<PAGE>

                                                                   EXHIBIT 10.14


                             AMENDED AND RESTATED
                           CROSS TIMBERS OIL COMPANY
                      EMPLOYEE SEVERANCE PROTECTION PLAN
                      ----------------------------------


     WHEREAS, the Board of Directors of Cross Timbers Oil Company, a Delaware
corporation ("the Company") recognizes that the current business environment
makes it difficult to attract and retain highly qualified employees unless a
certain degree of security can be offered to such individuals against
organizational and personnel changes which frequently follow a Change in Control
(as defined below) of a corporation; and

     WHEREAS, even rumors of acquisitions or mergers may cause employees to
consider major career changes in an effort to ensure financial security for
themselves and their families; and

     WHEREAS, the Company desires to ensure fair treatment of its employees in
the event of a Change in Control and to allow them to make critical career
decisions without undue time pressure and financial uncertainty, thereby
increasing their willingness to remain with the Company notwithstanding the
outcome of a possible Change in Control transaction; and

     WHEREAS, the Board of Directors of the Company believes it is essential to
provide such employees with compensation arrangements upon a Change in Control
which provide the employees with individual financial security and which are
competitive with those of other corporations, and in order to accomplish these
objectives, the Board has caused the Company to adopt the Cross Timbers Oil
Company Employee Severance Protection Plan on June 10, 1997; and

     WHEREAS, the Board of Directors desires to amend and restate this Plan to
provide for additional protection for the employees to assure fair treatment of
the employees in the event of a Change in Control.

     NOW, THEREFORE, in order to fulfill the above purposes, the following plan
has been developed and is hereby adopted.

                                   ARTICLE I
                             ESTABLISHMENT OF PLAN

     As of the Effective Date, the Company hereby establishes a severance
compensation plan known as the Amended and Restated Cross Timbers Oil Company
Employee Severance Protection Plan, as set forth in this document.

                                       1
<PAGE>

                                  ARTICLE II
                                  DEFINITIONS

     As used herein, the following words and phrases shall have the following
respective meanings unless the context clearly indicates otherwise.

     2.1  Base Salary.  The amount a Participant is entitled to receive as wages
          -----------
or salary on an annualized basis, calculated immediately prior to a Change in
Control.

     2.2  Board.  The Board of Directors of the Company.
          -----

     2.3  Bonus Amount.  An amount equal to the most recent bonus awarded prior
          ------------
to a Change in Control under the Non-Exempt Employee Bonus Plan and the Exempt
Employee Bonus Plan adopted by the Company (or any other bonus plan or program
then in effect).

     2.4  Cause.  The Employer shall have "Cause" to terminate a Participant if
          -----
the Participant (i) willfully and continually fails to substantially perform his
duties with the Employer (other than a failure resulting from the Participant's
incapacity due to physical or mental illness) which failure continues for a
period of at least thirty (30) days after a written notice of demand for
substantial performance has been delivered to the Participant specifying the
manner in which the Participant has failed to substantially perform, or (ii)
willfully engages in conduct which is demonstrably and materially injurious to
the Employer, monetarily or otherwise.

     2.5  Change in Control.  A "Change in Control" shall mean any one of the
          -----------------
following:

          (a) "Continuing Directors" no longer constitute a majority of the
     Board; the term "Continuing Director" means any individual who is a member
     of the Board on the date hereof or was nominated for election as a director
     by, or whose nomination as a director was approved by, the Board with the
     affirmative vote of a majority of the Continuing Directors;

          (b) any person or group of persons (as defined in Rule 13d-5 under the
     Securities Exchange Act of 1934, as amended ("Exchange Act")) together with
     his or its affiliates, becomes the beneficial owner, directly or
     indirectly, of 25% or more of the voting power of the Company's then
     outstanding securities entitled generally to vote for the election of the
     Company's directors;

          (c) the merger or consolidation to which the Company is a party if the
     shareholders of the Company immediately prior to the effective date of such
     merger or consolidation have beneficial ownership (as defined in Rule 13d-3
     under the Exchange Act) of less than 50% of the combined voting power to
     vote for the election of directors of the surviving corporation or other
     entity following the effective date of such merger or consolidation; or

                                       2
<PAGE>

          (d) the sale of all or substantially all of the assets of the Company
     or the liquidation or dissolution of the Company.

