EDISON INTERNATIONAL
2007 Long-Term Incentives
Terms and Conditions
1. LONG-TERM INCENTIVES
The long-term incentive awards granted in 2007 ("LTI") for eligible persons (each, a "Holder") employed by
Edison International ("EIX") or its participating affiliates (the "Companies", or individually, the
"Company") include the following:
o Nonqualified stock options to purchase shares of EIX Common Stock ("EIX Options") as described in
Section 3;
o Contingent EIX performance units ("Performance Shares") as described in Section 4; and
o With respect to certain eligible persons, restricted EIX stock units ("Restricted Stock Units") as
described in Section 5.
Each of the LTI awards will be granted under the Equity Compensation Plan (the "ECP") or, after the 2007
annual meeting of the Company's shareholders (the "Annual Meeting"), the 2007 Performance Incentive Plan
(the "2007 Plan" and, together with the ECP, the "Plans"); provided, however, that no award shall be
granted under the 2007 Plan unless and until such plan is approved by the Company's shareholders or such
award is expressly granted subject to approval of the 2007 Plan by the Company's shareholders.
The LTI shall be subject to these 2007 Long-Term Incentives Terms and Conditions (these "Terms"). The LTI
shall be administered by the Compensation and Executive Personnel Committee of the EIX Board of Directors
(the "Committee"). The Committee shall have the administrative powers with respect to the LTI set forth in
Section 3.2 of the ECP or Section 3.2 of the 2007 Plan, as applicable.
In the event EIX grants LTI to a Holder, the number of EIX Options, Performance Shares and Restricted Stock
Units (if any) granted to the Holder will be set forth in a written award certificate delivered by EIX to
the Holder.
2. VESTING OF LTI
2.1 EIX Options. The EIX Options will vest over a four-year period as described in this Section 2 (the
"Vesting Period"). The effective "initial vesting date" will be January 2 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 will vest as follows:
o On the initial vesting date, one-fourth of the award will vest.
o On January 2, 2009, an additional one-fourth of the award will vest.
o On January 2, 2010, an additional one-fourth of the award will vest.
o On January 2, 2011, the balance of the award will vest.
2.2 Performance Shares. The Performance Shares will vest and become payable to the extent earned as
determined at the end of the three-calendar-year period commencing on January 1, 2007, and ending
December 31, 2009 (the "Performance Period"), subject to the provisions of Section 4.
2.3 Restricted Stock Units. The Restricted Stock Units will vest and become payable on January 2, 2010.
2.4 Continuance of Employment/Service Required. The vesting schedule requires continued employment or
service through each applicable vesting date as a condition to the vesting of the applicable
installment of the LTI and the rights and benefits thereunder. Employment or service for only a
portion of the vesting period, even if a substantial portion, will not entitle the Holder to any
proportionate vesting or avoid or
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mitigate a termination of rights and benefits upon or following a termination of employment or services
except as provided in Section 8 below.
3. EIX OPTIONS
3.1 Exercise Price. The exercise price of an EIX Option stated in the award certificate is the closing
price (in regular trading) of a share of EIX Common Stock on the New York Stock Exchange for the
effective date of the award.
3.2 Cumulative Exercisability; Term of Option. 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 this Section 3
and Sections 8 and 9, in whole or in part, in any subsequent period but not later than January 3, 2017.
3.3 Method of Exercise. The Holder may exercise an EIX Option by providing written notice to EIX on the
form prescribed by the Committee for this purpose, or completion of such other EIX Option exercise
procedures as EIX may prescribe, 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 closing price 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. The provisions of Section 11 must be satisfied as a condition precedent to the
effectiveness of any purported exercise.
