UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
þ
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended March 31, 2016
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from                        to

Commission
File Number
 
Exact Name of Registrant
as specified in its charter
 
State or Other Jurisdiction of
Incorporation or Organization
 
IRS Employer
Identification Number
1-9936
 
EDISON INTERNATIONAL
 
California
 
95-4137452
1-2313
 
SOUTHERN CALIFORNIA EDISON COMPANY
 
California
 
95-1240335

EDISON INTERNATIONAL
 
SOUTHERN CALIFORNIA EDISON COMPANY
2244 Walnut Grove Avenue
(P.O. Box 976)
Rosemead, California 91770
(Address of principal executive offices)
 
2244 Walnut Grove Avenue
(P.O. Box 800)
Rosemead, California 91770
(Address of principal executive offices)
(626) 302-2222
(Registrant's telephone number, including area code)
 
(626) 302-1212
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Edison International         Yes  þ No  o      Southern California Edison Company     Yes  þ No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Edison International         Yes  þ No  o      Southern California Edison Company     Yes  þ No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "accelerated filer," "large accelerated filer," and "smaller reporting company" in Rule 12b-12 of the Exchange Act. (Check One):
Edison International
Large Accelerated Filer þ
Accelerated Filer ¨
Non-accelerated Filer ¨
Smaller Reporting Company ¨
Southern California Edison Company
Large Accelerated Filer ¨
Accelerated Filer ¨
Non-accelerated Filer þ
Smaller Reporting Company ¨
 
 
 
 
 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Edison International         Yes  ¨ No  þ      Southern California Edison Company     Yes  ¨ No  þ
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
Common Stock outstanding as of April 28, 2016:
 
 
Edison International
 
325,811,206 shares
Southern California Edison Company
 
434,888,104 shares
 
 
 
 
 
 







TABLE OF CONTENTS
 
 
 
 
 
 
SEC Form 10-Q Reference Number
 
 
Part I, Item 2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Part I, Item 1A
 
 
 
Part I, Item 3
Part I, Item 1
 
 
 
 
 
 
 
 


i


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Part I, Item 4
 
 
 
 
 
 
Part II, Item 1
Part II, Item 2
 
 
 
 
Part II, Item 6
 
This is a combined Form 10-Q separately filed by Edison International and Southern California Edison Company. Information contained herein relating to an individual company is filed by such company on its own behalf. Each company makes representations only as to itself and makes no other representation whatsoever as to any other company.



ii


GLOSSARY
The following terms and abbreviations appearing in the text of this report have the meanings indicated below.
AFUDC
 
allowance for funds used during construction
2015 Form 10-K
 
Edison International's and SCE's combined Annual Report on Form 10-K for the year-ended December 31, 2015
ALJ
 
administrative law judge
APS
 
Arizona Public Service Company
ARO(s)
 
asset retirement obligation(s)
Bcf
 
billion cubic feet
Bonus Depreciation
 
Current federal tax deduction of a percentage of the qualifying property placed in service during periods permitted under tax laws 
CAA
 
Clean Air Act
CAISO
 
California Independent System Operator
CARB
 
California Air Resources Board
Competitive Businesses
 
businesses focused on providing energy services, including distributed generation and/or storage, to commercial and industrial customers; engaging in competitive transmission opportunities; and exploring distributed water treatment and recycling.
CPUC
 
California Public Utilities Commission
CRRs
 
congestion revenue rights
DOE
 
U.S. Department of Energy
Edison Energy
 
Edison Energy, LLC, a wholly-owned subsidiary of Edison Energy Group and one of the Competitive Businesses
Edison Energy Group
 
Edison Energy Group, Inc., the holding company for the Competitive Businesses
EME
 
Edison Mission Energy
EME Settlement Agreement
 
Settlement Agreement entered into by Edison International, EME, and the Consenting Noteholders in February 2014
EMG
 
Edison Mission Group Inc.
EPS
 
earnings per share
ERRA
 
energy resource recovery account
FERC
 
Federal Energy Regulatory Commission
Four Corners
 
coal fueled electric generating facility located in Farmington, New Mexico in
which SCE held a 48% ownership interest
GAAP
 
generally accepted accounting principles
GHG
 
greenhouse gas
GRC
 
general rate case
GWh
 
gigawatt-hours
HLBV
 
hypothetical liquidation at book value
IRS
 
Internal Revenue Service
Joint Proxy Statement
 
Edison International's and SCE's definitive Proxy Statement to be filed with the SEC in connection with Edison International's and SCE's Annual Shareholders' Meeting to be held on April 28, 2016
MD&A
 
Management's Discussion and Analysis of Financial Condition and Results
of Operations in this report
MHI
 
Mitsubishi Heavy Industries, Ltd. and a related company
Moody's
 
Moody's Investors Service
MW
 
megawatts
MWh
 
megawatt-hours
NAAQS
 
national ambient air quality standards
NEIL
 
Nuclear Electric Insurance Limited
NEM
 
net energy metering


iii


NERC
 
North American Electric Reliability Corporation
NRC
 
Nuclear Regulatory Commission
ORA
 
CPUC's Office of Ratepayers Advocates
OII
 
Order Instituting Investigation
Palo Verde
 
large pressurized water nuclear electric generating facility located near
Phoenix, Arizona in which SCE holds a 15.8% ownership interest
PBOP(s)
 
postretirement benefits other than pension(s)
PG&E
 
Pacific Gas & Electric Company
QF(s)
 
qualifying facility(ies)
ROE
 
return on common equity
S&P
 
Standard & Poor's Ratings Services
San Onofre
 
retired nuclear generating facility located in south San Clemente, California in which SCE holds a 78.21% ownership interest
San Onofre OII Settlement Agreement
 
Settlement Agreement by and among SCE, The Utility Reform Network, the CPUC's Office of Ratepayer Advocates and SDG&E, which was later joined by the Coalition of California Utility Employees and Friends of the Earth, (together, the "Settling Parties"), dated November 20, 2014
SCE
 
Southern California Edison Company
SDG&E
 
San Diego Gas & Electric
SEC
 
U.S. Securities and Exchange Commission
SED
 
Safety and Enforcement Division of the CPUC, formerly known as the Consumer Protection and Safety Division or CPSD
SoCalGas
 
Southern California Gas Company
TURN
 
The Utility Reform Network
US EPA
 
U.S. Environmental Protection Agency
VIE(s)
 
variable interest entity(ies)



iv


FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect Edison International's and SCE's current expectations and projections about future events based on Edison International's and SCE's knowledge of present facts and circumstances and assumptions about future events and include any statement that does not directly relate to a historical or current fact. Other information distributed by Edison International and SCE that is incorporated in this report, or that refers to or incorporates this report, may also contain forward-looking statements. In this report and elsewhere, the words "expects," "believes," "anticipates," "estimates," "projects," "intends," "plans," "probable," "may," "will," "could," "would," "should," and variations of such words and similar expressions, or discussions of strategy or of plans, are intended to identify forward-looking statements. Such statements necessarily involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Some of the risks, uncertainties and other important factors that could cause results to differ from those currently expected, or that otherwise could impact Edison International and SCE, include, but are not limited to the:
•
ability of SCE to recover its costs in a timely manner from its customers through regulated rates, including regulatory assets related to San Onofre;
•
decisions and other actions by the CPUC, the FERC, the NRC and other regulatory authorities, including determinations of authorized rates of return or return on equity, and delays in regulatory actions;
•
ability of Edison International or SCE to borrow funds and access the capital markets on reasonable terms;
•
possible customer bypass or departure due to technological advancements in the generation, storage, transmission, distribution and use of electricity, and supported by public policy, government regulations and incentives;
•
risks inherent in the construction of transmission and distribution infrastructure replacement and expansion projects, including those related to project site identification, public opposition, environmental mitigation, construction, permitting, power curtailment costs (payments due under power contracts in the event there is insufficient transmission to enable acceptance of power delivery), and governmental approvals;
•
risks associated with the operation of transmission and distribution assets and power generating facilities including: public safety issues, failure, availability, efficiency, and output of equipment and availability and cost of spare parts;
•
risks associated with the retirement and decommissioning of nuclear generating facilities;
•
physical security of SCE's critical assets and personnel and the cybersecurity of SCE's critical information technology systems for grid control, and business and customer data;
•
ability of Edison International to develop its Competitive Businesses, manage new business risks, and recover and earn a return on its investment in newly developed or acquired businesses;
•
cost and availability of electricity, including the ability to procure sufficient resources to meet expected customer needs in the event of power plant outages or significant counterparty defaults under power-purchase agreements;
•
environmental laws and regulations, at both the state and federal levels, or changes in the application of those laws, that could require additional expenditures or otherwise affect the cost and manner of doing business;
•
changes in the fair value of investments and other assets;
•
changes in interest rates and rates of inflation, including escalation rates, which may be adjusted by public utility regulators;
•
governmental, statutory, regulatory or administrative changes or initiatives affecting the electricity industry, including the market structure rules applicable to each market adopted by the CAISO, WECC, NERC, and adjoining regions;
•
availability and creditworthiness of counterparties and the resulting effects on liquidity in the power and fuel markets and/or the ability of counterparties to pay amounts owed in excess of collateral provided in support of their obligations;
•
cost and availability of labor, equipment and materials;
•
ability to obtain sufficient insurance, including insurance relating to SCE's nuclear facilities and wildfire-related liability, and to recover the costs of such insurance or in the absence of insurance the ability to recover uninsured losses;
•
potential for penalties or disallowance for non-compliance with applicable laws and regulations;

1


•
cost of fuel for generating facilities and related transportation, which could be impacted by, among other things, disruption of natural gas storage facilities, to the extent not recovered through regulated rate cost escalation provisions or balancing accounts;
•
disruption of natural gas supply due to unavailability of storage facilities, which could lead to electricity service interruptions; and
•
weather conditions and natural disasters.
Additional information about risks and uncertainties, including more detail about the factors described in this report, is contained throughout this MD&A and in Edison International's and SCE's combined 2015 Form 10-K, including the "Risk Factors" section. Readers are urged to read this entire report, including the information incorporated by reference, as well as the 2015 Form 10-K, and carefully consider the risks, uncertainties and other factors that affect Edison International's and SCE's businesses. Forward-looking statements speak only as of the date they are made and neither Edison International nor SCE are obligated to publicly update or revise forward-looking statements. Readers should review future reports filed by Edison International and SCE with the SEC. Additionally, Edison International and SCE provide direct links to SCE's regulatory filings with the CPUC and the FERC in open proceedings most important to investors at www.edisoninvestor.com (SCE Regulatory Highlights) so that such filings are available to all investors upon SCE filing with the relevant agency.
The MD&A for the three months ended March 31, 2016 discusses material changes in the consolidated financial condition, results of operations and other developments of Edison International and SCE since December 31, 2015, and as compared to the three months ended March 31, 2015. This discussion presumes that the reader has read or has access to Edison International's and SCE's MD&A for the calendar year 2015 (the "year-ended 2015 MD&A"), which was included in the 2015 Form 10-K.
Except when otherwise stated, references to each of Edison International, SCE, EMG, Edison Energy Group, EME or Edison Capital mean each such company with its subsidiaries on a consolidated basis. References to "Edison International Parent and Other" mean Edison International Parent and its consolidated competitive subsidiaries.

2

















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3


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MANAGEMENT OVERVIEW
Highlights of Operating Results
Edison International is the parent holding company of SCE. SCE is a public utility primarily engaged in the business of supplying and delivering electricity to an approximately 50,000 square mile area of southern California. Edison International is also the parent company of subsidiaries that are engaged in competitive businesses focused on providing energy services to commercial and industrial customers, including distributed resources, engaging in transmission opportunities, and exploring distributed water treatment and recycling (the "Competitive Businesses"). Such business activities are currently not material to report as a separate business segment. References to Edison International refer to the consolidated group of Edison International and its subsidiaries. References to Edison International Parent and Other refer to Edison International Parent and its competitive subsidiaries. Unless otherwise described, all of the information contained in this report relates to both filers.
 
 
Three months ended March 31,
 
 
(in millions)
 
2016
 
2015
 
Change
Net income (loss) attributable to Edison International
 
 
 
 
 
 
Continuing operations
 
 
 
 
 
 
SCE
 
$
287

 
$
305

 
$
(18
)
Edison International Parent and Other
 
(17
)
 
(6
)
 
(11
)
Discontinued operations
 
1

 
—

 
1

Edison International
 
271

 
299

 
(28
)
Less: Non-core items
 
 
 
 
 
 
     SCE
 
—

 
—

 
—

     Edison International Parent and Other
 
2

 
5

 
(3
)
     Discontinued operations
 
1

 
—

 
1

Total non-core items
 
3

 
5

 
(2
)
Core earnings (losses)
 
 
 
 
 
 
SCE
 
287

 
305

 
(18
)
Edison International Parent and Other
 
(19
)
 
(11
)
 
(8
)
Edison International
 
$
268

 
$
294

 
$
(26
)
Edison International's earnings are prepared in accordance with GAAP used in the United States. Management uses core earnings internally for financial planning and for analysis of performance. Core earnings (losses) are also used when communicating with investors and analysts regarding Edison International's earnings results to facilitate comparisons of the Company's performance from period to period. Core earnings (losses) are a non-GAAP financial measure and may not be comparable to those of other companies. Core earnings (losses) are defined as earnings attributable to Edison International shareholders less income or loss from discontinued operations, income resulting from allocation of losses to tax equity investors under the hypothetical liquidation at book value ("HLBV") accounting method and income or loss from significant discrete items that management does not consider representative of ongoing earnings, such as: exit activities, including sale of certain assets and other activities that are no longer continuing; write downs, asset impairments and other gains and losses related to certain tax, regulatory or legal settlements or proceedings.
SCE's core earnings for the three months ended March 31, 2016 decreased by $ 18 million primarily due to the timing of revenue recognized in 2015 due to the delay in receiving the 2015 GRC decision, higher operation and maintenance costs and lower incremental income tax benefits.
During the first quarter of 2015, pending the outcome of the 2015 GRC decision, SCE recognized GRC-related revenue largely based on the 2014 authorized revenue requirement. During 2015, SCE recorded an estimated revenue refund to customers of $451 million to reflect the final decision in the 2015 GRC. The estimated amount of the refund to customers attributable to the first quarter of 2015 but recorded subsequently in 2015 was approximately $35 million ($21 million after-tax). See "Results of Operations" for further information.

4


Edison International Parent and Other core losses for the three months ended March 31, 2016 increased by $8 million primarily due to higher development and operating costs at Edison Energy Group and subsidiaries and income in the first quarter of 2015 from Edison Capital's investments in affordable housing projects.
Consolidated non-core items included income of $2 million and $5 million for the three months ended March 31, 2016 and 2015, respectively, related to losses allocated to tax equity investors under the HLBV accounting method. Edison International reflected in core earnings the operating results of the solar rooftop projects, related financings and the priority return to the tax equity investor. The losses allocated to the tax equity investor under HLBV accounting method results in income allocated to subsidiaries of Edison International, neither of which is due to the operating performance of the projects but rather due to the allocation of income tax attributes under the tax equity financing. Accordingly, Edison International has included the non-operating allocation of income as a non-core item. For further information on HLBV, see the 2015 Form 10-K, "Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies."
Capital Program
Total capital expenditures (including accruals) were $729 million and $825 million for the first three months of 2016 and 2015, respectively. SCE projects that 2016 capital expenditures will be approximately $4 billion. Actual capital spending may be affected by: changes in regulatory, environmental and engineering design requirements; permitting and project delays; cost and availability of labor, equipment and materials; and other factors. SCE will file its 2018 GRC application in September 2016, which will include a forecast of capital expenditures and rate base for 2018 – 2020. For further information regarding the capital program see the year-ended 2015 MD&A, "Management Overview—Capital Program."
RESULTS OF OPERATIONS
Southern California Edison Company
SCE's results of operations are derived mainly through two sources:
•
Earning activities – representing revenue authorized by the CPUC and FERC which is intended to provide SCE a reasonable opportunity to recover its costs and earn a return on its net investment in generation, transmission and distribution assets. The annual revenue requirements are comprised of authorized operation and maintenance costs, depreciation, taxes and a return consistent with the capital structure. Also, included in earnings activities are revenue or penalties related to incentive mechanisms, other operating revenue, and regulatory charges or disallowances.
•
Cost-recovery activities – representing CPUC- and FERC-authorized balancing accounts which allow for recovery of specific project or program costs, subject to reasonableness review or compliance with upfront standards. Cost-recovery activities include rates which provide recovery, subject to reasonableness review of, among other things, fuel costs, purchased power costs, public purpose related-program costs (including energy efficiency and demand-side management programs) and certain operation and maintenance expenses.

5


The following table is a summary of SCE's results of operations for the periods indicated.
Three months ended March 31, 2016 versus March 31, 2015
 
Three months ended March 31, 2016
Three months ended March 31, 2015
(in millions)
Earning
Activities
Cost-
Recovery
Activities
Total
Consolidated
Earning
Activities
Cost-
Recovery
Activities
Total
Consolidated
Operating revenue
$
1,522

$
913

$
2,435

$
1,563

$
945

$
2,508

Purchased power and fuel
—

794

794

—

786

786

Operation and maintenance
484

119

603

462

159

621

Depreciation, decommissioning and amortization
475

—

475

463

—

463

Property and other taxes
91

—

91

88

—

88

Total operating expenses
1,050

913

1,963

1,013

945

1,958

Operating income
472

—

472

550

—

550

Interest expense
(131
)
—

(131
)
(136
)
—

(136
)
Other income and expenses
26

—

26

26

—

26

Income before income taxes
367

—

367

440

—

440

Income tax expense
50

—

50

107

—

107

Net income
317

—

317

333

—

333

Preferred and preference stock dividend requirements
30

—

30

28

—

28

Net income available for common stock
$
287

$
—

$
287

$
305

$
—

$
305

Core earnings 1
 
 
$
287

 
 
$
305

Non-core earnings
 
 
—

 
 
—

Total SCE GAAP earnings
 
 
$
287

 
 
$
305

1  
See use of non-GAAP financial measures in "Management Overview—Highlights of Operating Results."
Earning Activities
SCE's results of operations for the three months ended March 31, 2016 included an increase in revenue of approximately $46 million from the escalation mechanism set forth in the final 2015 GRC decision. The annual escalation increase implemented in customer rates for 2016 was $203 million. SCE's results of operations for the three months ended March 31, 2015 were largely based on 2014 authorized base revenue requirements included in customer rates.
During 2015, SCE recorded an estimated revenue refund to customers of $451 million to reflect the final decision in the 2015 GRC. The estimated amount of the refund to customers attributable to the first quarter of 2015 but recorded subsequently in 2015 was approximately $35 million ($21 million after-tax).
Earning activities were primarily affected by the following:
•
Lower operating revenue of $41 million primarily due to the following:
•
A decrease in revenue of approximately $74 million for tax benefits recognized through the tax accounting memorandum account ("TAMA") and the pole loading balancing account (offset in income taxes as discussed below) in the first quarter of 2016.
•
An increase in CPUC revenue of approximately $11 million primarily due to the implementation of the 2015 GRC decision. During the first quarter of 2016, SCE increased authorized revenue based on the escalation mechanism set forth in the 2015 GRC decision. This increase was partially offset by the timing of finalizing the 2015 GRC decision discussed above.
•
An increase in FERC-related revenue of $13 million primarily due to higher depreciation expense.
•
Higher operation and maintenance expense of $22 million primarily due to transmission and distribution costs for storm-related activities and inspection costs, and higher severance costs.
•
Higher depreciation, decommissioning and amortization expense of $12 million due to an increase in depreciation primarily related to transmission and distribution investments.

6


•
Lower income taxes of $57 million primarily due to the following:
•
Lower pre-tax income in 2016, as discussed above.
•
Higher income tax benefits in 2016 primarily related to $43 million of repair deductions (offset in revenue above) for TAMA and pole loading balancing accounts partially offset by lower tax benefits on other property-related items in 2016.
Cost-Recovery Activities
Cost-recovery activities were primarily affected by the following:
•
Lower operation and maintenance expense of $40 million primarily due to lower transmission access charges and lower benefit costs.
Supplemental Operating Revenue Information
SCE's retail billed and unbilled revenue (excluding wholesale sales and balancing account overcollections/undercollections) was $2.4 billion and $2.6 billion for the three months ended March 31, 2016 and 2015, respectively. Retail billed and unbilled revenue for the three months ended March 31, 2016 were lower compared to the same period last year primarily due to a rate decrease of $137 million and sales volume decrease of $55 million. The decrease in rates was primarily due to implementations of the 2016 ERRA rate decrease and the 2015 GRC decision in January 2016. The decrease in sales volume was due to lower load requirements related to cooler weather experienced in 2016 compared to the same period in prior year.
As a result of the CPUC-authorized decoupling mechanism, SCE earnings are not affected by changes in retail electricity sales (see "Business—SCE—Overview of Ratemaking Process" in the 2015 Form 10-K).
Income Taxes
SCE's income tax provision decreased by $57 million during the first quarter of 2016 compared to the same period in 2015.
The effective tax rates were 13.6% and 24.3% for the three months ended March 31, 2016 and 2015, respectively. The effective tax rate decrease was primarily due to higher income tax benefits related to repair deductions, mainly due to flow-through income tax benefits recorded through balancing accounts as discussed above.
See "Notes to Consolidated Financial Statements—Note 7. Income Taxes" for a reconciliation of the federal statutory rate of 35% to the effective income tax rates and "Liquidity and Capital Resources—SCE—Regulatory Proceedings—Tax Repair Deductions and Memorandum Account" below for more information.
Edison International Parent and Other
Results of operations for Edison International Parent and Other include amounts from other Edison International subsidiaries that are not significant as a reportable segment, as well as intercompany eliminations.
Income from Continuing Operations
The following table summarizes the results of Edison International Parent and Other:
 
 
Three months ended March 31,
(in millions)
 
2016
 
2015
Edison Energy Group and subsidiaries
 
$
(6
)
 
$
2

Edison Mission Group and subsidiaries
 
—

 
3

Corporate expenses and Other 1
 
(11
)
 
(11
)
Total Edison International Parent and Other
 
$
(17
)
 
$
(6
)
1  
Includes interest expense (pre-tax) of $8 million and $7 million for the three months ended March 31, 2016 and 2015, respectively.

7


The loss from continuing operations of Edison International Parent and Other increased $11 million for the three months ended March 31, 2016 compared to the same period in 2015 primarily due to:
•
Higher development and operating costs and lower income allocated under the HLBV accounting method at Edison Energy Group and subsidiaries for the three months ended March 31, 2016 compared with the same period in prior year. The results during the first quarter of 2016 also include the three businesses acquired by Edison Energy in December 2015. Revenue of Edison Energy Group for the three months ended March 31, 2016 and 2015, were
$6 million and $3 million, respectively. For further information, see the 2015 Form 10-K, "Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies" and "Management Overview—Highlights of Operating Results."
•
A decrease in income from Edison Mission Group and subsidiaries of $3 million for the three months ended March 31, 2016 primarily due to income related to affordable housing projects in the first quarter of 2015. In December 2015, EMG's subsidiary, Edison Capital completed the sale of its remaining affordable housing investments portfolio which represents the exit from this business activity.
LIQUIDITY AND CAPITAL RESOURCES
Southern California Edison Company
SCE's ability to operate its business, fund capital expenditures, and implement its business strategy is dependent upon its cash flow and access to the bank and capital markets. SCE's overall cash flows fluctuate based on, among other things, its ability to recover its costs in a timely manner from its customers through regulated rates, changes in commodity prices and volumes, collateral requirements, interest obligations and dividend payments to Edison International, and the outcome of tax and regulatory matters.
SCE expects to fund its 2016 obligations, capital expenditures and dividends through operating cash flows, tax benefits and capital market financings of debt and preferred equity, as needed. SCE also has availability under its credit facilities to fund liquidity requirements.
Available Liquidity
At March 31, 2016 , SCE had approximately $2.56 billion available under its $ 2.75 billion multi-year revolving credit facility. In March 2016, SCE issued $300 million of preference stock. For further details, see "Notes to Consolidated Financial Statements—Note 5. Debt and Credit Agreements" and "—Note 12. Preferred and Preference Stock of SCE" for further discussion).
Debt Covenant
The debt covenant in SCE's credit facility limits its debt to total capitalization ratio to less than or equal to 0.65 to 1. At  March 31, 2016 , SCE's debt to total capitalization ratio was 0.43 to 1.
Regulatory Proceedings
Cost of Capital
As discussed in the year-ended 2015 MD&A, SCE and the other Joint Investor-Owned Utilities submitted a petition to the CPUC in connection with their request for a one-year extension of the due date for the filing of the next cost of capital applications. A final decision approving the Joint Investor-Owned Utilities' petition was approved on February 25, 2016. As extended, the Joint Investor-Owned Utilities must file their next cost of capital applications by April 20, 2017 instead of April 20, 2016. SCE's authorized rate of return and capital structure for CPUC-related activities will remain unchanged through December 31, 2017. See "Business—SCE—Overview of Ratemaking Process—CPUC" in the 2015 Form 10-K for details on SCE's cost of capital and authorized rates of return.
Energy Efficiency Incentive Mechanism
In March 2016, ORA and TURN filed a joint proposal requesting that the CPUC recalculate SCE's 2006 – 2008 incentive awards and order SCE to refund $39.9 million to its customers. SCE disputes the assertion that SCE should be at risk to repay previously awarded incentives. SCE cannot predict the outcome of this proceeding. See "Notes to Consolidated Financial Statements—Note 11. Commitments and Contingencies—Energy Efficiency Incentive Mechanism" for more information.