     Notwithstanding the foregoing provisions of this Section 2.5, if a
                                                      -----------
Participant's employment with the Employer is terminated by the Employer other
than for "Cause" prior to the date on which a Change in Control occurs, and it
is reasonably demonstrated that such termination (i) was at the request of a
third party who has taken steps reasonably calculated to effect a Change in
Control or (ii) otherwise arose in connection with a Change in Control, then for
all purposes hereof, such termination shall be deemed to have occurred
immediately following a Change in Control.

     Notwithstanding anything herein to the contrary, under no circumstances
will a change in the constitution of the board of directors of any Subsidiary, a
change in the beneficial ownership of any Subsidiary, the merger or
consolidation of a Subsidiary with any other entity, the sale of all or
substantially all of the assets of any Subsidiary or the liquidation or
dissolution of any Subsidiary constitute a "Change in Control" under this Plan.

     2.6  Company.  Cross Timbers Oil Company, a Delaware corporation.
          -------

     2.7  Effective Date.  The date the Plan is approved by the Board of
          --------------
Directors of the Company, or such other date as the Board shall designate in its
resolution approving the Plan.

     2.8  Employee.  Each employee of the Employer who has not been designated
          --------
as a "Management Group Employee" under the Cross Timbers Oil Company Management
Group Employee Severance Protection Plan.

     2.9  Employer.  The Company and any Subsidiary of the Company which adopts
          --------
this Plan as a Participating Employer.  With respect to a Participant who is not
an employee of the Company, any reference under this Plan to such Participant's
"Employer" shall refer only to the employer of the Participant, and in no event
shall be construed to refer to the Company as well.

     2.10  Good Reason.  "Good Reason" shall mean the occurrence of any of the
           -----------
following events or conditions:

          (a) a change in the Participant's status, title, position or
     responsibilities (including reporting responsibilities) which, in the
     Participant's reasonable judgment, represents a substantial reduction of
     the status, title, position or responsibilities as in effect immediately
     prior thereto; the assignment to the Participant of any duties or
     responsibilities which, in the Participant's reasonable judgment, are
     inconsistent with such status, title, position or responsibilities; or any
     removal of the Participant from, or failure to reappoint or reelect him to,
     any of such positions, except in connection with the termination of his
     employment for Cause or by the Participant other than for Good Reason;

                                       3
<PAGE>

          (b) a reduction in the Participant's Base Salary or as the same may be
     increased from time to time thereafter;

          (c) the Employer's requiring the Participant (without the consent of
     the Participant) to be based at any place outside a twenty-five (25) mile
     radius of his place of employment immediately prior to a Change in Control,
     except for reasonably required travel on the Employer's business which is
     not materially greater than such travel requirements prior to the Change in
     Control, or, in the event the Participant consents to any relocation beyond
     such 25-mile radius, the failure by the Employer to pay (or reimburse the
     Participant) for all reasonable moving expenses incurred by him relating to
     a change of his principal residence in connection with such relocation and
     to indemnify the Participant against any loss (defined as the difference
     between the actual sale price of such residence and the higher of (a) his
     aggregate investment in such residence or (b) the fair market value of such
     residence as determined by a real estate appraiser designated by the
     Participant and reasonably satisfactory to the Employer) realized on the
     sale of the Participant's principal residence in connection with any such
     change of residence;

          (d) the failure by the Employer to provide the Participant with
     compensation and benefits at least equal (in terms of benefit levels and/or
     reward opportunities) to those provided for under each employee benefit
     plan, program and practice as in effect immediately prior to the Change in
     Control (or as in effect following the Change in Control, if greater),
     including, but not limited to, the Company's 1991 Stock Incentive Plan, the
     1994 Stock Incentive Plan,  the 1997 Stock Incentive Plan, the 1998 Stock
     Incentive Plan, the 1998 Royalty Trust Option Plan, the 1999 Royalty Trust
     Option Plan, the Cross Timbers Oil Company Employees' 401(k) Plan, the Non-
     Exempt Employee Bonus Plan, the Exempt Employee Bonus Plan, and any other
     stock option plan, pension plan, life insurance plan, health and accident
     plan or disability plan;

