Document:

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                             EMPLOYMENT AGREEMENT

THE STATE OF TEXAS   )
                     )               KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF MIDLAND    )

THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into effective as of
the 1st day of September, 2001.

By this Agreement, CAP ROCK ENERGY CORPORATION, referred to in this Agreement as
"Company", acting by and through its Chief Executive Officer, David W. Pruitt,
hereinafter referred to as the "CEO", agrees to employ LEE ATKINS, referred to
in this Agreement as "Atkins", and Atkins hereby agrees to accept employment on
the following terms and conditions as set forth herein:

                                   ARTICLE 1

                              TERMS OF EMPLOYMENT

1.01   By this Agreement, the Company, acting by and through and under the
direction of CEO, employs Atkins and Atkins accepts employment with the Company
as its Senior Vice President and Chief Financial Officer for an initial term of
two (2) years. Unless a written notice to terminate this Agreement is executed
and properly delivered by either party at least one (1) year prior to an
anniversary date, this Agreement shalt annually and automatically be renewed for
an additional term of one (1) year. This Agreement may, however, be terminated
earlier, as provided in Article 4, below.

1.02   During the term of this Agreement, Atkins shall serve in the capacity of
Senior Vice President and Chief Financial Officer. Atkins shall report directly
to the CEO. Atkins' job responsibilities shall be those set forth on the
attached "Position Specification".

1.03   During the term of this Agreement, and excluding any periods of
disability, vacation or sick leave to which Atkins is entitled, Atkins shall
devote his full business time, attention and energies to the business of the
Company. During the term of this Agreement, it shall not be a violation of
this Agreement for Atkins to (i) serve on corporate, civic or charitable
boards or committees, (ii) deliver lectures or fulfill speaking engagements
and (iii) manage personal investments, so long as such activities do not
interfere with the performance of Atkins' responsibilities as an employee of
the Company in accordance with this Agreement.

1.04   Atkins will perform his duties under this Agreement with fidelity and
loyalty, to the best of his ability, experience and talent and in a manner
consistent with his duties and responsibilities.

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                                   ARTICLE 2

                      EMPLOYMENT COMPENSATION & BENEFITS

2.01   As compensation for all services rendered under this Agreement, Atkins
shall be paid by Company a salary of $175,000.00 per year, or any greater amount
of compensation including bonuses, fees and deferred compensation authorized by
the wage and salary plan or Board policies authorized by the Company, together
with an annual salary adjustment in an amount at least equal to any approved
across the board salary adjustments for all employees, plus annual bonuses
approved by the Board of Directors.

2.02   Atkins shall receive the same annual leave and sick leave and all other
benefits as are accorded regular full-time employees of the Company including
provisions governing accrual and payment therefore on early retirement or other
methods of employment. Atkins shall receive four (4) weeks paid vacation for
each year of employment with the Company.

2.03   Subject to the above paragraph 2.02, all provisions of the Company's
rules and regulations relating to annual leave(vacation), sick leave, early
retirement, insurance, savings, deferred compensation, bonuses, pension
program contributions, holiday and other fringe benefits and working
conditions as they now exist or hereafter may be amended, shall apply to
Atkins as they would to other employees of the Company.

2.04   Because Atkins' duties will from time to time require him to work outside
of, and in addition to, the Company's established normal work week, work days
and work hours, Atkins shall be allowed to take compensatory time off.

2.05   The Company and Atkins understand and agree that Atkins will not be
required to live in Midland and will live in the Dallas area and commute as
necessary from Dallas to Midland. The Company shall reimburse Atkins for travel
expenses to and from Dallas to Midland. In addition, the Company shall provide
Atkins a company furnished apartment and a Company automobile for use in
Midland.

2.06   The Company shall reimburse Atkins for the golf dues and fees associated
with his membership in Dallas. Atkins shall be responsible for the membership
fee and personal expenses such as meals. Further, since Atkins plans to use the
membership for entertainment expenses, the Company shall reimburse Atkins for
business related expenses associated with such membership.

                                   ARTICLE 3

                              COVENANT TO PERFORM

3.01   Atkins shall report directly to the CEO. Atkins agrees and covenants
to perform his work and services diligently and use his best efforts to
faithfully comply with all of the assignments duly made to him on behalf of
the Company by CEO.

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3.02   Atkins agrees to execute and honor and abide by the Company's "Employee
Pledge and Proprietary Rights and Information Agreement" which all other
employees of the Company have executed and agreed to, a copy of which is
attached hereto as Exhibit "A".