8


Tax Repair Deductions and Memorandum Account
Previously, SCE recognized earnings and a regulatory asset for deferred income taxes related to 2012 – 2014 tax repair deductions. As a result of the CPUC's rate base offset in the 2015 GRC decision, SCE wrote down this regulatory asset in full during 2015. The after-tax charge was reflected in "Income tax expense" on the consolidated statements of income. The amount of tax repair deductions the CPUC used to establish the rate base offset was based on SCE's forecast of 2012 – 2014 tax repair deductions from the Notice of Intent filed in the 2015 GRC. The amount of tax repair deductions included in the Notice of Intent was less than the actual tax repair deductions SCE reported on its 2012 through 2014 income tax returns. In April 2016, the CPUC granted SCE's request to reduce SCE's Base Revenue Requirement Balancing Account by $234 million during 2016 through 2020 subject to the outcome of audits that may be conducted by tax authorities. The refunds result in flowing incremental tax benefits for 2012 – 2014 to customers through 2020, beginning in the second quarter of 2016. SCE does not expect to record a gain or loss from this reduction. Regulatory assets recorded from flow through tax benefits are recovered through SCE's general rate case proceedings.
Capital Investment Plan – Major Transmission Projects
Coolwater-Lugo
In February 2016, SCE filed an abandoned plant recovery request at FERC for the costs of the cancelled Coolwater-Lugo transmission project pursuant to the authority granted by FERC for SCE to recover 100% of all prudently-incurred costs if the project is cancelled for reasons beyond SCE's control. The project was cancelled by the CPUC in 2015 due to a reduction in need. SCE requested recovery of the $37.1 million in costs that SCE incurred for the project over a twelve-month period through the FERC transmission formula rate.
West of Devers
In April 2016, the CPUC issued a proposed decision to approve the project as recommended by SCE. An alternative project with a modified scope had been considered as part of required environmental impact reviews as discussed in the year-ended 2015 MD&A. The CPUC is expected to issue a final decision on the project in the second quarter of 2016.
Dividend Restrictions
The CPUC regulates SCE's capital structure which limits the dividends it may pay Edison International. SCE may make distributions to Edison International as long as the common equity component of SCE's capital structure remains at or above 48% on a 13-month weighted average basis. At March 31, 2016 , SCE's 13-month weighted-average common equity component of total capitalization was 50.2% and the maximum additional dividend, that SCE could pay to Edison International under this limitation was approximately $516 million, resulting in a restriction on net assets of approximately $13.4 billion.
In the first quarter of 2016, SCE declared and paid a dividend to Edison International of $170 million. Future dividend amounts and timing of distributions are dependent on a number of factors including the level of capital expenditures, operating cash flows and earnings.
Margin and Collateral Deposits
Certain derivative instruments, power procurement contracts and other contractual arrangements contain collateral requirements. Future collateral requirements may differ from the requirements at March 31, 2016 , due to the addition of incremental power and energy procurement contracts with collateral requirements, if any, and the impact of changes in wholesale power and natural gas prices on SCE's contractual obligations.
Some of the power procurement contracts contain provisions that require SCE to maintain an investment grade credit rating from the major credit rating agencies. If SCE's credit rating were to fall below investment grade, SCE may be required to pay the liability or post additional collateral.

9


The table below provides the amount of collateral posted by SCE to its counterparties as well as the potential collateral that would have been required as of March 31, 2016 .
(in millions)
 
 
Collateral posted as of March 31, 2016 1
 
$
131

Incremental collateral requirements for power procurement contracts resulting from a potential downgrade of SCE's credit rating to below investment grade
 
26

Incremental collateral requirements for power procurement contracts resulting from adverse market price movement 2
 
14

Posted and potential collateral requirements
 
$
171

1  
Net collateral provided to counterparties and other brokers consisted of $11 million of cash which was offset against net derivative liabilities on the consolidated balance sheets, $25 million  of cash reflected in "Other current assets" on the consolidated balance sheets and $95 million in letters of credit and surety bonds.
2  
Incremental collateral requirements were based on potential changes in SCE's forward positions as of March 31, 2016 due to adverse market price movements over the remaining lives of the existing power procurement contracts using a 95% confidence level.
Edison International Parent and Other
Edison International Parent and Other's liquidity and its ability to pay operating expenses and dividends to common shareholders are dependent on dividends from SCE, realization of tax benefits and access to bank and capital markets.
At March 31, 2016, Edison International Parent had $988 million available under its $ 1.25 billion multi-year revolving credit facility. In March 2016, Edison International issued $400 million of senior notes. For further details, see "Notes to Consolidated Financial Statements—Note 5. Debt and Credit Agreements."
Edison International may finance working capital requirements, payment of obligations and capital investments, including capital contributions to subsidiaries to fund new businesses, with commercial paper or other borrowings, subject to availability in the capital markets.
The debt covenant in Edison International Parent's credit facility requires a consolidated debt to total capitalization ratio as defined in the credit agreement of less than or equal to 0.65 to 1. At March 31, 2016, Edison International Parent's consolidated debt to total capitalization ratio was 0.47 to 1.
In August 2014, Edison International entered into an amendment of the EME Settlement Agreement that finalized the remaining matters related to the EME Settlement. Edison International is obligated to make the final payment of $214 million on September 30, 2016. Edison International has net operating loss and tax credit carryforwards retained by EME which are available to offset future consolidated taxable income or tax liabilities. In December 2015, the PATH Act of 2015 extended 50% bonus depreciation for qualifying property retroactive to January 1, 2015 and through 2017 and provided for 40% bonus depreciation in 2018 and 30% in 2019. As a result, realization of these tax benefits has been deferred (currently forecasted through 2022). The timing of realization of these tax benefits may be further delayed in the event of future extensions of bonus depreciation and the value of the net operating loss carryforwards could be permanently reduced in the event that tax reform decreases the current corporate tax rate.

10


Historical Cash Flows
Southern California Edison Company
 
Three months ended March 31,
(in millions)
2016
 
2015
Net cash provided by operating activities
$
882

 
$
966

Net cash (used in) provided by financing activities
(55
)
 
320

Net cash used in investing activities
(832
)
 
(1,288
)
Net decrease in cash and cash equivalents
$
(5
)
 
$
(2
)
Net Cash Provided by Operating Activities
The following table summarizes major categories of net cash provided by operating activities as provided in more detail in SCE's consolidated statements of cash flows for the three months ended March 31, 2016 and 2015.
 
Three months ended
March 31,
 
Change in cash flows
(in millions)
2016
2015
 
2016/2015
Net income
$
317

$
333

 
 
Non-cash items 1
537

532

 
 
    Subtotal
$
854

$
865

 
$
(11
)
Changes in cash flow resulting from working capital 2
(35
)
(99
)
 
64

Derivative assets and liabilities, net
5

(10
)
 
15

Regulatory assets and liabilities, net
119

193

 
(74
)
Other noncurrent assets and liabilities, net 3
(61
)
17

 
(78
)
Net cash provided by operating activities
$
882

$
966

 
$
(84
)
1  
Non-cash items include depreciation, decommissioning and amortization, allowance for equity during construction, impairment and other charges, deferred income taxes and investment tax credits and other.
2  
Changes in working capital items include receivables, inventory, accounts payable, prepaid and accrued taxes, and other current assets and liabilities.
3 Includes the nuclear decommissioning trusts.
Net cash provided by operating activities were impacted by the following:
•
Net cash used for working capital was $35 million and $99 million during the three months ended March 31, 2016 and 2015, respectively. The cash outflow for each period was primarily related to the timing of disbursements, including payments for payroll, payroll-related costs and income taxes. In addition, net cash for working capital during the first quarter of 2016 was benefited by the timing of receipts from customers. During the first three months of the 2016 and 2015, SCE had net tax payments of $11 million and $32 million, respectively. In addition, SCE had severance payments of $15 million and $23 million during the first quarters of 2016 and 2015, respectively.
•
Net cash provided by regulatory assets and liabilities, including changes in over (under) collections of balancing accounts. SCE has a number of balancing accounts, which impact cash flows based on differences between timing of collection of amounts through rates and accrual expenditures. During the first three months of 2016 and 2015, cash flows were impacted by the following principal balancing accounts:
•
ERRA overcollections for fuel and purchased power decreased $75 million during the first three months of 2016 primarily due to the implementation of the 2016 ERRA rate decrease in January 2016 partially offset by lower than forecasted power and gas prices experienced in 2016. ERRA undercollections for fuel and purchased power decreased $345 million in the first three months of 2015 primarily due to lower power and gas prices experienced in 2015.
•
The base rate revenue balancing account ("BRRBA") tracks differences between amounts authorized by the CPUC in the GRC proceedings and amounts billed to customers. BRRBA overcollections decreased $85 million in the first three months of 2016 primarily due to the implementation of the 2015 GRC decision in January 2016 and lower electricity

11


sales than forecasted in rates from warmer weather experienced in 2016. BRRBA undercollections increased $72 million in the first three months of 2015 primarily due to reduced customer sales from warmer weather during the first quarter of 2015.
•
The public purpose and energy efficiency programs track the differences between amounts authorized by the CPUC and amounts incurred to fund programs established by the CPUC. Overcollections increased by $ 134 million during the first quarter of 2016 due to higher funding and lower spending for these programs. Overcollections decreased by $23 million during the first three months of 2015 due to increased spending for these programs.
•
The 2015 GRC decision established the TAMA. As a result of this memorandum account, together with a balancing account for pole loading expenditures, any differences between the authorized tax repair deductions and actual tax repair deductions will be adjusted through customer rates. Overcollections increased by $ 30 million during the first three months of 2016 due to higher tax repair deductions than forecasted in rates.
•
Timing of greenhouse gas auction revenue and climate credit refunds to customers. Overcollections increased by $81 million compared to $36 million for the first three months of 2016 and 2015, respectively.
•
Cash flows (used in) provided by other noncurrent assets and liabilities were $(61) million and $17 million in the first three months of 2016 and 2015, respectively. Major factors affecting cash flow related to noncurrent assets and liabilities were activities related to SCE's nuclear decommissioning trusts (principally related to the payment of decommissioning costs). Decommissioning costs of San Onofre were approximately $41 million and $32 million for the three months ended March 31, 2016 and 2015, respectively (such costs were recorded as a reduction of SCE's asset retirement obligation).
Net Cash (Used in) Provided by Financing Activities
The following table summarizes cash (used in) provided by financing activities for the three months ended March 31, 2016 and 2015 . Issuances of debt and preference stock are discussed in "Notes to Consolidated Financial Statements—Note 5. Debt and Credit Agreements—Long-Term Debt" and "—Note 12. Preferred and Preference Stock of SCE."
 
Three months ended March 31,
(in millions)
2016
 
2015
Issuances of first and refunding mortgage bonds, net
$
—

 
$
1,287

Long-term debt matured or repurchased
(40
)
 
(419
)
Issuances of preference stock, net
294

 
—

Redemptions of preference stock
(125
)
 
—

Short-term debt financing, net
52

 
(370
)
Payments of common stock dividends to Edison International
(170
)
 
(147
)
Payments of preferred and preference stock dividends
(35
)
 
(34
)
Other
(31
)
 
3

Net cash (used in) provided by financing activities
$
(55
)
 
$
320

Net Cash Used in Investing Activities
Cash flows used in investing activities are primarily due to capital expenditures and funding of nuclear decommissioning trusts. Capital expenditures were $ 950 million and $1.3 billion for the three months ended March 31, 2016 and 2015 , respectively, primarily related to transmission, distribution and generation investments. Net proceeds (purchases) of nuclear decommissioning trust investments were $106 million and $(36) million for the three months ended March 31, 2016 and 2015 , respectively. The 2016 net proceeds from sale of nuclear decommissioning trust investments was due to disbursements less net earnings during the period. The 2015 net purchase of nuclear decommissioning trust investments was due to net earnings during the period.

12


Nuclear Decommissioning Trusts
SCE's statement of cash flows includes activities of the Nuclear Decommissioning Trusts which are reflected in the following line items:
 
Three months ended March 31,
(in millions)
2016
 
2015
Net cash (used in) provided by operating activities:
   Nuclear decommissioning trusts
$
(106
)
 
$
29

Net cash flow from investing activities:
   Proceeds from sale of investments
793

 
1,026

   Purchases of investments
(687
)
 
(1,062
)
Net cash impact
$
—

 
$
(7
)
Net cash (used in) provided by operating activities of the nuclear decommissioning trusts relate to interest and dividends less administrative expenses, taxes and decommissioning costs. See "Notes to Consolidated Financial Statements—Note 9. Investments" for further information. Such activities represent the source (use) of the funds for investing activities. The net cash impact represents the contributions made by SCE to the nuclear decommissioning trusts.
In future periods, decommissioning costs of San Onofre will increase significantly. Such amounts will continue to be reflected as a decrease in SCE net cash provided by operating activities and will be funded from sales of investments of the nuclear decommissioning trusts once approved by the CPUC. Decommissioning costs incurred prior to CPUC approval will be funded by SCE and are reflected as cash flow used by operating activities. See "Notes to Consolidated Financial Statements—Note 9. Investments" for further information.
Edison International Parent and Other
The table below sets forth condensed historical cash flow from operations for Edison International Parent and Other.
 
Three months ended March 31,
(in millions)
2016
 
2015
Net cash used in operating activities
$
(29
)
 
$
(2
)
Net cash provided by (used in) financing activities
12

 
(7
)
Net cash used in investing activities
(2
)
 
(6
)
Net decrease in cash and cash equivalents
$
(19
)
 
$
(15
)
Net Cash Used in Operating Activities
Net cash used in operating activities increased $27 million for the first three months of 2016 compared to 2015 due to the timing of payments and receipts relating to interest, operating costs and income taxes.
Net Cash Provided by (Used in) Financing Activities
Net cash provided by (used in) financing activities were as follows:
 
Three months ended March 31,
(in millions)
2016
 
2015
Dividends paid to Edison International common shareholders
$
(156
)
 
$
(136
)
Dividends received from SCE
170

 
147

Payment for stock-based compensation
(38
)
 
(94
)
Receipt from stock option exercises
22

 
54

Long-term debt issuance, net
397

 
—

Short-term debt financing, net
(384
)
 
15

Other
1

 
7

Net cash provided by (used in) financing activities
$
12

 
$
(7
)

13


Contingencies
SCE has contingencies related to San Onofre Related Matters, Energy Efficiency Incentive Mechanism, Long Beach Service Interruptions, Nuclear Insurance, Wildfire Insurance and Spent Nuclear Fuel which are discussed in "Notes to Consolidated Financial Statements—Note 11. Commitments and Contingencies."
Environmental Remediation
As of March 31, 2016, SCE had identified 19 material sites for remediation and recorded an estimated minimum liability of $133 million . SCE expects to recover 90% of its remediation costs at certain sites. See "Notes to Consolidated Financial Statements—Note 11. Commitments and Contingencies" for further discussion.
MARKET RISK EXPOSURES
Edison International's and SCE's primary market risks are described in the 2015 Form 10-K. For a further discussion of market risk exposures, including commodity price risk, credit risk and interest rate risk, see "Notes to Consolidated Financial Statements—Note 4. Fair Value Measurements" and "—Note 6. Derivative Instruments."
Commodity Price Risk
The fair value of outstanding derivative instruments used to mitigate exposure to commodity price risk was a net liability of $1.2 billion at both March 31, 2016 and December 31, 2015. For further discussion of fair value measurements and the fair value hierarchy, see "Notes to Consolidated Financial Statements—Note 4. Fair Value Measurements" and "— Note 6. Derivative Instruments."
Credit Risk
Credit risk exposure from counterparties for power and gas trading activities is measured as the sum of net accounts receivable (accounts receivable less accounts payable) and the current fair value of net derivative assets (derivative assets less derivative liabilities) reflected on the consolidated balance sheets. SCE enters into master agreements which typically provide for a right of setoff. Accordingly, SCE's credit risk exposure from counterparties is based on a net exposure under these arrangements. SCE manages the credit risk on the portfolio for both rated and non-rated counterparties based on credit ratings using published ratings of counterparties and other publicly disclosed information, such as financial statements, regulatory filings, and press releases, to guide it in the process of setting credit levels, risk limits and contractual arrangements, including master netting agreements.
As of March 31, 2016, the amount of balance sheet exposure as described above broken down by the credit ratings of SCE's counterparties, was as follows:
 
March 31, 2016
(in millions)
Exposure 2
 
Collateral
 
Net Exposure
S&P Credit Rating 1
 
 
 
 
 
A or higher
$
136

 
$
—

 
$
136

Not rated
8

 
(12
)
 
—

Total
$
144

 
$
(12
)
 
$
136

1  
SCE assigns a credit rating based on the lower of a counterparty's S&P or Moody's rating. For ease of reference, the above table uses the S&P classifications to summarize risk, but reflects the lower of the two credit ratings.
2  
Exposure excludes amounts related to contracts classified as normal purchases and sales and non-derivative contractual commitments that are not recorded on the consolidated balance sheets, except for any related net accounts receivable.
CRITICAL ACCOUNTING ESTIMATES AND POLICIES
For a complete discussion on Edison International's and SCE's critical accounting policies, see "Critical Accounting Estimates and Policies" in the year-ended 2015 MD&A.

14


NEW ACCOUNTING GUIDANCE
New accounting guidance is discussed in "Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies—New Accounting Guidance."
RISK FACTORS
The risk factors appearing in the 2015 Form 10-K under the headings set forth below are supplemented and updated as follows:
RISKS RELATING TO SOUTHERN CALIFORNIA EDISON COMPANY
Regulatory Risks
SCE's energy procurement activities are subject to regulatory and market risks that could materially affect its financial condition and liquidity.
SCE obtains energy, capacity, environmental credits and ancillary services needed to serve its customers from its own generating plants, and through contracts with energy producers and sellers. California law and CPUC decisions allow SCE to recover through the rates it is allowed to charge its customers reasonable procurement costs incurred in compliance with an approved procurement plan. Nonetheless, SCE's cash flows remain subject to volatility primarily resulting from changes in commodity prices. For instance, natural gas prices may increase due to the leak at the SoCalGas underground gas storage facility in Aliso Canyon, California. Additionally, significant and prolonged gas use restrictions may adversely impact the reliability of the electric grid if critical generation resources are limited in their operations. In April 2016, a joint action plan authored by staff of the CPUC, California Energy Commission, CAISO and Los Angeles Department of Water and Power concluded that the unavailability of the gas storage facility could result in electric reliability being at risk for outages in the summer of 2016 and possibly later in 2016 and in early 2017. For further information, see "Business-SCE-Purchased Power and Fuel Supply." SCE is also subject to the risks of unfavorable or untimely CPUC decisions about the compliance with SCE's procurement plan and the reasonableness of certain procurement-related costs.
SCE may not be able to hedge its risk for commodities on economic terms or fully recover the costs of hedges through the rates it is allowed to charge its customers, which could materially affect SCE's liquidity and results of operations, see "Market Risk Exposures" in the MD&A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information responding to this section is included in the MD&A under the heading "Market Risk Exposures" and is incorporated herein by reference.

15


FINANCIAL STATEMENTS
Consolidated Statements of Income
Edison International
 

 

 

Three months ended March 31,
(in millions, except per-share amounts, unaudited)
 
2016

2015
Total operating revenue
 
$
2,440


$
2,512

Purchased power and fuel
 
794


786

Operation and maintenance
 
629


636

Depreciation, decommissioning and amortization
 
477


463

Property and other taxes
 
92

 
89

Total operating expenses
 
1,992


1,974

Operating income
 
448


538

Interest and other income
 
31


39

Interest expense
 
(140
)

(143
)
Other expenses
 
(6
)

(10
)
Income from continuing operations before income taxes
 
333


424

Income tax expense
 
38


106

Income from continuing operations
 
295


318

Income from discontinued operations, net of tax
 
1

 
—

Net income
 
296


318

Preferred and preference stock dividend requirements of SCE
 
30


28

Other noncontrolling interests
 
(5
)
 
(9
)
Net income attributable to Edison International common shareholders
 
$
271


$
299

Amounts attributable to Edison International common shareholders:
 



Income from continuing operations, net of tax
 
$
270


$
299

Income from discontinued operations, net of tax
 
1


—

Net income attributable to Edison International common shareholders
 
$
271


$
299

Basic earnings per common share attributable to Edison International common shareholders:
 



Weighted-average shares of common stock outstanding
 
326


326

Continuing operations
 
$
0.83


$
0.92

Total
 
$
0.83


$
0.92

Diluted earnings per common share attributable to Edison International common shareholders:
 



Weighted-average shares of common stock outstanding, including effect of dilutive securities
 
328


329

Continuing operations
 
$
0.82


$
0.91

Total
 
$
0.82


$
0.91

Dividends declared per common share
 
$
0.4800


$
0.4175


The accompanying notes are an integral part of these consolidated financial statements.

16



Consolidated Statements of Comprehensive Income
 
Edison International
 
 
 
 
 
 
Three months ended March 31,
(in millions, unaudited)
 
2016
 
2015
Net income
 
$
296

 
$
318

Other comprehensive income (loss), net of tax:
 
 
 
 
Pension and postretirement benefits other than pensions:
 
 
 
 
Net gain (loss) arising during the period plus amortization included in net income
 
2

 
(1
)
Other comprehensive income (loss), net of tax
 
2

 
(1
)
Comprehensive income
 
298

 
317

Less: Comprehensive income attributable to noncontrolling interests
 
25

 
19

Comprehensive income attributable to Edison International
 
$
273

 
$
298



The accompanying notes are an integral part of these consolidated financial statements.

17


Consolidated Balance Sheets
Edison International
 






(in millions, unaudited)
March 31,
2016

December 31,
2015
ASSETS
 

 
Cash and cash equivalents
$
137


$
161

Receivables, less allowances of $59 and $62 for uncollectible accounts at respective dates
649


771

Accrued unbilled revenue
512


565

Inventory
268


267

Derivative assets
65


79

Regulatory assets
538


560

Other current assets
258


251

Total current assets
2,427


2,654

Nuclear decommissioning trusts
4,290


4,331

Other investments
208


203

Total investments
4,498


4,534

Utility property, plant and equipment, less accumulated depreciation and amortization of $8,751 and $8,548 at respective dates
35,323


34,945

Nonutility property, plant and equipment, less accumulated depreciation of $88 and $85 at respective dates
141


140

Total property, plant and equipment
35,464


35,085

Derivative assets
78


84

Regulatory assets
7,628


7,512

Other long-term assets
364


360

Total long-term assets
8,070


7,956

















































 
 
 
 
Total assets
$
50,459


$
50,229



The accompanying notes are an integral part of these consolidated financial statements.

18


Consolidated Balance Sheets

Edison International
 


 

 
(in millions, except share amounts, unaudited)

March 31,
2016

December 31,
2015
LIABILITIES AND EQUITY

 

 
Short-term debt

$
363


$
695

Current portion of long-term debt

295


295

Accounts payable

938


1,310

Accrued taxes

139


72

Customer deposits

253


242

Derivative liabilities

232


218

Regulatory liabilities

1,157


1,128

Other current liabilities

856


967

Total current liabilities

4,233


4,927

Long-term debt

11,243


10,883

Deferred income taxes and credits

7,699


7,480

Derivative liabilities

1,136


1,100

Pensions and benefits

1,771


1,759

Asset retirement obligations

2,597


2,764

Regulatory liabilities

5,920


5,676

Other deferred credits and other long-term liabilities

2,225


2,246

Total deferred credits and other liabilities

21,348


21,025

Total liabilities

36,824


36,835

Commitments and contingencies (Note 11)






Redeemable noncontrolling interest
 
4

 
6

Common stock, no par value (800,000,000 shares authorized; 325,811,206 shares issued and outstanding at respective dates)

2,491


2,484

Accumulated other comprehensive loss

(54
)

(56
)
Retained earnings

9,002


8,940

Total Edison International's common shareholders' equity

11,439


11,368

Noncontrolling interests –  preferred and preference stock of SCE

2,192


2,020

Total equity

13,631


13,388






















Total liabilities and equity

$
50,459


$
50,229



The accompanying notes are an integral part of these consolidated financial statements.

