Exhibit 10.8

RETENTION AGREEMENT

This Retention Agreement dated effective June 5, 2000 (the “Agreement”)
describes PacifiCorp’s (the “Company”) offer of certain pay and benefits to Mike
Pittman (“Executive”), subject to the satisfaction of the terms and conditions
of this Agreement. This Agreement is intended to provide Executive with
incentives that encourage Executive’s continuation of employment with PacifiCorp
or an affiliate.

1.

Retention Benefits for Continuation in Employment.

Subject to your execution of this Agreement and acceptance of your assignment to
the position of Senior Vice President, Human Resources, the Company offers you
the following retention pay and benefits (collectively, the “Retention Pay and
Benefits”) subject to the terms and conditions stated in this Agreement, in any
applicable stock option agreement, or any related stock or benefits plan:

1.1      Retention Pay. A cash award of $125,610, less applicable withholdings,
(“Retention Pay”) will be paid to you if you continue your employment with the
Company or an affiliate through December 1, 2001. Payment will be made to you as
soon as practicable following that date.

1.2      SERP Retention Benefit. The Supplemental Executive Retirement Plan 1996
Restatement (the “SERP”) will be amended to provide you a retention benefit (the
“SERP Retention Benefit”) equal to the difference between your regular SERP
benefit and a benefit calculated using the formula for the Change in Control
(“CIC”) benefits provided under Section 3.9 of the SERP. Under the terms of the
amended plan, the SERP Retention Benefit will vest and be calculated as of the
earlier of (a) December 1, 2002, provided that you continue employment until
that date or (b) the date of your earlier termination of employment due to your
death or disability or the circumstances specified in Section 2.2.1(a) or
2.2.1(b) of this Agreement. In the event of your termination for any other
reason prior to December 1, 2002, you would be ineligible for any SERP Retention
Benefit. This SERP Retention Benefit would be in addition to any regular SERP
benefits you accrue during your period of employment, including any SERP
benefits you may accrue after December 1, 2002 until the date of your
termination of employment.

 

 

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1.3      Stock Options. A grant of 108,207 ScottishPower American Depositary
Shares (“ADS”) stock options at a grant price of $31.75. The vesting schedule
for these options is as follows:

1.3.1

Twenty-five percent (25%) on September 1, 2001;

 

1.3.2

Twenty-five percent (25%) on September 1, 2002; and

1.3.3

Fifty percent (50%) on September 1, 2003.

 

Any such grant will be subject to the terms of the stock option agreement
provided in Exhibit A and the then-current PacifiCorp Stock Incentive Plan.

2.

Additional Requirements.

In addition to the continuing employment requirement specified above, you must
also satisfy the following requirements in order to qualify for Retention Pay
and Benefits under this Agreement. By signing this Agreement, you agree to the
following:

2.1      Acceptance of Assigned Position. The Company has assigned you to the
position of Senior Vice President, Human Resources, effective May 4, 2000. You
acknowledge that you understand the duties and responsibilities of this position
and you accept such assignment under the terms of this Agreement.

2.2      Waiver of Regular and CIC Severance Benefits. Unless one of the
following exceptions applies, you waive from the date you execute this Agreement
through November 28, 2004 any right you may have to any severance benefits
identified in Exhibit A (“Regular Severance Benefits”) to the PacifiCorp
Executive Severance Plan, as amended and restated December 1, 1998 (the “PESP”)
and any CIC severance benefits identified in Exhibit B to the PESP (the “CIC
Severance Benefits”).

2.2.1   During the period between the date you execute this Agreement and
November 28, 2001, your waiver of CIC Severance Benefits shall not apply in the
event of either of the following:

 

(a)

Your employment terminates involuntarily for other than gross misconduct or
gross negligence as specified in Section 3.04-2(a)(ii) of the PESP; or

 

(b)

You have a qualifying “material alteration” as defined in Section 3.03-3 of the
PESP after the effective date of this Agreement and resign your employment
within two (2) months of the qualifying material alteration.

