Board has determined that all of the members of the Audit Committee and the Compensation and Nominating Committee meet the applicable independence requirements.
Section 16(a) Beneficial Ownership Reporting Compliance		Rules adopted by the SEC under Section 16(a) of the Securities Exchange Act of 1934, or the Exchange Act, require our executive officers and directors, and persons who beneficially own more than 10% of the issued and outstanding shares of our equity securities, to file reports of their ownership, and changes in ownership, of such securities with the Securities and Exchange Commission on Forms 3, 4 or 5, as appropriate. Such persons are required by the regulations of the Securities and Exchange Commission to furnish us with copies of all forms they file pursuant to Section 16(a). Based solely upon a review of Forms 3, 4 and 5 and amendments thereto furnished to us during our most recent fiscal year, and any written representations provided to us, we believe that all of the executive officers, directors, and owners of more than 10% of the outstanding shares of our Common Stock complied with Section 16(a) of the Exchange Act for the year ended December 31, 2009, except as follows:
		● Our Chairman and Chief Executive Officer, Gary C. Evans, made a late filing of a Form 3 to report a grant of options. ● Our Chief Financial Officer, Ronald D. Ormand, made a late filing of a Form 3 to report a grant of options. ● Our directors, J. Raleigh Bailes, Sr., Brad Bynum, Gary L. Hall, Joe L. McClaugherty, Steven A. Pfeifer and Jeff Swanson, each made a late filing of a Form 4 to report a grant of shares. ● Our directors, Brad Bynum, Joe L. McClaugherty and Steven A. Pfeifer each made a late filing of a Form 4 to report a grant of options. ● Our director, Joe L. McClaugherty, made late filings of three Form 4s to report purchases of common shares. ● Our director, Jeff Swanson, made a late filing of a Form 3 to report a grant of options. ● Our officers, Brian G. Burgher, M. Bradley Davis, David S. Krueger, David Lipp and Victor Ponce de Leon, each made a late filing of a Form 3 to report a grant of options. ● Our officers, James W. Denny, III, H.C. Ferguson, III and Donald L. Kirkendall, each made a late filing of a Form 4 to report a grant of options.

Other Business		We know of no business that will be presented for consideration at the Annual Meeting other than that described in this Proxy Statement. As to other business, if any, that may properly come before the Annual Meeting, it is intended that proxies solicited by our Board will be voted according to the best judgment of the proxy holder(s).

Householding of Annual Meeting Materials		Some banks, brokers and other nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means that only one copy of the Company’s Proxy Statement or Annual Report to Stockholders may have been sent to multiple stockholders in each household. The Company will promptly deliver a separate copy of either document to any stockholder upon written or oral request to Investor Relations, Magnum Hunter Resources Corporation, 777 Post Oak Boulevard, Suite 910, Houston, Texas 77056; telephone: (832) 369-6986. Any stockholder who wants to receive separate copies of our Proxy Statement or Annual Report to Stockholders in the future, or any stockholder who is receiving multiple copies and would like to receive only one copy per household, should contact the s tockholder’s bank, broker, or other nominee record holder, or the stockholder may contact the Company at the above address and phone number.

Proposals for the 2011 Annual Meeting of Stockholders		Our Bylaws provide that we must receive stockholders’ proposals intended to be presented at our 2011 Annual Meeting of Stockholders no later than May 18, 2011 to be eligible for inclusion in our Proxy Statement relating to that meeting. Stockholder proposals must be submitted in writing to our Corporate Secretary at 777 Post Oak Boulevard, Suite 910, Houston, Texas 77056. The proposal must also otherwise comply with all requirements of the SEC for stockholder proposals. Under our Bylaws, a stockholder may nominate one or more persons for election as directors at any Annual Meeting of Stockholders or propose business to be brought before the Annual Meeting of Stockholders, or both, only if the stockholder has given timely notice in proper written form of such director nomination(s) or such proposed business. For purposes of proposing business at an Annual Meeting of Stockholders, the stockholder notice must include: (i) a brief description of the business desired to be brought before the Annual Meeting of Stockholders; (ii) the name and record address of the stockholder proposing such business; (iii) the class and number of shares of the Company which are beneficially owned by the stockholder; and (iv) any material interest the stockholder has in such proposed busines s. For purposes of nominating a director to be elected at an Annual Meeting of Stockholders, the stockholder notice must include: (i) all the information required to be disclosed in solicitations of proxies by applicable SEC rules and regulations with respect to each director nominee; (ii) the name and record address of the stockholder proposing such business; and (iii) the class and number of shares of the Company which are beneficially owned by the stockholder. A stockholder shall also comply with all applicable requirements of the Securities Exchange Act of 1934, the rules and regulations thereunder, and all other policies and procedures of the Company with respect to the above described matters. Our Board of Directors may refuse to acknowledge the nomination of any person or the proposal of any business not made in compliance with the foregoing procedures.

Information Incorporated by Reference		We are permitted to incorporate by reference information that we file with the Securities and Exchange Commission. Accordingly, we incorporate by reference our Annual Report on 10-K, as amended, for the fiscal year ended December 31, 2009, which was filed with the SEC March 31, 2010, except to the extent information in that report is different from the information contained in this Proxy Statement. The information incorporated by reference includes the description of our executive officers set forth in Part III, Item 10 “Directors, Executive Officers And Corporate Governance” in our 2009 Annual Report on Form 10-K.

Annual Report		COPIES OF OUR ANNUAL REPORT ON FORM 10-K, AS AMENDED, INCLUDING ALL EXHIBITS, CAN BE OBTAINED WITHOUT CHARGE FROM THE CORPORATE SECRETARY AT OUR CORPORATE OFFICES LOCATED AT 777 POST OAK BOULEVARD, SUITE 910, HOUSTON, TEXAS 77056 AND ON OUR WEBSITE AT www.magnumhunterresources.com.


		BY ORDER OF THE BOARD OF DIRECTORS


		Gary C. Evans, Chairman of the Board

		September 3, 2010
		Houston, Texas

Appendix A

MAGNUM HUNTER RESOURCES CORPORATION

STOCK INCENTIVE PLAN

(Amended and Restated Effective August 12, 2010)

Petro Resources Corporation adopted the Petro Resources Corporation 2006 Stock Incentive Plan effective March 1, 2006. Petro Resources Corporation subsequently changed its name to Magnum Hunter Resources Corporation (the “Company”). The Petro Resources Corporation 2006 Stock Incentive Plan is amended and restated effective August 12, 2010, as the Magnum Hunter Resources Corporation Stock Incentive Plan (the “Plan”) to make additional shares available for issuance under the Plan, to add Stock Appreciation Rights to the Plan, to incorporate certain tax law changes, and to make certain clarifying changes to the Plan and is subject to approval by the Company’s stockholders at the 2010 annual meeting.

1.Purpose of Plan.

The purpose of the Plan is to advance the interests of (the “Company”) and its stockholders by enabling the Company and its Subsidiaries to attract and retain qualified individua ls through opportunities for equity participation in the Company, and to reward those individuals who contribute to the Company’s achievement of its economic objectives.

2.Definitions.

The following terms will have the meanings set forth below, unless the context clearly otherwise requires:

2.1. “Award” means an Option, Restricted Stock Award, Performance Stock Award, unrestricted Award of Common Stock, or Stock Appreciation Right granted to an Eligible Recipient pursuant to the Plan.

2.2. 2.1. “Board” means the Company’s Board of Directors.

