PORTLAND GENERAL HOLDINGS, INC.

               OUTSIDE DIRECTORS' DEFERRED COMPENSATION PLAN

                             1997 RESTATEMENT



                                  <PAGE>


                             TABLE OF CONTENTS


ARTICLE I-PURPOSE...........................................    1

 1.1 Restatement                                                1
 1.2 Purpose                                                    1
 1.3 Effective Date                                             1
 1.4 Plan Sponsor                                               1

ARTICLE II-DEFINITIONS......................................    1

 2.1 Account                                                    1
 2.2 Beneficiary                                                1
 2.3 Board                                                      2
 2.4 Change in Control                                          2
 2.5 Committee                                                  2
 2.6 Company                                                    2
 2.7 Compensation                                               2
 2.8 Deferral Election                                          3
 2.9 Determination Date                                         3
 2.10 Direct Subsidiary                                         3
 2.11 Financial Emergency                                       3
 2.12 Indirect Subsidiary                                       3
 2.13 Interest                                                  3
 2.14 Merger Agreement                                          3
 2.15 Outside Director......................................    4
 2.16 PGC Board ............................................    4
 2.17 Participant                                               4
 2.18 Participating Company                                     4
 2.19 Plan                                                      4
 2.20 Policies                                                  4
 2.21 President                                                 4
 2.22 Senior Administrative Officer                             5

ARTICLE III-ELIGIBILITY AND DEFERRALS.......................    5

 3.1 Eligibility                                                5
 3.2 Deferral Elections                                         5
 3.3 Limits on Elective Deferrals                               5

ARTICLE IV-DEFERRED COMPENSATION ACCOUNT....................    6

 4.1 Crediting to Account                                       6
 4.2 Determination of Accounts                                  6
 4.3 Vesting of Accounts                                        6
 4.4 Statement of Accounts                                      6

                                  i
                                <PAGE>


                           TABLE OF CONTENTS

ARTICLE V-PLAN BENEFITS.....................................    6

 5.1 Benefits                                                   6
 5.2 Withdrawals for Financial Emergency                        7
 5.3 Form of Benefit Payment                                    7
 5.4 Accelerated Distribution                                   8
 5.5 Taxes                                                      9
 5.6 Commencement of Payments                                   9
 5.7 Full Payment of Benefits                                   9
 5.8 Payment to Guardian                                        9

ARTICLE VI-BENEFICIARY DESIGNATION..........................    9

 6.1 Beneficiary Designation                                    9
 6.2 Amendments                                                 9
 6.3 No Beneficiary Designation                                10
 6.4 Effect of Payment                                         10

ARTICLE VII-ADMINISTRATION.................................    10

 7.1 Senior Administrative Officer; Duties                     10
 7.2 Agents                                                    10
 7.3 Binding Effect of Decisions                               10
 7.4 Indemnity of Senior Administrative Officer; Committee     10
 7.5 Availability of Plan Documents                            11
 7.6 Cost of Plan Administration                               11

ARTICLE VIII-CLAIMS PROCEDURE..............................    11

 8.1 Claim                                                     11
 8.2 Denial of Claim                                           11
 8.3 Review of Claim                                           11
 8.4 Final Decision                                            11

ARTICLE IX-AMENDMENT AND TERMINATION OF PLAN...............    12

 9.1 Amendment                                                 12
 9.2 Termination                                               12
 9.3 Payment at Termination                                    12



                                  ii
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                           TABLE OF CONTENTS

ARTICLE X-MISCELLANEOUS....................................    12

 10.1 Unfunded Plan                                            12
 10.2 Liability                                                13
 10.3 Trust Fund                                               13
 10.4 Nonassignability                                         13
 10.5 Protective Provisions                                    14
 10.6 Governing Law                                            14
 10.7 Terms                                                    14
 10.8 Validity                                                 14
 10.9 Notice                                                   14
 10.10 Successors                                              14
 10.11 Not a Contract of Service                               15


























                                  iii
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                            INDEX OF TERMS


A

Account: 2.1                                                    1

B

Beneficiary: 2.2                                                1
Board: 2.3                                                      1

C

Change in Control: 2.4                                          2
Committee: 2.5                                                  3
Company: 2.6                                                    3
Compensation: 2.7                                               3

D

Deferral Election: 2.8                                          3
Determination Date: 2.9                                         3
Direct Subsidiary: 2.10                                         3

