Document:

ORDINANCE NO. 1222
                                                                           ----
AN  ORDINANCE  OF THE CITY OF  STANTON,  TEXAS,  GRANTING  TO CAP ROCK  ELECTRIC
COOPERATIVE,  INC.,  (A  CORPORATION  WITH ITS  PRINCIPAL  OFFICE IN THE CITY OF
STANTON,  MARTIN COUNTY, TEXAS) THE FRANCHISE AND RIGHTS TO CONDUCT IN SAID CITY
THE  BUSINESS  OF  ACQUIRING  MAINTAINING,  INSTALLING  AND  OPERATING  ELECTRIC
FACILITIES FOR THE  TRANSMISSION  AND DISTRIBUTION OF ELECTRICITY TO THE CITY OF
STANTON AND THE INHABITANTS  THEREOF FOR LIGHT,  HEAT,  POWER AND OTHER PURPOSES
AND THE RIGHT TO USE THE STREETS, ALLEYS AND OTHER PUBLIC WAYS IN SAID CITY, FOR
SAID PURPOSES;  PRESCRIBING THE CONDITIONS,  LIMITATIONS AND RESTRICTIONS  UNDER
WHICH SAID  PRIVILEGES  MAY BE EXERCISED  PRESCRIBING AN ANNUAL FEE TO THE CITY;
AND  PRESCRIBING  THE TERM OF SAID  FRANCHISE  AND RIGHTS TO BE EIGHT (8) YEARS;
CONTAINING A SAVINGS AND SEVERABILITY CLAUSE; AND ORDERING PUBLICATION.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF STANTON,  TEXAS,  (hereinafter
referred to as "City", which said term means the corporate entity of the City of
Stanton, Texas, the City Council or the corporate limits of the City of Stanton,
whenever  either of said  means  shall be  appropriate  in the  context  of this
ordinance):
THAT Cap Rock Electric Cooperative,  Inc.,  (hereinafter called "Grantee"),  its
successors and assigns,  be and it is hereby  granted the  franchise,  right and
privilege to conduct  within its service area as certified by the Public Utility
Commission on the effective date of this ordinance,  in the City the business of
acquiring   constructing,   maintaining,   installing  and  operating   electric
facilities for the  transmission and distribution of electricity to the City and
the inhabitants  thereof for light,  heat,  power, and other purposes,  upon the
following terms, provisions and conditions, to wit:
SECTION ONE. The term of this grant shall be a period of time commencing on July
11, 1995,  and ending on December 31, 2002,  and for such  additional  period or
extension of time as may be granted.

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SECTION  TWO.  That the said Grantee is hereby  granted the right to  construct,
lay, repair,  remove and replace electric light and power lines,  facilities and
equipment,  and to  construct  and  install  such  machinery,  equipment  and/or
facilities  as may be  necessary  or  advisable  in its  judgment for the proper
performance  of the  service to be  rendered  to the City and the  citizens  and
inhabitants  thereof,  and to the best  interest  of the  electricity  consumers
(including  underground  conduits,  poles, towers, wires and transmission lines,
and telephone and telegraph lines for its own use), in, on, over, under,  along,
upon,  arid across all of the present and/or future  streets,  roads,  highways,
alleys and public ways of the City and  controlled  by the City,  and to have at
all times  access to said  streets,  alleys,  and public ways for the purpose of
constructing,  laying, repairing, removing and replacing such electric light and
power lines, facilities, and equipment and other appurtances under this grant as
may be  needed  from  time to time  during  the  term of this  franchise  or any
extension thereof; provided,  however, that the work done in connection with the
construction,  maintenance,  and  operation  of  said  electric  facilities  and
distribution  system shall be subject to and governed by the regulations,  rules
and ordinances now legally in force or that may be hereafter  lawfully  adopted,
to the extent that such  regulations,  rules and ordinances are not inconsistent
with the provisions of this ordinance and do not deprive  Grantee of its use and
enjoyment of the franchise rights and privileges  herein granted.  That the said
Grantee is to have the right to construct  electric  light and power  facilities
and  equipment,  and to construct  such  buildings and install such machinery or
equipment,  and to sell or lease such  equipment  to the citizens of the City as
may be necessary or advisable in Grantee's  judgment for the proper  performance
of the service to be rendered to the City and to its citizens and inhabitants to
the best  interest  of the  electricity  consumers;  and to have,  at all times,
access to the streets  and alleys of said City for the  purpose of  constructing
such facilities and equipment as may be needed from time to time during the term
of this franchise, or any extensions thereof;