19


Consolidated Statements of Cash Flows
Edison International
 



Three months ended March 31,
(in millions, unaudited)
2016

2015
Cash flows from operating activities:
 

 
Net income
$
296


$
318

Less: Income from discontinued operations
1


—

Income from continuing operations
295


318

Adjustments to reconcile to net cash provided by operating activities:


 
Depreciation, decommissioning and amortization
499


485

Allowance for equity during construction
(22
)

(21
)
Deferred income taxes and investment tax credits
35


72

Other
5


5

Nuclear decommissioning trusts
(106
)
 
29

Changes in operating assets and liabilities:


 
Receivables
117


31

Inventory
(1
)

(10
)
Accounts payable
(184
)

63

Prepaid and accrued taxes
66

 
38

Other current assets and liabilities
(43
)

(229
)
Derivative assets and liabilities, net
5


(10
)
Regulatory assets and liabilities, net
119


193

Other noncurrent assets and liabilities
68


—

Net cash provided by operating activities
853


964

Cash flows from financing activities:
 

 
Long-term debt issued, net of discount and issuance costs of $3 and $13 for
respective periods
397


1,287

Long-term debt matured
(40
)

(419
)
Preference stock issued, net
294


—

Preference stock redeemed
(125
)

—

Short-term debt financing, net
(332
)

(355
)
Dividends to noncontrolling interests
(35
)

(34
)
Dividends paid
(156
)

(136
)
Other
(46
)
 
(30
)
Net cash (used in) provided by financing activities
(43
)

313

Cash flows from investing activities:
 

 
Capital expenditures
(951
)

(1,268
)
Proceeds from sale of nuclear decommissioning trust investments
793


1,026

Purchases of nuclear decommissioning trust investments
(687
)

(1,062
)
Other
11


10

Net cash used in investing activities
(834
)

(1,294
)
Net decrease in cash and cash equivalents
(24
)

(17
)
Cash and cash equivalents at beginning of period
161


132

Cash and cash equivalents at end of period
$
137


$
115


The accompanying notes are an integral part of these consolidated financial statements.

20


Consolidated Statements of Income
 
Southern California Edison Company

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended March 31,
(in millions, unaudited)
 
 
 
 
 
2016
 
2015
Operating revenue
 
 
 
 
 
$
2,435

 
$
2,508

Purchased power and fuel
 
 
 
 
 
794

 
786

Operation and maintenance
 
 
 
 
 
603

 
621

Depreciation, decommissioning and amortization
 
 
 
 
 
475

 
463

Property and other taxes
 
 
 
 
 
91

 
88

Total operating expenses
 
 
 
 
 
1,963

 
1,958

Operating income
 
 
 
 
 
472

 
550

Interest and other income
 
 
 
 
 
31

 
33

Interest expense
 
 
 
 
 
(131
)
 
(136
)
Other expenses
 
 
 
 
 
(5
)
 
(7
)
Income before income taxes
 
 
 
 
 
367

 
440

Income tax expense
 
 
 
 
 
50

 
107

Net income
 
 
 
 
 
317

 
333

Less: Preferred and preference stock dividend requirements
 
 
 
 
 
30

 
28

Net income available for common stock
 
 
 
 
 
$
287

 
$
305


Consolidated Statements of Comprehensive Income
 
 
 
 
 
 
 
 
 
 
 
Three months ended March 31,
(in millions, unaudited)
 
2016
 
2015
Net income
 
$
317

 
$
333

Other comprehensive income, net of tax:
 
 
 
 
Pension and postretirement benefits other than pensions:
 
 
 
 
Amortization of net loss included in net income
 
1

 
1

Other comprehensive income, net of tax
 
1

 
1

Comprehensive income
 
$
318

 
$
334



The accompanying notes are an integral part of these consolidated financial statements.

21


Consolidated Balance Sheets
Southern California Edison Company
(in millions, unaudited)
 
March 31,
2016
 
December 31, 2015
ASSETS
 
 
 
 
Cash and cash equivalents
 
$
21

 
$
26

Receivables, less allowances of $59 and $62 for uncollectible accounts at respective dates
 
624

 
724

Accrued unbilled revenue
 
511

 
564

Inventory
 
251

 
256

Derivative assets
 
65

 
79

Regulatory assets
 
538

 
560

Other current assets
 
233

 
234

Total current assets
 
2,243

 
2,443

Nuclear decommissioning trusts
 
4,290

 
4,331

Other investments
 
173

 
168

Total investments
 
4,463

 
4,499

Utility property, plant and equipment, less accumulated depreciation and amortization of $8,751 and $8,548 at respective dates
 
35,323

 
34,945

Nonutility property, plant and equipment, less accumulated depreciation of $83 and $81 at respective dates
 
73

 
73

Total property, plant and equipment
 
35,396

 
35,018

Derivative assets
 
78

 
84

Regulatory assets
 
7,628

 
7,512

Other long-term assets
 
239

 
239

Total long-term assets
 
7,945

 
7,835

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
50,047

 
$
49,795


The accompanying notes are an integral part of these consolidated financial statements.

22


Consolidated Balance Sheets
Southern California Edison Company
(in millions, except share amounts, unaudited)
 
March 31,
2016
 
December 31, 2015
LIABILITIES AND EQUITY
 
 
 
 
Short-term debt
 
$
101

 
$
49

Current portion of long-term debt
 
79

 
79

Accounts payable
 
935

 
1,299

Accrued taxes
 
105

 
46

Customer deposits
 
253

 
242

Derivative liabilities
 
232

 
218

Regulatory liabilities
 
1,157

 
1,128

Other current liabilities
 
662

 
760

Total current liabilities
 
3,524

 
3,821

Long-term debt
 
10,422

 
10,460

Deferred income taxes and credits
 
9,297

 
9,073

Derivative liabilities
 
1,134

 
1,100

Pensions and benefits
 
1,292

 
1,284

Asset retirement obligations
 
2,595

 
2,762

Regulatory liabilities
 
5,920

 
5,676

Other deferred credits and other long-term liabilities
 
1,934

 
1,947

Total deferred credits and other liabilities
 
22,172

 
21,842

Total liabilities
 
36,118

 
36,123

Commitments and contingencies (Note 11)
 


 


Common stock, no par value (560,000,000 shares authorized; 434,888,104 shares issued and outstanding at each date)
 
2,168

 
2,168

Additional paid-in capital
 
653

 
652

Accumulated other comprehensive loss
 
(21
)
 
(22
)
Retained earnings
 
8,884

 
8,804

Total common shareholder's equity
 
11,684

 
11,602

Preferred and preference stock
 
2,245

 
2,070

Total equity
 
13,929

 
13,672

Total liabilities and equity
 
$
50,047

 
$
49,795



The accompanying notes are an integral part of these consolidated financial statements.

23


Consolidated Statements of Cash Flows
Southern California Edison Company
 
Three months ended March 31,
(in millions, unaudited)
2016
 
2015
Cash flows from operating activities:
 
 
 
Net income
$
317

 
$
333

Adjustments to reconcile to net cash provided by operating activities:
 
 
 
Depreciation, decommissioning and amortization
496

 
483

Allowance for equity during construction
(22
)
 
(21
)
Deferred income taxes and investment tax credits
60

 
67

Other
3

 
3

Nuclear decommissioning trusts
(106
)
 
29

Changes in operating assets and liabilities:
 
 
 
Receivables
100

 
18

Inventory
5

 
(7
)
Accounts payable
(175
)
 
52

Prepaid and accrued taxes
60

 
43

Other current assets and liabilities
(25
)
 
(205
)
Derivative assets and liabilities, net
5

 
(10
)
Regulatory assets and liabilities, net
119

 
193

Other noncurrent assets and liabilities
45

 
(12
)
Net cash provided by operating activities
882

 
966

Cash flows from financing activities:
 
 
 
Long-term debt issued, net of discount and issuance costs of $13 for the three months ended March 31, 2015
—

 
1,287

Long-term debt matured
(40
)
 
(419
)
Preference stock issued, net
294

 
—

Preference stock redeemed
(125
)
 
—

Short-term debt financing, net
52

 
(370
)
Dividends paid
(205
)
 
(181
)
Other
(31
)
 
3

Net cash (used in) provided by financing activities
(55
)
 
320

Cash flows from investing activities:
 
 
 
Capital expenditures
(950
)
 
(1,266
)
Proceeds from sale of nuclear decommissioning trust investments
793

 
1,026

Purchases of nuclear decommissioning trust investments
(687
)
 
(1,062
)
Other
12

 
14

Net cash used in investing activities
(832
)

(1,288
)
Net decrease in cash and cash equivalents
(5
)
 
(2
)
Cash and cash equivalents, beginning of period
26

 
38

Cash and cash equivalents, end of period
$
21

 
$
36


The accompanying notes are an integral part of these consolidated financial statements.

24


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1.    Summary of Significant Accounting Policies
Organization and Basis of Presentation
Edison International is the parent holding company of Southern California Edison Company ("SCE"). SCE is an investor-owned public utility primarily engaged in the business of supplying and delivering electricity to an approximately 50,000 square mile area of southern California. Edison International is also the parent company of Edison Energy Group, a company that holds interests in subsidiaries that are engaged in competitive businesses focused on providing energy services to commercial and industrial customers, including distributed resources, engaging in competitive transmission opportunities, and exploring distributed water treatment and recycling. Such competitive business activities are currently not material to report as a separate business segment. These combined notes to the consolidated financial statements apply to both Edison International and SCE unless otherwise described. Edison International's consolidated financial statements include the accounts of Edison International, SCE and other wholly owned and controlled subsidiaries. References to Edison International refer to the consolidated group of Edison International and its subsidiaries. References to Edison International Parent and Other refer to Edison International Parent and its nonutility subsidiaries. SCE's consolidated financial statements include the accounts of SCE and its wholly owned and controlled subsidiaries. All intercompany transactions have been eliminated from the consolidated financial statements.
Edison International's and SCE's significant accounting policies were described in Note 1 of "Notes to Consolidated Financial Statements" included in the 2015 Form 10-K. This quarterly report should be read in conjunction with the financial statements and notes included in the 2015 Form 10-K.
In the opinion of management, all adjustments, consisting of recurring accruals, have been made that are necessary to fairly state the consolidated financial position, results of operations and cash flows in accordance with accounting principles generally accepted in the United States of America for the periods covered by this quarterly report on Form 10-Q. The results of operations for the three-month period ended March 31, 2016 are not necessarily indicative of the operating results for the full year.
The December 31, 2015 financial statement data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Certain prior year amounts have been reclassified for consistency with the current period presentation.
Cash Equivalents
Cash equivalents included investments in money market funds. Generally, the carrying value of cash equivalents equals the fair value, as these investments have original maturities of three months or less. The cash equivalents were as follows:
 
 
Edison International
 
SCE
(in millions)
 
March 31,
2016
 
December 31, 2015
 
March 31,
2016
 
December 31, 2015
Money market funds
 
$
36

 
$
37

 
$
7

 
$
8

Cash is temporarily invested until required for check clearing. Checks issued, but not yet paid by the financial institution, are reclassified from cash to accounts payable at the end of each reporting period as follows:
 
 
Edison International
 
SCE
(in millions)
 
March 31,
2016
 
December 31, 2015
 
March 31,
2016
 
December 31, 2015
Book balances reclassified to accounts payable
 
$
102

 
$
162

 
$
102

 
$
158

Inventory
Inventory is primarily composed of materials, supplies and spare parts, and stated at the lower of cost or market, cost being determined by the average cost method.

25



Revenue Recognition
Operating revenue is recognized when electricity is delivered and includes amounts for services rendered but unbilled at the
end of each reporting period. During the first quarter of 2015, SCE recognized revenue from CPUC activities largely based on 2014 authorized base revenue requirements included in customer rates. In the fourth quarter of 2015, SCE implemented its 2015 GRC decision which allowed SCE to recover its revenue requirement retroactive to January 1, 2015.
Earnings Per Share
Edison International computes earnings per common share ("EPS") using the two-class method, which is an earnings allocation formula that determines EPS for each class of common stock and participating security. Edison International's participating securities are stock-based compensation awards payable in common shares, including performance shares and restricted stock units, which earn dividend equivalents on an equal basis with common shares once the awards are vested. EPS attributable to Edison International common shareholders was computed as follows:
 
 
Three months ended March 31,
(in millions, except per-share amounts)
 
2016
 
2015
Basic earnings per share – continuing operations:
 
 
 
 
Income from continuing operations attributable to common shareholders
 
$
270

 
$
299

Participating securities dividends
 
—

 
—

Income from continuing operations available to common shareholders
 
$
270

 
$
299

Weighted average common shares outstanding
 
326

 
326

Basic earnings per share – continuing operations
 
$
0.83

 
$
0.92

Diluted earnings per share – continuing operations:
 
 
 
 
Income from continuing operations available to common shareholders
 
$
270

 
$
299

Income impact of assumed conversions
 
—

 
—

Income from continuing operations available to common shareholders and assumed conversions
 
$
270

 
$
299

Weighted average common shares outstanding
 
326

 
326

Incremental shares from assumed conversions
 
2

 
3

Adjusted weighted average shares – diluted
 
328

 
329

Diluted earnings per share – continuing operations
 
$
0.82

 
$
0.91

In addition to the participating securities discussed above, Edison International also may award stock options which are payable in common shares and are included in the diluted earnings per share calculation. Stock option awards to purchase 2,023,787 and 79,394 shares of common stock for the three months ended March 31, 2016 and 2015 , respectively, were outstanding, but were not included in the computation of diluted earnings per share because the exercise price of the awards was greater than the average market price of the common shares during the respective periods and, therefore, the effect would have been antidilutive.
New Accounting Guidance
Accounting Guidance Adopted
On April 7, 2015, the FASB issued an accounting standards update that requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts. Previously, accounting guidance required these costs to be presented as a deferred charge asset. Edison International and SCE adopted this guidance in the first quarter of 2016. At March 31, 2016, the amount of debt issuance costs that are reflected as a deduction of "Long-term debt" was $76 million for SCE and $83 million for Edison International. At December 31, 2015 the amount of debt issuance costs that have been reclassified from "Other long-term assets" to a deduction of "Long-term debt" was $77 million for SCE and $81 million for Edison International.

26


On April 15, 2015, the FASB issued an accounting standards update on fees paid by a customer for software licenses. This new standard provides guidance about whether a cloud computing arrangement includes a software license which may be capitalized in certain circumstances. If a cloud computing arrangement does not include a software license, then the arrangement should be accounted for as a service contract. Edison International and SCE adopted this guidance prospectively, effective January 1, 2016. The adoption of this standard did not have a material impact on Edison International's and SCE's consolidated financial statements.
Accounting Guidance Not Yet Adopted
On May 28, 2014, the FASB issued an accounting standards update on revenue recognition including enhanced disclosures and further amended the standard in 2016. Under the new standard, revenue is recognized when (or as) a good or service is transferred to the customer and the customer obtains control of the good or service. On July 9, 2015, the FASB approved a one-year deferral, updating the effective date to January 1, 2018. Edison International and SCE are currently evaluating this new guidance and cannot determine the impact of this standard at this time. Edison International and SCE anticipates adopting the standard using the modified retrospective application which means that we would recognize the cumulative effect of initially applying the revenue standard as an adjustment to the opening balance of retained earnings in 2018.
On January 5, 2016, the FASB issued an accounting standards update that amends the guidance on the classification and measurement of financial instruments. The amendments require equity investments (excluding those accounted for under the equity method or those that result in consolidation) to be measured at fair value, with changes in fair value recognized in net income. It also amends certain disclosure requirements associated with the fair value of financial instruments. In addition, the new guidance requires financial assets and financial liabilities to be presented separately in the notes to the financial statements, grouped by measurement category and form of financial asset. Edison International and SCE will adopt this guidance effective January 1, 2018. The adoption of this standard is not expected to have a material impact on Edison International's and SCE's consolidated financial statements.
On February 25, 2016, the FASB issued an accounting standards update related to lease accounting including enhanced disclosures. Under the new standard, a lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified assets for a period of time in exchange for consideration. Lessees will classify leases with a term of more than one year as either operating or finance leases and will need to recognize a right-of-use asset and a lease liability. The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern. This guidance is effective January 1, 2019 but early adoption is permitted. Edison International and SCE are currently evaluating this new guidance and cannot determine the impact of this standard at this time.
On March 30, 2016, the FASB issued an accounting standards update to simplify the accounting for share-based payments. Under this new guidance, the tax effects related to share based payments will be recorded through the income statement. Currently, tax benefits in excess of compensation cost ("windfalls") are recorded in equity, and tax deficiencies ("shortfalls") are recorded in equity to the extent of previous windfalls, and then to the income statement. This guidance is effective January 1, 2017 but early adoption is permitted. The new standard also revised reporting on the statement of cash flows. Edison International and SCE are currently evaluating this new guidance.

27


Note 2.    Consolidated Statements of Changes in Equity
The following table provides Edison International's changes in equity for the three months ended March 31, 2016 :
 
Equity Attributable to Common Shareholders
 
Noncontrolling Interests
 
 
(in millions, except per-share amounts)
Common
Stock
 
Accumulated
Other
Comprehensive Loss
 
Retained
Earnings
 
Subtotal
 
Preferred
and
Preference
Stock
 
Total
Equity
Balance at December 31, 2015
$
2,484

 
$
(56
)
 
$
8,940

 
$
11,368

 
$
2,020

 
$
13,388

Net income
—

 
—

 
271

 
271

 
30

 
301

Other comprehensive income
—

 
2

 
—

 
2

 
—

 
2

Common stock dividends declared ($0.48 per share)
—

 
—

 
(156
)
 
(156
)
 
—

 
(156
)
Dividends to noncontrolling interests
—

 
—

 
—

 
—

 
(30
)
 
(30
)
Stock-based compensation
1

 
—

 
(50
)
 
(49
)
 
—

 
(49
)
Non-cash stock-based compensation
6

 
—

 
—

 
6

 
—

 
6

Issuance of preference stock
—

 
—

 
—

 
—

 
294

 
294

Redemption of preference stock
—

 
—

 
(3
)
 
(3
)
 
(122
)
 
(125
)
Balance at March 31, 2016
$
2,491

 
$
(54
)
 
$
9,002

 
$
11,439

 
$
2,192

 
$
13,631

The following table provides Edison International's changes in equity for the three months ended March 31, 2015 :
 
Equity Attributable to Common Shareholders
 
Noncontrolling Interests
 
 
(in millions, except per-share amounts)
Common
Stock
 
Accumulated
Other
Comprehensive Loss
 
Retained
Earnings
 
Subtotal
 
Preferred
and
Preference
Stock
 
Total
Equity
Balance at December 31, 2014
$
2,445

 
$
(58
)
 
$
8,573

 
$
10,960

 
$
2,022

 
$
12,982

Net income
—

 
—

 
299

 
299

 
28

 
327

Other comprehensive loss
—

 
(1
)
 
—

 
(1
)
 
—

 
(1
)
Common stock dividends declared ($0.4175 per share)
—

 
—

 
(136
)
 
(136
)
 
—

 
(136
)
Dividends to noncontrolling interests
—

 
—

 
—

 
—

 
(28
)
 
(28
)
Stock-based compensation
9

 
—

 
(61
)
 
(52
)
 
—

 
(52
)
Non-cash stock-based compensation
6

 
—

 
—

 
6

 
—

 
6

Balance at March 31, 2015
$
2,460

 
$
(59
)
 
$
8,675

 
$
11,076

 
$
2,022

 
$
13,098


28


The following table provides SCE's changes in equity for the three months ended March 31, 2016 :
 
Equity Attributable to Edison International
 
 
 
 
(in millions)
Common
Stock
 
Additional
Paid-in
Capital
 
Accumulated
Other
Comprehensive Loss
 
Retained
Earnings
 
Preferred
and
Preference
Stock
 
Total
Equity
Balance at December 31, 2015
$
2,168

 
$
652

 
$
(22
)
 
$
8,804

 
$
2,070

 
$
13,672

Net income
—

 
—

 
—

 
317

 
—

 
317

Other comprehensive income
—

 
—

 
1

 
—

 
—

 
1

Dividends declared on common stock
—

 
—

 
—

 
(170
)
 
—

 
(170
)
Dividends declared on preferred and preference stock
—

 
—

 
—

 
(30
)
 
—

 
(30
)
Stock-based compensation
—

 
1

 
—

 
(34
)
 
—

 
(33
)
Non-cash stock-based compensation
—

 
3

 
—

 
—

 
—

 
3

Issuance of preference stock
—

 
(6
)
 
—

 
—

 
300

 
294

Redemption of preference stock
—

 
3

 
—

 
(3
)
 
(125
)
 
(125
)
Balance at March 31, 2016
$
2,168

 
$
653

 
$
(21
)
 
$
8,884

 
$
2,245

 
$
13,929

The following table provides SCE's changes in equity for the three months ended March 31, 2015 :
 
Equity Attributable to Edison International
 
 
 
 
(in millions)
Common
Stock
 
Additional
Paid-in
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Retained
Earnings
 
Preferred
and
Preference
Stock
 
Total
Equity
Balance at December 31, 2014
$
2,168

 
$
618

 
$
(28
)
 
$
8,454

 
$
2,070

 
$
13,282

Net income
—

 
—

 
—

 
333

 
—

 
333

Other comprehensive income
—

 
—

 
1

 
—

 
—

 
1

Dividends declared on common stock
—

 
—

 
—

 
(147
)
 
—

 
(147
)
Dividends declared on preferred and preference stock
—

 
—

 
—

 
(28
)
 
—

 
(28
)
Stock-based compensation
—

 
9

 
—

 
(22
)
 
—

 
(13
)
Non-cash stock-based compensation
—

 
4

 
—

 
—

 
—

 
4

Balance at March 31, 2015
$
2,168

 
$
631

 
$
(27
)
 
$
8,590

 
$
2,070

 
$
13,432

Note 3.    Variable Interest Entities
A VIE is defined as a legal entity that meets one of two conditions: (1) the equity owners do not have sufficient equity at risk, or (2) the holders of the equity investment at risk, as a group, lack any of the following three characteristics: decision-making rights, the obligation to absorb losses, or the right to receive the expected residual returns of the entity. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the VIE that most significantly impact the entity's economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE. A subsidiary of Edison International is the primary beneficiary of an entity that owns rooftop solar projects. Commercial and operating activities are generally the factors that most significantly impact the economic performance of such VIEs. Commercial and operating activities include construction, operation and maintenance, fuel procurement, dispatch and compliance with regulatory and contractual requirements.

29


Variable Interest in VIEs that are not Consolidated
Power Purchase Contracts
SCE has power purchase agreements ("PPAs") that are classified as variable interests in VIEs, including tolling agreements through which SCE provides the natural gas to fuel the plants and contracts with qualifying facilities ("QFs") that contain variable pricing provisions based on the price of natural gas. SCE has concluded that it is not the primary beneficiary of these VIEs since it does not control the commercial and operating activities of these entities. Since payments for capacity are the primary source of income, the most significant economic activity for these VIEs is the operation and maintenance of the power plants.
As of the balance sheet date, the carrying amount of assets and liabilities in SCE's consolidated balance sheet that relate to its involvement with VIEs result from amounts due under the PPAs or the fair value of those derivative contracts. Under these contracts, SCE recovers the costs incurred through demonstration of compliance with its CPUC-approved long-term power procurement plans. SCE has no residual interest in the entities and has not provided or guaranteed any debt or equity support, liquidity arrangements, performance guarantees or other commitments associated with these contracts other than the purchase commitments described in Note 11 of the 2015 Form 10-K. As a result, there is no significant potential exposure to loss to SCE from its variable interest in these VIEs. The aggregate contracted capacity dedicated to SCE from these VIE projects was 4,383  MW and 4,125  MW at March 31, 2016 and 2015 , respectively, and the amounts that SCE paid to these projects were $127 million and $103 million for the three months ended March 31, 2016 and 2015 , respectively. These amounts are recoverable in customer rates, subject to reasonableness review.
Unconsolidated Trusts of SCE
SCE Trust I, Trust II, Trust III, Trust IV, and Trust V were formed in 2012, 2013, 2014, 2015 and 2016, respectively, for the exclusive purpose of issuing the 5.625% , 5.10% , 5.75% , 5.375% and 5.45% trust preference securities, respectively ("trust securities"). The trusts are VIEs. SCE has concluded that it is not the primary beneficiary of these VIEs as it does not have the obligation to absorb the expected losses or the right to receive the expected residual returns of the trusts. SCE Trust I, Trust II, Trust III, Trust IV and Trust V issued to the public trust securities in the face amounts of $475 million , $400 million , $275 million , $325 million , and $300 million respectively, (cumulative, liquidation amounts of $25 per share) and $10,000 of common stock each to SCE. The trusts invested the proceeds of these trust securities in Series F, Series G, Series H, Series J, and Series K Preference Stock issued by SCE in the principal amounts of $475 million , $400 million , $275 million , $325 million and $300 million (cumulative, $2,500 per share liquidation values), respectively, which have substantially the same payment terms as the respective trust securities.
The Series F, Series G, Series H, Series J and Series K Preference Stock and the corresponding trust securities do not have a maturity date. Upon any redemption of any shares of the Series F, Series G, Series H, Series J or Series K Preference Stock, a corresponding dollar amount of trust securities will be redeemed by the applicable trust (see Note 12 for further information). The applicable trust will make distributions at the same rate and on the same dates on the applicable series of trust securities when and if the SCE board of directors declares and makes dividend payments on the related Preference Stock. The applicable trust will use any dividends it receives on the related Preference Stock to make its corresponding distributions on the applicable series of trust securities. If SCE does not make a dividend payment to any of these trusts, SCE would be prohibited from paying dividends on its common stock. SCE has fully and unconditionally guaranteed the payment of the trust securities and trust distributions, if and when SCE pays dividends on the related Preference Stock.
The Trust I, Trust II, Trust III and Trust IV balance sheets as of March 31, 2016 and December 31, 2015 , consisted of investments of $475 million , $400 million , $275 million and $325 million in the Series F, Series G, Series H and Series J Preference Stock, respectively, $475 million , $400 million , $275 million and $325 million of trust securities, respectively, and $10,000 each of common stock. The Trust V balance sheet as of March 31, 2016 consisted of investments of $300 million in the Series K Preference Stock, $300 million of trust securities, and $10,000 of common stock.