E

Exchange Act: 2.4(a)                                            2

F

Financial Emergency: 2.11                                       3

I

Indirect Subsidiary: 2.12                                       3
Interest: 2.13                                                  3

M

Merger Agreement: 2.14.....................................     3

O

Outside Director: 2.15                                          4

P

Participant: 2.17                                               4
Participating Company: 2.18                                     4
PGC Board: 2.16............................................     4
PGC: 2.4(a)                                                     2
Plan: 2.19                                                      4
Policies: 2.20                                                  4
President: 2.21............................................     3

                                  iv
                                <PAGE>


S

Senior Administrative Officer: 2.22                             4

                                  v
                                <PAGE>



                    PORTLAND GENERAL HOLDINGS, INC.

               OUTSIDE DIRECTORS' DEFERRED COMPENSATION PLAN

                             1997 RESTATEMENT



                             ARTICLE I-PURPOSE

1.1  Restatement

     Portland General Corporation adopted a Deferred Compensation Plan
effective January 1, 1983 to cover Directors, officers and certain key
employees. The Plan was renamed and amended by the 1987 Restatement and
further amended by the 1988, 1990, 1994 and 1996 Restatements.

1.2  Purpose

     The purpose of this Outside Directors' Deferred Compensation Plan is
to provide elective deferred compensation to Outside Directors. It is
intended that the Plan will aid in attracting and retaining Outside
Directors of exceptional ability.

1.3  Effective Date

     This Restatement shall be effective as of June 25, 1997.

1.4  Plan Sponsor

     The Plan is maintained for the benefit of previous Outside Directors
of Portland General Corporation, an Oregon Corporation, and Outside
Directors of any corporations or other entities affiliated with or
subsidiary to it, if such corporations or entities have been selected by
the Board.


                          ARTICLE II-DEFINITIONS

2.1  Account

     "Account" means the account, maintained by the Participating Company
in accordance with Article IV with respect to any deferral of Compensation
pursuant to this Plan.

2.2  Beneficiary

     "Beneficiary" means the person, persons or entity entitled under
Article VI to receive any Plan benefits payable after Participant's death.


2.3  Board

     "Board" means the Board of Directors of Portland General Holdings,
Inc.



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2.4  Change in Control

     "Change in Control" means an occurrence in which:

        (a) Any "person," as such term is used in Sections 13(d) and 14(d)
     of the Securities Exchange Act of 1934, as amended (the "Exchange
     Act") (other than Portland General Holdings, Inc. ("PGH"), any trustee
     or other fiduciary holding securities under an employee benefit plan
     of PGH, or any Employer owned, directly or indirectly, by the
     stockholders of PGH in substantially the same proportions as their
     ownership of stock of PGH), is or becomes the "beneficial owner" (as
     defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
     of securities representing thirty percent (30%) or more of the
     combined voting power of PGH's then outstanding voting securities; or

        (b) During any period of two (2) consecutive years (not including
     any period prior to the execution of this Agreement), individuals who
     at the beginning of such period constitute the Board, and any new
     director whose election by the Board or nomination for election by
     PGH's stockholders was approved by a vote of at least two-thirds (2/3)
     of the directors then still in office who either were directors as of
     the beginning of the period of whose election or nomination for
     election was previously so approved, cease for any reason to
     constitute at least a majority thereof.

        (c) Notwithstanding anything to the contrary in the foregoing, no
     "Change in Control" shall be deemed to have occurred upon the
     consummation of the Amended and Restated Agreement and Plan of Merger
     by and among Enron Corp., Portland General Corporation and Enron
     Oregon Corp., dated as of July 20, 1996, or amended and restated from
     time to time.

2.5  Committee

     "Committee" means the Non-Qualified Benefits Committee of the Board.

2.6  Company

     "Company" means Portland General Holdings, Inc., an Oregon
Corporation.

2.7  Compensation

     "Compensation" means annual retainer and fees for attendance at board
and various committee meetings paid to an Outside Director by the
Participating Company during the calendar year with respect to duties
performed as a member of the board. Compensation, for purposes of this
Plan, may include any new form of cash remuneration paid by the
Participating Company to an Outside Director which is explicitly designated
as deferrable pursuant to this Plan by the Deferral Election form approved
by the Senior Administrative Officer. Compensation does not include expense
reimbursements, imputed compensation, or any form of noncash compensation
or benefits.