4. PERFORMANCE SHARES
4.1 Performance Shares. Performance Shares are EIX Common Stock-based units subject to a performance
measure based on the percentile ranking of EIX total shareholder return ("TSR") among the TSRs for the
stocks comprising the Comparison Group (as defined below) over the entire Performance Period. TSR is
calculated using the average closing stock price for the relevant stock for the 20-trading-day period
ending with the measurement date (or the immediately preceding trading day if the measurement date is
not a trading day). A target number of contingent Performance Shares will be awarded on the initial
grant date. The target number of contingent Performance Shares will be increased by any additional
Performance Shares created by "reinvestment" of dividend equivalents as provided in Section 4.4. The
actual amount of Performance Shares to be paid will depend on EIX's TSR percentile ranking on the
measurement date. If EIX's TSR is below the 40th percentile, no Performance Shares will be paid.
Twenty five (25%) of the target number of Performance Shares will be paid if EIX's TSR percentile
ranking is at the 40th percentile. The target number of Performance Shares will be paid if EIX's TSR
rank is at the 50th percentile. Two times the target number of Performance Shares will be paid if
EIX's TSR percentile ranking is at the 75th percentile or higher. The payment multiple is
interpolated for performance between the points indicated in the preceding three sentences on a
straight-line basis.
The "Comparison Group" consists of the stocks comprising the Philadelphia Utility Index as the index
is constituted on the measurement date, but deleting AES Corporation and adding Sempra Energy (in each
case, if such stock is publicly traded on the measurement date), and adjusted as described below if
there are less than 20 companies in such index as so adjusted on the measurement date. If the
Comparison Group consists of less than 20 stocks on the measurement date, the stock with the median
TSR for the entire Performance Period (or, if there are an even number of stocks in the Comparison
Group before giving effect to this sentence, a stock deemed to have a TSR equal to the average TSR of
the two stocks in the Comparison Group that fall in the middle of such group when ranked based on TSR
for the entire Performance Period) shall be added back to the Comparison Group a sufficient number of
times to bring the stocks comprising the Comparison Group to 20. (For purposes of clarity, if there
are only 17 stocks in the Comparison Group before giving effect to the preceding sentence, the stock
with the median TSR for the entire Performance Period will be added back to the Comparison Group a
total of three times to bring the stocks comprising the Comparison Group to 20.)
4.2 Measurement Date. The performance measurement date will be the last day of the Performance Period on
which the New York Stock Exchange is open for trading. As of that date, the applicable payment
multiple
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will be determined as provided in Section 4.1 above based on the EIX TSR percentile ranking achieved during
the Performance Period.
o Payment of Performance Shares. Fifty percent of the Performance Shares that are earned pursuant to
Section 4.1 (plus any fractional shares) will be paid in cash. The remainder of the Performance
Shares earned will be paid on a one-for-one basis in EIX Common Stock under the ECP or 2007 Plan, as
applicable. The value of each Performance Share paid in cash will be equal to the closing price per
share of EIX Common Stock on the New York Stock Exchange for the measurement date. The cash and stock
payable for the earned Performance Shares will be delivered within 30 days following the end of the
Performance Period. The Performance Shares are subject to termination and other conditions specified
in Sections 8 and 9, and to the provisions of Section 11.
o Dividend Equivalent Reinvestment. For each dividend on EIX Common Stock for which the ex-dividend
date falls within the Performance Period, the Holder of Performance Shares will be credited with an
additional number of target contingent Performance Shares. The additional number of shares added on
each ex-dividend date will be equal to (i) the per-share cash dividend paid by EIX on its Common Stock
with respect to the related ex-dividend date, multiplied by (ii) the Holder's number of target
Performance Shares (including any additional target Performance Shares previously credited under this
Section 4.4), divided by (iii) the closing price of a share of EIX Common Stock on the related
ex-dividend date. Any target Performance Shares added pursuant to the foregoing provisions of this
Section 4.4 will be subject to the same vesting, payment, termination and other terms, conditions and
restrictions as the original target Performance Shares to which they relate (including application of
the TSR payment multiple as contemplated by Section 4.1). No target Performance Shares will be added
pursuant to this Section 4.4 with respect to any target Performance Shares which, as of the related
ex-dividend date, have either become payable pursuant to Section 4.3 or terminated pursuant to Section
8.
