Exhibit 10.72
CAP 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 the acquisition of capital other than through
conventional bank financing through the ultimate sale or though a sale/leaseback
of a Power Transmission Facility interconnecting Southwestern Public Service
Company's grid with Cap Rock Electric's distribution system.
(1) Responsible Individuals:
Xxxxxx X. Xxxx
(2) Amount of Achievement Based Compensation:
The achievement based compensation will be (1%) of the net profit
or net capital acquired by Cap Rock Electric through the
transaction if payment is taken in cash or (2%) if payment is taken
in stock of Cap Rock Energy Corporation.
(3) Calculation of the Transaction Proceeds:
The net profit or net capital is defined as the total capital
received by the company minus the original capital received from
the original sale/leaseback of the transmission line.
(4) Term of Achievement Based Compensation:
The achievement compensation will be owed after the receipt of the
proceeds from the transaction triggering payment under this
Agreement, but shall not be payable until 2003 or new equity in the
amount of five million dollars ($5,000,000,000.00) or more is
raised, whichever occurs first.
(5) Payment of the Achievement Based Compensation:
The Achievement based compensation will be paid in cash or stock in
Cap Rock Energy Corporation. The achievement based compensation
will be paid in stock in Cap Rock Energy Corporation as soon as
stock is available or cash at each eligible individual's option.
All compensation payable under this Agreement shall vest as of
the closing data of the transaction triggering payments under this
Agreement. The right to receive stock shall vest immediately on the
closing of the transaction, even if stock is not available to be
issued at that time. If stock is chosen by an individual, for each
one dollar ($1.00) of cash that an eligible individual would be
entitled to receive under this Agreement if payment were taken in
cash, the individual shall be paid two dollars ($2.00) worth of Cap
Rock Energy stock. For example, if based upon the formula set forth
in this agreement an individual is entitled to a cash payment of
$50,000.00, that individual will receive $100,000.00 in stock if he
chooses to be paid in stock rather than cash. The price of the Cap
Rock Energy stock shall be determined by the average price per
share of the last three trades prior to the issuance of stock to
the eligible individual and this is the price that shall be used to
determine the number of shares to be issued to each eligible
individual. At the option of the Board of Directors, the stock may
be restricted. If such stock is restricted or if a vesting
requirement is invoked on the stock issued to individuals
hereunder, then and in that event, the vesting shall start as of
the closing date of the transaction triggering payment under this
Agreement.
(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
paragraph (6) without regard to the continued employment of those
individuals by Cap Rock Electric or an affiliate or subsidiary
thereof. Each individual agrees that he will keep the terms of this
contract, as well as the terms of the transactions 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 - 30%
Management Team - 70%
a. President/CEO - 30%
b. Other Individuals selected by the President/CEO
and Board of Directors - 40%
x. Xxxx North 4.4%
ii. Xxx Xxxxxx 4.4%
iii. Xxxxxxx X. Xxxxx 4.4%
iv. Xxxxxx X. Xxxxxxxx 4.4%
v. S.D. Xxxxxxxx 4.4%
vi. Xxxxxx Xxxx 4.4%
vii. Xxxxx Hoclscher 4.4%
viii. Xxxxx Xxxxxxx 4.4%
ix. Xxxxxxx Xxxxxxxxx 4.4%
Except for the confidentially 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 for payment as set out in paragraph (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, not
already vested at the time, shall immediately cease and such interest or right
to future non-vested payments, if any, 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, the
right to receive future payments under this Agreement, not already vested at the
time, if any, 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 interest of the Cooperative. All compensation payable under this
Agreement shall one hundred percent (100%) vest as of the closing date of the
transaction triggering payments under this Agreement or if there is a change of
control of the Company. In the event any individual eligible to receive payments
under this Agreement dies after his compensation payable under this agreement
has vested, such eligible individual's compensation under this Agreement shall
be payable to his estate.
Witness our hands on this the 21st day of August, 2001.
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/s/ [Illegible] 8/21/01
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Responsible Individual Date
/s/ [Illegible] 8/21/01
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President/CEO Date
/s/ [Illegible] 8/21/01
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Chairman Date
