Since 1975 the Contoocook Valley District, a small rural cooperative school district in southwestern New Hampshire, has developed a performance-based student competency program which has resulted in a dramatic increase in scores on the Stanford Achievement Test. The district is comprised of 9 towns, covers an area of almost 300 square miles, and enrolls approximately 2,000 students in 8 elementary, 2 middle, and 1 high school. Desire to become an excellent school district prompted the establishment of voluntary staff committees, who used a "results planning" format to find a set of essential competencies basic to coping in society. Once terminal skills for graduates were identified, those skills were tracked linearly back to prerequisite skills at lower grade levels. The initial committees and subsequent coordinating committees developed and implemented the essential competency areas (communication, computation, personal economics, health, citizenship, and planning) and continue to monitor the instructional program, to identify areas needing work, and to initiate teacher training activities which address the areas of concern. Implementation was done gradually at all three levels--4th grade (1979), 8th grade (1980), high school (1981)--and will be completed with the senior class of 1985. Examples of competencies and test score summaries are included. (BRR)