5. RESTRICTED STOCK UNITS
o Restricted Stock Units. Restricted Stock Units are EIX Common Stock-based units that vest based on
the passage of time. As soon as administratively practical following January 2, 2010, EIX will
deliver to the Holder a number of shares of EIX Common Stock equal to the number of Restricted Stock
Units that have vested, except that if the Restricted Stock Units vest pursuant to Section 8.3, 8.4,
8.5 or 9, the Restricted Stock Units will become payable immediately upon vesting. The Restricted
Stock Units are subject to termination and other conditions specified in Sections 8 and 9, and to the
provisions of Section 11.
o Dividend Equivalent Reinvestment. For each dividend declared on EIX Common Stock with an ex-dividend
date on or after the date an award of Restricted Stock Units is granted and before all of such
Restricted Stock Units either have become payable pursuant to Section 5.1 or have terminated pursuant
to Section 8, the Holder of such award will be credited with an additional number of Restricted Stock
Units equal to (i) the per-share cash dividend paid by EIX on its Common Stock with respect to the
related ex-dividend date, multiplied by (ii) the total number of outstanding and unpaid Restricted
Stock Units (including any Restricted Stock Units previously credited under this Section 5.2) subject
to such award as of such ex-dividend date, divided by (iii) the closing price of a share of EIX Common
Stock on the related ex-dividend date. Any additional Restricted Stock Units credited pursuant to the
foregoing provisions of this Section 5.2 will be subject to the same vesting, payment, termination and
other terms, conditions and restrictions as the original Restricted Stock Units to which they relate;
provided, however, that the Committee shall retain discretion to pay any Restricted Stock Units in
cash rather than shares of EIX Common Stock if and to the extent that payment in shares would exceed
the applicable share limits of the ECP or the 2007 Plan, as applicable, with any fractional shares to
be paid in cash. No crediting of Restricted Stock Units will be made pursuant to this Section 5.2
with respect to any Restricted Stock Units which, as of the related ex-dividend date, have either been
paid pursuant to Section 5.1 or terminated pursuant to Section 8.
1. DELAYED PAYMENT OR DELIVERY OF LTI GAINS
Notwithstanding any other provision herein, Holders who are eligible to defer salary under the EIX
Executive Deferred Compensation Plan (the "EDCP") may irrevocably elect to defer receipt of all or a part
of the cash payable in respect of the portion of earned Performance Shares that are payable in cash
pursuant to the terms of
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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 Committee. 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.
2. TRANSFER AND BENEFICIARY
o Limitations on Transfers. Except as provided below and in Section 11, the LTI will not be
transferable by the Holder and, 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.
o Exceptions. Notwithstanding the foregoing, the LTI of the CEOs of EIX, Edison Mission Group, 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 Committee may determine.
3. TERMINATION OF EMPLOYMENT
o General. In the event of termination of the employment of the Holder for any reason other than those
specified in Sections 8.2, 8.3 or 8.4, the LTI will terminate as follows: (i) the Holder's unvested
EIX Options 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 (or, if earlier, on the last day of the applicable EIX Option term) to the extent not
theretofore exercised, (iii) the Holder's unearned Performance Shares will terminate for no value, and
(iv) the Holder's unvested Restricted Stock Units will terminate for no value. Any fractional vested
EIX Options will be rounded up to the next whole share.
o Retirement. If the Holder terminates employment on or after the first day of the month in which he or
she (A) attains age 65 or (B) attains age 61 with five "years of service," as that term is defined in
the Edison 401(k) Savings Plan, then the vesting and exercise provisions of this Section 8.2 will
apply.
