<SUBMISSION>
<ACCESSION-NUMBER>0000950147-00-001007
<TYPE>S-8
<PUBLIC-DOCUMENT-COUNT>5
<FILING-DATE>20000703
<EFFECTIVENESS-DATE>20000703
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>PINNACLE WEST CAPITAL CORP
<CIK>0000764622
<ASSIGNED-SIC>4911
<IRS-NUMBER>860512431
<STATE-OF-INCORPORATION>AZ
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>S-8
<ACT>33
<FILE-NUMBER>333-40796
<FILM-NUMBER>667630
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>400 E VAN BUREN ST PO BOX 52132
<STREET2>P O BOX 52132
<CITY>PHOENIX
<STATE>AZ
<ZIP>85072-2132
<PHONE>6023792616
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>400 E VAN BUREN ST
<STREET2>PO BOX 52132
<CITY>PHOENIX
<STATE>AZ
<ZIP>85072-2132
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>AZP GROUP INC
<DATE-CHANGED>19870506
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>S-8
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>FORM S-8 OF PINNACLE WEST CAPITAL CORP
<TEXT>

      As filed with the Securities and Exchange Commission on June 30, 2000
                                                 Registration No. 333-__________
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM S-8
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933


                        PINNACLE WEST CAPITAL CORPORATION
             (Exact name of Registrant as specified in its charter)

          ARIZONA                                               86-0512431
(State or other jurisdiction                                 (I.R.S. Employer)
incorporation or organization)                               Identification No.)

                            400 EAST VAN BUREN STREET
                                 P.O. Box 52132,
                           Phoenix, Arizona 85072-2132
               (Address of Principal Executive Offices) (Zip Code)

         THE PINNACLE WEST CAPITAL CORPORATION 2000 DIRECTOR EQUITY PLAN
    THE PINNACLE WEST CAPITAL CORPORATION AND ARIZONA PUBLIC SERVICE COMPANY
                           DIRECTORS' RETIREMENT PLAN
                            (Full title of the Plan)

                                Matthew P. Feeney
                              SNELL & WILMER L.L.P.
                               One Arizona Center
                             Phoenix, AZ 85004-0001
                     (Name and Address of Agent for Service)

                                 (602) 382-6239
          (Telephone number, including area code, of agent for service)

<TABLE>
<CAPTION>
                         CALCULATION OF REGISTRATION FEE
==========================================================================================================
<S>                          <C>              <C>                  <C>                   <C>
                                               PROPOSED MAXIMUM      PROPOSED MAXIMUM
TITLE OF SECURITIES           AMOUNT TO BE         OFFERING         AGGREGATE OFFERING        AMOUNT OF
 TO BE REGISTERED              REGISTERED     PRICE PER SHARE(1)         PRICE(1)         REGISTRATION FEE
----------------------------------------------------------------------------------------------------------
Common Stock, No Par Value
(2000 Director Equity
Participation Plan)          200,000 shares        $35.25              $7,050,000            $1,861.20
----------------------------------------------------------------------------------------------------------
Common Stock, No Par Value
(2000 Director Equity
Plan)                        14,800 shares         $35.25              $  521,700            $  137.73
----------------------------------------------------------------------------------------------------------
Total:                      214,800 shares                             $7,571,700            $1,998.93
==========================================================================================================
</TABLE>
(1)  Estimated  solely  for  the  purpose  of  calculating  the  amount  of  the
     registration fee, pursuant to Rules 457(c) and 457(h) of the Securities Act
     of 1933,  on the basis of the average of the high and low prices for shares
     of common stock on the New York Stock Exchange on June 27, 2000.

================================================================================
<PAGE>
                                     PART II

               INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.

     The  following  documents  have  been  filed  by  Pinnacle  West  with  the
Securities and Exchange  Commission  pursuant to the Securities  Exchange Act of
1934 and are incorporated by reference into this Registration Statement:

     1.   Annual  Report on Form 10-K for the  fiscal  year ended  December  31,
          1999;

     2.   Quarterly  Report on Form 10-Q for the fiscal  quarter ended March 31,
          2000;

     3.   The  description  of Pinnacle West's  common  stock  contained  in its
          registration  statement on Form 8-B, File No. 1-8962, as filed on July
          25, 1985,  except for the reference to transfer  agents and registrars
          for  the  common  stock  contained  therein  and  of  Pinnacle  West's
          Preferred Share Purchase Rights included in its registration statement
          on Form 8-A,  File No.  1-8962,  as filed on March 31,  1989, a Form 8
          Amendment thereto as filed on August 29, 1991, and a Form 8A/A thereto
          as filed on April 19, 1999.

     All  documents  subsequently  filed by Pinnacle  West  pursuant to Sections
13(a),  13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the
filing  of a  post-effective  amendment  to this  registration  statement  which
indicates that all securities  offered have been sold or which  deregisters  all
securities  then  remaining  unsold,  shall  be  deemed  to be  incorporated  by
reference in this  registration  statement and to be a part hereof from the date
of filing such documents.  Any statement contained in a document incorporated or
deemed to be incorporated by reference  herein shall be deemed to be modified or
superseded  for  purposes of this  registration  statement  to the extent that a
statement  contained herein or in any subsequently  filed document which also is
or is deemed to be incorporated by reference  herein modifies or supersedes such
statement.  Any statement so modified or superseded shall not be deemed,  except
as so  modified  or  superseded,  to  constitute  a part  of  this  registration
statement.

ITEM 4.  DESCRIPTION OF SECURITIES.

     Not applicable.

ITEM 5.  INTERESTS OF NAMED EXPERTS AND COUNSEL.

     Not applicable.

ITEM 6.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

         The Arizona  Business  Corporation Act (the "ABCA")  permits  extensive
indemnification of present and former directors,  officers,  employees or agents
of an Arizona corporation,  whether or not authority for such indemnification is
contained in the indemnifying corporation's articles of incorporation or bylaws.
Specific  authority  for  indemnification  of present and former  directors  and
officers,  under certain circumstances,  is contained in Article VII of Pinnacle
West's bylaws.

                                      II-1
<PAGE>
         Under the ABCA, in order for a corporation to provide  indemnification,
a majority  of the  corporation's  disinterested  directors,  independent  legal
counsel,  or the shareholders must find that the conduct of the individual to be
indemnified was in good faith and that the individual  reasonably  believed that
the conduct was in the  corporation's  best interests (in the case of conduct in
an "official  capacity" with the  corporation)  or that the conduct was at least
not opposed to the  corporation's  best  interests (in all other cases).  In the
case of any  criminal  proceeding,  the  finding  must be to the effect that the
individual  had no  reasonable  cause  to  believe  the  conduct  was  unlawful.
Indemnification  is permitted with respect to expenses,  judgments,  fines,  and
amounts paid in settlement by such individuals.

         Indemnification under the ABCA is permissive,  except in the event of a
successful defense, in which case a director,  officer,  employee, or agent must
be indemnified against reasonable expenses,  including attorneys' fees, incurred
in  connection  with the  proceeding.  In addition,  the ABCA  requires  Arizona
corporations  to indemnify any "outside  director" (a director who, when serving
as a director, was not an officer, employee or holder of five percent or more of
any class of the  corporation's  stock or of any  affiliate of the  corporation,
against liability unless (i) the corporation's  articles of incorporation  limit
such  indemnification,  (ii)  the  outside  director  is  adjudged  liable  in a
proceeding  by or in the right of the  corporation  or in any  other  proceeding
charging improper personal benefit to the director, or (iii) a court determines,
before  payment to the outside  director,  that the director  failed to meet the
standards of conduct  described  in the  preceding  paragraph.  A court may also
order that an individual be  indemnified  if the court finds that the individual
is fairly and  reasonably  entitled  to  indemnification  in light of all of the
relevant  circumstances,  whether or not the individual has met the standards of
conduct in this and the preceding paragraph.

