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                      CAP ROCK ELECTRIC COOPERATIVE, INC.
                        SUPPLEMENTAL EXECUTIVE DEFERRED
                         COMPENSATION RETIREMENT PLAN


                                 PLAN DOCUMENT



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                               TABLE OF CONTENTS

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<S>              <C>                                                        <C>
ARTICLE I        PURPOSE OF PLAN
    1.1          Purpose of Plan                                             1

ARTICLE II       DEFINITIONS
    2.1          Account                                                     1
    2.2          Beneficiary                                                 1
    2.3          Board                                                       1
    2.4          Code                                                        1
    2.5          Committee                                                   1
    2.6          Company                                                     1
    2.7          Company Contribution                                        1
    2.8          Compensation                                                1
    2.9          Effective Date                                              1
    2.10         Eligible Employee                                           2
    2.11         Entry Date                                                  2
    2.12         Nonqualified Deferral Contribution                          2
    2.13         Participant                                                 2
    2.14         Participant Enrollment and Election Form                    2
    2.15         Plan                                                        2
    2.16         Plan Year                                                   2
    2.17         Trust                                                       2
    2.18         Trustee                                                     2
    2.19         Valuation Date                                              2

ARTICLE III      ELIGIBILITY AND PARTICIPATION
    3.1          Requirements                                                2
    3.2          Re-employment                                               3
    3.3          Change of Employment Category                               3

ARTICLE IV       NONQUALIFIED DEFERRAL CONTRIBUTIONS
    4.1          Nonqualified Deferral Elections                             3
    4.2          Payroll Deductions                                          3
    4.3          Timing of Contribution                                      3

ARTICLE V        COMPANY CONTRIBUTION
    5.1          Company Contribution                                        3
    5.2          Timing of Contribution                                      3


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ARTICLE VI       PLAN ACCOUNTS
    6.1          Establishment of Accounts                                   3
    6.2          Nonqualified Deferral Account                               4
    6.3          Company contribution Account                                4
    6.4          Allocation of Income                                        4

ARTICLE VII      ALLOCATION OF FUNDS
    7.1          Allocation of Earnings or Losses on Accounts                4
    7.2          Accounting for Distributions                                4
    7.3          Interim Valuations                                          4

ARTICLE VIII     VESTING
    8.1          Nonqualified Deferral Contributions                         4
    8.2          Company Contributions                                       5

ARTICLE IX       PAYMENTS OF BENEFITS
    9.1          Payments of Benefits                                        5
    9.2          Withdrawal of Funds                                         5

ARTICLE X        COMMITTEE ADMINISTRATION
    10.1         Committee                                                   5

ARTICLE XI       THE TRUST
    11.1         Establishment of Trust                                      5

ARTICLE XII      ADMINISTRATION
    12.1         Administrative Authority                                    5
    12.2         Mutual Exclusion of Responsibility                          6
    12.3         Uniformity of Discretionary Acts                            6
    12.4         Litigation                                                  7
    12.5         Payment of Administration Expenses                          7
    12.6         Claims Procedure                                            7
    12.7         Liability of Committee, Indemnification                     8
    12.8         Expenses                                                    8
    12.9         Taxes                                                       8
    12.10        Attorney's Fees                                             8

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                         ARTICLE I - PURPOSE OF PLAN

1.1      PURPOSE OF PLAN. The Company intends and desires by the adoption of
this Plan to recognize the value to the Company of the past and present
services of Eligible Employees covered by the Plan and to encourage an assure
their continued service with the Company by making more adequate provisions for
their future retirement security.

This Plan has been adopted to provide certain select management and highly
compensated employees of Cap Rock Electric Cooperative, Inc. the opportunity to
accumulate deferred compensation until retirement, disability, resignation,
dismissal or death.

This Plan is intended to be "a plan which is unfunded and maintained by an
employer primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees" within the meaning
of Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income
Security Act of 1974 ("ERISA") and shall be interpreted and administered in a
manner consistent with that intent.

                           ARTICLE II - DEFINITIONS

2.1      ACCOUNT means those separate accounts established and maintained under
the Plan in the name of each Participant as required pursuant to the provisions
of Article VII.

2.2      BENEFICIARY means a Participant's beneficiary or
beneficiaries identified on the Participant Enrollment and Election
Form.