2.3. 2.2. “Broker Exercise Notice” means a written notice pursuant to which a Participant, upon exercise of an Option, irrevocably instructs a broker or dealer to sell a sufficient number of shares or loan a sufficient amount of money to pay all or a portion of the exercise price of the Option and/or any related withholding tax obligations and remit such sums to the Company and directs the Company to deliver stock certificates to be issu ed upon such exercise directly to such broker or dealer or theirits nominee.

2.4. 2.3. “Cause” means (i) dishonesty, fraud, misrepresentation, embezzlement or deliberate injury or attempted injury, in each case related to the Company or any Subsidiary, (ii) any unlawful or criminal activity of a serious nature, (iii) any intentional and deliberate breach of a duty or duties that, individually or in the aggregate, are material in relation to the Participant’s overall duties, (iv) any material breach of any c onfidentiality or noncompete agreement entered into with the Company or any Subsidiary, or (v) with respect to a particular Participant, any other act or omission that constitutes “cause” as that term may be defined in any employment, consulting or similar agreement between such Participant and the Company or any Subsidiary.

2.5. 2.4. “Change in Control” means an event described in Section 11.113.2 of the Plan.

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2.6. 2.5. “Code” means the Internal Revenue Code of 1986, as amended.

2.7. 2.6. “Committee” means the group of individuals administering the Plan, as provided in Section 3 of the Plan.

2.8. 2.7. “Common Stock” means the common stock of the Company, par value $0.01 per share, or the. The number and kind of shares of stock or other securities into which such Common Stock may be changed in accordance with Section 4.3 of the Plan.

2.9. 2.8. “Disability” means the disability of the Participant such as would entitle the Participant to receive disability income benefits pursuant to the long-term disability plan of the Company or Subsidiary then covering the Participant or, if no such plan exists or is applicable to the Participant, the permanent and t otal disability of the Participant within the meaning of Section 22(e)(3) of the Code.

2.9. “Effective Date” means March 1, 2006, but no Incentive Stock Option shall be exercised unless and until the Plan has been approved by the stockholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board. Notwithstanding the foregoing, to the extent an Award is subject to Section 409A and payment or settlement of the Award may be accelerated as a result of a Participant’s Disability, Disability will have the meaning ascribed to it under Section 409A.

2.10.“Eligible Recipients” means all employees, officers and directors of the Company or any Subsidiary, and any consultants and advisors to the Company or any Subsidiary.

2.11.“Exchange Act” means the Securities Exchange Act of 1934, as amended.

2.12. “Executive” means a “covered employee” within the meaning of Section 162(m)(3) or any other Eligible Recipient designated by the Committee for purposes of exempting compensation payable under the Plan from the deduction limitations of Section 162(m).

2.13. 2.12. “Fair Market Value” means, with respect to the Common Stock, as of any date: (i) the mean between the reported high and low sale prices of the Common Stock at the end of the regular trading session if the Common Stock is listed, admitted to unlisted trading privileges, or reported on any national se curities exchange or on theThe Nasdaq NationalStock Market on such date (or, if no shares were traded on such day, as of the next preceding day on which there was such a trade); or (ii) if the Common Stock is not so listed, admitted to unlisted trading privileges, or reported on any national securities exchange or on theThe Nasdaq NationalStock Market, the closing bid price as of such date at the end of the regular trading session, as reported by theThe Nasdaq SmallCapCapital Market, OTC Bulletin Board, the National Quotation Bureaus, Inc.Pink Sheets LLC, or other comparable service; or (iii) if the Common Stock is not so listed or reported, such price as the Committee determines in good faith in t he exercise of its reasonable discretion.

2.13. “Incentive Award” means an Option, Restricted Stock Award or Performance Stock Award granted to an Eligible Recipient pursuant to the Plan.

2.14.“Incentive Stock Option” means a right to purchase Common Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan that qualifies as an “incentive stock option” within the meaning of Section 422 of the Code.

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2.15. “Net-Share Payment” means (i) payment for shares of Common Stock to be purchased upon exercise of an Option by holding back an amount of shares to be issued upon such exercise equal in value to the amount of the exercise price and/or (ii) payment of withholding and employment-related tax obligations in accordance with Section 12.2 of the Plan by holding back shares to be issued upon the grant, exercise or vesting of an Award (including an Option) equal in value to the amount of the required tax obligations.

2.16. 2.15. “Non-Statutory Stock Option” means a right to purchase Common Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan that does not qualify as an Incentive Stock Option.

2.17. 2.16. “Option” means an Incentive Stock Option or a Non-Statutory Stock Option.

2.18. 2.17. “Participant” means an Eligible Recipient who receives one or more Incentive Awards under the Plan.

2.19. 2.18. “Performance Criteria” means the performance criteria that may be used by the Committee in granting Performance Stock Awards where the grant, vesting, or exercisability of the Award is conti ngent upon achievement of such performance goals as the Committee may determine in its sole discretion. The Committee may select one criterion or multiple criteria for measuring performance, and the measurement may be based upon Company, Subsidiary or, division, business unit or subunit or asset group performance, or the individual performance of the Eligible Recipient, either absolute or by relative comparison to other companies, other Eligible Recipients or any other external measure of the selected criteria.

(a) In order to preserve the deductibility of an Award under Section 162(m), the Committee may determine that any Award granted pursuant to the Plan to a Participant that is or is expected to become an Executive will be conditioned on performance goals that are based on any of the following:

(i) Net income measures (including but not limited to earnings, net earnings, operating earnings, earnings before taxes, EBIT (earnings before interest and taxes), EBITA (earnings before interest, taxes, and amortization) EBITDA (earnings before interest, taxes, depreciation, and amortization), and earnings per share);

(ii) Stock price measures (including but not limited to growth measures and total stockholder return (stock price plus reinvested dividends) relative to a defined comparison group or target and price-earnings multiples);

(iii) Cash flow measures (including but not limited to net cash flow, net cash flow before financing activities, economic value added (or equivalent metric), debt reduction, debt to equity ratio, or establishment or material modification of a credit facility);

(iv) Return measures (including but not limited to return on equity, return on average assets, return on capital, risk-adjusted return on capital, return on investors’ capital and return on average equity);

(v) Operating measures (including operating income, funds from operations, cash from operations, after-tax operating income, sales volumes, production volumes, and production efficiency);

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(vi) Expense measures (including but not limited to finding, development, and lifting costs, overhead cost and general and administrative expense);

(vii) Asset measures (including but not limited to a specified target, or target growth in gas, oil, or mineral reserves or gas, oil, or mineral reserves per share, reserve additions, reserve replacement ratio, market capitalization or market value, proceeds from dispositions, strategic acquisitions, or raising capital);

(viii) Relative performance measures (including but not limited to relative performance to a comparison group or index designated by the Committee and market share);

(ix) Corporate values measures (including but not limited to ethics, environmental, legal, regulatory, and safety); and

(x) Any combination of the above.

If an Award is made on this basis, the Committee will establish goals prior to the beginning of the period for which the Performance Criteria relate (or at a later date to the extent permitted under Section 162(m) but not later than 90 days after the commencement of the period of services to which the Performance Criteria relate). The Committee has the right for any reason to reduce (but not increase) the Award, notwithstanding the achievement of a specified goal. Any payment of an Award granted with Performance Criteria under this subparagraph (a) will be conditioned on the written certification of the Committee in each case that the Performance Criteria and any other material conditions were s atisfied.

(b) To the extent that Section 409A is applicable, (i) performance-based compensation will also be contingent on the satisfaction of pre-established organizational or individual Performance Criteria relating to a performance period of at least 12 consecutive months in which the Participant performs services and (ii) Performance Criteria will be established not later than 90 calendar days after the beginning of any performance period to which the Performance Criteria relate, provided that the outcome is substantially uncertain at the time the criteria are est ablished.