         Insurance is  maintained on a regular  basis (and not  specifically  in
connection  with  this  offering)  against  liabilities  arising  on the part of
directors and officers out of their performance in such capacities or arising on
the part of  Pinnacle  West  out of its  foregoing  indemnification  provisions,
subject to certain exclusions and to the policy limits.

ITEM 7.  EXEMPTION FROM REGISTRATION CLAIMED.

     Not applicable.

ITEM 8.  EXHIBITS.

     Exhibit Index located at Page 7.

ITEM 9.  UNDERTAKINGS.

     (a) The undersigned Registrant hereby undertakes:

     (1) To file,  during any period in which  offers or sales are being made, a
post-effective amendment to this registration statement:

          (i) To include  any  prospectus  required  by Section  10(a)(3) of the
     Securities Act of 1933;

                                      II-2
<PAGE>
          (ii) To reflect in the  prospectus  any facts or events  arising after
     the  effective  date of the  registration  statement  (or the  most  recent
     post-effective amendment thereof) which,  individually or in the aggregate,
     represent  a  fundamental  change  in  the  information  set  forth  in the
     registration  statement.  Notwithstanding  the  foregoing,  any increase or
     decrease  in volume of  securities  offered (if the total  dollar  value of
     securities  offered  would not exceed  that which was  registered)  and any
     deviation from the low or high end of the estimated  maximum offering range
     may be  reflected  in the form of  prospectus  filed  with  the  Commission
     pursuant  to Rule  424(b) if, in the  aggregate,  the changes in volume and
     price  represent no more than a 20 percent change in the maximum  aggregate
     offering price set forth in the "Calculation of Registration  Fee" table in
     the effective registration statement;

          (iii) To include any material  information with respect to the plan of
     distribution not previously disclosed in the registration  statement or any
     material change to such information in the registration statement;

PROVIDED, HOWEVER, that paragraphs (i) and (ii) do not apply if the registration
statement is on Form S-3, Form S-8 or Form F-3 and the  information  required to
be included in a  post-effective  amendment by those  paragraphs is contained in
periodic  reports filed with or furnished to the  Commission  by the  registrant
pursuant to Section 13 or Section 15(d) of the  Securities  Exchange Act of 1934
that are incorporated by reference in the registration statement.

     (2) That, for the purpose of determining any liability under the Securities
Act of 1933,  each  such  post-effective  amendment  shall be deemed to be a new
registration  statement  relating to the  securities  offered  therein,  and the
offering of such  securities at that time shall be deemed to be the initial bona
fide offering thereof.

     (3) To remove from registration by means of a post-effective  amendment any
of the securities being registered which remain unsold at the termination of the
offering.

     (b) The  undersigned  registrant  hereby  undertakes  that, for purposes of
determining  any liability  under the Securities Act of 1933, each filing of the
registrant's  annual  report  pursuant to Section  13(a) or Section 15(d) of the
Securities  Exchange  Act of 1934  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  Section  15(d)  of  the
Securities  Exchange  Act of 1934)  that is  incorporated  by  reference  in the
registration  statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

     (c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors,  officers and controlling  persons of
the  registrant  pursuant  to  the  foregoing  provisions,   or  otherwise,  the
registrant  has been advised that in the opinion of the  Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore,  unenforceable. In the event that a claim for indemnification
against such  liabilities  (other than the payment by the registrant of expenses
incurred or paid by a director,  officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director,  officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction  the  question  of whether  such  indemnification  by it is against
public  policy  as  expressed  in the Act  and  will be  governed  by the  final
adjudication of such issue.

                                      II-3
<PAGE>
                                   SIGNATURES

     The Registrant. Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the  requirements  for  filing  on  Form  S-8 and has  duly  caused  this
registration statement to be signed on its behalf by the undersigned,  thereunto
duly authorized, in the City of Phoenix, State of Arizona, on June 21, 2000.


                                  PINNACLE WEST CAPITAL CORPORATION


                                  By: /s/ William J. Post
                                     -------------------------------------------
                                  William J. Post, President and Chief Executive


     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
registration  statement  has  been  signed  by  the  following  persons  in  the
capacities and on the date indicated.  Each person whose signature appears below
hereby  authorizes  Chris N. Froggatt,  Barbara M. Gomez and Michael V. Palmeri,
and each of them , as attorneys-in-fact,  to sign in his or her name and behalf,
individually and in each capacity  designated below, and to file any amendments,
including post-effective amendments, to this registration statement.

<TABLE>
<CAPTION>
      Signature                                 Title                               Date
      ---------                                 -----                               ----
<S>                            <C>                                             <C>

/s/ William J. Post
--------------------------      President, Chief Executive Officer and
William J. Post                 Director  (Principal Executive Officer)          June 21, 2000

/s/ Michael V. Palmeri
--------------------------      Vice President, Finance (Principal Financial
Michael V. Palmeri              Officer)                                         June 21, 2000

/s/ Chris N. Froggatt
--------------------------      Vice President and Controller (Principal
Chris N. Froggatt               Accounting Officer)                              June 21, 2000


/s/ Edward N. Basha, Jr.
--------------------------
Edward N. Basha, Jr.            Director                                         June 21, 2000


/s/ Michael L. Gallagher
--------------------------
Michael L. Gallagher            Director                                         June 21, 2000


/s/ Pamela Grant
--------------------------
Pamela Grant                    Director                                         June 21, 2000


/s/ Roy A. Herberger, Jr.
--------------------------
Roy A. Herberger, Jr.           Director                                         June 21, 2000



--------------------------
Martha O. Hesse                 Director
</TABLE>

                                      II-4
<PAGE>
<TABLE>
<CAPTION>
<S>                            <C>                                             <C>


/s/ William S. Jamieson, Jr.
--------------------------
William S. Jamieson, Jr.        Director                                         June 21, 2000


/s/ Humberto S. Lopez
--------------------------
Humberto S. Lopez               Director                                         June 21, 2000


/s/ Robert G. Matlock
--------------------------
Robert G. Matlock               Director                                         June 21, 2000


/s/ Kathryn L. Munro
--------------------------
Kathryn L. Munro                Director                                         June 21, 2000


/s/ Bruce J. Nordstrom
--------------------------
Bruce J. Nordstrom              Director                                         June 21, 2000


/s/ Richard Snell
--------------------------
Richard Snell                   Chairman of the Board of Directors               June 21, 2000
</TABLE>

                                      II-5
<PAGE>
                                  EXHIBIT INDEX


Exhibit No.          Description
-----------          -----------

5.1               Opinion of Snell & Wilmer L.L.P.

23.1              Consent of Deloitte & Touche L.L.P.

99.1              The Pinnacle West Capital  Corporation  2000  Director  Equity
                  Plan

99.2              The  Pinnacle  West  Capital  Corporation  and Arizona  Public
                  Service  Company  Directors'  Retirement  Plan (as Amended and
                  Restated)

