Exhibit 10.2
Description of Annual Stock Grants to Non-Employee Directors
     Annual common stock grants to non-employee directors are made pursuant to
the Pinnacle West Capital Corporation 2007 Long-Term Incentive Plan (the “2007
Plan”). The Human Resources Committee of Pinnacle West’s Board of Directors has
approved annual grants of Pinnacle West common stock to non-employee directors
under the 2007 Plan as follows:
     Each Pinnacle West non-employee director will annually receive 1,600 shares
of Pinnacle West common stock under the 2007 Plan on the first business day of
July, beginning July 1, 2008, subject to the following restrictions: In the
first calendar year in which a non-employee director is eligible to participate
in the 2007 Plan, he or she must own at least 900 shares of Pinnacle West’s
common stock as of December 31 of the same calendar year to receive a grant of
1,600 shares of Pinnacle West common stock. If the non-employee director owns
900 shares of common stock as of June 30, he or she will receive a grant of
1,600 shares of common stock on the first business day of July of the same
calendar year. If the non-employee director does not own 900 shares of Pinnacle
West’s common stock as of June 30 in the first calendar year in which the
non-employee director is eligible to participate in the 2007 Plan, but acquires
the necessary shares on or before December 31 of the same year, he or she will
receive a grant of 1,600 shares of common stock within a reasonable time after
Pinnacle West verifies that the requisite number of shares has been acquired. In
each subsequent year, the number of shares of Pinnacle West’s common stock the
non-employee director must own to receive a grant of 1,600 shares of common
stock will increase by 900 shares, until reaching a maximum of 4,500 shares. In
each of the subsequent years, the non-employee director must own the requisite
number of shares of Pinnacle West’s common stock as of June 30 of the relevant
calendar year. The approved grant to non-employee directors represents an
increase from the annual grant of 1,100 shares previously authorized by the
Human Resources Committee pursuant to the 2007 Plan and became effective July 1,
2008.