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2.8  Deferral Election

     "Deferral Election" means the election completed by the Participant in
a form approved by the Senior Administrative Officer which indicates the
Participant's irrevocable election to defer Compensation as designated in
the Deferral Election, pursuant to Article III.

2.9  Determination Date

     "Determination Date" means the last day of each calendar month.

2.10 Direct Subsidiary

     "Direct Subsidiary" means any corporation of which a Participating
Company owns at least eighty percent (80%) of the total combined voting
power of all classes of its stock entitled to vote.

2.11 Financial Emergency

     "Financial Emergency" means a financial need resulting from a serious
unforeseen personal or family emergency, such as an act of God, an adverse
business or financial transaction, divorce, serious illness or accident, or
death in the family.

2.12 Indirect Subsidiary

     "Indirect Subsidiary" means any corporation of which a Participating
Company directly and constructively owns at least eighty percent (80%) of
the total combined voting power of all classes of its stock entitled to
vote. In determining the amount of stock of a corporation that is
constructively owned by a Participating Company stock owned, directly or
constructively, by a corporation shall be considered as being owned
proportionately by its shareholders according to such shareholder's share
of voting power of all classes of its stock entitled to vote.

2.13 Interest

     "Interest" means the interest yield computed at the monthly equivalent
of an annual yield that is three (3) percentage points higher than the
annual yield on Moody's Average Corporate Bond Yield Index for the three
(3) calendar months preceding the immediately prior month as published by
Moody's Investors Service, Inc. (or any successor thereto), or, if such
index is no longer published, a substantially similar index selected by the
Board.

2.14 Merger Agreement

     "Merger Agreement" shall mean the Agreement and Plan of Merger by and
between Enron Corporation, Portland General Corporation and New Falcon
Corp., dated as of July 20, 1996, as that Agreement may be amended or
restated from time to time.



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2.15 Outside Director

     "Outside Director" means a member of the PGC Board who is not an
employee of Portland General Holdings, Inc. or any Direct Subsidiary or
Indirect Subsidiary or affiliate of Portland General Holdings, Inc.

2.16 PGC Board

     "PGC Board" shall mean the Board of Directors of Portland General
Corporation, or the Board of Directors of the successor corporation
established pursuant to the Merger Agreement, or any Advisory Committee to
Portland General Electric Company or the board or officers of a corporation
qualifying as a Participating Company of the Plan, including subsidiaries
and joint venture partners, the status of which shall be determined at the
discretion of the Senior Administrative Office.

2.17 Participant

     "Participant" means any eligible Outside Director who has elected to
make deferrals under this Plan.

2.18 Participating Company

     "Participating Company" means the Company or any affiliated or
subsidiary company designated by the Board as a Participating Company under
the Plan, as long as such designation has become effective and continues to
be in effect. The designation as a Participating Company shall become
effective only upon the acceptance of such designation and the formal
adoption of the Plan by a Participating Company. A Participating Company
may revoke its acceptance of designation as a Participating Company at any
time, but until it makes such revocation, all of the provisions of this
Plan and any amendments thereto shall apply to the Outside Directors of the
Participating Company and their Beneficiaries.

2.19 Plan

     "Plan" means the Portland General Holdings, Inc. Outside Directors'
Deferred Compensation Plan, as may be amended from time to time.

2.20 Policies

     "Policies" means any life insurance policies, annuity contracts or the
proceeds therefrom owned or which may be acquired by the Participating
Company.

2.21 President

     "President" means the President of the Company.



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                                <PAGE>



2.22 Senior Administrative Officer

     "Senior Administrative Officer" means the employee in the management
position designated by the Committee to administer the Plan.


                   ARTICLE III-ELIGIBILITY AND DEFERRALS

3.1  Eligibility

     (a) Eligibility.  An Outside Director shall be eligible to participate
by making Deferral Elections under paragraph 3.2 below. The Senior
Administrative Officer shall notify eligible Outside Directors about the
Plan and the benefits provided under it.

     (b) Cessation of Eligibility.  An Eligible Outside Director who ceases
to serve on the PGC Board shall cease participating as to new deferrals
immediately.


3.2  Deferral Elections

        (a) Time of Elections.  An eligible Outside Director may elect to
     participate in the Plan with respect to any calendar year by making an
     election to defer Compensation in a Deferral Election in a form
     approved by the Senior Administrative Officer. The Deferral Election
     must be filed with the Senior Administrative Officer no later than
     December 15, or such shorter period as designated in the Deferral
     Election form.