In addition to those Exhibits shown above,  the registrant  hereby  incorporates
the following  Exhibits  pursuant to Rule 411 of Regulation C promulgated  under
the Securities Act of 1933 by reference to the filings set forth below:

<TABLE>
<CAPTION>
                                                  Previously Filed
Exhibit No.           Description                   as Exhibit                 File No.      Date Effective
-----------           -----------                   ----------                 --------      --------------

<S>             <C>                             <C>                             <C>            <C>
    4.1          Articles of Incorporation,     19.1 to the Company's
                 restated as of July 29, 1988   September 1988 Form 10-Q
                                                Report                          1-8962          11-14-88

                 Bylaws, amended as of          4.1 to the Company's
    4.2          December 15, 1999              Registration Statement on
                                                Form S-8 No. 333-95035          1-8962          1-20-00

    4.3          Rights Agreement               4.1 to Form 8-K Report
                                                dated March 22, 1999            1-8962          4-19-99
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>OPINION OF SNELL & WILMER LLP
<TEXT>

                                  June 30, 2000

VIA EDGAR

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

     Re:  Pinnacle West Capital Corporation 2000 Director Equity Plan

Ladies and Gentlemen:

     We have acted as counsel to Pinnacle West Capital  Corporation,  an Arizona
corporation  (the "Company"),  in connection with its Registration  Statement on
Form S-8 (the "Registration  Statement") filed under the Securities Act of 1933,
relating to the registration of 200,000 shares of its Common Stock, no par value
(the "Shares"),  issuable pursuant to the Pinnacle West Capital Corporation 2000
Director Equity Plan (the "Plan").

     In that connection, we have examined such documents, corporate records, and
other  instruments as we have deemed  necessary or  appropriate  for purposes of
this opinion, including the Articles of Incorporation and Bylaws of the Company.
Although,  we have been informed by the Company that treasury shares may be used
to fulfill the Company's obligations under the Plan, there is a possibility that
the  Company  will  issue  original  shares of its common  stock to fulfill  its
obligations under the Plan.

     Based upon the  foregoing,  it is our opinion that the Shares,  if and when
issued in accordance with the terms of the Plan,  will be validly issued,  fully
paid, and nonassessable.

     We  hereby  consent  to the  use  of  this  opinion  as an  exhibit  to the
Registration  Statement  and to the use of our name  wherever  it appears in the
Registration Statement.

                                Very truly yours,


                                /s/ Snell & Wilmer L.L.P.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>CONSENT OF DELOITTE & TOUCHE L.L.P.
<TEXT>

INDEPENDENT AUDITORS' CONSENT


We consent to the incorporation by reference in this  Registration  Statement of
Pinnacle West Capital  Corporation  on Form S-8 of our report dated February 18,
2000,  appearing  in the Annual  Report on Form 10-K of  Pinnacle  West  Capital
Corporation for the year ended December 31, 1999.


/s/ DELOITTE & TOUCHE LLP
Phoenix, Arizona

June 29, 2000
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>2000 DIRECTOR EQUITY PLAN
<TEXT>

                        PINNACLE WEST CAPITAL CORPORATION
                            2000 DIRECTOR EQUITY PLAN


                                   ARTICLE 1

                      ESTABLISHMENT, PURPOSE, AND DURATION

     1.1  ESTABLISHMENT OF THE PLAN.  Pinnacle West Capital  Corporation  hereby
establishes the Pinnacle West Capital Corporation 2000 Director Equity Plan (the
"Plan") for the benefit of its  Nonemployee  Directors.  The Plan sets forth the
terms of  grants  of  unrestricted  Stock  and  Nonqualified  Stock  Options  to
Nonemployee  Directors.  All such grants are subject to the terms and provisions
set forth in this Plan.

     1.2 PURPOSE OF THE PLAN. The purpose of the Plan is to encourage  ownership
in the  Company by  Nonemployee  Directors,  to  strengthen  the  ability of the
Company to attract and retain the  services  of  experienced  and  knowledgeable
individuals as Nonemployee  Directors of the Company, and to provide Nonemployee
Directors with a further incentive to work for the best interests of the Company
and its shareholders.  The Plan is intended to replace the Pinnacle West Capital
Corporation  Director Equity  Participation  Plan and the Arizona Public Service
Company Director Equity Plan, which have been terminated effective July 1, 2000.

     1.3  EFFECTIVE  DATE.  The  Plan  is  effective  as of July  1,  2000  (the
"Effective  Date").  Pursuant  to New York  Stock  Exchange  Rule  312.03(a)(4),
shareholder approval of the Plan is not required.

     1.4 DURATION OF THE PLAN.  The Plan will remain in effect until the earlier
of (a) June 30, 2010 or (b) such time as the Plan is  terminated by the Board of
Directors pursuant to Article 8 or Section 9.4.

                                   ARTICLE 2

                          DEFINITIONS AND CONSTRUCTION

     2.1  DEFINITIONS.  For purposes of the Plan, the following  terms will have
the meanings set forth below:


          (a) "Award" means a grant of Stock or Nonqualified Stock Options under
the Plan.

          (b) "Award Agreement" means any written instrument, contract, or other
instrument or document evidencing an Award.

          (c) "Board" or "Board of  Directors"  means the Board of  Directors of
the Company,  and includes any committee of the Board of Directors designated by
the Board to administer this Plan.
<PAGE>
          (d) "Code"  means the Internal  Revenue Code of 1986,  as amended from
time to time.

          (e)  "Committee"  means  the  committee  appointed  by  the  Board  to
administer the Plan.  Unless  otherwise  determined by the Board,  the Committee
will consist of the members of the Board's Human Resources Committee,  excluding
those members who do not qualify as  "Non-Employee  Directors,"  as such term is
defined  in  Rule  16b-3(b)(3)   promulgated  by  the  Securities  and  Exchange
Commission, or any successor provision.

          (f)  "Company"  means  Pinnacle  West  Capital  Corporation,   or  any
successor as provided in Section 9.3.

          (g)  "Exchange  Act" means the  Securities  Exchange  Act of 1934,  as
amended from time to time, or any successor provision.

          (h) "Fair Market Value" means,  as of any given date,  the fair market
value of Stock on a particular  date determined by such methods or procedures as
may be  established  from  time  to  time  by the  Committee.  Unless  otherwise
determined  by the  Committee,  the Fair Market Value of Stock as of the date an
Option is awarded to a  Participant  under the Plan will be the average  closing
price of the Stock on the New York Stock  Exchange for the ten (10) trading days
ending on and  including  the trading  date  immediately  preceding  the date of
grant.

          (i) "Nonemployee Director" means any individual who is a member of the
Board of Directors of the Company and who is not also an employee of the Company
or a Subsidiary.

          (j)  "Nonqualified  Stock Option"  means an option to purchase  Stock,
granted  under  Article 7, that is not intended to be an incentive  stock option
qualifying under Section 422 of the Code.

          (k) "Option" means a Nonqualified Stock Option granted under the Plan.

          (l) "Participant" means a Nonemployee  Director of the Company who has
been granted an Award under the Plan.

          (m) "Plan  Year"  means  the  twelve  (12)  consecutive  month  period
beginning on January 1 and ending on December 31.

          (n) "Stock" means the shares of the Company's Common Stock.

