Document:

DIRECTOR SUPPLEMENTAL COMPENSATION AGREEMENT

This  Agreement  is made and entered into  effective as of June 1, 2000,  by and
between San Jose National Bank, a national banking  association  chartered under
the federal  laws of the United  States of America  with its  principal  offices
located  in the City of San  Jose,  California  ("the  Bank"),  a  wholly  owned
subsidiary  of  SJNB   Financial   Corporation   (the  "Holding   Company")  and
____________________,  an individual  residing in the State of California  ("the
Director").
                                R E C I T A L S

WHEREAS,  the  Director is a member of the Board of Directors of the Bank and/or
the Holding Company and has served in such capacity since ________________;

WHEREAS,  the Bank desires to establish a compensation benefit for directors who
are not also  officers or  employees  of the Bank in order to attract and retain
individuals with extensive and valuable experience as directors and to establish
a director emeritus succession plan; and

WHEREAS,  the  Director  and the Bank wish to specify  in writing  the terms and
conditions upon which this additional compensatory incentive will be provided to
the Director.

NOW, THEREFORE, in consideration of the services to be performed by the Director
in the future,  as well as the mutual promises and covenants  contained  herein,
the Director and the Bank agree as follows:
                               A G R E E M E N T

1. Terms and Definitions.

1.1  Applicable  Percentage.  The term "Applicable  Percentage"  shall mean that
     percentage  listed on Schedule "A" attached hereto which is adjacent to the
     Plan Year in which the Director  Retires or otherwise  ceases to serve as a
     Director.  Notwithstanding  the foregoing or the  percentages  set forth on
     Schedule  "A",  but  subject to all other  terms and  conditions  set forth
     herein, the "Applicable  Percentage" shall automatically become one hundred
     percent  (100%) upon the  occurrence of a "Change in Control" as defined in
     subparagraph  1.2  below  or  the  Director's  Disability  (as  defined  in
     subparagraph 1.4 below).

1.2  Change in Control.  The term "Change in Control"  shall mean the occurrence
     of any of the  following  events  with  respect  to the Bank (with the term
     "Bank"  being  defined  for  purposes of  determining  whether a "Change in
     Control"  has  occurred  to include the  Holding  Company:  (i) a change in
     control of a nature  that would be  required  to be reported in response to
     Item  6(e)  of  Schedule  14A  of  Regulation  14A  promulgated  under  the
     Securities  Exchange Act of 1934, as amended (the  "Exchange  Act"),  or in
     response  to any  other  form  or  report  to the  regulatory  agencies  or
     governmental  authorities  having  jurisdiction  over the Bank or any stock
     exchange on which the Bank's shares are listed which requires the reporting
     of a change in control; (ii) any merger, consolidation or reorganization of
     the Bank in which  the  Bank  does not  survive;  (iii)  any  sale,  lease,
     exchange,   mortgage,   pledge,  transfer  or  other  disposition  (in  one
     transaction or a series of  transactions)  of any assets of the Bank having
     an aggregate fair market value of fifty percent (50%) of the total value of
     the assets of the Bank,  reflected in the most recent  balance sheet of the
     Bank; (iv) a transaction  whereby any "person" (as such term is used in the
     Exchange Act) or any  individual,  corporation,  partnership,  trust or any
     other entity  becomes the  beneficial  owner,  directly or  indirectly,  of
     securities of the Bank  representing  twenty-five  percent (25%) or more of
     the combined voting power of the Bank's then outstanding securities; or (v)
     a situation where, in any one-year period, individuals who at the beginning
     of such period  constitute the Board of Directors of the Bank cease for any
     reason to constitute at least a majority thereof,  unless the election,  or
     the  nomination  for  election  by the  Bank's  shareholders,  of each  new
     director  is  approved  by a vote of at least  three-quarters  (3/4) of the
     directors  then still in office who were  directors at the beginning of the
     period.  Notwithstanding the foregoing or anything else contained herein to
     the contrary,  there shall not be a "Change of Control" for the purposes of
     this  Agreement if the event which would  otherwise come within the meaning
     of the term "Change of Control"  involves an Employee Stock  Ownership Plan
     sponsored  by the  Bank or its  Holding  Company  which is the  party  that
     acquires  "control"  or is the  principal  participant  in the  transaction
     constituting a "Change in Control," as described above.

1.3  The Code.  The "Code"  shall mean the  Internal  Revenue  Code of 1986,  as
     amended (the "Code").

1.4  Disability/Disabled.  The term  "Disability"  or "Disabled"  shall have the
     same  meaning  given  such  terms in any  policy  of  disability  insurance
     maintained by the Bank for the benefit of directors including the Director.
     In the absence of such a policy which  extends  coverage to the Director in
     the event of  disability,  the terms  shall mean  bodily  injury or disease
     (mental or physical) which wholly and continuously prevents the performance
     by the Director of his duties for at least one year.

1.5  Effective Date. The term "Effective Date" shall mean the date first written
     above.

1.6  Director Retirement Benefit.  The term "Director  Retirement Benefit" shall
     mean (i) $22,500 per annum or (ii) if the Director been receiving  Director
     Emeritus  Payments  hereunder,  $23,877  per annum,  which shall be paid in
     equal  monthly  installments  for the  life of the  Director  and  shall be
     increased  each  year  on the  anniversary  date  of  commencement  of such
     payments by 2%; provided that all payments shall be subject to reduction or
     adjustment as may be required under any other provision of this Agreement;

1.7  Director Emeritus Benefit.  The term "Director Emeritus Benefit" shall mean
     $22,500 per year if the  Director  retires at age  seventy  (70) or $22,500
     reduced by 5% per year for the  difference  between the age of the Director
     at the date the  Director  Retires and age seventy  (70),  shall be paid in
     equal monthly  installments and shall be increased on each anniversary date
     of the commencement of payments by 2%;

1.8  Reduced Retirement  Benefit.  The term "Reduced  Retirement  Benefit" shall
     mean  the  amount  of the  Director  Retirement  Benefit  as set  forth  in
     Paragraph  1.6  reduced by 5% per year for the  difference  between the age
     specified for the then  applicable  Normal  Retirement  Date as provided in
     Paragraph 1.9 next following,  and the age of the Director at the date that
     payment of the Director  Emeritus Benefit is to commence,  or if none is to
     be paid,  the date that  payment of the  Reduced  Retirement  Benefit is to
     commence under the terms of this Agreement;

1.9  Normal  Retirement  Date.  The term  "Normal  Retirement  Date" or  "Normal
     Retirement  Age" shall mean age seventy  (70);  provided that on or after a
     Change in Control as defined in Paragraph 1.2, the Normal  Retirement  Date
     or Normal Retirement Age shall mean age sixty-two (62);

1.10 Early  Retirement  Date.  The term "Early  Retirement  Date" shall mean the
     later of the date when the Director attains age sixty (60), or the date the
     Director  qualifies  for an  Applicable  Percentage  equal  to one  hundred
     percent (100%).

1.11 Plan Year. The term "Plan Year" shall mean the Bank's fiscal year.

1.12 Retirement.  The terms  "Retirement,"  "Retires" or "Retire" shall refer to
     the date which the Director  acknowledges in writing to the Bank and/or the
     Holding  Company to be the last day of service as a member of the Boards of
     Directors of the Bank and the Holding Company.

1.13 Removal for Cause.  The term "removal for cause" shall mean the termination
     of the Director's  service as a member of the Boards of Directors by reason
     of any of the following  determined in good faith by disinterested  members
     of both Boards of Bank and the Holding Company:

     (a)  The willful, intentional and material breach or habitual and continued
          neglect by Director of his responsibilities and duties;

     (b)  The  continuous  mental or physical  incapacity  of the  Director,  on
          account of Disability;

     (c)  The  Director's  willful  and  intentional  violation  of any  federal
          banking or  securities  laws,  or of the  Bylaws,  rules,  policies or
          resolutions  of the  Bank or the  Holding  Company,  or the  rules  or
          regulations of the Board of Governors of the Federal  Reserve  System,
          Federal Deposit  Insurance  Corporation,  Office of the Comptroller of
          the Currency, or any other regulatory agency or governmental authority
          having   jurisdiction   over   the   Bank  or  the   Holding   Company
          (collectively,  "Bank  Regulator") which has a material adverse effect
          upon the Bank or the Holding Company;

     (d)  The  determination  by a state  or  federal  banking  agency  or other
          governmental  authority  having  jurisdiction  over  the  Bank  or the
          Holding  Company  that  the  Director  is not  suitable  to act in the
          capacity for which he is employed by the Bank, or;

     (e)  The  Director is convicted  of any felony or a crime  involving  moral
          turpitude  or willfully  and  intentionally  commits a  fraudulent  or
          dishonest act that has a material  adverse impact on the reputation or
          operations of the Bank or Holding Company.

