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Exhibit 10.93

This document constitutes part of a prospectus covering securities that have
been registered under the Securities Act of 1933, as amended.

EDISON INTERNATIONAL
EDISON MISSION ENERGY
Offer to Exchange
Cash and Stock Equivalent Units
For Affiliate Options of
Edison Mission Energy
EXCHANGE OFFER CIRCULAR

        Edison International ("EIX") and Edison Mission Energy ("EME") are
offering (the "Exchange Offer"), upon the terms and conditions set forth in this
Exchange Offer Circular (this "Circular"), to exchange (the "Exchange") cash and
stock equivalent units ("SEUs") related to shares of EIX common stock for
options held by current and former employees with respect to "phantom" units of
EME ("Affiliate Options").

        The consideration being offered in the Exchange is calculated based on
the difference between $425 per each unit underlying your Affiliate Options and
the Exercise Price (as defined under "Summary" below) applicable to that unit.
$50.00 of the consideration per unit generally will be granted in the form of
SEUs. The value of the SEUs generally will be paid in cash on the first or third
anniversary of the date of the Exchange, whichever you elect. The balance of the
consideration generally will be paid in cash on March 13, 2001. However, the
consideration being offered in the Exchange will remain subject to the vesting
schedule applicable to the underlying Affiliate Options and will not be paid
earlier than the date that the underlying Affiliate Options would have vested.

        EME is giving you an individualized statement setting forth the
consideration being offered to you and showing the calculation of this
consideration (your "Individualized Statement"). Your Individualized Statement
is included with this Circular.

        Completion of the Exchange is subject to: (1) acceptance of the Exchange
Offer by Affiliate Option holders entitled to receive at least 80% of the
aggregate Exchange Price (as defined under "Summary—Payment Terms" below) for
all outstanding EME Affiliate Options, and (2) receipt by the Board of Directors
of EIX of an opinion from its financial advisor supporting the conclusion that
the Exchange Offer is fair to EIX and its shareholders. You release all of your
rights (other than your right to receive the consideration contemplated by the
Exchange Offer) with respect to your Affiliate Options if you accept the
Exchange Offer and if the Exchange is completed.

        For details of the Exchange Offer, see "Questions and Answers about the
Exchange Offer" in this Circular. The Exchange Offer will expire at 5:00 p.m.,
Pacific Time, on August 7, 2000, unless extended by EIX and EME in their sole
discretion. Capitalized terms used in this Circular have the meanings given to
them herein. An index of defined terms is attached as Attachment A to this
Circular.

The Date of this Circular is July 3, 2000.

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TABLE OF CONTENTS

 
   
   
  Page

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Summary   1
Risk Factors
 
4
Questions and Answers About the Exchange Offer
 
7
 
 
General
 
7
 
 
The Exchange Price
 
11
 
 
EIX Stock Equivalent Units
 
17
 
 
Other Provisions; Administration
 
21
 
 
Federal Income Tax and Social Security Consequences
 
23
 
 
Section 16 Consequences
 
26
 
 
Effect on Retirement Plan Benefits
 
26
Additional Information; Incorporation of Documents by Reference
 
27
Attachments:
 
 
 
 
A.
 
Index of Defined Terms
 
A-1
 
 
B.
 
Prospectus for EIX Equity Compensation Plan
 
B-1
 
 
C.
 
Form of SEU Award Certificate/Statememnt of Terms and Conditions
 
C-1
The following other documents are enclosed with this Circular:
 
 
 
 
A.
 
Your Individualized Statement.
 
 
 
 
B.
 
An Election Form and Release Agreement.
 
 
 
 
C.
 
If you may be eligible to elect a deferral, a package of deferred compensation
plan materials. See the response to Question 13 in this Circular.
 
 

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SUMMARY

        The Exchange Offer.    If you accept the Exchange Offer, your
outstanding Affiliate Options will terminate and EME will pay you cash and EIX
will grant you SEUs. You will be paid all in cash, however, if you are not an
employee of the Company on the Exchange Date. (The term "Company" is used in
this Circular to mean EIX, EME, and/or any other corporation or entity the
majority of the voting stock or voting power of which is owned, directly or
indirectly, by EIX, as the context requires.) Certain other special rules,
described in the response to Question 14 below, and generally not discussed in
this section, also apply if you are not an employee of the Company on the
Exchange Date. You should read that response if you hold Affiliate Options but
are no longer an employee of the Company. Even if you are currently employed by
the Company, you should read that response so that you are aware of the effects
that a termination of your employment before the Exchange Date would have on the
amount and time of payment of your Exchange consideration.

        The Exchange Date will be August 8, 2000; provided that the EIX Board of
Directors or its delegate determines that the conditions to the completion of
the Exchange, described below, have been satisfied on or before that date. If
the EIX Board of Directors or its delegate has not determined, on or before
August 8, 2000, that the conditions to the completion of the Exchange have been
satisfied, the Exchange Date will be the date that the EIX Board of Directors or
its delegate determines that the conditions to the completion of the Exchange
have been satisfied.

        The consideration being offered to you in the Exchange for each of your
outstanding Affiliate Options (the "Exchange Price") is calculated based on the
difference between $425 per unit underlying that Affiliate Option and the
Exercise Price applicable to that unit. For purposes of this Circular, the
"Exercise Price" of a unit is the year 2000 exercise price of that Affiliate
Option, as reflected in the chart in the response to Question 11 below. For
details of the Exchange Offer, see the "Questions and Answers about the Exchange
Offer" section of this Circular generally.

        Reasons for the Exchange Offer.    The EME Board of Directors, together
with the EIX Board of Directors, believes it is important that all managers and
employees of EIX and its affiliates share a common interest with the EIX
shareholders in the integrated operations of the enterprise as reflected in
EIX's common stock price. Because the operations of EME now contribute a
significant percentage of EIX's earnings and are increasingly reflected in the
trading price of EIX common stock, maintenance of a separate long-term incentive
award structure at EME is no longer considered by the EME and EIX Boards of
Directors to be necessary or desirable to motivate managers and employees of
EME. For a more detailed explanation of the reasons for the Exchange Offer, see
the response to Question 1 below. The decision to accept or reject the Exchange
Offer is entirely voluntary on your part. The EME and EIX Boards of Directors,
and the Company, make no recommendation as to whether you should accept or
reject the Exchange Offer. In making your decision, be sure to bear in mind the
factors described under "Risk Factors" below.

        Payment Terms.    As noted above, if you accept the Exchange Offer, the
Exchange Price to be paid to you in exchange for your Affiliate Options will
consist of a cash component and, with certain exceptions noted below, SEUs. All
payments will be subject to applicable tax withholding requirements.

        SEUs.    $50.00 of the Exchange Price per unit will be granted to you in
the form of SEUs if you are employed by the Company on the Exchange Date. The
balance of the Exchange Price will be paid to you in cash as described below. If
you are not employed by the Company on the Exchange Date, the value otherwise to
be granted to you in SEUs also will be paid in cash.

        SEUs will be bookkeeping entries, the payment of which will be
determined with respect to the market value of an equivalent number of shares of
EIX common stock. Dividends on the corresponding shares of EIX common stock will
be treated as paid and reinvested in additional SEUs based on the then-market
price of EIX common stock.

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        The value of your SEUs will become payable to you on the first or third
anniversary of the Exchange Date, whichever you elect (unless you are eligible
and make a deferral election, as described below). To the extent that your SEUs
relate to unvested Affiliate Options, however, payment with respect to those
SEUs will not be made earlier than the date that the underlying Affiliate
Options would have vested had you not accepted the Exchange Offer.

        The SEUs are described below under "EIX Stock Equivalent Units" and in
the Prospectus attached to this Circular as Attachment B. You should read each
of those descriptions in its entirety.

        Cash Component.    The cash component of the Exchange Price generally
will be paid to you, with interest, on March 13, 2001 (unless you are eligible
and make a deferral election, as described below). To the extent the cash
component of the Exchange Price relates to unvested Affiliate Options, however,
payment of that portion of the Exchange Price and related interest will not be
made earlier than the date that the underlying Affiliate Options would have
vested had you not accepted the Exchange Offer.

        The cash component of the Exchange Price (to the extent not deferred, if
you are eligible and elect a deferral) will earn interest as follows: (1) the
portion that relates to vested Affiliate Options and Affiliate Options that are
scheduled to vest in January 2001 will earn interest at an annual rate of 6.3%
from the Exchange Date through the date of payment, and (2) the portion that
relates to Affiliate Options that are scheduled to vest in January 2002 or
January 2003 will earn interest at an annual rate equal to the 120% 10-Year
Rate, described below, from the Exchange Date through the date of payment.

        The 6.3% annual rate of interest is based on an average of short-term
rates of interest for primary issuances of certificates of deposit by major New
York banks. The "120% 10-Year Rate" is an annual rate of interest equal to 120%
of the 120-month average annual rate of 10-year U.S. Treasury Notes determined
as of October 15 of the preceding year. The 120% 10-Year Rate is 8% for the year
2000. The 120% 10-Year Rate is a long-term-based rate that applies to payments
that are expected to occur on or after March 13, 2001.

        Deferred Compensation Alternatives.    You may be eligible to elect that
your payments (including the value of your SEUs) be deferred under a new
deferred compensation plan. Eligibility for the deferred compensation plan is
described generally in the response to Question 13 below. This Circular
describes how the Exchange Price will be paid, if you accept the Exchange Offer
and the Exchange is completed, assuming that you do not make any deferral
election. If you are eligible and want to elect that all or a portion of your
payments be deferred, you should read this Circular and the Summary of Deferred
Compensation Alternatives document that was, if you are potentially eligible to
elect a deferral, included with this Circular. Your Individualized Statement
will indicate if you are not eligible to elect a deferral.

        Value of Your Affiliate Options.    The Exchange Price has been
calculated to give a current value to all your Affiliate Options, whether vested
or unvested, based on the difference between $425 per underlying unit and the
Exercise Price applicable to that unit. This value has been assumed solely for
purposes of the Exchange Offer. For an explanation of the calculation of the
Exchange Price, see the response to Question 9 below. Your Individualized
Statement is included with this Circular and sets forth the consideration being
offered to you and how the amount of that consideration was calculated. Be sure
to read and confirm the information in your Individualized Statement.

        Treatment of Unvested Options.    Any component of the Exchange Price
payable to you with respect to the unvested portion of your 1998 and 1999
Affiliate Options (which are currently 50% and 25% vested, respectively) will
remain subject to a vesting schedule. The vesting schedule will reflect the
vesting schedule applicable to the exchanged Affiliate Options. The effect of
the vesting requirement is

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that the amount otherwise payable to you on March 13, 2001 (or, with respect to
the SEUs, on the first or third anniversary of the Exchange Date) with respect
to the unvested portion of your 1998 and 1999 Affiliate Options will be paid
only if and when that portion of your 1998 and 1999 Affiliate Options would have
vested had you not accepted the Exchange Offer. As noted above, if the payment
of the cash portion of the Exchange Price is delayed past March 13, 2001 because
it relates to unvested Affiliate Options, the unpaid amount will earn interest
at the 120% 10-Year Rate (as opposed to an annual rate of 6.3%) from the
Exchange Date through the date of payment. If the payment of SEUs is delayed
past the first anniversary of the Exchange Date, the value represented by the
unpaid SEUs will continue to be subject to changes in the market value of EIX
common stock. If your employment by the Company terminates, you will forfeit the
unpaid cash (and interest thereon) and unpaid SEUs that relate to your unvested
Affiliate Options to the same extent that you would have forfeited the Affiliate
Options had you not accepted the Exchange Offer. (See the response to Question
12 below.)

        Exchange of all Affiliate Options; Release.    To accept the Exchange
Offer, you must: (1) agree to exchange all of your outstanding Affiliate Options
for the Exchange Price; and (2) release all of your rights and remedies with
respect to all of your Affiliate Options except the right to receive the
Exchange Price as described in this Circular. Your release will be void if the
Exchange is not completed.

        Expiration Time.    The Exchange Offer will expire at 5:00 p.m., Pacific
Time, on August 7, 2000 (the "Expiration Time"), unless the Expiration Time is
extended by EIX and EME in their sole discretion. If you want to accept the
Exchange Offer for your outstanding Affiliate Options, your election to that
effect must be received by EME prior to the Expiration Time; otherwise, you will
be deemed to have rejected the Exchange Offer. Your election to accept or reject
the Exchange Offer must be made on the Election Form and Release Agreement
included with this Circular and will be irrevocable once it is made.

        Conditions to the Completion of the Exchange.    The completion of the
Exchange is subject to (1) acceptance of the Exchange Offer by Affiliate Option
holders entitled to receive at least 80% of the aggregate Exchange Price for all
outstanding EME Affiliate Options, and (2) receipt by the Board of Directors of
EIX of an opinion from its financial advisor supporting the conclusion that the
Exchange Offer is fair to EIX and its shareholders. The EIX and EME Boards of
Directors retain the right in their sole discretion to waive any or all of the
foregoing conditions. The Company may not withdraw the Exchange Offer, unless
one of the conditions described above is not satisfied. Similarly, if the
Exchange is completed, the Company may not later revoke or rescind the Exchange.

        Consequences of Not Accepting the Exchange Offer.    You may decline to
accept the Exchange Offer. If you do so, or if you do not timely return an
election to accept the Exchange Offer, your Affiliate Options will remain
outstanding on their terms and you will be subject to uncertainties and risks
going forward relating to the future valuation of Affiliate Options and the EIX
Board of Director's right to terminate your Affiliate Options for cash in an
amount that it determines to be "substantially equivalent in value" to the
Affiliate Options. For a description of these risks, see "Risk Factors" below
and the response to Question 8 below. You should read that section and that
response in their entirety. The EME and EIX Boards of Directors, and the
Company, make no recommendation as to whether you should accept or reject the
Exchange Offer.

        Additional Information.    After reading this Circular, if you have any
questions with respect to the Exchange Offer or your eligibility to defer all or
a portion of the Exchange Price if you accept the Exchange Offer, or if you
disagree with the data reflected in your Individualized Statement, please
contact EIX Executive Compensation. EIX Executive Compensation has established a
special Exchange Offer telephone line (626/302-5675) and e-mail address
(exchange@Edison.com) for you to use.

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RISK FACTORS

        The value of your Affiliate Options (in the 2000 or any future Affiliate
Option exercise window or should your Affiliate Options be cashed-out as
described below) may be greater or lesser than the Exchange Price.

        Valuation Risks.    The Exchange Price was determined in the manner and
based on the assumptions described in the response to Question 9 below. The
actual value of the EME portfolio could be less than, more than, or equal to the
net present value that has been assumed for purposes of calculating the Exchange
Price.

        Various estimates of the value of EME's portfolio have been prepared
recently using various assumptions as to future cash flows, financing costs,
discount rates and other factors. Some of these estimates are substantially
above the $4,245,000,000 net present value assumed for purposes of determining
the Exchange Price. The Company nevertheless believes that the Exchange Price is
appropriate as a means of accomplishing the objectives described above and
giving the optionees a choice so they could elect to obtain value certainty and
a potential upside for those who receive SEUs.

        Furthermore, the net present value used for determining the Exchange
Price should be viewed in the context of the alternative methods by which
optionees could receive payments on account of their options (future exercise
windows and/or a "cash out"). If you do not timely accept the Exchange Offer,
your risks will also be affected by whether the Affiliate Options are subject to
one or more window valuations, or whether the Board of Directors of EIX instead
decides to terminate your Affiliate Options and substitute cash in an amount
that it determines to be "substantially equivalent in value" for your Affiliate
Options. The risks associated with each alternative are discussed below.

        Exercise Windows.    If you do not timely accept the Exchange Offer,
your Affiliate Options will remain outstanding as described in the response to
Question 8 below. Depending upon the future activity of EME, the performance of
the plants owned by EME (particularly the 1999 merchant plants and Paiton),
whether EME acquires any new plants (and the performance of those plants), and
the timing of any election you make to exercise your Affiliate Options, the
value realized by you if you retain your Affiliate Options and do not
participate in the Exchange Offer could equal, be more than, or be less than the
Exchange Price. You should not assume that the merchant plants (i.e., plants
having a projected net present value that is not primarily derived from
long-term power plant purchase contracts) will be valued for purposes of the
2000 or any future exercise window (or for purposes of any cash-out, as
described below) at the same amount as the approximate value that has been
assumed for purposes of determining the Exchange Price. Indeed, these projects
may be valued at a lesser amount than the approximate value that has been
assumed for purposes of determining the Exchange Price.

        Phase-In of Project Valuation.    The Compensation and Executive
Personnel Committee of EIX (the "Committee") has the authority to administer the
Affiliate Options by the terms of the executive compensation plans under which
the Affiliate Options have been granted. For purposes of the 2000 and subsequent
exercise windows, the Committee has determined that, in respect to EME's 1999
and subsequent merchant plant acquisitions, the portion of each investment's net
present value attributable to cash flows from merchant sources ("Merchant NPV")
should be treated separately from the portion of the investment's net present
value attributable to cash flows from other sources. The Merchant NPV would be
phased into the portfolio valuation over a five-year period on a cumulative, 20%
per year, basis. These percentages would be applied to the Merchant NPV as
determined for that year. The Committee has also determined that, to count as
one of the five phase-in years for a particular investment, the investment's
cash flow from merchant sources must generally be at least 50% of the
investment's total cash flow for the year. The Committee has the discretion to
modify these guidelines on a general or project specific basis, including the
discretion to adopt a longer or shorter phase-in period and to reduce the level
of merchant cash flows required to consider a year as a phase-in year.

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        A five-year phase-in for the valuation of EME's 1999 merchant plant
investments (as described above) would result in the inclusion of a valuation
number for those investments in the 2000 exercise window that is less than the
valuation number assumed for purposes of determining the Exchange Price. This
does not necessarily mean, however, that the value that might ultimately be
included on account of those investments for exercise window purposes over the
duration of the phase-in period would be less than the value assumed for those
investments for purposes of determining the Exchange Price.