2.20. 2.19. “Performance Stock Awards” means an award of Common Stock granted to an Eligible Recipient pursuant to Section 8 of the Plan and which may bethat is subject to the future achievement of Perf ormance Criteria or be free of any performance or vesting conditions.

2.21. 2.20. “Previously Acquired Shares” means shares of Common Stock that are already owned by the Participant or, with respect to any Incentive Award, that are to be issued upon the grant, exercise or vesting of such Incentive Award.

2.22. 2.21. “Restricted Stock Award” means an award of Common Stock granted to an Eligible Recipient pursuant to Section 7 of the Plan that is subject to the restrictions on transferability and the risk of forfeiture imposed by the provisions of such Section 7.Section 7 and which may be subject to the future achievement of Performance Criteria.

2.22. “Retirement” means normal or approved early termination of employment or service pursuant to and in accordance with the regular retirement/pension plan or practice of the Company or Subsidiary then covering the Participant, provided that if the Participant is not covered by any such plan or practice, the Participant will be deemed to be covered by the Company’s plan or practice for purposes of this determination.

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2.23. “Section 162(m)” means Code section 162(m) and the Treasury Regulations and other guidance promulgated thereunder.

2.24. “Section 409A” means Code section 409A and the Treasury Regulations and other guidance promulgated thereunder.

2.25. 2.23. “Securities Act” means the Securities Act of 1933, as amended.

2.26. “Stock Appreciation Right” means a right to receive payment, in cash or Common Stock, equal to the excess of the Fair Market Value or other specified valuation of a specified number of shares of Common Stock on the date the right is exercised over a specified base price, all as determined by the Committee in its discretion.

2.27. 2.24. “Subsidiary” means any entity that is directly or indirectly controlled by the Company or any entity in which the Company has a significant equity interest, as determined by the Committee.

3.Plan Administration.

3.1.The Committee. The Plan will be administered by the Board or by a committee of the Board. So long as the Company has a class of its equity securities registered under Section 12 of the Exchange Act, any committee administering the Plan will consist solely of two or more members of the Board who are “non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act. If necessary for relief from the limitation under Section 162(m) and that relief is sought by the Company, the committee administering the Plan will consist of “outside direct ors” within the meaning of Section 162(m). Such a committee, if established, will act by majority approval of the members (unanimous approval with respect to action by written consent), and a majority of the members of such a committee will constitute a quorum. As used in the Plan, “Committee” will refer to the Board or to such a committee, if established. To the extent consistent with applicable corporate law of the Company’s jurisdiction of incorporation and except as required for compliance with Section 162(m), the Committee may delegate to any officers of the Company the duties, power and authority of the Committee under the Plan pursuant to such conditions or limitations as the Committee may establish; provided, however, that only the Committee may exercise such duties, power and authority with respect to Eligible Recipients who are s ubject to Section 16 of the Exchange Act. The Committee may exercise its duties, power and authority under the Plan in its sole and absolute discretion without the consent of any Participant or other party, unless the Plan specifically provides otherwise. Each determination, interpretation or other action made or taken by the Committee pursuant to the provisions of the Plan will be conclusive and binding for all purposes and on all persons, and no member of the Committee will be liable for any action or determination made in good faith with respect to the Plan or any Incentive Award granted under the Plan.

3.2.Authority of the Committee.

(a)In accordance with and subject to the provisions of the Plan, the Committee will have the authority to determine all provisions of Incentive Awards as the Committee may deem necessary or desirable and as consistent with the terms of the Plan, including, without limitation, the following: (i) the Eligible Recipients to be selected as Participants; (ii) the nature and extent of the Incentive Awards to be made to each Participant (including the number of shares of Common Stock to be subject to each Incentive Award, any exercise price, the manner in which Incentive Awards will vest or become exercisable and whether Incentive Awards will be granted in tandem with other Incentive Awards) and the form of written agreement, if any, evidencing each such Incentive Award; (iii) the time or times when Incentive Awards will be granted; (iv) the duration of each Incentive Award; and (v) the restrictions and other conditions to which the payment or vesting of Incentive Awards may be subject. In addition, the Committee will have the authority under the Plan in its sole discretion to pay the economic value of any Incentive Award in the form of cash, Common Stock or any combination of both.

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(b)Subject to Section 3.2(d), below, the Committee will have the authority under the Plan to amend or modify the terms of any outstanding Incentive Award in any manner, including, without limitation, the authority to modify the number of shares or other terms and conditions of an Incentive Award, extend the term of an Incentive Award, accelerate the exercisability or vesting or othe rwise terminate any restrictions relating to an Incentive Award, accept the surrender of any outstanding Incentive Award or, to the extent not previously exercised or vested, authorize the grant of new Incentive Awards in substitution for surrendered Incentive Awards; provided, however, that the amended or modified terms are permitted by the Plan as then in effect and that any Participant adversely affected by such amended or modified terms has consented to such amendment or modification.

(c)In the event of (i) any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, extraordinary dividend or divestiture (including a spin-off) or any other change in corporate structure or shares; (ii) any purchase, acquisition, sale, disposition or write-down of a significant amount of assets or a significant business; (iii) any change in accounting principles or practices, tax laws or other such laws or provisions affecting reported results; or (iv) any other similar change, in each case with respect to the Company or any other entity whose performance is relevant to the grant or, vesting, or payment of an Incentive Award, the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) may, without the consent of any affected Participant, amend or modify the vesting or payment criteria (including Performance Criteria) of any outstanding Incentive Award that is based in whole or in part on the financial performance of the Company (or any Subsidiary or division or other subunit thereof) or such other entity so as equitably to reflect such event, with the desired result that the criteria for evaluating such financial performance of the Company or such other entity will be substantially the same (in the sole discretion of the Committee or the board of directors of the surviving corporation) following such event as prior to such event and make any such other adjustments to any outstanding Awards that the Committee deems appropriate, including, without limitation, accelerating vesting, substituting Awards, or assuming Awards; provid ed, however, that the amended or modified terms are permitted by the Plan as then in effect. and that the amended or modified terms do not violate the provisions of Section 162(m), Section 409A, or, to the extent applicable, Code section 424.

(d) Notwithstanding any other provision of thisthe Plan other than Section 4.3, the Committee may not, without prior approval of the Company’s stockholders, seek to effect any re-pricing of any previously granted, 220;underwater” Option by: (i) amending or modifying the terms of the Option to lower the exercise price; (ii) canceling the underwater Option and granting either (A) replacement Options having a lower exercise price; (B) Restricted Stock Awards; or (C) Performance Stock Awards in exchange; or (iii) repurchasing the underwater Options and granting new Incentive Awards under this Plan. For purposes of this Section 3.2(d) and Section 11.4, an Option will be deemed to be “underwater” at any time when the Fair Market Value of the Common Stock is less than the exercise price of the Option. Options or Stock Appreciation Rights.

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4.Shares Available for Issuance.

4.1.Maximum Number of Shares Available; Certain Restrictions on Awards. Subject to adjustment as provided in Section 4.3 of the Plan, the maximum number of shares of Common Stock that will be available for issuance under the Plan will be 6,000,000.15,000,000, of which 7,500,000 shares may be available for use in connection with Incentive Options. No more than 11,250,000 shares of Common Stock may be the subject of Awards that are not Options or Stock Appr eciation Rights. The aggregate number of shares with respect to which an Award or Awards may be granted to any one Participant in any one taxable year of the Company may not exceed 3,750,000 shares of Common Stock. The shares available for issuance under the Plan may, at the election of the Committee, be either treasury shares or shares authorized but unissued, and, if treasury shares are used, all references in the Plan to the issuance of shares will, for corporate law purposes, be deemed to mean the transfer of shares from treasury.

