Document:

Exhibit 10.5 Form of Director Stock Unit Agreement & Stock Unit Deferral

Exhibit 10.5

Grant No. _____________

THE GAP, INC.
DIRECTOR STOCK UNIT AGREEMENT

The Gap, Inc. (the “Company”) hereby grants to ______ (the “Director”), the number of Stock Units under the Company's 2011 Long-Term Incentive Plan (the “Plan”) indicated below.  This award is subject to all of the terms and conditions contained in this Director Stock Unit Agreement (the “Agreement”), including the terms and conditions contained in the attached Appendix A and the Plan.  The date of this Agreement is «Award_Date».  Subject to the provisions of Appendix A and of the Plan, the principal features of this award are as follows: 
Date of Grant:     ________
Number of Stock Units:     ________
Vesting of Stock Units (“Vesting Schedule”):     100% of the Stock Units shall be immediately vested upon the Date of Grant.
Your signature below indicates your agreement and understanding that this award is subject to all of the terms and conditions contained in Appendix A and the Plan.  PLEASE BE SURE TO READ ALL OF APPENDIX A AND THE PLAN, WHICH CONTAINS THE SPECIFIC TERMS AND CONDITIONS OF THIS AWARD.
IN WITNESS WHEREOF, the Company and the Director have executed this Agreement, in duplicate, to be effective as of the day and year first above written.
THE GAP, INC.            

Date:              
            

My signature below indicates that I understand that this award is subject to all of the terms and conditions of this Agreement (including the attached Appendix A) and of the Plan.  

DIRECTOR
Dated:             
                    
Address:         
                            
                            

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APPENDIX A
TERMS AND CONDITIONS OF STOCK UNIT GRANT
1.Grant of Stock Units.  The Company hereby grants to the Director under the Plan the number of Stock Units indicated on the first page of this Agreement subject to the terms and conditions set forth in this Agreement and the Plan.  
2.    Company’s Obligation to Pay.  On any date, a Stock Unit has a value equal to the Fair Market Value of one Share.  Unless and until the Stock Units have vested in accordance with the Vesting Schedule set forth on the first page of this Agreement, the Director will have no right to payment of the Stock Units.  Prior to actual payment of any vested Stock Units, Stock Units represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company.  
3.    Payment.  
(a)    General Rule.   Vested Stock Units will be paid to the Director in full Shares (with the balance, if any, in cash) as soon as practicable (but not more than ninety (90) days) following the earliest of (i) the date which is three (3) years from the Date of Grant (or later date elected by the Director in accordance with Section 3(b)), (ii) the Director’s separation from service (in accordance with Section 3(c)), or (iii) certain change in control transactions described in Section 3(d), in each case, subject to paragraph 5.
(b)    Election to Defer Payment.  Notwithstanding paragraph 3(a), at the discretion of the Committee and in accordance with the Plan, Code Section 409A and such rules established by the Committee, the Director may elect to further defer delivery of the proceeds due with respect to his or her vested Stock Units by properly completing and submitting a Stock Unit Deferral Election Form (the “Election Form”) to the Company in accordance with the directions on the Election Form and the procedures established by the Committee.  
(c)    Termination of Service.  Notwithstanding paragraphs 3(a) and 3(b), in the event that the Director incurs a separation from service (within the meaning of Code Section 409A) for any reason, including, but not limited to, death, Disability, or Retirement, the vested Stock Units will be paid to the Director (or in the event of the Director’s death, to his or her estate) as soon as practicable (but not more than 90 days) following the date of such separation from service, except as provided by paragraph 8, and in each case subject to paragraph 5.
(d)    Change in Control.  In the event of a transaction or event  that constitutes a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company (as determined in accordance with section 409A(a)(2)(A)(v) of the U.S. Internal Revenue Code of 1986, as amended and Treasury Regulation Section 1.409A-3(i)(5)), the vested Stock Units will be paid to the Director as soon as practicable (but not more than 90 days) following the date of such change in control or other similar transaction or event (subject to paragraph 5).  
4.    Death of Director.  Any distribution or delivery to be made to the Director under this Agreement will, if the Director is then deceased, be made to the Director’s designated beneficiary to the extent such designation is valid under applicable law.  If the Director has not designated a then living beneficiary, distributions and deliveries will be made to the administrator or executor of the Director’s estate.  Any such administrator or executor must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.
5.    Withholding of Taxes.  The Director agrees that the Company will withhold a portion of the Shares scheduled to be issued pursuant to vested Stock Units that have an aggregate market value sufficient to pay the federal, state and local income, employment and any other applicable taxes required to be withheld by the Company or its designated Affiliate, determined at minimum statutory withholding rates.  The Company will only withhold whole Shares and therefore the Director also authorizes deduction without notice from amounts payable to the Director in cash in an amount sufficient to satisfy the Company’s remaining tax withholding obligation.  Notwithstanding the previous two sentences, the Director, if the Company in its sole discretion so agrees, may elect to furnish to the Company written notice, no more than 30 days and no less than 5 days in advance of the date the 