        Increasing Exercise Price.    The Exercise Price of outstanding
Affiliate Options will continue to escalate each year in accordance with the
terms of the Affiliate Options. Thus, if the net present value of the EME
portfolio as calculated for purposes of the exercise windows does not increase
at a rate that offsets the amount of the annual percentage increase in the
Exercise Price, the amount that you could realize by exercising your Affiliate
Options will decrease each year. Thus, you should balance the probability that
the net present value of the EME portfolio (as determined each year for exercise
window purposes) could increase from year to year, and the magnitude of any such
increases, against the annual Exercise Price increases.

        Cash-Out of Affiliate Options.    The Board of Directors of EIX has the
right, in its absolute discretion, to terminate your Affiliate Options and
substitute cash in an amount that it determines to be "substantially equivalent
in value" for the 1995-1999 Affiliate Options in accordance with the award
agreements for the 1994 Affiliate Options and the "Statement of Terms and
Conditions" applicable to the 1995-1999 Affiliate Options. The Board of
Directors has not made any decision, as of the date of this Circular, to
terminate Affiliate Options that remain outstanding after the Exchange and
substitute cash that it determines to be "substantially equivalent in value" for
the Affiliate Options. However, the Board could decide to take such action and
terminate your Affiliate Options before their scheduled termination date. A
cash-out could occur before or after the 2000 exercise window. The Exchange
Price for each unit used in the Exchange Offer is not necessarily "substantially
equivalent in value" for this purpose. If the EIX Board of Directors decides to
substitute cash that it determines to be "substantially equivalent in value" for
an outstanding Affiliate Option: (1) the value of the equivalent could be more
than, less than, or equal to the Exchange Price; and (2) there may be no
deferral opportunity (such as the deferral opportunity described in the response
to Question 13 below) available in such circumstances.

        No Assurances or Adjustments.    There can be no assurance that, upon a
subsequent exercise of your Affiliate Options or any cash-out thereof, you will
realize value for your Affiliate Options equal to or greater than the Exchange
Price. If you accept the Exchange Offer you release all of your rights with
respect to, and you will not be entitled to receive, any additional payment,
adjustment or other benefit should the value of EME increase in the future
(including if a greater value is used for purposes of any Affiliate Option
exercise window or for purposes of any other termination or settlement of
Affiliate Options).

        Termination of Employment.    In accordance with the terms of your
Affiliate Options, if your employment by the Company terminates due to any
reason other than your death, Retirement, or following your Total Disability (as
such terms are defined in the response to Question 12 below), your Affiliate
Options will remain outstanding no longer than through the end of the first
60-day exercise window that follows your termination. For example, if your
employment terminated (other than for the reasons noted above) before the 2000
exercise window, you would have to exercise your Affiliate Options in the 2000
exercise window or they would terminate unexercised. As noted above, the value
of the EME portfolio in the 2000 exercise window may be less than the value that
has been assumed for purposes of the Exchange Offer. Thus, you must balance
(1) any possible value of the Affiliate Options in any future exercise window,
with (2) the Exchange Price and the chance that your employment could terminate
and you would have to exercise your Affiliate Options sooner than you anticipate
(possibly

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during an exercise window during which the value of your Affiliate Options is
less than the Exchange Price). If your employment by the Company terminates due
to your death, Retirement, or following your Total Disability, your Affiliate
Options generally provide that the vested Affiliate Options will remain
exercisable for the balance of their terms.

        Solvency of EME and EIX.    Your rights to the Exchange Price (including
any portion of the Exchange Price that you may elect to defer) are only those of
a general unsecured creditor of EME and EIX (EIX has guaranteed EME's payment
obligations). The payment of the Exchange Price (including any portion of the
Exchange Price that you may elect to defer) is subject to those entities'
continued solvency.

        The Release.    If you accept the Exchange Offer and the Exchange is
completed, your Affiliate Options terminate and, as described in more detail in
the response to Question 3 below, you release all of your rights with respect to
your Affiliate Options except the right to receive the Exchange Price.

        Earnings-Related Risk.    The cash portion of the Exchange Price will
earn interest for a period of time at an annual interest rate of 6.3%, or the
120% 10-Year Rate, as described above. The 6.3% rate is fixed. The 120% 10-Year
Rate is determined on an annual basis and fixed for that year. Interest rates on
the open market are subject to frequent increases or decreases. You must
therefore weigh the opportunity costs and benefits, in your own specific case,
between the following two alternatives: (1) accepting the Exchange Offer and
having interest credited on the cash portion of the Exchange Price at a fixed
rate of 6.3% or the annually-fixed 120% 10-Year Rate, as applicable, and
receiving a grant of SEUs (unless you are not employed by the Company on the
Exchange Date, in which case you will be paid the Exchange Price all in cash);
or (2) exercising your Affiliate Options (or holding them if and until they are
cashed-out) and investing the net after-tax proceeds in alternative investments,
which could produce a rate of return that is greater than or less than the
interest rate(s) applicable to the cash portion of the Exchange Price and any
return on your SEUs.

        Stock-Related Risks.    The economic effect of SEUs is similar to an
investment in EIX common stock. However, unlike a shareholder, you cannot sell
or pledge your SEUs and your SEUs do not carry any voting or other shareholder
rights.

        SEUs are non-transferable and illiquid and thus their "value" is at full
market risk until they are (1) paid out or (2) converted as described in the
Summary of Deferred Compensation Alternatives (if you are eligible to elect a
deferral). You may lose value to the extent of any decline in the fair market
value of the EIX common stock or its failure to increase at a rate commensurate
with lost opportunities. Neither appreciation nor return on your SEUs can be
assured.

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QUESTIONS AND ANSWERS

ABOUT THE EXCHANGE OFFER

        Generally, the topics discussed in this section assume that (1) you will
be employed by the Company on the Exchange Date, and (2) you do not elect a
deferral. Certain special rules, described in the response to Question 14 below
and generally not discussed in this section, apply if you are not an employee of
the Company on the Exchange Date. You should read that response if you hold
Affiliate Options but are no longer an employee of the Company. Even if you are
currently an employee of the Company, you should read that response so that you
are aware of the effects that a termination of your employment before the
Exchange Date would have on the amount and time of payment of the Exchange
Price. Your ability to elect a deferral under the deferred compensation plan,
and the consequences of such a deferral, are described in the response to
Question 13 below and in the Summary of Deferred Compensation Alternatives
document referenced in that response.

General

1.Why are EME and EIX making the Exchange Offer?

The Boards of Directors of EME and EIX have determined that the Affiliate
Options, while appropriate during the establishment and initial expansion of
EME's business, have since become inconsistent with the best interests of EIX
and its shareholders. Among the factors considered by the Boards of Directors in
approving the Exchange Offer were the following:

•The future success of EME and EIX depends on the managers and employees of EME
sharing a common interest with EIX shareholders, as reflected in the price of
EIX common stock.

•In 1999, EME had consolidated income of $130 million, representing 20.9% of
EIX's consolidated income. At December 31, 1999, it had consolidated total
assets of $15.534 billion, representing 42.9% of EIX's consolidated total
assets. Unlike the situation when the Affiliate Options were first granted, the
earnings from EME now constitute a significant portion of EIX's consolidated
income, so that the prevailing trading price of EIX common stock is
significantly affected by EME's operations. Maintenance of a separate long-term
incentive award structure at the EME level is therefore no longer thought by the
Boards of Directors of EIX and EME to be necessary or desirable to motivate
EME's managers and employees.

•The variable accounting treatment accorded the Affiliate Options causes
substantial earnings charges for EIX that could be avoided through certain other
incentive compensation plan structures (such as the grant of stock options).

•Administration of the Affiliate Options is expensive and consumes a large
amount of time and resources of management and employee benefit plan
administrators.

For these reasons, the Boards of Directors have concluded that a current
exchange of the outstanding Affiliate Options is in the best interests of EME
and EIX and have authorized the implementation of the Exchange Offer.

2.How can I accept the Exchange Offer?

You may accept, under the terms and subject to the conditions set forth herein,
the Exchange Offer at any time prior to the Expiration Time. If you accept the
Exchange Offer, you accept it with respect to all of your outstanding Affiliate
Options. You may not accept the Exchange Offer with respect to only a portion of
your Affiliate Options.

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To accept the Exchange Offer, you must: (1) sign and date the Election Form and
Release Agreement included with this Circular (also referred to as the "Election
Form"); (2) indicate on the Election Form that you accept the Exchange Offer and
agree to the terms of the release set forth in the Election Form; and (3) mail,
telecopy, or hand deliver the Election Form to EME at the following address for
receipt prior to the Expiration Time:

Attn: Lynn Gardner, Vice President
Edison Mission Energy
18101 Von Karman Avenue, Suite 1700
Irvine, California 92612-1046
Facsimile: (949) 263-9162

If the Election Form is signed by trustees, executors, administrators,
guardians, attorneys-in-fact or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and unless waived by
EME, submit evidence satisfactory to EME of their authority to act in this
capacity.

Your election to accept or reject the Exchange Offer is irrevocable by you once
your Election Form is filed.

If you are employed in a non-U.S. jurisdiction, your Election Form (or a
supplement thereto) may contain other terms and conditions, not described in
this Circular, that will apply if you accept the Exchange Offer. Be sure to read
your Election Form.

3.What is the release that is set forth in the Election Form?

By signing your Election Form and indicating that you accept the Exchange Offer,
you agree to the provisions of a release set forth in Section D of the Election
Form. The release will operate as an unconditional release by you and your
trustees, executors, administrators, guardians, attorneys-in-fact or others
acting in a fiduciary or representative capacity of all rights and remedies
relating to all of your Affiliate Options. That is, by agreeing to the release
you agree that your Affiliate Options, and all of your rights with respect to
your Affiliate Options, automatically terminate on the Exchange Date. (Of
course, your right to receive payment of the Exchange Price is not being
waived.) For example and without limiting the generality of the release, if you
accept the Exchange Offer you release all of your rights with respect to, and
you will not be entitled to receive, any additional payment, adjustment or other
benefit should the value of EME increase in the future (including if a greater
value is used for purposes of any Affiliate Option exercise window or for
purposes of any other termination or settlement of Affiliate Options).

By signing your Election Form, you also agree that any dispute or controversy
related to or arising out of the Exchange will be submitted to arbitration in
accordance with the terms set forth in Section E of the Election Form.

4.What happens if I accept the Exchange Offer and the Exchange is completed?

If you decide to accept the Exchange Offer and timely return a valid Election
Form to that effect, and the other conditions to the completion of the Exchange
described herein have been satisfied, the Exchange Price will be credited to you
on the Exchange Date as described in the next paragraph. You will have no
further rights with respect to your Affiliate Options. The Company will sign and
return a copy of your Election Form to you after the Exchange Date to evidence
the completion of the Exchange.

$50.00 of the Exchange Price per unit will be granted to you in the form of
SEUs, as described in the response to Question 10 below. All SEUs will be issued
under the EIX Equity Compensation Plan (the "ECP"). For more information on the
SEUs, see the "EIX

8

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Stock Equivalent Units" section below and the Prospectus attached to this
Circular as Attachment B. The remainder of the Exchange Price for your Affiliate
Options will be paid to you in cash on March 13, 2001 (except as described in
the next paragraph or if you are eligible and make a deferral election).

As described above under "Summary—Treatment of Unvested Options," any component
of the Exchange Price payable to you with respect to the unvested portion of
your 1998 and 1999 Affiliate Options will remain subject to the vesting schedule
applicable to the unvested portion of your exchanged Affiliate Options and will
not be paid earlier than the applicable vesting date.

5.Can the Exchange Offer be revoked?

No. If you accept the Exchange Offer, the completion of the Exchange and the
payment of the Exchange price will be a binding obligation of EIX and EME,
subject only to the conditions set forth above under "Summary—Conditions to the
Completion of the Exchange." You will be notified if and when the EIX Board of
Directors or its delegate determines that the conditions to the Exchange have
been satisfied. The Company may not revoke or withdraw the Exchange Offer,
unless one of the described conditions to the Exchange is not satisfied.
Similarly, if the conditions to the Exchange have been satisfied, the Company
may not later revoke or rescind the Exchange. If the conditions to the Exchange
are not satisfied by August 31, 2000, you will be given an opportunity to
withdraw your election to accept the Exchange Offer, if you have made such an
election.

If you accept the Exchange Offer and the Exchange is completed, the amount or
payment of the Exchange Price will not be subject to future EIX or EME
performance, EME asset performance, or changes in macroeconomic conditions;
except: (1) the Company's payment obligations are subject to the solvency of EIX
and EME as described under "Risk Factors" above, (2) the value represented by
outstanding SEUs will fluctuate with changes in the market price of EIX common
stock and any changes in EIX's dividend policy, and (3) changes in market
interest rates will affect the annual determination of the 120% 10-Year Rate.

6.Do the terms of my Affiliate Options apply to the Exchange?

No. The Exchange Offer is made outside the scope of any Company incentive
compensation plan. The terms of any such plan and your Affiliate Options
therefore do not apply to the Exchange Offer or to the payment of the Exchange
Price. The SEUs will, however, be granted under and subject to the terms of the
ECP.

7.What happens if I accept the Exchange Offer but the Exchange is not completed?

If you accept the Exchange Offer but the Exchange is not completed, the release
that you gave in accepting the Exchange Offer will be void and your Affiliate
Options will remain outstanding in accordance with their terms.

If you do not accept the Exchange Offer, or if the Exchange is not completed,
EME reserves the right in its sole discretion to purchase or make exchange
offers for Affiliate Options outstanding subsequent to the Expiration Time, or
otherwise terminate such Affiliate Options in accordance with their terms. At
this time, no decision has been made whether to do so. The terms of any such
purchases, offers or terminations could differ from the terms of the Exchange
Offer. Also see the response to Question 8 below.

8.What will happen to my Affiliate Options if I do not accept the Exchange
Offer?

Voluntary Nature of Participation.    Participation in the Exchange Offer is
entirely voluntary. You should consult with your legal, financial and tax
advisors in making your decision on what

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action to take, and neither the Boards of Directors of EME and EIX, nor the
Company, takes a position with respect to the advisability in your particular
case of the Exchange Offer. If you do not accept the Exchange Offer, your
Affiliate Options will remain outstanding until such time as (1) you exercise
your Affiliate Options in accordance with their terms; (2) the Board of
Directors of EIX, in its absolute discretion, decides to terminate your
Affiliate Options and substitute cash in an amount that it determines to be
"substantially equivalent in value" for your Affiliate Options in accordance
with the "Statement of Terms and Conditions" applicable to your Affiliate
Options; or (3) your Affiliate Options terminate in accordance with their terms
or your agreement. The Board of Directors has not made any decision, as of the
date of this Circular, to terminate Affiliate Options that remain outstanding
after the Exchange and substitute cash that it determines to be "substantially
equivalent in value" for the Affiliate Options. The Exchange Price for each unit
used in the Exchange Offer (i.e., $425 less the Exercise Price applicable to
that unit) is not necessarily "substantially equivalent in value" for this
purpose. If the EIX Board of Directors decides to substitute cash that it
determines to be "substantially equivalent in value" for an outstanding
Affiliate Option, the value of the equivalent could be more or less than the
Exchange Price.

Future Exercise Payments.    Affiliate Options that remain outstanding after the
Exchange can still be exercised, to the extent then vested, in any future window
period. However, the Board of Directors of EIX retains the right, in its
absolute discretion, to terminate your Affiliate Options and substitute cash in
an amount that it determines to be "substantially equivalent in value" for your
Affiliate Options. There can be no assurance that, upon a subsequent exercise of
your Affiliate Options or any cash-out thereof by the Board of Directors, you
will realize value for your Affiliate Options equal to or greater than the
Exchange Price.

The Committee has the authority to administer the Affiliate Options by the terms
of the executive compensation plans under which the Affiliate Options have been
granted. For purposes of the 2000 and subsequent exercise windows, the Committee
has determined that, in respect to EME's 1999 and subsequent merchant plant
acquisitions, the Merchant NPV should be treated separately from the portion of
the investment's net present value attributable to cash flows from other
sources. The Merchant NPV would be phased into the portfolio valuation over a
five-year period on a cumulative, 20% per year, basis. These percentages would
be applied to the Merchant NPV as determined for that year. The Committee has
also determined that, to count as one of the five phase-in years for a
particular investment, the investment's cash flow from merchant sources must
generally be at least 50% of the investment's total cash flow for the year. The
Committee has the discretion to modify these guidelines on a general or project
specific basis, including the discretion to adopt a longer or shorter phase-in
period and to reduce the level of merchant cash flows required to consider a
year as a phase-in year.

A five-year phase-in for the valuation of EME's 1999 merchant investments (as
described above) would result in the inclusion of a valuation number for those
investments in the 2000 exercise window that is less than the valuation number
assumed for purposes of determining the Exchange Price. This does not
necessarily mean, however, that the value that might ultimately be included on
account of those investments for exercise window purposes over the duration of
the phase-in period would be less than the value assumed for those investments
for purposes of determining the Exchange Price.

In any event, you should not assume that the merchant plants will be valued for
purposes of any future exercise window at the same amount as the approximate
value that has been assumed for purposes of determining the Exchange Price.
Indeed, these projects may be valued at a lesser amount (before or after giving
effect to the phase-in) than the approximate value that has been assumed for
purposes of determining the Exchange Price. Similarly, the

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other projects in the EME portfolio (including Paiton) will be revalued each
year for any Affiliate Options that remain outstanding after the Exchange.
Assuming no other changes, a lower valuation of the projects in the EME
portfolio would reduce the amount payable upon an exercise of your Affiliate
Options.

In addition, the Exercise Price of outstanding Affiliate Options will continue
to escalate each year in accordance with the terms of the Affiliate Options.

The Exchange Price

9.How has the aggregate Exchange Price applicable to my Affiliate Options been
calculated?

