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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
______________
CROSS TIMBERS OIL COMPANY
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 75-2347769
(State of Incorporation or Organization) (I.R.S. Employer Identification no.)
810 HOUSTON STREET, SUITE 2000
FORT WORTH, TEXAS 76102
(Address of principal executive offices) (zip code)
If this Form relates to the If this Form relates to the
registration of a class of debt registration of a class of debt
securities and is effective upon filing securities and is to become
pursuant to General Instruction A(c)(1), effective simultaneously with the
please check the following box. [_] effectiveness of a current
registration statement under the
Securities Act of 1933 pursuant to
General Instruction A(c)(2),
please check the following box. [_]
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
<TABLE>
<CAPTION>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
------------------- ------------------------------
<S> <C>
Series A Convertible Preferred Stock New York Stock Exchange
(par value $.01 per share)
</TABLE>
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
(Title of class)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
The description of the Registrant's Series A Convertible Preferred Stock,
par value $.01 per share, is incorporated by reference to pages 23 to 26,
inclusive, of the Registrant's Offering Circular, dated August 12, 1996, filed
with the Commission as Exhibit 99.1 to the Registrant's Schedule 13E-4 on August
12, 1996.
ITEM 2. EXHIBITS.
3. (A) Certificate of Incorporation of Cross Timbers Oil Company, as
amended through and restated on May 18, 1994 (incorporated by
reference to Exhibit 4.1 to Registration Statement on Form S-8,
File No. 33-81766)
(B) Bylaws of Cross Timbers Oil Company (incorporated by reference to
Exhibit 3.4 to Registration Statement on Form S-1, File No.
33-59820)
4. Form of Certificate of Designations of Series A Convertible Preferred
Stock, par value $.01 per share.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereto duly authorized.
CROSS TIMBERS OIL COMPANY
Date: August 12, 1996 By /s/ Louis G. Baldwin
___________________________
Name: Louis G. Baldwin
Title: Senior Vice President &
Chief Financial Officer
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EXHIBIT 4
CERTIFICATE OF DESIGNATIONS
of
SERIES A CONVERTIBLE PREFERRED STOCK
of
CROSS TIMBERS OIL COMPANY
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
CROSS TIMBERS OIL COMPANY, a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), does hereby certify that,
pursuant to the authority conferred on the Board of Directors of the Corporation
by the Certificate of Incorporation, as amended, of the Corporation and in
accordance with Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors of the Corporation (and, as to certain matters
allowed by law, a duly authorized committee thereof) adopted the following
resolution establishing a series of 2,365,000 shares of Preferred Stock of
the Corporation designated as "Series A Convertible Preferred Stock":
RESOLVED, that pursuant to the authority conferred on the Board of
Directors of this Corporation by the Restated Certificate of Incorporation,
a series of Preferred Stock, par value $.01 per share, of the Corporation
be and hereby is established and created, and that the designation and
number of shares thereof and the voting and other powers, preferences and
relative, participating, optional or other rights of the shares of such
series and the qualifications, limitations and restrictions thereof are as
follows:
Series A Convertible Preferred Stock
------------------------------------
1. Designation and Amount. There shall be a series of Preferred Stock
----------------------
designated as "Series A Convertible Preferred Stock" and the number of shares
constituting such series shall be 2,365,000. Such series is referred to
herein as the "Series A Preferred Stock".
2. Par Value. The par value of each share of Series A Preferred Stock
---------
shall be $.01.
3. Rank. All shares of Series A Preferred Stock shall rank prior, both as
----
to payment of dividends and as to distributions of assets upon liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
to all of the Corporation's now or hereafter issued Common Stock, par value $.01
per share (the "Common Stock").