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vested Stock Units are scheduled to be paid (in accordance with paragraph 3), of his or her intent to satisfy the tax withholding requirement by remitting the full amount of the tax withholding to the Company on this date.  In the event that Director provides such written notice and fails to satisfy the tax withholding requirement by the date the vested Stock Units are scheduled to be paid (in accordance with paragraph 3), the Company shall satisfy the tax withholding requirement pursuant to the first two sentences of this section.    
6.    Rights as Stockholder.  Subject to paragraph 7, neither the Director nor any person claiming under or through the Director will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such Shares have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to the Director.  After such issuance, recordation, and delivery, the Director will have all the rights of a stockholder of the Company with respect to such Shares.  
7.    Dividend Equivalents.  The Director shall be entitled to receive Dividend Equivalents paid on Shares underlying the Stock Units.  Any Dividends Equivalents automatically shall be deemed reinvested in Stock Units annually on each anniversary after the date of grant or, if earlier, the settlement of the Stock Units (the “Dividend Equivalent Stock Units”).  Dividend Equivalent Stock Units shall be subject to the same terms and conditions as the Stock Units, including any deferral election.
8.    Section 409A.  Notwithstanding anything in the Plan or this Agreement to the contrary, if at the time of the Director’s “separation from service” within the meaning of Section 409A, as determined by the Company other than due to the Director’s death (x) the Director is a “specified employee” within the meaning of Section 409A at the time of such separation and (y) the payment of any vested Stock Units that become payable as a result of such separation will result in the imposition of additional tax under Section 409A if paid to the Director on or within the six (6) month period following the Director’s separation from service, then the payment of such vested Stock Units will not be made until the date six (6) months and one day following the date of the Director’s separation from service, subject to paragraph 5, unless the Director dies following his or her separation from service, in which case, the vested Stock Units will be paid in Shares to the Director’s estate upon his or her death, subject to paragraph 5.  It is the intent of this Agreement to comply with the requirements of Section 409A so that none of the Stock Units provided under this Agreement or Shares issuable thereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply.  For purposes of this Agreement, “Section 409A” means Section 409A of the U.S. Internal Revenue Code of 1986, as amended, and any proposed, temporary or final Treasury Regulations and Internal Revenue Service guidance thereunder, as each may be amended from time to time.
9.    No Effect on Service.  The transactions contemplated hereunder and the vesting schedule set forth on the first page of this Agreement do not constitute an express or implied promise of continued service for any period of time.  The terms of the Director’s service shall not be affected by the grant of this award.
10.    Address for Notices.  Any notice to be given to the Company under the terms of this Agreement must be addressed to the Company, in care of its Legal Department, at The Gap, Inc., Two Folsom, San Francisco, California 94105, or at such other address as the Company may hereafter designate in writing.  Any notice to be given to the Director will be addressed to the Director at the address set forth on the records of the Company.  Any such notice will be deemed to have been duly given if and when enclosed in a properly sealed envelope, addressed as aforesaid, and deposited, postage prepaid, in a United States post office.
11.    Grant is Not Transferable.  Except as otherwise expressly provided herein, this grant, and the rights and privileges conferred hereby, may not be transferred, assigned, pledged, or hypothecated in any way (whether by operation of law or otherwise) and may not be subject to sale under execution, attachment, or similar process.  Upon any attempt to transfer, assign, pledge, hypothecate, or otherwise dispose of this grant, or any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment, or similar process, this grant and the rights and privileges conferred hereby immediately will become null and void.  
12.    Restrictions on Sale of Securities.  The Director’s sale of Shares acquired pursuant to Stock Units shall be subject to the terms of the Plan and any market blackout-period that may be imposed by the Company and must comply with the Company’s insider trading policies, and any other applicable securities laws.

