<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Cross Timbers Royalty Trust
---------------------------
(Name of Issuer)
Units of Beneficial Interest
----------------------------
(Title of Class of Securities)
22757R 10 9
---------------
(CUSIP Number)
Louis G. Baldwin
Senior Vice President
and Chief Financial Officer
Cross Timbers Oil Company
810 Houston Street, Suite 2000
Fort Worth, Texas 76102
(817) 870-2800
-------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 9, 1996
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
Page 1 of 10
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
CUSIP No. 22757R 10 9
-----------
- --------------------------------------------------------------------------------
1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Cross Timbers Oil Company
-------------------------
75-2347769
----------
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group
(See Instructions) a) [ X ] b) [ ]
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions)
WC, BK
-------
- --------------------------------------------------------------------------------
5) Check Box if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
Delaware
--------
- --------------------------------------------------------------------------------
7) Sole Voting Power
Number of Shares 365,840
Beneficially Owned -------
by Each Reporting ------------------------------------------------------
Person With 8) Shared Voting Power
------------------------------------------------------
9) Sole Dispositive Power
365,840
-------
------------------------------------------------------
10) Shared Dispositive Power
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
365,840
-------
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [ X ]
- --------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
6.1%
----
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions)
CO
----
- --------------------------------------------------------------------------------
Page 2 of 10
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
CUSIP No. 22757R 10 9
-----------
- --------------------------------------------------------------------------------
1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Bob R. Simpson
--------------
- --------------------------------------------------------------------------------
2) Check the Appropriate Box if a Member of a Group
(See Instructions) a) [ X ] b) [ ]
- --------------------------------------------------------------------------------
3) SEC Use Only
- --------------------------------------------------------------------------------
4) Source of Funds (See Instructions)
PF, OO
------
- --------------------------------------------------------------------------------
5) Check Box if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6) Citizenship or Place of Organization
United States
-------------
- --------------------------------------------------------------------------------
7) Sole Voting Power
Number of Shares 216,000
Beneficially Owned -------
by Each Reporting ------------------------------------------------------
Person With 8) Shared Voting Power
------------------------------------------------------
9) Sole Dispositive Power
216,000
-------
------------------------------------------------------
10) Shared Dispositive Power
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person
216,000
-------
- --------------------------------------------------------------------------------
12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [ X ]
- -------------------------------------------------------------------------------
13) Percent of Class Represented by Amount in Row (11)
3.6%
----
- --------------------------------------------------------------------------------
14) Type of Reporting Person (See Instructions)
IN
----
- --------------------------------------------------------------------------------
Page 3 of 10
<PAGE>
ITEM 1. SECURITY AND ISSUER
This statement on Schedule 13D relates to units of beneficial interest
("Units") of Cross Timbers Royalty Trust, a grantor trust created under the laws
of Texas ("the Issuer"). The address of the principal executive offices of the
Issuer is 500 West Seventh Street, Suite 1300, P.O. Box 1317, Fort Worth, Texas
76101-1317.
ITEM 2. IDENTITY AND BACKGROUND
This statement on Schedule 13D is filed by Cross Timbers Oil Company, a
Delaware corporation ("Cross Timbers"), which is engaged in the acquisition,
exploitation and development of producing oil and gas properties and the
marketing and transportation of oil and natural gas, and by Bob R. Simpson,
Chairman of the Board of Directors and Chief Executive Officer of Cross Timbers.
The address of Cross Timbers' and Mr. Simpson's principal business office is 810
Houston Street, Suite 2000, Fort Worth, Texas 76102.
The name, business address and present principal occupation or employment for
each executive officer and director of Cross Timbers, and the name of the
organization in which such employment is conducted, are set forth in Schedule I
attached hereto and incorporated herein by reference. Each such person is a
citizen of the United States.
Neither Cross Timbers nor Mr. Simpson nor, to the best of Cross Timbers' or
Mr. Simpson's knowledge, any of the other persons listed on Schedule I attached
hereto, has during the last five years been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or was a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction, and
as a result of such proceeding, was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation with
respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Cross Timbers' purchases of Units, at a total cost of $4.2 million, were
funded by working capital and borrowings under its Revolving Credit Agreement
dated June 15, 1995, among Cross Timbers, Morgan Guaranty Trust Company of New
York, NationsBank of Texas, N.A. and other banks parties thereto. Mr. Simpson's
purchases of Units, at a total cost of $2.0 million, were funded by personal
funds and margin debt. The source and amount of funds or other consideration of
Unit purchases by other executive officers and directors is provided under Item
5.
ITEM 4. PURPOSE OF TRANSACTION
Cross Timbers regards its investment in Units as an acquisition of producing
oil and gas properties within its strategic acquisition plan. Cross Timbers'
investment in the Units increases its oil and gas production, cash flow and
proved reserves. Mr. Simpson has purchased Units for personal investment
purposes. Each of Cross Timbers and Mr. Simpson continues to monitor and
evaluate its or his investment in the Issuer in light of various factors
including oil and gas prices, the Issuer's distributable income, financial
condition and prospects, price levels of the Units, general market and economic
conditions and other available investment opportunities. Cross Timbers and Mr.