4.2.Accounting for Incentive Awards. Shares of Common Stock that are issued under the Plan or that are subject to outstanding Incentive Awards will be applied to reduce the maximum number of shares of Common Stock remaining available for issuance under the Plan; provided, however, that shares subject to an Incentive Award that lapses, expires, is forfeited (including issued shares forfeited under a Restricted Stock Award) or for any reason is terminated unexercised or unvested or is settled or paid in cash or any form other than shares of Common Stock will automatically again become available for issuance under the Plan. To the extent that the exercise price of any Option, and/or associated taxor withholding or employment-related tax obligations associated with an Option or other Award, are paid by tender or attestation as to ownership of Previously Acquired Shares, or to the extent that such tax withholding obligations are satisfied by withholding of shares otherwise issuable upon exercise of the Option or by holding back shares pursuant to a Net-Share Payment, only the number of shares of Common Stock issued net of the number of shares tendered, attested to or withheldheld back will be applied to reduce the maximum numb er of shares of Common Stock remaining available for issuance under the Plan. To the extent that an Award can only be settled in cash, it will not reduce the number of shares available under the Plan.

4.3.Adjustments to Shares and Incentive Awards. In the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares or any other change in the corporate structure or shares of the Company, the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) will make appropriate adjustment (which determination will be conclusive), acting in its discretion, may make such adjustment as to the number and kind of securities or other property (including cash) available for issuance or payment under the Plan and, in order to prevent dilution or enlargement of the rights of Participants, the number and kind of securities or other property (including cash) subject to outstanding Incentive Awards and the exercise price of outstanding Options and base price of outstanding Stock Appreciation Rights.

5.Participation.

Participants in the Plan will be those Eligible Recipients who, in the judgment of the Committee, have contributed, are contributing or are expected to contribute to the achievement of economic objectives of the Company or its Subsidiaries. Eligible Recipients may be granted from time to time one or more Incentive Awards, singly or in combination or in tandem with other Incentive Awards, as may be determined by the Committee in its sole discretion. Incentive Awards will be deemed to be granted as of the date specified in the grant resolution of the Committee, which date will be the date of any related agreement with the Participant.

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6.Options.

6.1.Grant. An Eligible Recipient may be granted one or more Options under the Plan, and such Options will be subject to such terms and conditions, including the satisfaction of Performance Criteria, consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion. The Committee may designate whether an Option is to be considered an Incentive Stock Option or a Non-Statutory Stock Option. To the extent that any Option that is intended to be an Incentive Stock Option granted under the Planfails or ceases for any reason to qualify as an “incentive stock option” for purposes of Section 422 of the Code, such Incentive Stock Option will continue to be outstanding for purposes of the Plan but will thereafter be deemed to be a Non-Statutory Stock Option.

6.2.Exercise Price. The per share price to be paid by a Participant upon exercise of an Option will be determined by the Committee in its discretion at the time of the Option grant; provided, however, that such price will not be less than 100% of the Fair Market Value of one share of Common Stock on the date of grant with respect to any Incentive Stock Option (110% of the Fair Market Value with respect to an Incentive Stock Option if, at the time such Incentive Stock Option is granted, the Participant owns, directly or indirectly, more than 10% of the total combine d voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company).

6.3.Exercisability and Duration. An Option will become exercisable at such times and in such installments and upon such terms and conditions as may be determined by the Committee in its sole discretion at the time of grant (including without limitation (i) the achievement of one or more of the Performance Criteria and/or (ii) that the Participant remain in the continuous employ or service of the Company or a Subsidiary for a certain period); provided, however, that no Option may be exercisable after 10 years from its date of grant (five years from its date of grant in the case of an Incentive Stock Option if, at the time the Incentive Stock Option is granted, the Participant owns, directly or indirectly, more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company).

6.4.Payment of Exercise Price. The total purchase price of the shares to be purchased upon exercise of an Option will be paid entirely in cash (including check, bank draft or money order); provided, however, that the Committee, in its sole discretion and upon terms and conditions established by the Committee, may allow such payments to be made, in whole or in part, by tender of a Broker Exercise Notice, by Net-Share Payment, by tender, or attestation as to ow nership, of Previously Acquired Shares that have been held for the period of time necessary to avoid a charge to the Company’s earnings for financial reporting purposes and that are otherwise acceptable to the Committee, or by a combination of such methods. For purposes of such payment, Previously Acquired Shares tendered or covered by an attestation and shares held back pursuant to a Net-Share Payment will be valued at their Fair Market Value on the exercise date.

6.5.Manner of Exercise. An Option may be exercised by a Participant in whole or in part from time to time, subject to the conditions contained in the Plan and in the agreement evidencing such Option, by delivery in person, by facsimile or electronic transmission or through the mail of written notice of exercise to the Company at its principal executive office in Houston, Texas and by paying in full the total exercise price for the shares of Common Stock to be purchased in accordance with Section 6.4 of the Plan.

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7.Restricted Stock Awards.

7.1.Grant. An Eligible Recipient may be granted one or more Restricted Stock Awards under the Plan, and such Restricted Stock Awards will be subject to such terms and conditions, consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion. The Committee may impose such restrictions or conditions, not inconsistent with the provisions of the Plan, to the vesting of such Restricted Stock Awards as it deems appropriate, including, without limitation, (i) the achievement of one or more of the Performance Criteria and/or (ii) that the Participant remain in the continuous employ or service of the Company or a Subsidiary for a certain perio d.

7.2.Rights as a Stockholder; Transferability. Except as provided in Sections 7.1, 7.3, 7.4 and 12.314.3 of the Plan, a Participant will have all voting, dividend, liquidation and other rights with respect to shares of Common Stock issued to the Participant as a Restricted Stock Award under this Section 7 upon the Participant becoming the holder of record of such shares as if such Participant were a holder of record of shares of unrestricted Common Stock.

7.3.Dividends and Distributions. Unless the Committee determines otherwise in its sole discretion (either in the agreement evidencing the Restricted Stock Award at the time of grant or at any time after the grant of the Restricted Stock Award), any dividends or distributions (other than regular quarterly cash dividends) paid with respect to shares of Common Stock subject to the unvested portion of a Restricted Stock Award will be subject to the same restrictions as the shares to which such dividends or distributions relate. The Committee will determine in its sole discretion whether any interest will be paid on such dividends or distributions.

7.4.Enforcement of Restrictions. To enforce the restrictions referred to in this Section 7, the Committee may place a legend on the stock certificates referring to such restrictions and may require the Participant, until the restrictions have lapsed, to keep the stock certificates, together with duly endorsed stock powers, in the custody of the Company or its transfer agent, or to maintain evidence of stock ownership, together with duly endorsed stock powers, in a certificateless book-entry stock account with the Company’s transfer agent.

8.Performance Stock Awards.

8.1.Grant. An Eligible Recipient may be granted one or more Performance Stock Awards under the Plan, and the issuance of shares of Common Stock pursuant to such Performance Stock Awards will be subject to such terms and conditions, if any, as are consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion, including, but not limited to, the achievement of one or more of the Per formance Criteria.

8.2.Restrictions on Transfers. The right to receive shares of Performance Stock Awards on a deferred basis may not be sold, assigned, transferred, pledged or otherwise encumbered, other than by will or the laws of descent and distribution.

9. Unrestricted Stock Awards.

The Committee may, in its sole discretion, grant an Award of shares of Common Stock free from any restrictions under this Plan to any Eligible Recipient.

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10. Stock Appreciation Rights.