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13.    Binding Agreement.  Subject to the limitation on the transferability of this grant contained herein, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors, and assigns of the Company and the Director.
14.    Additional Conditions to Issuance of Certificates for Shares.  The Shares deliverable to the Director may be either previously authorized but unissued Shares or issued Shares that have been reacquired by the Company.  Solely for purposes of Delaware corporate law, par value for the Shares actually delivered to the Director for the Stock Units will be deemed satisfied by past services rendered by the Director. The Company shall not be required to issue any Shares hereunder so long as the Company reasonably anticipates that such issuance will violate Federal securities law or other applicable law; provided however, that in such event the Company shall issue such Shares at the earliest possible date at which the Company reasonably anticipates that the issuance of the Shares will not cause such violation.  For purposes of the previous sentence, any issuance of Shares that would cause inclusion in gross income or the application of any penalty provision or other provision of the Code shall not be treated as a violation of applicable law.
15.    Plan Governs.  This Agreement is subject to all terms and provisions of the Plan.  In the event of a conflict between one or more provisions of this Agreement and one or more provisions of the Plan, the provisions of the Plan will govern.  Capitalized terms used and not defined in this Agreement will have the meaning set forth in the Plan.
16.    Committee Authority.  The Committee will have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation, and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Stock Units have vested).  All actions taken and all interpretations and determinations made by the Committee in good faith will be final and binding upon the Director, the Company, and all other interested persons.  No member of the Committee will be personally liable for any action, determination, or interpretation made in good faith with respect to the Plan or this Agreement.
17.    Captions.  Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
18.    Agreement Severable.  In the event that any provision in this Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.
19.    Modifications to the Agreement.  This Agreement constitutes the entire understanding of the Company and the Director on the subjects covered.  The Director expressly warrants that he or she is not accepting this Agreement in reliance on any promises, representations, or inducements other than those contained herein.  Modifications to this Agreement or the Plan can be made only in an express written agreement executed by a duly authorized officer of the Company.  Notwithstanding anything to the contrary in the Plan or this Agreement, the Company reserves the right to revise this Agreement as it deems necessary or advisable, in its sole discretion and without the consent of the Director, to comply with Section 409A of the Code or to otherwise avoid imposition of any additional tax or income recognition under Section 409A of the Code in connection with these Stock Units (including settlement or payment thereof).
20.    Amendment, Suspension or Termination of the Plan.  By accepting this award, the Director expressly warrants that he or she has received a right to an equity based award under the Plan, and has received, read, and understood a description of the Plan.  The Director understands that the Plan is discretionary in nature and may be modified, suspended, or terminated by the Company at any time.
21.    Notice of Governing Law.  This grant of Stock Units shall be governed by, and construed in accordance with, the laws of the State of California without regard to principles of conflict of laws.
***

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Grant No. [INSERT]

THE GAP, INC.
2011 LONG-TERM INCENTIVE PLAN
STOCK UNIT DEFERRAL ELECTION FORM
(ACTION REQUIRED)

Complete and return this Election Form if you want to defer the settlement (payment) of stock units granted to you under The Gap, Inc. 2011 Long-Term Incentive Plan (the “Plan”) on [DATE OF GRANT] (“Date of Grant”).  

Stock units that are granted to you under the Plan (“Stock Units”) generally become payable as soon as practicable (but not later than 90 days) after the date which is three (3) years from the Date of Grant (the “Original Payment Date”) in whole shares of common stock of The Gap, Inc. (the “Company”), with the balance, if any, in cash.  Stock Units are immediately one hundred percent (100%) vested upon the Date of Grant.  The Committee (as defined in the Plan) permits you to defer the settlement of your Stock Units beyond the Original Payment Date on a tax-deferred basis in accordance with the terms of the Plan.  To achieve this favorable tax result, the amounts deferred will continue to represent an unfunded and unsecured promise to pay on behalf of the Company.  With respect to any amounts that you defer, you will become a general, unsecured creditor of the Company, which means that your deferral remains subject to the claims of the Company’s creditors, and, if the Company’s assets are insufficient to pay all of its creditors, you may not receive part or all of your deferral. 

Please note that the Plan has been amended to comply with Section 409A of the Internal Revenue Code (“Section 409A”).  As a result, any deferral elections made with respect to Stock Units must comply with the requirements of Section 409A.  This means that deferral elections can be accepted and become effective only if the following requirements (the “Deferral Requirements”) are satisfied: (a) the deferral election must be made at least twelve (12) months before the Original Payment Date; (b) the deferral election must defer the payment of the Stock Units for a period of not less than five (5) years from the Original Payment Date; and (c) the deferral election may not take effect until at least twelve (12) months after the date on which the election is made.  