If you timely accept the Exchange Offer, and the other conditions to the
completion of the Exchange described herein have been satisfied, you will be
entitled to receive the Exchange Price, as set forth herein. The Exchange Price
was determined as follows:

The starting point was the January 1, 1999 valuation of the EME portfolio used
for the 1999 exercise window ($3,068,250,000). A 9% rate of appreciation was
applied to the January 1, 1999 valuation through December 31, 1999, producing a
total of $3,344,390,000. Next, this appreciated value was subject to the
following adjustments for purposes of determining the Exchange Price:

•an increase of $199 million with respect to ISAB;

•an increase of $109 million with respect to Doga;

•a decrease of $150 million with respect to Paiton;

•an increase of $112 million for the 4 Star adjustment;

•an increase of $100 million for the SRAC adjustment; and

•an increase of $31 million for certain other project developments after
January 1, 1999.

Thus, solely for purposes of determining the Exchange Price, the appreciated net
present value of the EME portfolio is assumed to be $3,745,390,000.

Next, the $3,745,390,000 value was increased by $500 million to give an
approximate net present value to the 1999 merchant plants (Homer City, the
Illinois plants, Contact Energy, and the Fiddler's Ferry and Ferrybridge
merchant plants). The $500 million value assigned to the 1999 merchant plants
was solely for purposes of the Exchange Offer and (1) is based on a review of
events that occurred and information available through the date of this
Circular, and (2) reflects a determination that there are substantially higher
uncertainties with respect to approximating the net present values of those
plants than there are for other elements of the EME portfolio. Thus, solely for
purposes of determining the Exchange Price, the appreciated net present value of
the EME portfolio is assumed to be $4,245,390,000
($3,745,390,000 + $500 million).

The Affiliate Option program for EME assumes that EME has 10,000,000
hypothetical or "phantom" ownership units outstanding. Thus, the $4,245,390,000
valuation creates a per unit value, rounded to the nearest whole dollar, of $425
($4,245,390,000 divided by 10,000,000). The per Affiliate Option consideration
being offered in the Exchange Offer is therefore based on the difference between
the per unit value of $425 and the Exercise Price applicable to that unit.

11

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10.If the Exchange is completed, how will the components of the Exchange Price
payable to me be determined?

SEUs.    If you are employed by the Company on the Exchange Date, $50.00 of the
Exchange Price per unit will be granted to you in the form of SEUs. The $50.00
per unit amount relates to the approximate value of the 1999 merchant plants
assumed for purposes of the Exchange Offer as follows: $500 million divided by
the 10,000,000 units assumed to be outstanding equals $50.00 per unit.

The number of SEUs granted to you will equal $50.00 per unit divided by $20.50.
$20.50 was the closing price of a share of EIX common stock on June 30, 2000 on
the New York Stock Exchange.

The percentage of the Exchange Price granted to you in SEUs will vary depending
on the number and grant date of the Affiliate Options you hold, and the value of
these SEUs will rise and fall with fluctuations in the price of the underlying
shares of EIX common stock and any changes in EIX's dividend policy.

The value of your SEUs will be paid to you, as described in more detail in the
responses to Questions 21 and 22 below, on the first or third anniversary of the
Exchange Date, whichever you elect (except as noted in the response to Question
4 above with respect to the SEUs that relate to unvested Affiliate Options, or
if you are eligible and make a deferral election).

Cash Payments.    The balance of the Exchange Price (the total Exchange Price
less the $50.00 per unit to be granted in the form of SEUs) will be paid to you
in a lump-sum on March 13, 2001 (except as noted in the response to Question 4
above with respect to the portion that relates to unvested Affiliate Options, or
if you are eligible and make a deferral election).

The cash component of the Exchange Price will earn interest as follows: (1) the
portion that relates to vested Affiliate Options and Affiliate Options that are
scheduled to vest in January 2001 (which portion will be paid in March 2001)
will earn interest at an annual rate of 6.3% from the Exchange Date through the
date of payment, and (2) the portion that relates to Affiliate Options that are
scheduled to vest and be paid in January 2002 or January 2003 will earn interest
at an annual rate equal to the 120% 10-Year Rate from the Exchange Date through
the date of payment.

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11.How would the Exchange Offer work for a hypothetical Affiliate Optionee?

Set forth below is an illustration of how the Exchange Offer would operate for a
hypothetical Affiliate Optionee employed by the Company on the Exchange Date.
See your Individualized Statement for the calculation of the consideration being
offered you.

Year of Award

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  1994

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  1995

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  1996

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  1997

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  1998

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  1999

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  Total

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Total Award     500 units     1,000 units     1,000 units     750 units     750
units     500 units     4,500 units Exercised     0     0     0     0     0    
0     0 Cancelled     0     0     0     0     0     0     0 Now Vested     500
units     1,000 units     1,000 units     750 units     375 units     125 units
    3,750 units Now Unvested     0     0     0     0     375 units     375 units
    750 units Year 2000 Exercise Price   $ 169.2742   $ 154.2317   $ 181.0666  
$ 226.6772   $ 313.8153   $ 334.4392     N/A Per Unit Value Assumed for Exchange
Offer   $ 425.00   $ 425.00   $ 425.00   $ 425.00   $ 425.00   $ 425.00     N/A
Exchange Price/Unit   $ 255.7258   $ 270.7683   $ 243.9334   $ 198.3228   $
111.1847   $ 90.5608     N/A Aggregate Exchange Price(1)   $ 127,862.90   $
270,768.30   $ 243,933.40   $ 148,742.10   $ 83,388.53   $ 45,280.40   $
919,975.63 Vested Portion to be Granted in SEUs ($50.00 per Unit)(2)   $
25,000.00   $ 50,000.00   $ 50,000.00   $ 37,500.00   $ 18,750.00   $ 6,250.00  
$ 187,500.00 Vested Portion Payable in Cash   $ 102,862.90   $ 220,768.30   $
193,933.40   $ 111,242.10   $ 22,944.27   $ 5,070.10   $ 656,821.07 Total Vested
Portion of Exchange Price   $ 127,862.90   $ 270,768.30   $ 243,933.40   $
148,742.10   $ 41,694.27   $ 11,320.10   $ 844,321.07   Unvested Portion to be
Granted in SEUs ($50.00 per Unit)                           $ 18,750.00 (3) $
18,750.00 (4) $ 37,500.00   Unvested Portion Payable in Cash                    
      $ 22,944.26 (5) $ 15,210.30 (6) $ 38,154.56   Total Unvested Portion of
Exchange Price                           $ 41,694.26   $ 33,960.30   $ 75,654.56

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(1)The aggregate Exchange Price ($919,975.63) would be payable as follows:

•$50.00 of the Exchange Price per unit will be granted in the form of SEUs. With
4,500 units, the Affiliate Optionee would receive $225,000.00 of the Exchange
Price in the form of SEUs ($187,500.00 attributable to vested units plus
$37,500.00 attributable to unvested units). The actual number of SEUs to be
issued to the Affiliate Optionee would equal 10,975.61, which is $225,000.00
divided by $20.50 (as described in the response to Question 10 above).

•The remainder of the Exchange Price, $694,975.63 ($656,821.07 attributable to
vested units plus $38,154.56 attributable to unvested units), would be paid in
cash on March 13, 2001 (except as described below with respect to the portion
that relates to unvested Affiliate Options, or if the Affiliate Optionee was
eligible and elected a deferral). (2)As indicated in Note 1, above, the
Affiliate Optionee would be granted a total of 10,975.61 SEUs. The vested
portion of the Exchange Price to be granted in the form of SEUs is $187,500.00.
Thus, 9,146.34 ($187,500.00 divided by $20.50) of the Affiliate Optionee's SEUs
relate to vested Affiliate Options and would be vested on the Exchange Date.

(3)The portion of the Exchange Price attributable to the unvested 1998 Affiliate
Options and to be granted in the form of SEUs is $18,750.00. Thus, 914.64
($18,750.00 divided by $20.50) of the Affiliate Optionee's SEUs relate to the
unvested portion of the 1998 Affiliate Options. Those SEUs are scheduled to vest
in two equal installments on January 2, 2001 and January 2, 2002. The vesting
dates correspond to the remaining scheduled vesting dates of the 1998 Affiliate
Options.

(4)The portion of the Exchange Price attributable to the unvested 1999 Affiliate
Options and to be granted in the form of SEUs is $18,750.00. Thus, 914.63
($18,750.00 divided by $20.50) of the Affiliate Optionee's SEUs relate to the
unvested portion of the 1999 Affiliate Options. Those SEUs are scheduled to vest
in three equal installments on January 2, 2001, January 2, 2002 and January 2,
2003. The vesting dates correspond to the remaining scheduled vesting dates of
the 1999 Affiliate Options.

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(5)The cash portion of the Exchange Price attributable to the unvested 1998
Affiliate Options is $22,944.26. Of this amount, $11,472.13 (50%) is scheduled
to vest on January 2, 2001 and be paid on March 13, 2001, and $11,472.13 (50%)
is scheduled to vest and be paid on January 2, 2002. The vesting dates
correspond to the remaining scheduled vesting dates of the 1998 Affiliate
Options.

(6)The cash portion of the Exchange Price attributable to the unvested 1999
Affiliate Options is $15,210.30. Of this amount, $5,070.10 (1/3) is schedule to
vest on January 2, 2001 and be paid on March 13, 2001, $5,070.10 (1/3) is
scheduled to vest and be paid on January 2, 2002, and $5,070.10 (1/3) is
scheduled to vest and be paid on January 2, 2003. The vesting dates correspond
to the remaining scheduled vesting dates of the 1999 Affiliate Options.

The following example illustrates how the Company will pay the Exchange Price to
the hypothetical Affiliate Optionee referenced in the above chart.

For Example:    This example assumes that the Affiliate Optionee was not
eligible or did not elect to make a deferral election. If you are eligible and
want to elect a deferral, examples that include the effects of a deferral
election are contained in the Summary of Deferred Compensation Alternatives. For
ease of illustration, this example ignores the effects of tax withholding. (See
the responses to Question 36 below for information on the effects of tax
withholding.) Note that "scheduled" payments would not be made if the Affiliate
Optionee's employment terminated and such amounts were not vested or did not
vest in connection with the termination.

•The Affiliate Optionee will be paid $656,821.07 (plus interest at 6.3% from the
Exchange Date through the date of payment) on March 13, 2001. This amount
represents the cash portion of the Exchange Price that is vested on the Exchange
Date.

•$16,542.23 (plus interest at 6.3% from the Exchange Date through the date of
payment) is scheduled to vest in January 2001 and also be paid on March 13, 2001
(in addition to the $656,821.07 described above). This amount represents the
cash portion of the Exchange Price attributable to the January 2001 vesting
installments of the Affiliate Optionee's 1998 and 1999 Affiliate Options
($11,472.13 + $5,070.10 = $16,542.23).

•$16,542.23 (plus interest at the 120% 10-Year Rate from the Exchange Date
through the date of payment) is scheduled to vest and be paid on January 2,
2002. This amount represents the cash portion of the Exchange Price attributable
to the January 2002 vesting installments of the Affiliate Optionee's 1998 and
1999 Affiliate Options ($11,472.13 + $5,070.10 = $16,542.23).

•$5,070.10 (plus interest at the 120% 10-Year Rate from the Exchange Date
through the date of payment) is scheduled to vest and be paid on January 2,
2003. This amount represents the cash portion of the Exchange Price attributable
to the January 2003 vesting installment of the Affiliate Optionee's 1999
Affiliate Options.

•EIX will grant 10,975.61 SEUs to the Affiliate Optionee on the Exchange Date.
This number is determined by dividing $225,000.00 (the total portion of the
Exchange Price to be granted in the form of SEUs, or $187,500.00 + $37,500.00)
by $20.50. As indicated in Notes 2, 3, and 4 above, the SEUs will remain subject
to the same vesting schedule as the related Affiliate Options. As described in
more detail below under "EIX Stock Equivalent Units," vested SEUs generally will
become payable on the first or third anniversary of the Exchange Date, whichever
the Affiliate Optionee elected.

14

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12.What happens if I accept the Exchange Offer and my employment terminates
after the Exchange Date?

The following rules apply if you accept the Exchange Offer and your employment
by the Company terminates after the Exchange Date:

(1)If your employment terminates due to your Retirement, Total Disability, or
death you will become vested in a pro rata portion of the cash payable and SEUs
that are attributable to your unvested Affiliate Options (the Affiliate Options
provide for pro rata vesting in connection with Retirement, Total Disability, or
death), and you will forfeit the remaining unvested amounts and unvested SEUs;

(2)If your employment by the Company terminates for any other reason, you will
forfeit the cash payable that was attributable to your unvested Affiliate
Options and the unvested SEUs attributable to your unvested Affiliate Options
(for this purpose, your unvested Affiliate Options are those Affiliate Options
that, had they remained outstanding after the Exchange, would not have vested
prior to the termination of your employment);

(3)Any portion of the cash component of the Exchange Price that vests in
connection with the termination of your employment will be paid following the
later of March 13, 2001 or a date no later than 60 days after your employment
terminates; and

(4)The value of your vested SEUs will be paid as described in the response to
Question 21 below.

For purposes of the Exchange, "Retirement" or "Retire" generally means that you
terminate employment with the Company at age 55 or later with at least five
years of service to the Company. For purposes of the Exchange, EIX's Benefits
Committee will determine whether you are "Totally Disabled" in its discretion.

If you are entitled to pro rata vesting, you will become vested in an additional
cash portion of the Exchange Price so that the aggregate cash portion of the
Exchange Price that you are vested in, and the total number of SEUs that you are
vested in, with respect to Affiliate Options granted for a particular year
equals X%, where X is obtained by dividing (1) the completed months that have
elapsed between the date those Affiliate Options were granted and the date that
your employment by the Company terminates, by (2) 48.

The Affiliate Options also provide for automatic vesting in connection with
certain mergers, consolidations or other corporate events if a "Distribution
Date" occurs under the Rights Agreement approved by the EIX Board of Directors
on November 20, 1996, as amended. The Exchange Price also will become fully
vested in such events if a "Distribution Date" occurs under such Rights
Agreement.

13.Can I elect a deferral?

Certain persons may be eligible to elect that all or a portion of the cash
component of the Exchange Price be deferred under a deferred compensation plan,
and/or that the payment of their SEUs be deferred under a deferred compensation
plan. If EIX and EME determined that you may be eligible to elect a deferral,
you were given a copy of the Summary of Deferred Compensation Alternatives
document with your copy of this Circular. If you are eligible, you should read
the Summary of Deferred Compensation Alternatives before you elect a deferral.
That summary describes the deferred compensation plan and the effect that a
deferral election will have on the payment of the Exchange Price.

EIX and EME had to limit eligibility for the deferred compensation plan because
of applicable requirements under the Employee Retirement Income Security Act of
1974, as

15

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amended ("ERISA"). Your Individualized Statement will indicate if you are not
eligible to participate in the deferred compensation plan.

There is a second test, required under applicable securities laws, that you also
must satisfy if you want to elect a deferral. This test requires that, to be
eligible to make a deferral election, you must (1) have individual income in
excess of $200,000 in each of the two most recent years or joint income with
your spouse in excess of $300,000 in each of the two most recent years and
reasonably expect to reach the same level this year, or (2) have an individual
net worth or a joint net worth with your spouse in excess of $1,000,000. These
requirements are described in more detail in the Summary of Deferred
Compensation Alternatives.

EIX's and EME's determination of whether you are eligible to elect a deferral
was based solely on the ERISA test. Even if EIX and EME determined that you are
eligible under the ERISA test and gave you a copy of the Summary of Deferred
Compensation Alternatives, the Company has made no determination of whether you
satisfy the securities law requirement for eligibility described above. Thus,
even if it was determined that you are eligible, you must attest when you elect
a deferral to the fact that you satisfy one of the above income or net worth
requirements under the securities test; otherwise, your deferral election will
not be effective.

16

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14.What special rules apply if I am not employed by the Company on the Exchange
Date?

The following special rules apply if you accept the Exchange Offer and you are
not employed by the Company on the Exchange Date:

•Your outstanding Affiliate Options will terminate and you will only be paid for
your Affiliate Options that vested prior to the termination of your employment
and, if your employment by the Company terminated due to your Retirement, Total
Disability, or death, for any Affiliate Options that vested in connection with
the termination of your employment.

•You will be paid the Exchange Price all in cash.

•$50.00 of the Exchange Price per vested unit (plus interest at an annual rate
of 6.3% from the Exchange Date through the date of payment) will be paid on the
first anniversary of the Exchange Date (expected to be August 8, 2001). $50.00
is the portion of the Exchange Price per unit that otherwise would have been
granted in the form of SEUs. The first anniversary of the Exchange Date is the
earliest date that your SEUs would have been paid had you been granted SEUs.

•The balance of the Exchange Price for your vested units (plus interest at an
annual rate of 6.3% from the Exchange Date through the date of payment) will be
paid on March 13, 2001.

•You may make a deferral election, if you are otherwise eligible as described in
the response to Question 13, only if your employment by the Company terminated
due to your Retirement or Total Disability. If you are eligible and elect a
deferral, the portion of the Exchange Price that you elect to defer will be
credited under, and will begin to earn interest at the rate described in the
Summary of Deferred Compensation Alternatives, as of the Exchange Date.

EIX Stock Equivalent Units

EIX maintains the ECP to provide participants with a financial incentive that
reinforces and recognizes long-term corporate, organizational and individual
performance and accomplishments. Persons who accept the Exchange Offer and who
are employed by the Company on the Exchange Date will receive a portion of their
consideration in the form of a grant of SEUs under the ECP. Generally, an SEU is
a non-voting unit of measurement that is deemed for bookkeeping purposes to be
equivalent to one outstanding share of EIX common stock. When an SEU becomes
payable, the holder will be paid a cash amount determined with reference to the
then fair market value of a share of EIX common stock, as described in the
response to Question 22 below.