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 provided  that at no time shall the Grantee  obstruct such streets or alleys so
as to interfere with the public use thereof for a period longer than twenty-four
hours,  unless approved by the City's  Director of Public Works,  and that after
such  facilities  or equipment  are erected or laid and tested the same shall be
covered,  if  under-ground,  and such streets or alleys shall be replaced in the
same or as good  condition  as  before  such  work was done at the sole cost and
expense of the Grantee.
That this franchise is granted upon and subject to the following provisions:
1.  Maintaining  its  properties,   the  Grantee  shall  not   unnecessarily  or
unreasonably impair or obstruct the streets, roads, highways,  alleys, sidewalks
and public ways. 2. The Grantee shall use reasonable precautions to avoid damage
or injury to persons or property, and shall indemnify and hold and save harmless
the City from all damages,  losses,  or expense  caused by any negligence of the
Grantee,  its agents or  employees,  while  exercising  any of the rights herein
granted.
3. In installing and  constructing  additional pole lines or underground  lines,
Grantee shall,  insofar as practicable,  so install and construct the same along
or under the alleyways,  where alleys exist, rather than along or under streets,
using the streets as necessary in connecting from one alley to another.  Grantee
shall  give prior  notice to the  City's  Director  of Public  Works  before any
construction  or repair work on Grantee's  lines  obstructs any public street or
roads. -
4. All facilities shall be so laid or erected so as to protect and not interfere
with existing  paving,  wire cables,  water pipes,  underground  wires, or sewer
laterals,  as  directed  by and to the  satisfaction  of the City or the  City's
Director of Public Works. 5. Grantee,  at its expense,  shall construct or erect
and extend electric  service to any consumer within its service area in the City
of Stanton  within ninety (90) days after  receiving a written  request from the
Stanton City Manager,  but Grantee shall not be required to extend service lines
more than three hundred (300) feet to any one consumer.

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6. Grantee  covenants  and agrees that it will repair any of the City's  streets
and alleys that Grantee, its employees,  agents,  contractors and subcontractors
damages so that such  streets and alleys  will  comply with the City's  Standard
Specifications.  7. Grantee  covenants and agrees that Grantee shall, at its own
expense,  repair all water lines,  sewer lines,  service  lines and water meters
owned  by  the  City  that  Grantee,   its   employees,   agents,   contractors,
subcontractors,  damage so that such water  lines,  sewer lines and water meters
shall   comply  with  the   requirements   of  the  City  of  Stanton   Standard
Specifications.
8.  Before the  Grantee  seeks bids on any phase of the repair of City  Streets,
alleys,  water lines, sewer lines or any other City owned utility, the plans and
specifications  shall be approved by the City's Director of Public Works. 9. The
Grantee  shall  indemnify  and save and  hold  harmless  the City and all of its
officers,  employees,  and agents  from all  suits,  actions,  claims,  damages,
losses, attorney's fees and expenses of any character whatsoever, brought for or
on account of any  injuries  or damages  received  or  sustained  by any person,
persons  or  property,  on  account of any act of the  Grantee,  its  employees,
agents,  officers,  or their  contractors,  subcontractors  and their  employees
arising  directly or  indirectly  or in any way  connected  with the  placement,
construction, operation, repair, maintenance, replacement or removal of any part
of the  Grantee's  system,  and the  Grantee  will be  required to pay any final
judgment  with costs  which may be  obtained  against  the Grantee or any of its
officers,  agents or employees,  including  attorney's  fees.  City shall not be
liable for any damage caused to the Grantee's system by reason of any subsequent
construction  authorized  or  permitted  by the City in its  streets,  alleys or
public rights of way.
The city  reserves  the right to lay and  permit to be laid  electric  conduits,
water and sewer lines and other pipelines or cables,  and to do and permit to be
done any