Notwithstanding the foregoing and any election made hereunder, in accordance with paragraph 3(c) of the Stock Unit Agreement applicable to your Stock Units, the vested Stock Units will be paid to you (or in the event of your death, to your estate) as soon as practicable (but not later than 90 days) following the date you incur a Termination of Service for any reason, including, but not limited to, death, Disability, or Retirement (as such terms are defined in the Plan); provided, however, that, in accordance with Section 8 of the Stock Unit Agreement, payment will be made no earlier than six (6) months and one (1) day following the date of termination to the extent necessary to comply with Section 409A.  In addition, in accordance with paragraph 3(d), of the Stock Unit Agreement applicable to your Stock Units, the vested Stock Units will be paid to you (or in the event of your death, to your estate) as soon as practicable (but not later than 90 days) following the date of certain changes in control of the Company.  
I.    PERSONAL INFORMATION (Please Print)

Director Name:     ___________________ (the “Director”)

II.    STOCK UNIT DEFERRAL ELECTION (Choose One)

Payment of the Stock Units indicated below will be made as soon as practicable (but not later than 90 days) following the date you choose below (the “Designated Payment Date”) or earlier in accordance with Section 3(c) or 3(d) of the Stock Unit Agreement, as applicable, provided that the Deferral Requirements are satisfied.  This means that your Designated Payment Date will be given effect only if (a) you complete and return this Election Form at least twelve (12) months before the Original Payment Date, and (b) the Designated Payment Date is deferred at least five (5) years from the Original Payment Date.  As noted above, any payment will be made in the form of whole shares of Company common stock with the balance, if any, in cash.

		
	___
	I DO NOT wish to further defer the settlement (i.e., payment) of the Stock Units granted to me under the Plan on Date of Grant, past the “Original Payment Date”.  

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OR

		
	___
	I elect to defer the settlement (i.e., payment) of the Stock Units granted to me under the Plan on Date of Grant until _______________________, 20_____ (specify a date that is at least five (5) years from Original Payment Date of the Stock Units).  

IMPORTANT:  Please note that if the Original Payment Date is within twelve (12) months of the date you complete and return this Election Form, or you choose a deferral date that is not at least five (5) years from the Original Payment Date then, due to Section 409A requirements, we cannot accept your deferral election and it will be deemed null and void.  This means that payment of the Stock Units will be made as soon as practicable (but not later than 90 days) after the Original Payment Date regardless of your deferral election or, earlier, in accordance with Section 3(c) or 3(d) of the Stock Unit Agreement, as applicable.

Any amounts deferred will be taxable as ordinary income in the year paid.  Please seek advice from your professional tax advisor before making your deferral election. 

III.  DIRECTOR SIGNATURE

I acknowledge that I have read and reviewed a copy of the Plan’s prospectus.  I understand that my decision to defer the settlement of Stock Units continues to make me only a general, unsecured creditor of the Company.  I also understand that the amounts deferred will be taxable as ordinary income in the year paid.  If the Company determines that it is required to withhold for any taxes, including, but not limited to, income or employment taxes, prior to the date of deferred payout, I agree that, if I do not make other arrangements that are satisfactory to the Committee, in its sole discretion, the Company will withhold from the amounts due to me.  I also understand that, upon receipt of deferred payouts, in addition to federal taxes, I may owe taxes both (1) to the state where I resided on the Date of Grant or at the time of making this election and, if different, (2) to the state where I reside when I receive a deferred payout. 

The Committee shall have the discretion to make all determinations and decisions regarding this deferral election.  To the extent the Committee determines that this election does not comply with applicable laws, now or in the future, this election shall be null and void.  

By signing this Election Form, I authorize implementation of the above instructions.  I understand that the deferral elections that I have made on this Election Form are generally irrevocable and may not be changed in the future except in accordance with the requirements of Section 409A and the procedures specified by the Committee.

Please return a signed copy of this Election Form to [Lisa Delgado at lisa_delgado@gap.com] by the earlier of (i) August 1st following the date of grant or (ii) within sixty (60) days from the Date of Grant (the “Election Deadline”).

Your elections hereunder will become irrevocable on the Election Deadline. If you fail to make an election by the Election Deadline, you will be deemed to have elected to not further defer the settlement of your Stock Units granted on Date of Grant.  

DIRECTOR

Signed: ___________________________        Date: ___________________________

Agreed to and accepted:

THE GAP, INC.