(A) EIX Options. The EIX Options will vest; 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 that vests upon the Holder's Retirement will be prorated by multiplying the
total number of shares subject to the option by a fraction, the numerator of which shall be the
number of whole months in the calendar year of grant that the Holder was employed by one or more
of the Companies, and the denominator of which shall be 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 by one of the Companies as of the last day of such calendar
month. The portion of the option not eligible to vest following the Holder's Retirement after
giving effect to the proration described in the preceding two sentences shall terminate upon the
Holder's Retirement, and the Holder shall have no further rights with respect to such terminated
portion. Any fractional EIX Options vested under this Section 8.2 will be rounded up to the next
whole number. Although vested upon Retirement, the options will become exercisable on the
schedule under which they would have been vested had the Holder not retired (one-fourth of the
option grant on the effective initial vesting date (January 2, 2008 or six months after the date
of grant, whichever is later) and an additional one-fourth on January 2, 2009, 2010 and 2011),
except that if the Holder dies, the then-outstanding portion of the option will be immediately
exercisable as of the date of the Holder's death. In the event pro-rated vesting is required in
connection with the Holder's Retirement, the portion of the option that does vest will become
exercisable first on the effective initial vesting date (up to the maximum number of shares that
would have become exercisable on that date had no termination of employment occurred) and so on
until the vested portion of the option becomes exercisable, except that if the Holder dies, the
then-outstanding portion of the option will be immediately exercisable as of the date of the
Holder's death. Once exercisable, EIX Options will remain exercisable as provided in Section 3 for
the remainder of the original EIX Option term.
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(B) Performance Shares. The Performance Shares 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
Retirement occurs within one year following the date the applicable Performance Shares are
granted, the portion of the Performance Shares 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 months in the calendar year of grant that the Holder was
employed by one or more of the Companies, and the denominator of which shall be twelve (12). For
this purpose, the number of "whole calendar months" shall be calculated as provided in Section
8.2(A) above. Performance Shares will be payable to the Holder on the payment date specified in
Section 4 to the extent of the EIX TSR ranking achieved as specified in Section 4.1. Any
fractional Performance Shares vested under this Section 8.2 will be rounded up to the next whole
number. Any unvested Performance Shares (after application of the foregoing vesting provisions)
will terminate for no value.
(C) Restricted Stock Units. The Restricted Stock Units will vest and become payable January 2, 2010;
provided, however, that in the event the Holder's termination of employment occurs within one year
following the date the applicable Restricted Stock Unit award is granted, the number of Restricted
Stock Units that vests upon the Holder's Retirement will be prorated by multiplying the total
number of Restricted Stock Units subject to the award by a fraction, the numerator of which shall
be the number of whole months in the calendar year of grant that the Holder was employed by one or
more of the Companies, and the denominator of which shall be 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 by one of the Companies as of the last day of
such calendar month. Any fractional Restricted Stock Units vested under this Section 8.2 will be
rounded up to the next whole number. Any unvested Restricted Stock Units (after application of
the foregoing vesting provisions) will terminate for no value.
o Death or Disability. If the Holder's employment terminates due to death or permanent and total
disability, the provisions of this Section 8.3 will apply.
(D) EIX Options. Any unvested EIX Options will immediately vest. The EIX Options will be exercisable
immediately as of the date of such termination and will remain exercisable as provided in Section
3 for the remainder of the original EIX Option term.
(E) Performance Shares. The Performance Shares 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.
(F) Restricted Stock Units. Any unvested Restricted Stock Units will immediately vest and become payable.
o Involuntary Termination Not for Cause. Upon involuntary termination of the Holder's employment by his
or her employer not for cause, the provisions of this Section 8.4 shall apply.
(i) EIX Options. 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 number of shares granted multiplied by a fraction (not greater
than 1), the numerator of which is the number of weekdays in the period from January 1 of the year
of grant of the award through the one-year anniversary of the Holder's last day of employment
prior to termination of the Holder's employment, and the denominator of which is the number of
weekdays in the four calendar years 2007-2010. The Holder will have one year following the date
of termination in which to exercise the EIX Options, or until the end of the EIX Option term,
whichever occurs earlier, except that if the Holder qualifies for Retirement (as defined in
Section 8.2) the EIX Options will become exercisable on the schedule specified in Section 8.2 and
will remain exercisable for the remainder of the original EIX Option term. The Holder's vested
options will terminate for no value at the end of such period to the extent not theretofore
exercised. The portion of the option not eligible to vest following the termination of the
Holder's employment after giving effect to the proration
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described in this Section 8.4(A) shall terminate upon the termination of the Holder's employment, and
the Holder shall have no further rights with respect to such terminated portion. Any fractional EIX
Options vested under this Section 8.4 will be rounded up to the next whole number.
