EIX Option Gain Deferral Plan
                                                                January 1, 1998









                              EDISON INTERNATIONAL

                            OPTION GAIN DEFERRAL PLAN












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1. PURPOSE AND AUTHORIZED SHARES............................................1

         1.1 Purposes ......................................................1
         1.2 Shares Available...............................................1
         1.3 Relationship to Incentive Plans................................2

2. DEFINITIONS..............................................................2


3. PARTICIPATION............................................................5

         3.1 General Participation Requirements.............................5
         3.2 Manner and Timing of Election..................................5
         3.3 Execution of Alternative Exercise Agreement by the Company.....5

4. ALTERNATIVE EXERCISE OF OPTIONS..........................................6

         4.1 Form of Agreement..............................................6
         4.2 Limited Ability to Exercise Option.............................6
         4.3 Termination of Alternative Exercise Agreements.................6
         4.4 Other Terms of Alternative Exercise Agreements.................6

5. STOCK UNIT ACCOUNTS......................................................7

         5.1 Crediting of Stock Units.......................................7
         5.2 Dividend Equivalent Credits to Stock Unit Accounts.............7
         5.3 Vesting....................................................... 7
         5.4 Distribution of Benefits.......................................7
         5.5 Adjustments in Case of Changes in Common Stock.................10
         5.6 Company's Right to Withhold....................................10

6. ADMINISTRATION...........................................................11

         6.1 The Administrator..............................................11
         6.2 Committee Action...............................................11
         6.3 Rights and Duties..............................................11
         6.4 Indemnity and Liability........................................12
         6.5 Claims Procedure...............................................12



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7. PLAN CHANGES AND TERMINATION...........................................13

         7.1 Amendments...................................................13
         7.2 Term.........................................................13

8. MISCELLANEOUS..........................................................13

         8.1 Limitation on Participant Rights.............................13
         8.2 Beneficiary Designation......................................14
         8.3 Payments to Minors or Persons Under Incapacity...............14
         8.4 Stock Units and Other Benefits Not Assignable;
             Obligations Binding Upon Successors..........................15
         8.5 Employment Taxes.............................................15
         8.6 Governing Law; Severability..................................15
         8.7 Compliance With Laws.........................................15
         8.8 Plan Construction............................................15
         8.9 Headings Not Part of Plan....................................16



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                              EDISON INTERNATIONAL

                            OPTION GAIN DEFERRAL PLAN


                                        1.
                          PURPOSE AND AUTHORIZED SHARES



1.1  Purposes

The purpose of this Plan is to promote the  ownership and retention of Shares by
Eligible Persons and to enable Eligible Persons to defer compensation that would
otherwise  be realized  upon  exercise  of a  Qualifying  Option and  ultimately
receive the deferred compensation in the form of Shares.

1.2. Shares Available

The number of Shares that may be issued under each of the  Management  Plan, the
Officer Plan, and the 1998 Plan (except as provided  below) as part of this Plan
is  limited  to the  aggregate  number of Shares  that were the  subject  of the
Qualifying  Options  granted  under  such Plan that are  exercised  pursuant  to
Article IV in exchange for the  crediting of Stock Units under this Plan. If the
number of Shares  payable under this Plan would exceed one or more of the limits
described in the preceding  sentence  because of the accumulation of Stock Units
in respect of  Dividend  Equivalents,  such  excess  Shares  shall be issued and
charged  against the Share limits under the 1998 Plan.  If  insufficient  Shares
remain under the 1998 Plan for the  accumulation of Dividend  Equivalents  under
the Management Plan, the Officer Plan or the 1998 Plan, such excess Shares shall
be issued  under  other  authority  of the  Board,  or, in absence of such other
authority, may be paid (in the sole discretion of the Committee) in cash.

Shares not exceeding the number of Already-Owned  Shares used under this Plan to
exercise a Qualifying Stock Option granted under the Management Plan may be used
in respect of Dividend  Equivalents  on the Stock Units credited with respect to
Alternatively  Exercised  Qualifying  Options granted under the Management Plan,
but may not be used for other  awards  under the  Incentive  Plans.  Shares  not
exceeding the number of Already-Owned  Shares used under this Plan to exercise a
Qualifying Stock Option granted under the Officer Plan may be used in respect of
Dividend  Equivalents on the Stock Units credited with respect to  Alternatively
Exercised Qualifying Options granted under the Officer Plan, but may not be used
for other awards under the Incentive  Plans.  Shares not exceeding the number of
Already-Owned  Shares used under this Plan to exercise a Qualifying Stock Option
granted  under the 1998 Plan may be used in respect of Dividend  Equivalents  on
the Stock Units credited with respect to an Alternatively  Exercised  Qualifying
Option  granted  under any one of the Incentive  Plans,  but may not be used for
other awards under the Incentive Plans.

<PAGE 1>

1.3.  Relationship To Incentive Plans

This  Plan  constitutes  a  deferred  compensation  plan  providing  alternative
settlements  under and as  contemplated  by the  Incentive  Plans in  respect of
nonqualified stock options granted  thereunder.  This Plan also contemplates the
grant of Stock Units under and as  contemplated  by the 1998 Plan. This Plan and
all rights  under it are  provided  under and shall be subject to and  construed
consistently  with the other terms of the Management  Plan, the Officer Plan, or
the 1998 Plan, as the case may be, except as the context otherwise requires.

                                        3.
                                   DEFINITIONS

Whenever the  following  terms are used in this Plan they shall have the meaning
specified  below  unless  the  context   clearly   indicates  to  the  contrary:
"ALREADY-OWNED SHARES" shall mean Shares owned by an Eligible Person;  provided,
however,  that Shares  acquired by an Eligible  Person from the Company under an
option or other  employee  benefit plan  maintained  by the Company or otherwise
must be held by the Eligible  Person for at least six months in order to qualify
as Already-Owned  Shares and, if Shares are used to pay the exercise price of an
option or other award,  such Shares may not be reused as payment of the exercise
price  of  another  option  or  award  within  six  months  of such  prior  use.

