EDISON INTERNATIONAL
Director Nonqualified Stock Options
2004 Terms and Conditions
Edison International (EIX) nonqualified stock options to purchase EIX Common Stock (EIX Options) and dividend
equivalents awarded under the Equity Compensation Plan (ECP) for non-employee members of the Boards of Directors
(Holders) of EIX or Southern California Edison Company (SCE) are subject to the following terms and conditions:
1. PRICE
The exercise price of an EIX Option stated in the award certificate is the average of the high and low sales
prices of EIX Common Stock on the New York Stock Exchange for the date of the award.
2. VESTING AND TERM
(a) The EIX Options and dividend equivalents are fully vested as of the date of grant. The EIX Options shall
have a term of ten years from the date of grant (Option Term) and any EIX Option outstanding at the end of the
Option Term will terminate. Dividend equivalents will have a term of five years, except as otherwise provided in
these terms and conditions.
(b) Upon termination of service as a director, the EIX Options will be forfeited unless the Holder exercises them
within 180 days following the date of termination, or by the end of the Option Term, if that date is earlier. If
termination of service occurs while dividend equivalents remain outstanding, any accrued dividend equivalents
remaining unpaid on the termination date will be paid within 30 days following the date of termination.
(c) If termination of service as a director is due to retirement from the Board(s) after attaining at least age
65, disability or death, EIX Options may be exercised by the Holder or beneficiary through the end of the Option
Term and dividend equivalents will continue to accrue and may be exercised as provided in Section 4.
(d) Notwithstanding the foregoing, upon a Change in Control of EIX, this Section 2(d) shall apply. "Change in
Control of EIX" shall be as defined in Appendix A. If EIX Common Stock does not remain outstanding after the
Change in Control of EIX, and the new owners do not replace EIX Options with substantially equivalent options, a
cash out of unexercised EIX Options will occur based on the average of the high and low sales prices of EIX
Common Stock on the New York Stock Exchange immediately prior to the Change in Control, and dividend equivalents
will be paid. If EIX Common Stock does remain outstanding after the Change in Control, or if EIX Options are
replaced with substantially equivalent options, the unexercised options and dividend equivalents will continue
according to their original terms unless a Director's Board service is involuntarily terminated as a result of
such Change in Control within one year of the Change-in-Control event. Following such termination, any
unexercised options will remain exercisable for a period of two years after the termination date or until the end
of the Option Term if that date is earlier. Any unexercised dividend equivalents will be paid within 30 days
following such termination.
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3. EIX OPTION EXERCISE
(a) The Holder may exercise an EIX Option by providing written notice to EIX on the form prescribed by EIX for
this purpose accompanied by full payment of the applicable exercise price. Payment must be in cash, or its
equivalent, including EIX Common Stock, if held at least six months prior, valued on the exercise date at a per
share price equal to the average of the high and low sales prices of EIX Common Stock on the New York Stock
Exchange. A broker-assisted "cashless" exercise may be accommodated for EIX Options at the discretion of EIX.
Until payment is accepted, the Holder will have no rights in the optioned stock. EIX Options may be exercised at
any time through the end of the Option Term except as otherwise provided in Sections 2(b), 2(c), and 2(d).
(b) The Holder agrees that any securities acquired by him or her hereunder are being acquired for his or her own
account for investment and not with a view to or for sale in connection with any distribution thereof and that he
or she understands that such securities may not be sold, transferred, pledged, hypothecated, alienated, or
otherwise assigned or disposed of without either registration under the Securities Act of 1933 or compliance with
the exemption provided by Rule 144 or another applicable exemption under such act.
(c) The Holder will have no right or claim to any specific funds, property or assets of EIX as a result of the
EIX Options or dividend equivalents.
4. DIVIDEND EQUIVALENTS
A dividend equivalents account will be established on behalf of the Holder. During the five-year period
commencing on the date of grant, for each dividend paid on EIX Common Stock, this account will be credited with
the amount of dividends that would have been paid on the number of shares of EIX Common Stock covered by the
Holder's corresponding EIX Option award except as provided below. The dividend equivalents will be credited on
the ex-dividend date for EIX Options held on that date. Dividend equivalents will accumulate in this account
without interest. The dividend equivalents will be paid in cash upon the earlier of (i) the request of the
Holder at any time during the four year period following the date of grant, regardless of whether the
corresponding EIX Option is exercised, (ii) the exercise or termination of the corresponding EIX Option, (iii)
termination of service as a director other than retirement, or (iv) the fifth anniversary of the date of grant.
Upon payment or termination of the dividend equivalents, no further dividend equivalents will accrue as to the
corresponding EIX Option, even if the EIX Option remains outstanding and exercisable. The dividend equivalents
are subject to termination and other conditions specified in Sections 2 and 9.