By: _____________________________            Date: ___________________________

Title: ____________________________

6Exhbit 41

Exhibit 4.1

CERTIFICATE OF DETERMINATION OF PREFERENCES OF THE
SERIES H PREFERENCE STOCK

SOUTHERN CALIFORNIA EDISON COMPANY

We, the undersigned, being the Vice President and the Assistant Treasurer, respectively, of Southern California Edison Company (the “Corporation”), a corporation organized and existing under and by virtue of the provisions of the laws of the State of California, DO HEREBY CERTIFY: 

FIRST:  The Restated Articles of Incorporation, as amended (the “Articles”), authorize the issuance of 50,000,000 shares of Preference Stock which may be issued from time to time in one or more series, and authorize the Board of Directors of the Corporation to (i) fix the number of shares of any series of Preference Stock and to determine the designation of any such series, (ii) to determine or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preference Stock, including but not limited to rights, preferences, privileges and restrictions regarding dividends (including provisions specifying dividends at a floating or variable rate or dividends to be determined by reference to an index, formula, auction, bid or other objectively ascertainable criterion), liquidation, conversion, redemption and voting (including provisions specifying no general voting rights or voting rights of more than one vote per share), and, (iii) within the limits and restrictions stated in any resolution or resolutions of the Board of Directors originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of any such series subsequent to the issue of shares of that series.

SECOND:  Acting pursuant to the authority delegated by the Board of Directors of the Corporation, the Pricing Committee of the Board of Directors did duly adopt on February 27, 2014, the following resolutions authorizing and providing for the creation of a series of said shares of Preference Stock to be known as Series H Preference Stock, consisting of 110,004 shares, none of the shares of such series having been issued:

“NOW, THEREFORE, BE IT RESOLVED, that 110,004 shares of the presently authorized but unissued Preference Stock, no par value, be and hereby determined to be and shall be of a series of said Preference Stock hereby designated as the “Series H Preference Stock” (the “Series H Shares”); and 

BE IT FURTHER RESOLVED, that the rights, preferences, privileges and restrictions of Series H Shares of such series be and the same are hereby fixed, respectively, as follows:

		
	1.
	Dividends

(a)    The holders of record of the Series H Shares (each individually a “Holder,” or collectively the “Holders”) will be entitled to receive, when, as and if declared by the Board of Directors of the Corporation or duly authorized committee thereof (the “Board”), in its sole discretion out of funds legally available therefor, cumulative quarterly cash dividends at an annual rate equal to (1) 5.75% of the Liquidation Preference for each Dividend Period (as defined below) from, and including, the issue date of the Series H Shares to, but excluding, March 15, 2024 (the “Fixed Rate Period”), and (2) the three-month LIBOR rate plus 2.99% of the Liquidation Preference, for each Dividend Period from, and including, March 15, 2024 through, but excluding, the redemption date of the Series H Shares, if any (the “Floating Rate Period”).  When, as and if declared by the Board, we will pay dividends on the Series H Shares quarterly, in arrears, on March 15, June 15, September 15 and December 15 of each year (each, a “Dividend Payment Date”), commencing June 15, 2014.  Such dividends shall be cumulative from the date of issue whether or not earned or declared, and no interest, dividends or sum in lieu thereof shall be payable in respect of the amount of any dividend on the Series H Shares not paid on a Dividend Payment Date and accrued.  If a Dividend Payment Date during the Fixed Rate Period is not a Business Day (as defined below), the related dividend (if declared) will be paid on the next succeeding Business Day with the same force and effect as though paid on the Dividend Payment Date, without any increase to account for the period from such Dividend Payment Date through the date of actual payment.  If any Dividend Payment Date during the Floating Rate Period is not a Business Day, the related dividend (if declared) will be payable on the next succeeding Business Day, with the same force and effect as though paid on the Dividend Payment Date, without any increase to account for the period from such Dividend Payment Date through the date of actual payment, unless that day falls in the next calendar month, in which case the Dividend Payment Date will be the immediately preceding Business Day.  Dividends payable on the Series H Shares for any period from but including a Dividend Payment Date to but excluding the next succeeding Dividend Payment Date (a “Dividend Period”) during the Fixed Rate Period will be computed on the basis of a 360-day year consisting of twelve 30-day months; provided however that Dividends payable on the Series H Shares for the initial Dividend Period and any period shorter than a full Dividend Period will be computed on the basis of a 360-day year consisting of twelve 30-day months and the actual number of days elapsed in the period using 30-day months.  Dividends payable on the Series H Shares for any Dividend Period during the Floating Rate Period will be computed based on the actual number of days in a Dividend Period and a 360-day year. “Liquidation Preference” means $2,500.00 per share of the Series H Shares.  “Business Day” means any weekday that is not a legal holiday in New York, New York and is not a day on which banking institutions in New York, New York or Los Angeles, California are closed.
(i)    The dividend rate for each Dividend Period in the Floating Rate Period will be determined by the Calculation Agent (as defined below) using three-month LIBOR as in effect on the second London Business Day (as defined below) prior to the beginning of the applicable 