4. Dividends. The holders of Series A Preferred Stock shall be entitled
---------
to receive, when, as and if declared by the Board of Directors out of funds at
the time legally available therefor, dividends at the rate of $1.5625 per
annum per share, and no more, which shall be fully cumulative, shall accrue
without interest from the date of first issuance of any shares
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of Series A Preferred Stock and shall be payable in cash quarterly in arrears on
January 15, April 15, July 15 and October 15 of each year commencing January
15, 1997 (except that if any such date is a Saturday, Sunday or legal holiday,
then such dividend shall be payable on the next day that is not a Saturday,
Sunday or legal holiday) to holders of record as they appear on the stock
transfer books of the Corporation on such record dates, not more than 60 days
nor less than 10 days preceding the payment dates for such dividends, as are
fixed by the Board of Directors (or, to the extent permitted by applicable law,
a duly authorized committee thereof). For purposes hereof, the term "legal
holiday" shall mean any day on which banking institutions are authorized to
close in New York City, New York or in Dallas, Texas. Subject to the next
paragraph of this Section 4, dividends on account of arrears for any past
dividend period may be declared and paid at any time, without reference to any
regular dividend payment date. The amount of dividends payable per share of
Series A Preferred Stock for each quarterly dividend period shall be computed by
dividing the annual dividend amount by four. The amount of dividends payable for
the initial dividend period and any period shorter than a full quarterly
dividend period shall be computed on the basis of a 360-day year of twelve 30-
day months.
No dividends or other distributions, other than dividends payable solely in
shares of Common Stock or other capital stock of the Corporation ranking junior
as to dividends and as to liquidation rights to the Series A Preferred Stock,
shall be declared, paid or set apart for payment on and no purchase, redemption
or other acquisition shall be made by the Corporation of any shares of Common
Stock or other capital stock of the Corporation ranking junior as to dividends
to the Series A Preferred Stock (the Junior Dividend Stock) unless and until all
accrued and unpaid dividends on the Series A Preferred Stock, including the full
dividend for the then-current quarterly dividend period, shall have been paid or
declared and set apart for payment.
If at any time any dividend on any capital stock of the Corporation ranking
senior as to dividends to the Series A Preferred Stock (the "Senior Dividend
Stock") shall be in default, in whole or in part, then (except to the extent
allowed by the terms of such Senior Dividend Stock) no dividend shall be paid or
declared and set apart for payment on the Series A Preferred Stock unless and
until all accrued and unpaid dividends with respect to the Senior Dividend
Stock, including the full dividends for the then-current dividend period, shall
have been paid or declared and set apart for payment, without interest. No full
dividends shall be paid or declared and set apart for payment on any class or
series of the Corporation's capital stock ranking, as to dividends, on a parity
with the Series A Preferred Stock (the "Parity Dividend Stock") for any period
unless full cumulative dividends have been, or contemporaneously are, paid or
declared and set apart for such payment on the Series A Preferred Stock for all
dividend payment periods terminating on or prior to the date of payment of such
full cumulative dividends. No full dividends shall be paid or declared and set
apart for payment on the Series A Preferred Stock for any period unless full
cumulative dividends have been, or contemporaneously are, paid or declared and
set apart for payment on the Parity Dividend Stock for all dividend periods
terminating on or prior to the date of payment of such full cumulative
dividends. When dividends are not paid in full upon the Series A Preferred Stock
and the Parity Dividend Stock, all dividends paid or declared and set aside for
payment upon shares of Series A Preferred Stock and the Parity Dividend Stock
shall be paid or declared and set aside for payment pro rata so that the amount
of dividends paid or declared and set aside for payment per share on the Series
A Preferred Stock and the Parity Dividend Stock shall in all cases bear to each
other the same
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ratio that accrued and unpaid dividends per share on the shares of Series A
Preferred Stock and the Parity Dividend Stock bear to each other.
Any reference to "distribution" contained in this Section 4 shall not be
deemed to include any distribution made in connection with any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary.
5. Liquidation Preference. In the event of a liquidation, dissolution or
----------------------
winding up of the Corporation, whether voluntary or involuntary, the holders of
Series A Preferred Stock shall be entitled to receive out of the assets of the
Corporation, whether such assets are stated capital or surplus of any nature, an
amount equal to the dividends accrued and unpaid thereon to the date of final
distribution to such holders, whether or not declared, without interest, and a
sum equal to $25.00 per share, and no more, before any payment shall be
made or any assets distributed to the holders of Common Stock or any other class
or series of the Corporation's capital stock ranking junior as to liquidation
rights to the Series A Preferred Stock (the "Junior Liquidation Stock");
provided, however, that such rights shall accrue to the holders of Series A
- -------- -------
Preferred Stock only in the event that the Corporation's payments with respect
to the liquidation preferences of the holders of capital stock of the
Corporation ranking senior as to liquidation rights to the Series A Preferred
Stock (the "Senior Liquidation Stock") are fully met. The entire assets of the
Corporation available for distribution after the liquidation preferences of the
Senior Liquidation Stock are fully met shall be distributed ratably among the
holders of the Series A Preferred Stock and any other class or series of the
Corporation's capital stock which may hereafter be created having parity as to
liquidation rights with the Series A Preferred Stock in proportion to the
respective preferential amounts to which each is entitled (but only to the
extent of such preferential amounts). Neither a consolidation or merger of the
Corporation with another corporation nor a sale or transfer of all or part of
the Corporation's assets for cash, securities or other property will be
considered a liquidation, dissolution or winding up of the Corporation.