5. TRANSFER AND BENEFICIARY
(a) EIX Options and dividend equivalents of the Holder are transferable to a spouse, child or grandchild, or
trusts or other vehicles established exclusively for their benefit. Any transfer request must specifically be
authorized by EIX in writing and shall be subject to any conditions, restrictions or requirements as the
administrator may determine.
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(b) The Holder may designate a beneficiary who, upon the death of the Holder, will be entitled to exercise the
EIX Options and dividend equivalents subject to the provisions of the ECP and these terms and conditions through
the end of their original terms.
6. TAXES
The Holder shall be responsible for any and all taxes resulting from the grant or exercise of the EIX Options and
dividend equivalents.
7. CONTINUED SERVICE
Nothing in the award certificate or these terms and conditions will be deemed to confer on the Holder any right
to continue in service as a director of EIX or SCE.
8. NOTICE OF DISPOSITION OF SHARES AND SECTION 16
Holder agrees that if he or she should dispose of any shares of stock acquired on the exercise of EIX Options,
including a disposition by sale, exchange, gift or transfer of legal title, the Holder will notify EIX promptly
of such disposition.
9. AMENDMENT
The EIX Options and dividend equivalents are subject to the terms of the ECP as amended from time to time. EIX
reserves the right to substitute cash awards substantially equivalent in value to the EIX Options and dividend
equivalents. The EIX Options and dividend equivalents may not otherwise be restricted or limited by any plan
amendment or termination approved after the date of the award without the Holder's consent.
10. FORCE AND EFFECT
The various provisions herein are severable in their entirety. Any determination of invalidity or
unenforceability of any one provision will have no effect on the continuing force and effect of the remaining
provisions.
11. GOVERNING LAW
The terms and conditions of the EIX Options and dividend equivalents will be construed under the laws of the
State of California.
12. NOTICE
Unless waived by EIX, any notice required under or relating to the EIX Options and dividend equivalents must be
in writing, with postage prepaid, addressed to: Edison International, Attn: Corporate Secretary, P.O. Box 800,
Rosemead, CA 91770.
EDISON INTERNATIONAL
/s/ Beverly P. Ryder
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Beverly P. Ryder, Vice President
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APPENDIX A
DIRECTOR NONQUALIFIED OPTIONS AND DIVIDEND EQUIVALENTS
TERMS AND CONDITIONS
CHANGE IN CONTROL
"Change in Control of EIX" shall be deemed to have occurred as of the first day that any one or more of the
following conditions shall have been satisfied:
(a) Any Person (other than a trustee or other fiduciary holding securities under an employee
benefit plan of EIX) becomes the Beneficial Owner, directly or indirectly, of securities of EIX
representing thirty percent (30%) or more of the combined voting power of EIX's then
outstanding securities. For purposes of this clause, "Person" shall not include one or more
underwriters acquiring newly-issued voting securities (or securities convertible into voting
securities) directly from EIX with a view towards distribution.
(b) On any day after the date of grant (the "Reference Date") Continuing Directors cease for any
reason to constitute a majority of the Board. A director is a "Continuing Director" if he or
she either:
(i) was a member of the Board on the applicable Initial Date (an "Initial Director"); or
(ii) was elected to the Board, or was nominated for election by EIX's shareholders, by a
vote of at least two-thirds (2/3) of the Initial Directors then in office.
A member of the Board who was not a Director on the applicable Initial Date shall be deemed to
be an Initial Director for purposes of clause (b) above if his or her election, or nomination
for election by EIX's shareholders, was approved by a vote of at least two-thirds (2/3) of the
Initial Directors (including directors elected after the applicable Initial Date who are deemed
to be Initial Directors by application of this provision) then in office.
"Initial Date" means the later of (A) the date of grant or (B) the date that is two (2) years
before the Reference Date.
(c) EIX is liquidated; all or substantially all of EIX's assets are sold in one or a series of
related transactions; or EIX is merged, consolidated, or reorganized with or involving any
other corporation, other than a merger, consolidation, or reorganization that results in the
voting securities of EIX outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the surviving entity)
more than fifty percent (50%) of the combined voting power of the voting securities of EIX (or
such surviving entity) outstanding immediately after such merger, consolidation, or
reorganization. Notwithstanding the foregoing, a bankruptcy of EIX or a sale or spin-off of an
EIX Affiliate (short of a dissolution of EIX or a liquidation of substantially all of EIX's
assets, determined on an aggregate basis) will not constitute a Change in Control of EIX.
(d) The consummation of such other transaction that the Board may, in its discretion in the
circumstances, declare to be a Change in Control of EIX for purposes of the Plans.