This section provides important information regarding the SEUs to be granted as
part of the Exchange Offer. The information presented in this section is
qualified in its entirety by the more detailed information set forth in the form
of SEU Award Certificate and SEU Statement of Terms and Conditions that will
evidence each grant of SEUs (collectively, the "Award Certificate") and by the
more detailed information set forth in the ECP. A copy of the ECP is included in
the Prospectus attached as Attachment B to this Circular. A copy of the Award
Certificate is attached as Attachment C to this Circular.

The ECP or the Award Certificate controls if any discrepancy exists between the
information presented in this Circular with respect to the SEUs and the terms of
the ECP or the Award Certificate.

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15.Can I opt out of the SEUs or elect that a greater portion of my Exchange
Offer consideration be granted in the form of SEUs?

No. If you accept the Exchange Offer, the number of SEUs that you will be
granted per unit is fixed and will be calculated as described in the response to
Question 10 above. You may not elect to receive cash or other benefits in lieu
of the SEUs. Similarly, you may not elect to increase the portion of your
Exchange Offer consideration that will be granted in the form of SEUs.

16.What is an SEU?

An SEU is a bookkeeping entry and evidences a right to receive a cash payment
determined with reference to the fair market value of a share of EIX common
stock, as described in the response to Question 22 below. This right, however,
is subject to certain terms and conditions contained in the applicable Award
Certificate and generally described in this Circular. The time of payment of
your SEUs is described in the response to Question 21 below.

In accordance with the ECP, the Committee, to the extent it deems equitable and
appropriate, may adjust the number of SEUs referenced in an award in the event
of certain reorganizations, mergers, combinations, consolidations,
recapitalizations, stock splits, stock dividends, reverse stock splits, stock
consolidations and other similar events that change the number or kind of shares
of EIX common stock outstanding.

17.How are SEUs credited?

EIX will maintain a SEU bookkeeping account for each participant who accepts the
Exchange Offer. Your SEUs will be credited to the bookkeeping account maintained
in your name.

18.Will dividend equivalents be credited on the SEUs credited to my account?

Yes. SEUs accrue dividend equivalents as EIX declares dividends on its common
stock. Dividend equivalents are credited on the ex-dividend date, based on the
average of the high and low prices of a share of EIX common stock on the New
York Stock Exchange on that date, in the form of additional SEUs to your
account.

For Example:    Assume that you have 1,000 SEUs. Assume that EIX declares a
$0.25 cash dividend per share of its common stock and that the ex-dividend date
average of the high and low prices of a share of EIX common stock on the New
York Stock Exchange is $25. Your account will be credited, on the ex-dividend
date, with an additional 10 SEUs (1,000 SEUs multiplied by $0.25 equals $250;
$250 divided by the share value of $25 equals 10).

SEUs credited as dividend equivalents are subject to the same vesting schedule
as your other SEUs.

19.When will the SEUs vest?

To the extent that your SEUs relate to vested Affiliate Options, your SEUs will
be vested on the Exchange Date. To the extent that your SEUs relate to unvested
Affiliate Options, your SEUs will be subject to the same vesting schedule as the
underlying Affiliate Option. If your employment terminates due to your
Retirement, death, or following your Total Disability, you will be entitled to
pro rata vesting as described in the response to Question 12 above. You will
forfeit the SEUs to the extent that they are not vested (or do not become
vested) in such circumstances. If your employment terminates for any other
reason, you will forfeit your SEUs to the extent that they are not vested.

For Example:    If you Retire on July 15, 2001, you would be only 62.5% vested
in your 1999 Affiliate Options. If you accept the Exchange Offer and Retire on
July 15, 2001, a

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total of 62.5% of the SEUs that relate to your 1999 Affiliate Options will be
vested. You will forfeit the remainder. (This rule also would apply to your SEUs
that relate to 1998 Affiliate Options, except that you would be 87.5% vested in
your 1998 Affiliate Options if you Retired on July 15, 2001. Your Affiliate
Options from 1997 or earlier are fully vested. Therefore, your SEUs related to
those Affiliate Options will be fully vested on the Exchange Date.)

20.Do I have to make an SEU payment election?

Yes. The value of your vested SEUs generally will become payable on the first or
third anniversary of the Exchange Date, whichever you elect (unless you are
eligible and make an SEU deferral election). You must indicate your SEU payment
election on your Election Form at the time you accept the Exchange Offer. If you
do not make an election on your Election Form, you will be deemed to have
elected payment on (or as soon as administratively practical after) the third
anniversary of the Exchange Date. For tax reasons, you may not change your
election after your Election Form is filed.

The effect of electing a third anniversary payment is that the value of your
SEUs will continue to be subject to changes in the market value of EIX common
stock for a longer period of time, and you will defer taxation for a longer
period of time, than if you had elected a first anniversary payment.

21.When will the value of my SEUs be paid?

Subject to the exceptions described below, the value of your vested SEUs will be
paid as soon as administratively practical after the first or third anniversary
of the Exchange Date, whichever you elect. In addition, the payment rules
described in this response are subject to any SEU deferral election that you may
make (if you are eligible to defer payment of your SEUs).

To the extent that your SEUs relate to unvested Affiliate Options, the value of
your SEUs will not be paid until the date that the underlying Affiliate Options
would have vested had you not accepted the Exchange Offer.

The termination of your employment could trigger payment of your SEUs earlier
than the payment date that you elected. If your employment terminates before the
first anniversary of the Exchange Date, the value of your vested SEUs will
become payable on the first anniversary of the Exchange Date. If your employment
terminates on or after the first anniversary of the Exchange Date, the value of
your vested outstanding SEUs will become payable on the date your employment
terminates.

The following examples illustrate these payment rules.

Example (1):    Assume that you are granted 1,200 SEUs. 900 are attributable to
vested Affiliate Options and are vested on the Exchange Date. 300 are
attributable to unvested Affiliate Options and are scheduled to vest as follows:
200 are scheduled to vest on January 2, 2001, 50 are scheduled to vest on
January 2, 2002, and 50 are scheduled to vest on January 2, 2003. Assuming that
you remain employed by the Company through the applicable vesting dates and that
you elect a first anniversary payout, your 1,100 vested SEUs (the 900 vested on
the Exchange Date plus the 200 that are scheduled to vest on January 2, 2001)
would become payable on the first anniversary of the Exchange Date, the 50 SEUs
that are scheduled to vest on January 2, 2002 would become payable on that date,
and the 50 SEUs that are scheduled to vest on January 2, 2003 would become
payable on that date.

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Example (2):    Assume the same facts as in Example (1) except that you elect a
third anniversary payout. In this case, all 1,200 SEUs would become payable on
the third anniversary of the Exchange Date.

Example (3):    Assume the same facts as in Example (1) except that you elect a
first anniversary payout and your employment terminates prior to the first
anniversary of the Exchange Date. In this case, your vested SEUs (900 plus an
additional 200 if you are employed through January 2, 2001) would become payable
on the first anniversary of the Exchange Date.

Example (4):    Assume the same facts as in Example (1) except that that you
elect a third anniversary payout but that your employment terminates February 1,
2002. Your 1,150 vested SEUs (900, plus the 200 that are scheduled to vest on
January 2, 2001, plus the 50 that are scheduled to vest on January 2, 2002)
would become payable following the date your employment terminated.

22.How is an SEU payment calculated?

An SEU represents the right to receive a payment determined with respect to the
fair market value of a share of EIX common stock (less required tax
withholding). The amount that you will be paid for each of your SEUs that vests
will equal the "Per SEU Payment Amount" determined at the time the SEU becomes
payable. You have no further right with respect to an SEU once you receive
payment with respect to that SEU.

Fixed Vesting Date.    If payment of your SEUs is triggered by a fixed payment
or vesting date (the first or third anniversary of the Exchange Date or the
scheduled vesting date of the underlying Affiliate Option), the Per SEU Payment
Amount equals: (1) the sum of the daily average of the high and low trading
prices of a share of EIX common stock on the New York Stock Exchange for each of
the 20 trading days preceding the payment trigger date; (2) divided by 20.
Payment will actually be made on or as soon as administratively practicable
after the payment trigger date.

For Example:    Assume that you elect a first anniversary payment, that 1,000 of
your SEUs are vested on the first anniversary of the Exchange Date, and that the
Per SEU Payment Amount is $25 on that date. The Company will make a lump-sum
cash payment of $25,000 (1,000 multiplied by $25), less required tax
withholding, to you on or as soon as administratively practicable after that
date.

Termination of Employment.    If vesting and payment of your SEUs is triggered
by the termination of your employment with the Company after the first
anniversary of the Exchange Date, the Per SEU Payment Amount will equal the
average of the high and low prices of a share of EIX common stock on the New
York Stock Exchange on the date your employment terminates (or, if that day is
not a trading day, determined as of the immediately preceding trading day).
Payment will actually be made as soon as administratively practicable after the
date your employment terminates.

23.Do my SEUs carry any shareholder rights?

No. Your SEU rights are only those contractual rights evidenced by your SEU
Award Certificate. You have no rights as a shareholder of the Company with
respect to your SEUs (including, without limitation, dividend and voting rights,
except to the extent that dividend equivalent rights have been provided as
discussed in this section of the Circular). You have no rights as a holder of an
SEU to participate in or affect (without limitation): (1) the management or
control of the Company, (2) fundamental changes in the business or existence of
the Company, or (3) the issuance of additional securities by the Company.

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The Company does not, with respect to the ECP and SEUs, have or assume any trust
or fiduciary relationship of any kind with any SEU holder.

24.Is the ECP a "qualified" plan?

No. The ECP is not subject to ERISA and is not qualified under Section 401(a) of
the Internal Revenue Code of 1986, as amended.

25.Can the ECP be amended or terminated?

EIX generally may amend the ECP at any time. Generally, you must consent to any
amendment (other than an adjustment described in the next sentence) that is
materially adverse to your rights or benefits under your SEUs. EIX may, without
your consent, adjust your SEUs after they have been granted in certain
circumstances (for example, in connection with stock splits, exchanges of stock,
mergers and other reorganizations or extraordinary corporate transactions).

26.How will the SEUs be administered?

The Committee administers the ECP. The EIX Board of Directors appoints the
members of the Committee and has the right to change the membership of the
Committee at any time. The Committee has the authority to make and enforce all
rules and regulations for the administration of the ECP and to decide or resolve
any and all questions, including interpretations of the ECP, as may arise in
connection with the ECP.

Decisions of the Committee with respect to the ECP and/or amounts payable under
the ECP are final, conclusive and binding on all parties.

Other Provisions; Administration

27.Can I name a beneficiary?

Yes. You may name a beneficiary to receive any portion of the Exchange Price
that is payable to you in the event of your death. You can name any individual
or entity you wish as your beneficiary, subject to your spouse's consent if you
are married and do not name your spouse as your sole primary beneficiary. Your
beneficiary designation must be on a form approved by the Committee. If you do
not name a beneficiary, your beneficiary will be your surviving spouse, if your
spouse survives you; otherwise, your beneficiary will be your estate.

You may change your beneficiary designation by filing a new beneficiary
designation form with the Committee, subject to the spousal consent requirement
described above. The Committee will rely on the last valid beneficiary
designation that you file and it receives before the date of your death.

A beneficiary designation form is included with this Circular. Additional
beneficiary designation forms are available from EIX Executive Compensation at
the telephone number or e-mail address given on page 4, or at (626) 302-1025 or
(626) 302-7568.

Your beneficiary designation will automatically be revoked if you marry or
divorce after the date of the designation (unless, in the case of marriage, your
new spouse was already named as your sole primary beneficiary or, in the case of
divorce, your prior spouse was not named as a beneficiary). Therefore, you
should file a new beneficiary designation following either of such events.

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28.What happens if I die before EME pays me the cash component of the Exchange
Price and/or before my SEUs are paid?

If you accept the Exchange Offer and you die before payment of the cash portion
of the Exchange Price and/or before the value of your SEUs are paid, EME will
pay your beneficiary the vested amount that you would otherwise be paid.

29.Can I transfer my right to payment or my SEUs?

You generally cannot transfer your rights to payment or your SEUs. Payment of
the cash portion of the Exchange Price and any payment with respect to your SEUs
will be made only to you or (1) in the event of your divorce, to your spouse
pursuant to a domestic relations order that requires payment be made to your
spouse, or (2) if you die, to your estate.

30.Does the Company have any right to further delay the payment of the Exchange
Price or the payment with respect to my SEUs?

The Company may delay the date of your payment if you are an officer described
in the next paragraph and the Company's ability to deduct its payment to you
would otherwise be lost.

The Company's ability to deduct compensation in excess of $1 million per year to
certain of its officers is limited by Section 162(m) of the Internal Revenue
Code. Section 162(m) is, however, very limited in its application. It generally
only applies to an officer in a year in which the officer constitutes one of the
five EIX executive officers whose compensation is listed in the Proxy Statement
prepared for the following year. These five persons may be officers of an EIX
affiliate in some circumstances.

If the Committee determines that the Company's ability to deduct amounts
otherwise payable to one of these five officers in a year is or reasonably could
be limited by Section 162(m) because the officer is or reasonably could be a
Section 162(m) officer (as described above) in that year, the Company may delay
the payment to that officer until a year in which the Committee determines that
the Company's tax deduction for that amount is not or is not reasonably expected
to be limited by Section 162(m). If the payment is deferred, the deferred amount
will earn interest at an annual rate equal to the 120% 10-Year Rate.

31.Does the Exchange Offer give me any rights to continued employment by the
Company?

No. The Exchange Offer does not have any effect on your employment status or
give you any rights to continued employment with the Company or its affiliates.

32.How do I make a claim for payment?

If you accept the Exchange Offer, you generally will not have to take any other
actions to receive the consideration payable to you. If, however, you believe
that you are being denied a benefit to which you are entitled to, you should
file a written request with the Committee. The request should set forth the
reasons for your claim. Any communication to the Committee should be sent to the
Committee, care of EIX's Secretary to the following address:

Corporate Secretary, Edison International
2244 Walnut Grove Avenue, P.O. Box 800
Rosemead, California 91170

Claims also may be submitted to arbitration as provided in the Election Form and
in the SEU Award Certificate.

33.Who pays the costs of administering the Exchange?

The Company pays the expenses of administering the Exchange and the SEUs.

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Federal Income Tax and Social Security Consequences

        Questions 34 through 38 below discuss the material United States federal
income tax and Social Security considerations that relate to the Exchange.
Question 39 comments on state, local and foreign tax matters. This section does
not address the effects of a deferral election, if you are eligible and make a
deferral election. If you are eligible to make a deferral election, see the
Summary of Deferred Compensation Alternatives for the tax consequences of a
deferral.

The information in this section has been prepared based on the advice of the
Company's tax advisors. The Company cannot and does not guarantee any particular
tax consequences. You should consult your own tax advisors.

The Company may withhold any amounts required by law (including U.S. federal,
state or local, or foreign, income, employment or other taxes) to be withheld
from amounts credited in respect of the SEUs or payments of the Exchange Price.
In the event that the Company does not elect for any reason to withhold amounts
necessary to satisfy any applicable tax withholding obligations that arise, the
Company may withhold such amounts from compensation otherwise payable to you or
you must pay or provide for the payment of such amounts to the Company. The
amount of tax withheld by the Company may not be sufficient to pay the actual
tax liability due, and you will be responsible for any shortfall.

34.If I accept the Exchange Offer, what will be the tax consequences of the cash
component of the Exchange Price?

The cash portion of the Exchange Price, including interest paid by EME on the
cash portion, will be taxable as ordinary income in the year that it is paid to
you. You will pay federal income tax based on the tax rates in effect for the
year in which you receive a payment, rather than based on the tax rates in
effect for the year 2000.

35.What is the income tax effect of the SEU grants?

The portion of the Exchange Price granted to you in the form of SEUs will not be
taxed for income tax purposes until the year in which payment is actually made
with respect to your SEUs. In addition, additional SEUs credited as dividend
equivalents will not be taxed in the year that they are credited.

You will recognize taxable income when the value of your SEUs (including SEUs
credited as dividend equivalents) is paid in cash. The amount of income that you
recognize will equal the amount of cash that you receive and it will constitute
ordinary income, not capital gain.

You will pay federal income tax based on the tax rates in effect for the year in
which you receive a payment, rather than based on the tax rates in effect for
the year 2000.

36.What are the tax withholding requirements with respect to the payments?

General Tax Withholding Rules.    The Federal Insurance Contributions Act
("FICA") imposes two types of taxes—Social Security tax (at 6.2%) and Medicare
tax (at 1.45%)—on both employers and employees for wages paid to employees. The
Social Security tax is a percentage of wages up to the Social Security wage base
limitation, which is $76,200 for the year 2000. The Social Security wage base is
adjusted annually. Once you have paid Social Security tax for a given year on an
amount of wages from a particular employer equal to the wage base limitation, no
further Social Security tax is payable on that year's wages from that employer.
Currently, there is no wage base limitation for Medicare tax purposes. Thus, all
wages paid to you are subject to Medicare tax.

Income tax withholding is also required on wages paid to employees. The Company
will withhold federal income taxes from payments of the Exercise Price at the
supplemental wage withholding rate (currently 28%). State and local income tax
withholding also may be

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required, depending on your state of employment. For purposes of the following
illustration, the state tax withholding rate is assumed to be 6%. (The
California supplemental wage withholding rate is 6%.)

The Exchange Price (including interest paid by EME on the cash portion and any
amounts attributable to appreciation in the value of your SEUs) will be treated
as wages received for FICA and income tax purposes. Income taxes will be
withheld at the time(s) of payment. FICA taxes also will be withheld at the
time(s) of payment, except as noted below under "Special FICA Withholding Rule."

For Example:    Assume that $1,000,000 of the Exchange Price (including
interest) becomes payable to you on March 13, 2001. The actual amount paid to
you will be approximately $640,775.60. This amount represents the $1,000,000,
less Social Security tax at 6.2% up to the wage base limitation ($4,724.40,
assuming the wage base limitation is the same as in 2000 and had not been offset
by other compensation paid to you in 2001), Medicare tax at 1.45% ($14,500),
federal income taxes at 28% ($280,000), and state income taxes at an assumed
rate of 6% ($60,000). This example assumes no other state or local tax
withholding is required. The actual amount of your payment would be less if
other withholding was required.