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above or  underground  work which may be deemed  necessary or proper by the City
in,  across,  along or under any street,  alley,  highway,  or other  public way
occupied by the Grantee; and whenever by reason of changes in the grade or width
of any street, or in the location or manner of constructing any City-owned water
pipes, sewer lines or other above-ground or under-ground structures, it shall be
deemed  necessary  by the City to alter,  change,  adapt,  or  conform  electric
service lines of Grantee in any street or alley lawfully dedicated to public use
or other public ways occupied by Grantee,  such  alterations or changes shall be
made  by the  Grantee  when  ordered  in  writing  by the  City  Manager  or any
supervisor or other  representatives  of the City thereof so -authorized to act,
without  any claim for  reimbursement  for damages  against the City;  provided,
however, that Grantee shall at all times be entitled to receive from appropriate
governmental  bodies,  excluding  the  City,  payments  for  relocation  of  its
facilities to which it may be lawfully entitled to under applicable  federal law
or laws of the State of Texas with respect to relocation  payments where highway
construction or reconstruction is involved. SECTION THREE. The Grantee shall not
discriminate against any person, corporation,  firm or association in the charge
for electric  service or in the services  rendered  under like  circumstance  to
customers  of  the  same  classification.  The  Grantee  will  not  directly  or
indirectly grant any discount, rebate, or give things of value to circumvent the
rate schedule.
SECTION FOUR.  Grantee,  its  successors  and assigns,  shall file with the City
Secretary of the City a schedule of all rates for the sale of electricity to its
general domestic and commercial  customers who use electricity  within the City,
which shall be the rates now in existence;  provided,  however,  nothing  herein
shall  prohibit  the  Grantee  from  filing in the  future its  application  for
increase or decrease of such rates and the City acting thereon by ordinance.
SECTION FIVE. The City, by the granting of this franchise, does not surrender

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or to any extent lose, waive, imperil or lessen the lawful powers and rights now
pr  hereinafter  vested in the City under the  Constitution  and Statutes of the
State of Texas and  under  the  Charter  of the City to  regulate  the rates for
services of Grantee;  and Grantee,  by its acceptance of this franchise,  agrees
that all such lawful  regulatory power and rights,  as the same may from time to
time be vested in the City, shall be in full force and effect and subject to the
exercise thereof by the City at any time and from time to time. SECTION SIX. The
Grantee may require from any consumer of electricity, before electric service is
commenced  or  continued,  a deposit of up to one/sixth  (1/6) of the  estimated
yearly bill,  which said deposit may be retained by the Grantee until service is
discontinued and all bills therefore have been paid, if in accordance with state
or federal  law.  The Grantee  shall then return said  deposit to the  consumer,
together with interest  accrued thereon (to the extent not  theretofore  paid or
applied) at the statutory rate from the date of said deposit.  The Grantee shall
be entitled to apply said deposit  and/or accrued  interest to any  indebtedness
owed the Grantee by the consumer  owning the deposit,  and when said deposit has
been applied in whole or in part to any such  indebtedness,  the consumer may be
required to restore or increase  said deposit to its proper level as a condition
to the resumption or continuation of service. The Grantee may make, from time to
time,  and  enforce,  reasonable  rules and  regulations  for the conduct of its
business and may require,  as a condition to the commencement or continuation of
its  service,  the  execution  of a contract  therefore  by the consumer of such
electricity.  In case of default or  nonpayment of any electric bill rendered at
any authorized rate, Grantee shall have the right to discontinue service to such
consumer  in  accordance  with the laws of the  United  States  and the State of
Texas;  and in case  said  consumer  shall  make  application  to  have  service
reconnected,  he may be required to pay, as a condition  precedent thereto,  all
amounts due to the Grantee and also, a reasonable reconnecting fee.