6. Redemption at Option of the Corporation. The Corporation may not
---------------------------------------
redeem the Series A Preferred Stock through October 15, 1999. The
Corporation, at its option, may at any time during the 12-month period ending
October 15, 2000 (but only if at the date on which notice of redemption shall be
given during such period the closing price per share of Common Stock, determined
as provided in Section 7(c)(iv) hereof, for any 20 trading days during any
period of 30 successive trading days ending within three days of the date of
such notice shall have equalled or exceeded 150% of the then prevailing
conversion price (for all purposes an amount equal to $25.00 divided by the
conversion rate applicable to one share of Series A Preferred Stock as in effect
at such time) of the Series A Preferred Stock) and at any time during any
succeeding 12-month period, redeem in whole at any time, or from time to time in
part, the Series A Preferred Stock on any date set by the Board of Directors, at
the following cash redemption prices per share: if redeemed during the 12-month
period ending October 15 of the years indicated,
----------
<TABLE>
<CAPTION>
PRICE PRICE
YEAR PER SHARE YEAR PER SHARE
---- --------- ---- ---------
<S> <C> <C> <C>
2000.... $26.09 2003....... $25.47
2001.... $25.78 2004....... $25.31
2002.... $25.63 2005....... $25.16
</TABLE>
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and thereafter at $25.00 per share, plus, in each case, an amount in cash
equal to all dividends on the Series A Preferred Stock accrued and unpaid
thereon, whether or not declared, pro rata to the date fixed for redemption,
such sum being hereinafter referred to as the "Redemption Price".
In case of the redemption of less than all of the then outstanding Series A
Preferred Stock, the Corporation shall designate by lot, or in such other manner
as the Board of Directors may determine, the shares to be redeemed, or shall
effect such redemption pro rata. Notwithstanding the foregoing, the Corporation
shall not redeem less than all of the Series A Preferred Stock at any time
outstanding until all dividends accrued and in arrears upon all Series A
Preferred Stock then outstanding shall have been paid for all past dividend
periods.
Not more than 60 nor less than 20 days prior to the redemption date, notice
by first class mail, postage prepaid, shall be given to the holders of record of
the Series A Preferred Stock to be redeemed, addressed to such stockholders at
their last addresses as shown on the stock transfer books of the Corporation.
Each such notice of redemption shall specify the date fixed for redemption, the
Redemption Price, the place or places of payment, that payment will be made upon
presentation and surrender of the shares of Series A Preferred Stock, that on
and after the redemption date, dividends will cease to accumulate on such
shares, the then-effective conversion rate pursuant to Section 7 and that the
right of holders to convert shall terminate at the close of business on the date
fixed for redemption with respect to any redemption occurring on or before the
third business day after October 15, 1999, and, with respect to any redemption
occurring thereafter, on the third business day prior to the redemption date
(unless the Company defaults in the payment of the Redemption Price).
Any notice which is mailed as herein provided shall be conclusively
presumed to have been duly given, whether or not the holder of the Series A
Preferred Stock receives such notice; and failure to give such notice by mail,
or any defect in such notice, to the holders of any shares designated for
redemption shall not affect the validity of the proceedings for the redemption
of any other shares of Series A Preferred Stock. On or after the date fixed for
redemption as stated in such notice, each holder of the shares called for
redemption shall surrender the certificate evidencing such shares to the
Corporation at the place designated in such notice and shall thereupon be
entitled to receive payment of the Redemption Price. If less than all the shares
evidenced by any such surrendered certificate are redeemed, a new certificate
shall be issued evidencing the unredeemed shares. If, on the date fixed for
redemption, funds necessary for the redemption shall be available therefor and
shall have been irrecoverably deposited or set aside, then, notwithstanding that
the certificates evidencing any shares so called for redemption shall not have
been surrendered, the dividends with respect to the shares so called shall cease
to accrue after the date fixed for redemption, the shares shall no longer be
deemed outstanding, the holders thereof shall cease to be stockholders and all
rights whatsoever with respect to the shares so called for redemption (except
the right of the holders to receive the Redemption Price without interest upon
surrender of their certificates therefor) shall terminate. If funds legally
available for such purpose are not sufficient for redemption of the shares of
Series A Preferred Stock which were to be redeemed, or if the Corporation is
then or would be in default under any of its loan agreements after such
redemption, then the certificates evidencing such shares shall be deemed not to
be surrendered, such shares shall remain outstanding and the right of holders of
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shares of Series A Preferred Stock thereafter shall continue to be only those of
a holder of shares of a series of Preferred Stock of the Corporation referred to
herein as Series A Preferred Stock.