30


The following table provides a summary of the trusts' income statements:
 
 
Three months ended March 31,
(in millions)
 
Trust I
 
Trust II
 
Trust III
 
Trust IV
 
Trust V
2016
 
 
 
 
 
 
 
 
 
 
Dividend income
 
$
7

 
$
5

 
$
4

 
$
4

 
$
1

Dividend distributions
 
7

 
5

 
4

 
4

 
1

2015
 
 
 
 
 
 
 
 
 
 
Dividend income
 
$
7


$
5


$
4

 
*

 
*

Dividend distributions
 
7


5


4

 
*

 
*

* Not applicable.
Note 4.    Fair Value Measurements
Recurring Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (referred to as an "exit price"). Fair value of an asset or liability considers assumptions that market participants would use in pricing the asset or liability, including assumptions about nonperformance risk. As of March 31, 2016 and December 31, 2015 , nonperformance risk was not material for Edison International and SCE.
Assets and liabilities are categorized into a three-level fair value hierarchy based on valuation inputs used to determine fair value.
Level 1 – The fair value of Edison International's and SCE's Level 1 assets and liabilities is determined using unadjusted quoted prices in active markets that are available at the measurement date for identical assets and liabilities. This level includes exchange-traded equity securities, U.S. treasury securities, mutual funds and money market funds.
Level 2 – Edison International and SCE's Level 2 assets and liabilities include fixed income securities primarily consisting of U.S. government and agency bonds, municipal bonds and corporate bonds, and over-the-counter derivatives. The fair value of fixed income securities is determined using a market approach by obtaining quoted prices for similar assets and liabilities in active markets and inputs that are observable, either directly or indirectly, for substantially the full term of the instrument.
The fair value of SCE's over-the-counter derivative contracts is determined using an income approach. SCE uses standard pricing models to determine the net present value of estimated future cash flows. Inputs to the pricing models include forward published or posted clearing prices from exchanges (New York Mercantile Exchange and Intercontinental Exchange) for similar instruments and discount rates. A primary price source that best represents trade activity for each market is used to develop observable forward market prices in determining the fair value of these positions. Broker quotes, prices from exchanges or comparison to executed trades are used to validate and corroborate the primary price source. These price quotations reflect mid-market prices (average of bid and ask) and are obtained from sources believed to provide the most liquid market for the commodity.
Level 3 – The fair value of SCE's Level 3 assets and liabilities is determined using the income approach through various models and techniques that require significant unobservable inputs. This level includes over-the-counter options, tolling arrangements and derivative contracts that trade infrequently such as congestion revenue rights ("CRRs") and long-term power agreements. Edison International Parent and Other does not have any Level 3 assets and liabilities.
Assumptions are made in order to value derivative contracts in which observable inputs are not available. Changes in fair value are based on changes to forward market prices, including extrapolation of short-term observable inputs into forecasted prices for illiquid forward periods. In circumstances where fair value cannot be verified with observable market transactions, it is possible that a different valuation model could produce a materially different estimate of fair value. Modeling methodologies, inputs and techniques are reviewed and assessed as markets continue to develop and more pricing information becomes available and the fair value is adjusted when it is concluded that a change in inputs or techniques would result in a new valuation that better reflects the fair value of those derivative contracts. See Note 6 for a discussion of fair value of derivative instruments.

31


SCE
The following table sets forth assets and liabilities of SCE that were accounted for at fair value by level within the fair value hierarchy:
 
March 31, 2016
(in millions)
Level 1
 
Level 2
 
Level 3
 
Netting
and
Collateral 1
 
Total
Assets at fair value
 
 
 
 
 
 
 
 
 
Derivative contracts
$
—

 
$
—

 
$
143

 
$
—

 
$
143

Other
28

 
—

 
—

 
—

 
28

Nuclear decommissioning trusts:
 
 
 
 
 
 
 
 
 
Stocks 2
1,464

 
—

 
—

 
—

 
1,464

Fixed Income 3
907

 
1,810

 
—

 
—

 
2,717

Short-term investments, primarily cash equivalents
69

 
48

 
—

 
—

 
117

Subtotal of nuclear decommissioning trusts 4
2,440

 
1,858

 
—

 
—

 
4,298

Total assets
2,468

 
1,858

 
143

 
—

 
4,469

Liabilities at fair value
 
 
 
 
 
 
 
 
 
Derivative contracts
—

 
21

 
1,356

 
(11
)
 
1,366

Total liabilities
—

 
21

 
1,356

 
(11
)
 
1,366

Net assets (liabilities)
$
2,468

 
$
1,837

 
$
(1,213
)
 
$
11

 
$
3,103

 
December 31, 2015
(in millions)
Level 1
 
Level 2
 
Level 3
 
Netting
and
Collateral 1
 
Total
Assets at fair value
 
 
 
 
 
 
 
 
 
Derivative contracts
$
—

 
$
—

 
$
163

 
$
—

 
$
163

Other
28

 
—

 
—

 
—

 
28

Nuclear decommissioning trusts:
 
 
 
 
 
 
 
 
 
Stocks 2
1,460

 
—

 
—

 
—

 
1,460

Fixed Income 3
947

 
1,776

 
—

 
—

 
2,723

Short-term investments, primarily cash equivalents
91

 
81

 
—

 
—

 
172

Subtotal of nuclear decommissioning trusts 4
2,498

 
1,857

 
—

 
—

 
4,355

Total assets
2,526

 
1,857

 
163

 
—

 
4,546

Liabilities at fair value
 
 
 
 
 
 
 
 
 
Derivative contracts
—

 
22

 
1,311

 
(15
)
 
1,318

Total liabilities
—

 
22

 
1,311

 
(15
)
 
1,318

Net assets (liabilities)
$
2,526

 
$
1,835

 
$
(1,148
)
 
$
15

 
$
3,228

1  
Represents the netting of assets and liabilities under master netting agreements and cash collateral across the levels of the fair value hierarchy. Netting among positions classified within the same level is included in that level.
2  
Approximately 70% of SCE's equity investments were located in the United States at both March 31, 2016 and December 31, 2015 .
3  
Includes corporate bonds, which were diversified and included collateralized mortgage obligations and other asset backed securities of $101 million and $111 million at March 31, 2016 and December 31, 2015 , respectively.
4  
Excludes net payables of $8 million and net payables of $24 million at March 31, 2016 and December 31, 2015 , which consist of interest and dividend receivables as well as receivables and payables related to SCE's pending securities sales and purchases.

32


Edison International Parent and Other
Edison International Parent and Other assets measured at fair value consisted of money market funds of $ 30 million and $29 million at March 31, 2016 and December 31, 2015 , respectively, classified as Level 1.
SCE Fair Value of Level 3
The following table sets forth a summary of changes in SCE's fair value of Level 3 net derivative assets and liabilities:
 
 
Three months ended March 31,
(in millions)
 
2016
 
2015
Fair value of net liabilities at beginning of period
 
$
(1,148
)
 
$
(902
)
Total realized/unrealized gains (losses):
 
 
 
 
Included in regulatory assets and liabilities 1
 
(65
)
 
(74
)
Fair value of net liabilities at end of period
 
$
(1,213
)
 
$
(976
)
Change during the period in unrealized gains and losses related to assets and liabilities held at the end of the period
 
$
(84
)
 
$
(96
)
1  
Due to regulatory mechanisms, SCE's realized and unrealized gains and losses are recorded as regulatory assets and liabilities.
Edison International and SCE recognize the fair value for transfers in and transfers out of each level at the end of each reporting period. There were no significant transfers between any levels during 2016 and 2015 .
Valuation Techniques Used to Determine Fair Value
The process of determining fair value is the responsibility of SCE's risk management department, which reports to SCE's chief financial officer. This department obtains observable and unobservable inputs through broker quotes, exchanges and internal valuation techniques that use both standard and proprietary models to determine fair value. Each reporting period, the risk and finance departments collaborate to determine the appropriate fair value methodologies and classifications for each derivative. Inputs are validated for reasonableness by comparison against prior prices, other broker quotes and volatility fluctuation thresholds. Inputs used and valuations are reviewed period-over-period and compared with market conditions to determine reasonableness.
The following table sets forth SCE's valuation techniques and significant unobservable inputs used to determine fair value for significant Level 3 assets and liabilities:
 
Fair Value (in millions)
 
Significant
Range
 
Assets
 
Liabilities
Valuation Technique(s)
Unobservable Input
(Weighted Average)
Congestion revenue rights
 
 
 
 
 
March 31, 2016
$
136

 
$
—

Market simulation model and auction prices
Load forecast
6,289 MW - 24,349 MW
 
 
 
 
 
Power prices 1
$0 - $110.44
 
 
 
 
 
Gas prices 2
$1.98 - $5.72
December 31, 2015
152

 
—

Market simulation model and auction prices
Load forecast
6,289 MW - 24,349 MW
 
 
 
 
 
Power prices 1
$0 - $110.44
 
 
 
 
 
Gas prices 2
$1.98 - $5.72
Tolling
 
 
 
 
 
 
March 31, 2016
7

 
1,329

Option model
Volatility of gas prices
16% - 46% (30%)
 
 
 
 
 
Volatility of power prices
26% - 86% (40%)
 
 
 
 
 
Power prices
$17.67 - $47.29 ($33.00)
December 31, 2015
10

 
1,297

Option model
Volatility of gas prices
15% - 58% (20%)
 
 
 
 
 
Volatility of power prices
26% - 38% (30%)
 
 
 
 
 
Power prices
$24.15 - $46.93 ($34.80)
1  
Prices are in dollars per megawatt-hour.
2  
Prices are in dollars per million British thermal units.

33


Level 3 Fair Value Sensitivity
Congestion Revenue Rights
For CRRs, where SCE is the buyer, generally increases (decreases) in forecasted load in isolation would result in increases (decreases) to the fair value. In general, an increase (decrease) in electricity and gas prices at illiquid locations tends to result in increases (decreases) to fair value; however, changes in electricity and gas prices in opposite directions may have varying results on fair value.
Tolling Arrangements
The fair values of SCE's tolling arrangements contain intrinsic value and time value. Intrinsic value is the difference between the market price and strike price of the underlying commodity. Time value is made up of several components, including volatility, time to expiration, and interest rates. The option model for tolling arrangements reflects plant specific information such as operating and start-up costs.
For tolling arrangements where SCE is the buyer, increases in volatility of the underlying commodity prices would result in increases to fair value as it represents greater price movement risk. As power and gas prices increase, the fair value of tolling arrangements tends to increase. The valuation of tolling arrangements is also impacted by the correlation between gas and power prices. As the correlation increases, the fair value of tolling arrangements tends to decline.
Nuclear Decommissioning Trusts
SCE's nuclear decommissioning trust investments include equity securities, U.S. treasury securities and other fixed income securities. Equity and treasury securities are classified as Level 1 as fair value is determined by observable market prices in active or highly liquid and transparent markets. The remaining fixed income securities are classified as Level 2. The fair value of these financial instruments is based on evaluated prices that reflect significant observable market information such as reported trades, actual trade information of similar securities, benchmark yields, broker/dealer quotes, issuer spreads, bids, offers and relevant credit information.
Fair Value of Debt Recorded at Carrying Value
The carrying value and fair value of Edison International's and SCE's long-term debt (including current portion of long-term debt) are as follows:
 
 
March 31, 2016
 
December 31, 2015
(in millions)
 
Carrying
Value
 
Fair
Value
 
Carrying
Value
 
Fair
Value
SCE
 
$
10,501

 
$
12,045

 
$
10,616

 
$
11,592

Edison International
 
11,538

 
13,109

 
11,259

 
12,252

The fair value of Edison International and SCE's short-term and long-term debt is classified as Level 2 and is based on evaluated prices that reflect significant observable market information such as reported trades, actual trade information of similar securities, benchmark yields, broker/dealer quotes of new issue prices and relevant credit information.
The carrying value of Edison International's and SCE's trade receivables and payables, other investments, and short-term debt approximates fair value.
Note 5.    Debt and Credit Agreements
Long-Term Debt
In March 2016, Edison International issued $400 million of 2.95% senior notes due in 2023. The proceeds from these bonds were used to repay commercial paper borrowings and for general corporate purposes.
Credit Agreements and Short-Term Debt
SCE and Edison International Parent have multi-year revolving credit facilities of $2.75 billion and $1.25 billion , respectively, with both maturing in July 2020. SCE's credit facility is generally used to support commercial paper borrowings and letters of credit issued for procurement-related collateral requirements, balancing account undercollections and for general corporate purposes, including working capital requirements to support operations and capital expenditures. Edison International Parent's credit facility is used to support commercial paper borrowings and for general corporate purposes.

34


At March 31, 2016 , SCE's outstanding commercial paper was $101 million at a weighted-average interest rate of 0.45% . At March 31, 2016 , letters of credit issued under SCE's credit facility aggregated $94 million and are scheduled to expire in twelve months or less. At December 31, 2015 , the outstanding commercial paper was $ 49 million at a weighted-average interest rate of 0.51% .
At March 31, 2016 , Edison International Parent's outstanding commercial paper was $262 million at a weighted-average interest rate of 0.69% . At December 31, 2015 , the outstanding commercial paper was $ 646 million at a weighted-average interest rate of 0.78% .
Note 6.    Derivative Instruments
Derivative financial instruments are used to manage exposure to commodity price risk. These risks are managed in part by entering into forward commodity transactions, including options, swaps and futures. To mitigate credit risk from counterparties in the event of nonperformance, master netting agreements are used whenever possible and counterparties may be required to pledge collateral depending on the creditworthiness of each counterparty and the risk associated with the transaction.
Commodity Price Risk
Commodity price risk represents the potential impact that can be caused by a change in the market value of a particular commodity. SCE's electricity price exposure arises from energy purchased from and sold to wholesale markets as a result of differences between SCE's load requirements and the amount of energy delivered from its generating facilities and power purchase agreements. SCE's natural gas price exposure arises from natural gas purchased for the Mountainview power plant and peaker plants, QF contracts where pricing is based on a monthly natural gas index and power purchase agreements in which SCE has agreed to provide the natural gas needed for generation, referred to as tolling arrangements.
Credit and Default Risk
Credit and default risk represent the potential impact that can be caused if a counterparty were to default on its contractual obligations and SCE would be exposed to spot markets for buying replacement power or selling excess power. In addition, SCE would be exposed to the risk of non-payment of accounts receivable, primarily related to the sales of excess power and realized gains on derivative instruments.
Certain power contracts contain master netting agreements or similar agreements, which generally allow counterparties subject to the agreement to setoff amounts when certain criteria are met, such as in the event of default. The objective of netting is to reduce credit exposure. Additionally, to reduce SCE's risk exposures counterparties may be required to pledge collateral depending on the creditworthiness of each counterparty and the risk associated with the transaction.
Certain power contracts contain a provision that requires SCE to maintain an investment grade rating from each of the major credit rating agencies, referred to as a credit-risk-related contingent feature. If SCE's credit rating were to fall below investment grade, SCE may be required to post additional collateral to cover derivative liabilities and the related outstanding payables. The net fair value of all derivative liabilities with these credit-risk-related contingent features was $50 million and $38 million as of March 31, 2016 and December 31, 2015 , respectively. SCE has posted $12 million collateral at March 31, 2016 and no collateral at December 31, 2015 to its counterparties at the respective dates for its derivative liabilities and related outstanding payables. If the credit-risk-related contingent features underlying these agreements were triggered on March 31, 2016 , SCE would be required to post $31 million of additional collateral of which $3 million is related to outstanding payables that are net of collateral already posted.

35


Fair Value of Derivative Instruments
SCE presents its derivative assets and liabilities on a net basis on its consolidated balance sheets when subject to master netting agreements or similar agreements. Derivative positions are offset against margin and cash collateral deposits. In addition, SCE has provided collateral in the form of letters of credit. Collateral requirements can vary depending upon the level of unsecured credit extended by counterparties, changes in market prices relative to contractual commitments and other factors. See Note 4 for a discussion of fair value of derivative instruments. The following table summarizes the gross and net fair values of SCE's commodity derivative instruments:
 
 
March 31, 2016
 
 
 
 
Derivative Assets
 
Derivative Liabilities
 
Net
Liability
(in millions)
 
Short-Term
 
Long-Term
 
Subtotal
 
Short-Term
 
Long-Term
 
Subtotal
 
Commodity derivative contracts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross amounts recognized
 
$
66

 
$
78

 
$
144

 
$
244

 
$
1,134

 
$
1,378

 
$
1,234

Gross amounts offset in the consolidated balance sheets
 
(1
)
 
—

 
(1
)
 
(1
)
 
—

 
(1
)
 
—

Cash collateral posted 1
 
—

 
—

 
—

 
(11
)
 
—

 
(11
)
 
(11
)
Net amounts presented in the consolidated balance sheets
 
$
65

 
$
78

 
$
143

 
$
232

 
$
1,134

 
$
1,366

 
$
1,223

 
 
December 31, 2015
 
 
 
 
Derivative Assets
 
Derivative Liabilities
 
Net
Liability
(in millions)
 
Short-Term
 
Long-Term
 
Subtotal
 
Short-Term
 
Long-Term
 
Subtotal
 
Commodity derivative contracts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross amounts recognized
 
$
81

 
$
84

 
$
165

 
$
235

 
$
1,100

 
$
1,335

 
$
1,170

Gross amounts offset in the consolidated balance sheets
 
(2
)
 
—

 
(2
)
 
(2
)
 
—

 
(2
)
 
—

Cash collateral posted 1
 
—

 
—

 
—

 
(15
)
 
—

 
(15
)
 
(15
)
Net amounts presented in the consolidated balance sheets
 
$
79

 
$
84

 
$
163

 
$
218

 
$
1,100

 
$
1,318

 
$
1,155

1  
In addition, at March 31, 2016 and December 31, 2015 , SCE had posted $25 million and $31 million , respectively, of collateral that is not offset against derivative liabilities and is reflected in "Other current assets" on the consolidated balance sheets.
Income Statement Impact of Derivative Instruments
SCE recognizes realized gains and losses on derivative instruments as purchased power expense and expects that such gains or losses will be part of the purchase power costs recovered from customers. As a result, realized gains and losses do not affect earnings, but may temporarily affect cash flows. Due to expected future recovery from customers, unrealized gains and losses are recorded as regulatory assets and liabilities and therefore also do not affect earnings. The remaining effects of derivative activities and related regulatory offsets are recorded in cash flows from operating activities in the consolidated statements of cash flows.
The following table summarizes the components of SCE's economic hedging activity:
 
 
Three months ended March 31,
(in millions)
 
2016
 
2015
Realized losses
 
$
(27
)
 
$
(36
)
Unrealized losses
 
(64
)
 
(69
)

36


Notional Volumes of Derivative Instruments
The following table summarizes the notional volumes of derivatives used for SCE hedging activities:
 
 
 
 
Economic Hedges
Commodity
 
Unit of Measure
 
March 31, 2016
 
December 31, 2015
Electricity options, swaps and forwards
 
GWh
 
4,842

 
6,221
Natural gas options, swaps and forwards
 
Bcf
 
17

 
32
Congestion revenue rights
 
GWh
 
96,182

 
109,740
Tolling arrangements
 
GWh
 
68,331

 
70,663
Note 7.    Income Taxes
Effective Tax Rate
The table below provides a reconciliation of income tax expense computed at the federal statutory income tax rate to the income tax provision:
 
Edison International
 
SCE
 
Three months ended March 31,
(in millions)
2016
 
2015
 
2016
 
2015
Income from continuing operations before income taxes
$
333

 
$
424

 
$
367

 
$
440

Provision for income tax at federal statutory rate of 35%
117

 
148

 
128

 
154

Increase in income tax from:
 
 
 
 
 
 
 
State tax, net of federal benefit
6

 
11

 
9

 
14

Property-related
(79
)
 
(60
)
 
(79
)
 
(60
)
Change related to uncertain tax positions
(1
)
 
15

 
(1
)
 
10

Other
(5
)
 
(8
)
 
(7
)
 
(11
)
Total income tax expense from continuing operations
$
38

 
$
106

 
$
50

 
$
107

Effective tax rate
11.4
%
 
25.0
%
 
13.6
%
 
24.3
%
The CPUC requires flow-through ratemaking treatment for the current tax benefit arising from certain property-related and other temporary differences which reverse over time. Flow-through items reduce current authorized revenue requirements in SCE's rate cases and result in a regulatory asset for recovery of deferred income taxes in future periods. The difference between the authorized amounts as determined in SCE's rate cases, adjusted for balancing and memorandum account activities, and the recorded flow-through items also result in increases or decreases in regulatory assets with a corresponding impact on the effective tax rate to the extent that recorded deferred amounts are expected to be recovered in future rates.
Tax Disputes
Tax Years 2007 – 2009
Edison International received a Revenue Agent Report from the IRS in February 2013 which included a proposed adjustment to disallow deductions related to certain capitalized overhead costs. Edison International has tentatively reached an agreement with the IRS regarding this matter, which if finalized, would result in a federal tax liability of approximately $64 million , including interest through March 31, 2016 .
Tax Years 2010 – 2012
The IRS Revenue Agent Report was received in June 2015. As a result, Edison International and SCE have re-measured their Federal and State uncertain tax positions and recorded $94 million and $100 million , respectively, of income tax benefits including interest and penalty during the second quarter of 2015. The Revenue Agent Report included a proposed adjustment to disallow deductions related to certain capitalized overhead expenses. Edison International has tentatively reached an agreement with IRS regarding this matter, which if finalized, would result in a federal tax liability of approximately
$9 million , including interest through March 31, 2016 .