          (o)  "Subsidiary"  means any entity or association of which securities
or other ownership interests having ordinary voting power to elect a majority of
the  board of  directors  or other  persons  performing  similar  functions  are
directly or indirectly owned by the Company.

     2.2 GENDER AND NUMBER.  Except as indicated by the context,  any  masculine
term also  includes the  feminine,  the plural  includes the  singular,  and the
singular includes the plural.

                                      -2-
<PAGE>
     2.3 SEVERABILITY OF PROVISIONS.  With respect to persons subject to Section
16 of the Exchange Act, transactions under this Plan are intended to comply with
all  applicable  conditions of Rule 16b-3 or its  successors  under the Exchange
Act. To the extent any  provision of the Plan or action by the Board fails to so
comply,  it will be deemed  null and void,  to the extent  permitted  by law and
deemed  advisable  by the Board,  and the  remaining  provisions  of the Plan or
actions by Board will be construed  and enforced as if the invalid  provision or
action had not been included or undertaken.

     2.4  INCORPORATION BY REFERENCE.  In the event this Plan does not include a
provision required by Rule 16b-3 to be stated herein, such provision (other than
one relating to eligibility requirements or the price and amount of Awards) will
be deemed  automatically  to be  incorporated  by reference  herein,  insofar as
Participants subject to Section 16 of the Exchange Act are concerned.

                                   ARTICLE 3

                                 ADMINISTRATION

     3.1  ADMINISTRATION  BY THE  COMMITTEE.  The  Committee has the full power,
discretion,  and authority to interpret and administer the Plan in a manner that
is consistent with the Plan's provisions.

     3.2 AUTHORITY OF THE COMMITTEE.  Subject to any specific designation in the
Plan, the Committee has the exclusive power, authority and discretion to:

          (a) Designate Participants to receive Awards;

          (b)  Determine  the type or  types of  Awards  to be  granted  to each
Participant;

          (c)  Determine  the number of Awards to be  granted  and the number of
shares of Stock to which an Award will relate;

          (d) Determine the terms and  conditions of any Award granted under the
Plan including but not limited to, the exercise price,  grant price, or purchase
price,  any  restrictions or limitations on the Award, any schedule for lapse of
forfeiture  restrictions or restrictions on the  exercisability of an Award, and
accelerations or waivers thereof,  based in each case on such  considerations as
the Committee in its sole discretion determines;

          (e) Amend,  modify,  or  terminate  any  outstanding  Award,  with the
Participant's consent,  unless the Committee has the authority to amend, modify,
or  terminate  an Award  without  the  Participant's  consent  under  any  other
provision of the Plan or the relevant Award Agreement.

          (f) Determine whether, to what extent, and under what circumstances an
Award may be settled in, or the exercise price of an Award may be paid in, cash,
Stock, other Awards, or other property, or an Award may be canceled,  forfeited,
or surrendered;

                                      -3-
<PAGE>
          (g)  Prescribe  the form of each  Award  Agreement,  which need not be
identical for each Participant;

          (h) Decide all other  matters that must be  determined  in  connection
with an Award;

          (i) Establish,  adopt,  or revise any rules and  regulations as it may
deem necessary or advisable to administer the Plan; and

          (j) Interpret the terms of, and any matter arising under,  the Plan or
any Award Agreement;

          (k) Make all other decisions and  determinations  that may be required
under the Plan or as the  Committee  deems  necessary or advisable to administer
the Plan.

     3.3 DECISIONS BINDING.  The Committee's  determinations and decisions under
the Plan,  and all  related  orders or  resolutions  of the Board will be final,
conclusive, and binding on all persons, including the Company, its shareholders,
employees, Participants, and their estates and beneficiaries.

                                   ARTICLE 4

                           SHARES SUBJECT TO THE PLAN

     4.1 NUMBER OF SHARES.  The total  number of shares of Stock  available  for
grant under the Plan may not exceed  200,000,  subject to adjustment as provided
in Section 4.4. The shares issued under the Plan may be authorized  and unissued
Stock,  treasury  stock or Stock  reacquired  by the Company,  including  shares
purchased on the open market.

     4.2 LAPSED AWARDS. If any Award granted under the Plan terminates, expires,
or lapses for any reason,  any shares subject to purchase pursuant to such Award
again will be available for grant under the Plan.

     4.3 LIMITATION ON NUMBER OF SHARES SUBJECT TO AWARDS.  Notwithstanding  any
provision in the Plan to the contrary,  and subject to the adjustment in Section
4.4, the maximum  aggregate number of shares of Stock with respect to the Awards
that may be granted to any one  Participant  may not exceed one percent  (1%) of
the Company's outstanding Stock.

     4.4 ADJUSTMENTS IN AUTHORIZED  SHARES.  In the event a stock split or stock
dividend is declared upon the Stock: (a) the shares of Stock available for grant
under the Plan,  the  shares of Stock to be  awarded  under  Article  6, and the
shares of Stock required to be  beneficially  owned under Section 6.1(b) will be
increased  proportionately  and (b) the shares of Stock  subject to each  Option
that has been awarded under Article 7 will be increased proportionately, without
any change in the aggregate  purchase price therefor.  In the event the Stock is
changed into or exchanged for a different  number or class of shares of Stock or
of   shares   of   another   corporation,    whether   through   reorganization,
recapitalization,  stock split-up or  combination  of shares:  (a) there will be
substituted for each such share of Stock available for grant under the Plan, the

                                      -4-
<PAGE>
shares of Stock to be awarded under Article 6, and the shares of Stock  required
to be beneficially  owned under Section 6.1(b) the number and class of shares of
Stock into which each  outstanding  share of Stock is changed  into or exchanged
and (b) there will be  substituted  for each such share of Stock then subject to
each outstanding  Option the number and class of shares of Stock into which each
outstanding share of Stock is changed into or exchanged,  all without any change
in the aggregate purchase price for the shares then subject to each Option.

                                   ARTICLE 5

                          ELIGIBILITY AND PARTICIPATION

     5.1  ELIGIBILITY.  Eligibility  to  participate  in the Plan is  limited to
Nonemployee Directors.

     5.2 ACTUAL  PARTICIPATION.  All eligible Nonemployee Directors will receive
grants of Stock pursuant to Section 6.1.  Subject to the provisions of the Plan,
the Committee may, from time to time, select from among all eligible Nonemployee
Directors,  those to whom Awards of Stock or Options will be granted pursuant to
Section  6.2 and  Article 7 and will  determine  the  nature  and amount of each
Award.  No individual will have any right to be granted Stock or an Option under
Section 6.2 or Article 7 of this Plan.

                                   ARTICLE 6

                                 GRANT OF STOCK

     6.1 ANNUAL GRANT OF STOCK.

          (a) AMOUNT OF GRANT. Subject to the limitation on the number of shares
that may be awarded  under  this  Plan,  each  individual  who is a  Nonemployee
Director  as of July 1 of each  Plan  Year and who  meets  the  stock  ownership
requirements  described in  subparagraph  (b) will  receive  Nine Hundred  (900)
shares of Stock.