The shares of Series A Preferred Stock shall not be subject to the
operation of any purchase, retirement or sinking fund.
7. Conversion Privilege.
--------------------
(a) Right of Conversion. Each share of Series A Preferred Stock shall be
-------------------
convertible at the option of the holder thereof, at any time prior to the close
of business on the third business day prior to the date fixed for redemption of
such share as herein provided, into fully paid and nonassessable shares of
Common Stock and such other securities and property as hereinafter provided,
initially at the rate of .961538 shares of Common Stock for each full
share of Series A Preferred Stock.
For the purpose of this Section 7, the term "Common Stock" shall initially
mean the class designated as Common Stock, par value $.01 per share, of the
Corporation, subject to adjustment as hereinafter provided.
(b) Conversion Procedures. Any holder of shares of Series A Preferred
---------------------
Stock desiring to convert such shares into Common Stock shall surrender the
certificate or certificates evidencing such shares of Series A Preferred Stock
at the office of the transfer agent for the Series A Preferred Stock, which
certificate or certificates, if the Corporation shall so require, shall be duly
endorsed to the Corporation or in blank or accompanied by proper instruments of
transfer to the Corporation or in blank, accompanied by irrevocable written
notice to the Corporation that the holder elects so to convert such shares of
Series A Preferred Stock and specifying the name or names (with address) in
which a certificate or certificates evidencing shares of Common Stock are to be
issued.
No adjustments in respect of dividends on shares surrendered for conversion
or any dividend on the Common Stock issued upon conversion shall be made upon
the conversion of any shares of Series A Preferred Stock.
The Corporation shall, as soon as practicable after such deposit of
certificates evidencing shares of Series A Preferred Stock accompanied by the
written notice and compliance with any other conditions herein contained,
deliver at such office of such transfer agent to the person for whose account
such shares of Series A Preferred Stock were so surrendered, or to the nominee
or nominees of such person, certificates evidencing the number of full shares of
Common Stock to which such person shall be entitled as aforesaid, together with
a cash adjustment of any fraction of a share as hereinafter provided. Subject to
the following provisions of this paragraph, such conversion shall be deemed to
have been made as of the date of such surrender of the shares of Series A
Preferred Stock to be converted, and the person or persons entitled to receive
the Common Stock deliverable upon conversion of such Series A Preferred Stock
shall be treated for all purposes as the record holder or holders of such Common
Stock on such date; provided, however, that the Corporation shall not be
-------- -------
required to convert any shares of Series A Preferred Stock while the stock
transfer books of the Corporation are closed for any purpose, but the surrender
of Series A Preferred Stock for conversion during any period while such books
are
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<PAGE>
so closed shall become effective for conversion immediately upon the reopening
of such books as if the surrender had been made on the date of such reopening,
and the conversion shall be at the conversion rate in effect on such date.
(c) Adjustment of Conversion Rate. The number of shares of Common Stock
-----------------------------
and number or amount of any other securities and property as hereinafter
provided into which a share of Series A Preferred Stock is convertible (the
"conversion rate") shall be subject to adjustment from time to time as follows:
(i) In case the Corporation shall (1) pay a dividend or make a
distribution on its Common Stock that is paid or made (A) in other shares
of stock of the Corporation or (B) in rights to purchase stock or other
securities if such rights are not separable from the Common Stock except
upon the occurrence of a contingency, (2) subdivide its outstanding shares
of Common Stock into a greater number of shares or (3) combine its
outstanding shares of Common Stock into a smaller number of shares, then in
each such case the conversion rate in effect immediately prior thereto
shall be adjusted retroactively so that the holder of any shares of Series
A Preferred Stock thereafter surrendered for conversion shall be entitled
to receive the number of shares of Common Stock and other shares and rights
to purchase stock or other securities (or, in the event of the redemption
of any such shares or rights, any cash, property or securities paid in
respect of such redemption) which such holder would have owned or have been
entitled to receive after the happening of any event described above had
such shares of Series A Preferred Stock been converted immediately prior to
the happening of such event. An adjustment made pursuant to this
subparagraph (i) shall become effective immediately after the record date
in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision or
combination.