37


Tax years that remain open for examination by the IRS and the California Franchise Tax Board are 2007 – 2015 and 2003 – 2015, respectively.
Note 8.    Compensation and Benefit Plans
Pension Plans
Edison International made contributions of $5 million during the three months ended March 31, 2016, which includes contributions of $1 million by SCE. Edison International expects to make contributions of $115 million during the remainder of 2016 , which includes $94 million from SCE. Annual contributions made by SCE to most of SCE's pension plans are anticipated to be recovered through CPUC-approved regulatory mechanisms. Annual contributions to these plans are expected to be, at a minimum, equal to the related annual expense.
Pension expense components for continuing operations are:
 
Edison International
 
SCE
 
Three months ended March 31,
(in millions)
2016
 
2015
 
2016
 
2015
Service cost
$
39

 
$
35

 
$
38

 
$
35

Interest cost
44

 
41

 
41

 
38

Expected return on plan assets
(56
)
 
(57
)
 
(53
)
 
(53
)
Amortization of prior service cost
1

 
1

 
1

 
1

Amortization of net loss 1
9

 
9

 
8

 
7

Expense under accounting standards
$
37

 
$
29

 
$
35

 
$
28

Regulatory adjustment
(9
)
 
(1
)
 
(9
)
 
(1
)
Total expense recognized
$
28

 
$
28

 
$
26

 
$
27

1  
Includes the amount of net loss reclassified from other comprehensive loss. The amount reclassified for Edison International and SCE was $3 million and $2 million , respectively, for the three months ended March 31, 2016 , and  $3 million and $2 million , respectively, for the three months ended March 31, 2015 .
Postretirement Benefits Other Than Pensions
Edison International made contributions of $7 million during the three months ended March 31, 2016 and expects to make contributions of $26 million during the remainder of 2016 , substantially all of which are expected to be made by SCE. Annual contributions made to SCE plans are anticipated to be recovered through CPUC-approved regulatory mechanisms and are expected to be, at a minimum, equal to the total annual expense for these plans, pending the outcome of the 2015 GRC decision. Benefits under these plans, with some exceptions, are generally unvested and subject to change. Under the terms of the Edison International Health and Welfare Plan ("PBOP Plan") each participating employer (Edison International or its participating subsidiaries) is responsible for the costs and expenses of all PBOP benefits with respect to its employees and former employees. A participating employer may terminate the PBOP benefits with respect to its employees and former employees, as may SCE (as Plan sponsor), and, accordingly, the participants' PBOP benefits are not vested benefits.
PBOP expense components for continuing operations are:
 
Edison International
 
SCE
 
Three months ended March 31,
(in millions)
2016
 
2015
 
2016
 
2015
Service cost
$
10

 
$
12

 
$
10

 
$
12

Interest cost
26

 
29

 
26

 
28

Expected return on plan assets
(28
)
 
(28
)
 
(28
)
 
(28
)
Amortization of prior service cost
(1
)
 
(3
)
 
(1
)
 
(3
)
Amortization of net loss
—

 
6

 
—

 
6

Total expense
$
7

 
$
16

 
$
7

 
$
15


38


Workforce Reductions
SCE continues to focus on productivity improvements to mitigate rate pressure from its capital program, optimize its cost structure and improve operational efficiency, which is expected to result in further workforce reductions through 2016. During the three months ended March 31, 2016, SCE increased the estimated impact for approved workforce reductions.
The following table provides a summary of changes in the accrued severance liability associated with these reductions:
(in millions)
 
 
Balance at January 1, 2016
 
$
22

Additions
 
5

Payments
 
(15
)
Balance at March 31, 2016
 
$
12

The liability presented in the table above is reflected in "Other current liabilities" on the consolidated balance sheets. The severance costs are included in "Operation and maintenance" on the consolidated income statements.
Note 9.    Investments
Nuclear Decommissioning Trusts
Future decommissioning costs related to SCE's nuclear assets are expected to be funded from independent decommissioning trusts.
The following table sets forth amortized cost and fair value of the trust investments (see Note 4 for a discussion of fair value of the trust investments):
 
Longest
Maturity
Dates
 
Amortized Cost
 
Fair Value
(in millions)
 
March 31,
2016
 
December 31,
2015
 
March 31,
2016
 
December 31, 2015
Stocks
—
 
$
311

 
$
304

 
$
1,464

 
$
1,460

Municipal bonds
2054
 
736

 
691

 
894

 
840

U.S. government and agency securities
2046
 
1,002

 
1,070

 
1,092

 
1,128

Corporate bonds
2057
 
662

 
708

 
731

 
755

Short-term investments and receivables/payables 1
One-year
 
106

 
144

 
109

 
148

Total
 
 
$
2,817

 
$
2,917

 
$
4,290

 
$
4,331

1
Short-term investments include $8 million and $81 million of repurchase agreements payable by financial institutions which earn interest, are fully secured by U.S. Treasury securities and mature by April 4, 2016 and January 5, 2016 as of March 31, 2016 and December 31, 2015 , respectively.
Trust fund earnings (based on specific identification) increase the trust fund balance and the ARO regulatory liability. Unrealized holding gains, net of losses, were $1.5 billion and $1.4 billion at March 31, 2016 and December 31, 2015 , respectively.


39


The following table sets forth a summary of changes in the fair value of the trust:
 
 
Three months ended March 31,
(in millions)
 
2016
 
2015
Balance at beginning of period
 
$
4,331

 
$
4,799

Gross realized gains
 
17

 
27

Gross realized losses
 
(3
)
 
(2
)
Unrealized gains, net
 
59

 
44

Other-than-temporary impairments
 
(7
)
 
(4
)
Interest and dividends
 
29

 
28

Contributions
 
—

 
7

Income taxes
 
(18
)
 
—

Decommissioning disbursements
 
(116
)
 
—

Administrative expenses and other
 
(2
)
 
(3
)
Balance at end of period
 
$
4,290

 
$
4,896

Trust assets are used to pay income taxes as the Trust files separate income taxes returns from SCE. Deferred income taxes related to unrealized gains at March 31, 2016 were $357 million . Accordingly, the fair value of Trust assets available to pay future decommissioning costs, net of deferred income taxes, totaled $3.9 billion at March 31, 2016 . Due to regulatory mechanisms, changes in assets of the trusts from income or loss items have no impact on operating revenue or earnings.
Note 10.    Regulatory Assets and Liabilities
Regulatory Assets
SCE's regulatory assets included on the consolidated balance sheets are:
(in millions)
March 31,
2016
 
December 31,
2015
Current:
 
 
 
Regulatory balancing accounts
$
329

 
$
382

Energy derivatives
182

 
159

Other
27

 
19

Total current
538

 
560

Long-term:
 
 
 
Deferred income taxes, net
3,920

 
3,757

Pensions and other postretirement benefits
842

 
849

Energy derivatives
1,066

 
1,027

Unamortized investments, net
169

 
182

San Onofre
982

 
1,043

Unamortized loss on reacquired debt
197

 
201

Regulatory balancing accounts
39

 
36

Environmental remediation
131

 
129

Other
282

 
288

Total long-term
7,628

 
7,512

Total regulatory assets
$
8,166

 
$
8,072


40


Regulatory Liabilities
SCE's regulatory liabilities included on the consolidated balance sheets are:
(in millions)
March 31,
2016
 
December 31,
2015
Current:
 
 
 
Regulatory balancing accounts
$
1,135

 
$
1,106

Other
22

 
22

Total current
1,157

 
1,128

Long-term:
 
 
 
Costs of removal
2,822

 
2,781

Recoveries in excess of ARO liabilities 1
1,690

 
1,502

Regulatory balancing accounts
1,352

 
1,314

Other
56

 
79

Total long-term
5,920

 
5,676

Total regulatory liabilities
$
7,077

 
$
6,804

1
Represents the cumulative differences between ARO expenses and amounts collected in rates primarily for the decommissioning of the SCE's nuclear generation facilities. Decommissioning costs recovered through rates are primarily placed in nuclear decommissioning trusts. This regulatory liability also represents the deferral of realized and unrealized gains and losses on the nuclear decommissioning trust investments. See Note 9.
Net Regulatory Balancing Accounts
The following table summarizes the significant components of regulatory balancing accounts included in the above tables of regulatory assets and liabilities:
(in millions)
March 31,
2016
 
December 31,
2015
Asset (liability)
 
 
 
Energy resource recovery account
$
(364
)
 
$
(439
)
New system generation balancing account
(189
)
 
(171
)
Public purpose programs and energy efficiency programs
(817
)
 
(683
)
Tax accounting memorandum account and pole loading balancing account
(278
)
 
(248
)
Base rate recovery balancing account
(234
)
 
(319
)
Greenhouse gas auction revenue
(156
)
 
(75
)
FERC balancing accounts
43

 
74

Generator settlements
—

 
(4
)
Other
(124
)
 
(137
)
Liability
$
(2,119
)
 
$
(2,002
)

41


Note 11.    Commitments and Contingencies
Indemnities
Edison International and SCE have various financial and performance guarantees and indemnity agreements which are issued in the normal course of business.
Edison International and SCE have provided indemnifications through contracts entered into in the normal course of business. These are primarily indemnifications against adverse litigation outcomes in connection with underwriting agreements, and indemnities for specified environmental liabilities and income taxes with respect to assets sold. Edison International's and SCE's obligations under these agreements may or may not be limited in terms of time and/or amount, and in some instances Edison International and SCE may have recourse against third parties. Edison International and SCE have not recorded a liability related to these indemnities. The overall maximum amount of the obligations under these indemnifications cannot be reasonably estimated.
SCE has indemnified the City of Redlands, California in connection with Mountainview's California Energy Commission permit for cleanup or associated actions related to groundwater contaminated by perchlorate due to the disposal of filter cake at the City's solid waste landfill. The obligations under this agreement are not limited to a specific time period or subject to a maximum liability. SCE has not recorded a liability related to this indemnity.
Contingencies
In addition to the matters disclosed in these Notes, Edison International and SCE are involved in other legal, tax and regulatory proceedings before various courts and governmental agencies regarding matters arising in the ordinary course of business. Edison International and SCE believe the outcome of these other proceedings will not, individually or in the aggregate, materially affect its results of operations or liquidity.
San Onofre Related Matters
Replacement steam generators were installed at San Onofre in 2010 and 2011. On January 31, 2012, a leak suddenly occurred in one of the heat transfer tubes in San Onofre's Unit 3 steam generators. The Unit was safely taken off-line and subsequent inspections revealed excessive tube wear. Unit 2 was off-line for a planned outage when areas of unexpected tube wear were also discovered. On June 6, 2013, SCE decided to permanently retire Units 2 and 3.
Settlement of San Onofre CPUC Proceedings
In November 2014, the CPUC approved the San Onofre OII Settlement Agreement that SCE had entered into with TURN, ORA, SDG&E, the Coalition of California Utility Employees, and Friends of the Earth. The San Onofre OII Settlement Agreement resolved the CPUC's investigation regarding the Steam Generator Replacement Project at San Onofre and the related outages and subsequent shutdown of San Onofre. The San Onofre OII Settlement Agreement does not affect proceedings related to recoveries from third parties described below, but does describe how shareholders and customers will share any recoveries.
Challenges related to San Onofre CPUC Proceedings
A federal lawsuit challenging the CPUC's authority to permit rate recovery of San Onofre costs and an application to the CPUC for rehearing of its decision approving the San Onofre OII Settlement Agreement were filed in November and December 2014, respectively. In April 2015, the federal lawsuit was dismissed with prejudice and the plaintiffs in that case appealed the dismissal to the Ninth Circuit in May 2015. Both the appeal and the application for rehearing remain pending.
In April 2015, the Alliance for Nuclear Responsibility ("A4NR") filed a petition to modify the CPUC's decision approving the San Onofre OII Settlement Agreement based on SCE's alleged failures to disclose communications between SCE and CPUC decision-makers pertaining to issues in the San Onofre OII. The petition seeks the reversal of the decision approving the San Onofre OII Settlement Agreement and reopening of the OII proceeding. Subsequently, TURN and ORA filed responses supporting A4NR's petition to reopen the San Onofre OII proceeding. In August 2015, ORA filed its own petition to modify the CPUC's decision approving the San Onofre OII Settlement Agreement seeking to set aside the settlement and reopen the San Onofre OII proceeding. SCE and SDG&E responded to this petition in September 2015. Both petitions remain pending before the CPUC.
In July 2015, a purported securities class action lawsuit was filed in federal court against Edison International, its Chief Executive Officer and Chief Financial Officer and was later amended to include SCE's former President as a defendant. The lawsuit alleges that the defendants violated the securities laws by failing to disclose that Edison International had ex parte

42


contacts with CPUC decision-makers regarding the San Onofre OII that were either unreported or more extensive than initially reported. The complaint purports to be filed on behalf of a class of persons who acquired Edison International common stock between March 21, 2014 and June 24, 2015.
Subsequently and also in July 2015, a federal shareholder derivative lawsuit was filed against members of the Edison International Board of Directors for breach of fiduciary duty and other claims. The federal derivative lawsuit is based on similar allegations to the federal class action securities lawsuit and seeks monetary damages, including punitive damages, and various corporate governance reforms. An additional federal shareholder derivative lawsuit making essentially the same allegations was filed in August and was subsequently consolidated with the July 2015 federal derivative lawsuit.
In October 2015, a shareholder derivative lawsuit was filed in California state court against members of the Edison International Board of Directors for breach of fiduciary duty and other claims, making similar allegations to those in the federal derivative lawsuits discussed above.
In November 2015, a purported securities class action lawsuit was filed in federal court against Edison International, its Chief Executive Officer and Treasurer by an Edison International employee, alleging claims under the Employee Retirement Income Security Act ("ERISA"). The complaint purports to be filed on behalf of a class of Edison International employees who were participants in the Edison 401(k) Savings Plan and invested in the Edison International Stock Fund between March 27, 2014 and June 24, 2015. The complaint alleges that defendants breached their fiduciary duties because they knew or should have known that investment in the Edison International Stock Fund was imprudent because the price of Edison International common stock was artificially inflated due to Edison International's alleged failure to disclose certain ex parte communications with CPUC decision-makers related to the San Onofre OII.
Edison International and SCE cannot predict the outcome of these proceedings.
MHI Claims
SCE is also pursuing claims against Mitsubishi Heavy Industries, Ltd. and a related company ("MHI"), which designed and supplied the RSGs. MHI warranted the RSGs for an initial period of 20 years from acceptance and is contractually obligated to repair or replace defective items with dispatch and to pay specified damages for certain repairs. MHI's stated liability under the purchase agreement is limited to $138 million and excludes consequential damages, defined to include "the cost of replacement power;" however, limitations in the contract are subject to applicable exceptions both in the contract and under law. SCE has advised MHI that it believes one or more of such exceptions apply and that MHI's liability is not limited to $138 million . MHI has advised SCE that it disagrees. In October 2013, SCE sent MHI a formal request for binding arbitration under the auspices of the International Chamber of Commerce in accordance with the purchase contract seeking damages for all losses. In the request for arbitration, SCE alleges contract and tort claims and seeks at least $4 billion in damages on behalf of itself and its customers and in its capacity as Operating Agent for San Onofre. MHI has denied any liability and has asserted counterclaims for $41 million , for which SCE has denied any liability. Each of the other San Onofre owners sued MHI, alleging claims arising from MHI's supplying the faulty steam generators. These litigation claims have been stayed pending the arbitration. The other co-owners (SDG&E and Riverside) have been added as additional claimants in the arbitration. The arbitration is being conducted pursuant to a confidentiality order issued by the arbitration panel. Hearings concluded on April 29, 2016. A decision may be issued by year-end 2016 but could be later.
SCE, on behalf of itself and the other San Onofre co-owners, has submitted seven invoices to MHI totaling $149 million for steam generator repair costs incurred through April 30, 2013. MHI paid the first invoice of $45 million , while reserving its right to challenge it and subsequently rejected a portion of the first invoice and has not paid further invoices, claiming further documentation is required, which SCE disputes. SCE recorded its share of the invoice paid (approximately $35 million ) as a reduction of repair and inspection costs in 2012.
Under the San Onofre OII Settlement Agreement, recoveries from MHI (including amounts paid by MHI under the first invoice), if any, will first be applied to reimburse costs incurred in pursuing such recoveries, including litigation costs. To the extent SCE's share of recoveries from MHI exceed such costs, they will be allocated 50% to customers and 50% to SCE.
The first $282 million of SCE's customers' portion of such recoveries from MHI will be distributed to customers via a credit to a sub-account of SCE's Base Revenue Requirement Balancing Account ("BRRBA"), reducing revenue requirements from customers. Amounts in excess of the first $282 million distributable to SCE customers will reduce SCE's regulatory asset represented by the unamortized balance of investment in San Onofre base plant, reducing the revenue requirement needed to amortize such investment. The amortization period, however, will be unaffected. Any additional amounts received after the regulatory asset is recovered will be applied to the BRRBA.

43



The San Onofre OII Settlement Agreement provides the utilities with the discretion to resolve the MHI dispute without CPUC approval, but the utilities are obligated to use their best efforts to inform the CPUC of any settlement or other resolution of these disputes to the extent this is possible without compromising any aspect of the resolution. SCE and SDG&E have also agreed to allow the CPUC to review the documentation of any final resolution of the MHI dispute and the litigation costs incurred in pursuing claims against MHI to ensure they are not exorbitant in relation to the recovery obtained. There is no assurance that there will be any recovery from MHI or, if there is a recovery, that it will equal or exceed the litigation costs incurred to pursue the recovery.
Energy Efficiency Incentive Mechanism
In September 2015, the CPUC granted TURN and ORA requests for rehearing of prior CPUC decisions related to $74.5 million of incentive awards that SCE received for savings achieved by its 2006 – 2008 energy efficiency programs. In March 2016, ORA and TURN filed a joint proposal requesting that the CPUC recalculate SCE's 2006 – 2008 incentive awards and order SCE to refund $39.9 million to its customers. SCE disputes the assertion that SCE should be at risk to repay previously awarded incentives. SCE cannot predict the outcome of these petitions.
Long Beach Service Interruptions
In July 2015, SCE's customers who are served via the network portion of SCE's electric system in Long Beach, California experienced service interruptions due to multiple underground vault fires and underground cable failures. No personal injuries have been reported in connection with these events. SCE instituted an internal investigation and commissioned an external investigation of these events and their causes, which revealed that the main cause of the interruptions was a lack of adequate management oversight of the downtown network system. The investigations also revealed deficiencies in maintaining the knowledge base on the configuration and operation of the system, and a lack of sophisticated controls needed to more efficiently and effectively prevent and respond to the cascading events that occurred. These events and their causes are also being investigated by the CPUC's SED. SCE is unable to estimate a possible loss or range of loss associated with any penalties that may be imposed by the CPUC related to this matter. Subject to applicable deductibles, SCE is generally insured against customer claims arising from these service interruptions.
Environmental Remediation
SCE records its environmental remediation liabilities when site assessments and/or remedial actions are probable and a range of reasonably likely cleanup costs can be estimated. SCE reviews its sites and measures the liability quarterly, by assessing a range of reasonably likely costs for each identified site using currently available information, including existing technology, presently enacted laws and regulations, experience gained at similar sites, and the probable level of involvement and financial condition of other potentially responsible parties. These estimates include costs for site investigations, remediation, operation and maintenance, monitoring and site closure. Unless there is a single probable amount, SCE records the lower end of this reasonably likely range of costs (reflected in "Other long-term liabilities") at undiscounted amounts as timing of cash flows is uncertain.
At March 31, 2016 , SCE's recorded estimated minimum liability to remediate its 19 identified material sites (sites in which the upper end of the range of the costs is at least $1 million ) was $133 million , including $80 million related to San Onofre. In addition to these sites, SCE also has 39 immaterial sites for which the total minimum recorded liability was $3 million . Of the $136 million total environmental remediation liability for SCE, $131 million has been recorded as a regulatory asset. SCE expects to recover $49 million through an incentive mechanism that allows SCE to recover 90% of its environmental remediation costs at certain sites (SCE may request to include additional sites) and $82 million through a mechanism that allows SCE to recover 100% of the costs incurred at certain sites through customer rates. SCE's identified sites include several sites for which there is a lack of currently available information, including the nature and magnitude of contamination, and the extent, if any, that SCE may be held responsible for contributing to any costs incurred for remediating these sites. Thus, no reasonable estimate of cleanup costs can be made for these sites.
The ultimate costs to clean up SCE's identified sites may vary from its recorded liability due to numerous uncertainties inherent in the estimation process, such as: the extent and nature of contamination; the scarcity of reliable data for identified sites; the varying costs of alternative cleanup methods; developments resulting from investigatory studies; the possibility of identifying additional sites; and the time periods over which site remediation is expected to occur. SCE believes that, due to these uncertainties, it is reasonably possible that cleanup costs at the identified material sites and immaterial sites could exceed its recorded liability by up to $165 million and $7 million , respectively. The upper limit of this range of costs was estimated using assumptions least favorable to SCE among a range of reasonably possible outcomes.

44


SCE expects to clean up and mitigate its identified sites over a period of up to 30  years. Remediation costs for each of the next five years are expected to range from $7 million to $23 million . Costs incurred were $1 million for both the three months ended March 31, 2016 and 2015.
Based upon the CPUC's regulatory treatment of environmental remediation costs incurred at SCE, SCE believes that costs ultimately recorded will not materially affect its results of operations, financial position or cash flows. There can be no assurance, however, that future developments, including additional information about existing sites or the identification of new sites, will not require material revisions to estimates.
Nuclear Insurance
SCE is a member of NEIL, a mutual insurance company owned by entities with nuclear facilities. NEIL provides insurance for nuclear property damage, including damages caused by acts of terrorism up to specified limits, and for accidental outages for active facilities. The amount of nuclear property damage insurance purchased for San Onofre and Palo Verde exceeds the minimum federal requirement of $1.06 billion . If NEIL losses at any nuclear facility covered by the arrangement were to exceed the accumulated funds for these insurance programs, SCE could be assessed retrospective premium adjustments of up to approximately $45 million per year.
Federal law limits public offsite liability claims for bodily injury and property damage from a nuclear incident to the amount of available financial protection, which is currently approximately $13.5 billion . Based on its ownership interests, SCE could be required to pay a maximum of approximately $255 million per nuclear incident. However, it would have to pay no more than approximately $38 million per incident in any one year.
For more information on nuclear insurance coverage, see Note 11 in the 2015 Form 10-K.
Wildfire Insurance
Severe wildfires in California have given rise to large damage claims against California utilities for fire-related losses alleged to be the result of the failure of electric and other utility equipment. Invoking a California Court of Appeal decision, plaintiffs pursuing these claims have relied on the doctrine of inverse condemnation, which can impose strict liability (including liability for a claimant's attorneys' fees) for property damage. Prolonged drought conditions in California have also increased the risk of severe wildfire events. On June 1, 2015, Edison International renewed its liability insurance coverage, which included coverage for SCE's wildfire liabilities up to a $610 million limit (with a self-insured retention of $10 million per wildfire occurrence). Various coverage limitations within the policies that make up this insurance coverage could result in additional self-insured costs in the event of multiple wildfire occurrences during the policy period (June 1, 2015 to May 31, 2016). SCE also has additional coverage for certain wildfire liabilities of $390 million , which applies when total covered wildfire claims exceed $610 million , through June 14, 2016. SCE may experience coverage reductions and/or increased insurance costs in future years. No assurance can be given that future losses will not exceed the limits of SCE's insurance coverage.
Spent Nuclear Fuel
Under federal law, the Department of Energy ("DOE") is responsible for the selection and construction of a facility for the permanent disposal of spent nuclear fuel and high-level radioactive waste. The DOE has not met its contractual obligation to accept spent nuclear fuel. Extended delays by the DOE have led to the construction of costly alternatives and associated siting and environmental issues. Currently, both San Onofre and Palo Verde have interim storage for spent nuclear fuel on site sufficient for their current license period.
In June 2010, the United States Court of Federal Claims issued a decision granting SCE and the San Onofre co-owners damages of approximately $142 million (SCE share $112 million ) to recover costs incurred through December 31, 2005 for the DOE's failure to meet its obligation to begin accepting spent nuclear fuel from San Onofre. SCE received payment from the federal government in the amount of the damage award. In April 2016, SCE, as operating agent, settled a lawsuit on behalf of the San Onofre owners against the DOE for $162 million (SCE share $124 million ) to compensate for damages caused by the DOE's failure to meet its obligation to begin accepting spent nuclear fuel for the period from January 1, 2006 to December 31, 2013. The settlement also provides for a claim submission/audit process for expenses incurred from 2014 – 2016, where SCE will submit a claim for damages caused by the DOE failure to accept spent nuclear fuel each year, followed by a government audit and payment of the claim. This process will make additional legal action to recover damages incurred in 2014 – 2016 unnecessary. All damages recovered by SCE are subject to CPUC review as to how these amounts would be distributed among customers, shareholders, or to offset fuel decommissioning or storage costs.