         2.       Scope, Purpose and Effect.

2.1  Contract of Employment.  Although this Agreement is intended to provide the
     Director with an  additional  incentive to continue to serve as a member of
     the Boards of Directors  of the Bank and Holding  Company,  this  Agreement
     shall not be deemed to  constitute  a contract  of  employment  between the
     Director  and the Bank or the Holding  Company nor shall any  provision  of
     this  Agreement  restrict  the right of the Bank or the Holding  Company to
     remove or cause the removal of the Director including,  without limitation,
     by (i) refusal to nominate the  Director  for  election for any  successive
     term of office as a member  of the  Board of  Directors  of the Bank or the
     Holding Company,  or (ii) complying with an order or other directive from a
     court  of  competent   jurisdiction  or  any  regulatory  authority  having
     jurisdiction over the Bank or Holding Company which requires either of them
     to take action to remove the Director.

2.2  Fringe Benefit.  The benefits provided by this Agreement are granted by the
     Bank as a fringe  benefit to the  Director and are not a part of any salary
     reduction plan or any arrangement  deferring a bonus or a salary  increase.
     The Director has no option to take any current payments or bonus in lieu of
     the benefits provided by this Agreement.

2.3  Prohibited  Payments.  Notwithstanding  anything in this  Agreement  to the
     contrary  (and in  particular  in section 1.8 or section 3 hereof),  if any
     payment  made under  this  Agreement  is a "golden  parachute  payment"  as
     defined in Section  28(k) of the Federal  Deposit  Insurance Act (12 U.S.C.
     section  1828(k) and Part 359 of the Rules and  Regulations  of the Federal
     Deposit  Insurance  Corporation  (collectively,  the  "FDIC  Rules")  or is
     otherwise prohibited, restricted or subject to the prior approval of a Bank
     Regulator (as defined in section 1.14 (d) herein), no payment shall be made
     hereunder without complying with said FDIC Rules.

         3.       Director Benefits Payments.

3.1  Payments  for  Service as Director  Emeritus.  Upon the  attainment  of the
     earlier of the Director's Early Retirement  Date,  Normal  Retirement Date,
     the date of 100% vesting or date of removal as director  without cause, but
     prior to a Change in  Control as defined in  Paragraph  1.2,  the  Director
     shall be entitled  to Retire and serve the Bank and/or the Holding  Company
     as a Director  Emeritus in  accordance  with the  procedures  and  policies
     established  by the Boards of  Directors  of the Bank  and/or  the  Holding
     Company as set forth in Schedule B attached hereto.  If the Director elects
     to serve as a Director  Emeritus of either the Bank or the Holding Company,
     the  Director  shall  be paid the  Applicable  Percentage  of the  Director
     Emeritus Payments specified in Paragraph 1.7 until the earlier of the third
     anniversary of the  commencement  thereof or the death of the Director.  If
     the  Director  declines  or is unable to serve as  Director  Emeritus,  the
     Director  shall  not  receive  any  Director  Emeritus  Benefit  but  shall
     nevertheless be entitled to the Director Benefits described in subparagraph
     3.2 following.

3.2  Payments  After  Expiration  of the  Director  Emeritus  Period.  After the
     expiration of the three (3) year period  described  above in Paragraph 3.1,
     the  Bank  shall  pay to the  Director  the  Applicable  Percentage  of the
     Director Retirement Benefit specified in Paragraph 1.6. Said Payments shall
     commence on the third anniversary of the Director's Retirement.

4.   Payments in the Event of Disability  Prior to Retirement.  In the event the
     Director  becomes  Disabled  while  serving  as a  member  of the  Board of
     Directors  of either the Bank or the Holding  Company at any time after the
     Effective Date of this  Agreement,  but prior to  Retirement,  the Director
     shall be entitled to one hundred percent (100%) of the Director  Retirement
     Benefit  specified in Paragraph  1.6. if the  Director  elects  payments to
     commence at age seventy (70) or  one-hundred  percent (100%) of the Reduced
     Retirement  Benefit  determined  under Paragraph 1.8 if the Director elects
     payments to commence prior to age seventy (70).  The Director  cannot elect
     payments to commence earlier than age sixty (60). A disabled Director shall
     not be entitled to receipt of Director Emeritus Payments.

5.   Payments  in the Event  Director  Is  Terminated  Prior to  Retirement.  As
     indicated in subparagraph  2.1 above, the Bank and the Holding Company each
     reserves  the right to remove or cause the  removal of the  Director  under
     certain circumstances,  at any time prior to the Director's Retirement.  In
     the event that the service of the Director shall be terminated,  other than
     by reason of  Death,  Disability  or  Retirement,  prior to the  Director's
     Normal  Retirement  Date, then this Agreement shall terminate upon the date
     of such termination; provided, however, that the Director shall be entitled
     to  the  following  benefits  as  my  be  applicable   depending  upon  the
     circumstances surrounding the Director's termination:

5.1  Termination  Without Cause.  If the  Director's  service as a member of the
     Boards of Directors of both the Bank and the Holding  Company is terminated
     for  reasons  other than as  specified  in  paragraph  5.3 below,  and such
     terminations  are not subject to the provisions of subparagraph  5.4 below,
     the Director shall be entitled to be paid the Applicable Percentage of both
     the Director  Emeritus  Benefit as determined  under  Paragraph 1.7 and the
     Director Retirement Benefit or the Reduced Retirement Benefit.  Payments of
     the  Director  Emeritus  Benefit  shall  commence on the date the  Director
     elects but not before the  Director  attains age sixty  (60),  and shall be
     continuous  until the earlier of the third  anniversary of the commencement
     or the Director's death.  Thereafter,  payment of the applicable Percentage
     of the Director Retirement Benefit or Reduced Retirement Benefit, whichever
     is applicable, shall commence and continue until the Director's death.

5.2  Voluntary  Termination by the Director.  If the Director's  service on both
     Boards of  Directors is  terminated  by  voluntary  resignation  before age
     seventy  (70) on a date  when the  Applicable  Percentage  is less than one
     hundred  percent  (100%),  and  such  resignation  is  not  subject  to the
     provisions of  subparagraph  5.4 below,  the Director shall forfeit any and
     all rights and benefits he may have under the terms of this  Agreement  and
     shall have no right to be paid any of the amounts which would  otherwise be
     due or paid to the  Director  by the  Bank  pursuant  to the  terms of this
     Agreement.  If the Applicable  Percentage is one hundred  percent (100%) on
     the date of such voluntary  resignations  and the Director has not attained
     age sixty (60),  the Director  shall be entitled to the  Director  Emeritus
     Benefit  and the  Reduced  Retirement  Benefit.  Payment  of the  Directors
     Emeritus  Benefit shall commence when and if the Director attains age sixty
     (60) and shall continue  until the earlier of the third  anniversary of its
     commencement or the Director's death; thereafter the payment of the Reduced
     Retirement  Benefit shall  commence and shall continue until the Director's
     death.  A voluntary  resignation  after 60 when the  Director's  Applicable
     Percentage is one hundred  percent (100%) shall be deemed to be an election
     to Retire.

5.3  Termination by Removal for Cause.  The Director  agrees that if his service
     as a member of either the Boards of Directors is terminated by "removal for
     cause," as defined in subparagraph 1.14 of this Agreement, he shall forfeit
     any and all  rights  and  benefits  he may  have  under  the  terms of this
     Agreement and shall have no right to be paid any of the amounts which would
     otherwise be due or paid to the Director by the Bank  pursuant to the terms
     of this Agreement.