(ii) In case the Corporation shall issue rights or warrants to all
holders of its Common Stock entitling them (for a period expiring within 45
days after the date fixed for determination mentioned below) to subscribe
for or purchase shares of Common Stock at a price per share less than the
current market price per share (determined as provided below) of the Common
Stock on the date fixed for the determination of stockholders entitled to
receive such rights or warrants, then the conversion rate in effect at the
opening of business on the day following the date fixed for such
determination shall be increased by multiplying such conversion rate by a
fraction of which the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase and the denominator shall be the number of shares
of Common Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common
Stock so offered for subscription or purchase would purchase at such
current market price, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination; provided, however, that in the event that all the shares of
-------- -------
Common Stock offered for subscription or purchase are not delivered upon
the exercise of such rights or warrants, upon the expiration of such rights
or warrants the conversion rate shall be readjusted to the conversion rate
which would have been in effect had the
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numerator and the denominator of the foregoing fraction and the resulting
adjustment been made based upon the number of shares of Common Stock
actually delivered upon the exercise of such rights or warrants, rather
than upon the number of shares of Common Stock offered for subscription or
purchase. For the purposes of this subparagraph (ii), the number of shares
of Common Stock at any time outstanding shall not include shares held in
the treasury of the Corporation.
(iii) In case the Corporation shall by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its
indebtedness, cash (excluding ordinary cash dividends paid out of retained
earnings of the Corporation), other assets or rights or warrants to
subscribe for or purchase any security (excluding those referred to in
subparagraphs (i) and (ii) above), then in each such case the conversion
rate shall be adjusted retroactively so that the same shall equal the rate
determined by multiplying the conversion rate in effect immediately prior
to the close of business on the date fixed for the determination of
stockholders entitled to receive such distribution by a fraction of which
the numerator shall be the current market price per share (determined as
provided below) of the Common Stock on the date fixed for such
determination and the denominator shall be such current market price per
share of the Common Stock less the amount of cash and the then fair market
value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a resolution of the Board of Directors) of
the portion of the assets, rights or evidences of indebtedness so
distributed applicable to one share of Common Stock, such adjustment to
become effective immediately prior to the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such distribution.
(iv) For the purpose of any computation under subparagraphs (ii)
and (iii), the current market price per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices for the 20
consecutive trading days commencing with the 30th trading day before the
day in question. The closing price for each day shall be the reported last
sales price regular way or, in case no such reported sale takes place on
such day, the average of the reported closing bid and asked prices regular
way, in either case on the New York Stock Exchange or, if the Common Stock
is not listed or admitted to trading on such Exchange, on the principal
national securities exchange on which the Common Stock is listed or
admitted to trading (based on the aggregate dollar value of all securities
listed or admitted to trading) or, if not listed or admitted to trading on
any national securities exchange, on the Nasdaq National Market System or,
if the Common Stock is not listed or admitted to trading on any national
securities exchange or quoted on the Nasdaq National Market System, the
average of the closing bid and asked prices in the over-the-counter market
as furnished by any New York Stock Exchange member firm selected from time
to time by the Corporation for that purpose, or, if such prices are not
available, the fair market value set by, or in a manner established by, the
Board of Directors of the Corporation in good faith. "Trading day" shall
mean a day on which the national securities exchange or the Nasdaq National
Market System used to determine the closing price is open for the
transaction of business or the reporting of trades or, if the closing price
is not so determined, a day on which the New York Stock Exchange is open
for the transaction of business.
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(v) No adjustment in the conversion rate shall be required unless
such adjustment would require an increase or decrease of at least 1% in
such rate; provided, however, that the Corporation may make any such
-------- -------
adjustment at its election; and provided, further, that any adjustments
-------- -------
which by reason of this subparagraph (v) are not required to be made shall
be carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 7 shall be made to the nearest cent or to
the nearest one-hundredth of a share, as the case may be.
