This Compensation Agreement ("Agreement") is made effective as of February 9, 1994 between PacifiCorp, an
Oregon corporation (the "Company") and Keith R. McKennon (the "Director").
The Director has been elected Chairman of the Board of Directors of the Company. The Company wishes to
provide compensation to the Director that will induce him to perform in such a way as to enhance the investment
return to the Company's shareholders. Part of the inducement will be achieved by causing the Director to hold a
substantial investment in the Company's common stock (the "Common Stock"). Therefore, the Company and the
Director agree as follows:
1. ANNUAL COMPENSATION OF DIRECTOR. The Director's total annual compensation for service on the
Company's Board of Directors for the 12 months beginning February 9, 1994 shall be $150,000. The total
annual compensation for subsequent years shall be as determined by the Board of Directors. Of the total annual
compensation, $10,000 shall be provided through the Director's participation in the PacifiCorp Non-Employee
Directors' Stock Compensation Plan. The balance of the total annual compensation shall be provided through a
grant of restricted stock under Section 2.
2. GRANT OF COMMON STOCK.
2.1 The Company hereby grants to the Director $140,000 in Common Stock (the "First Year Grant") as of
February 9, 1994, subject to the following vesting restriction. One-twelfth of the First Year Grant shall become
vested on the 9th day of each calendar month starting with March 9, 1994 if the Director continues in service as
Chairman of the Company's Board of Directors until such day. If the Director's service as Chairman of the
Company's Board of Directors terminates for any reason before February 9, 1995, the Director shall forfeit any
unvested portion of the granted Common Stock.
2.2 If the Director continues as Chairman of the Company's Board of Directors on February 9 of any year after
1994 (the "Grant Date"), the Company shall