10.1. Grant. An Eligible Recipient may be granted one or more Stock Appreciation Rights under the Plan subject to such terms and conditions, if any, consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion, including, but not limited to, the achievement of one or more of the Pe rformance Criteria.

10.2. Exercise. A Participant may exercise a vested Stock Appreciation Right by giving written notice of the exercise to the Company stating the number of shares subject to the exercise. Upon receipt of the notice and subject to the Committee’s election to pay cash as provided in Section 10.3, the Company will deliver a certificate or certificates for Common Stock and/or a cash payment in accordance with Section 10.3.

10.3. Number of Shares or Amount of Cash. The Committee may provide that a Stock Appreciation Right will be settled in cash or Common Stock. If the Committee does not specify that a Stock Appreciation Right can be settled in cash, that Stock Appreciation Right will be settled in shares of Common Stock except as determined by the Committee in its discretion. The amount of Common Stock that may be issued pursuant to the exercise of a Stock Appreciation Right will be determined by dividing (a) the total number of shares of Commo n Stock as to which the Stock Appreciation Right is exercised, multiplied by the amount by which the Fair Market Value (or other specified valuation) of the Common Stock on the exercise date exceeds the base price (which may not be less than the Fair Market Value of the Common Stock on the date of grant) by (b) the Fair Market Value of the Common Stock on the exercise date; provided that fractional shares will not be issued and will instead be paid in cash. In lieu of issuing Common Stock upon the exercise of a Stock Appreciation Right, the Committee in its sole discretion may elect to pay the cash equivalent of the Fair Market Value of the Common Stock on the exercise date for any or all of the shares of Common Stock that would otherwise be issuable upon the exercise of the Stock Appreciation Right.

11. 9. Effect of Termination of Employment or Other Service.

11.1. 9.1. Termination Due to Death or Disability. InSubject to Sections 11.3 and 11.4 of the Plan, in the event a Participant’s employment or other service with the Company and all Subsidiaries is terminated by reason of death or Disability:

(a)All outstanding Options and Stock Appreciation Rights then held by the Participant will, to the extent exercisable as of such termination, remain exercisable in full for a period of six (6) months after such termination (but in no event after the expiration date of any such Option); and or Stock Appreciation Right). Options and Stock Appreciation Rights not exercisable as of such termination will be forfeited and terminate;

(b)All Restricted Stock Awards then held by the Participant that have not vested as of such termination will be terminated and forfeited; and

(c)All outstanding Performance Stock Awards then held by the Participant that have not vested as of such termination will be terminated and forfeited.

9.2. Termination Due to Retirement. Subject to Section 9.5 of the Plan, in the event a Participant’s employment or other service with the Company and all Subsidiaries is terminated by reason of Retirement:

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(a) All outstanding Options then held by the Participant will, to the extent exercisable as of such termination, remain exercisable in full for a period of three (3) months after such termination (but in no event after the expiration date of any such Option). Options not exercisable as of such Retirement will be forfeited and terminate; and

(b) All Restricted Stock Awards then held by the Participant that have not vested as of such termination will be terminated and forfeited; and

(c) All outstanding Performance Stock Awards then held by the Participant that have not vested as of such termination will be terminated and forfeited.

11.2. 9.3. Termination for Reasons Other than Death, or Disability or Retirement. Subject to Section 9.5Sections 11.3 and 11.4 of the Plan, in the event a Participant’s employment or other service is terminated with the Company and all Subsidiaries is terminated for any reason other than death, or Disability or Retirement, or a Participant is in the employ of a Subsidiary and the Subsidiary ceases to be a Subsidiary of the Company (unless the Participant continues in the employ of the Company or another Subsidiary):

(a)All outstanding Options and Stock Appreciation Rights then held by the Participant will, to the extent exercisable as of such termination, remain exercisable in full for a period of three months after such termination (but in no event after the expiration date of any such Option or Stock Appreciation Right). Options and Stock Appreciation Rights not exercisable as of such termination will be forfeited and terminate; and

(b)All Restricted Stock Awards then held by the Participant that have not vested as of such termination will be terminated and forfeited; and

(c)All outstanding Performance Stock Awards then held by the Participant that have not vested as of such termination will be terminated and forfeited.

11.3. 9.4. Modification of Rights Upon Termination. Notwithstanding the other provisions of this Section 9,11, upon a Participant’s termination of employment or other service with the Company and a ll Subsidiaries, the Committee may, in its sole discretion (which may be exercised at any time on or after the date of grant, including following such termination), cause Options and Stock Appreciation Rights (or any part thereof) then held by such Participant to become or continue to become exercisable and/or remain exercisable following such termination of employment or service, and Restricted Stock Awards and Performance Stock Awards then held by such Participant to vest and/or continue to vest or become free of restrictions and conditions to issuance, as the case may be, following such termination of employment or service, in each case in the manner determined by the Committee.

11.4. 9.5. Effects of Actions Constituting Cause. Notwithstanding anything in the Plan to the contrary, in the event that a Participant is determined by the Committee, acting in its sole discretion, to have committed any action which would constitute Cause as defined in Section 2.3,2.4, irrespective of whether such action or the Committee’s determination occurs before or after termination of such Participant’s employment or service with the Company or any Subsidiary, all rights of the Participant under the Plan and any agreements evidencing an Incentive Award then held by the Participant shall terminate and be forfeited without notice of any kind. The Company may defer the exercise of any Option or Stock Appreciation Right or the vesting of any Restricted Stock Award or Performance Stock Award for a period of up to forty-five (45) days in order for the Committee to make any determination as to the existence of Cause.

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11.5. 9.6. Determination of Termination of Employment or Other Service. Unless the Committee otherwise determines in its sole discretion, a Participant’s employment or other service will, for purposes of the Plan, be deemed to have terminated on the date recorded on the personnel or other records of the Company or the Subsidiary for which the Participant provides employment or service, as determined by the Committee in its sole disc retion based upon such records.

12. 10. Payment of Withholding Taxesand Employment-Related Tax Obligations.

12.1. 10.1. General Rules. The Company is entitled to (a) withhold and deduct from future wages of the Participant (or from other amounts that may be due and owing to the Participant from the Company or a Subsidiary), or make other arrangements for the collection of, all legally required amounts necessary to satisfy any and all federal, foreign, state and local withholding and employment-related tax requirements attributable to an Incentive Award, including, without limitation, the grant, exercise or vesting of, or payment of dividends with respect to, an Incentive Award or a disqualifying disposition of stock received upon exercise of an Incentive Stock Option, or (b) require the Participant promptly to remit the amount of such withholding to the Company before taking any action, including issuing any shares of Common Stock, with respect to an Incentive Award.

12.2. 10.2. Special Rules. The Committee may, in its sole discretion and upon terms and conditions established by the Committee, permit or require a Participant to satisfy, in whole or in part, any withholding or employment-related tax obligation described in Section 10.112.1 of the Plan by electing to tender, or by attestation as to ownership of, Previously Acquired Shares that have been held for the period of time necessary to avoid a charge to the Company’s earnings for financial reporting purposes and that are otherwise acceptable to the Committee, by delivery of a Broker Exercise Notice, by Net-Share Payment, or a combination of such methods. For purposes of satisfying a Participant’s withholding or employment-related tax obligation, Previously Acquired Shares tendered or covered by an attestation and shares held back pursuant to a Net-Share Payment will be valued at their Fair Market Value on the date of tender, attestation, or holding back.

13. 11. Change in Control.

13.1. Change in Control Definitions. For purposes of this Section:

(a) “Bona Fide Underwriter” means an entity engaged in business as an underwriter of securities that acquires securities of the Company through such entity’s participation in good faith in a firm commitment underwriting until the expiration of 40 days after the date of such acquisition.

