CHANGE IN CONTROL AGREEMENT


        AGREEMENT between CENTRAL AND SOUTH WEST CORPORATION (the
"Company"), and MICHAEL D. SMITH ("EXECUTIVE"),

                              W I T N E S S E T H:

        WHEREAS, the Company desires to retain certain key employee personnel
and, accordingly, the Board of Directors of the Company (the "BOARD") has
approved the Company entering into a severance agreement with Executive in order
to encourage his/her continued service to the Company; and

        WHEREAS, Executive is prepared to commit such services in return for
specific arrangements with respect to severance compensation and other benefits;

        NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the Company and Executive agree as follows:

        1.     DEFINITIONS.

               (a)     "CHANGE IN DUTIES" shall mean the occurrence, within
                       three years after the date upon which a Change in Control
                       occurs, of any one or more of the following:

                       (i)    A significant reduction in the duties or
                              responsibilities of Executive from those
                              applicable to him/her immediately prior to the
                              date on which a Change of Control occurs;

                       (ii)   A reduction in Executive's total remuneration
                              (including salary, bonus, qualified retirement
                              benefits, nonqualified retirement benefits,
                              welfare benefits and any other employee benefits)
                              from that provided to him/her immediately prior to
                              the date on which a Change of Control occurs;

                       (iii)  A change in the location of Executive's principal
                              place of employment by the Company by more than 35
                              miles from the location where he was principally
                              employed immediately prior to the date on which a
                              Change of Control occurs; or

                       (iv)   A failure by the Company to provide directors and
                              officers liability insurance covering Executive
                              comparable to that

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                              provided to him/her immediately prior to the date
                              on which a Change of Control occurs.

               (b)     "CHANGE OF CONTROL" means the occurrence of one of the
                       following events:

                       (i)    Any person or entity, including a "GROUP" as
                              contemplated by Section 13(d)(3) of the Securities
                              Exchange Act of 1934, as amended, acquires or
                              gains ownership or control (including, without
                              limitation, power to vote) of 25% or more of the
                              outstanding shares of the Company's voting stock
                              (based upon voting power); or

                       (ii)   A period of twenty-four consecutive months during
                              which two-thirds of the individuals who are
                              directors of the Company at the beginning of such
                              period cease to be directors of the Company for
                              any reason; or

                       (iii)  The Closing of any merger, acquisition, or
                              consolidation following which the shareholders of
                              the Company own less than 75% of the surviving
                              entity; or

                       (iv)   The Closing of a sale or disposition (other than
                              to a subsidiary) of more than 85% of the Company's
                              assets.

               (c)     "CLOSING" shall mean a meeting at which all documents
                       necessary to consummate a transaction are executed and
                       delivered; provided that a transaction shall not be
                       considered Closed for purposes of this Agreement until
                       all conditions precedent to the consummation of the
                       transaction, including but not limited to, all required
                       regulatory approvals, have been fulfilled.

               (d)     "CODE" shall mean the Internal Revenue Code of 1986, as
                       amended.

               (e)     "COMPENSATION" shall mean the greater of (i) or (ii), 
                       where:

                       (i)    equals the Executive's annual salary plus Target
                              Bonus immediately prior to the date on which a
                              Change of Control occurs; and

                       (ii)   equals the Executive's annual salary plus Target
                              Bonus at the time of his Covered Termination.


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               (f)     "COVERED TERMINATION" shall mean an Involuntary
                       Termination within three years after the date upon which
                       a Change of Control occurs or a Voluntary Termination
                       during the thirteenth month after the date upon which a
                       Change of Control occurs.

               (g)     "DCP" shall mean the Central and South West Corporation
                       Executive Deferred Compensation Plan, as amended from
                       time to time.

               (h)     "INVOLUNTARY TERMINATION" shall mean any termination of
                       Executive's employment with the Company which:

                       (i)    does not result from a resignation by Executive
                              (other than a resignation pursuant to clause (ii)
                              of this subparagraph (h)); or

                       (ii)   results from a resignation by Executive on or
                              before the date which is sixty days after the date
                              upon which Executive receives notice of a Change
                              in Duties;

                       (iii)  provided, however, the term "INVOLUNTARY
                              TERMINATION" shall not include a Termination for
                              Cause or any termination as a result of death,
                              disability under circumstances entitling Executive
                              to benefits under the Company's long-term
                              disability plan, or Retirement.