5.4  Termination  as Part of or After a Change in Control.  Notwithstanding  any
     other provision of this Agreement, in the event that the Director's service
     as a member of the Board of Directors  of the Bank and the Holding  Company
     is  terminated  as a part of or after a "Change in Control"  (as defined in
     subparagraph 1.2 above) voluntarily, involuntarily or for any reason except
     as provided in subparagraph 5.3 above, the Director shall be entitled to be
     paid one  hundred  percent  (100%) of the  Director  Retirement  Benefit or
     Reduced  Retirement  Benefit as follows:  The Director shall be entitled to
     elect the date on or after  attainment  of age sixty (60) that the payments
     shall commence.  If the Director elects that payments shall commence before
     age sixty-two (62) he or she shall be paid the Reduced  Retirement  Benefit
     described  in  Paragraph  1.8 and if the  Director  elects the  payments to
     commence at age sixty-two  (62) or  thereafter,  the Director shall be paid
     the Director Retirement Benefit described under Paragraph 1.6. The Director
     shall not be  entitled  to receipt of Director  Emeritus  Payments  and the
     payment of the Director  Retirement  Benefit or Reduced  Retirement Benefit
     shall commence on the date elected as described above.

6.   Right  To  Determine  Funding  Methods.  The  Bank  reserves  the  right to
     determine, in its sole and absolute discretion, whether, to what extent and
     by what method, if any, to provide for the payment of the amounts which may
     be payable to the Director, under the terms of this Agreement. In the event
     that the Bank elects to fund this Agreement,  in whole or in part,  through
     the use of life insurance or annuities,  or both, the Bank shall  determine
     the ownership and beneficial interests of any such policy of life insurance
     or annuity.  The Bank further  reserves the right, in its sole and absolute
     discretion, to terminate any such policy, and any other devise used to fund
     its  obligations  under this  Agreement,  at any time, in whole or in part.
     Consistent with Paragraph 8  below, the Director shall have no right, title
     or  interest  in or to any  funding  source or amount  utilized by the Bank
     pursuant to this Agreement, and any such funding source or amount shall not
     constitute security for the performance of the Bank's obligations  pursuant
     to this Agreement. In connection with the foregoing, the Director agrees to
     execute such documents and undergo such medical examinations or tests which
     the Bank may request and which may be  reasonably  necessary to  facilitate
     any funding for this Agreement  including,  without limitation,  the Bank's
     acquisition of any policy of insurance or annuity.

7.   Claims  Procedure.  The Bank shall have authority to control and manage the
     operation and administration of this Agreement.  Consistent therewith,  the
     Bank shall make all  determinations as to the rights to benefits under this
     Agreement.  Any  decision by the Bank  denying a claim by the  Director for
     benefits under this  Agreement  shall be stated in writing and delivered or
     mailed,  via registered or certified mail, to the Director,  the Director's
     spouse or the Director's  beneficiaries,  as the case may be. Such decision
     shall  set  forth  the  specific  reasons  for the  denial  of a claim.  In
     addition,  the Bank shall  provide  the  Director,  or as  applicable,  the
     Director's  spouse or  beneficiaries,  with a reasonable  opportunity for a
     full and fair review of the decision denying such claim.

8.   Status as an Unsecured General Creditor. Notwithstanding anything contained
     herein to the contrary:  (i) the  Director shall have no legal or equitable
     rights, interests or claims in or to any specific property or assets of the
     Bank as a result of this Agreement; (ii) none of the Bank's assets shall be
     held in or under any trust for the  benefit of the  Director or held in any
     way as security for the  fulfillment  of the  obligations of the Bank under
     this  Agreement;  (iii) all  of the Bank's  assets  shall be and remain the
     general  unpledged and  unrestricted  assets of the Bank;  (iv) the  Bank's
     obligation  under this Agreement shall be that of an unfunded and unsecured
     promise by the Bank to pay money in the future;  and (v) the Director shall
     be an unsecured  general creditor with respect to any benefits which may be
     payable under the terms of this Agreement.

     Notwithstanding  subparagraphs  (i)  through  (v)  above,  the Bank and the
     Director  acknowledge  and agree that, in the event of a Change in Control,
     upon request of the Director,  or in the Bank's  discretion if the Director
     does not so request and the Bank nonetheless deems it appropriate, the Bank
     shall  establish,  not  later  than the  effective  date of the  Change  in
     Control,  a Rabbi Trust or multiple  Rabbi Trusts (the "Trust" or "Trusts")
     upon such terms and conditions as the Bank, in its sole  discretion,  deems
     appropriate and in compliance  with  applicable  provisions of the Code, in
     order to permit the Bank to make  contributions  and/or  transfer assets to
     the  Trust  or  Trusts  to  discharge  its  obligations  pursuant  to  this
     Agreement.  The  principal of the Trust or Trusts and any earnings  thereon
     shall be held  separate  and apart from other  funds of the Bank to be used
     exclusively  for  discharge  of the  Bank's  obligations  pursuant  to this
     Agreement  but shall  continue  to be  subject  to the claims of the Bank's
     general  creditors  until paid to the  Director  in such manner and at such
     times as specified in this Agreement.

9.   Discretion of Board to Accelerate Payout.  Notwithstanding any of the other
     provisions  of this  Agreement,  the Board of  Directors of the Bank or the
     Holding  Company may, if determined in its sole and absolute  discretion to
     be  appropriate,  accelerate the payment of the amounts due under the terms
     of this  Agreement,  provided  that the  Director  consents  to the revised
     payout terms determined appropriate by the Board of Directors.

         10.      Miscellaneous.

10.1 Opportunity To Consult With Independent Advisors. The Director acknowledges
     that he has been  afforded  the  opportunity  to consult  with  independent
     advisors of his choosing including, without limitation,  accountants or tax
     advisors and counsel  regarding both the benefits  granted to him under the
     terms of this Agreement and the (i) terms and  conditions  which may affect
     the  Director's  right to these  benefits and (ii)  personal tax effects of
     such benefits including,  without limitation, the effects of any federal or
     state taxes, Section 280G of the Code, and any other taxes, costs, expenses
     or liabilities  whatsoever  related to such  benefits,  which in any of the
     foregoing instances the Director  acknowledges and agrees shall be the sole
     responsibility of the Director  notwithstanding any other term or provision
     of this Agreement.  The Director  further  acknowledges and agrees that the
     Bank shall have no liability  whatsoever  related to any such  personal tax
     effects or other personal costs, expenses, or liabilities applicable to the
     Director and further  specifically waives any right for himself or herself,
     and  his  or  her  heirs,  beneficiaries,  legal  representatives,  agents,
     successor  and assign to claim or assert  liability on the part of the Bank
     related to the  matters  described  above in this  subparagraph  10.1,  the
     Director further acknowledges that he has read, understands and consents to
     all of the terms and conditions of this Agreement,  and that he enters into
     this  Agreement  with a full  understanding  of its terms  and  conditions.
     Nothing  contained in this  subparagraph  10.1 is intended to  constitute a
     release by the Director of any rights to indemnity  and defense for actions
     or inactions in the course and scope of his service as a Director which are
     provided  to  Director  under the Bank's or Holding  Company's  Articles or
     Bylaws, any existing indemnity agreements, or any applicable laws.