(b) “Continuity Directors” mean any individuals who are members of the Board on March 1, 2006, and any individual who subsequently becomes a member of the Board whose election, or nomination for election by the C ompany’s stockholders, was approved by a vote of at least a majority of the Continuity Directors (either by specific vote or by approval of the Company’s proxy statement in which such individual is named as a nominee for director without objection to such nomination); provided, however, that any individual whose initial assumption of office occurs as a result of either an actual or threatened election contest or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board, a default on any financial instrument, or a default on any dividends will not be considered a Continuity Director.

(c) “Outstanding Securities” are those outstanding securities ordinarily having the right to vote at elections of directors.

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(d) “Successor” means any individual, entity, group, or other person (as such term is used in Section 13(d) or Section 14(d) of the Exchange Act), other than the Company, any “affiliate” (as defined below) or any benefit plan(s) sponsored by the Company or any affiliate, that succeeds to, or has the practical ability to control (either immediately or solely with the passage of time), the Company’s business directly, by merger, consolidation or other form of business combination, or indirectly, by purchase of the Company’s Outstanding Securities or all or substantially all of its assets or otherwise. For this purpose, an “affiliate” is (i) a ny corporation at least a majority of whose Outstanding Securities are owned directly or indirectly by the Company or (ii) any other form of business entity in which the Company, by virtue of a direct or indirect ownership interest, has the right to elect a majority of the members of such entity’s governing body.

13.2. 11.1. A “Change in Control” shall be deemed to have occurred if thean event set forthdescribed in any one of the following paragraphs has occurred:

(a)the sale, lease, exchange or other transfer, directly or indirectly, of all or substantially all of the assets of the Company (in one transaction or in a series of related transactions) to any Successor;

(b)the approval by the stockholders of the Company of any plan or proposal for the liquidation or dissolution of the Company;

(c)any Successor (as defined in Section 11.2 below), other than a Bona Fide Underwriter (as defined in Section 11.2 below), becomes after the effective date of the Plan the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of (i) 20% or more, but notless than 50% or more, of the combined voting power of the Company’s outstanding securities ordinarily having the right to vote at elections of directorsOutstanding Securities, unless the transaction resulting in such ownersh ip has been approved in advance by the Continuity Directors (as defined in Section 11.2 below), or (ii) 50% or more than 50% of the combined voting power of the Company’s outstanding securities ordinarily having the right to vote at elections of directorsOutstanding Securities (regardless of any approval by the Continuity Directors);

(d)a merger or consolidation to which the Company is a party (a “Transaction”) if the Company’s stockholders of the Company immediately prior to the effective date of such merger or consolidationthe Transaction have “beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act), of securities of the surviving corporation immediately following the effective date of such merger or consolidation, of securities of the surviving corporationthe Transaction representing (i) 50% or more, but not more than 80%, of the combined voting power of the surviving corporation’s then outstanding securities ordinarily having the right to vote at elections of directors, unless such merger or consolidationOutstanding Securities, unless the Transaction has been approved in advance by the Continuity Directors, or (ii) less than 50% of the combined voting power of the surviving corporation’s then outstanding securities ordinarily having the right to vote at elections of directorsOutstanding Securities (regardless of any approval by the Continuity Directors); or

(e)the Continuity Directors cease for any reason to constitute at least 50% or more of the Board.

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11.2. Change in Control Definitions. For purposes of this Section 11:

(a) “Continuity Directors” of the Company will mean any individuals who are members of the Board on the effective date of the Plan and any individual who subsequently becom es a member of the Board whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the Continuity Directors (either by specific vote or by approval of the Company’s proxy statement in which such individual is named as a nominee for director without objection to such nomination).

(b) “Bona Fide Underwriter” means an entity engaged in business as an underwriter of securities that acquires securities of the Company through such entity’s participation in good faith in a firm commitment underwriting until the expiration of 40 days after the date of such acquisition.

(c) “Successor” means any individual, corporation, partnership, group, association or other person,” as such term is used in Section 13(d) or Section 14(d) of the Exchange Act, other than the Company, any “affiliate” (as defined below) or any benefit plan(s) sponsored by the Company or any affiliate that succeeds to, or has the practical ability to control (either immediately or solely with the passage of time), the Company’s business directly, by merger, consolidation or other form of business combination, or indirectly, by purchase of the Company’s outstanding securities ordinarily having the right to vote at the election of directors or all or substantially all of its assets or otherwise. For this purpose, an “affiliate” is (i) any corporation at least a majority of whose outstanding securiti es ordinarily having the right to vote at elections of directors is owned directly or indirectly by the Company or (ii) any other form of business entity in which the Company, by virtue of a direct or indirect ownership interest, has the right to elect a majority of the members of such entity’s governing body.

13.3. 11.3. Acceleration of Vesting. Without limiting the authority of the Committee under Sections 3.2 and 4.3 of the Plan, if a Change in Control of the Company occurs, then, if approved by the Committee in its sole discretion either in an agreement evidencing an Incentive Award at the time of grant or at an y time after the grant of an Incentive Award: (a) all Options and Stock Appreciation Rights that have been outstanding for at least six months will become immediately exercisable in full and will remain exercisable in accordance with their terms; (b) all Restricted Stock Awards that have been outstanding for at least six months will become immediately fully vested and non-forfeitable; and (c) any conditions to the issuance of shares of Common Stock pursuant to Performance Stock Awards that have been outstanding for at least six months will lapse.

13.4. 11.4. Cash Payment. If a Change in Control of the Company occurs, then theany Options or Stock Appreciation Rights that, as of the effective date of the Change in Control, are “underwater” wil l terminate as of the effective date of the Change in Control. The Committee, if approved by the Committee in its sole discretion either in an agreement evidencing an Incentive Award at the time of grant or at any time after the grant of an Incentive Award, and without the consent of any Participant affected thereby, may determine that if a Change in Control of the Company occurs:

(a) Some or all Participants holding outstanding Options or Stock Appreciation Rights will receive, with respect to some or all of the shares of Common Stock subject to such OptionsAwards (“OptionAward Shares”), either (i) as of the effective date of any such Change in Control, cash in an amount equal to the excess of the Fair Market Value of such Optionthese Award Shares on the last business day prior to the effective date of suchthe Change in Control over the aggregate exercise price per shareor base price of such Option SharesAwards, (ii) immediately prior to such Change of Control, a number of shares of Common Stock having an aggregate Fair Market Value equal to the excess of the Fair Market Value of the OptionAward Shares as of the last business day prior to the effective date of such Change in Control over the aggregate exercise price per shareor base price of such Option Shares;Awards or (iii) any combination of cash or shares of Common Stock with the amount of each component to be determined by the Committee not inconsistent with the foregoing clauses (i) and (ii), as proportionally adjusted; and/or

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(b) any Options which, as of the effective date of any such Change in Control, are “underwater” (as defined in Section 3.2(d)) shall terminate as of the effective date of any such Change in Control; and

(b) (c) some or all Participants holding Performance Stock Awards will receive, with respect to some or all of the shares of Common Stock subject to such Performance Stock Awards that remain subject to issuance based upon the future achievement of Performance Criteria as of the effective date of any such Change in Control of the Company, cash in an amount equal to the Fair Market Value of such shares immediately prior to the effective date of such Change in Control.