                                   ARTICLE 4

                             TERM AND TERMINATION

4.01   The Company shall employ Atkins pursuant to this Agreement for the two
(2) year term beginning on the effective date of his employment hereunder,
automatically renewable for one (1) year terms unless either party provides
at least one (1) years advance notice prior to an anniversary date as set
forth in Article 1 above. However if during such employment, Atkins fails or
refuses to perform the work and services assigned to him on behalf of the
Company by the CEO, or should he become derelict in so performing, or become
unable to perform, or otherwise become in substantial breach of this
Agreement all as may be determined by the CEO in his sole discretion or
otherwise so act as to give the Company good cause, this Agreement shall, at
the CEO's sole option, cease and terminate and any of Atkins' rights
hereunder not already finally vested shall cease on or at such time as the
CEO shall notify Atkins in writing. The term "good cause" shall include the
following:

       (1)  Knowingly, willfully and substantially, during the term of this
            Agreement, neglecting the duties that Atkins is required to perform
            under the terms of this Agreement.

       (2)  Knowingly, willfully and substantially, during the term of this
            Agreement, committing clearly dishonest acts toward the Company with
            the intent to injure or damage the Company.

       (3)  Conviction of Atkins by a court of competent jurisdiction of any
            felony or a crime involving moral turpitude;

       (4)  Insubordination or failing to follow the directives of the
            President/CEO.

4.02   If Atkins' employment terminates for any reason other than as provided
for in paragraphs 4.01, 4.03, 4.04, 4.05, 4.06, the Company shall pay Atkins
a lump-sum cash settlement equal to the total salary then in effect for the
remaining two (2) year term of the contract, plus the amount the Company
would have paid for during such period for Atkins' retirement-pension plans,
and health insurance, plus such amounts, if any, are at the time of his
termination of employment, payable for accrued but untaken vacation and sick
leave, compensatory time, bonuses and other compensation authorized by the
Board of Directors.

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4.03   Notwithstanding paragraphs 4.01 and 4.02, this Agreement and Atkins'
employment hereunder may be terminated at such time and upon such terms and
conditions as the parties may mutually agree.

4.04   Notwithstanding the provisions of paragraphs 4.01, 4.02 and 4.03 above,
Atkins employment hereunder shall terminate under any of the following
conditions:

       (1)  DEATH. Atkins' employment under this Agreement shall terminate
            automatically upon his death. In such event, Atkins' Base Salary
            shall continue to be paid to his designated beneficiary for the
            remaining term of this Agreement.

       (2)  TOTAL DISABILITY. The Company shall have the right to terminate this
            Agreement if Atkins becomes Totally Disabled. For purposes of this
            Agreement, "Totally Disabled" means that Atkins is not working and
            is currently unable to perform the substantial and material duties
            of his position hereunder as a result of sickness, accident or
            bodily injury for a period of three months. Prior to a determination
            that Atkins is Totally Disabled, but after Atkins has exhausted all
            sick leave and vacation benefits provided by the Company, Atkins
            shall continue to receive his Base Salary, offset by any disability
            benefits he may be eligible to receive, for the remaining term of
            this Agreement.

4.05   Notwithstanding any other provisions in this Agreement, if (i) Atkins
remains employed until the date that is three (3) months after the date of a
Change in Control (the "Retention Date"), or (ii) Atkins' employment is
terminated after or in anticipation of a Change in Control (or the execution of
a definitive agreement providing for actions which, if completed, would
constitute a Change in Control) and before the Retention Date (A) by the Company
without Good Cause or (B) by Atkins for Good Reason, then, in addition to any
other amounts payable pursuant to this Agreement, the Company shall pay Atkins a
lump sum cash payment within thirty (30) days of termination equal to six (6)
times the sum of Atkins' annual Base Salary and the greater of (x) the highest
bonus awarded to Atkins in a prior year or (y) 50% of Atkins' annual Base
Salary.