2.3      BOARD means the Board of Directors of Cap Rock Electric
Cooperative, Inc.

2.4      CODE means the Internal Revenue Code of 1986 and the regulations
thereunder, as amended from time to time.

2.5      COMMITTEE means the Retirement Committee appointed by the
Board.

2.6      COMPANY means Cap Rock Electric Cooperative, Inc. or any
company which is a successor as a result of merger, consolidation,
liquidation, transfer of assets, or other reorganization.

2.7      COMPANY CONTRIBUTION means an amount contributed by the
Company pursuant to the provisions of Article V.

2.8      COMPENSATION means base salary or wages, plus overtime,
bonuses, commissions, etc., which is paid the employee by the
Company for the performance of duties during the Plan Year.
Compensation used shall be prior to any salary deferrals.

2.9      EFFECTIVE DATE means the date on which the Company adopts the
Plan.


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2.10     ELIGIBLE EMPLOYEE means, for any Plan Year (or applicable portion
thereof), a person employed by the Company who is determined by the Board to be
a member of a select group of management or highly compensated employees, who
is designated by the Board to be eligible under the Plan. By fifteen days prior
to the beginning of a Plan Year, the Company shall notify those individuals, if
any, who will be Eligible Employees for the next Plan Year. If the Company
determines that an employee first becomes an Eligible Employee during a Plan
Year, the Company shall notify such employee of its determination and of the
date during the Plan Year on which the employee shall first become an Eligible
Employee.

2.11     ENTRY DATE means the date as determined by the Company.

2.12     NONQUALIFIED DEFERRAL CONTRIBUTION means Compensation that is due to
be earned and which would otherwise be paid to the Participant, which the
Participant elects to defer under the Plan and which is contributed on behalf
of each Participant by the Company pursuant to the provisions of Article IV.

2.13     PARTICIPANT means any person so designated in accordance with the
provisions of Article III, including, where appropriate according to the
context of the Plan, any former employee who is or may become (or whose
Beneficiaries may become) eligible to receive a benefit under the Plan.

2.14     PARTICIPANT ENROLLMENT AND ELECTION FORM means the form on which a
Participant elects to defer Compensation hereunder and on which the Participant
makes certain other designations as required thereon.

2.15     PLAN means this Cap Rock Electric Cooperative, Inc. Supplemental
Executive Deferred Compensation Retirement Plan.

2.16     PLAN YEAR means the twelve (12) month period ending on December 31
each year.

2.17     TRUST means the trust fund established pursuant to the Plan.

2.18     TRUSTEE means the trustee named in the agreement establishing the
Trust and such successor and/or additional trustees as may be named pursuant to
the terms of the agreement establishing the Trust.

2.19     VALUATION DATE means the last day of each Plan Year and any other date
that the Company, in its sole discretion, designates as a Valuation Date.

                  ARTICLE III - ELIGIBILITY AND PARTICIPATION


3.1      REQUIREMENTS. Every Eligible Employee as of the Effective Date shall
be eligible to become a Participant on the Effective Date. Every other Eligible
Employee shall be eligible to become a Participant on the first Entry Date
occurring on or after the date on which he or she becomes an Eligible Employee.
No individual shall become a Participant, however, if he or she in not an
Eligible Employee on the date his or her participation is to begin.


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Participation in the Plan is voluntary. In order to participate, an otherwise
Eligible Employee must execute a valid Participant Enrollment and Election Form
in such manner as the Company may require and must agree to make Nonqualified
Deferral Contributions as provided in Article IV.

3.2      RE-EMPLOYMENT. If a Participant whose employment with the Company is
terminated is subsequently re-employed, he or she shall become a Participant in
the Plan in accordance with the provisions of Section 3.1 of this Article.

3.3      CHANGE OF EMPLOYMENT CATEGORY. During any period in which a
Participant remains in the employ of the Company, but ceases to be an Eligible
Employee, he or she shall not be eligible to make additional Nonqualified
Deferral Contributions under this Plan.

               ARTICLE IV - NONQUALIFIED DEFERRAL CONTRIBUTIONS

4.1      NONQUALIFIED DEFERRAL ELECTIONS. In accordance with rules established
by the Company, a Participant may elect to make a Nonqualified Deferral
Contribution with respect to a Plan Year by use of a Participant Enrollment and
Election Form.

4.2      PAYROLL DEDUCTIONS. Nonqualified Deferral Contributions shall be made
through payroll deductions. The Participant may change the amount of his or her
Nonqualified Deferral Contribution amount by delivering to the Company at least
fifteen days prior to the beginning of any quarter a new Participant Enrollment
and Election form with such change being first effective for Compensation to be
earned in the first payroll period of the quarter. Once made, a Nonqualified
Deferral Contribution payroll deduction election shall continue in force
indefinitely, until changed by the Participant on a subsequent Participant
Enrollment and Election Form delivered to the Company.