          (b) STOCK OWNERSHIP REQUIREMENTS.  During the first Plan Year in which
a  Nonemployee  Director is eligible  to receive an annual  grant of Stock,  the
Nonemployee  Director:  (a) must  beneficially  own at least Nine Hundred  (900)
shares of Stock as of June 30 of the same Plan  Year;  or (b) must  beneficially
own at least  Nine-Hundred (900) shares of Stock on or before December 31 of the
same Plan Year.  In  subsequent  Plan  Years,  the number of shares of Stock the
Nonemployee  Director must  beneficially own to receive an annual grant of Stock
under this Section 6.1 will  increase by Nine Hundred (900) shares of Stock each
Plan Year until  reaching a maximum of 4,500  shares.  In each of the Plan Years
following  the first Plan Year in which a  Nonemployee  Director  is eligible to
receive an annual grant of Stock, the Nonemployee Director must beneficially own
the  requisite  number of shares of Stock as of June 30 to receive  the grant of
Stock. The Nonemployee  Director may acquire  beneficial  ownership  directly or
indirectly. Shares of Stock subject to an option granted under or outside of the
Plan will not be considered to be beneficially  owned by a Nonemployee  Director
until the option is exercised.

                                      -5-
<PAGE>
          (c) ISSUANCE OF SHARES.

               (1) First Plan Year.  If the  Nonemployee  Director  beneficially
          owns Nine Hundred (900) shares of Stock as of June 30, the Nonemployee
          Director will receive a grant of Nine Hundred (900) shares of Stock as
          of July 1 of the same Plan Year. If the Nonemployee  Director does not
          beneficially own Nine Hundred (900) shares of Stock as of June 30, the
          Nonemployee  Director  has until  December 31 of the same Plan Year to
          acquire the requisite  number of shares of Stock.  If the  Nonemployee
          Director  acquires  Nine  Hundred  (900)  shares of Stock on or before
          December  31 of the same Plan  Year,  the  Nonemployee  Director  will
          receive  Nine Hundred  (900) shares of Stock within a reasonable  time
          after the Company verifies the Nonemployee  Director's  acquisition of
          the requisite number of shares of Stock.

               (2)  Subsequent  Plan  Years.   Each  Nonemployee   Director  who
          beneficially  owns the requisite  number of shares of Stock as of June
          30 of a Plan Year will receive  Nine Hundred  (900) shares of Stock as
          of July 1 of the same Plan Year.

     6.2 DISCRETIONARY  GRANT OF STOCK.  Subject to the limitation on the number
of shares that may be awarded under this Plan,  the Committee  may, from time to
time,  select  from  among all  eligible  Nonemployee  Directors,  those to whom
discretionary  awards of Stock are given and will  determine  the amount of each
Award. No individual will have any right to a discretionary award of Stock under
this Plan.

                                   ARTICLE 7

                                GRANT OF OPTIONS

     7.1 GENERAL.  The Committee is  authorized to grant options to  Nonemployee
Directors on the following terms and conditions.

     7.2 EXERCISE  PRICE.  The exercise price per share of Stock under an Option
may not be less than Fair Market Value on the date of grant.

     7.3 TIME AND CONDITIONS OF EXERCISE.  The Committee will determine the time
or times at which an Option may be exercised in whole or in part.  The Committee
will also determine the  performance or other  conditions,  if any, that must be
satisfied before all or part of an Option may be exercised.

     7.4 EVIDENCE OF GRANT.  All Options  will be evidenced by a written  Option
Agreement  between  the Company  and the  Participant  that will not include any
terms or conditions that are inconsistent  with the terms and conditions of this
Plan.

     7.5 DURATION OF OPTIONS.  Each Option  granted to a Participant  under this
Article 7 will expire on the tenth anniversary date of the date of grant, unless
the  Option is earlier  terminated,  forfeited,  or  surrendered  pursuant  to a
provision of this Plan or the applicable  Award Agreement.  Notwithstanding  the
foregoing,  if a  Participant  ceases to be a Company  director  for any reason,
including death or disability,  any Options held by that Participant will expire

                                      -6-
<PAGE>
on the second  anniversary of the date on which the  Participant  ceased to be a
Company director, unless otherwise provided in the applicable Award Agreement.

     7.6 PAYMENT. The Committee will determine the methods by which the exercise
price  of an  Option  may be  paid,  the  form of  payment,  including,  without
limitation,  cash, shares of Stock, or other property (including broker-assisted
arrangements),  and the methods by which  shares of Stock will be  delivered  or
deemed to be delivered to Participants.

     7.7 NO SHAREHOLDERS RIGHTS. The Participant does not have any of the rights
of a  shareholder  of the  Company  until  shares  of Stock  are  issued  to the
Participant in connection with such Option.

     7.8  LIMITATIONS ON THE  TRANSFERABILITY  OF OPTIONS.  Unless the Committee
provides  otherwise,  no  Option  granted  under  this  Article  7 may be  sold,
transferred,  pledged, assigned, or otherwise alienated, other than by will, the
laws of descent and distribution,  or under any other  circumstances  allowed by
the Committee.

                                   ARTICLE 8

                    AMENDMENT, MODIFICATION, AND TERMINATION

     8.1  AMENDMENT,  MODIFICATION,  AND  TERMINATION.  Subject to the terms set
forth in Section 8.2, the Board may terminate,  amend, or modify the Plan at any
time.

     8.2 AWARDS  PREVIOUSLY  GRANTED.  Unless  required by law, no  termination,
amendment,  or modification of the Plan will in any manner  adversely affect any
Award  previously  granted  under the Plan  without the  written  consent of the
Participant holding the Award.

                                   ARTICLE 9

                                  MISCELLANEOUS

     9.1 INDEMNIFICATION. Each individual who is or was a member of the Board or
the Committee will be indemnified  and held harmless by the Company  against and
from  any  loss,  cost,  liability,  or  expense  that  may be  imposed  upon or
reasonably  incurred  by him or her in  connection  with or  resulting  from any
claim, action, suit, or proceeding to which he or she may be a party or in which
he or she may be involved by reason of any action  taken or failure to act under
this  Plan  and  against  and  from  any and all  amounts  paid by him or her in
settlement  thereof,  with  the  Company's  approval,  or  paid by him or her in
satisfaction of any judgment in any such action, suit, or proceeding against him
or her, provided he or she gives the Company an opportunity, at its own expense,
to assume and defend the same before he or she undertakes to defend it on his or
her own behalf. The foregoing right of indemnification  will not be exclusive of
any other rights of  indemnification  to which such  individuals may be entitled
under the Company's  Certificate of Incorporation or Bylaws, as a matter of law,
or otherwise,  or any power that the Company may have to indemnify  them or hold
them harmless.

                                      -7-
<PAGE>
     9.2 BENEFICIARY  DESIGNATION.  Each Participant under the Plan may name any
beneficiary or beneficiaries to whom any benefit under the Plan is to be paid in
the  event  of his  or  her  death.  Each  designation  will  revoke  all  prior
designations  by the  same  Participant,  will  be in a form  prescribed  by the
Committee,  and will be effective only when filed by the  Participant in writing
with the  Committee  during  his or her  lifetime.  In the  absence  of any such
designation,  benefits remaining unpaid at the Participant's  death will be paid
to the Participant's estate.

     9.3 SUCCESSORS. All obligations of the Company under the Plan, with respect
to Awards  granted  hereunder,  will be binding on any successor to the Company,
whether the  existence  of such  successor is the result of a direct or indirect
purchase,  merger,  consolidation,  or otherwise, of all or substantially all of
the business and/or assets of the Company.

