EDISON INTERNATIONAL
2005 Long-Term Incentives
Terms and Conditions
Long-term incentives (LTI) for the year 2005 for eligible persons (Holders) at Edison International (EIX) or its
participating affiliates (the Companies, or individually, the Company) include (i) EIX nonqualified stock options
to purchase EIX Common Stock (EIX Options) to be awarded under the Equity Compensation Plan (ECP) or the 2000
Equity Plan (collectively, the Plans), (ii) dividend equivalents to be awarded under the ECP payable in cash
credited for the number of shares of EIX Common Stock covered by the EIX Options awarded (Dividend Equivalents),
and (iii) contingent EIX performance units, 50% of which will be payable as Stock Grants under the ECP and 50% of
which will be payable in cash outside of the Plans (Performance Shares), with related dividend equivalents
payable in cash (PS Dividends). The Committee shall have discretion, however, to pay awards otherwise payable in
cash in shares of EIX Common Stock awarded under the ECP. The LTI 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 effective date of the award.
2. VESTING
(a) The EIX Options and Dividend Equivalents vest over a four-year period as described in this Section 2 (Vesting
Period). The initial vesting date will be January 2nd of the year following the date of the grant, or six months
after the date of the grant, whichever date is later. The EIX Options and Dividend Equivalents will vest as
follows:
o On the initial vesting date, one-fourth will vest.
o On January 2, 2007, an additional one-fourth will vest.
o On January 2, 2008, an additional one-fourth will vest.
o On January 2, 2009, the balance will vest.
(b) The vested portions of the EIX Options will accumulate to the extent not exercised, and be exercisable by the
Holder subject to the provisions of Section 3, in whole or in part, in any subsequent period but not later than
January 2, 2015. The vested portions of the Dividend Equivalents will accumulate to the extent not exercised,
and be paid as provided in Section 4.
(c) The Performance Shares and related PS Dividends will vest and become payable to the extent earned as
determined at the end of the three-calendar-year period commencing on January 1, 2005, and ending December 31,
2007 (Performance Period), subject to the provisions of Section 5.
(d) If, during the EIX Option term or the Performance Period, the Holder terminates employment on or after (A)
attaining age 65 or (B) attaining age 55 with five "years of service," as that term is defined in the Edison
401(k) Savings Plan, or (C) such earlier date that qualifies the Holder for retirement under any Company
retirement plan, then the vesting and exercise provisions of this Section 2(d) will apply. The EIX Options and
Dividend Equivalents will continue to vest as scheduled; provided, however, that in the event the Holder's
termination of employment occurs within one year following the date the applicable EIX Option is granted, the
portion of the option (and any related Dividend Equivalents) that will be eligible to vest on each of the vesting
dates listed in Section 2(a) above will be prorated by multiplying (i) the portion of the option (or related
Dividend Equivalents, as applicable) scheduled to vest on such date, by (ii) a fraction, the numerator of which
shall be the number of whole calendar months between the date the option was
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granted and the date of the Holder's termination of employment, and the denominator of which shall be twelve
(12). In calculating the number of "whole calendar months" for purposes of the foregoing provision, the calendar
month in which the option is granted shall be counted as a whole calendar month if the Holder's termination of
employment occurs at any time after the last day of such calendar month; provided, however, that in no event
shall the numerator described in clause (ii) of the preceding sentence be a number greater than twelve (12). In
no event shall the Holder be credited with services performed during any portion of a calendar month (even if a
substantial portion) if the Holder is not employed as of the last day of such calendar month. The portion of the
option not eligible to vest following the Holder's termination of employment after giving effect to the proration
described in the preceding three sentences shall terminate upon the Holder's termination of employment, and the
Holder shall have no further rights with respect to such terminated portion. Once vested, EIX Options will
remain exercisable as provided in Section 3 for the remainder of the original EIX Option term. Vested Dividend
Equivalents will be paid as provided in Section 4. The Performance Shares and PS Dividends will vest and become
payable at the end of the Performance Period to the extent they would have vested and become payable if the
Holder's employment had continued through the last day of the Performance Period; provided, however, that if the
Holder's termination of employment occurs within one year following the date the applicable Performance Shares
are granted, the portion of the Performance Shares (and any related PS Dividends) that will vest and become
payable will equal (i) the portion that would have vested and become payable if the Holder's employment had
continued through the last day of the Performance Period, multiplied by (ii) a fraction, the numerator of which
shall be the number of whole calendar months between the date the Performance Shares were granted and the date of
the Holder's termination of employment, and the denominator of which shall be twelve (12). For this purpose, the
number of "whole calendar months" shall be calculated as provided in this Section 2(d) above. Performance Shares
and PS Dividends will be payable to the Holder on the payment date to the extent of the EIX total shareholder
return (TSR) ranking achieved as specified in Section 5(a). Any fractional EIX Options or Performance Shares
vested under this Section 2(d) will be rounded to the next whole number.