45


Note 12.    Preferred and Preference Stock of SCE
During the first quarter of 2016, SCE issued $300 million of 5.45% Series K Preference Stock ( 120,004 shares; cumulative, $2,500 liquidation value) to SCE Trust V, a special purpose entity formed to issue trust securities as discussed in Note 3. The Series K Preference Stock may be redeemed at par, in whole, but not in part, at any time prior to March 15, 2026 if certain changes in tax or investment company laws occur. On or after March 15, 2026, SCE may redeem the Series K shares at par, in whole or in part and distributions will accrue and be payable at a floating rate. The shares are not subject to mandatory redemption. The proceeds were used to redeem $125 million of SCE's Series D Preference Stock and for general corporate purposes.
Note 13.    Accumulated Other Comprehensive Loss
Edison International's accumulated other comprehensive loss, net of tax consist of:
 
Edison International
 
SCE
 
Three months ended March 31,
(in millions)
2016

 
2015

 
2016

 
2015

Beginning balance
$
(56
)
 
$
(58
)
 
$
(22
)
 
$
(28
)
Pension and PBOP – net loss:
 
 
 
 
 
 
 
Other comprehensive loss before reclassifications
—

 
(3
)
 
—

 
—

    Reclassified from accumulated other comprehensive loss 1
2

 
2

 
1

 
1

Change
2

 
(1
)
 
1

 
1

Ending Balance
$
(54
)
 
$
(59
)
 
$
(21
)
 
$
(27
)
1  
These items are included in the computation of net periodic pension and PBOP expense. See Note 8 for additional information.
Note 14.    Interest and Other Income and Other Expenses
Interest and other income and other expenses are as follows:
 
Three months ended March 31,
(in millions)
2016
 
2015
SCE interest and other income:
 
 
 
Equity allowance for funds used during construction
$
22

 
$
21

Increase in cash surrender value of life insurance policies and life insurance benefits
7

 
10

Interest income
—

 
1

Other
2

 
1

Total SCE interest and other income
31

 
33

Other income of Edison International Parent and Other
—

 
6

Total Edison International interest and other income
$
31

 
$
39

SCE other expenses:
 
 
 
Civic, political and related activities and donations
$
(5
)
 
$
(5
)
Other
—

 
(2
)
Total SCE other expenses
(5
)
 
(7
)
Other expense of Edison International Parent and Other
(1
)
 
(3
)
Total Edison International other expenses
$
(6
)
 
$
(10
)

46


Note 15.    Supplemental Cash Flows Information
Supplemental cash flows information for continuing operations is:
 
Edison International
 
SCE
 
Three months ended March 31,
(in millions)
2016
 
2015
 
2016
 
2015
Cash payments for interest and taxes:
 
 
 
 
 
 
 
Interest, net of amounts capitalized
$
158

 
$
152

 
$
149

 
$
144

Tax payments, net
2

 
—

 
11

 
32

Non-cash financing and investing activities:
 
 
 
 
 
 
 
Dividends declared but not paid:
 
 
 
 
 
 
 
Common stock
$
156

 
$
136

 
$
—

 
$
147

Preferred and preference stock
1

 
3

 
1

 
3

SCE's accrued capital expenditures at March 31, 2016 and 2015 were $360 million and $407 million , respectively. Accrued capital expenditures will be included as an investing activity in the consolidated statements of cash flow in the period paid.
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The management of Edison International and SCE, under the supervision and with the participation of Edison International's Chief Executive Officer and Chief Financial Officer and SCE's President and Chief Financial Officer, have evaluated the effectiveness of Edison International's and SCE's disclosure controls and procedures (as that term is defined in
Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended), respectively, as of the end of the first quarter of 2016. Based on that evaluation, Edison International's Chief Executive Officer and Chief Financial Officer and SCE's President and Chief Financial Officer have each concluded that, as of the end of the period, Edison International's and SCE's disclosure controls and procedures, respectively, were effective.
Changes in Internal Control Over Financial Reporting
There were no changes in Edison International's or SCE's internal control over financial reporting, respectively, during the first quarter of 2016 that have materially affected, or are reasonably likely to materially affect, Edison International's or SCE's internal control over financial reporting.
Jointly Owned Plant
Edison International's and SCE's respective scope of evaluation of internal control over financial reporting includes their Jointly Owned SCE Projects as discussed in Note 2. Property, Plant and Equipment in the 2015 Form 10-K.
LEGAL PROCEEDINGS
The following proceeding was previously reported to comply with SEC regulations, which require disclosure of certain information about proceedings arising under federal, state or local environmental provisions if a company reasonably believes that such proceedings might result in monetary sanctions of $100,000 or more.
Shaver Lake Dam Project Administrative Civil Liability Complaint
In 2011, SCE installed a PVC plastic geomembrane liner on the Shaver Lake Dam to prevent water seepage. Before starting the project, SCE received the required regulatory permits and approvals. SCE and the California Department of Fish and Wildlife executed a Streambed Alteration Agreement in November 2011 that governed SCE's activities in Shaver Lake as required by state and federal law. SCE also obtained the required federal Clean Water Act Certification in November 2011 for the project's completion.
In February 2012, the California Department of Fish and Wildlife and the Central Valley Regional Water Quality control Board issued letters alleging that SCE had violated provisions of the Streambed Alteration Agreement and certain conditions of the federal Clean Water Act Certification, respectively. Both letters alleged that during the draining of Shaver Lake, SCE failed to prevent the discharge of sediment into an adjoining creek, causing the deaths of fish in the lake and creek. In

47


October 2014, SCE received a pre-issuance draft of an Administrative Civil Liability Complaint from the Central Valley Regional Water Quality Control Board alleging violations of certain permit conditions relating to the Shaver Lake Dam Project. The Regional Water Quality Control Board is seeking $25 million in civil penalties for the violations. SCE disputes the allegations but is working with the regulatory agencies to resolve the matter.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Purchases of Equity Securities by Edison International and Affiliated Purchasers
The following table contains information about all purchases of Edison International Common Stock made by or on behalf of Edison International in the first quarter of 2016.
Period
(a) Total
Number of Shares
(or Units)
Purchased 1
 
(b) Average
Price Paid per Share (or Unit) 1
 
(c) Total
Number of Shares
(or Units)
Purchased
as Part of
Publicly
Announced
Plans or
Programs
 
(d) Maximum
Number (or
Approximate
Dollar Value)
of Shares
(or Units) that May
Yet Be Purchased
Under the Plans or
Programs
January 1, 2016 to January 31, 2016
391,478

 
 
$
59.21

 
 
—
 
—
February 1, 2016 to February 29, 2016
961,019

 
 
66.88

 
 
—
 
—
March 1, 2016 to March 31, 2016
656,598

 
 
70.15

 
 
—
 
—
Total
2,009,095

 
 
$
66.45

 
 
—
 
—
1  
The shares were purchased by agents acting on Edison International's behalf for delivery to plan participants to fulfill requirements in connection with Edison International's: (i) 401(k) Savings Plan; (ii) Dividend Reinvestment and Direct Stock Purchase Plan; and (iii) long-term incentive compensation plans. The shares were purchased in open-market transactions pursuant to plan terms or participant elections. The shares were never registered in Edison International's name and none of the shares purchased were retired as a result of the transactions.
Purchases of Equity Securities by SCE and Affiliated Purchasers
The following table contains information about all purchases of SCE Series D Preference Stock made by or on behalf of SCE in the first quarter of 2016.
Period
(a) Total
Number of Shares
(or Units)
Purchased 1
 
(b) Average
Price Paid per Share (or Unit) 1
 
(c) Total
Number of Shares
(or Units)
Purchased
as Part of
Publicly
Announced
Plans or
Programs
 
(d) Maximum
Number (or
Approximate
Dollar Value)
of Shares
(or Units) that May
Yet Be Purchased
Under the Plans or
Programs
January 1, 2016 to January 31, 2016
 
 
 
 
 
 
—
 
—
February 1, 2016 to February 29, 2016
 
 
 
 
 
 
—
 
—
March 1, 2016 to March 31, 2016
1,250,000

 
 
$
100.54

 
 
1,250,000
 
—
Total
1,250,000

 
 
$
100.54

 
 
1,250,000
 
—
1  
On March 31, 2016, SCE repurchased 1,250,000 shares of the Series D Preference Shares, at $100.54 (liquidation value and accrued dividends) per share. The redemption of SCE's Series D Preference Stock was announced via an SCE press release on March 1, 2016.

48


EXHIBITS
Exhibit
Number
 
Description
 
 
 
3.1
 
Restated Articles of Incorporation of Southern California Edison Company, together with all Certificates of Determination of Preferences of all outstanding Preferred and Preference Stock
 
 
 
10.1**
 
Edison International 2008 Executive Severance Plan, as amended and restated effective February 24, 2016
 
 
 
10.2**
 
Edison International 2008 Executive Disability Plan, as amended and restated effective January 1, 2016
 
 
 
10.3**
 
Edison International 2016 Executive Annual Incentive Program
 
 
 
10.4**
 
Edison International 2016 Long-Term Incentives Terms and Conditions
 
 
 
31.1
 
Certifications of the Chief Executive Officer and Chief Financial Officer of Edison International pursuant to Section 302 of the Sarbanes-Oxley Act
 
 
 
31.2
 
Certifications of the Chief Executive Officer and Chief Financial Officer of Southern California Edison Company pursuant to Section 302 of the Sarbanes-Oxley Act
 
 
 
32.1
 
Certifications of the Chief Executive Officer and the Chief Financial Officer of Edison International required by Section 906 of the Sarbanes-Oxley Act
 
 
 
32.2
 
Certifications of the Chief Executive Officer and the Chief Financial Officer of Southern California Edison Company required by Section 906 of the Sarbanes-Oxley Act
 
 
 
101.1
 
Financial statements from the quarterly report on Form 10-Q of Edison International for the quarter ended March 31, 2016, filed on May 2, 2016, formatted in XBRL: (i) the Consolidated Statements of Income; (ii) the Consolidated Statements of Comprehensive Income; (iii) the Consolidated Balance Sheets; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to Consolidated Financial Statements
 
 
 
101.2
 
Financial statements from the quarterly report on Form 10-Q of Southern California Edison Company for the quarter ended March 31, 2016, filed on May 2, 2016, formatted in XBRL: (i) the Consolidated Statements of Income; (ii) the Consolidated Statements of Comprehensive Income; (iii) the Consolidated Balance Sheets; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to Consolidated Financial Statements
________________________________________
**
Indicates a management contract or compensatory plan or arrangement, as required by Item 15(a)(3).



49


SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized.
 
EDISON INTERNATIONAL
 
 
SOUTHERN CALIFORNIA EDISON COMPANY
 
 
 
 
 
By:
/s/ Aaron D. Moss
 
By:
/s/ Connie J. Erickson
 
 
 
 
 
 
Aaron D. Moss
Vice President and Controller
(Duly Authorized Officer and
Principal Accounting Officer)
 
 
Connie J. Erickson
Vice President and Controller
(Duly Authorized Officer and
Principal Accounting Officer)
 
 
 
 
 
Date:
May 2, 2016
 
Date:
May 2, 2016


50

Exhibit 3.1


CERTIFICATE OF
RESTATED ARTICLES OF INCORPORATION OF
SOUTHERN CALIFORNIA EDISON COMPANY

The undersigned, ROBERT C. BOADA and BARBARA E. MATHEWS, hereby certify that they are the duly elected and acting Vice President and Treasurer, and Vice President, Associate General Counsel, Chief Governance Officer and Corporate Secretary, respectively, of SOUTHERN CALIFORNIA EDISON COMPANY, a California corporation, and that the Articles of Incorporation of said corporation shall be restated as follows:

“RESTATED ARTICLES OF INCORPORATION
OF
SOUTHERN CALIFORNIA EDISON COMPANY

First: The name of the corporation is:

SOUTHERN CALIFORNIA EDISON COMPANY

Second: The purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code.

Third: Intentionally omitted.

Fourth: Intentionally omitted.

Fifth: SPECIAL VOTING PROVISIONS:

1.      The preferred capital stock of the corporation may be increased or diminished at a meeting of the shareholders of said corporation by a vote representing at least two-thirds of the entire subscribed or issued capital stock of the corporation.

2.      Whenever six or more quarterly dividends, whether consecutive or not, payable with respect to any one or more series of the Cumulative Preferred Stock, 4.32% Series, 4.08% Series, 4.24% Series or 4.78% Series, of the corporation (such series being hereinafter collectively referred to in this paragraph 2 as “Preferred Stock”), shall be in default, and until all such Preferred Stock dividends then in default shall have been paid or declared and set apart for payment, the holders of Preferred Stock, voting separately as a single class and on the basis of the voting rights set forth in Article Sixth hereof, shall be entitled to elect two (2) directors to the Board of Directors of the corporation, and the holders of all the outstanding shares of the capital stock of the corporation, exercising the voting rights conferred by Article Sixth and by law, shall be entitled to elect the remaining exact number of authorized directors. The special voting power to elect directors conferred by this paragraph 2 upon the holders of Preferred Stock (herein called the “Preferred Stock special voting right”) shall terminate, subject to renewal from time to time upon the same terms and conditions, when all such dividends in default shall have been paid or declared and set apart for payment.






The Preferred Stock special voting right shall vest the day after the corporation defaults in the payment of a dividend on any one or more series or classes of the Preferred Stock which, together with prior continuing and concurrent defaults in the payment of dividends on any one or more series or classes of the Preferred Stock, aggregate six defaults in the quarterly dividend payments on any one or more series or classes of the Preferred Stock. Upon such vesting, the Preferred Stock special voting right may be first exercised at the next scheduled annual meeting of shareholders of the corporation unless the Preferred Stock special voting right vests on a date falling on or after December 31 of any year and on or prior to the scheduled date of the annual meeting next following such December 31, in which case the Preferred Stock special voting right may be first exercised at a special meeting of shareholders of the corporation, which may be held for such purpose upon call and notice as provided in the Bylaws of the corporation then in effect, not earlier than sixty (60) days after the date of such annual meeting. If such special meeting shall not have been called within ten (10) days after personal service or fifteen (15) days after mailing by registered mail within the United States of America, of a request for the holding of such meeting by the record holders of at least 10% of the shares of Preferred Stock then outstanding addressed to the Secretary at the principal executive office of the corporation, then a person designated by the record holders of at least 10% of the shares of Preferred Stock then outstanding may call such meeting at the place and upon the notice provided in the Bylaws, and for that purpose shall have access to the stock records of the corporation.

Except as provided in the next sentence, if the Preferred Stock special voting right shall terminate, the holders of all the outstanding shares of the capital stock of the corporation, exercising the voting rights conferred by Article Sixth and by law, shall be entitled to elect all directors comprising the authorized number of directors. If the Preferred Stock special voting right shall terminate after a date which precedes by ten (10) days the proposed date of mailing of notice of any meeting of shareholders at which said right was to be exercised and before the date of said meeting, no election of directors shall occur at said meeting and the election of directors shall occur thereafter at a special or annual meeting of shareholders which may be held for such purpose upon call (in the case of a special meeting) and notice as provided in the Bylaws of the corporation then in effect within ninety (90) days after the date of such prior special or annual meeting of shareholders; provided, however, that no special meeting of shareholders to elect directors shall be required if such terminated Preferred Stock special voting right has never been exercised.

At any special or annual meeting of shareholders of the corporation at which the Preferred Stock special voting right shall be exercisable, the holders of the Preferred Stock may exercise the right to elect two directors to the Board of Directors prior to the exercise of the right of the holders of all of the outstanding shares of the capital stock of the corporation to elect the remaining members of the Board of Directors. The terms of office of all persons who are directors of the corporation immediately prior to such meeting shall terminate upon the election of their successors. Nothing herein contained shall be construed to be a bar to the reelection of any director at any special or annual meeting of shareholders at which the Preferred Stock special voting right is exercised.

Upon termination of the Preferred Stock special voting right, the term of office of all the directors of the corporation shall terminate upon the election of their successors at a meeting of the shareholders of the corporation then entitled to vote.

Sixth:      1. AUTHORIZED CAPITAL: The corporation is authorized to issue the following designated classes of shares of stock with the following number of shares per class:

(a)      Cumulative Preferred Stock --twenty-four million (24,000,000) shares with a par value of $25 per share;


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(b)      $100 Cumulative Preferred Stock --twelve million (12,000,000) shares with a par value of $100 per share;
(c)      Preference Stock --fifty million (50,000,000) shares with no par value; and
(d)      Common Stock --five hundred sixty million (560,000,000) shares with no par value.
2.      CUMULATIVE PREFERRED STOCK AND $100 CUMULATIVE PREFERRED STOCK: Shares of the Cumulative Preferred Stock may be issued from time to time in one or more series, and shares of the $100 Cumulative Preferred Stock may be issued from time to time in one or more series. Each series of Cumulative Preferred Stock and each series of $100 Cumulative Preferred Stock shall be so designated as to distinguish it from other series of such stock. Such designation may include an appropriate reference to its dividend rate and any other characteristics. The Board of Directors is hereby authorized, within the limitations and restrictions stated in this Article, to fix or alter, from time to time, the dividend rights, dividend rate, conversion rights, voting rights (in addition to the voting rights hereinafter provided), rights and terms of redemption (including sinking fund provisions), the redemption price or prices and/or the liquidation preferences of any wholly unissued series of Cumulative Preferred Stock and of any wholly unissued series of $100 Cumulative Preferred Stock, and to fix the number of shares constituting any unissued series. The term “fixed for such series” and correlative terms shall be deemed to mean as stated in a resolution or resolutions adopted by the Board of Directors in exercise of the authority granted by this paragraph. The term “Board of Directors,” as used in this Article Sixth, shall be deemed to include any duly authorized and functioning committee of the Board of Directors of the corporation, to the extent such committee is permitted to exercise the powers of the Board of Directors under the California General Corporation Law. The number of shares of Cumulative Preferred Stock, 4.78% Series, heretofore fixed by the resolution of the Board of Directors set forth in the Certificate of Determination of Preferences of said 4.78% Series filed in the office of the Secretary of State of the State of California on February 10, 1958, is determined to be 1,296,769. The dividend rate, redemption price, and voluntary liquidation preferences of shares of said 4.78% Series shall be as heretofore fixed by the resolution of the Board of Directors set forth in said Certificate of Determination of Preferences. In addition to any other rights, preferences, privileges and restrictions that the Board of Directors may grant to or impose upon any wholly unissued series of Cumulative Preferred Stock or any wholly unissued series of $100 Cumulative Preferred Stock, all of the holders of shares of Cumulative Preferred Stock and $100 Cumulative Preferred Stock shall be subject to the following rights, preferences, privileges and restrictions:

(a)      Dividend Rights : The holders of the Cumulative Preferred Stock of each series and the holders of the $100 Cumulative Preferred Stock of each series, in preference to the holders of the Preference Stock and the Common Stock, shall be entitled to receive, when and as declared by the Board of Directors out of any funds legally available therefor, cash dividends at the rate fixed for such series, and no more, payable quarterly on such dates as may be determined by the Board of Directors with respect to the quarterly period (or, in the case of initial issuance of any shares of any series, with respect to the portion of such period) ending on each such respective payment date. Such dividends with respect to any particular shares of such stock shall be cumulative from the first day of the quarterly period in which such shares were issued or, in the case of initial issuance of any shares of any series, from the date of issuance thereof. No dividend shall be paid upon, or declared or set apart for, any share of Cumulative Preferred Stock or any share of $100 Cumulative Preferred Stock for any current dividend period if dividends on any series of Cumulative Preferred Stock or any series of $100 Cumulative Preferred Stock are accumulated and unpaid for any prior quarterly dividend period, or, in the case of payment of dividend arrearages on Cumulative Preferred Stock or on $100 Cumulative Preferred Stock, unless at the same time a like proportionate dividend for the

3




same or corresponding dividend period, ratably in proportion to the respective annual dividend rates fixed therefor, shall be paid upon, or declared and set apart for, all shares of Cumulative Preferred Stock and $100 Cumulative Preferred Stock of all series then issued and outstanding and entitled to receive such dividend.

In no event, so long as any shares of Cumulative Preferred Stock or $100 Cumulative Preferred Stock shall be outstanding, shall any dividend, whether in cash or property, be paid or declared, nor shall any distribution be made, on the Preference Stock or the Common Stock, nor shall any shares of Preference Stock or Common Stock be purchased, redeemed or otherwise acquired for value by the corporation, unless all dividends on the Cumulative Preferred Stock and the $100 Cumulative Preferred Stock of all series for all past quarterly dividend periods shall have been paid or declared and set apart. The foregoing provisions of this subparagraph shall not, however, apply to a dividend payable in Preference Stock or Common Stock or to the acquisition of any shares of Preference Stock or Common Stock in exchange for, or through application of the proceeds of the sale of, any shares of Preference Stock or Common Stock.

(b)     Liquidation Rights: In the event of any voluntary liquidation, dissolution or winding up of the affairs of the corporation, then, before any distribution or payment shall be made to the holders of the Preference Stock or the Common Stock, the holders of the Cumulative Preferred Stock and the holders of the $100 Cumulative Preferred Stock shall be entitled to be paid in full the liquidation preferences fixed by the Board of Directors for the respective series thereof, together with an amount equal to all accumulated and unpaid dividends thereon to and including the date fixed for such distribution or payment. In the event of any involuntary liquidation, dissolution or winding up of the affairs of the corporation, then, before any distribution or payment shall be made to the holders of the Preference Stock or the Common Stock, the holders of the Cumulative Preferred Stock shall be entitled to be paid the sum of twenty-five dollars ($25) per share, and the holders of the $100 Cumulative Preferred Stock shall be entitled to be paid the sum of one hundred dollars ($100) per share, together, in the case of each class, with an amount equal to all accumulated and unpaid dividends thereon to and including the date fixed for such distribution or payment. If, upon any liquidation, dissolution or winding up of the affairs of the corporation, the amounts so payable are not paid in full to the holders of all outstanding shares of Cumulative Preferred Stock and $100 Cumulative Preferred Stock the holders of all series of Cumulative Preferred Stock and all series of $100 Cumulative Preferred Stock shall share ratably in any distribution of assets to shares of such classes in proportion to the full amounts to which they would otherwise be respectively entitled.

(c)      Voting Rights: The Cumulative Preferred Stock, 4.32% Series, 4.08% Series, 4.24% Series and 4.78% Series, shall be entitled to voting rights on the basis of six votes per share. The Cumulative Preferred Stock and the $100 Cumulative Preferred Stock shall also, in addition to such voting rights as may be fixed for any series thereof, be entitled to the following voting rights:

(1)    So long as any shares of Cumulative Preferred Stock are outstanding, the consent of the holders of at least two-thirds of the Cumulative Preferred Stock at the time outstanding, 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:

4





(i)          any amendment of the Articles of Incorporation which would change any outstanding shares of Cumulative Preferred Stock in any one or more of the following respects: (1) to authorize the corporation to levy assessments thereon; (2) to reduce the dividend rate thereof; (3) to make noncumulative, in whole or in part, the dividends payable with respect thereto; (4) to reduce the redemption price thereof; (5) to reduce any amount payable thereon upon voluntary or involuntary liquidation; (6) to eliminate, diminish or alter adversely conversion rights pertaining thereto; (7) to diminish or eliminate voting rights pertaining thereto; (8) to rearrange the priority of outstanding shares of Cumulative Preferred Stock so as to make them subject to the preferences of other then outstanding shares as to distributions by way of dividends or otherwise; provided, however, that if such amendment changes in any of the foregoing respects one or more but not all series of Cumulative Preferred Stock at the time outstanding, only the consent of the holders of at least two-thirds of each series so affected shall be required;

(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 Cumulative Preferred Stock; or

(iii)      the consolidation or merger of the corporation; provided, however, that this restriction shall not apply to, nor shall it operate to prevent, a consolidation or merger of the corporation with a subsidiary of the corporation, if none of the voting powers, rights or preferences of the holders of the Cumulative Preferred Stock will be adversely affected thereby, and if none of the property or business theretofore owned or operated by the corporation will thereby become subject to the lien of any mortgage, deed of trust or other encumbrance of such subsidiary, and if the company resulting from or surviving such consolidation or merger will be authorized to carry on the business then being conducted by the corporation and will have authorized and outstanding, after such consolidation or merger, no stock of any class or other securities ranking senior to or on a parity with the Cumulative Preferred Stock, or securities convertible into any such stock or securities, except the same number of shares of stock and the same amount of other securities with the same voting powers, rights and preferences as the stock and securities of the corporation authorized and outstanding immediately preceding such consolidation or merger, and if each holder of Cumulative Preferred Stock at the time of such consolidation or merger will receive the same number of shares, with the same voting powers, rights and preferences, of the resulting or surviving company as he held of the Cumulative Preferred Stock; and provided, further, that in the event of the amendment of the applicable laws of the State of California so as to permit the consolidation or merger of the corporation upon the vote of the holders of less than two-thirds of the outstanding shares of each class of stock of the corporation, then the consent of the holders of only such lesser proportion of the Cumulative Preferred Stock at the time outstanding (but in no event of less than a majority thereof) shall be necessary for effecting or validating the consolidation or merger of the corporation;

provided, however, that no such consent of the holders of the Cumulative Preferred Stock 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


5




convertible security is to be made, or when such consolidation or merger is to take effect, as the case may be, provision is to be made as provided in the third paragraph of subparagraph (d) of this paragraph 2 for the redemption of all shares of Cumulative Preferred Stock at the time outstanding or, in the case of any such amendment as to which the consent of less than all series of the Cumulative Preferred Stock would otherwise be required, for the redemption of all shares of the series of Cumulative Preferred Stock the consent of which would otherwise be required.