10.2 Arbitration of Disputes. All claims, disputes and other matters in question
     arising  out  of  or  relating   to  this   Agreement   or  the  breach  or
     interpretation thereof, other than those matters which are to be determined
     by the Bank in its sole  and  absolute  discretion,  shall be  resolved  by
     binding arbitration before a representative member,  selected by the mutual
     agreement  of  the  parties,  of the  Judicial  Arbitration  and  Mediation
     Services, Inc. ("JAMS"), located in San Jose, California. In the event JAMS
     is unable or  unwilling to conduct the  arbitration  provided for under the
     terms of this  Paragraph,  or has  discontinued  its business,  the parties
     agree that a representative member, selected by the mutual agreement of the
     parties of the  American  Arbitration  Association  ("AAA")  located in San
     Francisco, California, shall conduct the binding arbitration referred to in
     this  Paragraph.  Notice of the  demand for  arbitration  shall be filed in
     writing  with the other party to this  Agreement  and with JAMS (or AAA, if
     necessary).  In no event shall the demand for arbitration be made after the
     date  when  institution  of legal or  equitable  proceedings  based on such
     claim,  dispute  or  other  matter  in  question  would  be  barred  by the
     applicable statute of limitations. The arbitration shall be subject to such
     rules of procedure  used or  established by JAMS, or if there are none, the
     rules of procedure  used or  established by AAA. Any award rendered by JAMS
     or AAA shall be final and  binding  upon the  parties,  and as  applicable,
     their  respective  heirs,  beneficiaries,  legal  representatives,  agents,
     successors and assigns, and may be entered in any court having jurisdiction
     thereof. The obligation of the parties to arbitrate pursuant to this clause
     shall  be  specifically  enforceable  in  accordance  with,  and  shall  be
     conducted  consistently  with,  the  provisions of Title 9 of Part 3 of the
     California  Code of Civil  Procedure.  Any  arbitration  hereunder shall be
     conducted  in San  Jose,  California,  unless  otherwise  agreed  to by the
     parties.

10.3 Attorneys'  Fees. In the event of any arbitration or litigation  concerning
     any controversy,  claim or dispute between the parties hereto,  arising out
     of  or  relating  to  this   Agreement  or  the  breach   hereof,   or  the
     interpretation  hereof,  the prevailing  party shall be entitled to recover
     from the  losing  party  reasonable  expenses,  attorneys'  fees and  costs
     incurred in connection therewith or in the enforcement or collection of any
     judgment or award rendered therein.  The "prevailing party" means the party
     determined by the  arbitrator(s) or court, as the case may be, to have most
     nearly  prevailed,  even if such party did not prevail in all matters,  not
     necessarily the one in whose favor a judgment is rendered.

10.4 Notice. Any notice required or permitted of either the Director or the Bank
     under  this  Agreement  shall be  deemed to have  been  duly  given,  if by
     personal  delivery,  upon the date received by the party or its  authorized
     representative;  if by facsimile,  upon  transmission to a telephone number
     previously  provided by the party to whom the facsimile is  transmitted  as
     reflected in the records of the party  transmitting  the facsimile and upon
     reasonable confirmation of such transmission;  and if by mail, on the third
     day after  mailing  via U.S.  first class mail,  registered  or  certified,
     postage prepaid and return receipt requested, and addressed to the party at
     the address given below for the receipt of notices, or such changed address
     as may be requested in writing by a party.

         If to the Bank:             San Jose National Bank
                                     One North Market Street
                                     San Jose, California  95113
                                     Attn:  President

         If to the Director:         Robert A. Archer
                                     14251 Juniper Lane
                                     Saratoga, California 95070

10.5 Assignment.  The Director shall have no power or right to transfer, assign,
     anticipate,  hypothecate,  modify or otherwise  encumber any part or all of
     the amounts payable hereunder, nor, prior to payment in accordance with the
     terms of this Agreement,  shall any portion of such amounts be: (i) subject
     to seizure by any creditor of the  Director,  by a proceeding  at law or in
     equity,  for the  payment of any  debts,  judgments,  alimony  or  separate
     maintenance  obligations  which  may be  owed  by  the  Director;  or  (ii)
     transferable by operation of law in the event of bankruptcy,  insolvency or
     otherwise. Any such attempted assignment or transfer shall be void.

10.6 Binding  Effect/Merger or  Reorganization.  This Agreement shall be binding
     upon and inure to the benefit of the  Director  and the Bank.  Accordingly,
     the Bank shall not merge or consolidate  into or with another  corporation,
     or  reorganize  or  sell   substantially  all  of  its  assets  to  another
     corporation, firm or person, unless and until such succeeding or continuing
     corporation,  firm or person agrees to assume and discharge the obligations
     of the Bank under this Agreement.  In the alternative,  the Holding Company
     may agree to assume and  discharge  the  obligation  of the Bank under this
     Agreement.  Upon the  occurrence of such event,  the term "Bank" as used in
     this  Agreement  shall be deemed to refer to such  surviving  or  successor
     firm, person,  entity or corporation,  or the Holding Company,  as the case
     may be.

10.7 Nonwaiver.  The  failure of either  party to enforce at any time or for any
     period of time any one or more of the terms or conditions of this Agreement
     shall not be a waiver of such  term(s) or  condition(s)  or of that party's
     right  thereafter  to  enforce  each and every term and  condition  of this
     Agreement.

10.8 Partial Invalidity. If any terms, provision, covenant, or condition of this
     Agreement is determined by an arbitrator or a court, as the case may be, to
     be invalid, void, or unenforceable, such determination shall not render any
     other  term,   provision,   covenant   or   condition   invalid,   void  or
     unenforceable,  and the  Agreement  shall  remain in full  force and effect
     notwithstanding such partial invalidity.

10.9 Entire Agreement.  This Agreement  supersedes any and all other agreements,
     either oral or in writing,  between the parties with respect to the subject
     matter of this  Agreement and contains all of the covenants and  agreements
     between the parties  with  respect  thereto.  Each party to this  Agreement
     acknowledges  that no  other  representations,  inducements,  promises,  or
     agreements,  oral or  otherwise,  have  been made by any  party,  or anyone
     acting on behalf of any party,  which are not set forth herein, and that no
     other  agreement,  statement,  or promise not  contained in this  Agreement
     shall be valid or binding on either party.

10.10Modifications.  Any  modification of this Agreement shall be effective only
     if it is in writing  and signed by each  party or such  party's  authorized
     representative.

10.11Paragraph  Headings.  The  paragraph  headings  used in this  Agreement are
     included  solely for the convenience of the parties and shall not affect or
     be used in connection with the interpretation of this Agreement.

10.12No Strict Construction. The language used in this Agreement shall be deemed
     to be the  language  chosen by the parties  hereto to express  their mutual
     intent,  and no rule of strict  construction  will be applied  against  any
     person.

10.13Governing Law. The laws of the State of  California,  other than those laws
     denominated  choice  of law  rules,  and  where  applicable,  the rules and
     regulations  of the  Board of  Governors  of the  Federal  Reserve  System,
     Federal  Deposit  Insurance  Corporation,  Office of the Comptroller of the
     Currency,  or any other regulatory agency or governmental  authority having
     jurisdiction  over  the  Bank or the  Holding  Company,  shall  govern  the
     validity, interpretation, construction and effect of this Agreement.

IN   WITNESS WHEREOF,  the Bank and the Director have executed this Agreement on
     the date first above-written in the City of San Jose, California.

BANK                                                         DIRECTOR

San Jose National Bank
By:
       -------------------------------------                 By:
       James R. Kenny,
       President and Chief Executive Officer

<PAGE>

6477.1
101\248846.3
                                                              SCHEDULE A

          ---------------------------------------------------------------------
          PLAN YEAR                                      APPLICABLE
                                                         PERCENTAGE
          ---------------------------------------------------------------------
          ----------------------------------------------------------------- ---
          May 1, 2000 to April 30, 2001                  50%
          ----------------------------------------------------------------- ---
          ----------------------------------------------------------------- ---
          May 1, 2001 to April 30, 2002                  60%
          ----------------------------------------------------------------- ---
          ----------------------------------------------------------------- ---
          May 1, 2002 to April 30, 2003                  70%
          ----------------------------------------------------------------- ---
          ----------------------------------------------------------------- ---
          May 1, 2003 to April 30, 2004                  80%
          ----------------------------------------------------------------- ---
          ----------------------------------------------------------------- ---
          May 1, 2004 to April 30, 2005                  90%
          ----------------------------------------------------------------- ---
          ----------------------------------------------------------------- ---
          May 1, 2005 to April 30, 2006 and thereafter   100%
          ----------------------------------------------------------------- ----

6477.1
101\248846.3                                        -1-
                                                              SCHEDULE B

                                                       DIRECTOR EMERITUS DUTIES

It will be the  responsibility of the Director Emeritus to perform the following
duties:

     1. Attend San Jose National Bank's social functions to which they have been
     invited;

     2. Continue to refer business opportunities to the Bank;

     3. Be available to provide requested advice and consulting to the Bank; and

     4. Continue to represent and sponsor the Bank in the Community.

                                        3
                                   SCHEDULE C

                          WAIVER OF PRIOR PLAN BENEFITS

In  consideration  for the Director  Benefits made  available to the Director by
this Director  Supplemental  Compensation  Benefits Agreement (the "Agreement"),
the Director acknowledges and agrees as follows:

     (a) The  Director is a party to that certain  ______________  made with the
     Bank  or  its  predecessor   dated   _________________   (the  "Prior  Plan
     Agreement");

     (b) This  Agreement and the Director  Benefits  hereunder are provided as a
     substitute  for  the  Prior  Plan  Agreement  and  the  benefits   provided
     thereunder;

     (c) The  Prior  Plan  Agreement  and the  benefits  thereunder  are  hereby
     terminated effective as of the date of this Agreement;

     (d) The Director hereby waives and relinquishes for himself or herself, and
     his or her heirs, beneficiaries, legal representatives,  agents, successors
     and assigns, any and all right,  entitlement and interest that the Director
     has or may have  pursuant  to the Prior  Plan  Agreement  and the  benefits
     thereunder;

     (e) The Director accepts the Director  Benefits  afforded by this Agreement
     in full and complete  substitution for the benefits  otherwise  provided by
     the Prior Plan Agreement; and

     (f)  Without  limiting  the scope and  effect of  subparagraph  10.1 of the
     Agreement, the Director (i) has had an opportunity to consult with advisors
     of the  Director's  own choice in  determining to enter into this Agreement
     and this  Waiver,  (ii)  understands  that the effect of this  Waiver is to
     terminate,  waive and  relinquish  forever  all  rights,  entitlements  and
     interests  that the Director has or may have under the Prior Plan Agreement
     and the  benefits  thereunder  as a condition  to  receiving  the  Director
     Benefits  under this  Agreement;  and (iii)  Director is entering into this
     Agreement  and this  Waiver  voluntarily  and will full  appreciate  of the
     effect of doing so.

Dated: _______________, 2000        ______________________________FORM OF

                              EDISON INTERNATIONAL

                                       TO

                              THE BANK OF NEW YORK,
                                   AS TRUSTEE

                          SUPPLEMENTAL INDENTURE NO. 3

                          Dated as of November 8, 2000

                                  $350,000,000

                          Floating Rate Notes due 2001

<PAGE>

                              EDISON INTERNATIONAL

                                  $350,000,000

                          Floating Rate Notes due 2001

                          SUPPLEMENTAL INDENTURE NO. 3

         SUPPLEMENTAL INDENTURE No. 3, dated as of November 8, 2000, between
Edison International, a California corporation (the "Corporation"), and The Bank
of New York, a New York banking corporation, as successor Trustee (the
"Trustee") to Harris Trust and Savings Bank, an Illinois banking corporation.

                                    RECITALS

         The Corporation and the Trustee are parties to a Senior Indenture,
dated as of September 28, 1999, as amended and supplemented (the "Senior
Indenture"), providing for the issuance from time to time of series of the
Corporation's Securities.

         Section 301 of the Senior Indenture provides for various matters with
respect to any series of Securities issued under the Senior Indenture to be
established in an indenture supplemental to the Senior Indenture.

         Section 901 of the Senior Indenture provides for the Corporation and
the Trustee to enter into an indenture supplemental to the Senior Indenture to
establish the form or terms of Securities of any series as provided by Sections
201 or 301 of the Senior Indenture.

         For and in consideration of the premises and the issuance of the series
of Securities provided for herein, it is mutually covenanted and agreed, for the
equal and proportionate benefit of the Holders of the Securities of such series,
as follows:

                                    ARTICLE 1
                       RELATION TO INDENTURE; DEFINITIONS

        Section 1.1. This  Supplemental  Indenture No. 3 constitutes an integral
part of the Senior Indenture.

        Section  1.2.  For all purposes of this  Supplemental  Indenture  No. 3,
except as otherwise expressly provided or unless the context otherwise requires:

        (A)  capitalized  terms used  herein  without  definition  will have the
meanings specified in the Senior Indenture;

                                      1
<PAGE>

        (B) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;

        (C) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;

        (D) all accounting terms not otherwise  defined herein have the meanings
assigned to them in accordance with generally  accepted  accounting  principles,
and, except as otherwise herein expressly provided, the term "generally accepted
accounting  principles"  with respect to any  computation  required or permitted
hereunder shall mean such accounting principles as are generally accepted in the
United States of America;

        (E) unless the context otherwise requires, any reference to an "Article"
or a  "Section"  refers to an Article or a Section,  as the case may be, of this
Supplemental Indenture No. 3; and

        (F) the words "herein," "hereof," "hereunder" and other words of similar
import  refer to this  Supplemental  Indenture  No. 3 as a whole  and not to any
particular Article, Section or other subdivision.

        (G) Specific Definitions:

     (1)  "Calculation  Agent" means the Trustee,  or its successor appointed by
          the Corporation, acting as calculation agent.

     (2)  "Interest  Determination  Date" means the second  London  Business Day
          immediately preceding the first day of the relevant Interest Period.

     (3)  "Interest  Payment  Date" shall have the meaning  specified in Section
          2.4 hereof.

     (4)  "Interest  Period" means the period  commencing on an Interest Payment
          Date for the Notes (or commencing on the issue date for the Notes,  if
          no interest  has been paid or duly made  available  for payment  since
          that date) and ending on the day before the next  succeeding  Interest
          Payment Date for the Notes.

     (5)  "LIBOR" for any Interest  Determination  Date will be the offered rate
          for deposits in U.S.  dollars having an index maturity of three months
          for a period  commencing on the second London Business Day immediately
          following the Interest  Determination Date in amounts of not less than
          $1,000,000,   as  such  rate   appears  on   Telerate   Page  3750  at
          approximately  11:00 a.m., London time, on the Interest  Determination
          Date (the "Reported Rate").

     (6)  "London  Business  Day" means a day on which  dealings  in deposits in
          U.S.  dollars are  transacted,  or with respect to any future date are
          expected to be transacted, in the London interbank market.

                                       2
<PAGE>

     (7)  "Notes" shall have the meaning specified in Section 2.1 hereof.

     (8)  "Regular Record Date" means,  for the interest payable on any Interest
          Payment  Date,  the date which is fifteen  calendar  days  immediately
          prior to such Interest Payment Date (whether or not a Business Day).

     (9)  "Telerate Page 3750" means the display  designated on page 3750 on Dow
          Jones Markets Limited (or such other page as may replace the 3750 page
          on that  service or such  other  service  as may be  nominated  by the
          British  Bankers'  Association  for the purpose of  displaying  London
          interbank  offered  rates  for  U.S.  dollar  deposits  or such  other
          successor reporter of such rates as may be selected by the Calculation
          Agent and acceptable to the Corporation).

                                    ARTICLE 2
                            THE SERIES OF SECURITIES

         Section 2.1. Title of the Securities. There shall be a series of
Securities designated the "Floating Rate Notes due 2001" (the "Notes").

         Section 2.2. Limitation on Aggregate Principal Amount; Date of Notes.
The aggregate principal amount of the Notes initially shall be limited to
$350,000,000. The Corporation may, without the consent of the Holders of the
Notes, issue additional notes having the same interest rate and other terms as
the Notes. Any additional notes will, together with the existing Notes,
constitute a single series of notes under the Indenture. No additional notes may
be issued if an Event of Default has occurred with respect to the existing
Notes. Each Note shall be dated the date of its authentication.

        Section 2.3.  Principal Payment Date. Subject to Section 2.4 hereof, the
principal amount of the Notes Outstanding  (together with any accrued and unpaid
interest) shall be payable in a single installment on November 1, 2001.

        Section 2.4. Interest and Interest Rates.