       For purposes of this Agreement "Change in Control" means: (i) a
reorganization or merger of the Company with or into any other company which
will result in the Company's stockholders immediately prior to such transaction
not holding, as a result of such transaction, at least 50% of the voting power
of the surviving or continuing entity or the entity controlling the surviving
or continuing entity; (ii) a sale of all or substantially all of the assets of
the Company to an entity in which the Company's stockholders immediately prior
to such sale will not hold following such sale at least 50% of the voting power
of such purchasing entity; (iii) a transaction or series of related
transactions which result in more than 50% of the voting power of the Company
being "beneficially owned" by a single "person" (quoted terms having their
respective meanings under Sections 13(d) and 14(d) under the Securities
Exchange Act of 1934, as amended); (iv) a change in the majority of the Board
not approved by at least two-thirds of the Company's directors in office prior
to such

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change or (v) the adoption of any plan of liquidation providing for the
distribution of all or substantially all of the Company's assets.

       For purposes of this Agreement, after a Change in Control, "Good Reason"
shall mean the occurrence of any one of the following circumstances without
Atkins' consent:

       (1)  a material reduction in Atkins' salary or benefits excluding the
            substitution of substantially equivalent compensation and benefits;

       (2)  a material diminution of Atkins' duties, authority or
            responsibilities as in effect immediately prior to such diminution;

       (3)  the relocation of Atkins' primary work location to a location more
            than 50 miles from Atkins' primary work location as of the date of
            this Agreement; or

       (4)  the failure of a successor to assume and perform under this
            Agreement

4.06   In the event Atkins is eligible to receive a lump sum payment pursuant to
this Agreement and such lump sum payment would cause Atkins to be subject to an
excise tax in excess of normal income taxes on such lump sum, then and in that
event, the lump sum payment shall be increased (grossed up) in an amount
sufficient to pay such excise tax.

                                   ARTICLE 5

                  TRADE SECRETS AND CONFIDENTIAL INFORMATION

5.01   During the term of Atkins' employment, the Company will provide Atkins
access to, so he may become familiar with, various trade secrets and other
confidential or proprietary information of the Company, train his in the use of
same, and provide associates a working environment in which he can contribute
toward enhancing same and upgrading his general knowledge. Trade secrets,
proprietary information and confidential information encompass, without
limitation, anything which is owned by the Company and is regularly used in the
operation of the business of the Company to obtain a competitive advantage over
the Company's competitors who do not know, have access to, or utilize such
information or trade secrets. Proprietary information further includes, but is
not limited to, records, files, documents, bulletins, publications, manuals,
financial data and information concerning and the identity of customers,
prospects and suppliers. Trade secrets further include, but are not limited to,
specifications, software programs, both the source code and the object code,
documentation, flow charts, diagrams, schematics, data, data bases, and
business and production methods and techniques.

5.02   Atkins acknowledges that such training and the use of the trade
secrets and confidential or proprietary information will enable him to
perform his job and enhance his compensation. Atkins recognizes and
acknowledges that the trade secrets and other confidential or proprietary
information

                                                                             5
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of the Company are valuable, special and unique and that the protection
thereof is of critical importance to the Company in maintaining its
competitive position. Atkins, therefore, covenants and agrees that, except as
required by his employment hereunder or with the express prior written
consent of the Company, he shall not, during the term of his employment by
the Company or at any time thereafter, either directly or indirectly, make
independent use of, publish or otherwise disclose any of the aforesaid trade
secrets or other confidential or proprietary information of the Company
(whether acquired, learned, obtained or developed by him alone or in
conjunction with others) to any person, firm, corporation, association or
other entity for any reason or purpose whatsoever or allow any other person,
firm, corporation, association or other entity to make use of, publish or
disclose any of the aforesaid trade secrets or other confidential or
proprietary information. Atkins agrees not to use, steal, or appropriate such
items or versions thereof, whether copies or reconstructed from memory or
otherwise, in any manner. Atkins further recognizes and acknowledges that in
order to enable Company to perform services for its customers and engage in
Company's business, information may be furnished to the Company that is
confidential information and that the goodwill afforded to Company depends
upon, among other things, Company and its employees keeping such services and
information confidential. Atkins therefore agrees that he shall keep all such
information of the Company and any of its affiliates and subsidiaries
completely and absolutely confidential. This agreement not to disclose
confidential information shall survive after the term of Atkins' employment
pursuant to this Agreement. Therefore, Atkins shall be bound by his agreement
herein not to disclose confidential information of the Company and its
affiliates or subsidiaries both during his employment with the Company and
after his employment with the Company is terminated. A violation by Atkins of
this Article shall be a material violation of this Agreement and will justify
legal and/or equitable relief. Atkins recognizes that if he breaches this
agreement and discloses confidential information or trade secrets of the
Company or any of its affiliates or subsidiaries, the Company will suffer
substantial, irreparable and continuing injuries, damages and costs attendant
thereto. Further, recognizing that money damages may not provide adequate
relief, Atkins agrees that, in the event that he breaches or threatens to
breach this Agreement, the Company shall be entitled to a preliminary or
permanent injunction in order to prevent the continuation of such harm and,
as liquidated damages, Atkins shall forfeit all payments made pursuant to
this Agreement from the date the Agreement was breached and any payments that
are or may be due pursuant to this Agreement, as well as any rights or
benefits, including health insurance benefits.