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SECTION SEVEN. In  consideration of the grant of said privilege and franchise by
the City and as full  payment  for the  privilege  of using  and  occupying  the
streets, alleys, highways,  easements,  parks and other public places within the
City,  and in lieu of any and all  occupation  taxes,  easements  and  franchise
taxes,  and in lieu of license and  inspection  fees or charges,  street  taxes,
street or alley rentals and of all other  charges,  levies,  fees and rentals of
whatsoever  kind and  character  which  the  City may  impose  or  hereafter  be
authorized or empowered by law to levy and collect, the Grantee shall pay to the
City  annually  and on or before  March 15 of each  yea(during  the term  hereof
beginning July 11, 1994, an amount equivalent to three percent (3%) of the gross
revenues  received  by the  Grantee,  its  successors  and  assigns  during  the
preceding calendar year from sales of electricity within the corporate limits of
said City,  Grantee's  failure to make the payment within thirty (30) days after
the payment is due shall  constitute  a late  payment and Grantee  shall pay the
Grantor a late  charge of five  percent  (5%) of the  payment  due.  The  yearly
franchise  fee  payment  shall  be made to the  City at the  office  of the City
Manager,  P. 0. Box 370, Stanton,  Texas, 79782. The franchise fee payment shall
be  exclusive  of and in  addition to all  general  municipal  taxes of whatever
nature, including, but not limited to sales and use taxes, ad valor em taxes and
special taxes and assessments for public improvements. On or before the 15th day
of March of each  year a  verified  report  shall be filed  with the City by the
Grantee showing its gross revenues as aforesaid for the preceding calendar year,
and the payment made hereunder shall be based upon said report. The payment made
by Grantee on or before March 15 of each year during the term  hereof,  shall be
fore the use during the preceding  calendar year of the City's  alleys,  streets
and other public rights of way.
Provided,  however,  that if at any  time  during  the  term  of this  franchise
agreement the Legislature of the State of Texas or any duly authorized and

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empowered  agency of the Legislature  authorized or directs a greater  franchise
fee (by  whatever  name  known,  such as gross  receipts  fee,  street and alley
rental,  etc.),  for Stanton in particular or home rule cities in general,  than
that  provided  herein,  then and in that event the fee to be paid by Grantee to
City  hereunder  shall  automatically  be and  become  the  greatest  amount  so
authorized or directed beginning with the first full calendar year following the
effective  date of any such  legislation  and provided  further that said fee is
subject to adjustment by mutual  agreement of the City and Grantee at all times.
In any event,  the  percentage of gross  receipts paid to City shall not be less
than the greatest  percentage  paid by Grantee to any other city served by it. -
The City, or its duly  authorized  representatives,  shall have the right at all
reasonable  times,  to  inspect  the books and  records of the  Grantee  whether
located in the City of Stanton or elsewhere.
SECTION EIGHT. The Grantee's  undertakings  shall be subject to its ability,  by
use of due diligence and normal business methods, to obtain and place in service
the necessary materials and facilities.  Moreover,  the Grantee shall be excused
from  failure or delay in  performing  such  obligations  if, and to the extent,
occasioned by act of God, fire, explosion, flood, act of public enemy, contagion
or  contamination  hazardous to human life or health,  legal  restraints,  labor
difficulties,  material  shortages,  interruption  or deficiency of  electricity
supply not  attributable to default of the Grantee or, without  limitation,  any
other cause or combination of causes  not-reasonable  with the Grantee's ability
to anticipate or control.  SECTION NINE. The Grantee, its successors or assigns,
shall  prepare and file with the City's  Director of Public  Works a set of maps
setting forth its underground distribution system located within the City, which
maps shall be  corrected  and  brought up to date from time to time  thereafter.
Grantee's  maps of its  overhead  distribution  system shall be kept current and
available to said Director of Public Works at all times.