(ii) Performance Shares. The Performance Shares will vest to the extent necessary to cause the number of
vested Performance Shares to equal the target number of Performance Shares granted (including
Performance Shares added as provided in Section 4.4) multiplied by a fraction (not greater than
1), the numerator of which is the number of weekdays the Holder was employed by EIX or a
subsidiary from January 1 of the year of grant of the award through the one-year anniversary of
the Holder's last day of employment prior to termination of the Holder's employment, and the
denominator of which is the number of weekdays in the three calendar years 2007-2009. Such vested
Performance Shares will be payable to the Holder on the payment date specified in Section 4 to the
extent of the EIX TSR ranking achieved as provided in Section 4.1. Any fractional Performance
Shares vested under this Section 8.4 will be rounded up to the next whole number. Any unvested
Performance Shares (after application of the foregoing vesting provisions) will terminate for no
value as of the date of the Holder's termination of employment.
(iii) Restricted Stock Units. The Restricted Stock Units will vest to the extent necessary to cause the
aggregate number of vested Restricted Stock Units to equal the number of Restricted Stock Units
granted (including any Restricted Stock Units added as provided in Section 5.2) multiplied by a
fraction (not greater than 1), the numerator of which is the number of weekdays in the period from
January 1 of the year of grant of the award through the one-year anniversary of the Holder's last
day of employment prior to termination of the Holder's employment, and the denominator of which is
the number of weekdays in the four calendar years 2007-2010. Any fractional Restricted Stock
Units vested under this Section 8.4 will be rounded up to the next whole number. Any unvested
Restricted Stock Units (after application of the foregoing vesting provisions) will terminate for
no value as of the date of the Holder's termination of employment. Vested Restricted Stock Units
will be paid as soon as administratively feasible following the date employment terminated.
5.2 Effect of Change of Employer. For purposes of the LTI only, 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 (the
"Code"), regardless of whether Holder's employment continues with that entity or a successor entity
outside of the EIX controlled group. A termination of employment will not be deemed to occur for
purposes of the LTI if a Holder's employment by one EIX Company terminates but immediately thereafter
the Holder is employed by another EIX Company.
6. CHANGE IN CONTROL; EARLY TERMINATION OF LTI
Notwithstanding any other provision herein, in the event of a Change in Control of EIX (as defined in
Section 9.4), the provisions of this Section 9 will apply.
6.1 EIX Options. Upon (or, as may be necessary to effect the acceleration, immediately prior to) a Change
in Control of EIX, all outstanding and unvested EIX Options will become fully vested; provided,
however, that such acceleration provision will not apply, unless otherwise expressly provided by the
Committee, with respect to any EIX Options to the extent the Committee has made a provision for the
substitution, assumption, exchange or other continuation or settlement of the EIX Options, or the EIX
Options would otherwise continue in accordance with their terms, in the circumstances. Any EIX
Options that become vested pursuant to this Section 9.1 or are otherwise vested shall terminate upon
the related Change in Control of EIX; provided that the Holder of such EIX Option will be given
reasonable advance notice of the impending termination and a reasonable opportunity to exercise such
EIX Option in accordance with its terms before such termination (except that in no event will more
than 10 days' notice of the accelerated vesting and impending termination be required); and provided
further, that the Committee may provide for such EIX Option, to the extent such option remains
outstanding and unexercised, to be settled by a cash payment to the Holder of such option based upon
the distribution or consideration payable to the holders of the EIX Common Stock upon or in respect of
such event, such cash payment to be made as soon as practicable after the Change in Control of EIX.