"ALTERNATIVE  EXERCISE"  shall  mean  the  exercise  of  all or a  portion  of a
Qualifying Stock Option using Already-Owned Shares in exchange for a combination
of Shares and Stock  Units  under this Plan.

"ALTERNATIVE  EXERCISE  AGREEMENT" shall mean an agreement  entered into between
the Company and an Eligible  Person in  accordance  with Article IV of this Plan
pursuant  to which the  Eligible  Person  elects to defer  that  portion  of the
proceeds of the  exercise of the  Qualifying  Option  equal to the spread in the
form of Stock Units.

"BENEFICIARY" or "BENEFICIARIES" shall mean the person, persons, trust or trusts
(or  similar  entity),   personal  representative,   or  other  fiduciary,  last
designated in writing by a  Participant  in  accordance  with the  provisions of
Section  8.2 to receive the  benefits  specified  hereunder  in the event of the
Participant's death. If there is no valid Beneficiary designation in effect that
complies  with the  provisions  of  Section  8.2,  or if  there is no  surviving
designated  Beneficiary,  then the  Participant's  surviving spouse shall be the
Beneficiary.  If there is no surviving spouse to receive any benefits payable in
accordance with the preceding sentence,  the duly appointed and currently acting
personal  representative of the Participant's estate (which shall include either
the Participant's  probate estate or living trust) shall be the Beneficiary.  In
any case where there is no such  personal  representative  of the  Participant's
estate  duly  appointed  and  acting in that  capacity  within 90 days after the
Participant's  death (or such  extended  period as the  Committee  determines is
reasonably necessary to allow such personal representative to be appointed,  but
not to exceed 180 days  after the  Participant's  death),  then  Beneficiary  or
Beneficiaries  shall mean the person or persons who can verify by  affidavit  or
court order to the  satisfaction of the Committee that they are legally entitled
to receive the benefits  specified  hereunder.

<PAGE 2>

"BOARD"  shall mean the Board of Directors  of the  Company.

"CHANGE IN CONTROL EVENT" shall mean any of the following:  

(a) The  dissolution  or  liquidation  of the Company;  

(b) The reorganization,  merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving  corporation;

(c) The sale of all or substantially  all of the property of the Company;

(d) A  reorganization,  merger,  consolidation,  or other corporate  transaction
which is consummated following the related occurrence of a Distribution Date (as
such term is defined in the Rights  Agreement  approved by the Board on November
20, 1996) and as a result of which the Company is not the surviving corporation.


"CODE" shall mean the Internal  Revenue  Code of 1986,  as amended.

"COMMITTEE" shall mean those members of the Compensation and Executive Personnel
Committee  of the Board of the Company  determined  under  Article  VI.

"COMMON STOCK" shall mean the Common Stock of the Company, subject to adjustment
pursuant to Section 5.5 of this Plan, Section 16 of the Management Plan, Section
16 of the Officer  Plan,  and Section 3.4 of the 1998 Plan,  as the case may be.

"COMPANY" shall mean Edison  International,  a California  corporation,  and its
successors and assigns.

"CONVERSION  DATE" shall mean the date that the Eligible Person exercises all or
a portion of a Qualifying  Option in accordance  with the  Alternative  Exercise
procedures  under this Plan.

"DISABILITY" shall mean the permanent and total disability of the Participant as
determined by the Committee.

"DISTRIBUTION  SUBACCOUNT" shall mean any subaccount established and maintained
under a Participant's  Stock Unit Account to separately  account for Stock Units
which are subject to different distribution elections made by the Participant.

"DIVIDEND  EQUIVALENT"  shall  mean the amount of cash  dividends  or other cash
distributions  paid by the Company on that number of Shares  equal to the number
of  Stock  Units  credited  to a  Participant's  Stock  Unit  Account  as of the
applicable  record date for the  dividend or other  distribution,  which  amount
shall be  credited  in the form of  additional  Stock  Units to the  Stock  Unit
Account of the Participant,  as provided in Section 5.2.

"EFFECTIVE  DATE" shall mean January 1, 1998.

"ELIGIBLE  PERSON" shall mean any employee of the Company,  Southern  California
Edison  Company or any other  Subsidiary  who is eligible to defer  compensation
under the terms of the Company Executive Deferred  Compensation Plan.

"EXCHANGE ACT" shall mean the  Securities  Exchange Act of 1934, as amended from
time to time.

<PAGE 3>


"FAIR MARKET VALUE" shall mean on any date the average of the highest and lowest
sale prices of the Common  Stock on the  Composite  Tape,  as  published  in the
Western Edition of The Wall Street Journal, of the principal securities exchange
or market on which the Common Stock is so listed,  admitted to trade,  or quoted
on such date, or, if there is no trading of (or no available  highest and lowest
sale prices of) the Common  Stock on such date,  then the average of the highest
and lowest sale prices of the Common Stock as quoted on such  Composite  Tape on
the next preceding date on which there was trading in such shares. If the Common
Stock is not so listed,  admitted or quoted,  the Committee  may designate  such
other exchange, market or source of data as it deems appropriate for determining
such  value for  purposes  of this  Plan.

"FINANCIAL   HARDSHIP"  shall  mean  an  unexpected  and  unforeseen   financial
disruption arising from an illness, casualty loss, sudden financial reversal, or
other such  unforeseeable  occurrence  as  determined  by the  Committee.  Needs
arising from foreseeable events such as the purchase of a residence or education
expenses for children shall not,  alone,  be considered a "financial  hardship."