                  (A) Interest on the Notes shall be payable quarterly in
         arrears, on the first day of each February, May, August and November
         (each such date, an "Interest Payment Date"), commencing on February 1,
         2001, until the principal hereof is paid or made available for payment.
         Interest will accrue from the issue date of the Notes, and will be paid
         to the Person in whose name such Note is registered in the Security
         Register at the close of business on the Regular Record Date for such
         interest installment. The interest so payable on any Note which is not
         punctually paid or duly provided for on any Interest Payment Date shall
         forthwith cease to be payable to the Holder on such Regular Record Date
         and may either be paid to the Person in whose name such Note is
         registered in the Security Register at the close of business on a date
         ("Special Record Date") for the payment of such Defaulted Interest to
         be fixed by the Trustee, notice whereof shall be given to Holders of
         the Notes not less than 10 days prior to such Special Record Date, or
         be paid at any time in any other lawful manner not inconsistent with
         the requirements of any securities exchange on which the Notes may be
         listed, and upon such notice as may be required by such exchange, all
         as more fully provided in said Indenture. If any scheduled Interest
         Payment Date falls on a day that is not a Business Day, it will be
         postponed to the following Business Day. If the maturity date of the
         Notes falls on a day which is not a Business Day, the required payment
         of principal and/or interest shall be made on the following Business
         Day as if it were made on the date the payment was due. Interest will
         not accrue as a result of this delayed payment.

                                       3
<PAGE>

                  (B) The Notes will bear interest for each quarterly Interest
         Period at an annual rate determined by the Calculation Agent, subject
         to the maximum interest rate permitted by California or other
         applicable state law, as such law may be modified by United States law
         of general application. The interest rate applicable during each
         quarterly Interest Period will be equal to LIBOR on the Interest
         Determination Date for such Interest Period plus 0.50%; provided,
         however, that under the limited circumstances described below in
         Section 2.4(C), the interest rate will be determined without reference
         to LIBOR. Promptly upon such determination, the Calculation Agent will
         notify the Trustee, if the Trustee is not then serving as the
         Calculation Agent, of the interest rate for the new Interest Period.
         The interest rate determined by the Calculation Agent, absent manifest
         error, shall be binding and conclusive upon the beneficial owners and
         Holders of the Notes, the Corporation and the Trustee.

                  (C) If the following circumstances exist on any Interest
         Determination Date, the Calculation Agent shall determine the interest
         rate for the Notes as follows:

                           (1) In the event no Reported Rate appears on Telerate
                  Page 3750 as of approximately 11:00 a.m., London time, on an
                  Interest Determination Date, the Calculation Agent shall
                  request the principal London offices of each of four major
                  banks in the London interbank market selected by the
                  Calculation Agent (after consultation with the Corporation) to
                  provide a quotation of the rate (the "Rate Quotation") at
                  which three month deposits in amounts of not less than
                  $1,000,000 are offered by it to prime banks in the London
                  interbank market, as of approximately 11:00 a.m., London time,
                  on such Interest Determination Date, that are representative
                  of single transactions at such time (the "Representative
                  Amounts"). If at least two Rate Quotations are provided, the
                  interest rate will be the arithmetic mean of the Rate
                  Quotations obtained by the Calculation Agent, plus 0.50%.

                           (2) In the event no Reported Rate appears on Telerate
                  Page 3750 as of approximately 11:00 a.m., London time, on an
                  Interest Determination Date and there are fewer than two Rate
                  Quotations, the interest rate will be the arithmetic mean of
                  the rates quoted at approximately 11:00 a.m., New York City
                  time, on such Interest Determination Date, by three major
                  banks in New York City selected by the Calculation Agent
                  (after consultation with the Corporation), for loans in
                  Representative Amounts in U.S. dollars to leading European
                  banks, having a term of three months for a period commencing
                  on the second London Business Day immediately following such
                  Interest Determination Date, plus 0.50%; provided, however,
                  that if fewer than three banks selected by the Calculation
                  Agent are quoting such rates, the interest rate for the
                  applicable Interest Period will be the same as the interest
                  rate in effect for the immediately preceding Interest Period.

                                       4
<PAGE>

                  (D) Upon the request of a Holder of the Notes, the Calculation
         Agent will provide to such Holder the interest rate in effect on the
         date of such request and, if determined, the interest rate for the next
         Interest Period.

                  (E) The amount of interest for each day that the Notes are
         outstanding (the "Daily Interest Amount") will be calculated by
         dividing the interest rate in effect for that day by 360 and
         multiplying that result by the principal amount of the Notes. The
         amount of interest to be paid on the Notes for each Interest Period
         will calculated by adding the Daily Interest Amounts for each day in
         the Interest Period. All dollar amounts resulting from such calculation
         will be rounded, if necessary, to the nearest cent with one-half cent
         rounded upward.

                  (F) The interest rate on the Notes will be subject to
         adjustment until the maturity date. In the event of a downgrade in the
         senior unsecured long-term debt rating of the Corporation (the
         "Rating") below A3 by Moody's Investors Service, Inc. ("Moody's") or A-
         by Standard & Poor's Rating Service ("S&P"), the interest rate on the
         Notes will be adjusted in accordance with the table set forth below in
         paragraph (J) of this Section.

                  (G) If, prior to the maturity of the Notes, either Moody's or
         S&P changes the Rating subsequent to an adjustment in the interest rate
         as a result of a previous Rating change by Moody's or S&P, the interest
         rate on the Notes will be re-adjusted in accordance with the table set
         forth in paragraph (J) below.

                  (H) The Notes will bear interest at an annual rate of LIBOR
         plus 0.50% from the issue date of the Notes, until the first day of
         the first Interest Period following a downgrade in the Rating below A3
         by Moody's or A- by S&P.  Under the limited circumstances described
         under this Section 2.4, the interest rate will be determined without
         reference to LIBOR.

                  (I) Beginning with the first day of the first Interest Period
         after a Rating change, the Notes will bear interest at an adjusted
         interest rate. Subsequent interest rate adjustments (whether the
         adjustment is up or down) will also become effective on the first day
         of the first Interest Period after such Rating change.

                  (J) The adjusted annual interest rate for the Notes will be
         the sum of (1) LIBOR (calculated as provided in this Section 2.4), (2)
         0.50% and (3) the sum of the Moody's and S&P adjustment amounts set
         forth below. Under the limited circumstances described under this
         Section 2.4, the interest rate will be determined without
         reference to LIBOR.

                                       5
<PAGE>
<TABLE>
<CAPTION>

         --------------------- ---------------------- ----------------- -------------------------
                                 Moody's Adjustment                         S&P Adjustment
             Moody's Rating           Amount             S&P Rating              Amount
         --------------------- ---------------------- ----------------- -------------------------
         <S>                         <C>                    <C>                  <C>
                   A3                 0.000%                 A-                  0.000%
         --------------------- ---------------------- ----------------- -------------------------
                  Baa1                0.125%                BBB+                 0.125%
         --------------------- ---------------------- ----------------- -------------------------
                  Baa2                0.250%                 BBB                 0.250%
         --------------------- ---------------------- ----------------- -------------------------
                  Baa3                0.375%                BBB-                 0.375%
         --------------------- ---------------------- ----------------- -------------------------
              Ba1 or lower            0.875%            BB+ or lower             0.875%
         --------------------- ---------------------- ----------------- -------------------------
</TABLE>

        Section 2.5. Place of Payment.  The Place of Payment where the Notes may
be presented or surrendered for payment,  where the Notes may be surrendered for
registration  of transfer or exchange  and where  notices and demands to or upon
the  Corporation in respect of the Notes and the Senior  Indenture may be served
shall be the Corporate Trust Office of the Trustee.

        Section 2.6. Exchange.  At any time, the Corporation may cause the Notes
to be distributed to Holders of the Notes in definitive  certificated  form upon
prior notice to the Trustee.

        Section 2.7. Denomination. The Notes shall be in registered form without
coupons and shall be issuable in denominations  of $1000 and integral  multiples
thereof.

        Section 2.8. Currency.  Principal and interest and other amounts payable
on the Notes  shall be paid in such coin or  currency  of the  United  States of
America  as at the time of payment  is legal  tender  for  payment of public and
private debt.

