-7-
                                                   Execution Copy

                         AMENDMENT NO. 1
                                
                             TO THE
                                
            AMENDED AND RESTATED EMPLOYMENT AGREEMENT
                                
                             BETWEEN
                                
                     CALENERGY COMPANY, INC.
                                
      (formerly known as "CALIFORNIA ENERGY COMPANY, INC.")
                                
                               AND
                                
                         DAVID L. SOKOL

     This Amendment No. 1 (the "Amendment") to the Amended and
Restated Employment Agreement dated August 21, 1995 (the
"Employment Agreement") by and between CalEnergy Company, Inc., a
Delaware Corporation (the "Company"), and David L. Sokol (the
"Executive"), is entered into as of August 28, 1996.

     WHEREAS, the Company and the Executive are presently parties
to the Employment Agreement; and

     WHEREAS, the Company and the Executive desire to amend the
Employment Agreement as set forth herein;

     NOW, THEREFORE, the Employment Agreement is hereby amended
as follows:

     (1)  By deleting from the first sentence of Section 3(b) of
the Employment Agreement the words "except pursuant to Section
7".

     (2)  By deleting from the first sentence of Section 4(e) of
the Employment Agreement from parenthetical "(i)".

     (3)  By deleting Section 4(g) of the Employment Agreement in
its entirety, and redesignating Section 4(h) as Section 4(g).

     (4)  By amending and restating Section 8 of the Employment
Agreement to read in its entirety as follows:

     "Section 8.  Payment Upon Termination.

          (a)  If the employment of the Executive is terminated
     pursuant to subsections (i) or (iii) of Section 7(a), the
     Company will pay to the Executive, within 30 calendar days,
     (x) any salary pursuant to Section 4(a) which is accrued but
     unpaid through the Termination Date, and (y) a bonus
     payment, in an amount determined by the Board by reference
     to the performance of the Executive for a portion of the
     fiscal year of the Company before the Termination Date,
     which is not less than a pro rata share (determined by
     reference to the portion of the fiscal year before the
     Termination Date) of the Minimum Bonus.

          (b)  If the employment of the Executive is terminated
     pursuant to subsections (ii), (iv), (v) or (vi) of Section
     7(a), the Company will pay the Executive, on or before the
     related Termination Date, an amount equal to three times the
     sum of the annual salary and Minimum Bonus then in effect
     pursuant to Section 4.  In addition, (x) any portion of the
     options granted to the Executive which would become vested
     within the next 36 months (beginning with the month
     following the month in which the Termination Date occurs)
     will vest immediately and may be exercised within the
     remaining term of the options as provided in the applicable
     option agreements, and (y) the Company shall continue in
     effect for Executive and his dependents, for a period of 36
     months after the Termination Date, the life insurance,
     medical benefits, dental benefits and disability plan
     available to the Executive and his dependents immediately
     prior to the Termination Date, subject to such employee
     contributions and other terms and conditions as are
     applicable to active employees generally and subject to
     subsequent modification or termination of such plans to the
     extent such subsequent actions are also applicable to active
     employees generally; provided that such plan benefits shall
     terminate earlier on the date, if any, that comparable
     benefits are made available to the Executive by any new
     employer."

     (5)  By inserting immediately following Section 8 new
Section 8A, which shall read in its entirety as follows:

     "Section 8A.  Certain Additional Payments by the Company.

          (a)  Anything in this Agreement to the contrary
     notwithstanding, in the event it shall be determined that
     any payment, distribution, waiver of Company rights,
     acceleration of vesting of any stock options or restricted
     stock, or any other payment or benefit in the nature of
     compensation to or for the benefit of the Executive, alone
     or in combination (whether such payment, distribution,
     waiver, acceleration or other benefit is made pursuant to
     the terms of this Agreement or any other agreement, plan or
     arrangement providing payments or benefits in the nature of
     compensation to or for the benefit of the Executive, but
     determined without regard to any additional payments
     required under this Section 8A) (a "Payment") would be
     subject to the excise tax imposed by Section 4999 of the
     Internal Revenue Code of 1986 (the "Code") (or any successor
     provision) or any interest or penalties are incurred by the
     Executive with respect to such excise tax (such excise tax,
     together with any such interest and penalties, are
     hereinafter collectively referred to as the "Excise Tax"),
     then the Executive shall be entitled to receive an
     additional payment (a "Gross-Up Payment") in an amount such
     that after payment by the Executive of all taxes with
     respect to the Gross-Up Payment (including any interest or
     penalties imposed with respect to such taxes), including,
     without limitation, any income taxes (and any interest and
     penalties imposed with respect thereto) and Excise Tax
     imposed upon the Gross-Up Payment, the Executive retains an
     amount of the Gross-Up Payment equal to the Excise Tax
     imposed upon the Payments.