(vi) Whenever the conversion rate is adjusted as provided in any
provision of this Section 7:
(1) the Corporation shall compute the adjusted conversion rate
in accordance with this Section 7 and shall prepare a certificate
signed by the principal financial officer of the Corporation setting
forth the adjusted conversion rate and showing in reasonable detail
the facts upon which such adjustment is based, and such certificate
shall forthwith be filed with the transfer agent of the Series A
Preferred Stock; and
(2) a notice stating that the conversion rate has been adjusted
and setting forth the adjusted conversion rate shall forthwith be
required, and as soon as practicable after it is required, such notice
shall be mailed by the Corporation to all record holders of Series A
Preferred Stock at their last addresses as they shall appear in the
stock transfer books of the Corporation.
(vii) In the event that at any time, as a result of any adjustment
made pursuant to this Section 7, the holder of any shares of Series A
Preferred Stock thereafter surrendered for conversion shall become entitled
to receive any shares of the Corporation other than shares of Common Stock
or to receive any other securities, the number of such other shares or
securities so receivable upon conversion of any share of Series A Preferred
Stock shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions contained in
this Section 7 with respect to the Common Stock.
(d) No Fractional Shares. No fractional shares or scrip representing
--------------------
fractional shares of Common Stock shall be issued upon conversion of Series A
Preferred Stock. If more than one certificate evidencing shares of Series A
Preferred Stock shall be surrendered for conversion at one time by the same
holder, the number of full shares issuable upon conversion thereof shall be
computed on the basis of the aggregate number of shares of Series A Preferred
Stock so surrendered. Instead of any fractional share of Common Stock which
would otherwise be issuable upon conversion of any shares of Series A Preferred
Stock, the Corporation shall pay a cash adjustment in respect of such fractional
interest in an amount equal to the same fraction of the market price per share
of Common Stock (as determined by the Board of Directors or in any manner
prescribed by the Board of Directors, which, so long as the Common Stock is
listed on the New York Stock Exchange, shall be the reported last sale price
regular way on the New York Stock Exchange) at the close of business on the day
of conversion.
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(e) Reclassification, Consolidation, Merger or Sale of Assets. In case of
---------------------------------------------------------
any reclassification of the Common Stock, any consolidation of the Corporation
with, or merger of the Corporation into, any other person, any merger of another
person into the Corporation (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of the Corporation), any sale or transfer of all or substantially
all of the assets of the Corporation or any compulsory share exchange, pursuant
to which share exchange the Common Stock is converted into other securities,
cash or other property, then lawful provision shall be made as part of the terms
of such transaction whereby the holder of each share of Series A Preferred Stock
then outstanding shall have the right thereafter, during the period such share
shall be convertible, to convert such share only into the kind and amount of
securities, cash and other property receivable upon such reclassification,
consolidation, merger, sale, transfer or share exchange by a holder of the
number of shares of Common Stock of the Corporation into which such share of
Series A Preferred Stock might have been converted immediately prior to such
reclassification, consolidation, merger, sale, transfer or share exchange. The
Corporation, the person formed by such consolidation or resulting from such
merger or which acquires such assets or which acquires the Corporation's shares,
as the case may be, shall make provisions in its certificate or articles of
incorporation or other constituent document to establish such right. Such
certificate or articles of incorporation or other constituent document shall
provide for adjustments which, for events subsequent to the effective date of
such certificate or articles of incorporation or other constituent document,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 7. The above provisions shall similarly apply to successive
reclassifications, consolidations, mergers, sales, transfers or share exchanges.
(f) Reservation of Shares; Transfer Taxes; Etc. The Corporation shall at
-------------------------------------------
all times reserve and keep available, out of its authorized and unissued stock,
solely for the purpose of effecting the conversion of the Series A Preferred
Stock, such number of shares of its Common Stock free of preemptive rights as
shall from time to time be sufficient to effect the conversion of all shares of
Series A Preferred Stock from time to time outstanding. The Corporation shall
from time to time, in accordance with the laws of the State of Delaware,
increase the authorized number of shares of Common Stock if at any time the
number of shares of Common Stock not outstanding shall not be sufficient to
permit the conversion of all the then-outstanding shares of Series A Preferred
Stock.