        (b) Mid-Year Eligibility.  If an individual first becomes eligible
     to participate during a calendar year and wishes to defer Compensation
     during the remainder of that year, a Deferral Election may be filed no
     later than thirty (30) days following notification to the Outside
     Director by the Senior Administrative Officer of eligibility to
     participate. Such Deferral Election shall be effective only with
     regard to Compensation earned after it is filed with the Senior
     Administrative Officer.

        (c) Irrevocability.  A Deferral Election for the following calendar
     year shall become irrevocable on the December 15 by which it is due
     under paragraph 3.2(a) and a Deferral Election for the current
     calendar year shall become irrevocable upon filing with the Senior
     Administrative Officer under paragraph 3.2(b).

3.3  Limits on Elective Deferrals

     An eligible Outside Director may elect to defer up to one hundred
percent (100%) of Compensation. The level elected must be in one percent
(1%) increments.



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                                <PAGE>


                 ARTICLE IV-DEFERRED COMPENSATION ACCOUNT

4.1  Crediting to Account

     The amount of the elective deferrals for a Participant under this Plan
shall be credited to an Account for the Participant on the books of the
Participating Company at the time the Compensation would have been paid in
cash. Any taxes or other amounts due from a Participant with respect to the
deferred Compensation under federal, state or local law, shall be withheld
from nondeferred Compensation payable to the Participant at the time the
deferred amounts are credited to the Account to the extent possible. To the
extent not possible, such amounts shall be withheld from deferred
Compensation with the balance to be credited to the Participant's Account.

4.2  Determination of Accounts

     The last day of each calendar month shall be a Determination Date.
Each Participant's Account as of each Determination Date shall consist of
the balance of the Account as of the immediately preceding Determination
Date, plus the Participant's elective deferrals, and Interest credited
under this Plan, minus the amount of any distributions made from this Plan
since the immediately preceding Determination Date. Interest credited shall
be calculated as of each Determination Date based upon the average daily
balance of the Account since the preceding Determination Date.

4.3  Vesting of Accounts

     Account balances in this Plan shall be fully vested at all times.

4.4  Statement of Accounts

     The Senior Administrative Officer shall submit to each Participant,
after the close of each calendar quarter and at such other times as
determined by the Senior Administrative Officer, a statement setting forth
the balance of the Account maintained for the Participant.


                          ARTICLE V-PLAN BENEFITS

5.1  Benefits

              (a) Entitlement to Benefits at Termination.  Benefits under
     this Plan shall be payable to a Participant on termination of
     membership on all boards of Participating Companies. The amount of the
     benefit shall be the balance of the Participant's Account including
     Interest to the date of payment, in the form elected under Paragraph
     5.3 below.

        Notwithstanding the above, if a Participant terminates Board
     membership with a Participating Company but, within sixty (60) days
     thereafter, becomes a Board member of an affiliate of the Company or
     Portland General Electric Company, including subsidiaries and joint
     venture partners, the status of which shall be determined at the
     discretion of the Senior Administrative Officer, the Participating
     Company shall continue to maintain the Participant's Account pursuant
     to Section IV. Benefits shall be payable to


PAGE 6 - OUTSIDE DIRECTOR'S DEFERRED COMPENSATION PLAN

                                <PAGE>


     such Participant under this paragraph or Paragraph 5.1(b) below when
     the Participant is no
     longer a member of the Board of any affiliated company, as determined
     at the discretion of the Senior Administrative Officer.

        (b) Entitlement to Benefits at Death.  Upon the death of a
     Participant for whom an Account is held under this Plan, a death
     benefit shall be payable to the Participant's Beneficiary in the same
     form as the Participant elected for payments at termination of service
     on the Board, under paragraph 5.3 below. The amount of the benefit
     shall be the balance of the Participant's Account including Interest
     to the date of payment.

5.2  Withdrawals for Financial Emergency

     A Participant may withdraw part or all of the Participant's Account
for a Financial Emergency as follows:

        (a) Determination.  The existence of a Financial Emergency and the
     amount to be withdrawn shall be determined by the Senior
     Administrative Officer.

        (b) Suspension.  A Participant who makes a withdrawal for Financial
     Emergency shall be suspended from participation for twelve (12) months
     from the date of withdrawal. Compensation payable during such
     suspension that would have been deferred under this Plan shall instead
     be paid to the Participant.