"INCENTIVE PLANS" shall mean the Management Plan, the Officer Plan, and the 1998
Plan.

"INTEREST  RATE" shall mean the rate  (quoted as an annual rate) that is 120% of
the federal long-term rate for compounding on a quarterly basis,  determined and
published by the  Secretary of the United States  Department  of Treasury  under
Section  1274(d) of the Code,  for the month for which the interest is credited.

"MANAGEMENT  PLAN"  shall  mean the  Company's  Management  Long-Term  Incentive
Compensation  Plan.  

"1998 PLAN" shall mean the Company's Equity Compensation Plan.

"OFFICER PLAN" shall mean the Company's Officer Long-Term Incentive Compensation
Plan.

"PARTICIPANT" shall mean any person who has Stock Units credited to a Stock Unit
Account under this Plan

"PLAN" shall mean this Edison International Option Gain Deferral Plan, as it may
be amended from time to time.

"QUALIFYING OPTION" or "QUALIFYING STOCK OPTION" shall mean a nonqualified stock
option  granted under one of the  Incentive  Plans and evidenced in writing that
provides  (or is  amended  to  provide)  that the  option  may be  Alternatively
Exercised  under this Plan;  provided,  however,  that an option  shall not be a
Qualifying Stock Option if it will expire,  by its terms,  before the end of the
six-month  period  commencing  with  the  date  that  the  Alternative  Exercise
Agreement is submitted to and received by the Company

"RETIREMENT"  shall mean a separation  from service under terms  constituting  a
retirement for purposes of the nonqualified  executive  retirement plan covering
the  Participant.

"RULE  16b-3"  shall  mean  Rule  16b-3  promulgated  under  the  Exchange  Act.

"SCHEDULED  WITHDRAWAL"  shall  mean a  distribution  of all or a portion of the
Stock Units credited to the Participant as elected by the  Participant  pursuant
to the provisions of Section  5.4(g) of the Plan.

<PAGE 4>

"SHARE" shall mean a share of Common Stock.

"STOCK  UNIT" or "UNIT"  shall mean a non-voting  unit of  measurement  which is
deemed solely for bookkeeping purposes to be equivalent to one outstanding Share
(subject to Section 5.5) solely for purposes of this Plan.

"STOCK  UNIT  ACCOUNT"  shall mean the  bookkeeping  account  maintained  by the
Company on behalf of each  Participant  which is  credited  with Stock  Units in
accordance  with Section 5.1(a) and Dividend  Equivalents  thereon in accordance
with Section  5.2.

"SUBSIDIARY" shall mean any company that is a "subsidiary company" as defined in
Section 424(f) of the Code.  

"TERMINATION  FOR  CAUSE"  shall  mean  the  Termination  of  Employment  of the
Participant upon willful failure by the Participant to substantially perform his
or her duties for the Company or one of its Subsidiaries or the willful engaging
by the  Participant  in conduct  which is injurious to the Company or one of its
Subsidiaries,  monetarily or otherwise.

"TERMINATION OF EMPLOYMENT" shall mean the voluntary or involuntary cessation of
the  Participant's  employment  with the Company or a Subsidiary  for any reason
other than death or Retirement. Termination of Employment shall not be deemed to
have occurred for purposes of this Plan if the Participant is re-employed by the
Company or a Subsidiary within thirty days of ceasing work with the Company or a
Subsidiary.

"UNSCHEDULED  WITHDRAWAL"  shall mean a distribution  of all or a portion of the
Stock  Units  credited to the  Participant  under the Plan as  requested  by the
Participant pursuant to the provisions of Section 5.4(h) of the Plan.

                                        3.
                                  PARTICIPATION


3.1  General Participation Requirements.

An Eligible Person may elect to exercise all or a portion of a Qualifying Option
under and subject to the Alternative Exercise provisions set forth herein and to
receive a credit of Stock Units under this Plan.


3.2  Manner And Timing Of Election.

An election must be made by the Eligible  Person by  completing  and executing a
form of Alternative  Exercise  Agreement which meets the requirements of Article
IV and  submitting  such form to the Company after the Effective  Date.  Such an
election shall be irrevocable.

3.3  Execution of Alternative Exercise Agreement by the Company.

The Company,  acting through any of its officers,  shall execute the Alternative
Exercise  Agreement form submitted by such Eligible Person and deliver a copy of
such fully executed Alternative Exercise Agreement to him or her.

<PAGE 5>
                                        4.
                         ALTERNATIVE EXERCISE OF OPTIONS


4.1  Form of Agreement.     

Each  Alternative  Exercise  Agreement with respect to a Qualifying Stock Option
shall be in the form approved by the Committee.  Each such Alternative  Exercise
Agreement shall specify the portion of the Qualifying Stock Option or Qualifying
Stock Options that the Eligible  Person  elects to exercise  under this Plan and
shall  provide that (i) the Eligible  Person will  exercise all or the specified
portion of such  Qualifying  Stock  Option(s) by paying the exercise  price with
Already-Owned Shares having an aggregate Fair Market Value equal to the exercise
price for the number of Shares with respect to which the Qualifying Stock Option
is  exercised  and (ii),  upon  exercise,  the  Company  will (A) deliver to the
Eligible  Person the same number of Shares used by the Eligible  Employee to pay
the  exercise  price of the  Qualifying  Stock  Option  and (B),  in lieu of the
remainder  of the Shares  which would  otherwise  be  delivered  to the Eligible
Person (the "Gain Shares"),  credit to a Stock Unit Account  established for the
Eligible  Person  Stock  Units  equal in  number to the  number of Gain  Shares.
Subject to applicable law and the intent of this Plan, the Committee may provide
for or permit an  alternative  method of delivering  or tendering  Already-Owned
Shares to pay the exercise price of a Qualifying Stock Option.