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SECTION TEN. If the said  Grantee  shall fail to comply  substantially  with the
conditions of the  franchise,  the City shall have the right,  by ordinance duly
passed therefore,  to forfeit all the right and franchises herein granted to the
said  Grantee;  provided that the City shall give Grantee,  its  successors  and
assigns, sixty (60) days notice in writing, specifying the conditions claimed to
have been  violated,  and giving full and fair  opportunity  to be heard thereon
before  declaring such  forfeiture,  which notice shall fairly and fully set out
all of the  conditions  claimed and complained of and shall be given by the said
City,  after having been properly  authorized by the Mayor and governing body of
the said City;  provided,  however,  that the said Grantee shall have sixty (60)
days after receiving such notice in which to rectify and correct such violations
and to comply  substantially  with the terms and  conditions  of the  ordinance,
should the violations of this ordinance so complained of not have been rectified
and  corrected  and the terms and  conditions  of this  ordinance  substantially
complied with at the end of said sixty (60) days,  then, and in that event,  the
City shall have the power to forfeit this franchise on account of the violations
specified in said notice.  In case of  forfeiture as herein  provided,  the City
reserves  the right to purchase the  electric  facilities  of the Grantee at its
fair appraised value or to allow the Grantee to remove same within one year from
the date of such forfeiture;  provided that,  before any of said property may be
removed, the Grantee shall be required to give to the City a good and sufficient
bond that the streets and alleys will be placed and left in as good condition as
found.  In lieu of  forfeiture,  at the  option of the City,  for each and every
breach or violation of any of the  provisions of this  ordinance by the Grantee!
it shall be liable to a civil penalty of  Twenty-Five  Dollars  ($25.00) and, if
the breach or violation  shall be a continuous  one,  each day during which such
breach or violation  continues shall be deemed a separate breach or violation of
this ordinance. Pursuant to State Law, upon termination hereof or in the case of
forfeiture,  as hereinabove provided for, the City reserves the right, and shall
have the option, to

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purchase this  franchise,  as well as any other  property of the Grantee  within
said City  constituting a part of its electric  facilities and system,  and upon
payment of a fair.  valuation  therefore;  provided,  however,  that the Grantee
shall never be entitled to any payment of valuation because of any value derived
from  the  franchise  or the  fact  that  it is or may be a going  concern  duly
installed  and  operated.  This right to  purchase  in the event of  termination
hereof  may be  exercised  only  after  notice in writing is given to Grantee at
least 120 days before the expiration date of this franchise.
For the  purpose of this  section,  the fair  valuation  of  Grantee's  electric
facilities shall be determined by the value of the  Reproduction  Cost New, less
observed  depreciation of the said electric facilities.  The said fair valuation
shall be determined by the majority  opinion of three (3) appraisers,  one to be
appointed by the City,  one to be appointed by the Grantee,  and the third to be
selected by the two so appointed;  and, in the event they cannot agree, then the
third  shall  be  appointed  by the  District  Judge  for  Martin  County.  Said
appraisers  shall be named in writing by both  parties  hereto  with in ten days
after the City's election and notice to Grantee to have said appraisal made; and
the third is to be selected  within ten days after the first two are  appointed.
The unanimous or majority  opinion,  as the case may be, of the appraisers as to
the fair  valuation of the property of Grantee  shall be furnished in writing to
both  parties  within  sixty (60) days from the date of the  appointment  of the
third  appraiser.  If either  party,  that is to say, the Grantee or the City of
Stanton be dissatisfied with the valuation of Grantee's facilities as determined
by the  unanimous  or  majority  opinion,  as the case may be, of the  appointed
appraisers,  said party may,  within  twenty  (20) days after the receipt of the
appraiser's report, file suit in the District Court of Martin County, Texas, and
the cause shall be tried de nova and  determined as in other civil causes in the
District  Court  with the only  issue to be  determined  being the amount of the
compensation to be paid by the City of Stanton to the Grantee as the fair