(e) If, during the EIX Option term or the Performance Period, the Holder's employment terminates due to death or
permanent and total disability, the provisions of this Section 2(e) will apply. Any unvested EIX Options and
Dividend Equivalents will vest. The EIX Options will be exercisable as provided in Section 3 for the remainder
of the original EIX Option term. The Dividend Equivalents will be paid to the full extent and at the time
provided in Section 4. The Performance Shares and related PS Dividends will be vested on a pro rata basis as
provided in Section 2(d). The Performance Shares and related PS Dividends will be payable to the Holder on such
pro rata basis on the payment date specified in Section 5(d) to the extent of the EIX total shareholder return
ranking achieved as provided in Section 5(a). Any fractional EIX Options or Performance Shares vested under this
Section 2(e) will be rounded to the next whole number.
(f) Upon involuntary termination of employment not for cause during the Vesting Period or Performance Period, the
provisions of this Section 2(f) shall apply. Unvested EIX Options will vest to the extent necessary to cause the
aggregate number of shares subject to vested EIX Options (including any shares acquired pursuant to previously
exercised EIX Options) to equal the product of 1/48th of the number of shares granted multiplied by the number of
full months of service the Holder has completed during the Vesting Period, except that one additional year of
vesting credit will apply. The Holder will have one year following the date of termination in which to exercise
the EIX Options, or until the end of the option term, whichever occurs earlier, except that if the holder
qualifies for retirement the EIX Options will be exercisable for the remainder of the original EIX Option term.
The Dividend Equivalents will be vested on a pro-rata basis as described above with respect to the EIX Options,
including the additional year of vesting credit. The vested Dividend Equivalents will be paid as provided in
Section 4. The Performance Shares and related PS Dividends will be vested on a pro rata basis as provided in
Section 2(d), except that one additional year of vesting credit will apply. Such vested Performance Shares and
related PS Dividends will
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be payable to the Holder on the payment date specified in Section 5(d) to the extent of the EIX total shareholder
return ranking achieved as provided in Section 5(a). For purposes of these terms and conditions only, an
involuntary termination of employment will be deemed to occur on the date the Holder's employing Company is no
longer a member of the EIX controlled group of corporations as defined in Section 1563(a) of the Internal Revenue
Code, regardless of whether Holder's employment continues with that entity or a successor entity outside of the
EIX controlled group. Any fractional EIX Options or Performance Shares vested under this Section 2(f) will be
rounded up to the next whole number.
(g) Upon termination of employment during the EIX Option term for any reason other than those specified in
Section 2(d), (2(e) or 2(f), only those EIX Options that have vested as of the prior vesting date may be
exercised, and they may only be exercised within 180 days following the date of termination or by the end of the
applicable EIX Option term, if that date is earlier. If such termination occurs while Dividend Equivalents
remain outstanding, any Dividend Equivalents vested as of the prior vesting date remaining unpaid on the
termination date will be paid as provided in Section 4. If such termination occurs during the Performance
Period, none of the Performance Shares and PS Dividends will vest. Any fractional EIX Options will be rounded up
to the next whole share.
(h) Notwithstanding the foregoing, in the event of a "Change in Control of EIX" as defined in Appendix A hereto,
outstanding EIX Options and Dividend Equivalents will vest. The EIX Options will remain exercisable for a period
of 2 years if EIX Common Stock remains outstanding after the Change in Control of EIX, or until the end of their
respective terms if earlier. Dividend Equivalents related to EIX Options will be paid on the first to occur of
(i) the end of the five-year term as provided in Section 4 or (ii) 2 years after the Change in Control of EIX.
If EIX Common Stock does not remain outstanding after the Change in Control of EIX, and the EIX Options and
Dividend Equivalents are not replaced by new owners, cash payout for unexercised EIX Options and Dividend
Equivalents will occur. Upon a Change in Control of EIX, all outstanding Performance Shares and PS Dividends
will vest and be paid in cash. The amount of the Performance Share payment will equal the greater of (i) the
value of the target number of shares and dividends equivalents under the award, or (ii) the value of the number
of shares and dividend equivalents that would be paid assuming the Performance Period ended on the date of the
Change in Control of EIX and based on actual performance through that date. Any fractional EIX Options or
Performance Shares vested under this Section 2(h) will be rounded up to the next whole number.