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Dividend Period, which date is the “Dividend Determination Date” for the Dividend Period.  The Calculation Agent then will add 2.99% to three-month LIBOR as determined on the Dividend Determination Date.  Absent manifest error, the Calculation Agent’s determination of the dividend rate for a Dividend Period in the Floating Rate Period for the Series H Shares will be binding and conclusive.  
(ii)     The term “three-month LIBOR” means (a) the offered quotation to leading banks in the London interbank market for three-month dollar deposits as defined by the British Bankers’ Association (or its successor in such capacity, such as NYSE Euronext Rate Administration Ltd.) and calculated by their appointed calculation agent and published, as such rate appears: (i) on the Reuters Monitor Money Rates Service Page LIBOR01 (or a successor page on such service) or (ii) if such rate is not available, on such other information system that provides such information, in each case as of 11:00 a.m. (London time) on the Dividend Determination Date, (b) if no such rate is so published, then the rate for the Dividend Determination Date shall be the arithmetic mean (rounded to five decimal places, with 0.000005 being rounded upwards) of the rates for three-month dollar deposits quoted to the Calculation Agent as of 11:00 a.m. (London time) on the Dividend Determination Date; it being understood that at least two such quotes must have been so provided to the Calculation Agent, or (c) if LIBOR cannot be determined on the Dividend Determination Date using the foregoing methods, then the LIBOR for the relevant dividend period shall be the LIBOR as determined using the foregoing methods for the first day before the Dividend Determination Date on which LIBOR can be so determined. “Reuters Monitor Money Rates Service Page LIBOR01” means the display designated on page “LIBOR01” on Reuters (or such other page as may replace the LIBOR01 page on that service or any successor service for the purpose of displaying London interbank offered rates for U.S. dollar deposits of major banks). “London Business Day” means any day on which dealings in deposits in U.S. dollars are transacted in the London interbank market. “Calculation Agent” means Wells Fargo Bank, N.A., or another firm appointed by the Corporation, acting as Calculation Agent
(iii)     All percentages resulting from any of the above calculations will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)) and all dollar amounts used in or resulting from such calculations will be rounded to the nearest cent (with one-half cent being rounded upwards).
(b)    Dividends will be payable to Holders as of the applicable record date, which record date shall be fixed by the Board and shall be a date not exceeding 60 

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days before the applicable payment date.  Dividends not declared with respect to a specific Dividend Payment Date shall be payable to the Holders as of the record date fixed with respect to such dividends when so declared. 

(c)    So long as any Series H Shares shall be outstanding, no dividend (other than dividends or distributions paid in shares of, or options, warrants or rights to subscribe for or purchase shares of, the common stock of the Corporation (the “Common Stock”) or any other stock of the Corporation ranking, as to the payment of dividends and the distribution of assets upon dissolution, liquidation or winding up of the Corporation, junior to the Series H Shares), whether in cash or property, may be paid or declared or set apart, nor may any distribution be made on the Common Stock or such other stock, nor may any shares of Common Stock or such other stock be purchased, redeemed or otherwise acquired for value by the Corporation, unless all dividends on the Series H Shares for the then-current quarterly Dividend Period and all past quarterly Dividend Periods shall have been declared and paid or set apart.

(d)    The Board may, in its discretion, choose to pay dividends on the Series H Shares without the payment of any dividends on the Common Stock (or any other stock of the Corporation ranking, as to the payment of dividends, junior to the Series H Shares).

(e)    No full dividends shall be declared or paid or set apart for payment on any stock of the Corporation ranking, as to the payment of dividends, equally with the Series H Shares for any period unless full dividends have been declared and paid or set apart for payment on the Series H Shares for the then-current quarterly Dividend Period and all past quarterly Dividend Periods.  When dividends are not paid in full upon the Series H Shares and all other classes or series of stock of the Corporation, if any, ranking, as to the payment of dividends, equally with the Series H Shares, all dividends declared upon the Series H Shares and all such other stock of the Corporation will be declared pro rata so that the amount of dividends declared for the Series H Shares and all such other stock will in all cases bear to each other the same ratio that accrued dividends for the Series H Shares and for all such other stock bear to each other (but without, in the case of non-cumulative shares of such other stock, accumulation of unpaid dividends for prior Dividend Periods).

(f)    No dividends may be declared or paid or set apart for payment on any Series H Shares if at the same time any arrears exist or default exists in the payment of dividends on any outstanding class or series of stock of the Corporation ranking, as to the payment of dividends, senior to the Series H Shares.

(g)    The Holders will not be entitled to any dividends, whether payable in cash or property, other than as herein provided and will not be entitled to interest or dividends, or any sum in lieu thereof, on or in respect of any dividend payment or other payment on the Series H Shares which may be in arrears.