5.3  Form of Benefit Payment

        (a) The Plan benefits attributable to the elective deferrals for
     any calendar year shall be paid in one (1) of the forms set out below,
     as elected by the Participant in the form of payment designation filed
     with the Deferral Election for that year. The forms of benefit payment
     are:

            (i) A lump sum payment; or

            (ii) Monthly installment payments in substantially equal
        payments of principal and Interest over a period of up to one
        hundred eighty (180) months. The amount of the installment payment
        shall be redetermined on the first day of the month coincidental
        with or next following the anniversary of the date of termination
        each year, based upon the then current rate of Interest, the
        remaining Account balance, and the remaining number of payment
        periods.

            (iii) For Participants designated by the President to the
        Senior Administrative Officer, monthly installment payments over a
        period of up to one hundred eighty (180) months, consisting of
        interest only payments for up to one hundred twenty (120) months
        and principal and interest payments of the remaining Account
        balance over the remaining period. The amount of the installment
        payment shall be redetermined on the first day of the month
        coincidental with or next following the anniversary of the date of
        termination each year, based upon the then current rate of
        Interest, the remaining Account balance, and the remaining number
        of payment periods.


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                                <PAGE>


            (iv) In the event the account balance is ten thousand ($10,000)
        or less, that benefit will be paid out in a lump sum
        notwithstanding the form of benefit payment elected by the
        Participant.

        (b) A Participant may elect to file a change of payment designation
     which shall supersede all prior form of payment designations with
     respect to the Participant's entire Account. The Participant may
     redesignate a combination of lump sum and monthly installments if
     approved by the Senior Administrative Officer. If, upon termination,
     the Participant's most recent change of payment designation has not
     been in effect for twelve (12) full months prior to such termination,
     then the prior election shall be used to determine the form of
     payment. The Senior Administrative Officer may, in his sole
     discretion, direct that plan benefits be paid pursuant to the change
     of payment designation, notwithstanding the twelve (12) month
     requirement.

        (c) Participants designated by the President to the Senior
     Administrative Officer may elect to file a change of payment
     designation which shall supersede all prior form of payment
     designations with respect to the Participant's entire Account. The
     Participant may redesignate monthly installment payments over a period
     of up to one hundred eighty (180) months, consisting of interest only
     payments for up to one hundred twenty (120) months and principal and
     interest payments of the remaining Account balance over the remaining
     period. To be effective, such designation must be approved by the
     President and the Senior Administrative Officer. If, upon termination,
     the Participant's most recent change of payment designation has not
     been in effect for twelve (12) full months prior to such termination,
     then the prior election shall be used to determine the form of
     payment. The Senior Administrative Officer may, in his sole
     discretion, direct that Plan benefits be paid pursuant to the change
     of payment designation, notwithstanding the twelve (12) month
     requirement.

5.4  Accelerated Distribution

     Notwithstanding any other provision of the Plan, a Participant shall
be entitled to receive, upon written request to the Senior Administrative
Officer, a lump sum distribution of all or a portion of the vested Account
balance, subject to the following:

        (a) Penalty.

            (i) If the distribution is requested within thirty-six (36)
        months following a Change in Control, six percent (6%) of the
        account shall be forfeited and ninety-four percent (94%) of the
        account paid to the Participant.

            (ii) If the distribution is requested at any time other than
        that in (i) above, ten percent (10%) of the account shall be
        forfeited and ninety percent (90%) of the account paid to the
        Participant.

        (b) Suspension.  A Participant who receives a distribution under
     this section shall be suspended from participation in this Plan for
     twelve (12) calendar months from the date of such distribution. The
     account balance shall be as of the Determination Date immediately
     preceding the date on which the Senior Administrative Officer receives
     the written request. The amount payable under this section shall be
     paid in a lump sum within


PAGE 8 - OUTSIDE DIRECTOR'S DEFERRED COMPENSATION PLAN

                                <PAGE>


     sixty-five (65) days following the receipt
     of the Participant's written request by the Senior Administrative
     Officer.

5.5  Taxes

     Each Participating Company shall withhold from payments made hereunder
any taxes required to be withheld from a Participant's Compensation for the
federal or any state or local government. Withholding shall also apply to
Beneficiary, unless an election against withholding is made under Section
3405(a)(2) of the Internal Revenue Code.

5.6  Commencement of Payments

     Payment shall commence at the discretion of the Senior Administrative
Officer, but not later than sixty-five (65) days after the end of the month
in which a Participant retires, dies or otherwise terminates membership on
the Board of Portland General Corporation. All payments shall be made as of
the first day of the month.