     9.4  REQUIREMENTS  OF LAW.  The  granting of Awards  under the Plan will be
subject to all applicable laws, rules, and regulations, and to such approvals by
any governmental  agencies or national securities  exchanges as may be required.
Notwithstanding  any other provision of the Plan, the Committee may, in its sole
discretion,  terminate, amend, or modify the Plan in any way necessary to comply
with the applicable requirements of Rule 16b-3 promulgated by the Securities and
Exchange   Commission  as   interpreted   pursuant  to  no-action   letters  and
interpretive releases.

     9.5 FRACTIONAL SHARES. No fractional shares of stock will be issued and the
Board will determine,  in its discretion,  whether cash will be given in lieu of
fractional  shares or whether  such  fractional  shares  will be  eliminated  by
rounding up.

     9.6 NO RIGHT TO CONTINUED SERVICE. Nothing in the Plan or in any instrument
executed  pursuant  to the Plan will confer  upon any  Participant  any right to
continue to serve as a Nonemployee  Director of the Company,  nor will it affect
the right of the Company and its  shareholders  to terminate the services of any
Participant  as a Nonemployee  Director as provided in the  Company's  Bylaws or
otherwise.

     9.7 EXPENSES.  The expenses of administering  the Plan will be borne by the
Company.

     9.8  GOVERNING  LAW. To the extent not  preempted by Federal law, the Plan,
and all agreements hereunder,  will be construed in accordance with and governed
by the laws of the State of Arizona.

                                      -8-
<PAGE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>5
<FILENAME>0005.txt
<DESCRIPTION>DIRECTORS' RETIREMENT PLAN
<TEXT>

                        PINNACLE WEST CAPITAL CORPORATION

                       AND ARIZONA PUBLIC SERVICE COMPANY

                           DIRECTORS' RETIREMENT PLAN
<PAGE>
                                TABLE OF CONTENTS

ARTICLE ONE - DEFINITIONS AND CONSTRUCTION.....................................1

     1.1  Definitions..........................................................1
     1.2  Construction.........................................................2

ARTICLE TWO - PARTICIPATION AND SERVICE........................................3

     2.1  Participation........................................................3
     2.2  Limitation on Years of Service.......................................3

ARTICLE THREE - REQUIREMENTS FOR BENEFITS......................................3

     3.1  Pension Entitlement..................................................3
     3.2  Death of a Participant...............................................4
     3.3  Pension Forfeiture...................................................4
     3.4  Non-Duplication of Benefits..........................................4

ARTICLE FOUR - DETERMINATION OF BENEFITS.......................................4

     4.1  Amount and Form of Benefit Payment...................................4
     4.2  Commencement and Form of Benefits....................................4
     4.3  Payment of Benefits..................................................4

ARTICLE FIVE - INALIENABILITY OF BENEFITS......................................5

     5.1  No Assignment Permitted..............................................5

ARTICLE SIX - PLAN ADMINISTRATION..............................................6

     6.1  Appointment..........................................................6
     6.2  Powers...............................................................6
     6.3  Indemnification......................................................6
     6.4  Claims Procedure.....................................................6

ARTICLE SEVEN - AMENDMENT AND TERMINATION......................................7

     7.1  Amendment............................................................7
     7.2  Right to Terminate...................................................7

ARTICLE EIGHT - MISCELLANEOUS..................................................7

     8.1  Funding..............................................................7
     8.2  Duration.............................................................8
     8.3  Limitation on Participant's Rights...................................8
     8.4  Heirs and Successors.................................................8
<PAGE>
                        PINNACLE WEST CAPITAL CORPORATION
                       AND ARIZONA PUBLIC SERVICE COMPANY
                           DIRECTORS' RETIREMENT PLAN

                                    PREAMBLE

     Effective January 1, 1995, PINNACLE WEST CAPITAL CORPORATION (the
"Company") adopted the PINNACLE WEST CAPITAL CORPORATION AND ARIZONA PUBLIC
SERVICE COMPANY DIRECTORS' RETIREMENT PLAN (the "Plan") to provide retirement
benefits to those members of the Boards of Directors of the Company and Arizona
Public Service Company ("APS") who are not employees of the Company, APS or
their subsidiaries. By this amendment and restatement of this Plan in its
entirety, the Company intends to amend the Plan to cease future benefit
accruals, increase the benefits of all directors, authorize the Company to pay
the benefits accrued by active directors in a lump sum in Company stock, and
grant the Company the discretion to pay the benefits accrued by former directors
in a lump sum, in cash or stock at any time in the future.

                                   ARTICLE ONE

                          DEFINITIONS AND CONSTRUCTION

     1.1 DEFINITIONS. When a word or phrase shall appear in this Plan with the
initial letter capitalized, and the word or phrase does not commence a sentence,
the word or phrase shall generally be a term defined in this Section 1.1. The
following words and phrases with the initial letter capitalized shall have the
meanings set forth in this Section 1.1, unless a clearly different meaning is
required by the context in which the word or phrase is used:

          (a) "Actuarially Equivalent" - Of equal value when computed on the
     basis of the actuarial assumptions and tables used for purposes of
     determining actuarial equivalency at the time the benefit is computed.
     Actuarial Equivalence shall be determined on the basis of the factors and
     assumptions set forth below:

               (i) an interest rate of six percent (6%) per annum;

               (ii) the 1983 Group Annuity Mortality Table (50/50 Blend); and

               (iii) a retirement age of sixty-five (65) unless the Participant
          had attained age sixty-five (65) prior to January 1, 1995, in which
          case the retirement age shall be age seventy (70).

          (b) "APS" - Arizona Public Service Company and each corporation that
     succeeds to substantially all of its assets and elects to continue its
     participation in this Plan.

          (c) "Board" - The Boards of Directors of the Company or APS.
<PAGE>
          (d) "Code" - The Internal Revenue Code of 1986, as the same may
     hereafter be amended from time to time.

          (e) "Company" - PINNACLE WEST CAPITAL CORPORATION and each corporation
     that succeeds to substantially all of its assets and elects to continue its
     participation in this Plan.

          (f) "Director" - An individual serving on the Boards of Directors of
     the Company or APS.

          (g) "Effective Date" - June 21, 2000.

          (h) "Participant" - A Director who has satisfied the eligibility
     requirements set forth in Section 2.1 prior to the Effective Date.

          (i) "Plan" - The PINNACLE WEST CAPITAL CORPORATION AND ARIZONA PUBLIC
     SERVICE COMPANY DIRECTORS' RETIREMENT PLAN, as set forth in this
     instrument, and as it may hereafter be amended from time to time.

          (j) "Plan Administrator" - The person or committee appointed by the
     Board of Directors of the Company to administer the Plan. Unless otherwise
     determined by the Company's Board of Directors, on and after the Effective
     Date, the Plan Administrator shall be the Vice President and Secretary of
     the Company.

          (k) "Retirement Plan" - The Pinnacle West Capital Corporation
     Retirement Plan or any other defined benefit pension plan within the
     meaning of Section 414(j) of the Code maintained by the Company, APS or
     their subsidiaries.