4.3      TIMING OF CONTRIBUTION. Nonqualified Deferral Contributions
shall be made at the same time Eligible Employees are paid.

                       ARTICLE V - COMPANY CONTRIBUTIONS

5.1      COMPANY CONTRIBUTION. In its sole discretion, the Company
may make a Company Contribution on behalf a Participant.

5.2      TIMING OF CONTRIBUTION. Company Contributions shall be made
as soon as administratively feasible after declared by the Board.

                          ARTICLE VI - PLAN ACCOUNTS
6.1      ESTABLISHMENT OF ACCOUNTS. There shall be established and
maintained by the Company separate Accounts in the name of each
Participant, as required and as described in this Article VI.


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6.2      NONQUALIFIED DEFERRAL ACCOUNT. The Company shall establish an Account
to which are credited a Participant's Nonqualified Deferral Contributions, plus
amounts equal to any income, gains, or losses (to extent realized, based upon
fair market value of the Account's assets) attributable or allocable to the
Participant's Account.

6.3      COMPANY CONTRIBUTION ACCOUNT. The Company shall establish an Account
to which are credited a Participant's Company Contributions, plus amounts equal
to any income, gains, or losses (to extent realized, based upon fair market
value of the Account's assets) attributable or allocable to the Participant's
Account.

6.4      ALLOCATION OF INCOME. The Company shall have the discretion to
allocate such income, gains, or losses among Accounts pursuant to such
allocation rules as the Company deems to be reasonable and administratively
practicable.

                       ARTICLE VII - ALLOCATION OF FUNDS


7.1      ALLOCATION OF EARNINGS OR LOSSES ON ACCOUNTS. Each Participant's
Account shall be invested in such investments as the Trustee shall determine.
The Trustee may (but is not required to) consider the Participant's investment
preferences when investing amounts credited to the Participant's Accounts. Such
investment preferences shall be related to the Trustee at the time and in the
manner prescribed by the Company, in its sole discretion. The Participant's
Accounts will be credited or debited with the increase or decrease in the
realizable net asset value or credited interest, as applicable, of each
investment, as follows. As of each Valuation Date, an amount equal to the net
increase of decrease in realizable net asset value or credited interest, as
applicable (as determined by the Trustee), of each investment option within the
Trust since the preceding Valuation Date shall be allocated among all
Participants' Accounts to be invested in that investment option in accordance
with the ratio which the portion, determined as provided herein, bears to the
aggregate of all amounts to be invested within that investment option.

7.2      ACCOUNTING FOR DISTRIBUTION. As of the date of any distribution under
the Plan to a Participant or his or her Beneficiary or Beneficiaries, such
distribution shall be charged to the applicable Participant's Account.

7.3      INTERIM VALUATIONS. If it is determined by the Company that the value
of the Trust as of any date on which distributions are to be made differs
materially from the value of the Trust on the prior Valuation Date upon which
the distribution is to be based, the Company, in its discretion, shall have the
right to designate any date in the interim as a Valuation Date for the purpose
of revaluing the Trust so that the Account from which the distribution is being
made will, prior to the distribution, reflect its share of such material
difference in value.

                            ARTICLE VIII - VESTING

8.1      NONQUALIFIED DEFERRAL CONTRIBUTIONS. A Participant shall always be one
hundred percent (100%) vested in amounts credited to his or her Nonqualified
Deferral Account.


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8.2      COMPANY CONTRIBUTIONS. A Participant's Company Contribution Account
will be subject to the vesting schedule attached hereto as Exhibit "A".


                       ARTICLE IX - PAYMENTS OF BENEFITS

9.1 PAYMENTS OF BENEFITS. The benefit payable under this Plan on account of a
Participant's termination of employment, retirement, disability, or death shall
be distributed in a cash lump sum as soon as practicable and no later than sixty
(60) days after the earlier of such termination of employment, retirement,
incurrence of disability (as determined by the Committee), or death. Any death
benefit payable under the Plan shall be payable to the Participant's
Beneficiary.

9.2 WITHDRAWAL OF FUNDS. Any participate may withdraw any amount of money at any
time that he or she has contributed to this Plan without penalty from the Plan.
Any participate withdrawing money from the Plan in this manner shall be
responsible for taxes including income taxes as ordinary income.