5.7  Full Payment of Benefits

     Notwithstanding any other provision of this Plan, all benefits shall
be paid no later than one hundred eighty (180) months following the date
payment to Participant commences.

5.8  Payment to Guardian

     If a Plan benefit is payable to a minor or a person declared
incompetent or to a person incapable of handling the disposition of
property, the Senior Administrative Officer may direct payment of such Plan
benefit to the guardian, legal representative or person having the care and
custody of such minor or incompetent person. The Senior Administrative
Officer may require proof of incompetency, minority, incapacity or
guardianship as he may deem appropriate prior to distribution of the Plan
benefit. Such distribution shall completely discharge the Senior
Administrative Officer, the Participating Company and the Company from all
liability with respect to such benefit.


                    ARTICLE VI-BENEFICIARY DESIGNATION

6.1  Beneficiary Designation

     Each Participant shall have the right, at any time, to designate one
(1) or more persons or entities as the Participant's Beneficiary, primary
as well as secondary, to whom benefits under this Plan shall be paid in the
event of the Participant's death prior to complete distribution to the
Participant of the benefits due under the Plan. Each Beneficiary
designation shall be in a written form prescribed by the Senior
Administrative Officer and will be effective only when filed with the
Senior Administrative Officer during the Participant's lifetime.

6.2  Amendments

     Any Beneficiary designation may be changed by a Participant without
the consent of any Beneficiary by the filing of a new Beneficiary
designation with the Senior Administrative


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                                <PAGE>


Officer. If a Participant's
Compensation is community property, any Beneficiary designation shall be
valid or effective only as permitted under applicable law.

6.3  No Beneficiary Designation

     In the absence of an effective Beneficiary designation, or if all
Beneficiaries predecease a Participant, the Participant's estate shall be
the Beneficiary. If a Beneficiary dies after a Participant and before
payment of benefits under this Plan has been completed, the remaining
benefits shall be payable to the Beneficiary's estate.

6.4  Effect of Payment

     Payment to the Beneficiary shall completely discharge the
Participating Company's obligations under this Plan.


                        ARTICLE VII-ADMINISTRATION

7.1  Senior Administrative Officer; Duties

     This Plan shall be administered by a Senior Administrative Officer as
designated by the Committee. Members of the Committee may be participants
under this Plan. The Senior Administrative Officer shall have the authority
to make, amend, interpret and enforce all appropriate rules and regulations
for the administration of this Plan and decide or resolve any and all
questions including interpretations of this Plan as may arise in connection
with the Plan. The Senior Administrative Officer shall report to the
Committee on an annual basis regarding Plan activity, and at such other
times as may be requested by the Committee.

7.2  Agents

     In the administration of the Plan, the Senior Administrative Officer
may, from time to time, employ agents and delegate to such agents,
including employees of any Participating Company, such administrative
duties as he sees fit, and may from time to time consult with counsel, who
may be counsel to any Participating Company.

7.3  Binding Effect of Decisions

     The decision or action of the Senior Administrative Officer with
respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the rules
and regulations promulgated hereunder shall be final and conclusive and
binding upon all persons having any interest in the Plan.

7.4  Indemnity of Senior Administrative Officer; Committee

     Each Participating Company shall indemnify and hold harmless the
Senior Administrative Officer, the Committee and its individual members,
against any and all claims, loss, damage, expense or liability arising from
any action or failure to act with respect to this Plan, except in the case
of gross negligence or willful misconduct.


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                                <PAGE>


7.5  Availability of Plan Documents

     Each Participant shall receive a copy of this Plan, and the Senior
Administrative Officer shall make available for inspection by any
Participant a copy of the rules and regulations used in administering the
Plan.

7.6  Cost of Plan Administration

     The Company shall bear all expenses of administration. However, a
ratable portion of the expense shall be charged back to each Participating
Company.


                       ARTICLE VIII-CLAIMS PROCEDURE

8.1  Claim

     Any person claiming a benefit, requesting an interpretation or ruling
under the Plan or requesting information under the Plan shall present the
request in writing to the Senior Administrative Officer or his delegatee
who shall respond in writing as soon as practicable.

8.2  Denial of Claim

     If the claim or request is denied, the written notice of denial shall
state:

        (a) The reasons for denial, with specific reference to the Plan
     provisions on which the denial is based.