               (i)     "PENSION PLAN" shall mean the Central and South West
                       System Pension Plan, as amended from time to time.

               (j)     "RETIREMENT" shall mean Executive's termination of
                       employment on or after the date he reaches age
                       sixty-five.

               (k)     "SERP" shall mean the Central and South West System
                       Special Executive Retirement Plan, as amended from time
                       to time.

               (l)     "SEVERANCE AMOUNT" shall mean an amount equal to 2 times
                       Executive's Compensation.

               (m)     "TARGET BONUS" shall mean Executive's target incentive
                       opportunity under the Central and South West Corporation
                       Annual Incentive Plan in effect for the year with respect
                       to which such award is being determined, if any, or for
                       the last year in which such a plan was in effect,
                       expressed as a dollar amount based upon Executive's
                       annual salary for the year of such determination.

               (n)     "TERMINATION FOR CAUSE" shall mean termination of
                       Executive's employment by the Company (or its
                       subsidiaries) by reason of Executive's (i) gross
                       negligence in the performance of his duties,

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                       (ii) willful and continued failure to perform his duties,
                       (iii) willful engagement in conduct which is materially
                       injurous to the Company or its subsidiaries (monetarily
                       or otherwise) or (iv) conviction of a felony or a
                       misdemeanor involving moral turpitude.

               (o)     "VOLUNTARY TERMINATION" shall mean any termination of
                       Executive's employment with the Company which results
                       from a resignation by Executive; provided, however, the
                       term "VOLUNTARY TERMINATION" shall not include an
                       Involuntary Termination, a Termination for Cause, or any
                       termination as a result of death, disability under
                       circumstances entitling Executive to benefits under the
                       Company's long-term disability plan, or Retirement.

               (p)     "WELFARE BENEFIT COVERAGES" shall mean the medical,
                       dental and life insurance coverages provided by the
                       Company to its active employees.

        2.     SERVICES. Executive agrees that he will render services to the
               Company (as well as any subsidiary thereof or successor thereto)
               during the period of his employment to the best of his ability
               and in a prudent and businesslike manner and that he will devote
               substantially the same time, efforts and dedication to his duties
               as heretofore devoted.

        3.     SEVERANCE BENEFITS. If Executive's employment by the Company or
               any subsidiary thereof or successor thereto shall be subject to a
               Covered Termination, then Executive shall be entitled to receive,
               as additional compensation for services rendered to the Company
               (including its subsidiaries), the following severance benefits:

               (a)     A lump sum cash payment in an amount equal to Executive's
                       Severance Amount.

               (b)     A lump sum cash payment Actuarially Equivalent (as such
                       term is defined in the Pension Plan) to Executive's
                       unreduced projected supplemental monthly benefit at age
                       sixty-two under the SERP if Executive has attained age
                       fifty-five or older as of the date of his Covered
                       Termination, or to Executive's accrued supplemental
                       monthly benefit under the SERP, plus three years of
                       Credited Service (as such term is defined in the SERP) if
                       Executive has not attained age fifty-five as of the date
                       of his Covered Termination.

               (c)     A lump sum cash payment Actuarially Equivalent (as such
                       term is defined in the Pension Plan) to Executive's
                       projected normal retirement benefit under the DCP.