If any shares of Common Stock required to be reserved for purposes of
conversion of the Series A Preferred Stock hereunder require registration with
or approval of any governmental authority under any Federal or State law before
such shares may be issued upon conversion, the Corporation will in good faith
and as expeditiously as possible endeavor to cause such shares to be duly
registered or approved, as the case may be. If the Common Stock is listed on the
New York Stock Exchange or any other national securities exchange, the
Corporation will if permitted by the rules of such exchange, list and keep
listed on such exchange, upon official notice of issuance, all shares of Common
Stock issuable upon conversion of the Series A Preferred Stock.
The Corporation shall pay any and all issue or other taxes that may be
payable in respect of any issue or delivery of shares of Common Stock on
conversion of the Series A Preferred Stock. The Corporation shall not, however,
be required to pay any tax which may be payable
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in respect of any transfer involved in the issue or delivery of Common Stock (or
other securities or assets) in a name other than that in which the shares of
Series A Preferred Stock so converted were registered, and no such issue or
delivery shall be made unless and until the person requesting such issue has
paid to the Corporation the amount of such tax or has established, to the
satisfaction of the Corporation, that such tax has been paid.
Before taking any action which would cause an adjustment reducing the
conversion rate, such that the effective conversion price (for all purposes an
amount equal to $25.00 divided by the conversion rate applicable to one share of
Series A Preferred Stock as in effect at such time) would be below the then par
value of the Common Stock, the Corporation shall take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Corporation
may validly and legally issue fully paid and nonassessable shares of Common
Stock at the conversion rate as so adjusted.
(g) Prior Notice of Certain Events. In case:
------------------------------
(i) the Corporation shall (1) declare any dividend (or any other
distribution) on its Common Stock, other than (A) a dividend payable in
shares of Common Stock or (B) a dividend payable in cash out of its
retained earnings other than any special or nonrecurring or other
extraordinary dividend or (2) declare or authorize a redemption or
repurchase of in excess of 10% of the then-outstanding shares of Common
Stock; or
(ii) the Corporation shall authorize the granting to the holders of
Common Stock of rights or warrants to subscribe for or purchase any shares
of stock of any class or of any other rights or warrants (other than any
rights specified in paragraph (c)(i)(1)(B) of this Section 7); or
(iii) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a change in
par value, or from par value to no par value, or from no par value to par
value), or of any consolidation or merger to which the Corporation is a
party and for which approval of any stockholders of the Corporation shall
be required, or of the sale or transfer of all or substantially all of the
assets of the Corporation or of any compulsory share exchange whereby the
Common Stock is converted into other securities, cash or other property; or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding up of the Corporation;
then the Corporation shall cause to be filed with the transfer agent for the
Series A Preferred Stock, and shall cause to be mailed to the holders of record
of the Series A Preferred Stock, at their last address as they shall appear upon
the stock transfer books of the Corporation, at least 15 days prior to the
applicable record date hereinafter specified, a notice stating (x) the date on
which a record (if any) is to be taken for the purpose of such dividend,
distribution, redemption, repurchase or granting of rights or warrants or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution, redemption, rights or
warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
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or winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property deliverable upon
such reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up (but no failure to mail such notice or
any defect therein or in the mailing thereof shall affect the validity of the
corporate action required to be specified in such notice).
(h) Other Changes in Conversion Rate. The Corporation from time to time
--------------------------------
may increase the conversion rate by any amount for any period of time if the
period is at least 20 days and if the increase is irrevocable during the period.
Whenever the conversion rate is so increased, the Corporation shall mail to
holders of record of the Series A Preferred Stock a notice of the increase at
least 15 days before the date the increased conversion rate takes effect and
such notice shall state the increased conversion rate and the period it will be
in effect.
The Corporation may make such increases in the conversion rate, in addition
to those required or allowed by this Section 7, as shall be determined by it, as
evidenced by a resolution of the Board of Directors, to be advisable in order to
avoid or diminish any income tax to holders of Common Stock resulting from any
dividend or distribution of stock or issuance of rights or warrants to purchase
or subscribe for stock or from any event treated as such for income tax
purposes.