4.2  Limited Ability to Exercise Option.

Any  Qualifying  Option (or portion  thereof) which is subject to an Alternative
Exercise  Agreement  may not be  exercised  at all during the  six-month  period
following  the date the  Company  receives  the  Eligible  Person's  Alternative
Exercise election.


4.3  Termination of Alternative Exercise Agreements.

If, prior to the end of the  six-month  period  described in Section 4.2, (a) an
Eligible  Person's  employment  with the Company  (including any  Subsidiary) is
terminated or (b), unless the Committee otherwise provides,  a Change in Control
Event  occurs,  the  Eligible  Person's  Alternative  Exercise  Agreement  shall
terminate and the related  Qualifying  Option may be exercised for actual Shares
in accordance  with the terms of the  Qualifying  Option  without  regard to the
Alternative Exercise Agreement.  If the Company unilaterally refuses to honor an
Alternative  Exercise  of a  Qualifying  Option  pursuant  to Section  8.7,  the
Alternative  Exercise  Agreement  with respect to such  Qualifying  Option shall
terminate and such  Qualifying  Option shall be exercisable for actual Shares in
accordance with its terms without regard to the Alternative  Exercise  Agreement
or the terms of the Qualifying Option regarding Alternative Exercise.


4.4  Other Terms of Alternative Exercise Agreements.

No Alternative Exercise Agreement shall have the effect of extending the term or
otherwise  changing  the terms of any  Qualifying  Option  (except as  expressly
contemplated hereby in respect of the consequences of exercise).  No Alternative
Exercise Agreement may be amended or terminated except as specifically  provided
herein.

<PAGE 6>

                                        5.
                               STOCK UNIT ACCOUNTS


5.1  Crediting of Stock Units.

(a)  Crediting  of  Stock  Units.  As of the  applicable  Conversion  Date  of a
Qualifying  Stock  Option,  an Eligible  Person's  Stock Unit  Account  shall be
credited  with the number of Stock Units  attributable  to the Gain  Shares,  as
described in Section 4.1(a). 

(b)   Distribution   Subaccounts.   The  Committee  shall   establish   separate
Distribution  Subaccounts under a Participant's  Stock Unit Account as necessary
to separately account for Stock Units that are subject to different distribution
elections made by the  Participant.

(c)  Limitations on Rights  Associated  With Units. A  Participant's  Stock Unit
Account  shall be a memorandum  account on the books of the  Company.  The Units
credited to a Participant's  Stock Unit Account shall be used solely as a device
for the  determination  of the number of Shares to be eventually  distributed to
such Participant in accordance with this Plan. The Units shall not be treated as
property or as a trust fund of any kind. No Participant shall be entitled to any
voting or other  stockholder  rights with  respect to Units  granted or credited
under  this  Plan.  The  number of Units  credited  (and the Shares to which the
Participant  is  entitled  under this Plan)  shall be subject to  adjustment  in
accordance  with Section 5.5 of this Plan, and Section 16 of the Management Plan
or Section 16 of the Officer  Plan or Section 3.4 of the 1998 Plan,  as the case
may be.

5.2  Dividend Equivalent Credits to Stock Unit Accounts.

As of any  applicable  dividend or  distribution  payment date, a  Participant's
Stock Unit Account shall be credited with additional Units in an amount equal to
the amount of the  Dividend  Equivalents  divided by the Fair Market  Value of a
Share as of the applicable  dividend payment date. If the limit on the number of
Shares available under this Plan in respect of Dividend  Equivalents is reached,
the Company may in its discretion credit or settle such amounts in cash.


5.3  Vesting.

All Units (including Stock Units credited as Dividend Equivalents) credited to a
Participant's Stock Unit Account shall be at all times fully vested.


5.4  Distribution of Benefits.

(a) Form of  Distribution.  Stock Units credited to a  Participant's  Stock Unit
Account shall be distributed in an equivalent whole number of Shares. Fractional
share interests shall be disregarded, but, in the Committee's discretion, may be
accumulated and paid in cash

(b)  Retirement  Benefits.  No later than sixty days  following a  Participant's
Retirement,  the Committee shall distribute or begin to distribute  Shares in an
amount equal to the number of Stock Units  credited to the  Participant's  Stock
Unit Account  pursuant to the  election  made by the  Participant  in his or her
Alternative  Exercise  Agreement.  The  Participant  may  elect  in  his  or her
Alternative Exercise Agreement to have the Retirement Benefit paid in one of the
following  forms:  

<PAGE 7>

     (i) in a lump sum, 

     (ii) in  installments  paid annually over a period of five,  ten or fifteen
years, or

     (iii) in a lump sum of a portion of the  Shares  upon  Retirement  with the
balance in  installments  paid  annually  over a period of five,  ten or fifteen
years.  

If no valid  election  is  made,  the  Committee  shall  distribute  the
Retirement Benefits in a lump sum.  Notwithstanding the foregoing or anything to
the contrary in Section 5.4(c) below, the Committee may, in its sole discretion:

     (iv)  distribute  the benefits in a single lump sum if the sum of Shares to
be distributed to the  Participant is less than or equal to 1,000, or 

     (v) reduce the number of installments elected by the Participant to produce
an annual  distribution  of at least 100 Shares.  

(c) Termination Benefits. No later than 60 days after Termination of Employment,
the Committee  shall  distribute  or commence to distribute  Shares in an amount
equal to the number of Units credited to the  Participant's  Stock Unit Account.
The Shares  shall be  distributed  in a single  lump sum unless the  Participant
elected three annual installments in his or her Alternative  Exercise Agreement.
Notwithstanding the foregoing, if the Participant's Termination of Employment is
a Termination  for Cause,  the Committee  shall  distribute the shares in a lump
sum. 