          (e) any material breach by the Employer of any provision of this Plan;

          (f) any purported termination of the Participant's employment for
     Cause by the Employer which does not otherwise comply with the terms of
     this Plan; or

          (g) any failure of the Company to obtain the assumption of, or the
     agreement to perform, this Agreement by any successor as contemplated in
     Article VI.
     ----------

     2.11  Notice of Termination.  A notice which indicates the specific
           ---------------------
provisions in this Plan relied upon as the basis for any termination of
employment which sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Participant's employment under
the provision so indicated; no purported termination of employment shall be
effective without such Notice of Termination.

2.12 Participant.  A Participant who meets the eligibility requirements of
---- -----------
Article III.
-----------

                                       4
<PAGE>

     2.13  Participating Employer.  A Subsidiary of the Company which adopts
           ----------------------
this Plan in accordance with Section 7.4 below.
                             -----------

     2.14  Severance Benefit.  The benefits payable in accordance with Article
           -----------------                                           -------
IV of the Plan.
--

     2.15  Severance Units.  A Participant shall receive one (1) Severance
           ---------------
Units, to be used in calculating his Severance Benefit, for (i) each $7,000 of
his Base Salary plus Bonus Amount, and (ii) each twelve months of employment by
the Company or an Employer; the sum of any partial Severance Units under (i) and
(ii) shall be rounded to one.  However, the maximum number of Severance Units
that may be granted to a Participant is 18, and each Participant shall be
granted at least 3 Severance Units. For example, if a Participant's Base Salary
                                    -----------
is $52,000, his Bonus Amount is $5,000, and he has been employed by the Company
or an Employer for 57 months, he would have 8.14 Severance Units for his
compensation and 4.75 Severance Units for his service, for a total of 13.

     2.16  Subsidiary.  Any subsidiary of the Company, and any wholly or
           ----------
partially owned partnership, joint venture, limited liability company,
corporation and other form of investment by the Company.

     A pronoun or adjective in the masculine gender includes the feminine
gender, and the singular includes the plural, unless the context clearly
indicates otherwise.

                                  ARTICLE III
                         ELIGIBILITY AND PARTICIPATION

     3.1  Participation.  Each Employee shall automatically become a Participant
          -------------
in the Plan as of the Effective Date, or the date he satisfies the definition of
an Employee, whichever occurs later.

     3.2  Duration of Participation.  A Participant shall cease to be a
          -------------------------
Participant in the Plan upon the first to occur of: (i) the date he ceases to be
an Employee of the Employer at any time prior to a Change in Control, (ii) the
date his employment is terminated following a Change in Control under
circumstances where he is not entitled to a Severance Benefit under the terms of
this Plan, or (iii) the date on which he has received all of the benefits to
which he is entitled under this Plan.

                                  ARTICLE IV
                              SEVERANCE BENEFITS

     4.1  Right to Severance Benefit.
          --------------------------

          (a) A Participant shall be entitled to receive from the Employer a
     Severance Benefit in the amount provided in Section 4.2 if (i) a Change in
                                                 -----------
     Control has occurred and (ii) within two years thereafter, the
     Participant's employment with the Employer terminates for any reason other
     than (A) termination by the Employer for Cause, or (B) termination by the
     Participant for other than Good Reason.

                                       5
<PAGE>

          (b) Notwithstanding any other provision of the Plan, the sale,
     divestiture or other disposition of a Subsidiary shall not be deemed to be
     a termination of employment of employees employed by such Subsidiary, and
     such employees shall not be entitled to benefits from the Company or any
     Participating Employer under this Plan as a result of such sale,
     divestiture, or other disposition, or as a result of any subsequent
     termination of employment.