 

 

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2.2.2   During the period between November 29, 2001 and November 28, 2004, your
waiver of Regular Severance Benefits will not apply in the event that you
terminate under any of the following circumstances:

 

(a)

You are involuntarily terminated and are deemed eligible for Regular Severance
Benefits under Section 3.03-1(a)(iii) of the PESP; or

 

(b)

You have a qualifying “material alteration” as defined in Section 3.03-4 of the
PESP and you voluntarily resign your employment within the time period specified
in Section 3.03-1(a)(i) of the PESP in order to qualify for Regular Severance
Benefits.

2.2.3   Effect of CIC or Regular Severance on Retention Pay and Benefits:

 

(a)

Effect of CIC Severance. You will automatically forfeit any rights to any unpaid
Retention Pay specified in Section 1.1 and any unvested Stock Options specified
in Section 1.3 of this Agreement in the event of your termination of employment
under circumstances qualifying you for CIC Severance Benefits as described in
Section 2.2.1(a) or (b) of this Agreement during the period between the date you
execute this Agreement and November 28, 2001.

 

(b)

Effect of Regular Severance. You will be eligible to receive any unpaid
Retention Pay specified in Section 1.1 and any unvested Stock Options specified
in Section 1.3 of this Agreement in the event of your termination under
circumstances qualifying you for Regular Severance Benefits under Section 2.2.2
of this Agreement. Such benefits will be paid or provided to you in accordance
with any applicable stock options agreement, benefit plan or separation
agreement.

2.3      Waiver of CIC SERP Benefits. The SERP Retention Benefit described in
Section 1.2 of this Agreement is in lieu of, not in addition to, the CIC SERP
Benefit specified in Section 3.9 of the 1996 Restatement of the SERP, as amended
through Amendment No. 6 (the “Current SERP”). You agree to waive any CIC SERP
Benefits under Section 3.9 of the Current SERP, including any right to
voluntarily resign and receive such benefits during the period that is at least
12 months and no later than 14 months following the closing of the ScottishPower
Merger.

 

 

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3.       Level of Benefits. The Company reserves the right to amend the PESP or
the SERP at any time. However, during the period between the date you execute
this Agreement and November 28, 2004, any such amendment will not reduce the
level of benefits for which you are eligible under the SERP below an amount
determined under the provisions of the Current SERP (excluding the CIC SERP
Benefit specified in Section 3.9 of the Current SERP), plus the SERP Retention
Benefit described in Section 1.2 of this Agreement if you qualify for the
benefit. Your level of PESP benefits for the period beginning from the date you
execute this Agreement through November 28, 2004 will be no less than the
following:

3.1      Level of Benefits from the Date of this Agreement through November 28,
2001. Your applicable benefits will be no less than would be provided under the
applicable CIC provisions of the PESP in effect as of the effective date of this
Agreement. Your current CIC level under the PESP is 2.5 times Annual Cash
Compensation.

3.2      Level of Benefits from November 29, 2001 through November 28, 2004.
Your applicable Regular Severance benefits will be no less than would be
provided under the applicable provisions of the PESP in effect as of the
effective date of this Agreement. Your current level is Level 1.

4.       Other.

4.1      Time Frame for Acceptance. This Agreement is an offer to provide
benefits not otherwise available to you. You will have until June 30, 2000 to
accept this offer of benefits. This offer, therefore, will expire on June 30,
2000 if you do not accept it by that date. If you wish to enter into this
Agreement, please sign and return the attached copy of the Agreement to Lea Anne
Doolittle no later than June 30, 2000. If you decide not to enter into this
Agreement, you will not be eligible to receive Retention Pay and Benefits.