3. EIX OPTION EXERCISE
(a) The Holder may exercise an EIX Option by providing written notice to EIX on the form prescribed by the
Administrator for this purpose accompanied by full payment of the applicable exercise price. Payment must be in
cash or its equivalent acceptable to EIX. At the discretion of the Holder, EIX Common Stock 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 may be used to pay the exercise price, provided the Company can comply with any legal
requirements. 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 after they have vested through January 2, 2015, except as otherwise provided in Sections
2(d), 2(e), 2(f), 2(g), 2(h) and 8.
(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 the Companies as a result
of the award.
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4. DIVIDEND EQUIVALENTS
(a) A Dividend Equivalents account will be established on behalf of the Holder. During the five-year period
commencing January 3, 2005, for each dividend paid on EIX Common Stock after the date of grant, 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 unless the Dividend Equivalent has
previously been paid or terminated. Dividend Equivalents will accumulate in this account without interest. This
account will be reduced by the amount of any Dividend Equivalents that are paid or terminated.
(b) Dividend Equivalents will be paid on or as soon as administratively practical after the Payment Date that
occurs on or next follows the later of (i) the date such Dividend Equivalents are credited, or (ii) the date such
Dividend Equivalents vest. A "Payment Date" shall occur on January 2 of each year; provided that if EIX has
declared a dividend as of any particular January 2 for which the ex-dividend date will not occur until after that
January 2, the "Payment Date" for that particular calendar year shall be the ex-dividend date corresponding to
that particular dividend.
(c) Dividend Equivalents will be paid in cash; provided, however, that the Committee shall have discretion to
make any such payment in the form of the number of whole shares of EIX Common Stock obtained by dividing (a) the
amount of the vested Dividend Equivalents otherwise payable in cash pursuant to this Section 4, by (b) the
average of the high and low sales prices per share of EIX Common Stock on the New York Stock Exchange for the
date such amount becomes payable. In the event vested Dividend Equivalents are paid in shares of EIX Common
Stock, any fractional shares resulting from the foregoing calculation will be paid in cash. Upon payment or
termination of the Dividend Equivalent, 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(d), 2(e), 2(f), 2(g), 2(h) and 8. Notwithstanding
anything else herein to the contrary, no further Dividend Equivalents will accrue as to any EIX Option once that
EIX Option is exercised, expires or otherwise terminates.
5. PERFORMANCE SHARES AND PS DIVIDENDS
(a) Performance Shares are EIX Common Stock-based units subject to a performance measure based on the percentile
ranking of EIX total shareholder return (TSR) compared to the TSR for each stock comprising the Philadelphia
Utility Index, deleting AES Corporation and adding Sempra Energy, over all of the Performance Period. TSR is
calculated using a 20-day trading average on the measurement date. A target number of contingent Performance
Shares will be awarded. The Performance Shares include PS Dividends that will accumulate on the target number of
Performance Shares awarded and be paid as provided in Section 5(c). The actual amount of Performance Shares and
PS Dividends to be paid will depend on the EIX TSR percentile ranking on the measurement date. The target number
of Performance Shares and accumulated PS Dividends will be paid if the EIX TSR rank is at the 50th percentile.
Payment may range from nothing if the EIX TSR is below the 40th percentile to three times the target number of
Performance Shares and accumulated PS Dividends if the EIX TSR percentile ranking is at the 90th percentile or
higher. The payment multiples for the various EIX TSR rankings are as follows:
- -------------------------------------------------------------
Performance Share Payment
- ------------------------------- -----------------------------
EIX TSR Rank Payment Multiple(1)
- ------------------------------- -----------------------------
At or Above 90th Percentile 3 times
- ------------------------------- -----------------------------
75th to 89th Percentile Between 2 and 3 times
- ------------------------------- -----------------------------
50th to 74th Percentile Between 1 and 2 times
- ------------------------------- -----------------------------
40th to 49th Percentile Between 0.25 and 1 times
- ------------------------------- -----------------------------
Below 40th Percentile 0 times
- ------------------------------- -----------------------------
(1) The payment multiple is interpolated for performance
between the points indicated on a straight-line basis.