The cash portion of your 2002 and 2003 vesting installments of the Exchange
Price, and (except as noted below) any payment with respect to SEUs, also
generally will be subject to tax withholding, at the time of payment, in the
manner described above.

Special FICA Withholding Rule.    A special FICA tax withholding rule applies
with respect to: (1) SEUs that are vested on the Exchange Date; (2) any other
SEUs that become vested in 2000 (for example, in connection with your
termination of employment due to your death, Retirement, or following your Total
Disability); and (3) if you elect a third anniversary payment date for your SEUs
(see the response to Question 20 above), any of your SEUs that become vested in
2001 or 2002. SEUs that are vested on the Exchange Date or that become vested in
2000 will be subject to FICA tax withholding in 2000 (but will not be subject to
income tax withholding until the value of the SEUs becomes payable). If you
elect a third anniversary payment date for your SEUs, any of your SEUs that
become vested in 2001 or 2002 will be subject to FICA tax withholding in 2001 or
2002, respectively (but will not be subject to income tax withholding until the
value of the SEUs becomes payable). Any of your SEUs that become vested in 2003,
and any of your SEUs that become vested in 2001 or 2002 if you elect a first
anniversary payment date for your SEUs, are subject to the general income and
FICA tax withholding rules described under "General Tax Withholding Rules"
above.

For Example:    You are vested in 1,000 SEUs on the Exchange Date. You are
subject to FICA tax on the value of 1,000 SEUs in the year 2000. If the average
of the high and low prices of a share of EIX common stock on the last day
preceding the date that tax withholding occurs is $25, you will recognize
$25,000 of taxable income in 2000 for FICA purposes. Any payment with respect to
those SEUs will be subject to income tax withholding as described in the general
tax withholding rules described above, but will not be subject to additional
FICA tax withholding.

A tax rule allows the Company to elect to defer the date that FICA taxes are
triggered with respect to your vested SEUs from the vesting date to December 31
of the year of vesting. The Company expects that it will satisfy its FICA tax
withholding obligation with respect to your SEUs that are vested on the Exchange
Date or that vest in 2000 by reducing the number of your outstanding vested SEUs
by a number equal in value to the amount of the withholding obligation. The
reduction to the number of your vested SEUs will, however, be treated as a

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taxable distribution to you that, as illustrated below, will also be subject to
income tax withholding.

For Example:    Using the facts of the last example, you are subject to FICA tax
on the value of 1,000 SEUs on December 31, 2000. If the average of the high and
low prices of a share of EIX common stock on December 31, 2000 is $25, you will
recognize $25,000 of taxable income at that time for FICA purposes. The required
FICA withholding will equal $362.50 (this amount is calculated at a rate of
1.45% and assumes that you had reached the Social Security wage base limitation
for 2000). The Company will satisfy its withholding obligation by reducing the
number of your outstanding vested SEUs by the required withholding amount. As
noted above, the reduction to the number of your vested SEUs will be treated as
a taxable distribution to you that will also be subject to income tax
withholding. Therefore, the actual amount required to be withheld will be
greater than $362.50 and will equal (1) the original $362.50, plus (2) the
income tax withholding due with respect to the reduction of your SEUs. The
actual withholding amount will be approximately $549.24 (assuming a federal
withholding rate of 28% and a state withholding rate of 6%) and will be ordinary
taxable income to you. If the average of the high and low prices of a share of
EIX common stock on December 31, 2000 is $25, the Company will reduce your
outstanding vested SEUs by 21.9696 units ($549.24 divided by $25) and you will
continue to hold 978.0304 vested SEUs. (Note that if you had not reached the
Social Security wage base limitation, the Company would also withhold Social
Security tax (at 6.2%) until the limitation had been reached, which would
increase the amount required to be withheld.) Any payment with respect to the
978.0304 SEUs will be subject to income tax withholding, but will not be subject
to additional FICA tax withholding, at the time of payment.

To the extent that the Company is required to withhold FICA taxes with respect
to any of your SEUs that become vested in 2001 or 2002, the Company will settle
the withholding amount, to the extent possible, by reducing any portion of the
Exchange Price that is then payable to you in cash. To the extent that the
Company cannot satisfy the withholding obligation in that manner, it will reduce
the number of your outstanding SEUs, as described above, to the extent necessary
to satisfy the withholding obligation.

The Company fully expects to satisfy its tax withholding obligations in the
manner described above. Thus, the Company's tax withholding obligations
(1) should not affect other compensation payable by the Company to you, and
(2) should not require you to make a payment to the Company.

37.Are amounts paid to my beneficiary taxable to my beneficiary?

Any amounts payable to your beneficiary upon or following your death are taxable
to your beneficiary as income and, under certain circumstances, may be subject
to estate taxes as part of your estate. Your tax advisor can provide you with
more information on this topic.

38.Could a change in tax law affect my benefits?

Yes. The foregoing discussion is based on current law. Congress may change the
relevant tax and Social Security law at any time, and such changes may be
retroactive to before the date of enactment. Such changes may have a material
effect on the benefit you expect to receive.

For example, Congress may change the rates of federal income tax in the future.
If federal income tax rates increase, you may pay more income tax when amounts
are paid than you would have if those amounts had been taxed currently.

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39.What are (1) the local income tax and (2) the foreign income tax consequences
of my payments and the SEUs?

EIX and EME are unaware of any state and local income tax consequences in the
United States of the payment of the Exchange Price (including the grant and
payment of SEUs) that differ from the United States federal income tax
consequences described above.

EIX and EME are unaware of any foreign jurisdiction (other than Singapore, as
noted below) in which you may now be employed by EME in which the income tax
consequences to you in that country would be different than those United States
federal income tax consequences described above. Taxation is, however, different
in Singapore. EIX and EME are distributing a supplement to this Circular to
participants who are employed in Singapore.

Section 16 Consequences

40.What are the Section 16 reporting and matching liability consequences of the
SEUs?

Under Section 16 of the Securities Exchange Act of 1934, as amended, an insider
is required to report the acquisition of SEUs (on Form 4 or 5), the granting of
additional SEUs as dividend equivalents (on Form 4 or Form 5), any forfeiture of
SEUs (on Form 4 or 5), and the payment of SEUs (on Form 4). Executive officers
of EIX and members of the EIX Board of Directors are considered "insiders." An
executive officer of an EIX affiliate may be deemed an EIX executive officer,
and therefore considered an insider, for this purpose.

The grant, forfeiture and/or payment of SEUs (including dividend equivalent
SEUs) should be exempt from Section 16 matching liability. SEU payment elections
contemplated by the Exchange Offer should also be exempt from Section 16
matching liability. If you are an insider, and you are eligible and elect a
deferral of your SEUs, you should also read the Section 16 discussion in the
Summary of Deferred Compensation Alternatives.

EIX has implemented a compliance program to assist insiders with their reporting
obligations and avoidance of Section 16 liability. You may contact the EIX
Corporate Secretary if you are uncertain whether EIX considers you to be an
insider. However, compliance with Section 16 is the sole responsibility of the
individual insider, and you should contact your personal attorney as
appropriate.

Effect on Retirement Plan Benefits

41.If I accept the Exchange Offer, how will the payment of the Exchange Price
affect my benefits under Company-sponsored retirement plans?

It will not. Income that you would have recognized if you had exercised your
Affiliate Options in the ordinary course would have been excluded from your
compensation for purposes of determining your benefits under other
Company-sponsored retirement plans. Similarly, income recognized in connection
with the Exchange will be excluded from your compensation for purposes of
determining your benefits under Company-sponsored retirement plans.

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ADDITIONAL INFORMATION;

INCORPORATION OF DOCUMENTS BY REFERENCE

        If you have any questions with respect to the Exchange Offer, the SEUs,
or any other matters discussed in this Circular, please contact EIX Executive
Compensation, at (626) 302-5675 (or e-mail EIX Executive Compensation at
exchange@Edison.com), or at the following address:

Executive Compensation
Edison International
2244 Walnut Grove Avenue, P.O. Box 800
Rosemead, California 91770

        After the Exchange Date, you may also contact EIX Executive Compensation
at (626) 302-1025 or (626) 302-7568.

        EIX and EME are reporting companies under the Securities Exchange Act of
1934, as amended, and are required to file periodic and other reports with the
Securities and Exchange Commission (the "SEC"). These reports include financial
material and other information about EIX and EME.

        The following documents filed by EIX with the SEC are incorporated by
reference into this Circular:

•EIX's Annual Report on Form 10-K for the year ended December 31, 1999; and

•EIX's Quarterly Report on Form 10-Q for the quarter ended March 31, 2000.

        The following documents filed by EME with the SEC are incorporated by
reference into this Circular:

•EME's Annual Report on Form 10-K for the year ended December 31, 1999, as
amended by EME's Form 10-K/A filed with the SEC on June 12, 2000; and

•EME's Quarterly Report on Form 10-Q for the quarter ended March 31, 2000.

        Copies of the foregoing reports can be inspected and copied at:

•the Public Reference Room of the SEC at 450 Fifth Street, N.W., Washington,
D.C. 20549;

•the SEC's Regional Office at 7 World Trade Center, 13th Floor, New York, New
York 10048; and

•the SEC Midwest Regional Office, CitiCorp Center, 500 West Madison, Suite 1400,
Chicago, Illinois 60061.

        Copies of such materials can also be obtained by mail at prescribed
rates from the Public Reference Section of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549.

        Reports, proxy statements and other information concerning EIX can also
be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, 18th Floor, New York, New York 1005, and at the offices of the Pacific
Stock Exchange, Inc., 301 Pine Street, San Francisco, California 94104.

        You also may view incorporated documents at the SEC's internet web site
at: http://www.sec.gov.

        You may also obtain without charge, upon oral or written request, a copy
of any document that has been incorporated by reference (except the exhibits to
any such document) into this Circular or any other report or document required
to be given to you under SEC Rule 428(b).

27

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        Please mail your written request for EIX documents to:

Law Department, Attn: Corporate Governance
Edison International
2244 Walnut Grove Avenue, P.O. Box 800
Rosemead, California 91770

        Please mail your written request for EME documents to:

Corporate Secretary
Edison Mission Energy
18101 Von Karman Avenue, Suite 1700
Irvine, California 92612

        Telephone requests may be directed to EIX Corporate Governance at
(626) 302-6816 or the EME Corporate Secretary at (949) 798-7895.

28

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ATTACHMENT A

INDEX OF DEFINED TERMS

 
  Page

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Affiliate Options   Cover page Award Certificate   22 Circular   Cover page
Committee   5 Company   1 ECP   11 EIX   Cover page Election Form   10 EME  
Cover page ERISA   20 Exchange   Cover page Exchange Date   1 Exchange Offer  
Cover page Exchange Price   1 Exercise Price   1 Expiration Time   3 FICA   29
Individualized Statement   Cover Page Per SEU Payment Amount   25
Retirement/Retire   19 SEC   34 SEU   Cover page Totally Disabled   19 120%
10-Year Rate   2

A-1

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ATTACHMENT B

PROSPECTUS FOR EIX EQUITY COMPENSATION PLAN

B-1

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[EDISON INTERNATIONAL LOGO]

EDISON INTERNATIONAL
EQUITY COMPENSATION PLAN

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PROSPECTUS

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THIS DOCUMENT CONSTITUTES PART OF A
PROSPECTUS COVERING SECURITIES THAT
HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933.

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Dated: April 17, 1998

B-2

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TABLE OF CONTENTS

 
  Page

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Description of the Plan   B-4   General   B-4   Securities Offered Through the
Plan   B-5   Eligibility and Award Determination   B-5 Description of Awards  
B-6   Statutory Stock Options   B-6     Tax Considerations   B-6   Nonqualified
Stock Options   B-7     Tax Considerations   B-8   Dividend Equivalents   B-8  
  Tax Considerations   B-8   Stock Appreciation Rights   B-9     Tax
Considerations   B-9   Performance Awards   B-10     Tax Considerations   B-10  
Stock Payment   B-10   Section 83 Tax Considerations   B-11 Award Gain Deferrals
  B-11 Administration of the Plan   B-11 Termination of Employment   B-12
Amendment and Termination of the Plan   B-12 Restrictions on Resale   B-13 Other
Terms and Conditions   B-13 Additional Matters   B-14

B-3

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DESCRIPTION OF THE PLAN

General

        The Edison International Board of Directors ("Board") has adopted,
subject to Edison International shareholder approval, the Edison International
Equity Compensation Plan (the "Plan"). The purpose of the Plan is to promote the
interests of Edison International and its shareholders by improving the
long-term financial and operational performance of Edison International and its
affiliated companies (collectively, the "Companies," and each individually, a
"Company") by providing eligible participants a financial incentive which
reinforces and recognizes long-term corporate, organizational and individual
performance and accomplishments. The Plan will help to attract, retain and
motivate qualified Directors and employees for the Companies by providing them
with competitive equity-based financial incentives that link their interests
with the interests of Edison International shareholders.

        If approved by the shareholders of Edison International, the Plan will
replace the Long-Term Incentive Compensation Program (the "Prior Program") which
was adopted by the shareholders in 1992 and consists of (1) the Officer
Long-Term Incentive Compensation Plan, (2) the Management Long-Term Incentive
Compensation Plan, and (3) the Director Incentive Compensation Plan. No new
awards will be made under the Prior Program after approval of the Plan by
shareholders; however, it will remain in effect as long as any awards remain
outstanding under the Prior Program.

        To accomplish its purposes, the Plan authorizes the granting of awards
("Awards") to Executive Officers and Key Management Employees of the Companies
in the following forms: (i) options to purchase shares of Edison International
Common Stock, which may be in the form of statutory or nonqualified stock
options, (ii) stock appreciation rights, (iii) performance awards, (iv) dividend
equivalents, and (v) stock payments. The Plan also authorizes awards to
Directors of stock grants or nonqualified stock options. The optional forms of
Awards and the tax effects associated with each of them are described below
under "Description of Awards."

        The Plan is subject to the reporting and disclosure requirements of the
Employee Retirement Income Security Act of 1974 and it is not qualified under
Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code").

        Capitalized terms used and not otherwise defined in this Prospectus will
have the meanings given them in the Plan. All of the descriptions of the terms
and conditions of the Plan contained in this Prospectus are qualified in their
entirety by the complete text of the Plan as modified or amended from time to
time in accordance with its terms.

        The Plan Administrator is the Compensation and Executive Personnel
Committee of the Board (excluding any member who would not be considered (i) an
"outside director" for purposes of Section 162(m) of the Code and the
regulations thereunder or (ii) a "non-employee director" within the meaning of
Rule 16b-3(b)(3) of the Securities Exchange Act of 1934 ("Exchange Act")).
Notwithstanding the foregoing, the Board is the Administrator with respect to
any Awards made to Directors. Company Management will select recipients of
Awards made to its participants other than those considered to be Edison
International Executive Officers under Section 16 of the Securities and Exchange
Act of 1934, as amended.

        The current members of the Compensation and Executive Personnel
Committee serving as the Plan Administrator are Charles D. Miller (Chair), Luis
G. Nogales, James M. Rosser, Robert H. Smith, Thomas C. Sutton and Daniel M.
Tellep. For additional information about the Plan and its administrators,
participants may write to Edison International Equity Compensation Plan, 2244
Walnut Grove Avenue, P.O. Box 800, Rosemead, California 91770; or an oral
inquiry may be made to the Director of Compensation and Benefits at
(626) 302-5023.

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Securities Offered Through the Plan

        Shares of Edison International Common Stock, no par value ("Common
Stock"), may be issued or transferred pursuant to Awards. To meet the
requirements of the Plan, the Board has authorized the annual issuance of shares
equal to one percent of the number of issued and outstanding shares of Common
Stock as of December 31 of the prior year. This authorization is cumulative so
that to the extent shares are not needed to meet Plan requirements in any year,
the excess authorized shares will carry over to subsequent years until Plan
termination. One percent of the issued and outstanding Common Stock on
December 31, 1997, was 3,757,644 shares. If any Award expires, is forfeited, is
canceled, or otherwise terminates for any reason (other than upon exercise or
payment), the shares of Common Stock (provided the participant receives no
benefit of ownership) or equivalent value that could have been delivered will
not be charged against the foregoing limitations and may again be made subject
to Awards.

        Except for the adjustments described below, or as otherwise provided in
"Amendment and Termination of the Plan" below, Awards of stock options to an
individual employee during any calendar year may not exceed 500,000 shares of
Common Stock. Stock grants to a Director during any calendar year may not exceed
2,500 shares of Common Stock, and awards of nonqualified stock options to a
Director during any calendar year may not exceed 12,500 shares.

        The number and kind of shares issuable pursuant to the Plan or subject
to outstanding Awards, and the price thereof, may be adjusted under certain
circumstances including an increase, decrease or exchange of the outstanding
shares of Common Stock, or if additional shares or new or different shares or
other securities are distributed with respect to such shares of Common Stock or
other securities, through a merger, consolidation, sale of assets,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other distribution with respect to such shares of Common
Stock or other securities. Outstanding Awards may also fully vest and become
immediately exercisable under certain circumstances, including a dissolution,
liquidation, reorganization, merger, consolidation or sale of assets, unless
provisions are made in connection with such transaction for the continuance of
the Plan and the assumption of or the substitution for such Awards of new awards
covering the stock of a successor employer corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and kind of
shares and prices. Any of the above-described adjustments will be made by the
Compensation and Executive Personnel Committee, whose determination as to what
adjustments will be made and the extent thereof will be final, binding and
conclusive. (See "Administration of the Plan" below.) Notwithstanding the
foregoing, upon a change of control of Edison International following the
occurrence of a Distribution Date, as that term is defined in the Rights
Agreement approved by the Board on November 20, 1996, the Awards will vest and
will remain exercisable for at least two years following the Distribution Date,
or through the first exercise period occurring at least two years after such
date. During that period, (i) the Plan may not be terminated, (ii) Awards may
not be cashed out, terminated, or modified without the participant's consent,
and (iii) valuation procedures and exercise periods will occur on a basis
consistent with past practice.