                     ARTICLE X - COMMITTEE ADMINISTRATION


10.1 COMMITTEE. The Committee shall administer, construe, and interpret this
Plan and shall determine, subject to the provision of this Plan, the Eligible
Employees who become Participants in the Plan from time to time and the amount,
if any, due a Participant (or his or her Beneficiary) under this Plan. No member
of the Committee shall be liable for any act done or determination made in good
faith. No member of the Committee who is a Participant in this Plan may vote on
matters affecting his or her personal benefit under this Plan, but any such
member shall otherwise be fully entitled to act in matters arising out of or
affecting this Plan notwithstanding his or her participation herein. In carrying
out its duties herein, the Committee shall have discretionary authority to
exercise all powers and to make all determinations, consistent with the terms of
the Plan, in all matters entrusted to it, and its determinations shall be given
deference and shall be final and binding on all interested parties.

                            ARTICLE XI - THE TRUST

11.1 ESTABLISHMENT OF TRUST. The Company shall establish the Trust with the
Trustee, pursuant to such terms and conditions as are set forth in the Trust
agreement to be entered into between the Company and the Trustee. The Trust is
intended to be treated as a "grantor" trust under the Code, and the
establishment of the Trust is not intended to cause Participants to realize
current income on amounts contributed thereto, and the Trust shall be so
interpreted.

                         ARTICLE XII - ADMINISTRATION

12.1 ADMINISTRATIVE AUTHORITY. Except as otherwise specifically provided herein,
the Company shall have the sole responsibility for and the sole control of the
operation and administration of the Plan, and shall have the power and authority
to take all actions including the right to amend or terminate the Plan, and to
make all decisions and interpretations which may be necessary or appropriate in
order to administer and operate the Plan, including, without limiting the
generality of the


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foregoing, the power, duty, and responsibility to:

         a) Resolve and determine all disputes or questions arising under the
            Plan, including the power to determine the rights of Eligible
            Employees, Participants, and Beneficiaries, and their respective
            benefits, and to remedy any ambiguities, inconsistencies, or
            omissions in the Plan.

         b) Adopt such rules of procedure and regulations as in its opinion may
            be necessary for the proper and efficient administration of the Plan
            and as are consistent with the Plan.

         c) Implement the Plan in accordance with its terms and the rules and
            regulations adopted as above.

         d) Make determinations with respect to the eligibility of any Eligible
            Employee as a Participant and make determination concerning the
            crediting and distribution of Plan Accounts.

         e) Appoint any persons or firms, or otherwise act to secure specialized
            advice or assistance, as it deems necessary or desirable in
            connection with the administration and operation of the Plan, and
            the Company shall be entitled to rely conclusively upon, and shall
            be fully protected in any action or omission taken by it in good
            faith reliance upon the advice or delegate from time to time by
            written instrument all or any part of its duties, powers, or
            responsibilities under the Plan, both ministerial and discretionary,
            as it deems appropriate, to any person or committee, and in the same
            manner to revoke any such delegation of duties, powers, or
            responsibilities. Any action of such person or committee in the
            exercise of such delegated duties, powers, or responsibilities shall
            have the same force and effect for all purposes hereunder as if such
            action had been taken by the Company. Further, the Company may
            authorize one or more persons to execute any certificate or document
            on behalf of the Company, in which event any person notified by the
            Company of such authorization shall be entitled to accept and;
            conclusively rely upon any such certificate or document executed by
            such person as representing action by the Company until such third
            person shall have been notified of the revocation of such authority.

12.2     MUTUAL EXCLUSION OF RESPONSIBILITY. Neither the Trustee nor
the Company shall be obliged to inquire into or be responsible for
any act or failure to act, or the authority therefor, on the part
of the other.

12.3 UNIFORMITY OF DISCRETIONARY ACTS. Whenever in the administration or
operation of the Plan discretionary actions by the Company are required or
permitted, such actions shall be consistently and uniformly applied to all
persons similarly situated, and no such action shall be taken which shall
discriminate in favor of any particular person or group of persons.


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12.4 LITIGATION. Except as may be otherwise required by law, in any action or
judicial proceeding affecting the Plan, no Participant or Beneficiary shall be
entitled to any notice or service of process, and any final judgment entered in
such action shall be binding on all persons interested in or claiming under the
Plan.

12.5 PAYMENT OF ADMINISTRATION EXPENSES. All expenses incurred in the
administration and operation of the Plan and the Trust, including any taxes
payable by the Company in respect of the Plan or Trust or payable by or from the
Trust pursuant to its terms shall be paid by the Company.