		
	2.
	Liquidation Rights

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(a)    Upon any voluntary or involuntary dissolution, liquidation or winding up of the Corporation, after payment or provision for the liabilities of the Corporation and the expenses of such dissolution, liquidation or winding up, the Holders of outstanding Series H Shares will be entitled to receive out of the assets of the Corporation or proceeds thereof available for distribution to shareholders, before any payment or distribution of assets is made to holders of the Common Stock (or any other stock of the Corporation ranking, as to the distribution of assets upon dissolution, liquidation or winding up of the Corporation, junior to the Series H Shares), the Liquidation Preference per Share plus an amount equal to the accrued and unpaid dividend (whether or not declared) for the then-current quarterly Dividend Period accrued to but excluding the date of such liquidation payment, plus unpaid dividends on the Series H Shares for all past quarterly Dividend Periods, if any.

(b)    If the assets of the Corporation available for distribution in such event are insufficient to pay in full the aggregate amount payable to Holders of Series H Shares and holders of all other classes or series of stock of the Corporation, if any, ranking, as to the distribution of assets upon dissolution, liquidation or winding up of the Corporation, equally with the Series H Shares, the assets will be distributed to the Holders of Series H Shares and holders of all such other stock pro rata, based on the full respective preferential amounts to which they are entitled (but without, in the case of any non-cumulative shares, accumulation of unpaid dividends for prior dividend periods).

(c)    Notwithstanding the foregoing, Holders of Series H Shares will not be entitled to be paid any amount in respect of a dissolution, liquidation or winding up of the Corporation until holders of any classes or series of stock of the Corporation ranking, as to the distribution of assets upon dissolution, liquidation or winding up of the Corporation, senior to the Series H Shares have been paid all amounts to which such classes or series are entitled.

(d)    Neither the sale, lease nor exchange (for cash, shares of stock, securities or other consideration) of all or substantially all of the property and assets of the Corporation, nor the merger, consolidation or combination of the Corporation into or with any other corporation or the merger, consolidation or combination of any other corporation or entity into or with the Corporation, shall be deemed to be a dissolution, liquidation or winding up, voluntary or involuntary, for the purposes of this Section 2.

(e)    After payment to the Holders of Series H Shares of the full amount of the distribution of assets upon dissolution, liquidation or winding up of the Corporation to which they are entitled pursuant to this Section 2, such Holders will not be entitled to any further participation in any distribution of assets by the Corporation.

		
	3.
	Voting Rights

The Series H Shares shall have no voting rights except as set forth in this Section 3 or as otherwise provided by California law:

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(a)    So long as any Series H Shares are outstanding, the consent of the Holders of at least a majority of the Series H Shares at the time outstanding, voting as a single class, or voting as a single class together with the holders of any other series of Preference Stock (i) upon which like voting or consent rights have been conferred and (ii) which are similarly affected by the matter to be voted upon, given in person or by proxy, either in writing or by vote at any meeting called for the purpose, shall be necessary for effecting or validating any one or more of the following:

(i)    any amendment of the Corporation’s Restated Articles of Incorporation which would adversely affect the rights, preferences, privileges or restrictions of the Series H Shares; or

(ii)    the authorization or creation, or the increase in the authorized amount, of any stock of any class or any security convertible into stock of any class, ranking senior to the Series H Shares.

provided, however, that no such consent of the Holders of Series H Shares shall be required if, at or prior to the time when such amendment is to take effect or when the authorization, creation or increase in the authorized amount of any such senior stock or convertible security is to be made, as the case may be, provision is to be made for the redemption of all Series H Shares at the time outstanding.

(b)On matters requiring their consent, the Holders will be entitled to one vote per Share.

		
	4.
	Redemption

(a)    The Series H Shares shall be redeemable (i) at the option of the Corporation at any time or from time to time on or after March 15, 2024 (an “Optional Redemption”) and (ii) at the option of the Corporation exercisable prior to March 15, 2024, if the Holder of all the Series H Shares is SCE Trust III or another Delaware statutory trust in which the Corporation owns all of the securities thereof designated as common securities, at any time within 90 days after an Investment Company Event or a Tax Event (each, a “Special Event Redemption”).  Subject to the notice provisions set forth in Section 4(b) below and subject to any further limitations which may be imposed by law, the Corporation (y) may redeem the Series H Shares, in whole or in part, in the event of an Optional Redemption and (z) may redeem the Series H Shares in whole but not in part upon occurrence of a Special Event Redemption, in each case out of funds legally available therefor, at a redemption price equal to the Liquidation Preference per Share plus an amount equal to the amount of the accrued and unpaid dividend (whether or not declared) for the then-current quarterly Dividend Period to but excluding the redemption date, plus unpaid dividends on the Series H Shares for all past quarterly Dividend Periods, if any.  If less than all of the outstanding Series H Shares are to be redeemed in an Optional Redemption, the Corporation will select the Series H Shares to 

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be redeemed from the outstanding Series H Shares not previously called for redemption by lot or pro rata.