4.2      Confidentiality. As a condition to receipt of the Retention Pay and
Benefits offered under this Agreement, you agree not to disclose to any person,
agency or court the terms and conditions of this Agreement and our discussions
related to this Agreement unless compelled to do so pursuant to legal process
(e.g., a summons or subpoena) or otherwise required by law. You may discuss this
Agreement with your attorney, financial advisor, certified public accountant or
immediate family members on a confidential basis; provided however that you
understand that any breach of confidentiality will be deemed a breach by you.
You understand that if you breach this confidentiality provision, you will
automatically forfeit all remaining unpaid Retention Pay and Benefits under this
Agreement and be obligated to repay the value of any benefits already provided.

4.3      Tax Treatment of Retention Pay and Benefits. The Retention Pay and
Benefits described in this Agreement are subject to applicable payroll
deductions and tax withholding and may constitute taxable income to you. You are
responsible for all tax obligations and should consult with your own tax advisor
regarding the tax treatment of the Retention Pay and Benefits.

 

 

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4.4      Entire Agreement. This Agreement contains the entire agreement between
you and the Company concerning the subject matters discussed herein and
supersedes and replaces any earlier understandings, agreements or summaries,
written or oral. Any modification of this Agreement shall be effective only if
in writing and signed by each party or its duly authorized representative. The
terms of this Agreement are contractual and not mere recitals. If, for any
reason, any provision of this Agreement shall be held invalid in whole or in
part, such invalidity shall not affect the remainder of this Agreement.

4.5      Not a Contract of Employment. Nothing in this Agreement is intended to
be a guaranty of employment or shall give any employee the right to continue
employment throughout the term for which Retention Pay and Benefits are offered.
Your employment with the Company shall remain at-will; you and the Company each
have the right to end the employment relationship at any time.

4.6      Applicable Law. This Agreement shall be construed according to the laws
of Oregon.

4.7      Successors and Assigns. Your rights and benefits under this Agreement
are personal to you and may not be transferred or assigned voluntarily or
involuntarily. This Agreement shall be binding on the Company, its successors
and assigns, including any person acquiring control of the Company’s business
and operations.

4.8      Conditions. The waiver of a condition of benefits on any occasion shall
not constitute a waiver of any other condition on the same occasion or a waiver
of the same or any other condition on any other occasion.

4.9      Dispute Resolution. Any dispute concerning the interpretation or
construction of this Agreement or relating to any compensation or benefits you
may claim under this Agreement or relating to any termination of employment on
or before November 28, 2004 shall first be submitted to confidential mediation
before a mediator selected by the parties. Should any dispute not be resolved
through mediation, it shall be submitted and settled exclusively by confidential
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association or such comparable rules as may be agreed upon by the
parties. The parties shall be responsible for their own costs and legal fees in
any mediation or arbitration proceeding. Both parties agree that the procedures
outlined in this section are the exclusive methods of dispute resolution.

4.10    Termination. This Agreement shall automatically terminate in the event
of your death or disability. For purposes of this Agreement, “disability” shall
mean any medically determinable physical or mental impairment that renders you
unable to engage in any substantial gainful activity and can be expected to
result in death or which has lasted or can be expected to last for a continuous
period of not less than 12 months.

4.10.1  In the event you die or become disabled before receiving all of the
Retention Pay and Benefits offered under this Agreement as of the date of your
death or disability, you or your estate will receive the SERP Retention Benefit
specified in Section 1.2 of this Agreement, plus a prorated share of any unpaid
Retention Pay (described in Section

 

 

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1.1) based on the time period from the date of execution of this Agreement to
the date of your death or disability as a percentage of the time period from the
date of execution of this Agreement through November 28, 2004.

4.10.2  In the event of your death or disability prior to September 1, 2003, any
vesting of unvested stock options will be in accordance with your Stock Option
Agreement and any SERP benefit will be determined in accordance with the Current
SERP.

 

PACIFICORP

 

 

By 

/s/ Alan Richardson

 

Date:  30/6/00

 

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Alan Richardson

 

 

 

Chief Executive Officer

 

 

 

 

 

Accepted and agreed:

 

 

By 

/s/ Mike Pittman

 

Date:  June 29, 2000

 

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Mike Pittman

 

 

 

 

 

 

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