          (l) "Year of Service" - Each twelve (12) consecutive month period
     during which the Director served as a member of the Board, commencing on
     the date on which the Director is or was first elected to the Board of
     either the Company or APS. If a Director ceases to serve on the Board and
     is later reelected as a member of the Board, for purposes of measuring
     Years of Service following reelection, the twelve (12) consecutive month
     period shall be measured from the date of the Director's re-election to the
     Board and from each anniversary thereof, and shall be aggregated with such
     Director's prior Years of Service. In the event that a Director's term on
     the Board ends, or the Director reaches age sixty-five (65), other than on
     the date of the Director's anniversary, Years of Service shall include the
     entirety of such partial year, through the next anniversary date, only if
     more than six (6) months have elapsed since the last anniversary of the
     Director's election or reelection to the Board.

     1.2 CONSTRUCTION. The masculine gender, where appearing in this Plan, shall
include the feminine gender, and vice-versa, and the singular may include the
plural, unless the context clearly indicates to the contrary. Headings and
subheadings are for the purpose of reference only and are not to be considered
in the construction of this

                                        2
<PAGE>
Plan. The term "delivered to the Plan Administrator," as used in this Plan,
shall include delivery to a person or persons designated by the Plan
Administrator for the disbursement and receipt of administrative forms. Delivery
shall be deemed to have occurred only when the form or other communication is
actually received. If any provision of this Plan is determined to be for any
reason invalid or unenforceable, the remaining provisions shall continue in full
force and effect. All of the provisions of this Plan shall be construed and
enforced according to the laws of the State of Arizona and shall be administered
according to the laws of such state, except as otherwise required by law.

                                   ARTICLE TWO

                            PARTICIPATION AND SERVICE

     2.1 PARTICIPATION. Each Director who is serving on the Board of Directors
of the Company or APS who is not at the same time an employee of the Company,
APS or their subsidiaries on the Effective Date, shall be a Participant as of
the Effective Date. Each Director who is not a Participant as of the Effective
Date shall become a Participant as of the date he or she first becomes a member
of the Board of Directors of the Company or APS; provided, however, that if such
person is an employee of the Company, APS or their subsidiaries, such person
shall become a Participant on the day that such employee status ceases.
Notwithstanding the foregoing, (a) a Director who is receiving or entitled to
receive a pension from the Retirement Plan shall not be eligible to participate
in this Plan, and (b) a Director who becomes a member of the Board on or after
the Effective Date shall not be eligible to participate in the Plan.

     2.2 LIMITATION ON YEARS OF SERVICE. The following Years of Service shall be
disregarded for purposes of this Plan: (a) Years of Service completed by a
Participant while he or she was an employee of the Company, APS or their
subsidiaries, (b) subject to Section 1.1(l), Years of Service completed by a
Participant after attaining age sixty-five (65), provided that Years of Service
for a Participant who was a Director as of January 1, 1995, and who first became
a Director after attaining age sixty-five (65), shall include such Participant's
actual Years of Service, and (c) Years of Service completed on or after the
Effective Date.

                                  ARTICLE THREE

                            REQUIREMENTS FOR BENEFITS

     3.1 PENSION ENTITLEMENT. Subject to Sections 3.2 and 3.3, a Participant
shall have a non-forfeitable right to a pension benefit under this Plan upon the
completion of one Year of Service or if he or she is serving as a Director on
the Effective Date.

     3.2 DEATH OF A PARTICIPANT. Except as otherwise provided in Section 4.2(e),
no death benefits shall be paid from this Plan on account of a Participant who
dies prior to the commencement of benefits or prior to receiving all of the
benefits to which he or she would otherwise be entitled under this Plan.

                                        3
<PAGE>
     3.3 PENSION FORFEITURE. Notwithstanding any provision to the contrary in
the Plan, a Participant shall not receive any pension under this Plan if he or
she is receiving, or is entitled to receive, a pension from the Retirement Plan,
or if the Participant has been found by a unanimous vote of the Company's Board
of Directors (but excluding that Participant) to have acted in bad faith in the
performance of his or her duties as a Director.

     3.4 NON-DUPLICATION OF BENEFITS. A Participant who serves on the Board of
Directors of both the Company and APS shall be entitled to only one pension
under the Plan, with such pension to be attributable to, and paid by, whichever
company with respect to which the Participant had accumulated the greatest
number of Years of Service as a Director.

                                  ARTICLE FOUR

                            DETERMINATION OF BENEFITS

     4.1 AMOUNT OF BENEFIT PAYMENT. (a) The benefits accrued by each Participant
who is serving as a Director as of the Effective Date shall be equal to the
amount reflected on Exhibit A to this Plan.

     (b) Except as otherwise provided in Section 4.2, the benefits payable to
each Participant who is not serving as a Director as of the Effective Date shall
be equal to the benefit accrued by such Participant under the terms of the Plan
as in effect prior to the Effective Date.

     4.2 COMMENCEMENT AND FORM OF BENEFITS. (a) For a Participant who is serving
as a Director as of the Effective Date, the benefits accrued by that Participant
under Section 4.1(a) shall be paid to the Participant in a lump-sum in Common
Stock of the Company. Such lump sum payment shall be paid as soon as practicable
following the Effective Date.

     (b) For a Participant who is not serving as a Director as of the Effective
Date, the benefit accrued by that Participant, as determined under Section
4.1(b), shall be paid to the Participant in the form of a monthly annuity on the
first business day of each month, commencing on the first business day of the
month following the later of (a) the month in which the Participant is no longer
serving as a member of the Board, or (b) the month in which the Participant
attains age sixty-five (65). Upon retirement from the Board, a Participant's
benefits shall be determined as of the last day of the month in which he or she
attains age sixty-five (65).

     (c) Notwithstanding the foregoing, the President and Chief Executive
Officer of the Company may, in his discretion, direct the Company, at any time
following the Effective Date, to pay a Participant entitled to benefits under
Section 4.2(b) a lump sum in lieu of the monthly annuity otherwise payable to
that Participant. Each Participant's lump sum payment shall be equal to the sum
of (i) an amount which is Actuarially Equivalent to his or her monthly annuity
(adjusted to take into account amounts previ-

                                        4
<PAGE>
ously paid to the Participant under this Plan), and (ii) an amount equal to
twenty percent (20%) of the amount determined under Section 4.2(c)(i). The
President and Chief Executive Officer of the Company may, in his discretion,
direct the Company to pay such lump sum payment in cash or Common Stock of the
Company.

     (d) For purposes of this Section 4.2, the value of the Company Common Stock
distributed to a Participant under this ARTICLE FOUR shall be equal to (i) for
Participants who are described in Section 4.2(a), the lesser of (A) the closing
price of such stock on the New York Stock Exchange on the Effective Date, or (B)
the average closing price of such stock on the New York Stock Exchange for the
five (5) trading days immediately preceding the Effective Date, and (ii) for
Participants described in Section 4.2(b), the lesser of (A) the date specified
by the President and Chief Executive Officer of the Company as the date on which
the lump sum payable to such Participant shall be determined (the "conversion
date"), or (B) the average closing price of such stock on the New York Stock
Exchange for the five (5) trading days immediately preceding the conversion
date. If the number of shares to be paid to a Participant, determined by
dividing the share price (as determined above) by the Participant's lump sum
amount, would result in the Participant being entitled to a number of shares
which is not divisible by ten (10), that number shall be rounded up to the next
whole number which is divisible by ten (10), and the Participant shall receive
that number of shares.

     (e) If a Participant entitled to a lump sum payment under Section 4.2(a) or
(c) dies prior to receipt of that payment, the amount payable shall be paid to
the Participant's estate.

