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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________
FORM 8-A/A
AMENDMENT NO. 2
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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Items 1 and 2 of Registrant's Form 8-A dated August 12, 1996, as amended
by Amendment No. 1 thereto dated September 3, 1996, are amended and restated
as set forth below.
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 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, as amended by Amendment No. 2 thereto, dated September 3, 1996, as
further amended by Exhibit 99.14 to Amendment No. 4 to the Registrant's
Schedule 13E-4, dated September 18, 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.
<PAGE>
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: September 18, 1996 By: /s/ Louis G. Baldwin
Name: Louis G. Baldwin
Title: Senior Vice President &
Chief Financial Officer
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 1,138,735 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 1,138,735. 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
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 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
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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
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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,
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Price Price
Year Per Share Year Per Share
---- --------- ---- ---------
<S> <C> <C> <C>
2000 . . . . . . . $26.09 2004 . . . . . . . $25.47
2001 . . . . . . . $25.94 2005 . . . . . . . $25.31
2002 . . . . . . . $25.78 2006 . . . . . . . $25.16
2003 . . . . . . . $25.63
</TABLE>
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 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 of one share 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 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 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.
(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.
(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 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 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.
8. 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) Default Voting Rights. Whenever dividends on the Series A
---------------------
Preferred Stock or any other class or series of Preferred Stock ranking as to
dividends on a parity with the Series A Preferred Stock shall be in arrears
in an amount equal to at least six quarterly dividends (whether or not
consecutive), (i) the number of members of the Board of Directors of the
Corporation shall be increased by two, effective as of the time of election
of such directors as hereinafter provided and (ii) the holders of the Series
A Preferred Stock (voting separately as a class with all other holders of
shares of any one or more other series of Preferred Stock ranking as to
dividends on a parity with the Series A Preferred Stock upon which like
voting rights have been conferred and are exercisable) will have the
exclusive right to vote for and elect such two additional directors of the
Corporation at any meeting of stockholders of the Corporation at which
directors are to be elected held during the period such dividends remain in
arrears. The right of the holders of the Series A Preferred Stock to vote
for such two additional directors shall terminate when all accrued and unpaid
dividends on the Series A Preferred Stock have been declared and paid or set
apart for payment. The term of office of all directors so elected shall
terminate immediately upon the termination of the right of the holders of the
Series A Preferred Stock and such other series of Preferred Stock ranking as
to dividends on a parity with the Series A Preferred Stock to vote for such
two additional directors.
The foregoing right of holders of the Series A Preferred Stock with
respect to the election of two directors may be exercised at any annual
meeting of stockholders or at any special meeting of stockholders held for
such purpose. If the right to elect directors shall have accrued to the
holders of the Series A Preferred Stock more than 90 days preceding the date
established for the next annual meeting of stockholders, the Chairman of the
Board of the Corporation shall, within 20 days after the delivery to the
Corporation at its principal office of a written request for a special
meeting signed by the holders of at least 10% of the Series A Preferred Stock
then outstanding, call a special meeting of the holders of the Series A
Preferred Stock to be held within 60 days after the delivery of such request
for the purpose of electing such additional directors.
The holders of the Series A Preferred Stock and any such other series of
Preferred Stock ranking as to dividends on a parity with the Series A
Preferred Stock referred to above voting as a class shall have the right to
remove without cause at any time and replace any directors such holders shall
have elected pursuant to this Section 8(b).
(c) 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 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.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, Cross Timbers Oil Company has caused this
certificate to be signed on its behalf by Louis G. Baldwin, its Senior Vice
President, and its corporate seal to be hereunto affixed and attested by
Virginia Anderson, its Secretary, this 13th day of September, 1996.
CROSS TIMBERS OIL COMPANY
[SEAL]
By: /s/ Louis G. Baldwin
Name: Louis G. Baldwin
Title: Senior Vice President
Attest:
/s/ Virginia Anderson
Virginia Anderson
Secretary