               (d)     If Executive is not eligible for retiree medical coverage
                       as of the date of his Covered Termination, Executive
                       shall be entitled to continue the Welfare Benefit
                       Coverages for himself/herself and,

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                       where applicable, his eligible dependents for up to
                       thirty-six months following the date of his Covered
                       Termination. Such benefit rights shall apply only to
                       those Welfare Benefit Coverages which the Company has in
                       effect from time to time for active employees. Welfare
                       Benefit Coverage(s) shall immediately end upon
                       Executive's obtainment of new employment and eligibility
                       for similar Welfare Benefit Coverage(s) (with Executive
                       being obligated hereunder to promptly report such
                       eligibility to the Company). If Executive is eligible for
                       retiree medical coverage as of the date of his Covered
                       Termination, Executive shall receive earned retiree
                       benefits as long as Executive continues to pay the
                       required premiums for such benefits. Notwithstanding the
                       foregoing, if any of the Welfare Benefit Coverages cannot
                       be continued during a period when Executive is not an
                       employee of the Company, the Company shall pay to
                       Executive a lump sum cash payment in amount equal to the
                       economic value of such benefit.

               (e)     Executive shall be entitled to receive reimbursements for
                       out-placement services in connection with obtaining new
                       employment incurred within twelve months of the date of
                       his Covered Termination, up to a maximum amount equal to
                       15% of his annual salary as of the date of his Covered
                       Termination.

               (f)     Executive shall have the option to purchase his company
                       vehicle for an amount equal to its depreciated book value
                       as of the date of his Covered Termination.

               (g)     If Executive relocates his primary residence in
                       connection with obtaining new employment and such
                       relocation occurs within thirty-six months of the date of
                       his Covered Termination, upon providing documentation of
                       such relocation acceptable to the Company, Executive
                       shall be entitled to receive a lump sum cash payment in
                       an amount equal to 25% of his annual salary on the date
                       of his Covered Termination.

               (h)     The Company shall cause the SERP and DCP to be amended to
                       reflect the severance benefits payable pursuant to this
                       Paragraph. Further, any severance benefits paid pursuant
                       to this Paragraph will be deemed to be a severance
                       payment and not compensation for purposes of determining
                       benefits under the Company's qualified retirement plans
                       and shall be subject to any required tax withholding.

               (i)     Notwithstanding anything to the contrary in this
                       Agreement, upon a Change of Control, Executive shall be
                       entitled to receive the benefits provided under the
                       Central and South West Corporation 1992 Long-Term
                       Incentive Plan or any subsequent similar plan that may be
                       implemented in the future.


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               (j)     Executive shall be entitled to continued access, for the
                       remainder of the calendar year in which a Covered
                       Termination occurs, to the financial planning services
                       available to executive employees of the Company at the
                       time of the Change of Control upon which such Covered
                       Termination is based.

        4.     INTEREST ON LATE BENEFIT PAYMENTS. If any payment provided for in
               Paragraph 3 hereof is not made when due, the Company shall pay to
               Executive interest on the amount payable from the date that such
               payment should have been made under such paragraph until such
               payment is made, which interest shall be calculated at the prime
               or base rate of interest announced by Mellon Bank (or any
               successor thereto) at its principal office in Pittsburgh, PA, and
               shall change when and as any such change in such prime or base
               rate shall be announced by such bank.

        5.     CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.  Notwithstanding 
               anything to the contrary in the Agreement, in the event that any
               payment or distribution by the Company to or for the benefit of
               Executive, whether paid or payable or distributed or
               distributable pursuant to the terms of this Agreement or
               otherwise (a "Payment"), would be subject to the excise tax
               imposed by Section 4999 of the Code or any interest or penalties
               with respect to such excise tax (such excise tax, together with
               any such interest or penalties, are hereinafter collectively
               referred to as the "Excise Tax"), the Company shall pay to
               Executive an additional payment (a "Gross-up Payment") in an
               amount such that after payment by Executive of all taxes
               (including any interest or penalties imposed with respect to such
               taxes), including any Excise Tax imposed on any Gross-up Payment,
               Executive retains an amount of the Gross-up Payment equal to the
               Excise Tax imposed upon the Payments. The Company and Executive
               shall make an initial determination as to whether a Gross-up
               Payment is required and the amount of any such Gross-up Payment.
               Executive shall notify the Company immediately in writing of any
               claim by the Internal Revenue Service which, if successful, would
               require the Company to make a Gross-up Payment (or a Gross-up
               Payment in excess of that, if any, initially determined by the
               Company and Executive) within five days of the receipt of such
               claim. The Company shall notify Executive in writing at least
               five days prior to the due date of any response required with
               respect to such claim if it plans to contest the claim. If the
               Company decides to contest such claim, Executive shall cooperate
               fully with the Company in such action; provided, however, the
               Company shall bear and pay directly or indirectly all costs and
               expenses (including additional interest and penalties) incurred
               in connection with such action and shall indemnify and hold
               Executive harmless, on an after-tax basis, for any Excise Tax or
               income tax, including interest and penalties with respect
               thereto, imposed as a result of the Company's action. If, as a
               result of the Company's action with respect to a claim, Executive
               receives a refund of any amount paid by the Company with respect
               to such claim, Executive shall promptly pay such

