Document:

NON-QUALIFIED STOCK OPTION AWARD AGREEMENT

OF

CROSS BORDER RESOURCES, INC.

A Nevada Corporation

THIS NON-QUALIFIED STOCK OPTION AWARD AGREEMENT (this “Agreement”) is made between CROSS BORDER RESOURCES, INC., a Nevada corporation (hereinafter referred to as the "Company"), and BDR, INC. (hereinafter referred to as the “Optionee”), an executive of the Company, effective as of the 31st day of January, 2011 (the “Grant Date”).

The Options described below are being granted in connection with Optionee’s Consulting Agreement dated January 31, 2011 (the “Consulting Agreement”).

1.           Options Granted.

The Company hereby grants the Optionee non-qualified stock options (the “Options”) to purchase TWO HUNDRED FIFTY THOUSAND (250,000) shares of the Company’s Common Stock at the purchase prices per share set out below for a term commencing on the vesting dates set out below (the “Vesting Date”) and expiring at 5:00 pm (Pacific Time) on the expiration dates set out below (the “Expiration Date”), subject to termination as set forth herein.

The Options will vest on the following schedule:

	
Number of Options to

Vest

	 	 	
Purchase Price Per

Share

	 	
Vesting Date

	 	
Expiration Date

	125,000	 	 	$	4.80	 	
January 31, 2011

	 	
January 30, 2016

	125,000	 	 	$	5.28	 	
January 31, 2012

	 	
January 30, 2017

No Option may be exercised unless the Option has vested.  The vesting of all Options will be cumulative.  All Options which have not vested will terminate on the date of termination of the Options in accordance with this Agreement.

2.           Method of Exercise.  These Options may be exercised to the extent they have vested (and have not yet been forfeited or terminated) by delivering written notice to the Company at its principal place of business, stating the number of shares for which the Option is being exercised. The notice must be accompanied by a check or other methods of payment acceptable to the Plan Administrator for the amount of the purchase price, and comply with all the requirements of the Company’s Amended and Restated 2009 Stock Incentive Plan dated July 28, 2010, a copy of which has been provided to the Optionee.

3.           Capital Adjustments.  The existence of the Options shall not affect in any way the right or power of the Company or its stockholders to: (1) make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in the Company's capital structure or its business;  (2) enter into any merger or consolidation; (3) issue any bonds, debentures, preferred or prior preference stocks ahead of or affecting the common stock or the rights thereof, (4) issue any securities convertible into any common stock, (5) issue any rights, options, or warrants to purchase any common stock, (6) dissolve or liquidate the Company, (7) sell or transfer all or any part of its assets or business, or (8) take any other corporate act or proceedings, whether of a similar character or otherwise.

4.           Adjustments for Reorganizations and Recapitalizations.  If there shall, prior to the exercise of any of the Options provided for by this Agreement, be any stock dividend, stock split, spin-off, combination or exchange of shares, recapitalization, merger, consolidation, distribution to stockholders (other than a normal cash dividend) or other change in the Company’s corporate or capital structure that results in (a) the Company’s outstanding shares of common stock (or any securities exchanged therefore or received in their place) being exchanged for a different number or kind of securities of the Company or any other corporation, or (b) new, different or additional securities of the Company or of any other corporation being received by the holders of shares of the Company’s common stock, then there shall automatically be an adjustment in either the number of shares which may be purchased pursuant hereto, the type of shares which may be purchased pursuant hereto or the price at which such shares may be purchased, or any combination thereof, so that the rights evidenced hereby shall thereafter as reasonably as possible be equivalent to those originally granted hereby.  The Company shall have the sole and exclusive power to make such adjustments as it considers necessary and desirable.

 

  

 

  

 

5.           Transfer of the Options.  The Options shall be exercisable only by the Optionee. The Options shall not be transferable by the Optionee unless otherwise consented to by the Company.

6.           Corporate Transaction.  [reserved]

 

7.           Termination of Option.  The Optionee’s right to exercise any Options that have vested and are exercisable shall terminate on the Expiration Date.

8.           Rights as Shareholder.  The Optionee will not be deemed to be a holder of any shares pursuant to the exercise of these Options until he or she pays the Option price and a stock certificate is delivered to him or her for those shares. No adjustment shall be made for dividends or other rights for which the record date is prior to the date the stock certificate is delivered.

9.           Integration with the Company’s Amended and Restated 2009 Stock Incentive Plan.  All of the terms and conditions of the Company’s Amended and Restated 2009 Stock Incentive Plan, a copy of which has been provided to the Optionee, are specifically made a part of this Agreement and shall control with regard to the interpretation or construction of any provision that is inconsistent herewith.  This Agreement will be governed by and construed in accordance with the laws of the State of Nevada.