Simpson may acquire additional Units through open market purchases or other
transactions, maintain its or his current equity position or dispose of a
portion or all of its or his Units.
Other than as set forth above, neither Cross Timbers nor Mr. Simpson
currently have plans or proposals which relate to or would result in any of the
actions set forth in parts (a) through (j) of Item 4.
Page 4 of 10
<PAGE>
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) As of October 21, 1996, Cross Timbers beneficially owns 365,840 Units or
approximately 6.1% of the Issuer's outstanding Units of 6,000,000 at August 12,
1996, as reported in its Quarterly Report on Form 10-Q for its quarter ended
June 30, 1996. As of October 21, 1996, Mr. Simpson beneficially owns 216,000 or
approximately 3.6% of the Issuer's outstanding Units.
Other than as provided above, the following are the Units beneficially owned,
the approximate percentage of Units beneficially owned and the amount and source
of funds or other consideration to purchase such Units for the only persons
named in Schedule I that beneficially own any Units as of October 21, 1996:
Percentage Funds or
Units of Units Other Consideration
Beneficially Beneficially ---------------------
Person Owned (a) Owned Amount Source
- -------------------------- ------------ ------------ ------ -------
Steffen E. Palko 92,080 1.5 % $926,000 Personal
Louis G. Baldwin 10,000 0.2 116,000 Personal
Keith A. Hutton 10,785 0.2 109,000 Personal
Bennie G. Kniffen 1,118 (b) 13,000 Personal
Kenneth F. Staab 24,003 0.4 238,000 Personal
Thomas L. Vaughn 1,500 (b) 16,000 Personal
Vaughn O. Vennerberg II 1,000 (b) 11,000 Personal
J. Luther King, Jr. 11,401(c) 0.2 122,000 (c)
J. Richard Seeds 214 (b) 2,000 Personal
Scott G. Sherman 15,024 0.3 147,000 Personal
George U. Wyper 36,388(d) 0.6 380,000(d) Personal(d)
- ----------------
(a) Unless otherwise noted, each person has sole voting and dispositive power
with respect to the Units beneficially owned.
(b) Less than 0.1% of the Issuer's outstanding Units.
(c) Includes 5,000 Units owned by 4K Land and Cattle Company, of which Mr.
King is president and owner. 4K Land and Cattle Company used $50,000 of
its working capital to purchase such Units. The remaining 6,401 Units are
owned by LKCM Investment Partnership ("Investment Partnership"), of which
Mr. King is the general partner and portfolio manager. The Investment
Partnership used $72,000 of its working capital to purchase such Units.
Luther King Capital Management Corporation (an investment management firm
of which Mr. King is a director and majority shareholder) and an
affiliated company are also limited partners of the Investment
Partnership. Mr. King has the sole voting and dispositive power with
respect to the Units owned by 4K Land and Cattle Company and the
Investment Partnership.
(d) Includes 1,973 Units owned by an investment partnership sponsored by E.M.
Warburg Pincus & Co., Inc., an investment management and venture capital
firm and the general partner of this partnership. Mr. Wyper has sole
voting and dispositive power with respect to these Units. The partnership
used $20,000 of its working capital to purchase such Units.
The Cross Timbers Oil Company Employees' 401(k) Plan owns 49,638 Units, or
0.8% of the Issuer's outstanding Units as of October 21, 1996. These Units were
purchased with funds totaling $617,000 provided by employee and matching
employer contributions and are held for the benefit of the employee
participants.
Page 5 of 10
<PAGE>
Cross Timbers and Mr. Simpson have no voting or investment power with respect
to, and disclaim beneficial ownership of, the Units owned by the persons and
entities described above. In addition, Cross Timbers and Mr. Simpson disclaim
the formation of a group with any or all of the persons or entities described
above. To the best of Cross Timbers' or Mr. Simpson's knowledge, no person
listed on Schedule I attached hereto, other than those described above, owns any
Units.
Neither the filing of this Schedule 13D nor any of its contents shall be
deemed to constitute an admission that Cross Timbers or Mr. Simpson beneficially
own the Issuer's Units owned by the other persons or entities described above,
or that any of the other persons or entities described above have formed a group
with Cross Timbers and Mr. Simpson for purposes of Section 13(d) of the
Securities Exchange Act of 1934 or for any other purpose.
(b) Cross Timbers has the sole voting power and dispositive power with
respect to the 365,840 Units it beneficially owns. Mr. Simpson has the sole
voting power and dispositive power with respect to the 216,000 Units he owns.
See Item 5(a) above regarding voting and dispositive power of Units owned
by persons listed on Schedule I attached hereto.
(c) Schedule II, attached hereto and incorporated herein by reference, lists
all transactions in the Units effected during the past 60 days by Cross Timbers
or Mr. Simpson or, to the knowledge of Cross Timbers or Mr. Simpson, by any of
the persons listed on Schedule I attached hereto.
