EXHIBIT 10.39
CAP ROCK ELECTRIC COOPERATIVE, INC.
ACHIEVEMENT BASED COMPENSATION CONTRACT
MERGER OR ACQUISITION WITH OTHER ELECTRIC UTILITIES
In accordance with Cap Rock Electric Cooperative, Inc.'s ("Cap Rock Electric")
Board Policy No. 143, this contract provides for calculation and payment of
incentive compensation in the form of a percentage of assets added to Cap Rock
Electric and/or Cap Rock Energy, Inc. ("Cap Rock Energy") hereinafter referred
to collectively as the "Companies" resulting from mergers with or acquisitions
of other electric utilities.
1. RESPONSIBLE INDIVIDUAL:
Xxxx X. Xxxxx, Xx.
2. AMOUNT OF ACHIEVEMENT BASED COMPENSATION:
The Achievement Based Compensation will be one and a half percent (1.5%)
of the total assets added to Cap Rock Electric.
3. CALCULATION OF ASSET BASIS:
The amount of total assets on which the compensation is based equals
the total of all assets acquired by Cap Rock Electric and/or Cap Rock
Energy at the time of the merger or acquisition. This applies to all
prior mergers and acquisitions since 1990, and includes the Lone Wolf,
Xxxx-Xxxxxx and XxXxxxxxx acquisitions and any future mergers or
acquisitions for the next ten (10) years of electric cooperatives,
telephone cooperatives, or municipal electric systems, when the company
does not take on additional debt to acquire the cooperative or
municipal electric system, but only assumes debt and equity.
4. TERM OF ACHIEVEMENT BASED COMPENSATION:
The Achievement Based Compensation will be paid no later than two (2)
months of completion of the merger or acquisition, such merger or
acquisition being considered completed at such time as ownership of all
of the assets of an electric utility are officially transferred to and
become a part of Cap Rock Electric and/or Cap Rock Energy.
5. PAYMENT OF THE ACHIEVEMENT BASED COMPENSATION:
The Achievement Based Compensation will be paid after ownership of all
total assets of an electric utility are transferred to Cap Rock
Electric and/or Cap Rock Energy.
The Achievement Based Compensation will be paid in cash to each eligible
individual in a lump sum unless the amount exceeds $10,000.00, in which
case Cap Rock Electric will have
the option to spread the payment over as many months as necessary so that
any one monthly payment does not exceed $10,000.00 or to pay in a lump sum
if the Board and the President/CEO so decide. The lump-sum payment or
series of payments, if applicable, will be made as provided in Board
Policy No. 143 and with cash availability and overall cash flow of the
Companies considered.
The eligible individual shall have the option to elect some or all of the
payment to be made to such deferred compensation plans as may be
maintained by the individual or Cap Rock Electric.
6. CONDITIONS AND CONSIDERATIONS FOR PAYMENT:
Except upon becoming eligible for benefits under any Cap Rock Electric
retirement plan, either early or regular, the Achievement Based
Compensation will be payable to the recipient listed below in paragraph
(7) without regard to the continued employment of those individuals by
Cap Rock Electric or an affiliate or subsidiary thereof, provided that,
unless otherwise agreed by Cap Rock Electric, each individual agrees
that he will not voluntarily terminate his employment or seat on the
Board of Directors or Advisory Director position with Cap Rock Electric
or any affiliate or subsidiary of Cap Rock Electric for the shorter of
three years following the date of initial payment under this contract.
Further, each individual agrees that he will keep the terms of this
contract, as well as the terms of the transaction causing the awarding
and payment of the Achievement Based Compensation, confidential.
7. SHARING WITH OTHER INDIVIDUALS:
In recognition of the necessary contribution of the entire management
team, including the General Counsel, and the Board of Directors, including
the Advisory Directors to the continued success of Cap Rock Electric, the
Achievement Based Compensation will be shared among the Responsible
Individual and the other management team members as follows:
Responsible Individual - 20 %
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Management Team - 80 %
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a. Chief Executive Officer - 20 %
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b. Other Individuals selected by the President/CEO
and Board of Directors - 60 %
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i. Xxxx X. Xxxxxx 10 %
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ii. Xxx Xxxxxx 10 %
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iii. Xxxxxx Xxxx 10 %
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iv. Xxxxxxx X. Xxxxx 2.70%
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v. Xxxxxx X. Xxxxxxxx 2.70%
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vi. X.X Xxxxxxxx 2.70%
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vii. Xxxxxx Xxxx 2.70%
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viii. Xxxxx Xxxxxxxx 2.70%
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ix. Xxxxx Xxxxxxxxx 2.70%
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x. Xxxxx Xxxxxxx 2.70%
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xi. Xxxxxx Xxxxx 2.70%
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xii. A.D. Xxxx 2.70%
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xiii. Xxxxx Xxxxxxx 2.70%
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xiv. Xxxxxx Xxxxxx 2.70%
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Except for the confidentiality and retirement provisions, the conditions
for payment described above in paragraph (6) are not applicable to those
persons identified and listed above as "Other Individuals". It is further
understood and agreed that such conditions of payment as set out in
paragraph (6) are applicable subject to the amount of such Achievement
Based Compensation total payment being commensurate and with the
conditions placed upon the recipients by the acceptance of such
Compensation.
In the event the Responsible Party should violate terms of this Agreement,
the right to receive future payments under this Agreement shall immediately
cease and such interest or right to future payments shall revert to the
Companies. In the event any individual named herein by the President/Chief
Executive Officer and Board of Directors as a part of the Management Team
shall violate the terms of this agreement, die, retire, or terminate their
employment with the Companies for any reason, the right to receive future
payments under this contract, if any, shall immediately cease and the
President/Chief Executive Officer shall have the right to allocate such
share among those named individuals or others as he may deem in the best
interests of the Companies.
Witness our hands on this the 22nd day of August, 2000.
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/s/ [ILLEGIBLE] Date: 8-22-2000
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Responsible Individual
/s/ [ILLEGIBLE] Date: 8-22-2000
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President/Chief Executive Officer
/s/ [ILLEGIBLE] Date: 8-22-2000
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Chairman
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