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               refund to the Company. If the Company fails to timely notify
               Executive whether it will contest such claim or the Company
               determines not to contest such claim, then the Company shall
               immediately pay to Executive the portion of such claim, if any,
               which it has not previously paid to Executive.

        6.     GENERAL.

               (a)     TERM.  The effective date of this Agreement is 
                       November 1, 1996. The term of this Agreement shall be for
                       a period of three years after such effective date.
                       Further, beginning on the day immediately following such
                       effective date and continuing on each subsequent day, the
                       term of this Agreement shall be extended automatically
                       one day, so that at no time shall the term of this
                       Agreement be less than three years, until such time as
                       the Company shall give written notice to Executive that
                       no such automatic extension shall occur and then this
                       Agreement shall terminate as of the last day of the
                       applicable three-year term.

               (b)     INDEMNIFICATION.  If Executive shall obtain an money 
                       judgment or otherwise prevail with respect to any
                       litigation brought by Executive or the Company to enforce
                       or interpret any provision contained herein, the Company,
                       to the fullest extent permitted by applicable law, hereby
                       indemnifies Executive for his reasonable attorneys' fees
                       and disbursements incurred in such litigation and hereby
                       agree (i) to pay in full all such fees and disbursements
                       and (ii) to pay prejudgment interest on any money
                       judgment obtained by Executive from the earliest date
                       that payment to him/her should have been made under this
                       Agreement until such judgment shall have been paid in
                       full, which interest shall be calculated at the prime or
                       base rate of interest announced by Mellon Bank (or any
                       successor thereto) at its principal office in Pittsburgh,
                       PA, and shall change when and as any such change in such
                       prime or base rate shall be announced by such bank.
                       Notwithstanding the foregoing, in lieu of litigation to
                       enforce or interpret any provision of this Agreement,
                       Executive may request by written notice to the Company
                       that any controversy regarding the enforcement or
                       interpretation of any provision contained herein be
                       submitted to arbitration pursuant to the labor
                       arbitration rules of the American Arbitration
                       Association. The Company, to the fullest extent permitted
                       by applicable law, hereby indemnifies Executive for his
                       reasonable attorneys' fees and disbursements incurred in
                       such arbitration and hereby agrees to pay in full all
                       such fees and disbursements. If any controversy regarding
                       this Agreement is submitted to arbitration, Executive and
                       the Company agree that the arbitrator's decision shall be
                       final and legally binding on both parties. The
                       arbitration provisions of this Paragraph shall be
                       governed by the provisions of the Federal Arbitration
                       Act.


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               (c)     PAYMENT OBLIGATIONS ABSOLUTE. The Company's obligation to
                       pay (or cause one of its subsidiaries to pay) Executive
                       the amounts and to make the arrangements provided herein
                       shall be absolute and unconditional and shall not be
                       affected by any circumstances, including, without
                       limitation, any set-off, counter-claim, recoupment,
                       defense or other right which the Company (including its
                       subsidiaries) may have against him/her or anyone else.
                       All amounts payable by the Company (including its
                       subsidiaries hereunder) shall be paid without notice or
                       demand. Executive shall not be obligated to sign an
                       agreement not to compete with the Company or to seek
                       other employment in mitigation of the amounts payable or
                       arrangements made under any provision of this Agreement,
                       and, except as provided in Paragraph 3 hereof, the
                       obtaining of any other employment shall in no event
                       effect any reduction of the Company's obligations to make
                       (or cause to be made) the payments and arrangements
                       required to be made under this Agreement.