(d) Survivor  Benefits.  If the Participant dies while actively  employed by the
Company  or  a  Subsidiary,  the  Committee  shall  distribute  or  commence  to
distribute to the  Participant's  Beneficiary  the number of Shares equal to the
number of Units credited to the  Participant's  Stock Unit Account in accordance
with the Participant's  election for Retirement Benefits within sixty days after
the Participant's death. If the Participant dies after Retirement, the Committee
shall  distribute  to  the   Participant's   Beneficiary  the  remaining  Shares
distributable  to the  Participant  under the Plan over the same period that the
Shares would have been distributed to the  Participant.  If the Participant dies
following Termination of Employment, but prior to the distribution of all Shares
distributable  to the  Participant,  the  Committee  shall deliver the remaining
Shares  to the  Participant's  Beneficiary  in a  lump  sum.  Beneficiaries  may
petition the Committee once, and only after the death of the Participant,  for a
change in the form of  survivor  benefits.  The  Committee  may, in its sole and
absolute  discretion,  choose to grant or deny such a petition.  Notwithstanding
the  foregoing,  the Committee may, in its sole  discretion:

     (i)  distribute  the Shares in a single lump sum if the total number of the
Shares  distributable to the Beneficiary is less than or equal to 1,000, or 

     (ii) reduce the number of installments elected by the Participant to ten or
five if  necessary  to produce an annual  benefit  of at least 100  Shares.

(e) Disability.  In the event that a Participant has suffered a Disability,  the
Committee  shall  distribute  shares  upon  the  Participant's   Termination  of
Employment,  Retirement or death according to the Participant's  prior election.

(f) Effect of Change in Control Event. Notwithstanding Section 5.4(a) and unless
the  Committee  provides  in advance  that no such  acceleration  shall occur in

<PAGE 8>

connection with a specific Change in Control Event,  then upon the occurrence of
a Change in Control Event,  cash equal to the Fair Market Value,  as of the date
immediately preceding the Change in Control Event, of the number of Shares equal
to the  number of Stock  Units then  credited  to the  Participant's  Stock Unit
Account shall be distributed  immediately in a lump sum to the Participant.

(g) Scheduled Withdrawals.  When completing an Alternative Exercise Agreement, a
Participant  may elect to receive a distribution  of a specific number of Shares
or a percentage of Shares deferred under such Alternative  Exercise Agreement on
the  first  business  day of the  calendar  year  which is at least  the  second
calendar  year  following the calendar  year in which the  Qualifying  Option is
Alternatively  Exercised.  Any Scheduled Withdrawal Election shall be superseded
by  distributions  due to the Retirement,  Termination of Employment or death of
the Participant.  

(h) Unscheduled Withdrawals. A Participant (or Beneficiary if the Participant is
deceased) may request in writing to the Committee a distribution of Shares in an
amount equal to all or a portion of the Units  credited to his or her Stock Unit
Account,  which shall be distributed in a lump sum within thirty days; provided,
that 

     (i) the minimum  distribution shall be 25% of the Stock Unit Account,  

     (ii) an election to receive 75% or more of the Stock Unit Account  shall be
deemed to be an  election to receive the entire  Stock Unit  Account,  and 

     (iii) such an election may be made only once in a Plan Year. 

There  shall be a penalty  deducted  from the  Stock  Unit  Account  prior to an
Unscheduled  Withdrawal  equal to 10% of the  Shares to be  delivered  under the
Unscheduled  Withdrawal.  Notwithstanding the foregoing,  if the number of Units
credited to the Stock Unit Account of the  Participant  or  Beneficiary  who has
requested  an  Unscheduled  Withdrawal  is less  than or  equal  to  1,000,  the
Committee may, in its sole discretion,  elect to distribute  Shares in an amount
equal to all of the Units credited, reduced by the 10% penalty, in a single lump
sum. 

(i) Financial Hardship  Distribution.  A Participant or Beneficiary may submit a
hardship  distribution  request to the  Committee in writing  setting  forth the
reasons for the request.  The Committee shall have the sole authority to approve
or deny such requests.  Upon a finding that the  Participant or the  Beneficiary
has suffered a Financial  Hardship,  the Committee  may in its sole  discretion,
accelerate  distributions  of  Shares  under the Plan in the  amount  reasonably
necessary to alleviate the Financial  Hardship.  

(j) Section 162(m) Limitation.  Notwithstanding the foregoing,  if the Committee
determines in good faith that there is a reasonable likelihood that any benefits
paid to a Participant  for a taxable year of the Company would not be deductible
by the Company or a  Subsidiary  solely by reason of the  limitation  under Code
Section 162(m),  then to the extent reasonably deemed necessary by the Committee
to ensure that the entire amount of any distribution to the Participant pursuant
to this Plan is  deductible,  the  Committee  may defer all or any  portion of a
distribution  under this Plan.  The amounts so deferred  shall be distributed to
the  Participant or his or her  Beneficiary  (in the event of the  Participant's
death) at the earliest  possible  date,  as  determined by the Committee in good
faith,  on which  the  deductibility  of  compensation  paid or  payable  to the

<PAGE 9>

Participant for the taxable year of the Company during which the distribution is
made will not be limited by Code  Section  162(m).  

(k)  Changes  in  Distribution  Elections.  Participants  may change the form of
payout  upon  termination  of  employment  due  to  Retirement,  Termination  of
Employment (other than Termination for Cause) or death by written election filed
with  the  Committee;  provided,  however,  that if the  Participant  files  the
election  less than  thirteen  months prior to the date of such  termination  of
employment,  the  payout  election  in  effect  thirteen  months  prior  to such
termination date shall govern.