        Section 2.9. Form of Notes.  The Notes shall be issuable in whole in the
form of one or more  Global  Securities,  and the  Depository  for  such  Global
Securities  shall be Depository  Trust  Company,  New York,  New York. The Notes
shall be substantially in the form attached as Exhibit A hereto.

        Section 2.10. Securities Registrar and Paying Agent;  Unclaimed Amounts.
The Trustee shall  initially serve as Security  Registrar and Paying Agent.  Any
amount  paid to the  Trustee  or any  Paying  Agent,  or held  in  trust  by the
Corporation,  for payments on any Note, that remains unclaimed at the end of two
years after such amount is due will be repaid to the Corporation.

        Section 2.11. No  Redemption.  The Notes may not be redeemed at any time
prior to the principal payment date specified in Section 2.3 hereof.

        Section 2.12. No Defeasance or Covenant Defeasance.  The Notes shall not
be subject to Defeasance or Covenant Defeasance at the option of the Corporation
pursuant to Article XIII of the Senior Indenture.

        Section  2.13.  No Sinking  Fund  Obligations.  The  Corporation  has no
obligation  to redeem or purchase  any Notes  pursuant  to any  sinking  fund or
analogous  requirement  or upon the  happening  of a  specified  event or at the
option of a Holder thereof.

                                       6
<PAGE>

                                    ARTICLE 3
                            MISCELLANEOUS PROVISIONS

        Section 3.1. The Senior  Indenture,  as supplemented and amended by this
Supplemental  Indenture No. 3, is in all respects hereby  adopted,  ratified and
confirmed.

        Section 3.2.  This  Supplemental  Indenture No. 3 may be executed in any
number  of  counterparts,   each  of  which  shall  be  an  original,  but  such
counterparts shall together constitute but one and the same instrument.

        Section 3.3.  Nothing in this  Supplemental  Indenture No. 3, express or
implied,  shall  give to any  Person,  other than the  parties  hereto and their
successors  and assigns,  and the Holders of the Notes,  any benefit or legal or
equitable right, remedy or claim under this Supplemental  Indenture No. 3 or the
Senior Indenture.

        Section 3.4.  THIS  SUPPLEMENTAL  INDENTURE NO. 3 AND EACH NOTE SHALL BE
GOVERNED  BY  AND  CONSTRUED  IN  ACCORDANCE  WITH  THE  LAWS  OF THE  STATE  OF
CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.

                                       7
<PAGE>

        IN WITNESS  WHEREOF,  the parties  hereto have caused this  Supplemental
Indenture No. 3 to be duly executed, as of the day and year first written above.

                                       EDISON INTERNATIONAL

                                       By:   -----------------------------
                                             Name:  Mary C. Simpson
                                             Title:    Assistant Treasurer

Attest:
       -------------------------------------

                                         THE BANK OF NEW YORK,
                                              as Trustee

                                         By:
                                              -------------------------
                                                Authorized Signatory

Attest:
       -------------------------------------

<PAGE>

                                   EXHIBIT A

                             [FORM OF FACE OF NOTE]

THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.
THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO
TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

                              EDISON INTERNATIONAL

                           Floating Rate Note due 2001

No.                                                 $
    ----
                                               CUSIP No. 281 020 AE 7

         Edison International, a corporation duly organized and existing under
the laws of the State of California (herein called the "Corporation," which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to ________________________or registered
assigns, the initial principal sum of _________________________________________
_______________________________________________ on November 1, 2001, and to pay
interest thereon from November 8, 2000, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, quarterly in arrears,
on the first day of each February, May, August and November (each such date, an
"Interest Payment Date"), commencing on February 1, 2001, until the principal
hereof is paid or made available for payment. Interest will accrue from the
issue date of November 8, 2000 and will be paid to the Person in whose name this
Note is registered in the Security Register at the close of business on the
Regular Record Date for such interest installment. The interest rate on the
Notes for each quarterly interest period will be reset quarterly based on the
three-month LIBOR rate plus 0.50%; provided, however, under limited
circumstances, the interest rate on the Notes for each quarterly interest period
will be determinted without reference to LIBOR. The interest so payable on any
Note which is not punctually paid or duly provided for on any Interest Payment
Date shall forthwith cease to be payable to the Holder on such Regular Record
Date and may either be paid to the Person in whose name such Note is registered

                                       1
<PAGE>

in the Security Register at the close of business on a date ("Special Record
Date") for the payment of such Defaulted Interest to be fixed by the Trustee,
notice whereof shall be given to Holders of the Notes not less than 10 days
prior to such Special Record Date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Notes may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture. If any scheduled
Interest Payment Date falls on a day that is not a Business Day, it will be
postponed to the following Business Day. If the maturity date of the Notes falls
on a day which is not a Business Day, the required payment of principal and/or
interest shall be made on the following Business Day as if it were made on the
date the payment was due. Additional interest will not accrue as a result of
this delayed payment.

         Payment of the principal of and any such interest on this Note will be
made at the office or agency of the Trustee maintained for that purpose in
Chicago, Illinois, in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Corporation payment of interest may
be made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or by wire transfer at such place
and to such account at a banking institution in the United States as may be
designated in writing to the Trustee at least sixteen (16) days prior to the
date for payment by the Person entitled thereto.

         Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

                                       2
<PAGE>

         IN WITNESS WHEREOF, the Corporation has caused this instrument to be
duly executed under its corporate seal.

Dated as of Date of Authentication:

                                  EDISON INTERNATIONAL

                                  By
                                    ----------------------------------
                                     Name:
                                     Title:

Attest:

         This is one of the Floating Rate Notes Due 2001 referred to in the
within-mentioned Indenture.

                                             THE BANK OF NEW YORK,
                                             as Trustee

                                             By:
                                                -------------------------------
                                                     Authorized Signatory

Dated:  _________________

                                       3
<PAGE>

                           [FORM OF REVERSE OF NOTE]

         This Floating Rate Note due 2001 is one of a duly authorized issue of
securities of the Corporation (herein called the "Notes"), issued and to be
issued in one or more series under a Senior Indenture, dated as of September 28,
1999, (herein called the "Indenture," which term shall have the meaning assigned
to it in such instrument), between the Corporation and The Bank of New York, as
successor Trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture) to Harris Trust and Savings Bank, and
reference is hereby made to the Indenture for a statement of the respective
rights, limitation of rights, duties and immunities thereunder of the
Corporation, the Trustee and the Holders of the Notes and of the terms upon
which the Notes are, and are to be, authenticated and delivered. This Note is
one of the series designated on the face hereof, initially limited in aggregate
principal amount to $350,000,000.

         The Notes will bear interest for each quarterly Interest Period (as
defined below) at an annual rate determined by the Calculation Agent (as defined
below), subject to the maximum interest rate permitted by California or other
applicable state law, as such law may be modified by United States law of
general application. The interest rate applicable during each quarterly Interest
Period will be equal to LIBOR (as defined below) on the Interest Determination
Date (as defined below) for such Interest Period plus 0.50%; provided, however,
that under the limited circumstances described below, the interest rate will be
determined without reference to LIBOR. Promptly upon such determination, the
Calculation Agent will notify the Trustee, if the Trustee is not then serving as
the Calculation Agent, of the interest rate for the new Interest Period. The
interest rate determined by the Calculation Agent, absent manifest error, shall
be binding and conclusive upon the beneficial owners and Holders of the Notes,
the Corporation and the Trustee.

         If the following circumstances exist on any Interest Determination
Date, the Calculation Agent shall determine the interest rate for the Notes as
follows:

                  (1) In the event no Reported Rate (as defined below) appears
         on Telerate Page 3750 (as defined below) as of approximately 11:00
         a.m., London time, on an Interest Determination Date, the Calculation
         Agent shall request the principal London offices of each of four major
         banks in the London interbank market selected by the Calculation Agent
         (after consultation with the Corporation) to provide a quotation of the
         rate (the "Rate Quotation") at which three month deposits in amounts of
         not less than $1,000,000 are offered by it to prime banks in the London
         interbank market, as of approximately 11:00 a.m., London time, on such
         Interest Determination Date, that are representative of single
         transactions at such time (the "Representative Amounts"). If at least
         two Rate Quotations are provided, the interest rate will be the
         arithmetic mean of the Rate Quotations obtained by the Calculation
         Agent, plus 0.50%.