               (d)     SUCCESSORS. This Agreement shall be binding upon and
                       inure to the benefit of the Company and any successor of
                       the Company, by merger or otherwise. This Agreement shall
                       also be binding upon and inure to the benefit of
                       Executive and his estate. If Executive shall die prior to
                       full payment of amounts due pursuant to this Agreement,
                       such amounts shall be payable pursuant to the terms of
                       this Agreement to his estate.

               (e)     SEVERABILITY. Any provision in this Agreement which is
                       prohibited or unenforceable in any jurisdiction by reason
                       of applicable law shall, as to such jurisdiction, be
                       ineffective only to the extent of such prohibition or
                       unenforceability without invalidating or affecting the
                       remaining provisions hereof, and any such prohibition or
                       unenforceability in any jurisdiction shall not invalidate
                       or render unenforceable such provision in any other
                       jurisdiction.

               (f)     NON-ALIENATION. Executive shall not have any right to
                       pledge, hypothecate, anticipate or assign this Agreement
                       or the rights hereunder, except by will or the laws of
                       descent and distribution.

               (g)     NOTICES. Any notices or other communications provided for
                       in this Agreement shall be sufficient if in writing. In
                       the case of Executive, such notices or communications
                       shall be effectively delivered if hand delivered to
                       Executive at his principal place of employment or if sent
                       by registered or certified mail to Executive at the last
                       address he has filed with the Company. In the case of the
                       Company, such notices or communications shall be
                       effectively delivered if sent by registered or certified
                       mail to the Company at its principal executive offices.


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               (h)     CONTROLLING LAW. This Agreement shall be governed by, and
                       construed in accordance with, the laws of the State of
                       Texas. Further, Executive agrees that any legal
                       proceeding to enforce the provisions of this Agreement
                       shall be brought in Dallas, Dallas County, Texas, and
                       hereby waives his right to any pleas regarding subject
                       matter or personal jurisdiction and venue.

               (i)     RELEASE. As a condition to the receipt of any benefit 
                       under Paragraph 3 hereof, unless such requirement is
                       waived by the Board in its sole discretion, Executive
                       shall first execute a release, in the form established by
                       the Company, releasing the Company, its shareholders,
                       partners, officers, directors, employees and agents from
                       any and all claims and from any and all causes of action
                       of any kind or character, including but not limited to
                       all claims or causes of action arising out of Executive's
                       employment with the Company or the termination of such
                       employment.

               (j)     FULL SETTLEMENT. If Executive is entitled to and receives
                       the benefits provided hereunder, performance of the
                       obligations of the Company hereunder will constitute full
                       settlement of all claims that Executive might otherwise
                       assert against the Company on account of his termination
                       of employment.

               (k)     UNFUNDED OBLIGATION. The obligation to pay amounts under
                       this Agreement is an unfunded obligation of the Company
                       (including its subsidiaries), and no such obligation
                       shall create a trust or be deemed to be secured by any
                       pledge or encumbrance on any property of the Company
                       (including its subsidiaries).

               (l)     NOT A CONTRACT OF EMPLOYMENT. The Agreement shall not be
                       deemed to constitute a contract of employment, nor shall
                       any provision hereof affect (i) the right of the Company
                       (or its subsidiaries) to discharge Executive at will or
                       (ii) the terms and conditions of any other agreement
                       between the Company and Executive except as provided
                       herein.

               (m)     NUMBER AND GENDER. Wherever appropriate herein, words
                       used in the singular shall include the plural and the
                       plural shall include the singular. The masculine gender
                       where appearing herein shall be deemed to include the
                       feminine gender.


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        IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the 20TH day of DECEMBER, 1996.

                                   "EXECUTIVE"


                                   MICHAEL D. SMITH


                              "COMPANY"

                              CENTRAL AND SOUTH WEST CORPORATION



                              BY:   E. R. BROOKS
                                    NAME:  E. R. BROOKS
                                    TITLE:    CHAIRMAN, PRESIDENT AND CEO