(2)    So long as any shares of Cumulative Preferred Stock are outstanding, the consent of the holders of at least majority of the Cumulative Preferred Stock at the time outstanding, 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)        the increase in the authorized amount of the Cumulative Preferred Stock or the $100 Cumulative Preferred Stock or the authorization or creation, or the increase in the authorized amount, of any new class of stock ranking on a parity with the Cumulative Preferred Stock and the $100 Cumulative Preferred Stock or of any security convertible into Cumulative Preferred Stock or $100 Cumulative Preferred Stock or into stock of any class ranking on a parity with the Cumulative Preferred Stock and the $100 Cumulative Preferred Stock;

(ii)          the sale, lease or conveyance of all or substantially all of the property or business of the corporation, or the parting with control thereof; or

(iii)      the issue of any additional shares of Cumulative Preferred Stock or $100 Cumulative Preferred Stock (or the reissue of any shares of Cumulative Preferred Stock or $100 Cumulative Preferred Stock) or any shares of stock of any class ranking senior to or on a parity with the Cumulative Preferred Stock and the $100 Cumulative Preferred Stock, unless the consolidated income of the corporation and its subsidiaries (determined as hereinafter provided) for any thirty-six consecutive calendar months within the thirty-nine calendar months immediately preceding the month within which the issuance of such additional shares is authorized by the Board of Directors of the corporation shall have been in the aggregate not less than one and one-half times the sum of the interest requirements for three years on all of the funded indebtedness and other borrowings of the corporation and its subsidiaries to be outstanding at the date of such proposed issue and the full dividend requirements for three years on all shares of Cumulative Preferred Stock and $100 Cumulative Preferred Stock and all other stock, if any, ranking senior to or on a parity with the Cumulative Preferred Stock and the $100 Cumulative Preferred Stock to be outstanding at the date of such proposed issue, including the shares then proposed to be issued but excluding any such indebtedness and borrowings and any such shares proposed to be retired in connection with such issue. “Consolidated income” for any period for all purposes of this paragraph 2 shall be computed by adding to the consolidated net income of the corporation and its subsidiaries for said period (determined as hereinafter provided) the amount deducted for interest on funded indebtedness and other borrowings of the corporation and its subsidiaries in determining such consolidated net income. “Consolidated net income” for any period for all purposes of this paragraph 2 shall be as determined by independent certified public accountants of

6




national reputation selected by the corporation, and in determining such consolidated net income for any period, there shall be deducted, in addition to other items of expense, the amount charged to income for said period on the books of the corporation and its subsidiaries for taxes and the provisions for depreciation as recorded on such books or the minimum amount required therefor under the provisions of any then existing general indenture of mortgage or deed of trust of the corporation, whichever is larger; and the Board of Directors of the corporation may, in the exercise of their discretion, make adjustments by way of increase or decrease in such consolidated net income to give effect to changes therein resulting from any acquisition of properties or to any redemption, acquisition, purchase, sale or exchange of securities by the corporation or its subsidiaries either prior to the issuance of any shares of Cumulative Preferred Stock or $100 Cumulative Preferred Stock or stock ranking senior to or on a parity therewith then to be issued or in connection therewith. The term “subsidiary” shall mean, for all purposes of this paragraph 2, any company of which the corporation, directly or through another subsidiary, owns or controls a majority of the outstanding shares of stock entitling the holders thereof to elect a majority of the directors of such company, either at all times or so long as there is no default in the payment of dividends upon any stock having a preference or priority over such stock;

provided, however, that no such consent of the holders of the Cumulative Preferred Stock shall be required if, at or prior to the time when the increase in the authorized amount of the Cumulative Preferred Stock or the $100 Cumulative Preferred Stock or the authorization or creation or increase in the authorized amount of any such parity stock or any such convertible security, or any such sale, lease, conveyance, or parting with control, or the issue of any such additional shares of Cumulative Preferred Stock or $100 Cumulative Preferred Stock or any such senior or parity stock, as the case may be, is to be made, provision is to be made as provided in the third paragraph of subparagraph (d) of this paragraph 2 for the redemption of all shares of Cumulative Preferred Stock at the time outstanding.

(3)    So long as any shares of $100 Cumulative Preferred Stock are outstanding, the consent of the holders of at least two-thirds of the $100 Cumulative Preferred Stock at the time outstanding, 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 Articles of Incorporation which would change any outstanding shares of $100 Cumulative Preferred Stock in any one or more of the following respects: (1) to authorize the corporation to levy assessments thereon; (2) to reduce the dividend rate thereof; (3) to make noncumulative, in whole or in part, the dividends payable with respect thereto; (4) to reduce the redemption price thereof; (5) to reduce any amount payable thereon upon voluntary or involuntary liquidation; (6) to eliminate, diminish or alter adversely conversion rights pertaining thereto; (7) to diminish or eliminate voting rights pertaining thereto; (8) to rearrange the priority of outstanding shares of $100 Cumulative Preferred Stock so as to make them subject to the preferences of other then outstanding shares as to distributions by way of dividends or otherwise; provided, however, that if such amendment changes in any of the foregoing respects one or more but not all series of $100 Cumulative Preferred Stock at the time outstanding,


7




only the consent of the holders of at least two-thirds of each series so affected shall be required;

(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 $100 Cumulative Preferred Stock; or

(iii)      the consolidation or merger of the corporation; provided, however, that this restriction shall not apply to, nor shall it operate to prevent, a consolidation or merger of the corporation with a subsidiary of the corporation, if none of the voting powers, rights or preferences of the holders of the $100 Cumulative Preferred Stock will be adversely affected thereby, and if none of the property or business theretofore owned or operated by the corporation will thereby become subject to the lien of any mortgage, deed of trust or other encumbrance of such subsidiary, and if the company resulting from or surviving such consolidation or merger will be authorized to carry on the business then being conducted by the corporation and will have authorized and outstanding, after such consolidation or merger, no stock of any class or other securities ranking senior to or on a parity with the $100 Cumulative Preferred Stock, or securities convertible into any such stock or securities, except the same number of shares of stock and the same amount of other securities with the same voting powers, rights and preferences as the stock and securities of the corporation authorized and outstanding immediately preceding such consolidation or merger, and if each holder of $100 Cumulative Preferred Stock at the time of such consolidation or merger will receive the same number of shares, with the same voting powers, rights and preferences, of the resulting or surviving company as he held of the $100 Cumulative Preferred Stock; and provided further, that in the event of the amendment of the applicable laws of the State of California so as to permit the consolidation or merger of the corporation upon the vote of the holders of less than two-thirds of the outstanding shares of each class of stock of the corporation, then the consent of the holders of only such lesser proportion of the $100 Cumulative Preferred Stock at the time outstanding (but in no event of less than a majority thereof) shall be necessary for effecting or validating the consolidation or merger of the corporation;

provided, however, that no such consent of the holders of the $100 Cumulative Preferred Stock 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, or when such consolidation or merger is to take effect, as the case may be, provision is to be made as provided in the third paragraph of subparagraph (d) of this paragraph 2 for the redemption of all shares of $100 Cumulative Preferred Stock at the time outstanding or, in the case of any such amendment as to which the consent of less than all series of the $100 Cumulative Preferred Stock would otherwise be required, for the redemption of all shares of the series of $100 Cumulative Preferred Stock the consent of which would otherwise be required.

(4)      So long as any shares of $100 Cumulative Preferred Stock are outstanding, the consent of the holders of at least a majority of the $100 Cumulative Preferred Stock at the time outstanding, 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:

8





(i)      the increase in the authorized amount of the $100 Cumulative Preferred Stock or the Cumulative Preferred Stock or the authorization or creation, or the increase in the authorized amount, of any new class of stock ranking on a parity with the $100 Cumulative Preferred Stock and the Cumulative Preferred Stock or of any security convertible into $100 Cumulative Preferred Stock or Cumulative Preferred Stock or into stock of any class ranking on a parity with the $100 Cumulative Preferred Stock and the Cumulative Preferred Stock;

(ii)      the sale, lease or conveyance of all or substantially all of the property or business of the corporation, or the parting with control thereof; or

(iii)      the issue of any additional shares of $100 Cumulative Preferred Stock or Cumulative Preferred Stock (or the reissue of any shares of $100 Cumulative Preferred Stock or Cumulative Preferred Stock) or any shares of stock of any class ranking senior to or on a parity with the $100 Cumulative Preferred Stock and the Cumulative Preferred Stock, unless the consolidated income of the corporation and its subsidiaries (determined as provided in this paragraph 2) for any thirty-six consecutive calendar months within the thirty-nine calendar months immediately preceding the month within which the issuance of such additional shares is authorized by the Board of Directors of the corporation shall have been in the aggregate not less than one and one-half times the sum of the interest requirements for three years on all of the funded indebtedness and other borrowings of the corporation and its subsidiaries to be outstanding at the date of such proposed issue and the full dividend requirements for three years on all shares of $100 Cumulative Preferred Stock and Cumulative Preferred Stock and all other stock, if any, ranking senior to or on a parity with the $100 Cumulative Preferred Stock and the Cumulative Preferred Stock to be outstanding at the date of such proposed issue, including the shares then proposed to be issued but excluding any such indebtedness and borrowings and any such shares proposed to be retired in connection with such issue;

provided, however, that no such consent of the holders of the $100 Cumulative Preferred Stock shall be required if, at or prior to the time when the increase in the authorized amount of the $100 Cumulative Preferred Stock or the Cumulative Preferred Stock or the authorization or creation or increase in the authorized amount of any such parity stock or any such convertible security, or any such sale, lease, conveyance, or parting with control, or the issue of any such additional shares of $100 Cumulative Preferred Stock or Cumulative Preferred Stock or any such senior or parity stock, as the case may be, is to be made, provision is to be made as provided in the third paragraph of subparagraph (d) of this paragraph 2 for the redemption of all shares of $100 Cumulative Preferred Stock at the time outstanding.

(d)     Redemption: Except as otherwise provided in subparagraph (e) of this paragraph 2, the Cumulative Preferred Stock or the $100 Cumulative Preferred Stock of any series may be redeemed, as a whole or in part, at the option of the corporation, by vote of its Board of Directors, at any time or from time to time (subject to any special provisions affecting or limitations on such right to redeem which may be fixed with respect to any particular series of Cumulative Preferred Stock or $100 Cumulative Preferred Stock), at the applicable redemption price fixed for


9




such series which shall include an amount equal to all accumulated and unpaid dividends thereon to and including the date of redemption. If less than all the outstanding shares of Cumulative Preferred Stock or $100 Cumulative Preferred Stock of any series first issued prior to August 14, 1973, are to be redeemed, the shares to be redeemed shall be determined prior to the time of each such partial redemption by lot in such manner as the Board of Directors may prescribe. If less than all the outstanding shares of the Cumulative Preferred Stock or $100 Cumulative Preferred Stock of any series first issued on or subsequent to August 14, 1973, are to be redeemed, the shares to be redeemed shall be determined prior to the time of each such partial redemption either by lot in such manner as the Board of Directors may prescribe or, in the alternative at the discretion of the Board of Directors, pro rata to the nearest whole share.

Notice of every redemption of Cumulative Preferred Stock or $100 Cumulative Preferred Stock shall be given by the corporation by causing a notice thereof to be published in a newspaper printed in the English language and published and of general circulation in the City of Los Angeles, California, and in one such newspaper published and of general circulation in the Borough of Manhattan, the City of New York, New York, in each instance at least once a week for two (2) successive weeks and in each instance on any day of the week, commencing not earlier than sixty (60) nor later than thirty (30) days before the date fixed for redemption. It shall be the duty of the corporation to mail a copy of such notice, postage prepaid, to each holder of record of the shares to be redeemed as of the record date, addressed to such holder at his address appearing on the books of the corporation, not earlier than sixty (60) nor later than thirty (30) days before the date fixed for redemption, but the failure to mail such notice as aforesaid shall not invalidate the redemption of such shares. The publication of notice in accordance with the foregoing procedure may be dispensed with in the discretion of the Board of Directors in any case where it determines that the outstanding shares of any series of Cumulative Preferred Stock or $100 Cumulative Preferred Stock are held by no more than ten (10) holders of record, but in any such case, the copy of such notice of redemption specified above shall be delivered by messenger or mailed by registered or certified mail to the address and within the times specified above.

If the corporation shall deposit on or prior to any date fixed for redemption of Cumulative Preferred Stock or $100 Cumulative Preferred Stock, 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, a fund sufficient to redeem the shares called for redemption, with irrevocable instructions and authority to such bank or trust company to publish the notice of redemption thereof (or to complete such publication if theretofore commenced) and to pay on and after the date fixed for redemption or such earlier date as the Board of Directors may determine, to the respective holders of such shares, the redemption price thereof upon the surrender of their share certificates, then from and after the date of such deposit (although prior to the date fixed for redemption) such shares so called shall be deemed to be redeemed and dividends thereon shall cease to accrue after said date fixed for redemption and such deposit shall be deemed to constitute full payment of said shares to the holders thereof and thereafter said shares shall no longer be deemed to be outstanding, and the holders thereof shall cease to be shareholders with respect to such 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 shares without interest, upon surrender of their certificates therefor, and the right to exercise, on or before the date fixed for redemption, any right to convert or exchange said shares which may then exist.

Any moneys deposited by the corporation pursuant to this subparagraph (d) 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. Any other moneys


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deposited by the corporation pursuant to this subparagraph (d) and unclaimed at the end of six years from the date fixed for redemption shall be repaid to the corporation upon its request expressed in a resolution of its Board of Directors.

(e)      Miscellaneous: If at any time dividends on any of the outstanding shares of Cumulative Preferred Stock or $100 Cumulative Preferred Stock, or on any shares of stock of any class ranking on a parity with the Cumulative Preferred Stock and the $100 Cumulative Preferred Stock, shall be in default, thereafter and until all arrears in payment of quarterly dividends on the Cumulative Preferred Stock and the $100 Cumulative Preferred Stock have been paid, or deposited with any bank or trust company having a capital, surplus and undivided profits aggregating at least five million dollars ($5,000,000) in trust for payment on or before the next succeeding dividend payment date, the corporation shall not redeem less than all of the Cumulative Preferred Stock and the $100 Cumulative Preferred Stock at the time outstanding and shall not purchase or otherwise acquire for value any Cumulative Preferred Stock or $100 Cumulative Preferred Stock except in accordance with offers made to all holders of Cumulative Preferred Stock and $100 Cumulative Preferred Stock, which offers shall bear a reasonably proportional relationship to the par values and market prices per share of the respective classes.

Except when required by law and except as otherwise provided in this Article, or as may be fixed with respect to any particular series, whenever shares of two or more series of the Cumulative Preferred Stock are outstanding, no particular series of the Cumulative Preferred Stock of all series shall be entitled to vote or consent as a separate series on any matter and all shares of Cumulative Preferred Stock of all series shall be deemed to constitute but one class for any purpose for which a vote or consent of the shareholders by classes may now or hereafter be required.

Except when required by law and except as otherwise provided in this Article, or as may be fixed with respect to any particular series, whenever shares of two or more series of the $100 Cumulative Preferred Stock are outstanding, no particular series of the $100 Cumulative Preferred Stock of all series shall be entitled to vote or consent as a separate series on any matter and all shares of $100 Cumulative Preferred Stock of all series shall be deemed to constitute but one class for any purpose for which a vote or consent of the shareholders by classes may now or hereafter be required.

Any shares of Cumulative Preferred Stock or $100 Cumulative Preferred Stock which are converted, redeemed or retired shall thereafter have the status of authorized but unissued shares of Cumulative Preferred Stock or $100 Cumulative Preferred Stock, as the case may be, of the corporation, and may thereafter be reissued by the Board of Directors in the same manner as any other authorized and unissued shares of Cumulative Preferred Stock or $100 Cumulative Preferred Stock.

Neither the consolidation or merger of the corporation nor the sale or transfer of all or a part of its assets nor the expropriation, condemnation or seizure of all or a part of its assets by any governmental body or authority shall be deemed a liquidation, dissolution or winding up of the affairs of the corporation within the meaning of this paragraph 2.

3.      PREFERENCE STOCK. Shares of the Preference Stock may be issued from time to time in one or more series. To the extent not prohibited by law, the Board of Directors is authorized (i) to 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


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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. Whenever in this paragraph 3 the Board of Directors is authorized to “fix,” “determine,” “alter,” “increase” or “decrease” the number of shares, designation, rights, preferences, privileges or restrictions of any series of the Preference Stock, the Board of Directors (including any committee thereof) shall take such action by resolution, but such resolution may specify any of the foregoing matters by reference to indexes, formulas, conversion rates or other objectively ascertainable criteria.

4.      COMMON STOCK: Subject to the preferential rights above provided in this Article, or granted pursuant to this Article, with respect to the Cumulative Preferred Stock, the $100 Cumulative Preferred Stock and the Preference Stock, the Common Stock and/or the holders thereof shall have the following dividend rights, liquidation rights and voting rights:

(a)      Dividend Rights: The holders of the Common Stock shall be entitled to dividends when and as declared by the Board of Directors out of any funds legally available therefor, in such amounts and at such times as the Board of Directors may from time to time determine.

(b)      Liquidation Rights: In the event of any liquidation, dissolution or winding up, whether voluntary or involuntary, of the corporation, the remaining assets and funds of the corporation shall be distributed ratably to the holders of the Common Stock.

(c)      Voting Rights: The Common Stock shall be entitled to voting rights on the basis of one vote per share.

Seventh: BUSINESS COMBINATIONS:

1.      In addition to any affirmative vote required by law or these Articles of Incorporation, and except as otherwise expressly provided in paragraph 2 of this Article Seventh, none of the following transactions shall be consummated unless and until such transaction shall have been approved by the affirmative vote of the holders of at least eighty percent (80%) of the voting power of the then outstanding shares of stock of the corporation entitled to vote generally in the election of directors (the “Voting Stock”), voting together as a single class (it being understood that for purposes of this Article Seventh, each share of the Voting Stock shall have the number of votes granted to it pursuant to Article Sixth of these Articles of Incorporation):

(a)      any merger or consolidation of the corporation or any Subsidiary (as hereinafter defined) with (i) any Interested Shareholder (as hereinafter defined) or (ii) any other corporation (whether or not itself an Interested Shareholder) which is, or after such merger or consolidation would be, an Affiliate (as hereinafter defined) of an Interested Shareholder; or

(b)      any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of related transactions) to or with any Interested Shareholder or any Affiliate of any Interested Shareholder of any assets of the corporation or any Subsidiary having an aggregate


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Fair Market Value (as hereinafter defined) of more than ten percent (10%) of the total book value of the assets of the corporation and its consolidated subsidiaries as shown on the most recently available quarterly consolidated balance sheet of the corporation; or

(c)      the issuance or transfer by the corporation or any Subsidiary (in one transaction or a series of related transactions) of any securities of the corporation or any Subsidiary to any Interested Shareholder or any Affiliate of any Interested Shareholder having an aggregate Fair Market Value (as hereinafter defined) of more than ten percent (10%) of the total book value of the assets of the corporation and its consolidated subsidiaries as shown on the most recently available quarterly consolidated balance sheet of the corporation; or

(d)      the adoption of any plan or proposal for the spin-off, split-off or split-up of the corporation or any material Subsidiary proposed by or on behalf of an Interested Shareholder or any Affiliate of any Interested Shareholder; or

(e)      any reclassification of any securities of the corporation (including any reverse stock split), any recapitalization of the capital stock of the corporation, any merger or consolidation of the corporation with or into any of its Subsidiaries, or any other transaction (whether or not with or involving any Interested Shareholder), which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of stock or series thereof of the corporation or of any Subsidiary directly or indirectly Beneficially Owned (as hereinafter defined) by any Interested Shareholder or as a result of which the shareholders of the corporation would cease to be shareholders of a corporation incorporated under the laws of the State of California having, as parts of its articles of incorporation, provisions to the same effect as this Article Seventh; or

(f)      any agreement, contract or other arrangement providing for any of the transactions described in the foregoing paragraphs (a) through (e).

The term “Business Combination” as used in this Article Seventh shall mean any transaction or proposed transaction which is referred to in any one or more of the foregoing subparagraphs (a) through (f) of this paragraph 1.

2.      The provisions of paragraph 1 of this Article Seventh shall not be applicable to any particular Business Combination, and such Business Combination shall require only such affirmative vote of shareholders, if any, as is required by law and any other provision of any Article hereof, if such Business
Combination has been approved by at least a majority of the Disinterested Directors (as hereinafter defined) at the time or if all the conditions specified in the following subparagraphs (a), (b), (c), (d), (e) and (f) are satisfied:

(a)      The aggregate amount of the cash and the Fair Market Value as of the date of the consummation of the Business Combination of any consideration other than cash to be received per share by holders of Common Stock in such Business Combination shall be at least equal to the higher of the following:

(1)      (if applicable) the Highest Per Share Price (as hereinafter defined) paid in order to acquire any shares of Common Stock beneficially owned by the Interested Shareholder which were acquired beneficially by such Interested Shareholder (x) within the two-year period immediately prior to the first public announcement of the proposal of the

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Business Combination (the “Announcement Date”) or (y) in the transaction in which it became an Interested Shareholder, whichever is higher; and

(2)      the Fair Market Value per share of Common Stock on the Announcement Date or on the date on which the Interested Shareholder became an Interested Shareholder (such later date is referred to in this Article Seventh as the “Determination Date”), whichever is higher.

(b)      The aggregate amount of the cash and the Fair Market Value as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by holders of shares of any class or series of outstanding Voting Stock other than the Common Stock shall be at least equal to the highest of the following (it being intended that the requirements of this subparagraph (b) shall be required to be met with respect to every such class or series of outstanding Voting Stock, whether or not the Interested Shareholder beneficially owns any shares of a particular class or series of Voting Stock):

(1)      (if applicable) the Highest Per Share Price (as hereinafter defined) paid in order to acquire any shares of such class or series of Voting Stock beneficially owned by the Interested Shareholder which were acquired beneficially by such Interested Shareholder (x) within the two-year period immediately prior to the Announcement Date or (y) in the transaction in which it became an Interested Shareholder, whichever is higher; and

(2)      (if applicable) the highest preferential amount per share to which the holders of shares of such class or series of Voting Stock are entitled in the event of any voluntary or involuntary liquidation, dissolution or winding up of the corporation; and

(3)      the Fair Market Value per share of such class or series of Voting Stock on the Announcement Date or on the Determination Date, whichever is higher.

(c)      The consideration to be received by holders of a particular class or series of outstanding Voting Stock (including Common Stock) shall be in cash or in the same form as the Interested Shareholder has previously paid in order to acquire beneficially shares of such class or series of Voting Stock that are beneficially owned by the Interested Shareholder and, if the Interested Shareholder beneficially owns shares of any class or series of Voting Stock that were acquired with varying forms of consideration, the form of consideration to be received by holders of such class or series of Voting Stock shall be either cash or the form used to acquire beneficially the largest number of shares of such class or series of Voting Stock beneficially acquired by it prior to the Announcement Date. The price determined in accordance with paragraphs 2(a) and 2(b) shall be subject to appropriate adjustment in the event of any stock dividend, stock split, combination of shares or similar event.

(d)      After such Interested Shareholder has become an Interested Shareholder and prior to the consummation of such Business Combination: (i) except as approved by at least a majority of the Disinterested Directors, there shall have been no failure to declare and pay at the regular dates therefor the full amount of any dividends (whether or not cumulative) payable on any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation; (ii) there shall have been (x) no reduction in the annual rate of dividends paid on the Common Stock (except as necessary to reflect any subdivision of the Common Stock), except as approved by at least a majority of the Disinterested Directors, and (y) an increase in such annual rate of dividends (as necessary to prevent any such reduction) in the event of any reclassification (including any reverse


14




stock split), recapitalization, reorganization or any similar transaction which has the effect of reducing the number of outstanding shares of the Common Stock, unless the failure to increase such annual rate was approved by at least a majority of the Disinterested Directors; and (iii) such Interested Shareholder shall have not become the beneficial owner of any additional shares of Voting Stock except as part of the transaction which results in such Interested Shareholder becoming an Interested Shareholder or as a result of a pro rata stock dividend or stock split.

(e)      After such Interested Shareholder has become an Interested Shareholder, such Interested Shareholder shall not have received the benefit, directly or indirectly (except proportionally as a shareholder), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the corporation, whether in anticipation of or in connection with such Business Combination or otherwise.

(f)      A proxy or information statement describing the proposed Business Combination and complying with the requirements of the Securities Exchange Act of 1934 and the rules and regulations thereunder (or any subsequent provisions replacing such Act, rules or regulations) shall be mailed to public shareholders of the Corporation at least 30 days prior to the consummation of such Business Combination (whether or not such proxy or information statement is required to be mailed pursuant to such Act or subsequent provisions).

3.    For the purposes of this Article Seventh:

(a)          A “person” shall mean any individual, firm, corporation or other entity.

