EXHIBIT 10.81


 


CAP
ROCK ELECTRIC


Achievement Based Compensation Contract


 


Southwestern Public Service Company Contract


 


In
accordance with Cap Rock Electric Cooperative, Inc. (“Cap Rock Electric”) Board
Policy #143, this contract provides for calculation and payment of incentive
compensation in the form of a percentage of net power cost savings resulting
from the Southwestern Public Service Company power supply contract.


 


(1)          Responsible Individual:


 


Steven E. Collier, Director
of Power Supply and Regulatory Affairs.


 


(2)          Amount of Achievement Based Compensation:


 


The Achievement Based Compensation will be two
percent (2%) of the net savings, where the net savings is defined as the amount
by which SPSCo purchased power costs are less than the purchased power costs
would have been had TU Electric remained the full requirements power suppliers.


 


Since a portion of the savings will result from the
diversity of the various delivery points that were served under noncoincident
peak billing by TU Electric and which will be served as a single point of
delivery under the terms negotiated with SPSCo, and since Cap Rock Electric
would have eventually combined the delivery points into one or two in any
event, the portion of the savings resulting from diversity will be imputed only
for the first five years of the Achievement Based Compensation or until TU
Electric implements coincident peak billing, whichever is sooner.


 


(3)          Calculation of the Savings:


 


The net savings will be calculated as the difference
between the sum of the power bills that would have applied under the standard
TU Electric wholesale tariff and the power bill that actually occurs under the
SPSCo tariff.


 


Since the various substations that would have been
separate delivery points under the TU Electric noncoincident billing approach
will be combined into one delivery point for SPSCo, actual noncoincident demand
billing units may not be conveniently available.  If this is the case, the coincident demand of the load served by
SPSCo will be converted to an equivalent noncoincident demand for calculation
of the TU Electric benchmark bill using the average demand diversity that
existed among the relevant delivery points for the two years prior to transfer
to SPSCo.


 


(4)          Term of Achievement Based Compensation:


 


The Achievement Based Compensation will be paid
until the sooner of the termination of the SPSCo contract or ten years.


 

















 


(5)          Payment of the Achievement Based Compensation:


 


The Achievement Based Compensation will be paid
after the end of each calendar year based on the above-referenced calculation
for that calendar year after review and approval by the General Manager and
Board of Directors of this contract and the annual approval of the
above-referenced calculation by the General Manager.


 


The Achievement Based Compensation will be paid in
cash to each eligible individual in a lump sum unless the amount exceeds
$10,000.00, in which case Cap Rock Electric will have the option to spread the
payment over as many months as many months as necessary so that any one monthly
payment does not exceed $10,000.00.  The
lump-sum payment or series of payments, if applicable, will be made as provided
in Board Policy #143 and with cash availability and overall cash flow of the
Cooperative considered.


 


The eligible individual shall have the option to
elect some or all of the payment to be made to such deferred compensation plans
as may be maintained by the individual or Cap Rock Electric.


 


(6)          Conditions and Considerations for Payment:


 


Except upon becoming eligible for benefits under any
Cap Rock Electric retirement plan, either early or regular, the Achievement
Based Compensation will by payable to the recipient listed below in para. (7)
without regard to the continued employment of those individuals by Cap Rock
Electric or an affiliate or subsidiary thereof, provided that, unless otherwise
agreed by Cap Rock, each individual agrees that he will not voluntarily
terminate his employment by Cap Rock Electric or any affiliate or subsidiary of
Cap Rock Electric for the shorter of three years following the date of initial
payment under this contract or until power deliveries have started and then
ceased under the SPSCo contract, during the first ten (10) years of said
contract.  Further, each individual
agrees that he will keep the terms of this contract, as well as the terms of
the transaction causing the awarding and payment of the Achievement Based
Compensation, confidential.


 


(7)          Sharing with Other Individuals:


 


In recognition of the necessary contribution of the
entire management team to the continued success of Cap Rock Electric and the
successful implementation of the lease-purchase financing arrangements, the
Achievement Based Compensation will be shared among the Responsible Individual
and the other management team members as follows:


 


Responsible Individuals – 50%


 


Management Team – 50%


a.                                       Chief Executive Officer – 30%


b.                                      Other individuals selected by the CEO and
Board of Directors –20%


i.                                          Ulen North 10%


iii.                                    John D. Parker 10%


 


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Except for the confidentiality and retirement
provisions, the conditions for payment described above in Para. (6) are not
applicable to those persons identified and listed above as “Other
Individuals”.  It is further understood
and agreed that such conditions for payment as set out in para. (6) are
applicable subject to the amount of such Achievement Based Compensation total
payment being commensurate and with the condition placed upon the recipients by
acceptance of such Compensation.


 


In the event the Responsible Party should violate
the terms of the Agreement, the right to receive future payments under this
Agreement shall immediately cease and such interest or right to future payments
shall revert to Cap Rock Electric.  In
the event any individual name herein by the Chief Executive Officer and Board
of Directors as a part of the Management Team shall violate the terms of this
agreement, die, retire, or terminate their employment with Cap Rock Electric
for any reason, the right to receive future payments under this contract shall
immediately cease and the Chief Executive Officer shall have the right to
allocate such share among those named individuals or others as he may deem in
the best interests of the Cooperative.


 


Witness
our hands on this 27th day of October, 1992


 


 


	
  /s/ Steven E. Collier

  	
  10/27/92

  	
   

  
	
  Responsible Individual

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ David W. Pruitt

  	
  10/27/92

  	
   

  
	
  Chief Executive Officer

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Russell Jones

  	
  10/27/92

  	
   

  
	
  Chairman

  	
  Date

  	
   

  
					



 


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