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     valuation of Grantee's electrical  facilities,  which compensation shall be
determined  by  the  value  of  the   reproduction   costs  new,  less  observed
depreciation  of said  electrical  facilities,  and shall not  include any value
derived from the franchise or the fact that it is or may be a going concern duly
installed and operated.  If no suit be filed,  as herein  provided for, the City
shall  within ten (10) days  after the  expiration  of the twenty  (20) days for
filing of suit, exercise its option to purchase Grantee's electrical  facilities
by payment of the amount  determined by the appraisers,  or allow the Grantee to
remove the same, within one (1) year thereafter. In the event either party shall
appeal to the District Court, as herein provided for, the term o~ this franchise
shall be extended  and it shall  remain in full force and effect  until ten days
after the entry of a final  judgment in such  cause.  Within ten (10) days after
entry of said final  judgment,  the City shall  exercise  its option to purchase
Grantee's  electrical  facilities at the amount determined by said judgment,  or
allow the  Grantee to remove  its  facilities  within  one (1) year  thereafter.
SECTION ELEVEN. The Grantee shall have the right and privilege of assigning this
franchise and all the rights and  privileges  granted  herein,  and wherever the
word  "Grantee"  appears  herein  it  shall  be  construed  as  applying  to its
successors and assigns. SECTION TWELVE. If any section, paragraph,  subdivision,
clause,   phrase,   or   provision   hereof   shall  be   adjudged   invalid  or
unconstitutional,  the same shall not affect the validity  hereof as a whole, or
any part or provision  other than the part or provision so decided to be invalid
or  unconstitutional.  SECTION THIRTEEN.  Grantee shall, within thirty (30) days
from date of the final passage of this ordinance by the City, file with the City
Secretary a written statement signed in its name and behalf by a duly authorized
officer of Grantee in the following  form:  `The Honorable  Mayor and Council of
the City of Stanton, "Cap Rock Electric

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     Cooperative,  Incorporated , for itself, its successors and assigns, hereby
accepts the attached  ordinance  finally passed by the City Council the 11th day
of July  1994,  and agrees to be bound by all of its terms and  provisions  "CAP
ROCK ELECTRIC  COOPERATIVE,  INCORPORATED  "By Not Legible "Dated this, the 11th
day of July , 1994."

     SECTION   FOURTEEN.   Any   notice  or   communication   required   in  the
administration  of this  franchise  shall be sent to the City as  follows:  City
Manager,  City of Stanton,  P. 0. Box 370,  Stanton,  Texas 79782. Any notice or
communication  required in the administration of this franchise shall be sent to
the Grantee as follows:  Mr. David W. Pruitt,  President/CEO,  Cap Rock Electric
Cooperative,  P. 0. Box 700,  Stanton,  Texas  79782.  SECTION  FIFTEEN.  If any
section,  subsection,  sentence,  clause or phrase of this ordinance is, for any
reason, held to be  unconstitutional  or invalid,  such holding shall not affect
the validity of the  remaining  portions of this  ordinance.  The Council of the
City of Stanton  hereby  declares  that it would have passed this  ordinance and
each section, subsection, sentence, clause, or phrase hereof irrespective of the
fact that any one or more sections,  subsections,  sentences, clauses or phrases
be declared  unconstitutional or invalid. SECTION SIXTEEN. The city Secretary is
hereby  authorized  and  directed  to publish  the  descriptive  caption of this
ordinance  in the  manner  and for the  length of time  prescribed  by law as an
alternative method of publication.  On motion of Council member Ronnie Christian
, seconded by Council member James Jenkins , the foregoing  ordinance was passed
on first reading on the 11th day of July , 1994, by the following vote:

 Council members voting "AYE"
Gene Wheeler
James Jenkins
Valentine Sotelo
Ronnie Christian
Dennis Kotasek

Council members voting "NAY":