     4.2  Amount of Severance Benefit.  If a Participant's employment is
          ---------------------------
terminated in circumstances entitling him to a Severance Benefit as provided in

Section 4.1, such Participant shall be entitled to the following benefits:
-----------

          (a) The Employer shall pay to the Participant, as severance pay and in
     lieu of any further salary for periods subsequent to the Termination Date
     (as specified in Section 5.2), in a single payment within ten (10) days
                      -----------
     after his Termination Date (without any discount for accelerated payment),
     an amount in cash equal to:  one-twelfth (1/12) of the sum of the
     Participant's Base Salary and Bonus Amount, multiplied by the Participant's
     Severance Units.

          (b) For a period of twelve (12) months subsequent to the Participant's
     termination of employment, the Employer shall at its expense continue on
     behalf of the Participant and his dependents and beneficiaries, all
     medical, dental, vision, and health benefits and insurance coverage which
     were being provided to the Participant at the time of termination of
     employment.  The benefits provided in this Section 4.2(b) shall be no less
                                                --------------
     favorable to the Participant, in terms of amounts and deductibles and costs
     to him, than the coverage provided the Participant under the plans
     providing such benefits at the time Notice of Termination is given.  The
     Employer's obligation hereunder to provide a benefit shall terminate if the
     Participant obtains comparable coverage under a subsequent employer's
     benefit plan.    For purposes of the preceding sentence, benefits will not
     be comparable during any waiting period for eligibility for such benefits
     or during any period during which there is a preexisting condition
     limitation on such benefits.  The Employer also shall pay a lump sum equal
     to the amount of any additional income tax payable by the Participant and
     attributable to the benefits provided under this subparagraph (b) at the
     time such tax is imposed upon the Participant. In the event that the
     Participant's participation in any such coverage is barred under the
     general terms and provisions of the plans and programs under which such
     coverage is provided, or any such coverage is discontinued or the benefits
     thereunder are materially reduced, the Employer shall provide or arrange to
     provide the Participant with benefits substantially similar to those which
     the Participant was entitled to receive under such coverage immediately
     prior to the Termination Notice. At the end of the period of coverage set
     forth above, the Participant shall have the option to have assigned to him
     at no cost to the Participant and with no apportionment of prepaid
     premiums, any assignable insurance owned by the Employer and relating
     specifically to the Participant, and the Participant shall be entitled to
     all health and similar benefits that are or would have been made available
     to the Participant under law.

                                       6
<PAGE>

          (c) Notwithstanding any provision to the contrary in any stock option
     agreement, restricted stock agreement, or other agreement relating to
     equity-type compensation that may be outstanding between the Participant
     and the Employer, all units, stock options, incentive stock options,
     performance shares, and stock appreciation rights (under the 1991 Stock
     Incentive Plan, the 1994 Stock Incentive Plan, the 1997 Stock Incentive
     Plan, the 1998 Stock Incentive Plan, the 1998 Royalty Trust Option Plan,
     the 1999 Royalty Trust Option Plan, or any other plan or arrangement) held
     by the Participant immediately prior to the Change in Control, and any such
     units, options, shares or rights received by the Participant in exchange
     for or in substitution for existing units, options, shares, or rights,
     shall immediately become 100% vested and exercisable, and the Participant
     shall become 100% vested in all shares of restricted stock held by or for
     the benefit of the Participant; provided, however, that to the extent the
     Employer is unable to provide for such acceleration of vesting, the
     Employer shall provide in lieu thereof a lump-sum cash payment equal to the
     difference between the total value of such units, stock options, incentive
     stock options, performance shares, stock appreciation rights and shares of
     restricted stock (the "stock rights") as of the date of the Participant's
     termination of employment and the total value of the stock rights in which
     the Participant is vested as of the date of his termination of employment.
     The value of such accelerated vesting in the Participant's stock rights
     shall be determined by the Board in good faith based on a valuation
     performed by an independent consultant selected by the Board; any such
     stock rights which are not in existence at the time of the Participant's
     termination of employment shall be valued as of the date of the Change in
     Control.