                                  ARTICLE FIVE

                           INALIENABILITY OF BENEFITS

     5.1 No Assignment Permitted. No Participant and no creditor of a
Participant shall have any right to assign, pledge, hypothecate, anticipate or
in any way create a lien upon the benefits payable under this Plan. Except as
provided in Section 4.2(e), all payments to be made to Participants, excepting
persons under legal disability, shall be made only upon their personal receipts
or endorsements, and no interest in the Plan shall be subject to assignment or
transfer or otherwise be alienable, either by voluntary or involuntary act or by
operation of law or equity, or subject to attachment, execution, garnishment,
sequestration, levy or other seizure under any legal, equitable or other
process, or be liable in any way for the debts or defaults of Participants. This
Section 5.1 shall, however, not preclude assignments or alterations pursuant to
a court order for purposes of satisfying the Participant's family support
obligations.

                                        5
<PAGE>
                                   ARTICLE SIX

                               PLAN ADMINISTRATION

     6.1 APPOINTMENT. The Board of Directors of the Company shall appoint the
Plan Administrator. Members of the Board and officers and employees of the
Company and its subsidiaries may serve as the Plan Administrator.

     6.2 POWERS. The Plan Administrator shall have the discretionary power and
authority to perform the administrative duties of the Plan Administrator as
described in the Plan or required for proper administration of the Plan, and
shall have all powers necessary to enable it to properly carry out such duties.
Without limiting the generality of the foregoing, the Plan Administrator shall
have the power and discretion to construe and interpret the Plan, to determine
all questions of meaning or interpretation that shall arise under the Plan, to
hear and determine claims relating to the Plan as provided in Section 6.4 of the
Plan, and to decide all questions relating to the eligibility to participate in
the Plan, to decide all questions relative to the determination of Years of
Service, status, and rights of a Participant, and to determine the manner and
time of payment of benefits under the Plan. All benefit disbursements shall be
made upon the written instructions of the Plan Administrator. The decisions of
the Plan Administrator shall be binding and conclusive upon all persons. The
Plan Administrator shall file all reports and forms lawfully required to be
filed and shall distribute any forms, reports, statements or plan descriptions
lawfully required to be distributed to Participants and others.

     6.3 INDEMNIFICATION. To the extent permitted by law, the Company may, but
shall not be required to, indemnify and agree to hold harmless its employees,
agents and the Plan Administrator from all loss, damage, or liability, joint or
several, including payment of expenses in connection with defense against any
such claim, for their acts, omissions and conduct, and for the acts, omissions
and conduct of their duly appointed agents, which acts, omissions, or conduct
constitutes or is alleged to constitute a breach of such individual's fiduciary
or other responsibilities under any law, except for those acts, omissions, or
conduct resulting from his or her own willful misconduct, willful failure to
act, or gross negligence; provided, however, that if any party would otherwise
be entitled to indemnification hereunder with respect to any liability and such
party shall be insured against loss as a result of such liability by any
insurance contract or contracts, such party shall be entitled to indemnification
hereunder only to the extent by which the amount of such liability shall exceed
the amount thereof payable under such insurance contract or contracts. The
Company may obtain insurance covering itself and others for breaches of
fiduciary obligations under the Plan to the extent permitted by law, and nothing
in this Plan shall restrict the right of any person to obtain such insurance for
himself in connection with the performance of his or her duties under the Plan.

     6.4 CLAIMS PROCEDURE. If a Participant disagrees with the Plan
Administrator's determination regarding his or her eligibility for a pension or
the amount of such pension, the affected Participant may, within thirty (30)
days after receiving the Plan Administrator's written notice of that decision,
request in writing a review of his or her claim by the Plan Administrator. The
written statement requesting that review should set forth

                                        6
<PAGE>
the Participant's reasons supporting the claim. If the claimant does not request
a review meeting within thirty (30) days after receiving written notice of the
Plan Administrator's decision, the Participant shall be deemed to have accepted
the Plan Administrator's decision. A decision on review shall be rendered in
writing by the Plan Administrator not later than sixty (60) days after review,
and a written copy of such decision shall be delivered to the Participant. To
the extent permitted by law, a decision on review by the Plan Administrator
shall be binding and conclusive upon all persons whomsoever. To the extent
permitted by law, the claims procedures described in this Section 6.4 shall be a
mandatory precondition that must be complied with prior to commencement of a
legal or equitable action in connection with the Plan by a Participant or a
person claiming rights through a Participant. The Plan Administrator may, in his
or her sole discretion, waive these procedures as a mandatory precondition to
such an action.

                                  ARTICLE SEVEN

                            AMENDMENT AND TERMINATION

     7.1 AMENDMENT. The Company shall have the right at any time to modify,
alter or amend this Plan. An amendment shall be in writing, approved by the
Board of Directors of the Company, and executed by a duly authorized officer of
the Company. Any such modification, alteration or amendment may be in whole or
in part and may be prospective or retroactive; provided that no amendment shall
reduce any Participant's vested benefit determined as of the date the amendment
is adopted.

     7.2 RIGHT TO TERMINATE. The Company shall have the right to terminate the
Plan, completely or partially, at any time. The termination of the Plan shall
not reduce the pension benefit of any Participant determined as of the Plan's
termination date. The Plan shall be terminated as of the effective Date,
provided that it shall continue in existence until all benefits accrued under
the Plan as of the Effective Date have been paid.

                                  ARTICLE EIGHT

                                  MISCELLANEOUS

     8.1 FUNDING. Benefits payable under the Plan shall be paid from the general
assets of the Company or APS as to each company's own directors. Participants
shall be unsecured creditors of the Company or APS and shall have no legal or
equitable rights, interest or claims in any property or assets of the Company,
APS or their subsidiaries.

     8.2 DURATION. The Plan shall continue in full force and effect for the
maximum period permitted under applicable law, subject to the Company's right to
amend the Plan and to terminate the Plan as provided in ARTICLE SEVEN of the
Plan.

     8.3 LIMITATION ON PARTICIPANT'S RIGHTS. Nothing contained in the Plan shall
be deemed to give any individual the right to be retained as a Director.

                                        7
<PAGE>
     8.4 HEIRS AND SUCCESSORS. All of the provisions of the Plan shall be
binding upon all persons who shall be entitled to any benefits under the Plan,
their heirs and legal successors.

     IN WITNESS WHEREOF, PINNACLE WEST CAPITAL CORPORATION has caused this Plan
to be executed by its duly authorized officers, this ____ day of June, 2000.

                                        PINNACLE WEST CAPITAL CORPORATION


                                        By
                                           -------------------------------------

                                        Its
                                           -------------------------------------

                                        8
<PAGE>
                                    EXHIBIT A

     Director                                                    Lump Sum Amount
     --------                                                    ---------------
Edward N. Basha                                                      $ 19,297
Michael L. Gallagher                                                 $ 21,711
Pamela Grant                                                         $116,757
Roy A. Herberger, Jr.                                                $ 55,210
Martha O. Hesse                                                      $ 59,974
William S. Jamieson, Jr.                                             $ 56,289
Humberto S. Lopez                                                    $ 31,713
Robert G. Matlock                                                    $ 47,516
Kathryn L. Munro                                                     $  6,050
Bruce J. Nordstrom                                                   $ 15,928
</TEXT>
</DOCUMENT>
</SUBMISSION>