        (b) A description of any additional material or information
     required and an explanation of why it is necessary.

        (c) An explanation of the Plan's claim review procedure.

8.3  Review of Claim

     Any person whose claim or request is denied or who has not received a
response within thirty (30) days may request review by notice given in
writing to the Senior Administrative Officer. The claim or request shall be
reviewed by the Senior Administrative Officer, who may, but shall not be
required to, grant the claimant a hearing. On review, the claimant may have
representation, examine pertinent documents and submit issues and comments
in writing.

8.4  Final Decision

     The decision by the Senior Administrative Officer on review shall
normally be made within sixty (60) days. If an extension of time is
required for a hearing or other special circumstances, the claimant shall
be notified and the time limit shall be one hundred twenty (120) days. The
decision shall be in writing and shall state the reasons and the relevant
Plan provisions. All decisions on review shall be final and bind all
parties concerned.


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                                <PAGE>



               ARTICLE IX-AMENDMENT AND TERMINATION OF PLAN

9.1  Amendment

     The Senior Administrative Officer may amend the Plan from time to time
as may be necessary for administrative purposes and legal compliance of the
Plan, provided, however, that no such amendment shall affect the benefit
rights of Participants or Beneficiaries in the Plan. The Committee may
amend the Plan at any time, provided, however, that no amendment shall be
effective to decrease or restrict the accrued rights of Participants and
Beneficiaries to the amounts in their Accounts at the time of the
amendment. Such amendments shall be subject to the following:

        (a) Preservation of Account Balance.  No amendment shall reduce the
     amount accrued in any Account to the date such notice of the amendment
     is given.

        (b) Changes in Interest Rate.  No amendment shall reduce the rate
     of Interest to be credited, after the date of the amendment, on the
     amount already accrued in any Account or on the deferred Compensation
     credited to any Account under Deferral Elections already in effect on
     the date of the amendment.

9.2  Termination

     The board of directors of each Participating Company may at any time,
in its sole discretion, terminate or suspend the Plan in whole or in part.
However, no such termination or suspension shall adversely affect the
benefits of Participants which have accrued prior to such action, the
benefits of any Participant who has previously retired, the benefits of any
Beneficiary of a Participant who has previously died, or already accrued
Plan liabilities between Participating Companies.

9.3  Payment at Termination

     If the Plan is terminated, payment of each Account to a Participant or
a Beneficiary for whom it is held shall commence pursuant to Paragraph 5.6,
and shall be paid in the form designated by the Participant.


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                                <PAGE>


                         ARTICLE X-MISCELLANEOUS

10.1 Unfunded Plan

     This Plan is intended to be an unfunded plan maintained primarily to
provide deferred compensation benefits for Outside Directors. This Plan is
not intended to create an investment contract, but to provide retirement
benefits to eligible individuals who have elected to participate in the
Plan. Eligible individuals are directors of the Participating Company, who
by virtue of their position with the Participating Company, are uniquely
informed as to the Participating Company's operations and have the ability
to materially affect the Participating Company's profitability and
operations.


10.2 Liability

        (a) Liability for Benefits.  Except as otherwise provided in this
     paragraph, liability for the payment of a Participant's benefit
     pursuant to this Plan shall be borne solely by the Participating
     Company for which the Participant serves during the accrual or
     increase of the Plan benefit, and no liability for the payment of any
     Plan benefit shall be incurred by reason of Plan sponsorship or
     participation except for the Plan benefits of a Participating
     Company's own Outside Directors. Provided, however, that each
     Participating Company, by accepting the Board's designation as a
     Participating Company under the Plan and formally adopting the Plan,
     agrees to assume secondary liability for the payment of any benefit
     accrued or increased while a Participant serves on the board of
     directors of a Participating Company that is a Direct Subsidiary or
     Indirect Subsidiary of the Participating Company at the time such
     benefit is accrued or increased. Such liability shall survive any
     revocation of designation as a Participating Company with respect to
     any liabilities accrued at the time of such revocation. Nothing in
     this paragraph shall be interpreted as prohibiting any Participating
     Company or any other person from expressly agreeing to the assumption
     of liability for a Plan Participant's payment of any benefits under
     the Plan.