          (d) Notwithstanding any provision to the contrary in any stock option
     agreement that may be outstanding between the Participant and the Employer,
     the Participant's right to exercise any previously unexercised options
     under any such stock option agreement shall not terminate until the latest
     date on which the option granted under such agreement would expire under
     the terms of such agreement but for the Participant's termination of
     employment;  provided, however, that to the extent the Employer is unable
     to provide for the extension of the expiration date of such options, the
     Employer shall provide in lieu thereof a lump-sum cash payment equal to the
     value of such extension the Employer is unable to provide.  Such values of
     such accelerated vesting and exercisability shall be determined by the
     Board in good faith based on a valuation performed by an independent
     consultant selected by the Board.

          (e) A Participant who is entitled to severance benefits under an
     employment agreement with the Employer may elect, in writing within ten
     (10) days after his Termination Date, to receive the severance benefits
     provided under this Section 4.2 in lieu of, but not in addition to, such
                         -----------
     other severance benefits as may be provided by such other agreement.  In
     the event that no election is made, the Participant shall forego his right
     to receive the severance benefits provided under this Section 4.2.
                                                           -----------

                                       7
<PAGE>

4.3  Limitations on Payments.
     -----------------------

          (a) Anything in this Article IV to the contrary notwithstanding, in
                               ----------
     the event it shall be determined that any payment or distribution made, or
     benefit provided, by the Company to or for the benefit of the Participant
     (whether paid or payable or distributed or distributable or provided
     pursuant to the terms hereof or otherwise) would constitute a "parachute
     payment" as defined in Section 280G of the Internal Revenue Code of 1986,
     as amended (the "Code"), then the lump sum severance payment payable
     pursuant to Section 4.2(a) shall be reduced so that the aggregate present
                 --------------
     value of all payments in the nature of compensation to (or for the benefit
     of) the Participant which are contingent on a change of control (as defined
     in Code Section 280G(b)(2)(A)) is One Dollar ($1.00) less than the amount
     which the Participant could receive without being considered to have
     received any parachute payment (the amount of this reduction in the lump
     sum severance payment is referred to herein as the "Excess Amount").  The
     determination of the amount of any reduction required by this Section 4.3
                                                                   -----------
     shall be made by an independent accounting firm (other than the Company's
     independent accounting firm) selected by the Company and acceptable to the
     Participant, and such determination shall be conclusive and binding on the
     parties hereto.

          (b) Notwithstanding the provisions of Section 4.3(a), if it is
                                                --------------
     established, pursuant to a final determination of a court or an Internal
     Revenue Service proceeding which has been finally and conclusively
     resolved, that an Excess Amount was received by the Participant from the
     Company, then such Excess Amount shall be deemed for all purposes to be a
     loan to the Participant made on the date the Participant received the
     Excess Amount and the Participant shall repay the Excess Amount to the
     Company on demand (but no less than ten (10) days after written demand is
     received by the Participant) together with interest on the Excess Amount at
     the "applicable Federal rate" (as defined in Section 1274(d) of the Code)
     from the date of the Participant's receipt of such Excess Amount until the
     date of such repayment.

     4.4  Mitigation or Set-off of Amounts Payable Hereunder.   The Participant
          --------------------------------------------------
shall not be required to mitigate the amount of any payment provided for in this

Article IV by seeking other employment or otherwise, nor shall the amount of any
----------
payment provided for in this Article IV be reduced by any compensation earned by
                             ----------
the Participant as the result of employment by another employer after the
Termination Date, or otherwise.  The Employer's obligations hereunder also shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Employer may have against the Participant.

     4.5  Company Guarantee of Severance Benefit.  In the event a Participant
          --------------------------------------
becomes entitled to receive from the Employer a Severance Benefit under Section
                                                                        -------
4.1 above and such Employer fails to pay such Severance Benefit, the Company
---
shall assume the obligation of such Employer to pay such Severance Benefit.  In
consideration of the Company's assumption of the obligation to pay such
Severance Benefit provided under this Plan, the Company (as the source of
payment of benefits under the Plan) shall be subrogated to any recovery
(irrespective of whether there is recovery from the third party of the full
amount of all claims against the third party) or right to recovery of either a
Participant

                                       8
<PAGE>

or his legal representative against the Employer or any person or entity. The
Participant or his legal representative shall cooperate in doing what is
reasonably necessary to assist the Company in exercising such rights, including
but not limited to notifying the Company of the institution of any claim against
a third party and notifying the third party and the third party's insurer, if
any, of the Company's subrogation rights. Neither the Participant nor his legal
representative shall do anything after a loss to prejudice such rights.