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PASSED AND APPROVED THIS 11TH DAY OF JULY, A.D., 1994.
                         ----        ----

                                    /s/ Gene Wheeler____________
                                    ----------------
                                    Gene Wheeler, Mayor Pro-Tem

ATTEST:
/s/ Danny Fryer, Secretary
Danny Fryar, Secretary

APPROVED AS TO FORM:
/s/ William Clifton by permission
Bill Clifton, City AttorneyCAP ROCK ELECTRIC
                    Achievement Based Compensation Agreement
                 Corporate Asset Non-CFC Financing Arrangements
In accordance  with Cap Rock Electric  Cooperative,  Inc. ("Cap Rock  Electric")
Board  Policy  143,  this  contract  provides  for  calculation  and  payment of
achievement  compensation  in the form of a  percentage  of the gross  amount of
transactions  involving  financing through  arrangements with lenders other than
conventional  borrowing from CFC for the acquisition and ultimate ownership of a
Power Transmission Facility which will interconnect  Southwestern Public Service
Company's grid, with Cap Rock Electric's  distribution  system. Such lenders may
include, but are not limited to, leasing companies, commercial banks, investment
houses, power suppliers, and other financing sources.

     (1) Responsible Individual: John D. Parker,  Vice-President/Chief Financial
Officer  (2)  Amount  of  Achievement   Based   Compensation:   The  achievement
compensation  will be one percent (1%) of the gross  amount of the  transaction.
(3) Calculation of the Transaction Proceeds: The gross amount of the transaction
is defined as the total  proceeds  received  under the financing  agreement+ (4)
Term of Achievement  Based  Compensation:  The achievement  compensation will be
paid within two months of the receipt of the final advance of proceeds from each
individual financing transaction. (5) Payment of Achievement Based Compensation:
The achievement compensation will be paid after the receipt of the final advance
of the  proceeds  after review and  approval by the  President/CEO  and Board of
Directors of this contract. The achievement 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  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 Consideration for Payment:  Except upon becoming eligible for
benefits  under any Cap Rock  retirement  plan,  either  early or  regular,  the
Achievement Compensation will be payable to the recipients listed below in para.
(7) without regard to the continued  employment of those  individual by Cap Rock
Electric or an affiliate or subsidiary thereof,  provided that, unless otherwise
agreed by Cap Rock Electric, each individual agrees that he will not voluntarily
terminate  his  employment by Cap Rock Electric or an affiliate or subsidiary of
Cap Rock  Electric  prior to the shorter of either (A) for a period of three (3)
years following the date of initial payment under this contact,  or (B) the date
of the final  disposition  of a  transaction,  i.e.  the  effective  date of the
ultimate  assignment of the transaction to a power supplier+ In no event,  under
either  (A) or (B)  mentioned  in the  previous  sentence,  will the  individual
voluntarily  terminate his  employment by Cap Rock or an affiliate or subsidiary
of Cap Rock  Electric less than one year  following the date of initial  payment
under this contact.  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  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 alternate or non-CFC financing  arrangements,  the Achievement
Compensation  will be shared  among  the  Responsible  Individual  and the other
management team members as follows: Responsible Individual - 50% Management Team
- 50%  President/CEO  - 30% Other  individuals  selected by the CEO and Board of
Directors - 20%

                                    Ulen  North - 6.66%  Steve  Collier  - 6.66%
                                    Beverly Collier - 6.66%
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  Compensation  total  payment  being
commensurate and equitable with the conditions placed upon the recipients by the
acceptance of such Compensation.
In the event the  Responsible  Party should violate the terms of this Agreement,
the right to receive  further  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  named herein by the  President/CEO  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 President/CEO  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 28th day of August, 1994

                  /s/ John D. Parker                 8-28-94
                  ------------------                 -------
                  Responsible Individual    Date

                  /s/ Not Legible                    8-28-94
                  President / CEO           Date

                  /s/ Russell Jones         8-28-94
                  Chairman                  Date

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00019-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00019-of-00352.parquet"}]]