5.03   Atkins and the Company acknowledge and agree that the fact that the
Parties have entered into this Agreement and the terms of this Agreement are
confidential. Neither of the Parties may therefore disclose the terms of this
Agreement to others, except as necessary with regard to the filing of income
taxes and other necessary documents or as required by law, or pursuant to a
subpoena or court order, unless such disclosure has been approved by the
other party's written permission.

                                   ARTICLE 6

                           NON-COMPETITION AGREEMENT

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       Atkins agrees that upon his termination of employment from the Company,
for a period of Five (5) years, he will not engage or participate, directly or
indirectly, in competition with the Company or any of its affiliates or
subsidiaries without the prior written consent of the Company which consent
shall not be unreasonably withheld. This Agreement shall prohibit Atkins from,
among other things, attempts to serve or assist others in serving the Company's
present or potential customers. Atkins further agrees that he will never at any
time after executing this Agreement, assist any person or entity in buying,
merging with or acquiring the Company unless the Company consents in writing.

                                   ARTICLE 7

                        SUPERSESSION AND EFFECTIVENESS

7.01   This Agreement supersedes any other agreement or understanding,
written or oral, between the parties with respect to the matters covered
hereunder, and it contains the entire understanding of the parties and all of
the covenants and agreements between them with respect to Atkins employment.

7.02   This Agreement shall bind and be for the benefit of the parties to the
Agreement, as well as their respective successors, heirs and assigns, it being
understood, however that this Agreement may be assigned only with the written
consent of both parties.

7.03   The existence and effectiveness of this Agreement between the parties
hereto does not preclude or otherwise interfere with employment of Atkins by
subsidiary corporations of Cap Rock Electric Company, Inc., or by any
corporation organized by the Company's Board of Directors for the benefit of the
Company, or the receipt of compensation by Atkins from any such corporations.

7.04   This Agreement shall become binding upon the parties from an as of the
date of the execution.

IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate
originals, one being retained by each, on or as of the 27th day of September,
2001.

                                          CAP ROCK ENERGY CORPORATION

/s/ LEE ATKINS                            /s/ DAVID W. PRUITT
------------------------------            -----------------------------
Lee Atkins                                David W. Pruitt, CEO

                                                                             7
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THE STATE OF TEXAS      )
                        )
COUNTY OF MIDLAND       )

This instrument was acknowledge before me on this the 27th day of September,
2001, by DAVID W. PRUITT, Chief Executive Officer of Cap Rock Energy
Corporation, a Texas corporation, on behalf of said corporation.

                                    /s/ SHARON A. HOELSCHER
                                    --------------------------------
                                    Notary Public, State of Texas
                                    Printed Name of Notary:

                                    SHARON A. HOELSCHER
                                    --------------------------------
                                    My Commission Expires: 7-11-03
                                                          ----------

(SEAL)

THE STATE OF TEXAS      )
                        )
COUNTY OF MIDLAND       )

This instrument was acknowledge before me on this the 27th day of September,
2001, by LEE ATKINS.

                                    /s/ SHARON A. HOELSCHER
                                    --------------------------------
                                    Notary Public, State of Texas
                                    Printed Name of Notary:

                                    SHARON A. HOELSCHER
                                    --------------------------------
                                    My Commission Expires: 7-11-03
                                                          ----------

(SEAL)

                                                                             8<Page>

                              EMPLOYMENT CONTRACT

THE STATE OF TEXAS  )(
                    )(    KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF MIDLAND   )(

    This Employment Contract ("Agreement") is made and entered into on or as
of the _____ day of  ________________________, 2001.