5.5  Adjustments in Case of Changes in Common Stock.

(a) If the  outstanding  Shares are  increased,  decreased,  or exchanged  for a
different  number  or kind of  securities,  or if  additional  shares  or new or
different shares or other securities are distributed with respect to such Shares
or other securities, through merger, consolidation, sale of all or substantially
all of  the  assets  of the  Company,  reorganization,  recapitalization,  stock
dividend,  stock split,  reverse stock split or similar change in capitalization
or any other  distribution  with  respect  to such  Shares or other  securities,
proportionate and equitable adjustments consistent with the effect of such event
on  stockholders  generally  (but  without  duplication  of benefits if Dividend
Equivalents  are  credited)  shall be made in the  number  and type of Shares or
other securities, property and/or rights contemplated hereunder and of rights in
respect  of Units and Stock  Unit  Accounts  credited  under  this Plan so as to
preserve the benefits  intended.  The provisions of Section 16 of the Management
Plan,  Section 16 of the  Officer  Plan,  and Section 3.4 of the 1998 Plan shall
also apply to the  related  Stock Units  granted  under the  Incentive  Plans in
accordance  with  this  Plan.

(b) If the event  results in any rights of  stockholders  to receive cash (other
than cash  dividends and cash  distributions),  a  corresponding  amount of cash
shall be credited to each  Participant's  Stock Unit Account (or, if applicable,
the appropriate Distribution Subaccount of the Participant's Stock Unit Account)
as of the date that cash is paid in respect  of  outstanding  Shares.  As of the
last day of each calendar quarter, the Participant's Stock Unit Account shall be
credited with  earnings on the cash balance  credited to such Stock Unit Account
as of the last day of the  preceding  quarter  or,  if  later,  the date of such
event, at a rate (on an annualized basis) equal to the Interest Rate. The amount
of cash credited to a  Participant's  Stock Unit Account shall be distributed in
cash at such time (or times) and in such manner as otherwise provided under this
Plan and/or the applicable  election made by the  Participant in accordance with
the terms of this Plan.

5.6  Company's Right to Withhold.

The Company  (including its  Subsidiaries)  may satisfy any state or federal tax
withholding  obligation  arising upon a distribution of Shares and any cash with
respect to a  Participant's  Stock Unit Account by reducing the number of Shares
or cash otherwise  deliverable to the  Participant.  The  appropriate  number of
Shares required to satisfy such tax withholding  obligation in the case of Stock
Units will be based on the Fair Market  Value of a Share on the day prior to the
date of  distribution.  If the Company  (including  its  Subsidiaries),  for any
reason,  elects  not  to (or  cannot)  satisfy  the  withholding  obligation  in
accordance with the preceding sentence, the Participant shall pay or provide for
payment  in cash of the amount of any taxes  which the  Company  (including  its
Subsidiaries)  may  be  required  to  withhold  with  respect  to  the  benefits
hereunder, before any such benefits are paid.

<PAGE 10>
                                        6.
                                 ADMINISTRATION

6.1  The Administrator.

The Committee hereunder shall consist of (i) the members of the Compensation and
Executive Personnel Committee of the Board who are Non-Employee Directors within
the meaning of Rule 16b-3 and "outside directors" for purposes of Section 162(m)
of the Code,  or (ii) such  other  committee  of the Board,  each  participating
member of which is a  Non-Employee  Director (as defined in Rule 16b-3) and each
member of which is an "outside  director" for purposes of Section  162(m) of the
Code,  as may hereafter be appointed by the Board to serve as  administrator  of
this  Plan.  Any member of the  Committee  may  resign by  delivering  a written
resignation  to the  Board.  Members  of the  Committee  shall not  receive  any
additional compensation for administration of this Plan.

6.2  Committee Action.

Action of the Committee with respect to the administration of this Plan shall be
taken  pursuant  to a  majority  vote or by  unanimous  written  consent  of its
members.  A member of the Committee  shall not vote or act upon any matter which
relates solely to himself or herself as a Participant in this Plan.

6.3  Rights and Duties.

(a) Subject to the limitations of this Plan, the Committee shall be charged with
the general  administration of this Plan and the responsibility for carrying out
its provisions,  and shall have powers  necessary to accomplish  those purposes,
including, but not by way of limitation, the following:

     (i) To construe  and  interpret  this Plan;

     (ii) To resolve any questions  concerning the amount of benefits payable to
a  Participant;

     (iii) To make all other  determinations  required  by this Plan,  including
adjustments  under Section 5.5.

     (iv) To maintain all the necessary  records for the  administration of this
Plan and provide  statements of Stock Unit Accounts to Participants on an annual
or more frequent basis; 

     (v) To make and publish forms,  rules and procedures for the administration
of this Plan; and 

     (vi) To  administer  the claims  procedures  set forth in  Section  6.5 for
presentation of claims by Participants and Beneficiaries for benefits under this
Plan,  including  consideration  of such  claims,  review of claim  denials  and
issuance of a decision on review.  

(b) The Committee shall have full discretion to construe and interpret the terms

<PAGE 11>

and provisions of this Plan (but not to increase amounts payable  hereunder) and
to resolve  any  disputed  question  or  controversy,  which  interpretation  or
construction  or  resolution,  including  decisions  with respect to adjustments
under Section 5.5, shall be final and binding on all parties,  including but not
limited to the Company and any  Eligible  Person,  Participant  or  Beneficiary,
except as otherwise  required by law. The Committee shall  administer such terms
and provisions in a nondiscriminatory manner and in full accordance with any and
all laws  applicable to the Plan. In performing its duties,  the Committee shall
be entitled to rely on information,  opinions, reports or statements prepared or
presented  by: (i)  officers  or  employees  of the Company  whom the  Committee
believes to be reliable and competent as to such matters;  and (ii) counsel (who
may be employees of the Company),  independent  accountants and other persons as
to matters which the Committee believes to be within such persons'  professional
or expert competence. The Committee shall be fully protected with respect to any
action  taken or  omitted  by it in good  faith  pursuant  to the advice of such
persons.  The  Committee  may  delegate   ministerial,   bookkeeping  and  other
non-discretionary  functions to individuals who are officers or employees of the
Company.