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(b) The performance measurement date will be the last business day of the Performance Period. On that date, the
applicable payment multiple will be determined using the table above based on the EIX TSR percentile ranking
achieved during the Performance Period.
(c) A PS Dividend account will be established and credited with an amount equal to each dividend that would have
been paid during the Performance Period on the number of shares of EIX Common Stock equivalent to Holder's target
Performance Share award. The PS Dividends will be credited on the ex-dividend date and will accumulate without
interest. The PS Dividend payment will be determined by multiplying the amount accumulated in the account as of
the measurement date by the TSR payment multiple determined under section 5(a).
(d) Each Performance Share earned will be worth one share of EIX Common Stock. One-half of the earned
Performance Shares will be paid in EIX Common Stock as a Stock Payment under the ECP, and any fractional share
will be paid in cash. The remaining one-half of the earned Performance Shares will be paid in cash; provided,
however, that the Committee shall have discretion to pay such remaining one-half of the earned Performance Shares
in EIX Common Stock as a Stock Payment under the ECP with any fractional shares to be paid in cash. The value of
each Performance Share paid in cash will be equal to the average of the high and low sales prices per share of
EIX Common Stock on the New York Stock Exchange for the measurement date. The PS Dividends will be paid in cash;
provided, however, that the Committee shall have discretion to make such payment in the form of the number of
whole shares of EIX Common Stock obtained by dividing (a) the amount of the PS Dividends otherwise payable in
cash pursuant to this Section 5, by (b) the average of the high and low sales prices per share of EIX Common
Stock on the New York Stock Exchange for the date such amount becomes payable. In the event vested PS Dividends
are paid in shares of EIX Common Stock, any fractional shares resulting from the foregoing calculation will be
paid in cash. The shares of EIX Common Stock and the cash (if any) payable for the earned Performance Shares and
PS Dividends will be delivered within 30 days following the end of the Performance Period. The Performance
Shares and PS Dividends are subject to termination and other conditions specified in Sections 2(d), 2(e), 2(f),
2(g), 2(h) and 8.
6. DELAYED PAYMENT OR DELIVERY OF LTI GAINS; SPECIAL TAX RULES
(a) Notwithstanding the terms of any LTI, Holders who are eligible to defer salary under the EIX Executive
Deferred Compensation Plan (EDCP) may irrevocably elect to defer receipt of all or a part of the cash (or, if
the Committee so provides, stock) portion of any Dividend Equivalents or Performance Shares and PS Dividends
pursuant to the terms of the EDCP. To make such an election, the Holder must submit a signed agreement in the
form approved by, and in advance of the applicable deadline established by, the Administrator. In the event of
any timely deferral election, the LTI with respect to which the deferral election was made shall be paid in
accordance with the terms of the EDCP.
(b) Notwithstanding anything else contained herein to the contrary, if a Holder becomes entitled to LTI benefits,
EIX may direct that the Holder's benefit payment date be deferred to a date no later than thirteen (13) months
after the date such amount was originally scheduled to be paid (without interest or other earnings for the period
of deferral) to the extent that EIX reasonably determines that such deferral is necessary or advisable to comply
with applicable laws, rules or regulations or to preserve the intended tax consequences of the applicable LTI
(including, without limitation, compliance with Section 409A of the
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Internal Revenue Code and regulations thereunder, to the extent that Section 409A is applicable to the LTI).
7. TRANSFER AND BENEFICIARY
(a) The LTI will not be transferable by the Holder. During the lifetime of the Holder, the LTI will be
exercisable only by him or her. The Holder may designate a beneficiary who, upon the death of the Holder, will
be entitled to exercise the then vested portion of the LTI during the remaining term subject to the provisions of
the Plans and these terms and conditions. To the extent an LTI, or any portion thereof, is ordered paid to a
third party pursuant to court order, levy, or any other assessment imposed by legal authority, a cash award will
be substituted by EIX for such portion otherwise payable in EIX stock, rounded up to the next whole share.
(b) Notwithstanding the foregoing, EIX Options of the CEOs of EIX, Edison Mission Energy, Edison Capital, and
Southern California Edison Company, and the EVPs of EIX are transferable to a spouse, children or grandchildren,
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.
8. TERMINATION OF LONG TERM INCENTIVES
(a) In the event of termination of the employment of the Holder for any reason other than those specified in
Section 2(d), 2(e) or 2(f), the LTI will terminate as follows: (i) the Holder's unvested EIX Options and Dividend
Equivalents will terminate for no value on the date such employment terminates, (ii) the Holder's vested EIX
Options will terminate for no value 180 days from the date on which such employment terminated, and (iii) the
Holder's Performance Shares and PS Dividends will be forfeited for no value.