    By this Agreement, Cap Rock Energy Corporation, referred to in this
Agreement as "Company", acting by and through its President and Chief
Executive Officer, David W. Pruitt, or his successor, hereinafter referred to
as "Pruitt" employs Ronald Lyon, referred to in this Agreement as "Lyon", and
who accepts employment on the following terms and conditions:

                                    ARTICLE 1
                              TERMS OF EMPLOYMENT

    By this Agreement, the Company, acting by and through and under the
direction of Pruitt, employees Lyon and Lyon accepts employment with the
Company as Vice-President/General Counsel for an initial term of one (1)
year.  Unless a written notice to terminate this Agreement is executed and
properly delivered by either party at least ninety days prior to an
anniversary date of the execution of this Agreement, this Agreement shall
annually and automatically be renewed for an additional term of one (1) year.
This Agreement may, however, be terminated earlier, as provided in Article 4,
below.

                                    ARTICLE 2
                       EMPLOYMENT COMPENSATION & BENEFITS

2.01  As compensation for all services rendered under this Agreement by Lyon,
Company shall pay to Law Offices of Ronald W. Lyon, P.C. ("Lyon PC"), of
which Lyon is the President, $13,500.00 per month, or any greater amount of
compensation authorized by the Company, together with any annual salary
adjustment in an amount as determined by Pruitt, for Lyon's salary and for
non-reimbursed office expenses and overhead and for secretarial and staff
support as Lyon deems necessary to perform his duties as General Counsel
including  Lyon's secretary/legal assistant. Lyon shall be paid by Lyon P.C .
Additionally, Company shall pay $1,000.00 per month into the executive
supplemental deferred compensation plan or a similar plan on behalf of Lyon,
or any greater amount as determined by Pruitt.

2.02  Lyon shall work full time for the Company and shall be allowed time off
similar to regular full-time employees of the Company as approved by Pruitt.

2.03  Company will reimburse Lyon for professional dues and continuing legal
education requirements.

2.04  Company will provide Lyon with an office at the Hunt-Collin Division
Office or Lyon may office elsewhere in the North Texas area at his expense,
at Lyon's option. Should Lyon choose to office at the Hunt-Collin office,
then amount of payment set forth in paragraph 2.01 above, shall be reduced by
the amount of rent Lyon currently pays and the monthly telephone service (not
including long distance charges).

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2.05  Company will reimburse Lyon for traditional out of pocket expenses as
it has prior to this Agreement including mileage, long distance telephone,
copies etc.

                                   ARTICLE 3
                              COVENANT TO PERFORM

3.01  Lyon agrees and covenants to perform his work and services diligently
and use his best efforts to faithfully comply with all of the assignments
duly made to him on behalf of the Company by Pruitt.

3.02  Lyon agrees to execute and honor and abide by the Company's "Employee
Pledge and Proprietary Rights and Information Agreement" which all other
employees of the Company have executed and agreed to, a copy of which is
attached hereto as Exhibit "A".

3.03  Lyon shall devote full time to his duties as General Counsel of
Company.  However, nothing in this Agreement shall prevent Lyon from perform
nonconflicting legal work that does not interfere with his duties as General
Counsel as approved by Pruitt.

                                   ARTICLE 4
                             TERM AND TERMINATION

4.01  The Company shall employ Lyon pursuant to this Agreement for the one
(1) year term beginning with the effective date of his employment hereunder,
yearly renewable subject to and following a satisfactory evaluation employee
appraisal report on Lyon by, for successive one year terms.  However, if
during such employment, Lyon fails or refuses to perform the work and
services assigned to his on behalf of the Company by Pruitt, or should he
become derelict in so performing, or become unable to perform, or otherwise
become in substantial breach of this Agreement all as may be determined by
Pruitt in his sole discretion or otherwise so act as to give the Company
cause, this Agreement shall, at Pruitt's sole option, cease and terminate and
any of Lyon's rights hereunder not already finally vested shall cease on or
at such time as Pruitt shall notify Lyon in writing.  The term "cause" shall
include the following:

    1.  Knowingly, willfully and substantially, during the term of this
        Agreement, neglects the duties that Lyon is required to perform under
        the terms of this Agreement.

    2.  Knowingly, willfully and substantially, during the term of this
        Agreement, commits clearly dishonest acts toward the Company with the
        intent to injure or damage the Company.

    3.  Insubordination or failing to follow the directives of the
        President/CEO in connection normal assigned job related duties.

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4.02  If Lyon's employment terminates for any reason other than as provided
for in paragraph 4.01, 4.03, 4.04 or 4.05, the Company shall pay Lyon a lump
sum cash settlement equal to the total salary then in effect for one (1)
year, plus such amounts, if any, are at the time of his termination of
employment, payable for bonuses and other compensation authorized by the
Board of Directors or Pruitt.

