Exhibit 10.1

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:

 

  •  

Nonqualified stock options to purchase shares of EIX Common Stock (“EIX
Options”) as described in Section 3;

 

  •  

Contingent EIX performance units (“Performance Shares”) as described in
Section 4; and

 

  •  

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:

 

  •  

On the initial vesting date, one-fourth of the award will vest.

 

  •  

On January 2, 2009, an additional one-fourth of the award will vest.

 

  •  

On January 2, 2010, an additional one-fourth of the award will vest.

 

  •  

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 mitigate a termination of rights and benefits
upon or following a termination of employment or services except as provided in
Section 8 below.

 

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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 percent (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 will be determined as provided
in Section 4.1 above based on the EIX TSR percentile ranking achieved during the
Performance Period.

 

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  4.3 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.

 

  4.4 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

 

  5.1 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.

 

  5.2 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.

 

6. 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 the EDCP.

 

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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.

 

7. TRANSFER AND BENEFICIARY

 

  7.1 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.

 

  7.2 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.

 

8. TERMINATION OF EMPLOYMENT

 

  8.1 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.

 

  8.2 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 the calendar year in
which 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
prorated 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 the calendar year in which 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.

 

  8.3 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.

 

  (A) 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.

 

  (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.

 

  (C) Restricted Stock Units. Any unvested Restricted Stock Units will
immediately vest and become payable.

 

  8.4 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.

 

  (A)

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.

 

  (B) 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.

 

  (C) 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 three calendar years 2007-2009. 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.

 

  8.5 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.

 

9. 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.

 

  9.1 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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  9.2 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.

 

  9.3 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.

 

  9.4 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.

 

  9.5 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.

 

10. 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.

 

11. TAXES AND OTHER WITHHOLDING

Upon any exercise, vesting, or payment of any LTI, the Company shall have the
right at its option to:

 

  •  

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

 

  •  

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, “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.

 

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12. 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.

 

13. INSIDER TRADING; SECTION 16

 

  13.1 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).

 

  13.2 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.

 

  13.3 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.

 

14. 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.

 

15. MISCELLANEOUS

 

  15.1 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.

 

  15.2 Governing Law. These Terms will be construed under the laws of the State
of California.

 

  15.3 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.

 

  15.4 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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  15.5 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.

 

  15.6 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.

 

  15.7 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.

 

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