13.5. 11.5. Limitation on Change in Control Payments. NotwithstandingUnless otherwise provided by the Committee or by a separate agreement and notwithstanding anything in Section 11.3Sections 13.3 or 11.413.4 of the Plan to the contrary, if, with respect to a Participant, the acceleration of the exercisability of an Option or vesting of an Award as provided in Section 11.313.3 or the payment of cas h or shares of Common Stock in exchange for all or part of an Option or other Award as provided in Section 11.413.4 (which acceleration or payment could be deemed a “payment” within the meaning of Section 280G(b)(2) of the Code), together with any other “payments” that such Participant has the right to receive from the Company or any corporation that is a member of an “affiliated group” (as defined in Section 1504(a) of the Code without regard to Section 1504(b) of the Code) of which the Company is a mem ber, would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code), then the “payments” to such Participant pursuant to Section 11.313.3 or 11.413.4 of the Plan will be reduced to the largest amount as will result in no portion of such “payments” being subject to the excise tax imposed by Section 4999 of the Code; provided, however, that if a Participant is subject to a separate agreement with the Company or a Subsidiary which specifically provides that payments attributable to one or more forms of employee stock incentives or to payments made in lieu of employee stock incentives will not reduce any other payments under such agreement, even if it would constitute an excess parachute payment, or provides that the Participant will have the discretion to determine which payments will be reduced in order to avoid an excess parachute payment, then the limitations of this Section 11.4 will, to that extent, not apply.

14. 12. Rights of Eligible Recipients and Participants; Transferability.

14.1. 12.1. Employment or Service. Nothing in the Plan will interfere with or limit in any way the right of the Company or any Subsidiary to terminate the employment or service of any Eligible Recipient or Participant at any time, nor confer upon any Eligible Recipient or Participant any right to continue in the employ or service of the Company or any Subsidiary.

14.2. 12.2. Rights as a Stockholder. As a holder of Incentive Awards (other than Restricted Stock Awards), a Participant will have no rights as a stockholder unless and until such Incenti ve Awards are exercised for, or paid in the form of, shares of Common Stock and the Participant becomes the holder of record of such shares. Except as otherwise provided in the Plan, no adjustment will be made for dividends or distributions with respect to such Incentive Awards as to which there is a record date preceding the date the Participant becomes the holder of record of such shares, except as the Committee may determine in its discretion.

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14.3. 12.3. Restrictions on Transfer.

(a)Except pursuant to testamentary will or the laws of descent and distribution or as otherwise expressly permitted by subsections (b) and (c) below, no right or interest of any Participant in an Incentive Award prior to the exercise (in the case of Options or Stock Appreciation Rights) or vesting (in the case of Restricted Stock Awards or Performance Stock Awards) of such Incentive Award will be assignable or transferable, or subjected to any lien, during the lifetime of the Participant, either voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise.

(b)A Participant will be entitled to designate a beneficiary to receive an Incentive Award upon such Participant’s death, and in the event of such Participant’s death, payment of any amounts due under the Plan will be made to, and exercise of any Options or Stock Appreciation Rights (to the extent permitted pursuant to Section 911 of the Plan) may be made by, such beneficiary. If a deceased Participant has failed to designate a beneficiary, or if a beneficiary designated by the Participant fails to survive the Participant, payment of any amounts due under the Plan will be made to, and exercise of any Options or Stock Appreciation Rights (to the extent permitted pursuant to Section 910 of the Plan) may be made by, the Participant's legal representatives, heirs, devisees and legatees. If a deceased Participant has designated a beneficiary and such beneficiary survives the Participant but dies before complete payment of all amounts due under the Plan or exercise of all exercisable Options and Stock Appreciation Rights, then such payments will be made to, and the exercise of such Options and Stock Appreciation Rights may be made by, the legal representatives, heirs, devisees and legatees of the beneficiary.

(c)Upon a Participant’s request, the Committee may, in its sole discretion, permit a transfer of all or a portion of a Non-Statutory Stock Option or Stock Appreciation Right, other than for value, to such Participant’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, any person sharing such Participant’s household (other than a tenant or employee), a trust in which any of the foregoing have more than fifty percent50% of the beneficial interests, a foundation in which any of the foregoing (or the Participant) control the management of assets, and any other entity in which these persons (or the Participant) own more than fifty percent50% of the voting interests. Any permitted transferee will remain subject to all the terms and conditions applicable to the Participant prior to the transfer. A permitted transfer may be conditioned upon such requirements as the Committee may, in its sole discretion, determine, including, but not limited to execution and/or delivery of appropriate acknowledgements, opinion of co unsel, or other documents by the transferee.

14.4. 12.4. Non-Exclusivity of the Plan. Nothing contained in the Plan is intended to modify or rescind any previously approved compensation plans or programs of the Company or create any limitations on the power or authority of the Board to adopt such additional or other compensation arrangements as the Board may deem necessary or desirable.

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15. 13. Securities LawLaws and Other Restrictions.

Notwithstanding any other provision of the Plan or any agreements entered into pursuant to the Plan, the Company will not be required to issue any shares of Common Stock under thisthe Plan, and a Participant may not sell, assign, transfer or otherwise dispose of shares of Common Stock issued pursuant to Incentive Awards granted under the Plan, unless (a) there is in effect with respect to such shares a registration statement under the Securities Act and any applicable securities laws of a state or foreign jurisdiction or an exemption from such registration under the Securities Act and applicable state or foreign securities laws, and (b) there has been obtained any other consent, approval or permit from any other U.S. or foreign regulatory body which the Committee, in its sole discretion, deems necessary or advisable. The Company may condition such issuance, sale or transfer upon the receipt of any representations or agreements from the parties involved, and the placement of any legends on certificates representing shares of Common Stock, as may be deemed necessary or advisable by the Company in order to comply with such securities lawlaws or other restrictions.

16. 14. Plan Amendment, Modification and Termination.

The Board may suspend or terminate the Plan or any portion thereof at any time, and may amend the Plan from time to time in such respects as the Board may deem advisable in order that Incentive Awards under the Plan will conform to any change in applicable laws or regulations or in any other respect the Board may deem to be in the best interests of the Company; provided, however, that no such amendments to the Plan will be effective without approval of the Company’s stockholders if: (i) stockholder approval of the amendment is then required pursuant to Section 422 of the Code or the rules of any stock exchange or The Nasdaq Stock Market or similar regulatory body; or (ii) such amendment seeks to modify Section 3.2(d) hereof. No termination, suspension or amendment of the Plan may adversely affect any outstanding Incentive Award without the consent of the affected Participant; provided, however, that this sentence will not impair the right of the Committee to take whatever action it deems appropriate under Sections 3.2(c), 4.34.3, 12 and 1113 of the Plan.

17. 15. Effective Date and Duration of the Plan.

The Plan is effective as of the Effective Date. The Plan will terminate at midnight on March 1, 2016,August 12, 2020, and may be terminated prior to such time by Board action. No Incentive Award will be granted after termination of the Plan. Incentive Awards outstanding upon termination of the Plan may continue to be exercised, or become free of restrictions, according to their terms.

18. 16. Miscellaneous.

18.1. 16.1. Governing Law. Except to the extent expressly provided herein or in connection with other matters of corporate governance and authority (all of which shall be governed by the laws of the Company’s jurisdiction of incorporation), the validity, construction, interpretation, administration and effect of the Plan and any rules, regulations and actions relating to the Plan will be governed by and construed exclusively in acco rdance with the laws of the State of Delaware notwithstanding the conflicts of laws principles of any jurisdictions.

18.2. Compliance with Section 409A. Each Award issued under the Plan is intended to be exempt from or comply with Section 409A and will be interpreted accordingly. Where payment of an Award to a “specified employee” is triggered by a “separation from service” (terms as defined in Section 409A), payment will be delayed for six months following the specified employee’s separation from service.

18.3. 16.2. Successors and Assigns. The Plan will be binding upon and inure to the benefit of the successors and permitted assigns of the Company and the Participants.