9. Voting Rights.
-------------
(a) General. Except as set forth in Section 7(b) or as otherwise required
-------
by law, the holder of each share of Series A Preferred Stock shall be entitled
to the number of votes equal to the number of shares of Common Stock into which
such share of Series A Preferred Stock could be converted at the record date for
determination of the stockholders entitled to vote on such matters, such votes
to be counted together with all other shares of capital stock of the Company
having general voting power and not separately as a class or series. Holders of
Series A Preferred Stock shall be entitled to receive the same notice of any
stockholders' meeting as is provided to holders of Common Stock. Fractional
votes by the holders of Series A Preferred Stock shall not, however, be
permitted, and any fractional voting rights shall (after aggregating all shares
into which shares of Series A Preferred Stock held by each holder could be
converted) be rounded to the nearest whole number. The Company will, or will
cause its transfer agent or registrar to, transmit to the registered holders of
the Series A Preferred Stock all reports and communications from the Company
that are generally mailed to holders of its Common Stock.
(b) Class Voting Rights. So long as the Series A Preferred Stock is
-------------------
outstanding, the Corporation shall not, without the affirmative vote or consent
of the holders of at least 66-2/3% of all outstanding Series A Preferred Stock
voting separately as a class, (i) amend, alter or repeal (by merger or
otherwise) any provision of the Certificate of Incorporation or the By-Laws of
the Corporation as amended, so as adversely to affect the relative rights,
preferences, qualifications, limitations or restrictions of the Series A
Preferred Stock, (ii) authorize or issue, or increase the authorized amount of,
any additional class or series of stock, or any security convertible into stock
of such class or series, ranking prior to the Series A Preferred Stock in
respect of the payment of dividends or upon liquidation, dissolution or winding
up of the Corporation or (iii) effect any reclassification of the Series A
Preferred Stock. A class vote on
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the part of the Series A Preferred Stock shall, without limitation, specifically
not be deemed to be required (except as otherwise required by law or resolution
of the Corporation's Board of Directors) in connection with: (a) the
authorization, issuance or increase in the authorized amount of any shares of
any other class or series of stock which ranks junior to, or on a parity with,
the Series A Preferred Stock in respect of the payment of dividends and
distributions upon liquidation, dissolution or winding up of the Corporation; or
(b) the authorization, issuance or increase in the amount of any bonds,
mortgages, debentures or other obligations of the Corporation.
9. Outstanding Shares. For purposes of this Certificate of Designations,
------------------
all shares of Series A Preferred Stock shall be deemed outstanding except (i)
from the date fixed for redemption pursuant to Section 6 hereof, all shares of
Series A Preferred Stock that have been so called for redemption under Section
6; (ii) from the date of surrender of certificates evidencing shares of Series A
Preferred Stock, all shares of Series A Preferred Stock converted into Common
Stock; and (iii) from the date of registration of transfer, all shares of Series
A Preferred Stock held of record by the Corporation or any subsidiary of the
Corporation.
10. Partial Payments. Upon an optional redemption by the Corporation, if
----------------
at any time the Corporation does not pay amounts sufficient to redeem all Series
A Preferred Stock, then such funds which are paid shall be applied to redeem
such Series A Preferred Stock as the Corporation may designate by lot.
11. Status of Acquired Shares. Shares of Series A Preferred Stock
-------------------------
redeemed by the Corporation, received upon conversion pursuant to Section 7 or
otherwise acquired by the Corporation will be restored to the status of
authorized but unissued shares of Preferred Stock, without designation as to
class, and may thereafter be issued, but not as shares of Series A Preferred
Stock.
12. Preemptive Rights. The Series A Preferred Stock is not entitled to any
-----------------
preemptive or subscription rights in respect of any securities of the
Corporation.
13. Severability of Provisions. Whenever possible, each provision hereof
--------------------------
shall be interpreted in a manner as to be effective and valid under applicable
law, but if any provision hereof is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating or otherwise adversely affecting
the remaining provisions hereof. If a court of competent jurisdiction should
determine that a provision hereof would be valid or enforceable if a period of
time were extended or shortened or a particular percentage were increased or
decreased then such court may make such change as shall be necessary to render
the provision in question effective and valid under applicable law.
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IN WITNESS WHEREOF, Cross Timbers Oil Company has caused this certificate
to be signed on its behalf by _______________________, its
__________________________________________, and its corporate seal to be
hereunto affixed and attested by Virginia Anderson, its Secretary, this ______
day of ___________, 1996.
CROSS TIMBERS OIL COMPANY
[SEAL]
By:________________________________
Name:______________________________
Title:_____________________________
Attest:
________________________________
Virginia Anderson
Secretary
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