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6.2 Performance Shares. Upon a Change in Control of EIX, the Performance Period for all outstanding
Performance Shares will be shortened so that the Performance Period will be deemed to have ended on
the last day prior to such Change in Control of EIX, and the Performance Shares that will vest and
become payable will be determined in accordance with Section 4.1 based on such shortened Performance
Period; provided, however, that this provision will not apply, unless otherwise expressly provided by
the Committee, with respect to any Performance Shares to the extent the Committee has made a provision
for the substitution, assumption, exchange or other continuation or settlement of the Performance
Shares, or the Performance Shares would otherwise continue in accordance with their terms, in the
circumstances. Any Performance Shares that become subject to a shortened Performance Period pursuant
to this Section 9.2 shall be paid, to the extent such Performance Shares become vested and payable
after giving effect to the first sentence of this Section 9.2, to the Holder in cash within 30 days
after the date of the Change in Control of EIX, and any such Performance Shares that do not become
vested and payable shall terminate for no value as of the date of the Change in Control of EIX.
6.3 Restricted Stock Units. Upon (or, as may be necessary to effect the acceleration, immediately prior
to) a Change in Control of EIX, all outstanding and unvested Restricted Stock Units will become fully
vested; provided, however, that such acceleration provision will not apply, unless otherwise expressly
provided by the Committee, with respect to any Restricted Stock Units to the extent the Committee has
made a provision for the substitution, assumption, exchange or other continuation or settlement of the
Restricted Stock Units, or the Restricted Stock Units would otherwise continue in accordance with
their terms, in the circumstances.
6.4 Other Acceleration Rules. Any acceleration of LTI pursuant to this Section 9 will comply with
applicable legal requirements and, if necessary to accomplish the purposes of the acceleration or if
the circumstances require, may be deemed by the Committee to occur within a limited period of time not
greater than 30 days prior to the Change in Control of EIX. Without limiting the generality of the
foregoing, the Committee may deem an acceleration to occur immediately prior to the applicable event
and/or reinstate the original terms of a LTI if the event giving rise to acceleration does not occur.
6.5 Definition of Change in Control of EIX. A "Change in Control of EIX" shall be deemed to have occurred
as of the first day, after the date of grant of the award, 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 mean any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), except that such term 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; and the term "Beneficial Owner" shall mean as defined under
Rule 13d-3 promulgated under the Exchange Act.
(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. For these purposes, "Initial
Date" means the later of (A) the date of grant or (B) the date that is two (2) years before the
Reference Date.
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(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 affiliate of EIX
(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.
7. 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 the
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 10, "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.
8. TAXES AND OTHER WITHHOLDING
Upon any exercise, vesting, or payment of any LTI, the Company shall have the right at its option to:
o require the Holder (or the Holder's personal representative or beneficiary, as the case may be) to pay
or provide for payment of at least the minimum amount of any taxes which the Company may be required
to withhold with respect to such LTI event or payment; or
o deduct from any amount otherwise payable in cash to the Holder (or the Holder's personal
representative or beneficiary, as the case may be) the minimum amount of any taxes which the Company
may be required to withhold with respect to such cash payment.
To the extent that the receipt, exercise and/or vesting of any LTI requires tax withholding and a
sufficient amount of cash (not otherwise deferred) is not generated from the underlying transaction to
satisfy such withholding obligations, EIX shall (except as provided below) substitute a cash award for a
number of shares of Common Stock otherwise issuable pursuant to the LTI, rounded up to the next whole
share for fractional shares, valued in a consistent manner at their fair market value as of the date of
such receipt, exercise and/or vesting transaction, necessary to satisfy the minimum applicable
withholding obligation in connection with such transaction to the extent that such withholding amount
exceeds the amount of cash generated from the underlying transaction and not otherwise deferred. In no
event shall the shares withheld exceed the minimum whole number of shares required for tax withholding
under applicable law. If for any reason EIX cannot or elects not to satisfy such withholding obligations
in such manner, the Company shall have the right to satisfy such withholding obligations, or require the
Holder to satisfy such withholding obligations, as otherwise provided above.