        The shares of Common Stock to be issued under the Plan will be made
available, at the discretion of Edison International, either from authorized but
unissued shares of Common Stock or from previously issued shares of Common Stock
reacquired by or on behalf of Edison International, including shares purchased
on the open market. The Board has authorized the Edison International Chief
Executive Officer or Chief Financial Officer (or such other person or persons as
they may designate) to make this determination.

Eligibility and Award Determination

        Executive Officers, Key Management Employees and non-employee Directors
are eligible to receive Awards under the Plan. The Administrator may grant any
Award except Stock Grants to

B-5

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eligible Executive Officers and Key Management Employees. The Administrator may
grant only Nonqualified Stock Options or Stock Grants to Directors. Each Award
will be evidenced by a written instrument specifying the date of grant and may
include or incorporate by reference any additional terms and conditions
consistent with the Plan as determined in the discretion of the Administrator.
The Administrator may grant any Award permitted under the Plan which is
otherwise payable in Common Stock in the form of a cash equivalent award.

        The Administrator has sole discretion under the Plan to determine the
type of Awards to be granted, the number of shares of Common Stock or the amount
of cash subject to Awards, and the prices of Awards. The Administrator will
allocate a portion of the total number of Awards authorized to be made to Key
Management Employees to each Company. The management of each Company will then
have the sole discretion to determine and designate from time-to-time the Key
Management Employees to whom Awards will be granted, the times at which the
Awards will be granted and the amount of the individual Awards. The
Administrator will determine those Executive Officers who are to be granted
Awards, the amount of any Award, and the times at which Awards will be granted.
Director Awards are determined in the discretion of the Board.

        Each participant in the Plan will receive an annual statement showing
the outstanding Awards made to the participant and other pertinent information.

DESCRIPTION OF AWARDS

        The Plan provide for various kinds of Awards to be made to eligible
participants in the discretion of the Administrator. These Awards and the tax
considerations relevant to each of them are discussed below.

Statutory Stock Options

        The Plan authorizes the Administrator to grant Statutory Stock Options.
A Statutory Stock Option (also known as an incentive stock option) is a stock
option that satisfies the requirements of Section 422 of the Code.

        Statutory Stock Options under the Plan will be for a term of not more
than 10 years after the date the Option is granted. Options become exercisable
as they vest in accordance with the terms determined by the Administrator. The
term of an Option is subject to the exceptions discussed under "Termination of
Employment" below.

        An Statutory Stock Option may be exercised in whole or in part by giving
written notice to Edison International. Payment of the exercise price of a
Statutory Stock Option must be made in full at the time of exercise in cash
and/or its equivalent, such as Common Stock, acceptable to Edison International.
If payment is made, in whole or part, in shares of Common Stock, the Common
Stock will be valued at its fair market value on the exercise date.

        The Plan provides that the option price per share of Common Stock will
be at least equal to the fair market value of a share of Common Stock on the
date of the grant. The option price is established by the Administrator. There
are currently no Statutory Stock Options outstanding under the Plan.

Tax Considerations

        To the extent that the aggregate fair market value of all shares of
Common Stock with respect to which Statutory Stock Options are exercisable for
the first time by an individual in any calendar year exceeds $100,000, such
Options will not be treated as Statutory Stock Options. This limit does not
apply to, or affect the amount of shares subject to, Nonqualified Stock Options
that may be granted to an individual.

B-6

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        A participant will not be treated as receiving taxable income upon the
grant of a Statutory Stock Option or upon the exercise of a Statutory Stock
Option pursuant to the terms of the Plan. However, any appreciation in Common
Stock value since the date of grant will be an item of tax preference at the
time of exercise in determining liability for the alternative minimum tax.
Provided that Common Stock acquired pursuant to a Statutory Stock Option is not
sold or otherwise disposed of within two years from the date of grant of the
Statutory Stock Option and is held for at least one year after the date of
exercise of the Statutory Stock Option, any gain or loss resulting from such
sale or disposition will be treated as long-term capital gain or loss. If Common
Stock acquired upon exercise of a Statutory Stock Option is disposed of prior to
the expiration of such holding periods, the optionee will realize ordinary
income in the year of such disposition in an amount equal to the excess of the
fair market value of the Common Stock on the date of exercise over the exercise
price. Any gain in excess of such ordinary income amount generally will be taxed
at capital gains rates. However, under a special rule, the ordinary income
realized upon a disqualifying disposition will not exceed the amount of the
optionee's gain upon such disposition.

        Common Stock acquired upon exercise of a Statutory Stock Option
following the optionee's death will, under certain circumstances, receive the
favorable tax treatment described herein without regard to the one-year or
two-year holding period requirements.

        In the event an optionee exercises a Statutory Stock Option using Common
Stock acquired by a previous exercise of a Statutory Stock Option, such exchange
will be deemed a premature disposition of the Common Stock exchanged unless the
Common Stock exchange occurs after the required holding periods.

        Edison International will not be entitled to any tax deduction as a
result of the grant or exercise of a Statutory Stock Option, or on a later
disposition of the Common Stock received, except that in the event of a
disqualifying disposition, Edison International will be entitled to a tax
deduction equal to the amount of ordinary income realized by the optionee.

Nonqualified Stock Options

        The Plan authorizes the Administrator to grant Nonqualified Stock
Options. A Nonqualified Stock Option is a stock option that does not qualify as
a Statutory Stock Option under Section 422 of the Code.

        Nonqualified Stock Options under the Plan will be for a term of not more
than 10 years after the date the Option is granted and become exercisable as
they vest in accordance with the terms determined by the Administrator. The term
of the Option is subject to the exceptions discussed under "Termination of
Employment" below.

        A Nonqualified Stock Option may be exercised in whole or in part by
giving written notice to Edison International. Payment of the exercise price of
an Nonqualified Stock Option must be made in full at the time of exercise in
cash and/or its equivalent, such as Common Stock, acceptable to Edison
International. If payment is made, in whole or part, in shares of Common Stock,
the Common Stock will be valued at its fair market value on the exercise date.
To the extent permitted by the terms and conditions of the Award, eligible
participants may alternatively exercise a Nonqualified Stock Option and have the
gain that would otherwise be realized upon exercise deferred in the form of
stock units under the Edison International Option Gain Deferral Program, subject
to the terms and conditions of that program. See the discussion below entitled
"Award Gain Deferrals".

        The Plan provides that the option price per share of Common Stock will
be at least equal to the fair market value of a share of Common Stock on the
date of the grant. The option price is established by the Administrator.

B-7

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Tax Considerations

        No taxable income will be realized by a participant upon the grant of a
Nonqualified Stock Option. Upon exercise of a Nonqualified Stock Option, the
optionee will realize ordinary income in an amount equal to the excess of the
fair market value of the Common Stock on the date of exercise over the option
price, and Edison International then will be entitled to a corresponding tax
deduction, provided Edison International deducts and withholds taxes from
amounts paid to the optionee. Eligible participants may alternatively exercise a
Nonqualified Stock Option and have the gain that would otherwise be realized and
taxable upon exercise deferred in the form of stock units under the Edison
International Option Gain Deferral Program, subject to the terms and conditions
of that program. See the discussion below entitled "Award Gain Deferrals".

        In the case of a participant subject to Section 16(b) of the Exchange
Act (see "Restrictions on Resale" below) who exercises a Nonqualified Stock
Option within six months of the date of grant, the Common Stock received is
generally treated as "restricted property" for purposes of Section 83 of the
Code. See "Section 83 Tax Considerations" for further information concerning the
tax treatment of restricted property and the rules to be followed in making an
election under Section 83(b) of the Code.

        Upon a subsequent disposition of Common Stock acquired through exercise
of a Nonqualified Stock Option, the participant will realize short-term or
long-term capital gain or loss to the extent of any intervening appreciation or
depreciation. However, Edison International will not be entitled to any further
tax deduction at that time.

Dividend Equivalents

        The Administrator is authorized to grant Dividend Equivalents under the
Plan, at no additional cost to the participant, based on the dividends declared
on the Common Stock on ex-dividend dates during the period between the date an
Award is granted and the date such award is exercised or paid. Dividend
Equivalents will be converted to cash or additional shares of Common Stock by
such formula and at such times as may be determined by the Administrator.
However, if the written instrument evidencing any Dividend Equivalent award
states that the Award will be paid in cash, the Award will be paid only in cash.
To the extent permitted by the terms and conditions of the Award, eligible
participants may alternatively exercise a Dividend Equivalent and have the gain
that would otherwise be realized upon exercise deferred under the Edison
International Executive Deferred Compensation Plan, subject to the terms and
conditions of that plan. See the discussion below entitled "Award Gain
Deferrals".

        Dividend Equivalents will be computed with respect to the number of
shares under the Award not issued during the period prior to the ex-dividend
date.

Tax Considerations

        A recipient of a Dividend Equivalent will not realize taxable income at
the time of grant, and Edison International will not be entitled to a tax
deduction at that time. Instead, the participant will realize ordinary income
when the Dividend Equivalent is received.

        If a Dividend Equivalent is payable in Common Stock pursuant to its
terms, the provisions of Section 16(b) of the Exchange Act may apply to any
Common Stock received (see "Restrictions on Resale" below). All or a portion of
the Common Stock received pursuant to a Dividend Equivalent award by a
participant subject to Section 16(b) is generally treated as "restricted
property" for purposes of Section 83 of the Code. See "Section 83 Tax
Considerations" for further information concerning the tax treatment of
restricted property and the rules to be followed in making an election under
Section 83(b).

B-8

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        To the extent permitted by the Award terms and conditions, eligible
participants may alternatively exercise a dividend equivalent and have the gain
that would otherwise be received in cash upon exercise deferred under the Edison
International Executive Deferred Compensation Plan, subject to the terms and
conditions of that plan. See the discussion below entitled "Award Gain
Deferrals".

        Edison International will be entitled to a tax deduction in the same
amount as and at the time that the participant recognizes the ordinary income.
However, to receive that deduction, Edison International must deduct and
withhold taxes from amounts paid to the participant.

        The amount included as ordinary income in the participant's taxable
income becomes the participant's tax basis for determining gains or losses on
the subsequent disposition of the Common Stock.

Stock Appreciation Rights

        The Administrator may award a Stock Appreciation Right ("SAR") under the
Plan in conjunction with any Option granted pursuant to the Plan. SARs may also
be granted separate from an Option. An SAR allows the participant to receive a
number of shares of Common Stock, or at the election of the Administrator, cash
or a combination of cash and shares of Common Stock, based on the increase in
the fair market value of the Option shares subject to the SAR or based on the
increase in the fair market value of the shares used to measure the SAR. If an
SAR is issued in connection with an Option, the exercise of either the Option or
the SAR will reduce the shares of Common Stock subject to the remaining SAR or
Option.

        An SAR granted in connection with an Option entitles the participant to
surrender the Option unexercised, or any portion thereof, in exchange for the
number of shares of Common Stock having an aggregate value equal to the excess
of the fair market value of one share on the date the SAR is exercised, over the
purchase price per share specified in the Option, times the number of shares
called for in the Option, or portion thereof, so surrendered. Upon exercise of
an SAR issued independently of an Option, the participant will receive payment
in the same manner as described for an SAR issued pursuant to an Option, unless
Fair Market Value is used or if the Administrator specified another measure to
be used.

        SARs may be subject to any conditions as the Administrator may impose
not inconsistent with the Plan, including the limitation that an SAR granted
pursuant to an Option will be exercisable only to the extent the underlying
Option is exercisable.

Tax Considerations

        At the time an SAR is received, the participant will not recognize any
taxable income. Likewise, Edison International will not be entitled to a tax
deduction for the SAR. Upon the exercise of an SAR, the participant must
recognize ordinary income in an amount equal to the cash and the fair market
value of the shares received.

        All or a portion of any Common Stock received by participants who are
subject to Section 16(b) of the Exchange Act (see "Restrictions on Resale"
below) upon exercise of an SAR is generally treated as "restricted property" for
purposes of Section 83 of the Code. See "Section 83 Tax Considerations" below
for further information concerning the tax treatment of restricted property and
the rules to be followed in making an election under Section 83(b).

        Edison International will be entitled to a tax deduction in the same
amount as and at the time that the participant recognizes the ordinary income.
However, to receive that tax deduction Edison International must deduct and
withhold taxes from amounts paid to the participant.

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        The amount included as ordinary income in the participant's taxable
income becomes the participant's tax basis for determining gains or losses on
the subsequent disposition of such Common Stock.

Performance Awards

        The Administrator may approve Performance Awards to eligible
participants under the Plan. The Awards may be based on Common Stock performance
over a period determined in advance by the Administrator, on hypothetical stock
of a Company or any other measures as determined appropriate by the
Administrator. At the end of the award period, payment will be made in cash
unless replaced by payment in full or in part by Common Stock as determined by
the Administrator. To the extent permitted by the Award terms and conditions,
eligible participants may alternatively exercise a Performance Award and have
the gain that would otherwise be realized upon exercise deferred under the
Edison International Executive Deferred Compensation Plan, subject to the terms
and conditions of that plan. See the discussion below entitled "Award Gain
Deferrals".

Tax Considerations

        A participant who has been granted a Performance Award will not realize
taxable income at the time of grant, and Edison International will not be
entitled to a tax deduction at that time. The participant must recognize
ordinary income in an amount equal to the cash and the fair market value of the
shares at the time of receipt. Regardless of whether a Performance Award is paid
in cash or Common Stock, the participant will have ordinary income. The measure
of such income will be the amount of cash and the fair market value of the
Common Stock at the time the Performance Awards are paid out. To the extent
permitted by the Award terms and conditions, eligible participants may
alternatively exercise a Performance Award and have the gain that would
otherwise be taxed upon exercise deferred under the Edison International
Executive Deferred Compensation Plan, subject to the terms and conditions of
that plan. See the discussion below entitled "Award Gain Deferrals".

        In the event all or part of the Performance Award is paid in Common
Stock, the provisions of Section 16(b) of the Exchange Act may apply (see
"Restrictions on Resale" below). All or a portion of the Common Stock received
by a participant who is subject to Section 16(b) is generally treated as
"restricted property" for purposes of Section 83 of the Code. See "Section 83
Tax Considerations" for further information concerning the tax treatment of
restricted property and the rules to be followed in making an election under
Section 83(b).

        Edison International will be entitled to a tax deduction in the same
amount as and at the time that the participant recognizes ordinary income.
However, with regard to receipt of Common Stock, to receive that tax deduction,
Edison International must deduct and withhold taxes from amounts paid to the
participant.

        The amount included as ordinary income in the participant's taxable
income with respect to Performance Awards paid in Common Stock becomes the
participant's tax basis for determining gains and losses on the subsequent
disposition of such Common Stock.

Stock Payment

        The Administrator is authorized under the Plan to structure any award so
that it is paid solely in cash, solely in Common Stock, or in a combination of
Common Stock and cash. However, if the written instrument evidencing any Award
states that the Award will be paid in cash, the Award will be paid only in cash.

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Section 83 Tax Considerations

        A recipient of restricted property will recognize ordinary income equal
to the fair market value of the Common Stock received pursuant to the Award at
the time the restrictions lapse unless the recipient elects to report the fair
market value of the Common Stock as ordinary income at the time awarded pursuant
to Section 83(b) of the Code. Edison International may deduct the amount of
income recognized by the recipient at such time as the recipient recognizes the
income, provided Edison International withholds tax on the recipient's
recognized income. Common Stock issued to individuals subject to the provisions
of Section 16(b) of the Exchange Act will be considered restricted for these
purposes and the restrictions of Section 16 will lapse in accordance with such
Section.

        Section 83(b) of the Code allows the recipient of restricted property,
including a recipient of Common Stock subject solely to the restrictions of
Section 16(b) of the Exchange Act (see "Restrictions on Resale" below), to
report the fair market value of the Common Stock as ordinary income at the time
of receipt. Such an election is made by filing a written notice with the
Internal Revenue Service office with which the recipient files his Federal
income tax return. A copy of the election must also be filed with Edison
International. The notice must be filed within 30 days of receipt of the Common
Stock and must meet certain Internal Revenue Service technical requirements.

        The tax treatment of the disposition of restricted property will depend
upon whether the recipient has made an election to include the value of the
Common Stock in income when received. If the recipient makes such an election,
any disposition thereafter will result in a long-term or short-term capital gain
depending upon the period the restricted property is held. If no election is
made, the disposition prior to the lapse of the restrictions will result in
ordinary income to the recipient equal to the amount received on disposition.
Edison International may deduct such amount if it withholds the necessary tax.

AWARD GAIN DEFERRALS

        Award gains of some participants may be deferred under the Edison
International Award Gain Deferral Program (the "Program"). The Program consists
of the Option Gain Deferral Plan (the "OGDP") for deferral of Edison
International stock option gains and the Award deferral provisions of the Edison
International Executive Deferred Compensation Plan (the "EDCP") for deferral of
Award gains payable in cash. The individuals eligible to defer Award gains are
those employees who hold qualifying Awards and who are otherwise currently
eligible to defer salary or bonus under the EDCP. Retired or terminated
employees are not eligible to defer Award gains under the Program.

        A Supplemental Prospectus provides a detailed summary of the Award gain
deferral provisions under the Program. Each eligible person is advised to read
the Supplemental Prospectus, the OGDP and EDCP plan documents, the applicable
provisions of the Equity Compensation Plan, and the applicable OGDP and EDCP
agreements.

        An election to defer Award gains significantly limits the Award exercise
flexibility. Elections are irrevocable. Participants electing to defer Award
gains incur certain tax and other risks, otherwise not normally associated with
the Awards. Eligible Persons are advised to seek such tax and financial counsel
as he or she deems appropriate before electing to defer Award gains.

