EDISON INTERNATIONAL
2008 Executive Bonus Program
1. PURPOSE
The purpose of this Edison International 2008 Executive Bonus Program (this "Program") is
to promote the success of Edison International, a California corporation, (the
"Corporation"), by motivating the executives selected to participate in this Program and
set forth in Section 3.1 below (each, a "Participant") to maximize the performance of the
Corporation and rewarding them with cash bonuses directly related to such performance.
This Program is intended to provide bonuses that qualify as performance-based
compensation within the meaning of Section 162(m) ("Section 162(m)") of the United States
Internal Revenue Code of 1986, as amended (the "Code"). This Program is adopted under
Section 5.2 of the Corporation's 2007 Performance Incentive Plan (the "Plan").
Capitalized terms are defined in the Plan if not defined herein.
2. ADMINISTRATION
This Program shall be administered by the Compensation and Executive Personnel Committee
of the Board (the "Committee"), which shall consist solely of two or more members of the
Board who are "outside directors" within the meaning of Section 162(m). Action of the
Committee with respect to the administration of this Program shall be taken pursuant to a
majority vote or by the unanimous written consent of its members. The Committee shall
have the authority to construe and interpret this Program and any agreements or other
document relating to Awards under the Program, may adopt rules and regulations relating
to the administration of this Program, and shall exercise all other duties and powers
conferred on it by this Program. Any decision or action of the Committee within its
authority hereunder shall be conclusive and binding upon all persons. Neither the Board
nor the Committee, nor any person acting at the direction thereof, shall be liable for
any act, omission, interpretation, construction or determination made in good faith in
connection with this Program (or any Award made under this Program).
3. AWARDS
3.1 Award Grants; Maximum Bonus Amount. Each "Award" granted to a Participant under this
Program represents the opportunity to receive a cash payment determined under this
Section 3 (a "Bonus"), subject to the terms and conditions of this Program. The
maximum amount of the Bonus payable to each Participant (the "Maximum Bonus Amount")
shall be determined by multiplying (i) the Bonus Pool (as defined in Section 3.2
below), by (ii) the Participant's "Bonus Percentage" as set forth in the following
table:
Bonus
Participant Percentage
===================================
John E. Bryson 27%
Theodore F. Craver, Jr. 27%
Alan J. Fohrer 12%
Thomas R. McDaniel 10%
J.A. Bouknight, Jr. 10%
Polly Gault 7%
John R. Fielder 7%
In no case, however, shall the amount of any Bonus exceed the applicable limit set
forth in Section 5.2.3 of the Plan.
3.2 Bonus Pool. As soon as practicable after the end of the Corporation's 2008 fiscal
year (the "Performance Period"), the Committee shall determine the amount of the
Corporation's earnings from continuing operations (after interest, taxes,
depreciation and amortization, and determined on a consolidated basis) for the
Performance Period (the "Performance Level"). The "Bonus Pool" shall be determined
by multiplying (i) the Performance Level, by (ii) one and one-half percent (1.5%).
No Participant shall receive any payment under this Program unless and until the
Committee has certified, by resolution or other appropriate action in writing, that
the amount
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of the Performance Level has been accurately determined in accordance with
the terms, conditions and limits of this Program and that any other material terms
previously established by the Committee or set forth in this Program applicable to
the Award were in fact satisfied.
3.3 Committee Discretion. Notwithstanding the foregoing provisions, the Committee shall
retain discretion to reduce (but not increase) the Maximum Bonus Amount otherwise
payable to any one or more Participants pursuant to Sections 3.1 and 3.2. The
Committee may exercise such discretion on any basis it deems appropriate (including,
but not limited to, its assessment of the Corporation's performance relative to its
operating or strategic goals for the Performance Period and/or the Participant's
individual performance for such period). For purposes of clarity, if the Committee
exercises its discretion to reduce the amount of any Bonus payable hereunder, it may
not allocate the amount of such reduction to Bonuses payable to other Participants.
3.4 Payment of Bonuses. Any Bonuses shall be paid (subject to tax withholding pursuant
to Section 4.6) as soon as practicable following the certification of the Committee's
findings under Section 3.2 and its determination of the final Bonus amount (after
giving effect to any exercise of its discretion to reduce Bonuses pursuant to Section
3.3) and in all events no later than March 15, 2009.
3.5 Termination of Employment.
(a)Except as provided in Section 3.5(b), in the event that a Participant's employment
with the Corporation and its Subsidiaries terminates at any time during the
Performance Period, the Participant's Award will immediately terminate upon such
termination of employment, and the Participant will not be entitled to any Bonus
payment in respect of such Award; provided that the Committee may, in its
discretion, award a full or partial Bonus for the Performance Period to any
Participant whose termination of employment during the Performance Period is due
to the Participant's death, permanent and total disability, or Retirement (with
the amount of any such Bonus not to exceed the amount the Participant would have
been entitled to had he or she remained employed for the entire Performance
Period). For purposes of this Section 3.5, the term "Retirement" with respect to
a Participant shall mean a termination of the Participant's employment on or after
the first day of the month in which the Participant (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.