(b) If a Holder's employment terminates for a reason identified in Section 2(d), the Holder's unvested
Performance Shares and PS Dividends (after application of the vesting provisions of Section 2(d)) will terminate
for no value on the date of such employment termination.
(c) If a Holder's employment terminates for a reason identified in Section 2(e) or 2(f), the Holder's unvested
EIX Options, Dividend Equivalents, Performance Shares and PS Dividends (after application of the vesting
provisions of Section 2(e) or 2(f)) will terminate for no value on the date of such employment termination.
(d) The LTI, or any portion thereof, may be terminated if EIX elects to substitute cash awards as provided under
Section 13 or in conjunction with a change in control as described in Section 2(h). Any EIX Option remaining
outstanding after the New York Stock Exchange closes on January 2, 2015 will terminate for no value.
9. ENGAGING IN COMPETITION WITH EIX OR ITS AFFILIATES
In the event that a Holder who is at the level of Senior Vice President or above "competes" (as defined below)
with any of the Companies prior to, or during the six-month period following, any exercise of an EIX Option, the
Committee, in its sole discretion, may rescind such exercise within two years after such exercise. In the event
of any such rescission, the Holder shall pay to EIX, or the Company by which Holder is or was last employed, the
amount of any gain realized as a result of the rescinded exercise in such manner and on such terms and conditions
as the Committee may require, and EIX or such Company shall be entitled to set-off the amount of any such gain
against any amount owed to the Holder by EIX or such Company. For purposes of this Section 9, "compete" shall
mean the Holder's rendering of services for any organization, or engaging directly or indirectly in any business
that competes with the business of EIX or any of the Companies without the prior written consent of the General
Counsel of EIX.
10. TAXES
EIX will have the right to retain and withhold the amount of taxes required by any government to be withheld or
otherwise deducted and remitted with respect to the exercise or payment of any LTI. EIX has
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elected to substitute a cash award for the lowest number of whole shares of Common Stock otherwise issuable
pursuant to the LTI having a fair market value on the payment date equal to the fair market value of the LTI
multiplied by the applicable federal and state tax withholding rates, less any cash received and not deferred
from payment of the LTI on the payment date.
11. CONTINUED EMPLOYMENT
Nothing in the award certificate or these Terms and Conditions will be deemed to confer on the Holder any right
to continue in the employ of EIX or an EIX affiliate or interfere in any way with the right of the employer to
terminate his or her employment at any time.
12. NOTICE OF DISPOSITION OF SHARES AND SECTION 16
(a) 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 within six months from the
date such shares are transferred to the Holder, the Holder will notify EIX promptly of such disposition.
(b) If an LTI is granted to a person who later becomes subject to the provisions of Section 16 of the Securities
Exchange Act of 1934, as amended (Section 16), the LTI will immediately and automatically become subject to the
requirements of Rule 16b-3(d) and/or 16b-3(e) (Rule) and may not be exercised, paid or transferred until the Rule
has been satisfied. In its sole discretion, the Administrator may take any action to assure compliance with the
requirements of the Rule, including withholding delivery to Holder (or any other person) of any security or of
any other payment in any form until the requirements of the Rule have been satisfied. The Secretary of EIX may
waive compliance with the requirements of the Rule if he or she determines the transaction to be exempt from the
provisions of paragraph (b) of Section 16.
13. AMENDMENT
The LTI are subject to the terms of the Plans as amended from time to time. EIX reserves the right to substitute
cash awards substantially equivalent in value to the LTI. EIX also reserves the right to amend the LTI from time
to time to the extent that EIX reasonably determines that the amendment is necessary or advisable to comply with
applicable laws, rules or regulations or to preserve the intended tax consequences of the applicable LTI
(including, without limitation, compliance with Section 409A of the Internal Revenue Code and regulations
thereunder, to the extent that Section 409A is applicable to the LTI). The LTI may not otherwise be restricted
or limited by any amendment or termination (to or of the Plan or otherwise) approved after the date of the award
without the Holder's consent.
14. 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.
15. GOVERNING LAW
The terms and conditions of the LTI will be construed under the laws of the State of California.
16. NOTICE
Unless waived by EIX, any notice required under or relating to the LTI 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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APPENDIX A
2005 LONG-TERM INCENTIVES 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.