10.         Withholding Taxes.  The Optionee authorizes the Company to withhold from any payments due to the Optionee by the Company, whether pursuant to this Agreement or otherwise, any amounts required to be withheld and remitted by the Company on account of any income and employment taxes resulting from this Agreement.

11.         Miscellaneous.

	
  

	
(a)

	
Any notice required or permitted to be given under this Agreement shall be in writing and may be delivered personally or by fax, or by prepaid registered post addressed to the parties at such address of which notice may be given by either of such parties.  Any notice shall be deemed to have been received, if personally delivered or by fax, on the date of delivery, and, if mailed as aforesaid, then on the fifth business day after and excluding the day of mailing.

	
  

	
(b)

	
This agreement and the rights and obligations and relations of the parties shall be governed by and construed in accordance with the laws of the State of Nevada and the federal laws of the United States applicable therein (but without giving effect to any conflict of laws rules). The parties agree that the courts of the State of Nevada shall have jurisdiction to entertain any action or other legal proceedings based on any provisions of this agreement. Each party consents to the jurisdiction of the courts of the State of Nevada.

	
  

	
(c)

	
Time shall be of the essence of this agreement and of every part of it and no extension or variation of this agreement shall operate as a waiver of this provision.

	
  

	
(d)

	
This Agreement may be executed in one or more counterparts, each of which so executed shall constitute an original and all of which together shall constitute one and the same agreement.

[signature page attached]

  

- 2 -

  

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the 31st day of January, 2011.

	  	
CROSS BORDER RESOURCES, INC.

	  
	  	  	  	  
	  	
By:

	
/s/ Lawrence J. Risley

	  
	  	  	
Lawrence J. Risley

	  
	  	  	
President and COO

	  
	  	  	  	  
	  	
OPTIONEE

	  
	  	  	  
	  	
BDR, INC.

	  
	  	  	  	  
	  	
/s/ Jim D. Swink Jr.

	  
	  	
Jim D. Swink, Jr.

	  

	
250,000

	
AGGREGATE NUMBER OF OPTIONS

 

  

- 3 -Unassociated Document

EXHIBIT 10.1

2011 Executive Annual Bonus Plan

Total executive bonus opportunities will be based on 2011 base salaries as follows:

	  	 	
Percentage of

	 
	  	 	
2011 Base Salary

	 
	  	 	
Opportunity

	 
	
H. Eric Bolton, Jr.

	 	 	200	%
	
Albert M. Campbell, III

	 	 	100	%
	
Thomas L. Grimes, Jr.

	 	 	100	%
	
James Andrew Taylor

	 	 	100	%

The bonus opportunity will be earned by performance in the following areas: year-over-year funds from operations per diluted share/unit, or FFO per Share growth and same store gross operating income, or GOI, growth. The weight of these performance factors for each executive officer will be as follows:

	  	 	
FFO per Share

	 	 	
Same Store

	 
	  	 	
Growth

	 	 	
GOI Growth

	 
	
H. Eric Bolton, Jr.

	 	 	100	%	 	 	0	%
	
Albert M. Campbell, III

	 	 	100	%	 	 	0	%
	
Thomas L. Grimes, Jr.

	 	 	62.5	%	 	 	37.5	%
	
James Andrew Taylor

	 	 	62.5	%	 	 	37.5	%

The percentage of bonus opportunity earned from performance growth targets will be based on a sliding scale as follows:

	  	 	
Percentage of

	 
	
Performance

	 	
Bonus Opportunity

	 
	
Level

	 	
Earned

	 
	
Minimum Threshold

	 	 	0.0	%
	
Threshold I

	 	 	12.5	%
	
Threshold II

	 	 	25.0	%
	
Threshold III

	 	 	37.5	%
	
Target

	 	 	50.0	%
	
Target I

	 	 	62.5	%
	
Target II

	 	 	75.0	%
	
Target III

	 	 	87.5	%
	
High

	 	 	100.0	%

In determining FFO per Share growth, the Compensation Committee has the ability to factor in any material and non-recurring events that may or may not occur that impact the registrant’s FFO per Share performance, but may or may not subsequently impact the registrant’s share price, to help ensure that the potential bonus is in line with actual shareholder performance.

After the total bonus opportunity is calculated, the Compensation Committee, at its discretion, may apply a discretionary modifier allowing the bonus opportunity calculated to be lowered or raised by up to 25% to determine the final bonus award amount.

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