                  (2) In the event no Reported Rate appears on Telerate Page
         3750 as of approximately 11:00 a.m., London time, on an Interest
         Determination Date and there are fewer than two Rate Quotations, the
         interest rate will be the arithmetic mean of the rates quoted at
         approximately 11:00 a.m., New York City time, on such Interest
         Determination Date, by three major banks in New York City selected by

<PAGE>

         the Calculation Agent (after consultation with the Corporation), for
         loans in Representative Amounts in U.S. dollars to leading European
         banks, having a term of three months for a period commencing on the
         second London Business Day immediately following such Interest
         Determination Date, plus 0.50%; provided, however, that if fewer than
         three banks selected by the Calculation Agent are quoting such rates,
         the interest rate for the applicable Interest Period will be the same
         as the interest rate in effect for the immediately preceding Interest
         Period.

         Upon the request of a Holder of the Notes, the Calculation Agent will
provide to such Holder the interest rate in effect on the date of such request
and, if determined, the interest rate for the next Interest Period.

         The amount of interest for each day that the Notes are outstanding (the
"Daily Interest Amount") will be calculated by dividing the interest rate in
effect for that day by 360 and multiplying that result by the principal amount
of the Notes. The amount of interest to be paid on the Notes for each Interest
Period will calculated by adding the Daily Interest Amounts for each day in the
Interest Period. All dollar amounts resulting from such calculation will be
rounded, if necessary, to the nearest cent with one-half cent rounded upward.

         The interest rate on the Notes will be subject to adjustment until
November 1, 2001. In the event of a downgrade in the senior unsecured long-term
debt rating of the Corporation (the "Rating") below A3 by Moody's Investors
Service, Inc. ("Moody's") or A- by Standard & Poor's Rating Service ("S&P"), the
interest rate on the Notes will be adjusted in accordance with the table below.

         If, prior to the maturity of the Notes, either Moody's or S&P changes
the Rating subsequent to an adjustment in the interest rate as a result of a
previous Rating change by Moody's or S&P, the interest rate on the Notes will be
re-adjusted in accordance with the table below.

         The Notes will bear interest at an annual rate of LIBOR plus 0.50% from
November 8, 2000, until the first day of the first Interest Period following a
downgrade below A3 by Moody's or A- by S&P.

         Beginning with the first day of the first Interest Period after a
Rating change, the Notes will bear interest at an adjusted interest rate.
Subsequent interest rate adjustments (whether the adjustment is up or down) will
also become effective on the first day of the first Interest Period after such
Rating change.

         The adjusted annual interest rate for the Notes will be the sum of (1)
LIBOR, (2) 0.50% and (3) the sum of the Moody's and S&P adjustment amounts set
forth below.
<TABLE>
<CAPTION>

---------------------------- ------------------------------ ------------------------- ---------------------------
                                   Moody's Adjustment                                       S&P Adjustment
      Moody's Rating                    Amount                     S&P Rating                   Amount
---------------------------- ------------------------------ ------------------------- ---------------------------
<S>          <C>                        <C>                        <C>                          <C>
            A3                          0.000%                         A-                       0.000%
---------------------------- ------------------------------ ------------------------- ---------------------------
           Baa1                         0.125%                        BBB+                      0.125%
---------------------------- ------------------------------ ------------------------- ---------------------------
           Baa2                         0.250%                        BBB                       0.250%
---------------------------- ------------------------------ ------------------------- ---------------------------
           Baa3                         0.375%                        BBB-                      0.375%
---------------------------- ------------------------------ ------------------------- ---------------------------
       Ba1 or lower                     0.875%                    BB+ or lower                  0.875%
---------------------------- ------------------------------ ------------------------- ---------------------------
</TABLE>

         Under the limited circumstances described above, the interest rate will
be determined without reference to LIBOR.
<PAGE>

         The following definitions apply to this Note:

         "Calculation Agent" means the Trustee, or its successor appointed by
the Corporation, acting as calculation agent.

         "Interest Determination Date" means the second London Business Day
immediately preceding the first day of the relevant Interest Period.

         "Interest Period" means the period commencing on an Interest Payment
Date for the Notes (or commencing on the issue date for the Notes, if no
interest has been paid or duly made available for payment since that date) and
ending on the day before the next succeeding Interest Payment Date for the
Notes.

         "LIBOR" for any Interest Determination Date will be the offered rate
for deposits in U.S. dollars having an index maturity of three months for a
period commencing on the second London Business Day immediately following the
Interest Determination Date in amounts of not less than $1,000,000, as such rate
appears on Telerate Page 3750 at approximately 11:00 a.m., London time, on the
Interest Determination Date (the "Reported Rate").

         "London Business Day" means a day on which dealings in deposits in U.S.
dollars are transacted, or with respect to any future date are expected to be
transacted, in the London interbank market.

         "Regular Record Date" means, for the interest payable on any Interest
Payment Date, the date which is fifteen calendar days immediately prior to such
Interest Payment Date (whether or not a Business Day).

         "Telerate Page 3750" means the display designated on page 3750 on Dow
Jones Markets Limited (or such other page as may replace the 3750 page on that
service or such other service as may be nominated by the British Bankers'
Association for the purpose of displaying London interbank offered rates for
U.S. dollar deposits or such other successor reporter of such rates as may be
selected by the Calculation Agent and acceptable to the Corporation).

         The Notes will not be entitled to the benefits of any sinking fund. The
Notes are not subject to redemption, Defeasance or Covenant Defeasance at the
option of the Corporation.

         If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.

         The Corporation may, without the consent of the Holders of the Notes,
issue additional notes having the same interest rates and other terms as the
Notes. Any additional notes will, together with the existing Notes, constitute a
single series of notes under the Indenture. No additional notes may be issued if
any Event of Default has occurred with respect to the existing Notes. The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Corporation
and the rights of the Holders of the Securities of all series affected under the
Indenture at any time by the Corporation and the Trustee with the consent of the
Holders of a majority in principal amount of the Securities of all series at the
time Outstanding affected thereby (voting as one class). The Indenture contains
provisions permitting the Holders of not less than a majority in principal
amount of the Securities of all series at the time Outstanding with respect to
which a default under the Indenture shall have occurred and be continuing
(voting as one class), on behalf of the Holders of the Securities of all such
series, to waive, with certain exceptions, such past default with respect to all
such series and its consequences. The Indenture also permits the Holders of not
less than a majority in principal amount of the Securities of each series at the
time Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Corporation with certain provisions of the Indenture.
Any such consent or waiver by the Holder of this Note shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange therefor or
in lieu hereof, whether or not notation of such consent or waiver is made upon
this Note.

<PAGE>

         As provided in and subject to the provisions of the Indenture, the
Holder of this Note shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Notes, the Holders of not less than 25% in principal amount of the Notes at the
time Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have received from the
Holders of a majority in principal amount of the Notes at the time Outstanding a
direction inconsistent with such request, and shall have failed to institute any
such proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Note for the enforcement of any payment of principal hereof or any premium
or interest hereon on or after the respective due dates expressed herein.

         No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Corporation, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Security Register,
upon surrender of this Note for registration of transfer at the office or agency
of the Security Registrar in any place where the principal of and any premium
and interest on this Note are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Corporation and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes and of like tenor, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.

         The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Notes are
exchangeable for a like aggregate principal amount of the Notes and of like
tenor of a different authorized denomination, as requested by the Holder
surrendering the same.

         No service charge shall be made for any such registration of transfer
or exchange, but the Corporation may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

         Prior to due presentment of this Note for registration of transfer, the
Corporation, the Trustee and any agent of the Corporation or the Trustee may
treat the Person in whose name this Note is registered as the owner hereof for
all purposes, whether or not this Note be overdue, and neither the Corporation,
the Trustee nor any such agent shall be affected by notice to the contrary.

         All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.

         The Indenture and the Notes issued thereby shall be governed by and
construed in accordance with the laws of the State of California.

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