        (b) Unsecured General Creditor.  Participants and their
     Beneficiaries, heirs, successors and assigns shall have no secured
     legal or equitable rights, interest or claims in any property or
     assets of the Participating Company, nor shall they be beneficiaries
     of, or have any rights, claims or interests in any Policies or the
     proceeds therefrom owned or which may be acquired by the Participating
     Company. Except as provided in paragraph 10.3, such Policies or other
     assets of the Participating Company shall not be held under any trust
     for the benefit of Participants, their Beneficiaries, heirs,
     successors or assigns, or held in any way as collateral security for
     the fulfilling of the obligations of the Participating Company under
     this Plan. Any and all of the Participating Company's assets and
     Policies shall be, and remain, the general, unpledged, unrestricted
     assets of the Participating Company. Participating Company's
     obligation under the Plan shall be that of an unfunded and unsecured
     promise to pay money in the future.

10.3 Trust Fund

     At its discretion, each Participating Company, jointly or severally,
may establish one (1) or more trusts, with such trustee as the Board may
approve, for the purpose of providing for the payment of such benefits.
Such trust or trusts may be irrevocable, but the assets thereof shall be


PAGE 13 - OUTSIDE DIRECTOR'S DEFERRED COMPENSATION PLAN

                                <PAGE>


subject to the claims of the Participating Company's creditors. To the
extent any benefits provided under the Plan are actually paid from any such
trust, the Participating Company shall have no further obligation with
respect thereto, but to the extent not so paid, such benefits shall remain
the obligation of, and shall be paid by the Participating Company.

10.4 Nonassignability

     Neither a Participant nor any other person shall have any right to
sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber,
hypothecate or convey in advance of actual receipt the amounts, if any,
payable hereunder, or any part thereof, which are, and all rights to which
are, expressly declared to be nonassignable and nontransferable. No part of
the amounts payable shall, prior to actual payment, be subject to seizure
or sequestration for the payment of any debts, judgments, alimony or
separate maintenance owed by a Participant or any other person, nor be
transferable by operation of law in the event of a Participant's or any
other person's bankruptcy or insolvency.

10.5 Protective Provisions

     A Participant will cooperate with the Participating Company by
furnishing any and all information requested by the Participating Company,
in order to facilitate the payment of benefits hereunder, and by taking
such physical examination as the Participating Company may deem necessary
and taking such other action as may be requested by the Participating
Company.

10.6 Governing Law

     The provisions of this Plan shall be construed and interpreted
according to the laws of the State of Oregon, except as preempted by
federal law.

10.7 Terms

     In this Plan document, unless the context clearly indicates the
contrary, the masculine gender will be deemed to include the feminine
gender, and the singular shall include the plural.

10.8 Validity

     In case any provision of this Plan shall be held illegal or invalid
for any reason, such illegality or invalidity shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if
such illegal and invalid provision had never been inserted herein.

10.9 Notice

     Any notice or filing required or permitted to be given to the Senior
Administrative Officer under the Plan shall be sufficient if in writing and
hand delivered, or sent by registered or certified mail to the Senior
Administrative Officer, or to Secretary of the Participating Company.
Notice mailed to the Participant shall be at such address as is given in
the records of the Participating Company. Notice to the Senior
Administrative Officer, if mailed, shall be addressed to the principal
executive offices of the Company. Notices shall be deemed given as of the
date of delivery or, if delivery is made by mail, as of the date shown on
the postmark on the receipt for registration or certification.


PAGE 14 - OUTSIDE DIRECTOR'S DEFERRED COMPENSATION PLAN

                                <PAGE>


10.10 Successors

     The provisions of this Plan shall bind and inure to the benefit of
each Participating Company and its successors and assigns. The term
successors as used herein shall include any corporate or other business
entity which shall, whether by merger, consolidation, purchase or
otherwise, acquire all or substantially all of the business and assets of a
Participating Company, and successors of any such corporation or other
business entity.


10.11 Not a Contract of Service

     The terms and conditions of this Plan shall not be deemed to
constitute a contract of service between a Participating Company and a
Participant and neither a Participant nor a Participant's Beneficiary shall
have any rights against a Participating Company except as may otherwise be
specifically provided herein. Moreover, nothing in this Plan shall be
deemed to give a Participant the right to be retained on the Board of a
Participating Company nor shall it interfere with the Participant's right
to terminate his directorship at any time.

     IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its officers thereunto duly authorized, this 5th day of
September, 1997.

                              PORTLAND GENERAL HOLDINGS, INC.


                              By: /s/ Don F. Kielblock

                              Its: Vice President


PAGE 15  - OUTSIDE DIRECTORS' DEFERRED COMPENSATION PLAN