4.03  Notwithstanding paragraphs 4.01 and 4.02, this Agreement and Lyon's
employment hereunder may be terminated at such time and upon such terms and
conditions as the parties may mutually agree.

4.04  Notwithstanding the provisions of paragraphs 4.01, 4.02, 4.03 and 4.05
herein, Lyon's employment hereunder shall terminate under any of the
following conditions:

    a.  DEATH.  Lyon's employment under this Agreement shall terminate
        automatically upon his death.  In such event, Lyon's Compensation shall
        continue to be paid to his designated beneficiary for the remaining
        term of this Agreement.

    b.  TOTAL DISABILITY.  The Company shall have the right to terminate this
        Agreement if Lyon becomes Totally Disabled.  For purposes of this
        Agreement, "Totally Disabled" means that Lyon is not working and is
        currently unable to perform the substantial and material duties of his
        position hereunder as a result of sickness, accident or bodily injury
        for a period of three months.  Prior to a determination that Lyon is
        Totally Disabled,  Lyon shall continue to receive his Compensation,
        offset by any disability benefits he may be eligible to receive, for
        the remaining term of this Agreement.

4.05  If (i) Lyon remains employed until the date that is three (3) months
after the date of a Change in Control (the "Retention Date"), or (ii) Lyon's
employment is terminated after or in anticipation of a Change in Control (or
the execution of a definitive agreement providing for actions which, if
completed, would constitute a Change in Control) and before the Retention
Date (A) by the Company without Good Cause or (B) by Lyon for Good Reason,
then, in addition to any other amounts payable pursuant to this Agreement,
the Company shall pay Lyon a lump sum cash payment within thirty (30) days of
termination equal to six (6) times the sum of Lyon's annual Base Salary and
the greater of (x) the highest bonus awarded to Lyon in a prior year or (y)
50% of Lyon's annual Compensation.

For purposes of this Agreement "Change in Control" means: (i) a
reorganization or merger of the Company with or into any other company which
will result in the Company's stockholders immediately prior to such
transaction not holding, as a result of such transaction, at least 50% of the
voting power of the surviving or continuing entity or the entity controlling
the surviving or continuing entity; (ii) a sale of all or substantially all
of the assets of the Company to an entity in which the Company's stockholders
immediately prior to such sale will not hold following such sale at least 50%
of the voting power of such purchasing entity; (iii) a transaction or series
of related transactions which result in more than 50% of the voting power of
the Company being "beneficially owned" by a single "person" (quoted terms
having their respective

                                                                             3
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meanings under Sections 13(d) and 14(d) under the Securities Exchange Act of
1934, as amended); (iv) a change in the majority of the Board not approved by
at least two-thirds of the Company's directors in office prior to such change
or (v) the adoption of any plan of liquidation providing for the distribution
of all or substantially all of the Company's assets.

    For purposes of this Agreement, after a Change in Control, "Good Reason"
shall mean the occurrence of any one of the following circumstances without
Lyon's consent:

    (1)  a material reduction in Lyon's compensation or benefits excluding
         the substitution of substantially equivalent compensation and benefits;

    (2)  a material diminution of Lyon's duties, authority or
         responsibilities as in effect immediately prior to such diminution;

    (3)  the relocation of Lyon's primary work location to a location more
         than 50 miles from Lyon's primary work location as of the date of this
         Agreement; or

    (4)  the failure of a successor to assume and perform under this Agreement

                                    ARTICLE 5
                     TRADE SECRETS AND CONFIDENTIAL INFORMATION

5.01  During the term of Lyon's employment, the Company will provide Lyon
access to, so she may become familiar with, various trade secrets and other
confidential or proprietary  information of the Company, train his in the use
of same, and provide associates a working environment in which he can
contribute toward enhancing same and upgrading his general knowledge.  Trade
secrets, proprietary information and confidential information encompass,
without limitation, anything which is owned by the Company and is regularly
used in the operation of the business of the Company to obtain a competitive
advantage over the Company's competitors who do not know, have access to, or
utilize such information or trade secrets.  Proprietary information further
includes, but is not limited to, records, files, documents, bulletins,
publications, manuals, financial data and information concerning and the
identity of customers, prospects and suppliers.  Trade secrets further
include, but are not limited to, specifications, software programs, both the
source code and the object code, documentation, flow charts, diagrams,
schematics, data, data bases, and business and production methods and
techniques.