(b)In the event that the Participant's employment with the Corporation and its
Subsidiaries terminates during the Performance Period in circumstances that
entitle the Participant to severance benefits pursuant to the Corporation's
Executive Severance Plan, and in such circumstances the Participant satisfies the
applicable conditions for receiving severance benefits under that plan (including,
without limitation, any requirement to execute and deliver a release of claims),
then the provisions of this Section 3.5(b) shall control over Section 2.3.1(b) of
the Executive Severance Plan to determine the Participant's bonus for the year in
which such termination of employment occurs. If a Participant's Bonus is to be
determined pursuant to this Section 3.5(b), the Participant's Bonus shall equal
the lesser of (A) or (B); where (A) is determined by multiplying (i) the
Participant's highest base salary rate in effect during the 24 months preceding
the termination of the Participant's employment, by (ii) the highest target bonus
percentage in effect for the Participant during those 24 months, by (iii) a
fraction (not greater than 1) the numerator of which is the number of weekdays in
the Performance Period from January 1, 2008 through the Participant's last day of
employment prior to such termination and the denominator of which is the number of
weekdays in the entire Performance Period; and (B) is determined by multiplying
(i) the Participant's Bonus Percentage, by (ii) one and one-half percent (1.5%),
by (iii) the Corporation's earnings from continuing operations (after interest,
taxes, depreciation and amortization, and determined on a consolidated basis) for
the portion of the Performance Period through and ending on the last day of the
month in which the Participant's termination of employment occurs. In no case,
however, shall the amount of any Bonus exceed the applicable limit set forth in
Section 5.2.3 of the Plan.
(c) No Participant shall receive any payment under this Section 3.5 unless and until the
Committee has certified, by resolution or other appropriate action in writing, the
amount of the Bonus due in accordance with the terms, conditions and limits of
this Program. Any Bonus amount due pursuant to this Section 3.5 shall be paid
(subject to tax withholding pursuant to Section 4.6) as soon as practicable
following the Committee's certification of such amount and in all events no later
than March 15, 2009.
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3.6 Adjustments. The Committee shall adjust the Performance Level, Bonus Pool and other
provisions applicable to Awards granted under this Program to the extent (if any) it
determines that the adjustment is necessary or advisable to preserve the intended
incentives and benefits to reflect (1) any material change in corporate
capitalization, any material corporate transaction (such as a reorganization,
combination, separation, merger, acquisition, or any combination of the foregoing),
or any complete or partial liquidation of the Corporation, (2) any change in
accounting policies or practices, (3) the effects of any special charges to the
Corporation's earnings, or (4) any other similar special circumstances.
3.7 Change in Control. If a Change in Control of EIX occurs at any time during the
Performance Period, the Performance Period for all outstanding Awards 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 . The Bonus Pool and the Bonuses payable with
respect to each Award will be determined in accordance with the foregoing provisions
of this Section 3 based on such shortened Performance Period. Such Bonuses shall be
paid (subject to tax withholding pursuant to Section 4.6) as soon as practicable
following the date of the Change in Control of EIX. For purposes of this Section
3.7, "Change in Control of EIX" shall have the meaning ascribed to such term in the
Corporation's 2008 Long-Term Incentives Terms and Conditions.
4. GENERAL PROVISIONS
4.1 Rights of Participants.
(a) No Right to Continued Employment. Nothing in this Program (or in any other documents
evidencing any Award under this Program) will be deemed to confer on any
Participant any right to continue in the employ of the Corporation or any
Subsidiary or interfere in any way with the right of the Corporation or any
Subsidiary to terminate his or her employment at any time.
(b) Program Not Funded. No Participant or other person will have any right or claim to
any specific funds, property or assets of the Corporation by reason of any Award
hereunder. To the extent that a Participant or other person acquires a right to
receive payment pursuant to any Award hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Corporation.
4.2 Non-Transferability of Benefits and Interests. Except as expressly provided by the
Committee in accordance with the provisions of Section 162(m), all Awards are
non-transferable, and no benefit payable under this Program shall be subject in any
manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance
or charge. This Section 4.2 shall not apply to an assignment of a contingency or
payment due (a) after the death of a Participant to the deceased Participant's legal
representative or beneficiary or (b) after the disability of a Participant to the
disabled Participant's personal representative.
4.3 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.
4.4 Governing Law. This Program will be construed under the laws of the State of
California.
4.5 Construction.
(a)Section 162(m). It is the intent of the Corporation that this Program, Awards and
Bonuses paid hereunder will qualify as performance-based compensation or will
otherwise be exempt from deductibility limitations under Section 162(m). Any
provision, application or interpretation of this Program inconsistent with this
intent to satisfy the standards in Section 162(m) shall be disregarded.
(b)Section 409A. It is the intended that Awards under this Program qualify as
"short-term deferrals" within the meaning of the guidance provided by the Internal
Revenue Service under Section 409A of the Code and this Program shall be
interpreted consistent with that intent.
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4.6 Tax Withholding. Upon the payment of any Bonus, the Corporation shall have the right
to deduct the amount of any federal, state or local taxes that the Corporation or any
Subsidiary may be required to withhold with respect to such payment.
4.7 Amendment or Termination of Program. The Board or the Committee may at any time
terminate, amend, modify or suspend this Program, in whole or in part.
Notwithstanding the foregoing, no amendment may be effective without Board and/or
shareholder approval if such approval is necessary to comply with the applicable
rules of Section 162(m).
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