To the extent that the receipt, exercise and/or vesting of any LTI requires Garnishment Payments by the
Company, and a sufficient amount of cash is not generated by the underlying transaction to satisfy the
Garnishment Payment obligations arising from such transaction, the Company shall substitute a cash award
for a number of shares of Common Stock otherwise issuable pursuant to the LTI, rounded up to the next
whole share for fractional shares, having a fair market value on the payment date equal to the amount
required by any Garnishment, less any cash received and not deferred in connection with such
transaction. For this purpose,
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"Garnishment" means garnishment orders, levies, and other assessments imposed by legal authority and
"Garnishment Payments" means payments required by the Company pursuant to any such Garnishment.
9. CONTINUED EMPLOYMENT
Nothing in the award certificate or these Terms will be deemed to confer on the Holder any right to
continue in the employ of any Company or interfere in any way with the right of the Companies to
terminate his or her employment at any time.
10. INSIDER TRADING; SECTION 16
10.1 Insider Trading. Each Holder shall comply with all EIX notice, trading and other policies regarding
transactions in and involving EIX securities (including, without limitation, policies prohibiting
insider trading).
10.2 Section 16. If an LTI is granted to a person who later becomes subject to the provisions of Section
16 of the Exchange Act ("Section 16"), the LTI will immediately and automatically become subject to
the requirements of Rule 16b-3(d) and/or 16b-3(e) ( the "Rule") and may not be exercised, paid or
transferred until the Rule has been satisfied. In its sole discretion, the Committee 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.
10.3 Notice of Disposition. The Holder agrees that if he or she should plan to dispose of any shares of
stock acquired on the exercise or payment of LTI awards (including a disposition by sale, exchange,
gift or transfer of legal title) and the Holder is a person who is requested to preclear EIX
securities transactions, the Holder will notify EIX prior to such disposition.
11. AMENDMENT
The LTI are subject to the terms of the ECP and 2007 Plan, as applicable, and as each may be amended from
time to time. EIX reserves the right to amend these Terms 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 Code and regulations thereunder, to the extent that Section
409A is applicable to the LTI). The LTI may not otherwise be amended or terminated (by amendment to or of
a Plan or otherwise) in any manner materially adverse to the rights of the Holder of the affected LTI
without such Holder's consent.
12. MISCELLANEOUS [Add 409A paragraph]
12.1 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.
12.2 Governing Law. These Terms will be construed under the laws of the State of California.
12.3 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.
12.4 Construction. These Terms shall be construed and interpreted to comply with Section 409A of the
Code. Additionally, when any provision of this document refers to a date, and that date falls on a
holiday or weekend, the date shall be deemed to be the next succeeding business day, except that the
last day of the Performance Period shall occur on December 31, 2009. Any determination of trading
price or fair market value for purposes of these Terms shall be made consistent with the resolutions
adopted by the EIX Board of Directors on July 19, 2001 entitled "Fair Market Value Measure for
Equity-Based Awards."
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12.5 Transfer Representations. 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.
12.6 Award Not Funded. The Holder will have no right or claim to any specific funds, property or assets of
the Companies as to any award of LTI.
12.7 Section 409A. Notwithstanding any provision of these Terms to the contrary, if the Holder is a
"specified employee" as defined in Section 409A of the Code, the Holder shall not be entitled to any
payment with respect to any LTI subject to Section 409A upon a termination of the Holder's employment
until the earlier of (a) the date which is six (6) months after the Holder's termination of employment
for any reason other than the Holder's death, or (b) the date of the Holder's death. Any amounts
otherwise payable to the Holder following a termination of the Holder's employment that are not so
paid by reason of this Section 15.7 shall be paid as soon as practicable after the date that is six
(6) months after the termination of the Holder's employment (or, if earlier, the date of the Holder's
death). The provisions of this Section 15.7 shall only apply if, and to the extent, required to
comply with Section 409A of the Code.