ADMINISTRATION OF THE PLAN

        The Administrator has the sole authority for the Plan to determine the
type of Awards to be granted, the number of shares of Common Stock to be
awarded, the objectives, goals and performance criteria utilized to measure the
value of Awards, the form of payment (cash or Common Stock or a combination
thereof) payable upon the event or events giving rise to payment of an Award,
the vesting schedule of any Award, the term of any Award, and such other terms
and conditions as the

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Administrator may determine. The Administrator will allocate a portion of the
total number of Awards authorized to each Company for Key Management Employee
Awards. The management of each Company will then have the sole discretion to
determine and designate from time-to-time the management employees to whom
Awards will be granted, the times at which the Awards will be granted and the
amount of the individual Awards. The Administrator will determine the Edison
International Executive Officers who are to be granted Awards, the amount of any
Award, and the times at which Awards will be granted. The Board will determine
the terms and conditions of Director awards. The Administrator will interpret
the Plan, determine the terms and provisions of Award agreements and make all
determinations necessary or advisable for the administration of the Plan.
Actions of the Administrator with respect to the administration of the Plan are
taken pursuant to a majority vote or by the unanimous written consent of its
members; and all interpretations, determinations and actions by the
Administrator are final, conclusive and binding upon all parties. The
Administrator may delegate to one or more agents nondiscretionary duties.

TERMINATION OF EMPLOYMENT

        The Administrator will provide in the Award terms and conditions the
extent to which termination of employment or termination of service as a
Director will shorten the period for exercising an Award.

        In the event a holder of an Award ceases to be an employee, the
individual must have been a participant for the entire period to which the Award
applies in order to be eligible for the full amount of any such Award. Pro-rata
awards may be distributed to participants who are discharged or who terminate
their employment for reasons other than incompetence, misconduct or fraud, or
who retired or became disabled during the incentive period, or who were
participants for less than the full incentive period. A pro-rata award may be
made to a participant's designated beneficiary in the event of death of a
participant during an incentive period prior to an award being made.

        The Administrator may in its sole discretion determine with respect to
an Award that any holder who is on a leave of absence for any reason will be
considered as still an employee, provided that rights to such Award during an
unpaid leave of absence will be limited to the extent to which such right was
earned or vested at the commencement of such leave of absence.

        The Administrator may vary the Plan provisions with respect to the
impact of employment termination on Awards at the time of grant, or on a
case-by-case basis thereafter, as it deems appropriate and in the best interests
of Edison International. Among other things, the Administrator may accelerate
vesting or extend the exercise periods to as long as the maximum term provided
in the original Award agreement.

        Nothing in the Plan or in any instrument executed pursuant to the Plan
will confer upon any employee any right to continue in the employ of the
Companies or affect any right of the Companies to terminate the employment of
any employee at any time with or without cause.

AMENDMENT AND TERMINATION OF THE PLAN

        The Board will have the power, in its discretion, to amend, suspend or
terminate the Plan at any time it determines it is in the best interests of
Edison International to do so, subject to the provisions described above in the
third paragraph under "Description of the Plan—Securities Offered Through the
Plan." Subject to those provisions, no amendment may be adopted without the
approval of the shareholders of Edison International to the extent required by
law or the rules of any exchange on which the Common Stock is listed, that would
materially increase the number of securities which may be issued under the Plan,
the maximum individual award or the duration of the Plan. Unless previously
terminated by the Board, no Awards will be issued after December 31, 2007.

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        No amendment, suspension or termination of the Plan will, without the
consent of the Holder, alter, terminate, impair or adversely affect any right or
obligation under any Award previously granted under the Plan. The Administrator
may, with the consent of the Holder, make such modifications in the terms and
conditions of any Award as it deems advisable or cancel the Award (with or
without consideration).

RESTRICTIONS ON RESALE

        Participants in the Plan who are deemed to be "affiliates" of Edison
International, as that term is defined in the rules and regulations under the
Securities Act of 1933 (the "Securities Act"), may not offer or sell the shares
of Common Stock they acquire under the Plan unless the offers and sales are made
pursuant to an effective registration statement and prospectus under the
Securities Act or pursuant to an appropriate exemption from the registration
requirements of the Securities Act, such as that provided by Rule 144
thereunder. Participants in the Plan who are subject to Section 16 of the
Exchange Act will be required to report to the Securities and Exchange
Commission (the "Commission") on prescribed forms any acquisitions or
dispositions of Common Stock and "derivative securities" (as that term is
defined in the rules and regulations under the Exchange Act), which may include
any Award, and may also be held liable to give up any profits made on any
purchases and sales of Common Stock or derivative securities occurring within
any six-month period, unless an exemption is determined to be available.
Participants are urged to consult with legal counsel regarding the applicability
of the Securities Act and the Exchange Act to their particular circumstances, as
well as for further information regarding the tax considerations relevant to the
Awards.

        No Award and no right under the Plan, contingent or otherwise, will be
assignable or subject to any encumbrance, pledge, or charge of any nature or
otherwise transferable (meaning, among other things, that such Award or right is
exercisable during the Holder's lifetime only by him or her or by his or her
guardian or legal representative) except that, under such rules and regulations
as may be established pursuant to the terms of the Plan, a beneficiary may be
designated with respect to an Award in the event of death of a Holder of the
Award, and Awards may be transferred pursuant to a domestic relations order. In
addition, the Administrator may, to the extent permitted by applicable law,
permit a Holder to assign the rights to exercise Awards to immediate family
members or to a trust, limited liability corporation, family limited partnership
or other equivalent vehicle for their exclusive benefit, subject to applicable
provisions of the Code as specified in the Plan and any other conditions the
Administrator may impose.

        No shares of Common Stock will be issued or transferred pursuant to an
Award unless and until all then-applicable requirements imposed by federal and
state securities and other laws, rules and regulations, by any regulatory
agencies having jurisdiction and by any stock exchanges upon which the Common
Stock may be listed, have been fully met. As a condition precedent to the issue
of shares pursuant to the grant or exercise of an Award, a Holder may be
required to take any reasonable action to meet such requirements.

OTHER TERMS AND CONDITIONS

        The Plan permits granting Awards that are transferable by the
participant during his or her lifetime to the participant's spouse, children or
grandchildren, or to a trust or other vehicle established for their benefit.
Statutory stock options may be transferred only if permitted at that time under
the Code. In addition, notwithstanding the term of an Award, the Compensation
and Executive Personnel Committee may approve delayed payment or delivery of
cash or shares otherwise payable to a participant under the Plan. No fractional
shares will be issued under the Plan. Cash will be paid for any fractional share
payable.

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ADDITIONAL MATTERS

        Edison International has filed with the Commission a registration
statement incorporating by reference certain documents, including Edison
International's latest annual report and all other reports since the end of the
fiscal year covered by such annual report, which have been filed by Edison
International pursuant to Sections 13(a) or 15(d) of the Exchange Act. Such
annual and other reports are also incorporated by reference in this Prospectus.
Such documents, and any other documents required to be delivered by Edison
International pursuant to Rule 428(b) under the Securities Act, are available
without charge upon written or oral request to Manager of Investor Relations,
2244 Walnut Grove Avenue, P.O. Box 800, Rosemead, California 91770; telephone
number (626) 302-2515.

        The summaries herein of the Plan do not purport to be complete, and
reference is made to the Plan for a full and complete statement of the terms and
provisions thereof.

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ATTACHMENT C

FORM OF SEU AWARD CERTIFICATE /
STATEMENT OF TERMS AND CONDITIONS

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EDISON INTERNATIONAL EQUITY COMPENSATION PLAN
STOCK EQUIVALENT UNIT AWARD CERTIFICATE

        This award is made by Edison International to                         
as of                         , 2000, pursuant to the Affiliate Option Exchange
Offer. Edison International hereby grants to                         , as a
matter of separate agreement and not in lieu of salary or any other compensation
for services, the right to                          Edison International Stock
Equivalent Units.

        This award is made subject to the conditions contained in the Edison
International Equity Compensation Plan and the Edison International Equity
Compensation Plan Stock Equivalent Unit Award Agreement, the terms of which are
incorporated herein by reference.

    EDISON INTERNATIONAL
 
 
    

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John H. Kelly, Senior Vice President

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EDISON INTERNATIONAL EQUITY COMPENSATION PLAN

Statement of Terms and Conditions of Stock Equivalent Unit Awards
Granted under the Affiliate Option Exchange Offer

        1.    Summary.    

        Under the terms of the Exchange Offer Circulars, holders of Affiliate
Options of Edison Mission Energy and Edison Capital may elect to exchange their
Affiliate Options for cash and Stock Equivalent Units, granted under the Edison
International Equity Compensation Plan. Each Stock Equivalent Unit is a
non-voting unit of measurement that is deemed for bookkeeping purposes to be
equivalent to one outstanding share of Edison International common stock. When a
Stock Equivalent Unit becomes payable, the holder of such Stock Equivalent Unit
will be paid a cash amount determined with reference to the then fair market
value of a share of Edison International common stock. Stock Equivalent Units
granted under the Affiliate Option Exchange Offer are subject to the following
terms and conditions.

        2.    Definitions.    

        Whenever the following words or phrases are used in this Statement of
Terms and Conditions with the first letter capitalized, they shall have the
meanings specified below:

        Account means the account established for each Holder for bookkeeping
purposes to which SEUs are credited in accordance with Section 4.

        Administrator means the Administrator of the ECP as determined under
Article 3 of the ECP.

        Affiliate means EIX or any corporation or entity which, along with EIX,
is a component member of a "controlled group of corporations" within the meaning
of Section 414(b) of the Code.

        Affiliate Option means an Edison Mission Energy or Edison Capital
affiliate option performance award granted to an individual pursuant to the
terms of the EIX Officer Long-Term Incentive Compensation Plan, the EIX
Management Long-Term Incentive Compensation Plan or the ECP.

        Affiliate Option Exchange Offer or Exchange Offer means the offers by
EIX, Edison Mission Energy and Edison Capital which expire on August 7, 2000, to
exchange all outstanding Affiliate Options for cash and SEUs under the terms and
conditions of the Exchange Offer Circulars.

        Beneficiary means the person or persons, or entity, entitled in
accordance with Section 10 to receive all or a portion of a Holder's SEU
benefits upon the Holder's death.

        Change in Control means any event that triggers a "Distribution Date" as
set forth under the Rights Agreement approved by the EIX Board of Directors on
November 20, 1996, as amended on September 16, 1999.

        Code means the Internal Revenue Code of 1986, as amended from time to
time.

        DCP means the EIX Affiliate Option Deferred Compensation Plan, as
amended from time to time.

        DCP Conversion Election means a Holder's written election, filed on a
form and in a manner prescribed by the Administrator of the DCP for this
purpose, to convert all of the Holder's vested SEUs into a dollar credit to the
Holder's DCP Deferral Account in accordance with the terms and conditions of the
DCP.

        DCP Deferral Account means the notional account for each participant in
the DCP established for recordkeeping purposes to which amounts deferred under
the DCP, denominated in cash, and interest thereon, are allocated.

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        ECP means the EIX Equity Compensation Plan, as amended from time to
time.

        EIX means Edison International or any successor corporation.

        Exchange Date means the date the Affiliate Option Exchange Offer becomes
effective and Affiliate Options are exchanged for cash and SEUs.

        Exchange Offer Circular means either the document describing the offer
to exchange Edison Mission Energy Affiliate Options, dated July 3, 2000, or the
document describing the offer to exchange Edison Capital Affiliate Options,
dated July 3, 2000.

        Holder means any individual who has accepted the Affiliate Option
Exchange Offer and received a grant of SEUs in accordance with the terms of the
Exchange Offer.

        120% 10-Year Rate means an annual interest rate effective for a calendar
year equivalent to 120% of the 120-month average annual rate of 10-year U.S.
Treasury Notes determined as of October 15 of the preceding year.

        Payment Election means a Holder's written election, on a form prescribed
by the Administrator for this purpose, specifying when the Holder wishes to
receive payment with respect to the vested SEUs in such Holder's Account.

        Retirement means a Holder's termination of employment with the Affiliate
after attainment of age 55 and after completion of at least five years of
service with the Affiliate, as determined by the Administrator.

        Scheduled Withdrawal means a distribution of all or a portion of a
Holder's vested DCP Account as elected by the Holder in accordance with
Section 9.1 of the DCP.

        SEU means a Stock Equivalent Unit granted to an individual as a result
of the individual's acceptance of the Affiliate Option Exchange Offer.

        Stock Equivalent Unit means a non-voting unit of measurement that is
deemed for bookkeeping purposes to be equivalent to one outstanding share of EIX
common stock.

        Total Disability means the permanent and total disability of a Holder as
determined by the Benefits Committee of EIX, in its discretion.

        3.    Grant.    

        The number of SEUs granted to each Holder shall be determined under the
terms of the Exchange Offer.

        4.    Accounts.    

        EIX will maintain an SEU bookkeeping account for each Holder. SEUs
granted to a Holder in exchange for Affiliate Options under the terms of the
Exchange Offer will be credited to the Holder's Account as of the Exchange Date.
Additional SEUs will be credited to a Holder's Account as dividend equivalents
in accordance with Section 6. The Administrator may subdivide a Holder's Account
into separate sub-accounts to keep track of the portions of the Holder's Account
balance that are subject to different vesting schedules.

        5.    Vesting and Termination of SEUs.    

        (a)    General.    SEUs granted with respect to Affiliate Options that
have become fully vested prior to the Exchange Date shall be vested on the
Exchange Date. SEUs granted with respect to any Affiliate Option that has not
become fully vested on the Exchange Date shall be vested on the Exchange Date in
the same proportion as the underlying Affiliate Option and the remainder of such
SEUs shall be subject to the same vesting schedule as the underlying Affiliate
Option.

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        (b)    Certain Terminations of Employment Prior to Full Vesting.    If a
Holder's employment by the Affiliate terminates on account of the Holder's
Retirement, death, or following his or her Total Disability but prior to vesting
of all of the Holder's SEUs, the Holder will become vested in an additional
portion of the SEUs granted with respect to each Affiliate Option so that the
aggregate percentage of such SEUs in which the Holder is vested shall equal X%,
where X is obtained by dividing (i) the completed months that have elapsed
between the date the underlying Affiliate Option was granted and the date of the
termination of the Holder's employment with the Affiliate, by (ii) 48. Unvested
SEUs will terminate (without payment and to the extent that they do not become
vested in accordance with the preceding provisions of this Section 5(b)) on the
date that the Holder's employment by the Affiliate terminates.

        (c)    Change in Control.    Holders shall be 100% vested in the SEUs
credited to their Accounts upon a Change in Control.

        (d)    Termination of SEUs Upon Payment or Conversion.    An SEU will
terminate upon the payment of that SEU, or the conversion of that SEU to a
dollar credit to the Holder's account under the DCP, in accordance with the
terms hereof, and the Holder shall have no further rights with respect to such
SEU.

        6.    Dividend Equivalents.    

        SEUs shall accrue dividend equivalents as EIX declares dividends on its
common stock. The Administrator shall credit dividend equivalents to a Holder's
Account in the form of additional SEUs on the ex-dividend date in accordance
with the following formula: the number of SEUs granted to a Holder as dividend
equivalents will equal (a) the amount of the dividend declared by EIX on a share
of its common stock multiplied by the number of SEUs credited to the Holder's
Account on the ex-dividend date (before the crediting of additional SEUs as
dividend equivalents), divided by (b) the average of the high and low prices of
a share of EIX common stock on the New York Stock Exchange on the ex-dividend
date. SEUs credited to each Holder as dividend equivalents are subject to the
same vesting schedule as the related SEUs credited to the Holder's Account.

        7.    Other Adjustments.    

        If the outstanding shares of EIX common stock are increased, decreased,
or exchanged for a different number or kind of shares or other securities, or if
additional shares or new or different shares or other securities are distributed
with respect to such shares of EIX common stock or other securities, through
merger, consolidation, sale of all or substantially all of the property of EIX,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other distribution with respect to such shares of EIX
common stock or other securities, the number of SEUs credited to each Holder's
Account may be adjusted in accordance with the terms of the ECP.

        8.    Payment and Conversion Elections.    

        (a)    General.    Unless a Holder makes a deferral election under the
DCP, an SEU Payment Election must be filed with the Administrator, in the manner
prescribed by the Administrator, no later than August 7, 2000. A Holder's SEU
Payment Election is irrevocable once it is filed. Except as otherwise provided
in Sections 10 and 11, if a Holder does not make a valid SEU Payment Election
and does not make a deferral election under the DCP, the Holder will receive a
payment with respect to his or her vested SEUs as soon as administratively
practicable after the third anniversary of the Exchange Date. Payment of the
value of each vested SEU shall be made in an amount determined in accordance
with Section 9(a).

        (b)    Holders Who Are Not DCP Participants.    Except as otherwise
provided in Section 10 and 11, each Holder who is ineligible to participate in
the DCP, or who elects not to defer payment of his or her SEUs under the DCP,
may elect to receive payment of the value of his or her SEUs as soon as

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administratively practicable after: (i) the third anniversary of the Exchange
Date, or (ii) the first anniversary of the Exchange Date with respect to the
SEUs that are vested as of such date and the scheduled vesting date with respect
to the remaining SEUs. Payment of the value of each vested SEU shall be made in
an amount determined in accordance with Section 9(a).

        (c)    Holders Who Are DCP Participants and Who Elect to Defer Payment
of Their SEUs.    

          (i)  General. A Holder who elects to defer payment of his or her SEUs
under the DCP will receive payment of his or her DCP Deferral Accounts
(including the amounts credited thereto in respect of his or her SEUs) in the
manner specified in his or her DCP Participation Election and/or under the terms
of the DCP.