6.4  Indemnity and Liability.

All expenses of the Committee shall be paid by the Company and the Company shall
furnish the Committee with such clerical and other assistance as is necessary in
the  performance of its duties.  No member of the Committee  shall be liable for
any act or  omission  of any other  member of the  Committee  nor for any act or
omission on his or her own part.  To the extent  permitted  by law,  the Company
shall  indemnify and save harmless each member of the Committee  against any and
all  expenses  and  liabilities  arising  out of his  or her  membership  on the
Committee.

6.5  Claims Procedure.

(a)  The  Committee   shall  notify   Participants   and,   where   appropriate,
Beneficiaries  of their right to claim benefits  under these claims  procedures,
shall make forms available for filing of such claims, and shall provide the name
of the  person  or  persons  with  whom such  claims  should  be filed.

(b) The Committee  shall act upon claims as required and  communicate a decision
to the  claimant  promptly  and, in any event,  not later than 90 days after the
claim is received by the  Committee,  unless  special  circumstances  require an
extension of time for processing the claim. If an extension is required,  notice
of the  extension  shall be furnished  to the  claimant  prior to the end of the
initial 90-day period, which notice shall indicate the reasons for the extension
and the expected  decision  date.  The extension  shall not exceed 90 days.  The
claim may be deemed by the  claimant to have been denied for purposes of further
review  described below in the event a decision is not furnished to the claimant
within the period  described in the preceding three  sentences.  Every claim for
benefits  which is denied shall be denied by written  notice  setting forth in a
manner  calculated to be  understood by the claimant (i) the specific  reason or
reasons for the denial,  (ii) specific  reference to any provisions of this Plan
on which  denial is based,  (iii)  description  of any  additional  material  or
information  necessary for the claimant to perfect his claim with an explanation
of why such material or information is necessary, and (iv) an explanation of the
procedure for further  review of the denial of the claim under the Plan. 

<PAGE 12>

(c) The claimant or his or her duly authorized representative shall have 60 days
after  receipt of denial of his or her claim to request a review of such denial,
the right to review all  pertinent  documents and the right to submit issues and
comments in writing.  Upon  receipt of a request for a review of the denial of a
benefit  claim,  the  Committee  shall  undertake  a full and fair review of the
denial.

(d) The  Committee  shall issue a decision not later than 60 days after
receipt of a request for review from a claimant  unless  special  circumstances,
such as the need to hold a hearing,  require a longer  period of time,  in which
case a decision  shall be rendered  as soon as  possible  but not later than 120
days after receipt of the claimant's  request for review. The decision on review
shall be in writing and shall include  specific reasons for the decision written
in a manner calculated to be understood by the claimant with specific  reference
to any provisions of this Plan on which the decision is based.

                                        7.
                          PLAN CHANGES AND TERMINATION

7.1  Amendments.     

The  Committee  shall have the right to amend this Plan in whole or in part from
time to time or may at any  time  suspend  or  terminate  this  Plan;  provided,
however,  that no amendment or termination  shall cancel or otherwise  adversely
affect in any way, without his or her written consent,  any Participant's rights
with  respect to Stock Units and  Dividend  Equivalents  (and any cash  credited
pursuant  to Section  5.5(b))  credited  to his or her Stock Unit  Account.  Any
amendments  authorized  hereby shall be stated in an instrument in writing,  and
all Eligible  Persons  shall be bound  thereby  upon receipt of notice  thereof.
Adjustments  pursuant to Section 5.5 hereof,  Section 16 of the Management Plan,
Section 16 of the  Officer  Plan,  or Section  3.4 of the 1998 Plan shall not be
deemed  amendments  to this  Plan,  the Stock  Unit  Accounts  or the  rights of
Participants.

7.2  Term.

It is the current  expectation  of the Company that this Plan shall be continued
indefinitely,  but  continuance  of this Plan is not  assumed  as a  contractual
obligation  of  the  Company.  In  the  event  that  the  Committee  decides  to
discontinue  or terminate  this Plan, it shall notify the  Participants  in this
Plan of its action in  writing,  and this Plan shall be  terminated  at the time
therein set forth. All Participants  shall be bound thereby.  In such event, the
then credited  benefits of a Participant  shall be immediately  distributed in a
lump sum.

                                        8.
                                  MISCELLANEOUS

8.1  Limitation on Participant Rights.

Participation  in this Plan  shall not give any  person  the right to  continued
employment or service or any rights or interests other than as herein  provided.
No Participant  shall have any right to any payment or benefit  hereunder except
to the extent  provided in this Plan.  This Plan  creates no  fiduciary  duty to
Participants  and shall create only a contractual  

<PAGE 13>

obligation on the part of the Company as to such amounts;  the Plan shall not be
construed  as  creating  a trust.  The Plan,  in and of  itself,  has no assets.
Participants  shall have rights no greater  than the right to receive the Common
Stock (and any cash as  expressly  provided  herein)  or the value  thereof as a
general unsecured creditor in respect of their Stock Unit Accounts.