     In its sole discretion, the Company reserves the right to prosecute an
action in the name of the Participant or his legal representative against any
third parties potentially liable to the Participant.  The Company shall have the
absolute discretion to settle subrogation claims on any basis it deems warranted
and appropriate under the circumstances.  If a Participant or his legal
representative initiates a lawsuit against any third parties potentially liable
to the Participant, the Company shall not be responsible for any attorney's fees
or court costs that may be incurred in such liability claim.

     The Company shall be entitled, to the extent of any payments made to or on
behalf of a Participant or a dependent of the Participant, to be paid first from
the proceeds of any settlement or judgment that may result from the exercise of
any rights of recovery asserted by or on behalf of a Participant or his legal
representative against any person or entity legally responsible for the injury
for which such payment was made.  The Company shall be reimbursed by the
Participant or his legal representative an amount of money equal to all sums
paid by the Employer under the Plan to or on behalf of the Participant and all
expenses, costs and attorney's fees incurred by the Company in connection with
the prosecution and collection of the Company's subrogation interest.  The right
is also hereby given the Company to receive directly from the Employer or any
third party(ies), attorney(s) or insurance company(ies) an amount equal to the
amount paid to or on behalf of the Participant.

                                   ARTICLE V
                           TERMINATION OF EMPLOYMENT

     5.1  Written Notice Required.  Any purported termination of employment,
          -----------------------
either by the Employer or by the Participant, shall be communicated by written
Notice of Termination to the other.

     5.2  Termination Date.  In the case of the Participant's death, the
          ----------------
Participant's Termination Date shall be his date of death.  In all other cases,
the Participant's Termination Date shall be the date specified in the Notice of
Termination subject to the following:

          (a) If the Participant's employment is terminated by the Employer for
     Cause, the date specified in the Notice of Termination shall be at least
     thirty (30) days from the date the Notice of Termination is given to the
     Participant; and

          (b)  If the Participant terminates his employment for Good Reason, the
     date specified in the Notice of Termination shall not be more than sixty
     (60) days from the date the Notice of Termination is given to the Employer.

                                       9
<PAGE>

                                  ARTICLE VI
                             SUCCESSORS TO COMPANY

     6.1  Successors.  This Plan shall bind any successor (whether direct or
          ----------
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, in the same
manner and to the same extent that the Company would be obligated under this
Plan if no succession had taken place.  In the case of any transaction in which
a successor would not, by the foregoing provision or by operation of law, be
bound by this Plan, the Company shall require such successor expressly and
unconditionally to assume and agree to perform the Company's obligations under
this Plan, in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place.  Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach hereof and shall entitle the Participant to
compensation from the Company in the same amount and on the same terms as the
Participant would be entitled hereunder if the Participant terminated his
employment for Good Reason, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Termination Date.  As used herein, "the Company" shall mean the
Company as hereinbefore defined and any successor to its business and/or assets
as aforesaid which executes and delivers the agreement provided for in this

Section 6.1 or which otherwise becomes bound by all the terms and provisions
-----------
hereof by operation of law.

                                  ARTICLE VII
                   DURATION, AMENDMENT AND PLAN TERMINATION

     7.1  Duration.  This Plan shall continue in effect until terminated in
          --------
accordance with Section 7.2.  If a Change in Control occurs, this Plan shall
                -----------
continue in full force and effect, and shall not terminate or expire, until
after all Participants who have become entitled to a Severance Benefit hereunder
shall have received all of such benefits in full.