        (ii)  Conversion Elections. A Holder who elects to defer the payment of
his or her SEUs may file a DCP Conversion Election, to convert all of the vested
SEUs then credited to his or her Account into their monetary equivalent as a
credit to the Holder's DCP Deferral Account. Such an election may be made at any
time (A) after the first anniversary of the Exchange Date, and (B) before the
earlier of the third anniversary of the Exchange Date or the date the Holder
terminates employment with the Affiliate. In such event, the dollar amount to be
credited to the Holder's DCP Deferral Account in respect of each converted SEU
shall be determined in accordance with Section 9(c). A Holder may make
additional elections under this Section 8(c)(ii) as additional SEUs become
vested.

        (iii)  Automatic Conversions Upon Termination of Employment Prior to
Third Anniversary. In the event that a Holder's employment with the Affiliate
terminates prior to the third anniversary of the Exchange Date, all of the
vested SEUs remaining credited to such Holder's Account shall automatically
convert into their monetary equivalent as a credit to the Holder's DCP Deferral
Account as of the later of the first anniversary of the Exchange Date or the
date the Holder's employment with the Affiliate terminates. The dollar amount to
be credited to the Holder's DCP Deferral Account in respect of each converted
SEU shall be determined in accordance with Section 9(d).

        (iv)  Automatic Conversions Upon Third Anniversary. Any vested SEUs
remaining credited to a Holder's Account as of the third anniversary of the
Exchange Date shall automatically convert into their monetary equivalent as a
credit to such Holder's DCP Deferral Account as of that date. The dollar amount
to be credited to the Holder's DCP Deferral Account in respect of each converted
SEU shall be determined in accordance with Section 9(e).

        (v)  DCP Scheduled Withdrawal Conversions. If a Holder elects both a
Scheduled Withdrawal under the DCP and the deferral of his or her SEU payments,
and at the time such DCP Scheduled Withdrawal payment is to be made, the
Holder's vested balance in his or her DCP Deferral Account is not sufficient to
satisfy the entire amount of the Scheduled Withdrawal that the Holder elected,
then any vested SEUs then credited to the Holder's Account shall automatically
be converted into their monetary equivalent as a credit to the Holder's DCP
Deferral Account to the extent necessary to allow the Affiliate to pay the
amount that the Holder elected to receive as a Scheduled Withdrawal. In such
event, the dollar amount to be credited to the Holder's DCP Deferral Account in
respect of each converted SEU shall be determined in accordance with
Section 9(f).

        9.    Valuation.    

        Each SEU represents the right to receive a payment determined with
respect to the fair market value of a share of EIX common stock on or about the
date of payment. A Holder's benefit with respect to each SEU credited to his or
her Account shall be calculated in accordance with clause (a), (b), (c), (d),
(e) or (f) below, as applicable.

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        (a)    Fixed or Vesting Date Payment.    If the SEU payment is triggered
by a fixed payment date or a vesting date (that is, the first or third
anniversary of the Exchange Date or the scheduled vesting date of the underlying
Affiliate Option), the payment amount with respect to such SEU will equal
(i) the sum of the daily average of the high and low trading prices of a share
of EIX common stock on the New York Stock Exchange for each of the 20 trading
days preceding the payment trigger date, divided by (ii) 20.

        (b)    Termination of Employment Payment.    If the SEU payment is
triggered by the termination of the Holder's employment pursuant to Section 10
after the first anniversary of the Exchange Date, the payment amount with
respect to such SEU will equal the average of the high and low prices of a share
of EIX common stock on the New York Stock Exchange on the date of such
termination, or if that day is not a trading day, the immediately preceding
trading day. If the SEU payment is triggered by the termination of the Holder's
employment pursuant to Section 10 prior to the first anniversary of the Exchange
Date, the payment amount shall be determined as of the first anniversary of the
Exchange Date as described in Section 9(a).

        (c)    DCP Deferral—Elective Conversion.    If the SEU conversion is
triggered by the Holder's DCP Conversion Election pursuant to Section 8(c)(ii),
then the conversion amount with respect to that SEU will equal the closing price
of a share of EIX common stock on the New York Stock Exchange on the date that
the Affiliate receives the Holder's DCP Conversion Election or, if that day is
not a trading day, the immediately preceding trading day.

        (d)    DCP Deferral—Automatic Conversion Upon Termination of
Employment.    If the SEU conversion is triggered by the termination of the
Holder's employment on or after the first anniversary of the Exchange Date but
before the third anniversary of the Exchange Date, then the conversion amount
with respect to that SEU will equal the closing price of a share of EIX common
stock on the New York Stock Exchange on the date the Holder's employment
terminates. If the SEU conversion is triggered by the termination of Holder's
employment pursuant to Section 10 prior to the first anniversary of the Exchange
Date, the conversion amount with respect to that SEU will equal (i) the sum of
the daily average of the high and low trading prices of a share of EIX common
stock on the New York Stock Exchange for each of the 20 trading days preceding
the first anniversary of the Exchange Date, divided by (ii) 20.

        (e)    DCP Deferral—Automatic Conversion on the Third Anniversary of the
Exchange Date.    If the SEU conversion is triggered by the third anniversary of
the Exchange Date, the conversion amount with respect to that SEU will equal the
(i) the sum of the daily average of the high and low trading prices of a share
of EIX common stock on the New York Stock Exchange for each of the 20 trading
days preceding the conversion trigger date, divided by (ii) 20.

        (f)    DCP Deferral—Automatic Conversion Pursuant to a Scheduled
Withdrawal.    If the SEU conversion is triggered by the Holder's DCP Scheduled
Withdrawal election pursuant to Section 8(c)(iv), then the conversion amount
with respect to that SEU will equal the closing price of a share of EIX common
stock on the New York Stock Exchange on the last trading day before the
Scheduled Withdrawal date.

        10.    Payment upon Termination; Beneficiaries.    

        (a)    Payment.    Upon the termination of employment for any reason,
including death or following a Total Disability, of a Holder who was ineligible
to participate in the DCP or who elected not to defer payment of his or her SEUs
under the DCP, the vested SEUs credited to the Holder's Account will become
payable to the Holder or, in the case of death, the Holder's Beneficiary.
Payment of each vested SEU will be made in a single lump sum as soon as
administratively practicable after the later of the first anniversary of the
Exchange Date or the Holder's termination of employment in an amount determined
under Section 9(a) or (b), as applicable.

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        (b)    Beneficiaries.    Each Holder will have the right, at any time,
to designate any person or persons as Beneficiaries (both primary and
contingent) to whom payment with respect to the SEUs credited to such Holder's
Account will be made in the event of the Holder's death. The Beneficiary
designation will be effective when it is received in writing by the
Administrator during the Holder's lifetime on a form prescribed by the
Administrator.

        The receipt of a new valid Beneficiary designation by the Administrator
will cancel all prior Beneficiary designations. Any finalized divorce or
marriage of a Holder subsequent to the date of a Beneficiary designation will
revoke such designation, unless in the case of divorce the previous spouse was
not designated as Beneficiary, and unless in the case of marriage the Holder's
new spouse previously was designated as Beneficiary. The spouse of a married
Holder must consent in writing to any designation of a Beneficiary other than
the spouse.

        If a Holder fails to validly designate a Beneficiary as provided above,
or if the Beneficiary designation is revoked by marriage, divorce, or otherwise
without execution of a new designation, or if every person designated as
Beneficiary predeceases the Holder or dies prior to the complete distribution of
the Holder's SEU benefits, then the Administrator will direct the payment of the
Holder's remaining benefits to the Holder's surviving spouse, or if there is no
surviving spouse, to the Holder's estate. If a Beneficiary dies after
commencement of payment of the Holder's benefits to such Beneficiary, a lump sum
of any remaining payments will be paid to such Beneficiary's beneficiary, if one
has been designated, or to such Beneficiary's estate.

        11.    Deferral of Payment.    

        If the ECP Administrator determines that EIX's ability to take a tax
deduction for payments made with respect to one or more SEUs is, or reasonably
could be, limited by Code Section 162(m), EIX may elect to defer such payment(s)
until a year in which the ECP Administrator determines that EIX's tax deduction
for such payment(s) is not, or is reasonably not expected to be, limited by Code
Section 162(m). During any such period of deferral, unpaid SEUs will continue to
earn dividend equivalents and be subject to changes in the fair market value of
EIX common stock until they are paid; provided, however, that as of the third
anniversary of the Exchange Date, any such deferred SEUs shall be converted into
their monetary equivalent using the valuation method described in Section 9(a)
and such monetary amount shall earn interest at an annual rate equal to the 120%
10-Year Rate, as in effect from time to time, until paid.

        12.    Transfer.    

        SEU awards may not be alienated, assigned, transferred, pledged or
hypothecated by the Holder to any person or entity at any time in any manner
whatsoever. During the lifetime of the Holder, SEU awards may only be exercised
by the Holder. Notwithstanding the foregoing, upon the divorce of a Holder, SEU
awards may be transferred to the Holder's former spouse pursuant to a domestic
relations order issued by a court of competent jurisdiction.

        13.    Shareholder Rights.    

        Holders have no rights as shareholders of EIX with respect to the SEUs
credited to their Accounts or this Statement of Terms and Conditions, including,
but not limited to: (a) voting rights, (b) dividend rights (other than dividend
equivalent rights set forth in Section 6), (c) the right to participate in or
affect the management, control or fundamental changes in the business or
existence of EIX, and (d) the right to participate in or affect the issuance of
additional securities by EIX.

        14.    Claims Procedure.    

        (a)    Initial Claim.    If a Holder believes that he or she is being
denied an SEU benefit to which he or she is entitled, such Holder should file a
written request with the Administrator setting forth the basis of his or her
claim. The Administrator will notify the Holder in writing of its decision with
respect

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to such Holder's claim, within 90 days after the claim is received by the
Administrator. If the claim is denied, the Administrator's notice will set
forth: (i) the specific reasons for the denial, (ii) a specific reference to the
provisions of the ECP or this Statement of Terms and Conditions on which the
denial is based, (iii) a description of any additional information or material
necessary for the Holder to perfect his or her claim and a description of why it
is needed, and (iv) an explanation of the claims review procedures set forth in
this Statement of Terms and Conditions and other appropriate information as to
the steps to be taken if the Holder wishes to have the claim denial reviewed. If
the Administrator determines that there are special circumstances requiring
additional time to make a decision, the Administrator will notify the Holder of
the special circumstances and the date by which a decision is expected to be
made, and may extend the time for up to an additional 90-day period.

        (b)    Review of Claim Denial.    If a Holder's claim for SEU benefits
is denied or if the Holder believes that he or she is entitled to greater or
different SEU benefits, the Holder will have the opportunity to have the claim
denial reviewed by the Administrator by filing a petition for review with the
Administrator within 60 days after receipt of the claim denial notice issued by
the Administrator. Said petition will state the specific reasons which the
Holder believes entitle him or her to SEU benefits or to greater or different
SEU benefits. Within 60 days after receipt by the Administrator of the petition,
the Administrator will afford the Holder (and counsel, if any) an opportunity to
present his or her position to the Administrator orally or in writing, and the
Holder (or counsel) will have the right to review any pertinent documents. The
Administrator will notify the Holder of its decision in writing within the
60-day period, stating specifically the basis for its decision, written in a
manner calculated to be understood by the Holder and the specific provisions of
the ECP or this Statement of Terms and Conditions on which the decision is
based. If, because of special circumstances, the 60-day period is insufficient,
the decision may be deferred for up to another 60-day period at the election of
the Administrator and notice of this deferral will be given to the Holder. In
the event of the death of the Holder, the same procedures will apply to the
Holder's Beneficiaries.

        15.    Dispute Arbitration.    

        If a Holder or Beneficiary is dissatisfied with the Administrator's
decision on review, the matter shall be resolved through final and binding
arbitration in Los Angeles, California, pursuant to California Civil Procedure
Code Sections 1282-1284.2 (excluding Sections 1283 and 1283.05). The arbitration
shall be before a single neutral arbitrator mutually agreed upon by the parties.
In the event that the parties are unable to agree upon an arbitrator, the
arbitrator shall be selected pursuant to California Civil Procedure Code
Section 1281.6. If a Holder or Beneficiary does not submit a request for
arbitration within 30 days of receipt of the Administrator's written decision on
review, the Holder or Beneficiary will be bound by the Administrator's
determination on review and may not thereafter be entitled to a review of the
Administrator's determination by an arbitrator or a court.

        16.    Employment Rights.    

        Nothing in the award certificate or this Statement of Terms and
Conditions, nor the existence of SEUs credited to a Holder's Account, shall
confer upon any Holder any right to continue in the employ of the Affiliate,
constitute any contract or agreement of employment or affect any Holder's status
as an employee at will, nor shall interfere in any way with the right of the
Affiliate to change any Holder's compensation or other benefits, or to terminate
any Holder's employment with or without cause. Nothing in this Section 16,
however, is intended to adversely affect any express independent right of such
person under a separate employment contract.

        Amounts payable in respect of the SEUs will be payable from the general
assets of EIX and no special or separate reserve, fund or deposit will be made
to assure payment of such amounts. No Holder, Beneficiary or other person will
have any right, title or interest in any fund or in any specific asset of EIX by
reason of any SEU or this Statement of Terms and Conditions. Neither the
provisions of this Statement of Terms and Conditions (or of any related
documents), nor the creation or adoption

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of the ECP, nor any action taken pursuant to the provisions of the ECP or this
Statement of Terms and Conditions will create, or be construed to create, a
trust of any kind or a fiduciary relationship between the Affiliate and any
Holder, Beneficiary or other person. To the extent that a Holder, Beneficiary or
other person acquires a right to receive payment pursuant to any SEU, such right
will be no greater than the right of any unsecured general creditor of EIX.

        17.    Tax Withholding.    

        The Administrator may reduce the amount of any payments under this
Statement of Terms and Conditions by the amount of any federal, state or local
income tax withholding requirements and Social Security, Medicare or other
employee tax requirements applicable to the payment. To the extent the
Administrator can not or does not satisfy such withholding obligations in that
manner, Holders and Beneficiaries will make appropriate arrangements, as a
condition to receipt of the payment, with the Administrator for satisfaction of
any such withholding obligation.

        18.    Continued Service.    

        The vesting schedule applicable to unvested SEUs requires continued
service through each applicable vesting date as a condition to the vesting of
the applicable installment of the SEUs and the rights and benefits under this
Statement of Terms and Conditions. Partial service, even if substantial, during
any vesting period will not entitle a Holder to any proportionate vesting or
avoid or mitigate a termination of rights and benefits upon or following a
termination of employment as provided in Section 5, except as otherwise
expressly provided in Section 5(b) or 5(c).

        19.    Captions.    

        The captions of the sections of this Statement of Terms and Conditions
are for convenience only and will not control or affect the meaning or
construction of any of its provisions.

        20.    Validity.    

        If any provision of this Statement of Terms and Conditions is held
invalid, void or unenforceable, the same will not affect, in any respect
whatsoever, the validity of any other provisions of this Statement of Terms and
Conditions.

        21.    Applicable Law.    

        The terms and conditions of the SEUs will be governed and construed in
accordance with the laws of California.

        22.    Expenses.    

        Expenses and fees incurred in connection with administering SEU awards
shall be paid by EIX. The Administrator is authorized to employ such legal
counsel and consultants as it may deem advisable to assist in the performance of
its administrative duties.

        23.    Notice.    

        Any notice or filing required or permitted to be given to EIX will be
sufficient if made in writing and hand-delivered, or sent by first class mail to
the following address:

        Corporate Secretary, Edison International

        2244 Walnut Grove Avenue, P.O. Box 800

        Rosemead, CA 91170

        The notice will be deemed given as of the date of delivery, or, if
delivery is made by mail, as of the date shown on the postmark.

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        24.    Coordination with the ECP.    

        All SEUs are granted under, and are subject to the terms of, the ECP.
Accordingly, at the discretion of the ECP Administrator, any issues related to
SEUs that are not addressed in this Statement of Terms and Conditions, shall be
resolved by reference to the documents and/or rules governing the ECP,
including, but not limited to, the amendment, termination and administrative
provisions of the ECP which are incorporated by reference herein. The ECP shall
control in the event of any conflict between the ECP and this Statement of Terms
and Conditions.

        25.    Amendment.    

        This Statement of Terms and Conditions may be amended in accordance with
the terms of the ECP. Any such amendment must be in writing and signed by EIX.
The terms and conditions of SEUs may not be restricted or limited by any
amendment of this Statement of Terms and Conditions or the ECP without the
Holder's consent. EIX may, however, unilaterally waive any provision hereof in
writing to the extent such waiver does not adversely affect the interests of any
Holder hereunder, but no such waiver shall operate as or be construed to be a
subsequent waiver of the same provision or a waiver of any other provision
hereof.

[John H. Kelly]

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John H. Kelly, Senior Vice President
 
 

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QuickLinks

TABLE OF CONTENTS
SUMMARY
RISK FACTORS
QUESTIONS AND ANSWERS ABOUT THE EXCHANGE OFFER
ADDITIONAL INFORMATION; INCORPORATION OF DOCUMENTS BY REFERENCE
ATTACHMENT A INDEX OF DEFINED TERMS
ATTACHMENT B PROSPECTUS FOR EIX EQUITY COMPENSATION PLAN
PROSPECTUS
TABLE OF CONTENTS
DESCRIPTION OF THE PLAN
DESCRIPTION OF AWARDS
AWARD GAIN DEFERRALS
ADMINISTRATION OF THE PLAN
TERMINATION OF EMPLOYMENT
AMENDMENT AND TERMINATION OF THE PLAN
RESTRICTIONS ON RESALE
OTHER TERMS AND CONDITIONS
ADDITIONAL MATTERS
ATTACHMENT C FORM OF SEU AWARD CERTIFICATE / STATEMENT OF TERMS AND CONDITIONS
EDISON INTERNATIONAL EQUITY COMPENSATION PLAN STOCK EQUIVALENT UNIT AWARD
CERTIFICATE
EDISON INTERNATIONAL EQUITY COMPENSATION PLAN Statement of Terms and Conditions
of Stock Equivalent Unit Awards Granted under the Affiliate Option Exchange
Offer