8.2  Beneficiary Designation.

Upon forms  provided by and subject to conditions  imposed by the Company,  each
Participant may designate in writing the Beneficiary or Beneficiaries  whom such
Participant  desires to receive  any Shares or amounts  payable  under this Plan
after his or her death.  A  Participant  may from time to time change his or her
designated  Beneficiary or Beneficiaries without the consent of such Beneficiary
or Beneficiaries by filing a new designation with the Committee.  However,  if a
married Participant wishes to designate a person other than his or her spouse as
Beneficiary,  such  designation  shall be consented to in writing by the spouse,
which consent shall  acknowledge the effect of the designation.  The Participant
may change any election  designating a Beneficiary or Beneficiaries  without any
requirement  of further  spousal  consent if the  spouse's  consent so provides.
Notwithstanding  the  foregoing,  spousal  consent shall be unnecessary if it is
established (to the satisfaction of the Committee or a Committee representative)
that there is no spouse or that the required  consent cannot be obtained because
the spouse  cannot be located.  The Company  and the  Committee  may rely on the
Participant's  designation  of a  Beneficiary  or  Beneficiaries  last  filed in
accordance  with the terms of this Plan.  Upon the  dissolution of marriage of a
Participant, any designation of the Participant's former spouse as a Beneficiary
shall be treated as though the  Participant's  former spouse had predeceased the
Participant, unless (a) the Participant executes another Beneficiary designation
that complies with this Section 8.2 and that clearly names such former spouse as
a  Beneficiary,  or (b) a court order is presented to the Company that  requires
the  former  spouse be  maintained  as the  Beneficiary.  In any case  where the
Participant's  former  spouse is  treated  under the  Participant's  Beneficiary
designation  as  having   predeceased  the   Participant,   no  heirs  or  other
beneficiaries  of the former  spouse shall  receive  benefits from the Plan as a
Beneficiary of the Participant except as provided otherwise in the Participant's
Beneficiary designation.

8.3  Payments to Minors or Persons Under Incapacity.

If any amount is payable  under this Plan to a minor,  payment shall not be made
to the  minor,  but  instead  shall be paid  (i) to that  person's  then  living
parent(s) to act as custodian,  (ii) if that person's parents are then divorced,
and one parent is the sole custodial  parent, to such custodial parent, or (iii)
if no parent of that person is living, to a custodian  selected by the Committee
to hold the funds for the minor under the Uniform  Transfers  or Gifts to Minors
Act in effect in the  jurisdiction  in which the minor resides.  If no parent is
living and the  Committee  decides not to select  another  custodian to hold the
funds  for the  minor,  then  payment  shall be made to the duly  appointed  and
currently  acting guardian of the estate for the minor or, if no guardian of the
estate for the minor is duly appointed and currently acting within 60 days after
the date the amount becomes  payable,  payment shall be deposited with the court
having jurisdiction over the estate of the minor.

<PAGE 14>


8.4  Stock Units and Other Benefits Not Assignable; Obligations Binding Upon 
     Successors.

Stock  Units and other  benefits of a  Participant  under this Plan shall not be
assignable or transferable  and any purported  transfer,  assignment,  pledge or
other  encumbrance or attachment of any payments or benefits under this Plan, or
any interest therein, other than by operation of law or pursuant to Section 8.2,
shall not be permitted or recognized. Obligations of the Company under this Plan
shall be binding upon successors of the Company.

8.5  Employment Taxes.

The  Company  (including  its  Subsidiaries)  may  satisfy  any state or federal
employment tax withholding  obligation arising from an Alternative Exercise of a
Qualifying  Option  under the Plan by  deducting  such amount from any amount of
compensation payable to the Participant.  Alternatively,  the Company (including
its Subsidiaries) may require the Participant to deliver to it the amount of any
such  withholding  obligation as a condition to the Alternative  Exercise of the
Qualifying Option.

8.6  Governing Law; Severability.

The  validity  of  this  Plan  or any  of its  provisions  shall  be  construed,
administered  and governed in all respects under and by the laws of the State of
California.  If any  provisions of this  instrument  shall be held by a court of
competent jurisdiction to be invalid or unenforceable,  the remaining provisions
hereof shall continue to be fully effective.

8.7  Compliance With Laws.

This Plan, the Company's acceptance of the exercise price of a Qualifying Option
in the form of Shares,  the  Company's  issuance of Stock Units,  and the offer,
issuance  and  delivery  of Shares  and/or  the  payment in Shares  through  the
deferral  of  compensation  under this Plan are subject to  compliance  with all
applicable  federal and state laws,  rules and  regulations  (including  but not
limited  to state  and  federal  securities  law) and to such  approvals  by any
listing,  agency or any  regulatory  or  governmental  authority  as may, in the
opinion of counsel for the Company,  be  necessary  or  advisable in  connection
therewith.  Any  securities  delivered  under this Plan shall be subject to such
restrictions,  and the person  acquiring such securities  shall, if requested by
the Company,  provide such assurances and  representations to the Company as the
Company may deem necessary or desirable to assure compliance with all applicable
legal  requirements.  If the Company in its sole  discretion  determines that an
Alternative  Exercise of a  Qualifying  Option  would  violate any law,  rule or
regulation, the Company may refuse to honor such Alternative Exercise.

8.8  Plan Construction.

It is the intent of the Company that transactions  pursuant to this Plan satisfy
and be interpreted in a manner that  satisfies the  applicable  requirements  of
Rule 16b-3 so that to the extent  elections  are timely made,  the  crediting of
Stock Units and the  distribution  of Shares  with  respect to Stock Units under
this Plan will be  entitled  to the  benefits  of Rule 16b-3 or other  exemptive
rules  under  Section  16 of the  Exchange  Act and  will  not be  subjected  to
avoidable liability thereunder.

<PAGE 15>

8.9  Headings Not Part of Plan.

Headings and  subheadings  in this Plan are inserted for reference  only and are
not to be considered in the construction of the provisions hereof.

IN WITNESS  WHEREOF,  the  Company  has caused  its duly  authorized  officer to
execute this Plan on this 27th day of March, 1998.


                                                  EDISON INTERNATIONAL



                                                  Lillian R. Gorman
                                                  --------------------
                                                  Lillian R. Gorman
                                                  Vice President
<PAGE 16>