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ANNUAL MEETING OF STOCKHOLDERS OF

MAGNUM HUNTER RESOURCES CORPORATION

October 27, 2010

This Proxy is Solicited on Behalf of the Board of Directors

NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:

The Notice of the Annual Meeting, Proxy Statement/Annual Report to Stockholders

and Proxy Card are available at www.magnumhunterresources.com

The undersigned hereby appoints Gary C. Evans and Ronald D. Ormand and each of them as proxy, with full power of substitution, to vote all shares of Common Stock of the undersigned in Magnum Hunter Resources Corporation at the annual meeting of stockholders to be held on October 27, 2010, at 3:00 p.m., local time, at The Omni Hotels & Resorts, Colonnad Ball Room, Four Riverway, Houston, Texas 77056, and at any and all adjournments or postponements thereof, upon the matters designated on the reverse side, as more fully set forth in the Proxy Statement, and for the transaction of such other business as may properly come before the annual meeting and any adjournments or postponements thereof. The undersigned hereby revokes any previously submitted proxy by the undersigned for the matters to be voted on at the annual meeting and acknowledges receipt of the Notice of Annual Meeting of Stockholders and the Proxy Statement.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED ON THE REVERSE SIDE BY THE UNDERSIGNED COMMON STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” PROPOSAL I, PROPOSAL III, PROPOSAL IV, PROPOSAL V, AND PROPOSAL VI AND “FOR” ALL OF THE DIRECTOR NOMINEES IN PROPOSAL II.

If registrations of your shares are not identical, you may receive more than one set of proxy materials. You may also receive an additional proxy card if you are also a registered holder of our Preferred Stock. Please complete and return all proxy cards you receive. If you wish to vote or direct a vote on all matters as the Board of Directors recommends, please sign, date and return this proxy card. If you wish to vote on items individually, please also mark the appropriate boxes on the back of this proxy card.

(Continued, and to be marked, dated and signed, on the reverse side)

PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE PRE-ADDRESSED POSTAGE-PAID ENVELOPE PROVIDED. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x

_____________________________________________________________________________________________

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” EACH OF PROPOSALS I, II, III, IV, V, AND VI.

Proposal I. To approve an amendment to the Company’s Bylaws for purposes of establishing a classified board of directors with fixed terms, whereby one-third of directors are elected annually.	FOR o	AGAINST o	ABSTAIN o

Proposal II. Election of the following director nominees:
	FOR ALL	WITHHOLD FOR ALL	*EXCEPTIONS
Class I with terms ending in 2011: Wayne P. Hall Brad Bynum J. Raleigh Bailes, Sr.	o	o	o

Class II with terms ending in 2012 or 2011 if Proposal I is not approved: Ronald D. Ormand Steven A. Pfeifer Jeff Swanson	(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the “Exceptions” box above and write the name of the nominee(s) in the space below.)

Class III with terms ending in 2013 or 2011 if Proposal I is not approved: Gary C. Evans Gary L. Hall Joe L. McClaugherty

Proposal III. To approve an amendment to the Company’s Certificate of Incorporation that will increase the Company’s authorized number of shares of Common Stock to One Hundred Fifty Million (150,000,000).	FOR o	AGAINST o	ABSTAIN o

Proposal IV. To approve an amendment to the Company’s Certificate of Incorporation that will increase the Company’s authorized number of shares of Preferred Stock to Fifty Million (50,000,000).	FOR o	AGAINST o	ABSTAIN o

Proposal V. To approve Magnum Hunter Resources Corporation’s Stock Incentive Plan, which is an amendment and restatement of the Company’s 2006 Stock Incentive Plan.	FOR o	AGAINST o	ABSTAIN o

Proposal VI. To ratify the appointment of Hein & Associates LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2010.	FOR o	AGAINST o	ABSTAIN o

Address: _____________________________________________________________________________________

To change the address on your account, please check the box at the right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.		o


Signature of Stockholder: _____________________________		Date: ________________

Signature of Stockholder: _____________________________		Date: ________________

Note: Please sign exactly as your name or names appear on this proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign the full corporate name by a duly authorized officer, giving full title as such. If the signer is a partnership, please sign in partnership name by an authorized person.

--------------------------------------------------------------------------------------------------------------------------------------------

FOLD AND DETACH HERE

WE ENCOURAGE YOU TO TAKE ADVANTAGE OF TELEPHONE VOTING,

AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.

Telephone voting is available through 11:59 PM Central Time

the day prior to the annual meeting date.

If you vote your proxy by telephone, you do NOT need to mail back your proxy card.

Your telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.

TELEPHONE

1-800-579-1639

Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call.

To vote by mail, mark, sign and date your proxy card and return it in the pre-addressed postage-paid envelope provided.

ANNUAL MEETING OF STOCKHOLDERS OF

MAGNUM HUNTER RESOURCES CORPORATION

October 27, 2010

This Proxy is Solicited on Behalf of the Board of Directors

NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:

The Notice of the Annual Meeting, Proxy Statement/Annual Report to Stockholders

and Proxy Card are available at www.magnumhunterresources.com

The undersigned hereby appoints Gary C. Evans and Ronald D. Ormand and each of them as proxy, with full power of substitution, to vote all shares of Preferred Stock of the undersigned in Magnum Hunter Resources Corporation at the annual meeting of stockholders to be held on October 27, 2010, at 3:00 p.m., local time, at The Omni Hotels & Resorts, Colonnad Ball Room, Four Riverway, Houston, Texas 77056, and at any and all adjournments or postponements thereof, upon the matter designated on the reverse side, as more fully set forth in the Proxy S tatement, and for the transaction of such other business as may properly come before the annual meeting and any adjournments or postponements thereof. The undersigned hereby revokes any previously submitted proxy by the undersigned for the matters to be voted on at the annual meeting and acknowledges receipt of the Notice of Annual Meeting of Stockholders and the Proxy Statement.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED ON THE REVERSE SIDE BY THE UNDERSIGNED PREFERRED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” PROPOSAL IV.

If registrations of your shares are not identical, you may receive more than one set of proxy materials. You may also receive an additional proxy card if you are also a registered holder of our Common Stock. Please complete and return all proxy cards you receive. If you wish to vote or direct a vote on Proposal IV as the Board of Directors recommends, please sign, date and return this proxy card. If you wish to vote on Proposal IV individually, please also mark the appropriate boxes on the back of this proxy card.

(Continued, and to be marked, dated and signed, on the reverse side)

PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE PRE-ADDRESSED POSTAGE-PAID ENVELOPE PROVIDED. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x

_____________________________________________________________________________________________

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” PROPOSAL IV.

Proposal IV. To approve an amendment to the Company’s Certificate of Incorporation that will increase the Company’s authorized number of shares of Preferred Stock to Fifty Million (50,000,000).

FOR

AGAINST

ABSTAIN

Address: _____________________________________________________________________________________

To change the address on your account, please check the box at the right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.		o


Signature of Stockholder: _____________________________		Date: ________________

Signature of Stockholder: _____________________________		Date: ________________

--------------------------------------------------------------------------------------------------------------------------------------------

FOLD AND DETACH HERE

WE ENCOURAGE YOU TO TAKE ADVANTAGE OF TELEPHONE VOTING,

AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.

Telephone voting is available through 11:59 PM Central Time

the day prior to the annual meeting date.

If you vote your proxy by telephone, you do NOT need to mail back your proxy card.

Your telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.

TELEPHONE

1-800-579-1639

Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call.

To vote by mail, mark, sign and date your proxy card and return it in the pre-addressed postage-paid envelope provided.

Magnum Hunter Resources Inactive DEF 14ADefinitive proxy