12.6 CLAIMS PROCEDURE.

         a) Notice of Claim. Any Eligible Employee or Beneficiary, or the duly
            authorized representative of an Eligible Employee or Beneficiary,
            may file with the Committee a claim for a Plan benefit. Such a
            claim must be in writing on a form provided by the Committee and
            must be delivered to the Committee, in person or by mail, postage
            prepaid. Within ninety (90) days after the receipt of such a claim,
            the Committee shall send to the claimant, by mail, postage prepaid,
            a notice of the granting or the denying, in whole or in part, of
            such claim, unless special circumstances require an extension of
            time for processing the claim. In no event may the extension exceed
            ninety (90) days from the end of the initial period. If such an
            extension is necessary, the claimant will be given a written notice
            to this effect prior to the expiration of the initial ninety (90)
            day period. The Committee shall have full discretion to deny or
            grant a claim in whole or in part in accordance with the terms of
            the Plan. If notice of the denial of a claim is not furnished in
            accordance with this Section, the claim shall be denied and the
            claimant shall be permitted to exercise his or her right to review
            pursuant to Sections 13.6(c) and 13.6(d) of the Plan, as applicable.

         b) Action on Claim. The Committee shall provide to every
            claimant who is denied a claim for benefits a written
            notice setting forth, in a manner calculated to be
            understood by the claimant:

            (i)     The specific reason or reasons for the denial;

            (ii)    A specific reference to the pertinent Plan
                    provisions on which the denial is based;

            (iii)   A description of any additional material or information
                    necessary of the claimant to perfect the claim and an
                    explanation of why such material or information is
                    necessary; and

            (iv)    An explanation of the Plan's claim review
                    procedure.


         c) Review of Denial. Within sixty (60) days after the receipt by a
            claimant of written notification of the denial (in whole or in part)
            of a claim, the claimant or the claimant's duly authorized
            representative, upon written application to the Committee, delivered
            in person or by certified mail, postage prepaid, may


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            review pertinent documents and may submit to the Committee, in
            writing, issues and comments concerning the claim.

         d) Decision on Review. Upon the Committee's receipt of a notice of a
            request for review, the Committee shall make a prompt decision on
            the review and shall communicate the decision on review in writing
            to the claimant. The decision on review shall be written in a manner
            calculated to be understood by the claimant and shall include
            specific reasons for the decision and specific references to the
            pertinent Plan provisions on which the decision is based. The
            decision on review shall be made not later than sixty (60) days
            after the Committee's receipt of a request for a review, unless
            special circumstances require an extension of time for processing,
            in which case a decision shall be rendered not later than one
            hundred twenty (120) days after receipt of the request for review.
            If an extension is necessary, the claimant shall be given written
            notice of the extension by the Committee prior to the expiration of
            the initial sixty (60) day period. If notice of the decision on
            review is not furnished in accordance with this Section, the claim
            shall be denied on review.

12.7   LIABILITY OF COMMITTEE, INDEMNIFICATION. To the extent permitted by law,
the Committee or any Company employee shall not be liable to any person for any
action taken or omitted in connection with the interpretation and administration
of this Plan unless attributable to his or her own bad faith or willful
misconduct.

12.8 EXPENSES. The cost of the establishment of the Plan and the adoption of the
Plan by the Company, including but not limited to legal and accounting fees,
shall be borne by the Company.

12.9 TAXES. All amounts payable hereunder shall be reduced by any and all
federal, state, and local taxes imposed upon an Eligible Employee or his or her
Beneficiary which are required to be paid or withheld by Company. The
determination by the Company regarding applicable income and employment tax
withholding requirements shall be final and binding on the Eligible Employee.

12.10 ATTORNEY'S FEES. The Company shall pay the reasonable attorney's fees
incurred by any Eligible Employee in an action brought against Company to
enforce Eligible Employee's rights under the Plan, provided that such fees shall
only be payable in the event that the Eligible Employee prevails in such action.

                                    CAP ROCK ELECTRIC COOPERATIVE, INC.


                                    By: /s/ John D. Parker
                                       --------------------------------------
                                          John D. Parker

                                    Date:       6-27-97
                                              -------------------------


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                                  Exhibit "A"

                               VESTING SCHEDULE

1 Year  - 10%
2 Years - 20%
3 Years - 30%
4 Years - 40%
5 Years - 60%
6 Years - 80%
7 Years - 100%