     7.2  Amendment and Termination.  The Plan may be terminated or amended in
          -------------------------
any respect by resolution adopted by two-thirds of the Board; provided, however,
that no such amendment or termination of the Plan may be made if such amendment
or termination would adversely affect any right of a Participant who became a
Participant prior to the later of (a) the date of adoption of any such amendment
or termination, or (b) the effective date of any such amendment or termination;
and, provided further, that the Plan no longer shall be subject to amendment,
change, substitution, deletion, revocation or termination in any respect
whatsoever following a Change in Control.

     7.3  Form of Amendment.  The form of any amendment or termination of the
          -----------------
Plan shall be a written instrument signed by a duly authorized officer or
officers of the Company, certifying that the amendment or termination has been
approved by the Board.

     7.4  Adoption by Subsidiaries.  Any Subsidiary of the Company may, with the
          ------------------------
approval of the Board of Directors of the Company, adopt and become an Employer
under this Plan by executing and delivering to the Company an appropriate
instrument agreeing to be bound as an

                                       10
<PAGE>

Employer by all of the terms of the Plan with respect to its eligible employees.
The adoptive instrument may contain such changes and amendments in the terms and
provisions of the Plan as adopted by such Subsidiary as may be desired by such
Subsidiary and acceptable to the Company. The adoptive instrument shall specify
the effective date of such adoption of the Plan and shall become as to such
adopting Subsidiary a part of this Plan.


                                 ARTICLE VIII
                                 MISCELLANEOUS

     8.1  Participant's Legal Expenses.  The Company agrees to pay, upon written
          ----------------------------
demand therefor by the Participant, all legal fees and expenses which the
Participant may reasonably incur as a result of any dispute or contest
(regardless of the outcome thereof) by or with the Company or others regarding
the validity or enforceability of, or liability under, any provision hereof
(including as a result of any contest about the amount of any payment pursuant
to Article IV), plus in each case interest at the "applicable Federal rate" (as
   ----------
defined in Section 1274(d) of the Code). In any such action brought by a
Participant for damages or to enforce any provisions hereof, he shall be
entitled to seek both legal and equitable relief and remedies, including,
without limitation, specific performance of the Company's obligations hereunder,
in his sole discretion.

     8.2  Employment Status.  This Plan does not constitute a contract of
          -----------------
employment or impose on the Employer any obligation to retain a Participant as
an employee, to change the status of a Participant's employment as an Employee,
or to change any employment policies of the Employer.

     8.3  Validity and Severability.  The invalidity or unenforceability of any
          -------------------------
provision of the Plan shall not affect the validity or enforceability of any
other provision of the Plan, which shall remain in full force and effect, and
any prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

     8.4  The Participant's Heirs, etc.  This Agreement shall inure to the
          ----------------------------
benefit of and be enforceable by the Participant's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.  If the Participant should die while any amounts would
still be payable to him hereunder as if he had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms hereof to his designee or, if there be no such designee, to his estate.

     8.5  Governing Law.  The validity, interpretation, construction and
          -------------
performance of the Plan shall in all respects be governed by the laws of the
State of Texas.

     8.6  Choice of Forum.  A Participant shall be entitled to enforce the
          ---------------
provisions of this Plan in any state or federal court located in the State of
Texas, in addition to any other appropriate forum.

                                       11
<PAGE>

     8.7  Notice.  For the purposes hereof, notices and all other communications
          ------
provided for herein shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States registered or certified mail,
return receipt requested, postage prepaid, addressed to the Company at its
principal place of business and to the Participant at his address as shown on
the records of the Company, provided that all notices to the Company shall be
directed to the attention of the Chief Executive Officer of the Company with a
copy to the Secretary of the Company, or to such other in writing in accordance
herewith, except that notices of change of address shall be effective only upon
receipt.

     IN WITNESS WHEREOF, Cross Timbers Oil Company has caused these presents to
be executed by its duly authorized officer on the 15th day of February, 2000.


                              CROSS TIMBERS OIL COMPANY


                              By:    /s/ Robert C. Myers
                                 -----------------------------------------
                              Name:  Robert C. Myers
                              Title: Vice President - Human Resources

                                       12