          (b)  Subject to the provisions of Section 8A(c), all
     determinations required to be made under this Section 8A,
     including whether and when a Gross-Up Payment is required
     and the amount of such Gross-Up Payment and the assumptions
     to be utilized in arriving at such determination, shall be
     made by Deloitte and Touche LLP, or such other nationally
     recognized accounting firm then auditing the accounts of the
     Company (the "Accounting Firm") which shall provide detailed
     supporting calculations both to the Company and the
     Executive within 15 business days of the receipt of notice
     from the Executive that there has been a Payment, or such
     earlier time as is requested by the Company.  In the event
     that the Accounting Firm is unwilling or unable to perform
     its obligations pursuant to this Section 8A, the Executive
     shall appoint another nationally recognized accounting firm
     to make the determinations required hereunder (which
     accounting firm shall then be referred to hereunder as the
     Accounting Firm).  All fees and expenses of the Accounting
     Firm shall be borne solely by the Company.  Any Gross-Up
     Payment, determined pursuant to this Section 8A, shall be
     paid by the Company to the Executive within five days of the
     receipt of the Accounting Firm's determination.  Any
     determination by the Accounting Firm shall be binding upon
     the Company and the Executive.  The parties hereto
     acknowledge that, as a result of the potential uncertainty
     in the application of Section 4999 of the Code (or any
     successor provision) at the time of the initial
     determination by the Accounting Firm hereunder, it is
     possible that the Company will not have made Gross-Up
     Payments which should have been made consistent with the
     calculations required to be made hereunder (an
     "Underpayment").  In the event that the Company exhausts its
     remedies pursuant to Section 8A(c) and the Executive
     thereafter is required to make a payment of any Excise Tax,
     the Accounting Firm shall determine the amount of the
     Underpayment that has occurred and any such Underpayment
     shall be promptly paid by the Company to or for the benefit
     of the Executive.

          (c)  The Executive shall notify the Company in writing
     of any claim by the Internal Revenue Service that, if
     successful, would require the payment by the Company of the
     Gross-Up Payment.  Such notification shall be given as soon
     as practicable but no later than 20 business days after the
     Executive is informed in writing of such claim and shall
     apprise the Company of the nature of such claim and the date
     on which such claim is requested to be paid.  The Executive
     shall not pay such claim prior to the expiration of the 30-
     day period following the date on which he gives such notice
     to the Company (or such shorter period ending on the date
     that any payment of taxes with respect to such claim is
     due).  If the Company notifies the Executive in writing
     prior to the expiration of such period that it desires to
     contest such claim, the Executive shall:

     (i)   give the Company any information reasonably requested
           by the Company relating to such claim,
     
     (ii)  take such action in connection with contesting such
           claim as the Company shall reasonably request in
           writing from time to time, including, without
           limitation, accepting legal representation with
           respect to such claim by an attorney reasonably
           selected by the Company,
     
     (iii) cooperate with the Company in good faith in order
           effectively to contest such claim, and
     
     (iv)  permit the Company to participate in any proceedings
           relating to such claim;
     
     provided, however, that the Company shall bear and pay
     directly all costs and expenses (including additional
     interest and penalties) incurred in connection with such
     contest and shall indemnify and hold the 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 such representation and payment of
     costs and expenses.  Without limiting the foregoing
     provisions of this Section 8A(c), the Company shall control
     all proceedings taken in connection with such contest and,
     at its sole option, may pursue or forgo any and all
     administrative appeals, proceedings, hearings and
     conferences with the taxing authority in respect of such
     claim and may, at its sole option, either direct the
     Executive to pay the tax claimed and sue for a refund or
     contest the claim in any permissible manner, and the
     Executive agrees to prosecute such contest to a
     determination before any administrative tribunal, in a court
     of initial jurisdiction and in one or more appellate courts,
     as the Company shall determine; provided, however, that if
     the Company directs the Executive to pay such claim and sue
     for a refund, the Company shall advance the amount of such
     payment to the Executive, on an interest-free basis, and
     shall indemnify and hold the Executive harmless, on an after-
     tax basis, from any Excise Tax or income tax (including
     interest or penalties with respect thereto) imposed with
     respect to such advance or with respect to any imputed
     income with respect to such advance; and further provided
     that any extension of the statute of limitations relating to
     payment of taxes for the taxable year of the Executive with
     respect to which such contested amount is claimed to be due
     is limited solely to such contested amount.  Furthermore,
     the Company's control of the contest shall be limited to
     issues with respect to which a Gross-Up Payment would be
     payable hereunder and the Executive shall be entitled to
     settle or contest, as the case may be, any other issue
     raised by the Internal Revenue Service or any other taxing
     authority.
     
          (d)  If, after the receipt by the Executive of an
     amount advanced by the Company pursuant to Section 8A(c),
     the Executive becomes entitled to receive any refund with
     respect to such claim, the Executive shall (subject to the
     Company's complying with the requirements of Section 8A(c))
     promptly pay to the Company the amount of such refund
     (together with any interest paid or credited thereon after
     taxes applicable thereto).  If, after the receipt by the
     Executive of an amount advanced by the Company pursuant to
     Section 8A(c), a determination is made that the Executive
     shall not be entitled to any refund with respect to such
     claim and the Company does not notify the Executive in
     writing of its intent to contest such denial of refund prior
     to the expiration of 30 days after such determination, then
     such advance shall be forgiven and shall not be required to
     be repaid and the amount of such advance shall offset, to
     the extent thereof, the amount of Gross-Up Payment required
     to be paid."
     
     Except as provided herein and to the extent necessary to
give full effect to the provisions of this Amendment, the terms
of the Employment Agreement shall remain in full force and
effect.
     IN WITNESS WHEREOF, the parties hereto have entered into
this Amendment as of August 28, 1996.

                         CALENERGY COMPANY, INC.


                         By:  /S/__________________________
                         Name:     Steven A. McArthur
                         Title:    Senior Vice President


                         EXECUTIVE


                         /S/_________________________________
                                   David L. Sokol