5.02  Lyon acknowledges that such training and the use of the trade secrets
and confidential or proprietary information will enable his to perform his
job and enhance his compensation.  Lyon recognizes and acknowledges that the
trade secrets and other confidential or proprietary information of the
Company are valuable, special and unique and that the protection thereof is
of critical importance to the Company in maintaining its competitive
position.  Lyon, therefore, covenants and agrees that, except as required by
his employment hereunder or with the express prior written consent of the
Company, she shall not, during the term of his employment by the

                                                                             4
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Company or at anytime thereafter, either directly or indirectly, make
independent use of, publish or otherwise disclose any of the aforesaid trade
secrets or other confidential or proprietary information of the Company
(whether acquired, learned, obtained or developed by him alone or in
conjunction with others) to any person, firm, corporation, association or
other entity for any reason or purpose whatsoever or allow any other person ,
firm, corporation, association or other entity to make use of, publish or
disclose any of the aforesaid trade secrets or other confidential or
proprietary information.  Lyon agrees not to use, steal, or appropriate such
items or versions thereof, whether copies or reconstructed from memory or
otherwise, in any manner.  Lyon further recognizes and acknowledges that in
order to enable Company to perform services for its customers and engage in
Company's business, information may be furnished to the Company confidential
information and that the goodwill afforded to Company depends upon, among
other things, Company and its employees keeping such services and information
confidential.  Lyon therefore agrees that she shall keep all such information
of the Company and any of its affiliates and subsidiaries completely and
absolutely confidential.  This agreement not to disclose confidential
information shall survive after the term of Lyon's employment pursuant to
this Agreement.  Therefore, Lyon shall be bound by his agreement herein not
to disclose confidential information of the Company and its affiliates or
subsidiaries both during his employment with the Company and after his
employment with the Company is terminated.  A violation by Lyon of this
Article shall be a material violation of this Agreement and will justify
legal and/or equitable relief.  Lyon recognizes that if she breaches this
agreement and discloses confidential information or trade secrets of the
Company or any of its affiliates or subsidiaries, the Company will suffer
substantial, irreparable and continuing injuries, damages and costs attendant
thereto.  Further, recognizing that money damages may not provide adequate
relief, Lyon agrees that, in the event that she breaches or threatens to
breach this Agreement, the Company shall be entitled to a preliminary or
permanent injunction in order to prevent the continuation of such harm and,
as liquidated damages, Lyon shall forfeit all payments made pursuant to this
Agreement from the date the Agreement was breached and any payments that are
or may be due pursuant to this Agreement, as well as any rights or benefits,
including health insurance benefits.

5.03  Lyon and the Company acknowledge and agree that the fact that the
Parties have entered into this Agreement and the terms of this Agreement are
confidential.  Neither of the Parties may therefore disclose the terms of
this Agreement to others, except as necessary with regard to the filing of
income taxes and other necessary documents or as required by law, or pursuant
to a subpoena or court order, unless such disclosure has been approved by the
other Party's written permission.

                                   ARTICLE 6
                           NON-COMPETITION AGREEMENT

    Lyon agrees that upon his termination of employment from the Company, for
a period of two (2) years, he will not engage or participate, directly or
indirectly, in competition with the Company or any of its affiliates or
subsidiaries without the prior written consent of the Company which consent
shall not be unreasonably withheld.  This Agreement shall prohibit Lyon from,
among other things, attempts to serve or assist others in serving the
Company's present or potential customers.  Lyon further agrees that he will
never at any time after executing this

                                                                             5
<Page>

Agreement, assist any person or entity in buying, merging with or acquiring
the Company unless the Company consents in writing.  Notwithstanding the
foregoing, nothing in this Agreement does not apply to legal services whether
rendered to Company or to a subsequent employer of Lyon and nothing in this
Agreement shall be construed to relieve Lyon of his ethical duties regarding
conflicts of interest.

                                   ARTICLE 7
                                  PROHIBITIONS

7.01  Lyon shall not, at any time during or after the term of this Agreement,
make derogatory, false, or misleading oral or written comments to any person
or entity regarding the Company, its management, officers, directors,
employees or agents.  Lyon agrees generally to speak favorably of the Company
and his employment with the Company.