(b)    In the event the Corporation shall redeem any or all of the Series H Shares as aforesaid, the Corporation will give notice of any such redemption to Holders neither more than 60 nor less than 30 days prior to the date fixed by the Board for such redemption.  Failure to give notice to any Holder shall not affect the validity of the proceedings for the redemption of Series H Shares of any other Holder being redeemed.

(c)    Notice having been given as herein provided, from and after the redemption date, dividends on the Series H Shares called for redemption shall cease to accrue and such Series H Shares called for redemption will no longer be deemed outstanding, and all rights of the Holders thereof will cease.

(d)    The Series H Shares will not be subject to any mandatory redemption, sinking fund or other similar provisions.  In addition, Holders will have no right to require redemption of any Series H Shares.

(e)    Any Series H Shares which are converted, redeemed or retired shall thereafter have the status of authorized but unissued shares of Preference Stock of the Corporation undesignated as to series, and may thereafter be reissued by the Board in the same manner as any other authorized and unissued shares of Preference Stock.

(f)    If the Corporation shall deposit on or prior to any date fixed for redemption of the Series H Shares, with any bank or trust company having a capital, surplus and undivided profits aggregating at least five million dollars ($5,000,000), as a trust fund, funds sufficient to redeem the Series H Shares called for redemption, with irrevocable instructions and authority to such bank or trust company to pay on and after the date fixed for redemption or such earlier date as the Board may determine, to the respective Holders of such Series H Shares, the redemption price thereof, then from and after the date of such deposit (although prior to the date fixed for redemption) such Series H Shares so called shall be deemed to be redeemed and dividends thereon shall cease to accrue from and after said date fixed for redemption and such deposit shall be deemed to constitute full payment of said Series H Shares to the Holders thereof and thereafter said Series H Shares shall no longer be deemed to be outstanding, and the Holders thereof shall cease to be shareholders with respect to such Series H Shares, and shall have no rights with respect thereto except only the right to receive from said bank or trust company payment of the redemption price of such Series H Shares without interest.

(g)Any moneys deposited by the Corporation pursuant to Section 4(f) which shall not be required for the redemption because of the exercise of any such right of conversion or exchange subsequent to the date of the deposit shall be repaid to the Corporation forthwith.

(h)For purposes of this Certificate of Determination of Preferences, “Investment Company Event” and “Tax Event” shall have the meanings ascribed to such 

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terms in the Declaration of Trust of SCE Trust III, a Delaware statutory trust (the “Trust”), to be dated as of March 6, 2014, by and among Southern California Edison Company, as Sponsor, the Trustees identified therein and the holders, from time to time, of undivided beneficial interests in the assets of the Trust, as may be amended from time to time, a copy of which is available without charge upon request by writing or calling the Corporate Governance Department at the Corporation’s principal place of business. 

		
	5.
	Rank

The Series H Shares shall rank, with respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation:

(a)junior to the Cumulative Preferred Stock and the $100 Cumulative Preferred Stock, and any other equity securities that the Corporation may later authorize or issue, the terms of which provide that such securities will rank senior to the Series H Shares with respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation;

(b)equally with any other shares of Preference Stock and any other equity securities that the Corporation may later authorize or issue, the terms of which provide that such shares or other securities will rank equally with the Series H Shares with respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation; and

(c)senior to the Common Stock, and any other equity securities that the Corporation may later authorize or issue, the terms of which provide that such securities will rank junior to the Series H Shares with respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation.

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IN WITNESS WHEREOF, the undersigned have executed this Certificate in Rosemead, California on February 27, 2014.

/s/ Robert C. Boada
__________________________
Robert C. Boada
Vice President

/s/ George T. Tabata
__________________________
George T. Tabata
Assistant Treasurer

Each of the undersigned declares under penalty of perjury that the matters contained in the foregoing certificate are true of their own knowledge.  Executed in Rosemead, California on February 27, 2014.

/s/ Robert C. Boada
__________________________
Robert C. Boada
Vice President

/s/ George T. Tabata
__________________________
George T. Tabata
Assistant Treasurer

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