(d) No other person is known by Cross Timbers or Mr. Simpson to have the
right to receive or the power to direct the receipt of distributions from, or
the proceeds from the sale of, the Units beneficially owned by Cross Timbers
described in Item 5(a) above.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
To the best of Cross Timbers' or Mr. Simpson's knowledge, there are no
contracts, arrangements, understandings or relationships (legal or otherwise)
among the persons named in Item 2, or between any of the persons named in Item 2
and any other persons, with respect to the Units.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit
- -------
10.1 - Revolving Credit Agreement dated June 15, 1995, among Cross Timbers and
certain commercial banks named therein is incorporated by reference to
Exhibit 10.1 to Cross Timbers' Report on Form 10-K for the year ended
December 31, 1995.
99.1 - Joint Filing Agreement pursuant to Rule 13d-1(f)(1)(iii).
Page 6 of 10
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
CROSS TIMBERS OIL COMPANY
Date: October 21, 1996 By: /s/ LOUIS G. BALDWIN
-----------------------------------
Louis G. Baldwin
Senior Vice President and
Chief Financial Officer
/s/ BOB R. SIMPSON
----------------------------------------
Bob R. Simpson
Page 7 of 10
<PAGE>
SCHEDULE I TO SCHEDULE 13D
The following is a list of all executive officers of Cross Timbers and
their present principal office held. The business address for each of these
executive officers is 810 Houston Street, Suite 2000, Fort Worth, Texas, 76102.
Name Present Principal Office Held
- ----- -----------------------------
Bob R. Simpson Chairman of the Board of Directors and Chief
Executive Officer
Steffen E. Palko Vice Chairman of the Board of Directors and President
Louis G. Baldwin Senior Vice President and Chief Financial Officer
Keith A. Hutton Senior Vice President - Asset Development
Bennie G. Kniffen Senior Vice President and Controller
Larry B. McDonald Senior Vice President - Operations
Kenneth F. Staab Senior Vice President of Engineering
Thomas L. Vaughn Senior Vice President - Operations
Vaughn O. Vennerberg II Senior Vice President - Land
The following is a list of all directors (with exception of Messrs. Simpson
and Palko who are listed above), their business address and present principal
employment and employer.
Name and Business Address Present Principal Employment and Employer
- ------------------------- -----------------------------------------
Charles B. Chitty Retired Chief Financial Executive, The Lupton Company
c/o Lyndhurst Foundation
517 E. Fifth St.
Chattanooga, TN 37403
J. Luther King, Jr. President, Principal and Portfolio Manager/Analyst,
301 Commerce Street, Luther King Capital Management Corporation
Suite 1600
Fort Worth, TX 76102
J. Richard Seeds Counselor, Springtown Independent School District
300 Pojo Drive
Springtown, TX 76082
Scott G. Sherman Owner, Scott Sherman Enterprises
777 Taylor Street,
Suite 1135
Fort Worth, TX 76102
George U. Wyper Managing Director, E.M. Warburg Pincus & Co., Inc.
E.M. Warburg Pincus
& Co., Inc.
466 Lexington Ave.,
10th Floor
New York, NY 10017
Page 8 of 10
<PAGE>
SCHEDULE II TO SCHEDULE 13D
The following lists all Unit purchases effected by Cross Timbers during the past
60 days. All such purchases were open market transactions. Mr. Simpson has not
effected any transactions during the past 60 days. To the best of Cross
Timbers' and Mr. Simpson's knowledge, no Unit transactions were effected by any
persons listed in Schedule I attached hereto during the past 60 days.
Number Price
Date of Shares per Share
------------ --------- ---------
8/22/96 47,340 11.750
9/10/96 1,500 11.875
9/12/96 1,500 11.875
10/8/96 1,600 12.125
10/9/96 10,600 12.000
10/10/96 29,500 12.350
10/11/96 10,000 12.500
10/15/96 600 12.500
10/17/96 20,500 12.793
10/21/96 1,000 12,875
Page 9 of 10
<PAGE>
EXHIBIT 99.1
1. Joint Filing. Pursuant to Rule 13d-1(f)(1)(iii) of Regulation 13D-G of the
General Rules and Regulations of the Securities and Exchange Commission under
the Securities Exchange Act of 1934, as amended, the undersigned agrees that
the statement to which this Exhibit is attached is filed on behalf of each of
them in the capacities set forth below.
2. Power of Attorney. Know all persons by these presents that each person whose
signature appears below constitutes and appoints Steffen E. Palko, Louis G.
Baldwin and John O'Rear, and each of them, as his or its true and lawful
attorneys-in-fact and agents with full power of substitution and
resubstitution, for such person and in such person's name, place and stead,
in any and all capacities, to sign any and all amendments to the Schedule 13D
and any reports filed pursuant to Section 16 of the Securities Exchange Act
of 1934, filed on behalf of each of them with respect to their beneficial
ownership of Cross Timbers Royalty Trust, and to file the same, with all
exhibits thereto and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as such person might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or such person or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
DATED: October 21, 1996
CROSS TIMBERS OIL COMPANY
By: /s/ LOUIS BALDWIN
--------------------------------
Louis G. Baldwin
Senior Vice President and
Chief Financial Officer
/s/ BOB R. SIMPSON
-----------------------------------
Bob R. Simpson
Page 10 of 10