7.02  Lyon agrees that neither he, nor any member of his immediate family,
shall run for or serve as a Director of the Company for a period of five (5)
years after Lyon's employment with the Company is terminated.

7.03  The Company and Lyon recognize and agree that the damages to the
Company for violation of Articles 5,6 and 7 may be difficult, if not
impossible to ascertain, and therefore the Parties hereby agree that in the
event Lyon breaches these Articles 5, 6, and 7, the Company shall be entitled
to liquidated damages for such breach which shall be forfeiture and
reimbursement by Lyon of all amounts paid to Lyon from the time of the
breach, received by Lyon from Company pursuant to this Agreement from the
time of the breach, or any amounts which Lyon is entitled to receive pursuant
to this Agreement, and all rights and benefits, including health insurance
benefits and stock which Lyon may be entitled to receive pursuant to this
Agreement.

                                   ARTICLE 8
                         SUPERSESSION AND EFFECTIVENESS

8.01  This Agreement supersedes any other agreement or understanding, written
or oral, between the parties with respect to the matters covered hereunder,
and it contains the entire understanding of the parties and all of the
covenants and agreements between them with respect to Lyon's employment.

8.02  This Agreement shall bind and be for the benefit of the parties to the
agreement, as well as their respective successors, heirs and assigns, it
being understood, however that this Agreement may be assigned only with the
written consent of both parties.

8.03  The existence and effectiveness of this Agreement between the parties
hereto does not preclude or otherwise interfere with employment of Lyon by
subsidiary corporations of Cap Rock Energy Corporation, or by any corporation
organized by the Company's Board of Directors for the benefit of the Company,
or the receipt of compensation by Lyon from any such corporations.

                                                                             6
<Page>

8.04  This Agreement shall become binding upon the parties from and as of the
date of the execution.

                                   ARTICLE 9
                                 GOVERNING LAW

    This Agreement has been executed in the State of Texas and shall be
governed by and construed in all respects in accordance with the laws of the
State of Texas.  Nothing in this Agreement, including but not limited to
Sections 5, 6 and 7, shall conflict with all ethical rules applicable to
attorneys, and to the extent the contractual requirements conflict with such
ethical rules, the ethical rules shall control.

                                   ARTICLE 10
                                   ARBITRATION

    All disputes, claims and matters in question arising under, with respect
to or out of this Agreement or the relationship between the parties created
by this agreement, whether sounding in contract, tort or otherwise, which
cannot be resolved between the Parties, shall be resolved by binding
arbitration pursuant to the Federal Arbitration Act.  The arbitration shall
be administered by the American Arbitration Association ("AAA") in Dallas,
Texas in accordance with the Commercial Arbitration Rules of the AAA.  There
shall be three arbitrators.  Each party shall designate an arbitrator, who
need not be neutral, within 30 days of receiving notification of the filing
with the AAA of a demand for arbitration.  The two arbitrators so designated
shall elect a third arbitrator.  If either party fails to designate an
arbitrator within the time specified or the two parties' arbitrators fail to
designate a third arbitrator within 30 days of their appointments, the third
arbitrator shall be appointed by the AAA.  The decision or award of a
majority of the arbitrators shall be final and binding upon the parties.  Any
arbitral award may be entered as a judgment or order in any court of
competent jurisdiction.  It is expressly agreed that the arbitrators shall
have no authority to award punitive or exemplary damages, the parties hereby
waiving their right, if any, to recover punitive or exemplary damages, either
in arbitration or in litigation.

    IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate
originals, one being retained by each, on or as of the ____day of
____________________, 2001.

                                       CAP ROCK ENERGY CORPORATION

____________________________________   ____________________________________
Ronald Lyon                            David W. Pruitt, President/CEO

                                                                             7
<Page>

THE STATE OF TEXAS  )(
                    )(
COUNTY OF MIDLAND   )(

    This instrument was acknowledged before me on this the ______day of
_______________, 2001, by DAVID W. PRUITT, President/Chief Executive Officer
of Cap Rock Energy Corporation, a Texas corporation, on behalf of said
corporation.

                                       ____________________________________
                                       Notary Public, State of Texas

(SEAL)

THE STATE OF TEXAS  )(
                    )(
COUNTY OF GRAYSON   )(

    This instrument was acknowledged before me on this the ______day of
_______________, 2001, by Ronald Lyon.

                                       ____________________________________
                                       Notary Public, State of Texas
(SEAL)

                                                                             8

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