(b)          “Interested Shareholder” shall mean any person or group (other than this
corporation or any Subsidiary or any compensation plan or any benefit plan of this corporation or any Subsidiary or any trustee of, or fiduciary with respect to, any such plan when acting in such capacity, or any corporation formed pursuant to a resolution of the Board of Directors of this corporation which was approved by at least a majority of the Disinterested Directors as defined hereinafter) who or which:

(1)        is the Beneficial Owner, directly or indirectly, of more than ten percent (10%) of the voting power of the outstanding Voting Stock;

(2)          is an Affiliate of the corporation and at any time within the two-year period immediately prior to the date in question was the Beneficial Owner, directly or indirectly, of ten percent (10%) or more of the voting power of the then outstanding Voting Stock; or

(3)          is an assignee of or has otherwise succeeded to any shares of Voting Stock representing more than one percent (1%) of the voting power of the outstanding Voting Stock, which shares were at any time within the two-year period immediately prior to the date in question beneficially owned by any Interested Shareholder, if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933.

(c)          A person shall be a “Beneficial Owner” of any Voting Stock:

(1)          which such person or any of its Affiliates or Associates (as hereinafter defined) beneficially owns, directly or indirectly; or



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(2)          which such person or any of its Affiliates or Associates has (i) the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or otherwise, or (ii) the right to vote or direct the vote pursuant to any agreement, arrangement or understanding; or

(3)          which are beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purposes of acquiring, holding, voting or disposing of any shares of Voting Stock.

(d)        For the purposes of determining whether a person is an Interested Shareholder pursuant to subparagraph (b) of paragraph 3 of this Article Seventh, the number of shares of Voting Stock deemed to be outstanding shall include shares deemed owned through application of subparagraph (c) of paragraph 3 of this Article Seventh but shall not include any other shares of Voting Stock which may be issuable pursuant to any agreement, arrangement or understanding or upon exercise of conversion rights, warrants or options, or otherwise.

(e)        The term “Affiliate,” used to indicate a relationship to a specified person, means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified person.

(f)          The term “Associate,” used to indicate a relationship with a specified person, means (i) any corporation, partnership or other organization of which such specified person is an officer or partner (ii) any trust or other estate in which such specified person has a substantial beneficial interest or as to which such specified person serves as trustee or in a similar fiduciary capacity, (iii) any relative or spouse of such specified person, or any relative of such spouse, who has the same home as such specified person or who is a director or officer of the Corporation or any of its parents or subsidiaries and (iv) any person who is a director, officer or partner of such specified person or of any corporation (other than the corporation or any wholly-owned Subsidiary of the corporation), partnership or other entity which is an Affiliate of such specified person.

(g)          “Subsidiary” means any corporation of which a majority of any class of equity security is owned, directly or indirectly, by the corporation or by a Subsidiary of the corporation or by the corporation and one or more Subsidiaries; provided, however, that for the purposes of the definition of Interested Shareholder set forth in paragraph (b) of paragraph 3 of this Article Seventh the term “Subsidiary” shall mean only a corporation of which a majority of each class of equity security is owned, directly or indirectly, by the corporation.

(h)          “Disinterested Director” means any member of the Board of Directors of the corporation who was a member of the Board of Directors of the corporation on April 16, 1987, or who became a member of the Board of Directors of the corporation subsequent to that time and who is unaffiliated with, and not a nominee or representative of, an Interested Shareholder and who is recommended to succeed a Disinterested Director by at least a majority of Disinterested Directors then on the Board of Directors. Any reference to “Disinterested Directors” shall refer to a single Disinterested Director if there be but one. Any reference under this Article Seventh to an approval, designation or determination by “a majority of the Disinterested Directors” of the Board of Directors shall mean such approval, designation or determination by not less than a majority of the Disinterested Directors then serving on the Board of Directors.


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(i)      “Fair Market Value” means: (i) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the Composite Tape, for New York Stock Exchange-Listed Stocks, or, if such stock is not quoted on the Composite Tape on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Securities Exchange Act of 1934 on which such stock is listed, or, if such stock is not listed on any such exchange, the highest closing sales price or bid quotation with respect to a share of such stock during the 30-day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotations Systems or any system then in use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined by at least a majority of the Disinterested Directors in good faith, in each case with respect to any class of stock, appropriately adjusted for any dividend or distribution in shares of such stock or any stock split or reclassification of outstanding shares of such stock into a greater number of shares of such stock or any combination or reclassification of outstanding shares of such stock into a smaller number of shares of such stock; and (ii) in the case of stock of any class or series which is not traded on any United States registered securities exchange nor in the over-the-counter market or in the case of property other than cash or stock, the fair market value of such property on the date in question as determined by at least a majority of the Disinterested Directors in good faith; and such determination by the Disinterested Directors shall be conclusive and binding for all purposes of this Article Seventh.

(j)      References to “Highest Per Share Price” with respect to any class of stock, means the highest amount of consideration paid for a share of such stock (including, without limitation, any brokerage commissions, transfer taxes and soliciting dealers' fees) and shall reflect an appropriate adjustment for any dividend or distribution in shares of such stock or any stock split or reclassification of outstanding shares of such stock into a greater number of shares of such stock or any combination or reclassification of outstanding shares of such stock into a smaller number of shares of such stock.

(k)      In the event of any Business Combination in which the corporation survives, the phrase “consideration other than cash to be received” as used in subparagraphs (a) and (b) of paragraph 2 of this Articles Seventh shall include the shares of Common Stock and/or the shares of any other class of outstanding Voting Stock retained by the holders of such shares.

4.      At least a majority of the Disinterested Directors of the corporation shall have the power and duty to make a good faith determination, on the basis of information known to them, of all facts necessary to determine compliance with this Article Seventh, including without limitation:

(a)      whether a person is an Interested Shareholder;

(b)      the number of shares of Voting Stock beneficially owned by any person;

(c)      whether a person is an Affiliate or Associate of another;

(d)      whether the assets which are the subject of any Business Combination, or the securities issued or transferred by the corporation or any Subsidiary in any Business Combination, have an aggregate Fair Market Value of more than ten percent (10%) of the total book value of the assets of the corporation and its consolidated subsidiaries as shown on the most recently available quarterly consolidated balance sheet of the corporation; and

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(e)      whether the requirements of paragraph 2 of this Article Seventh have been met.

Such determination by a majority of the Disinterested Directors shall be conclusive and binding for all purposes of this Article Seventh.

5.      Nothing contained in this Article Seventh shall be construed to relieve any Interested
Shareholder from any fiduciary obligation imposed by law.

6.      The fact that a Business Combination complies with the provisions of Section 2 of this Article Seventh shall not be construed to impose any fiduciary duty, obligation or responsibility on the Board of Directors, or any member thereof, to approve such Business Combination or recommend its adoption or approval to the shareholders of the corporation.

7.      In addition to any affirmative vote required by law of these Articles of Incorporation, a proposal that the provisions of this Article Seventh be altered, amended or repealed in any respect, or any provision inconsistent therewith be adopted, shall require either (i) the affirmative vote of the holders of at least eighty percent (80%) of the voting power of the then outstanding Voting Stock voting together as a single class or (ii) approval by at least a majority of the Disinterested Directors and the affirmative vote of the holders of at least fifty percent (50%) of the voting power of the then outstanding Voting Stock together as a single class.

Eighth: LIMITATION ON LIABILITY OF DIRECTORS AND AUTHORITY TO INDEMNIFY AGENTS:

1.      The liability of directors of the corporation for monetary damages shall be eliminated to the fullest extent permissible under California law.

2.      The corporation is authorized to provide indemnification of agents (as defined in
Section 317 of the California Corporations Code) through bylaw provisions, agreements with agents, vote of shareholders or disinterested directors, or otherwise, in excess of the indemnification otherwise permitted by Section 317 of the California Corporations Code, subject only to the applicable limits set forth in
Section 204 of the California Corporations Code.

Ninth: CERTIFICATE OF DETERMINATION OF PREFERENCES OF THE CUMULATIVE PREFERRED STOCK, 4.32% SERIES: The Certificate of Determination of Preferences of the Cumulative Preferred Stock, 4.32% Series, which is attached hereto as Exhibit A is hereby incorporated by reference as Article Ninth of these Articles of Incorporation.

Tenth: CERTIFICATE OF DETERMINATION OF PREFERENCES OF THE CUMULATIVE PREFERRED STOCK, 4.08% SERIES: The Certificate of Determination of Preferences of the Cumulative Preferred Stock, 4.08% Series, which is attached hereto as Exhibit B is hereby incorporated by reference as Article Tenth of these Articles of Incorporation.

Eleventh: CERTIFICATE OF DETERMINATION OF PREFERENCES OF THE CUMULATIVE PREFERRED STOCK, 4.24% SERIES: The Certificate of Determination of Preferences of the Cumulative Preferred, 4.24% Series, which is attached hereto as Exhibit C is hereby incorporated by reference as Article Eleventh of these Articles of Incorporation.


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Twelfth: CERTIFICATE OF DETERMINATION OF PREFERENCES OF THE CUMULATIVE PREFERRED STOCK, 4.78% SERIES: The Certificate of Determination of Preferences of the Cumulative Preferred Stock, 4.78% Series, which is attached hereto as Exhibit D is hereby incorporated by reference as Article Twelfth of these Articles of Incorporation.

Thirteenth: CERTIFICATE OF DETERMINATION OF PREFERENCES OF THE SERIES A PREFERENCE STOCK: The Certificate of Determination of Preferences of the Series A Preference Stock, which is attached hereto as Exhibit E is hereby incorporated by reference as Article Thirteenth of these Articles of Incorporation.

Fourteenth: CERTIFICATE OF DETERMINATION OF PREFERENCES OF THE SERIES B PREFERENCE STOCK: The Certificate of Determination of Preferences of the Series B Preference Stock, which is attached hereto as Exhibit F is hereby incorporated by reference as Article Fourteenth of these Articles of Incorporation.

Fifteenth: CERTIFICATE OF DETERMINATION OF PREFERENCES OF THE SERIES C PREFERENCE STOCK: The Certificate of Determination of Preferences of the Series C Preference Stock, which is attached hereto as Exhibit G is hereby incorporated by reference as Article Fifteenth of these Articles of Incorporation.”

This Certificate of Restated Articles of Incorporation does not itself alter or amend the Articles of Incorporation of Southern California Edison Company in any respect; provided however, that all of the shares of $100 Cumulative Preferred Stock, 7.23% Series and 6.05% Series, have been reacquired and, pursuant to California Corporations Code Section 510, references to such series have been deleted. The Board of Directors of Southern California Edison Company has approved this Certificate of Restated Articles of Incorporation.

IN WITNESS WHEREOF, the undersigned have executed this certificate on this 1st day of March, 2006

 
 
Robert C. Boada
 
 
Vice President and Treasurer
 
 
of Southern California Edison Company
 
 
 
 
 
Barbara E. Mathews
 
 
Vice President, Associate General Counsel. Chief
 
 
Governance Officer and Corporate Secretary of
 
 
Southern California Edison Company


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DECLARATION

The undersigned ROBERT C. BOADA and BARBARA E. MATHEWS, the Vice President and Treasurer, and Vice President, Associate General Counsel, Chief Governance Officer and Corporate Secretary, respectively, of Southern California Edison Company, each declares under penalty of perjury under the laws of the State of California that the matters set forth in the foregoing certificate are true and correct of his own knowledge.

Executed at Rosemead, California on this 1st day of March, 2006.

 
 
Robert C. Boada
 
 
Vice President and Treasurer
 
 
of Southern California Edison Company
 
 
 
 
 
Barbara E. Mathews
 
 
Vice President, Associate General Counsel. Chief
 
 
Governance Officer and Corporate Secretary of
 
 
Southern California Edison Company



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EXHIBIT A

SOUTHERN CALIFORNIA EDISON COMPANY

Certificate of Determination of Preferences of the
Cumulative Preferred Stock, 4.32% Series

We, the undersigned, being the President and the Secretary, respectively, of Southern California Edison Company (hereinafter called 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 Articles of Incorporation of the corporation, as amended, authorize the issue of 6,000,000 shares of Cumulative Preferred Stock: which may be issued from time to time in one or more series, and authorize the Board of Directors, within the limitations and restrictions stated therein, to fix or alter, from time to time, the dividend rate, conversion rights, voting rights (in addition to the voting rights provided in such Articles), redemption price and/or the liquidation preferences of any wholly unissued series of Cumulative Preferred Stock, and to fix the number of shares constituting any unissued series.

Second: The Board of Directors of the corporation at a meeting duly called and held on May 6, 1947, in the City of Los Angeles, California, at which meeting a quorum was present and acting throughout, did duly adopt the following resolutions authorizing and providing for the creation of a series of said Cumulative Preferred Stock to be known as Cumulative Preferred Stock: 4.32% Series:

“Resolved, that 1,653,429 shares of the presently authorized but unissued Cumulative Preferred Stock of the par value of twenty-five dollars ($25) each of the corporation, be and hereby are determined to be and shall be of a series of said Cumulative Preferred Stock hereby designated as the Cumulative Preferred Stock, 4.32% Series; and further

Resolved, that the dividend rate, redemption price and voluntary liquidation preferences of shares of such series be and the same are hereby fixed, respectively, as follows:

(A) The dividend rate of such series shall be four and thirty-two one-hundredths per centum (4.32%) per annum of the par value of the shares thereof. Dividends on such series, when and as declared, shall be payable quarterly on March 31, June 30, September 30 and December 31.

(B) The redemption price from time to time of such series shall be: twenty-nine and 50/100 dollars ($29.50) per share if redeemed on or before May 31, 1952; twenty-nine and 25/100 dollars ($29.25) per share if redeemed thereafter and on or before May 31, 1957; twenty-nine and 00/100 dollars ($29.00) per share if redeemed thereafter and on or before May 31, 1962; and twenty-eight and 75/100 dollars ($28.75) per share if redeemed thereafter; together, in each case, with an amount equal to all accumulated and unpaid dividends to and including the date of redemption.

(C) The liquidation preferences payable with respect to such series in the event of voluntary, liquidation, dissolution or winding up of the affairs of the corporation shall be the same as the redemption price for shares of such series current on the date of the commencement of the proceedings for such voluntary liquidation, dissolution or winding up, including an amount equal to all accumulated and unpaid





dividends thereon to and including the date of distribution or payment.”

IN WITNESS WHEREOF this certificate is made under the seal of said Southern California Edison Company and signed by, W. C. Mullendore, its President. and O. V. Showers, its Secretary, this 6th day of May, 1947.

W. C. MULLENDORE
-------------------------------
(W. C. Mullendore)
President of Southern California
Edison Company.




O. V. SHOWERS
-------------------------------
(O. V. Showers)
Secretary of Southern California
Edison Company.


STATE OF CALIFORNIA      )
) ss: COUNTY OF LOS ANGELES          )


On this 6th day of May, 1947, before me, Barbara Rowe, a Notary Public in and for said County and State, residing therein, duly commissioned and sworn, personally appeared W. C. MULLENDORE, known to me to be the President and O. V. SHOWERS, known to me to be the Secretary, of SOUTHERN CALIFORNIA EDISON COMPANY, the corporation referred to in the foregoing certificate, and known to me to be the persons who executed said certificate as such officers, respectively, and acknowledged to me that they executed the same.

WITNESS my hand and official seal.



BARBARA ROWE
---------------------------------
Notary Public in and for said
County and State.
My Commission Expires June 5, 1950.





EXHIBIT B

SOUTHERN CALIFORNIA EDISON COMPANY

Certificate of Determination of Preferences of the
Cumulative Preferred Stock, 4.08% Series

We, the undersigned, being the President and the Secretary, respectively, of Southern California Edison Company (hereinafter called 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 Articles of Incorporation of the corporation, as amended, authorize the issue of 6,000,000 shares of Cumulative Preferred Stock which may be issued from time to time in one or more series, and authorize the Board of Directors, within the limitations and restrictions stated therein, to fix or alter, from time to time, the dividend rate, conversion rights, voting rights (in addition to the voting rights provided in such Articles), redemption price and/or the liquidation preferences of any wholly unissued series of Cumulative Preferred Stock, and to fix the number of shares constituting any unissued series.

SECOND: The Board of Directors of the corporation at a meeting duly called and held an May 16,
1950, in the City of Los Angeles, California, at which meeting a quorum was present and acting throughout, did duly adopt the following resolutions authorizing and providing for the creation of a series of said Cumulative Preferred Stock to be known as Cumulative Preferred Stock, 4.08% Series, consisting of 1,000,000 shares, none of the shares of such series having been issued:

“RESOLVED, that 1,000,000 shares of the presently authorized but unissued Cumulative Preferred Stock of the par value of twenty-five dollars ($25) each of this corporation be and are hereby determined to be and shall be of a series of said Cumulative Preferred Stock hereby designated as the Cumulative Preferred Stock, 4.08% Series; and

“RESOLVED FURTHER, that the dividend rate, redemption price and voluntary liquidation preferences of shares of such series be and the same are hereby fixed, respectively, as follows:

(A) The dividend rate of such series shall be four and 8/100 per centum (4.08%) per annum of the
par value of the shares thereof. Dividends on such series when and as declared shall be payable quarterly on the last days of February, May, August, and November, respectively,

(B) The redemption price from time to time of such series shall be: $26.25 per share if redeemed on or before May 31, 1955; $26.00 per share if redeemed thereafter and on or before May 31, 1960; $25.75 per share if redeemed thereafter and on or before May 31, 1965; and $25.50 per share if redeemed thereafter; together, in each case, with an amount equal to all accumulated and unpaid dividends to and including the date of redemption.

(C) The liquidation preferences payable with respect to shares of such series in the event of voluntary liquidation, dissolution or winding up of the affairs of this corporation shall be the same as the redemption price for shares of such series current on the date of the commencement of the proceedings for





such voluntary liquidation, dissolution or winding up, including an amount equal to all accumulated and unpaid dividends thereon to and including the date of distribution or payment.”

IN WITNESS WHEREOF this certificate is made under the seal of said Southern California Edison
Company and signed W. C. Mullendore, its President, and T. J. Gamble, its Secretary, this 16th day of May,
1950.

W. C. MULLENDORE
-------------------------------
(W. C. Mullendore)
President of Southern California
Edison Company

(CORPORATE SEAL)

T. J. GAMBLE
-------------------------------
(T. J. Gamble)
Secretary, of Southern California
Edison Company


STATE OF CALIFORNIA      )
)ss. COUNTY OF LOS ANGELES          )

W. C Mullendore and T. J. Gamble, being first duly sworn, each for himself deposes and says:

That W. C. Mullendore is and was at all of the times mentioned in the foregoing Certificate, the
President of Southern California Edison Company, the California corporation therein mentioned, and T. J. Gamble is, and was at all of said times, the Secretary of said corporation; that each has read said Certificate and that the matters set forth therein are true of his own knowledge, and that the signatures purporting to be the signatures of said President and Secretary thereto are the genuine signatures of said President and Secretary, respectively.

W. C. MULLENDORE
---------------------------------
(W. C. Mullendore)


T. J. GAMBLE
---------------------------------
(T. J. Gamble)

Subscribed and sworn to before me this 16th day of May, 1950.






BARBARA ROWE
------------------------------------
Notary Public in and for the County of Los Angeles, State of California.

(NOTARIAL SEAL)



MY COMMISSION EXPIRES JUNE 5, 1950.





EXHIBIT C


SOUTHERN CALIFORNIA EDISON COMPANY

Certificate of Determination of Preference of the
Cumulative Preferred Stock, 4.24% Series



We, the undersigned, being the President and the Secretary, respectively, of Southern California Edison Company (hereinafter called 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 Articles of Incorporation of the corporation, as amended, authorize the issue of
6,000,000 shares of Cumulative Preferred Stock which may be issued from time to time in one or more series, and authorize the Board of Directors, within the limitations and restrictions stated therein, to fix or alter, from time to time, the dividend rate, conversion rights, voting rights (in addition to the voting rights provided in such Articles), redemption price and/or the liquidation preferences of any wholly unissued series of Cumulative Preferred Stock, and to fix the number of shares constituting any unissued series.

SECOND: The Board of Directors of the corporation at a meeting duly called and held on
February 4, 1956, in the City of Los Angeles, California, at which meeting a quorum was present and acting throughout, did duly adopt the following resolutions authorizing and providing for the creation of a series of said Cumulative Preferred Stock to be known as Cumulative Preferred Stock, 4.24% Series, consisting of 1,200,000 shares, none of the shares of such series having been issued:

“RESOLVED, that 1,200,000 shares of the presently authorized but unissued Cumulative Preferred Stock of the par value of twenty-five dollars ($25) each of this corporation be and are hereby determined to be and shall be of a series of said Cumulative Preferred Stock hereby designated as the Cumulative Preferred Stock, 4.24% Series; and

“RESOLVED FURTHER, that the dividend rate, redemption price and voluntary liquidation preferences of shares of such series be and the same are hereby fixed, respectively, as follows:

(A) The dividend rate of such series shall be four and 24/100 per centum (4.24%) per annum of the par value of the shares thereof. Dividends on such series when and as declared shall be payable quarterly on the last days of February, May, August and November, respectively.

(B) The redemption price from time to time of such series shall be: $26.60 per share if redeemed on or before May 31, 1961; $26.30 per share if redeemed thereafter and on or before May 31, 1966; $26.05 per share if redeemed thereafter and on or before May 31, 1971; and $25.80 per share if redeemed thereafter: together, in each case, with an amount equal to all accumulated and unpaid dividends to and including the date of redemption.

(C) The liquidation preferences payable with respect to shares of such series in the event of voluntary liquidation, dissolution or winding up of the affairs of this corporation shall be the same as the redemption price for shares of such series current on the date of the commencement of the proceedings for






such voluntary liquidation, dissolution or winding up, including in amount equal to all accumulated and unpaid dividends thereon to and including the date of distribution or payment.”

IN WITNESS WHEREOF this certificate is made under the seal of said Southern California Edison Company and signed by Harold Quinton, its President, and T. J. Gamble, its Secretary, this 14th day of February, 1956.

HAROLD QUINTON
---------------------------------
(Harold Quinton)
President of Southern California
Edison Company

(CORPORATE SEAL)


T. J. GAMBLE
---------------------------------
(T. J. Gamble)
Secretary of Southern California
Edison Company


STATE OF CALIFORNIA      )
)      ss. COUNTY OF LOS ANGELES      )
Harold Quinton and T. J. Gamble, being first duly sworn, each for himself deposes and says:

That Harold Quinton is and was at all of the times mentioned in the foregoing Certificate, the
President of Southern California Edison Company, the California corporation therein mentioned, and T. J.
Gamble is, and was at all of said times, the Secretary of said corporation; that each has read said Certificate and that the matters set forth therein are true of his own knowledge, and that the signatures purporting to be the signatures of said President and Secretary thereto are the genuine signatures of said President and Secretary, respectively.

HAROLD QUINTON
------------------------------------
(Harold Quinton)

T. J. GAMBLE
------------------------------------
(T. J. Gamble)

Subscribed and sworn to before me this 14th day of February, 1956.







BARBARA ROWE
------------------------------------
Notary Public in and for the County of Los Angeles, State of California.

(NOTARIAL SEAL)


My Commission Expires June 14, 1958.






EXHIBIT D

SOUTHERN CALIFORNIA EDISON COMPANY

Certificate of Determination of Preferences of the
Cumulative Preferred Stock, 4.78% Series


We, the undersigned, being the President and the Secretary, respectively, of Southern California Edison Company (hereinafter called 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 Articles of Incorporation of the corporation, as amended, authorize the issue of
6,000,000 shares of Cumulative Preferred Stock which may be issued from time to time in one or more series, and authorize the Board of Directors, within the limitations and restrictions stated therein, to fix or alter, from time to time, the dividend rate, conversion rights, voting rights (in addition to the voting rights provided in such Articles), redemption price and/or the liquidation preferences of any wholly unissued series of Cumulative Preferred Stock, and to fix the number of shares constituting any unissued series.

SECOND: The Board of Directors of the corporation at a meeting duly called and held on February 10, 1958, in the City of Los Angeles, California, at which meeting a quorum was present and acting throughout did duly adopt the following resolutions authorizing and providing for the creation of a series of said Cumulative Preferred Stock to be known as Cumulative Preferred Stock, 4.78% Series, consisting of 1,000,000 shares, none of the shares of such series having been issued:

“RESOLVED, that 1,000,000 shares of the presently authorized but unissued Cumulative Preferred Stock of the par value of twenty-five dollars ($25) each of this corporation be and are hereby determined to be and shall be of a series of said Cumulative Preferred Stock hereby designated as the Cumulative Preferred Stock, 4.78% Series; and

“RESOLVED FURTHER, that the dividend rate, redemption price and voluntary liquidation preferences of shares of such series be and the same are hereby fixed respectively, as follows:

(A) The dividend rate of such series shall be four and 78/100 per centum (4.78%) per annum of
the par value of the shares thereof. Dividends on such series when and as declared shall be payable quarterly on the last days of February, May, August and November, respectively.

(B) The redemption price from time to time of such series shall be: $27.30 per share if redeemed on or before February 28, 1963; $26.55 per share if redeemed thereafter and on or before February 29, 1968;
$26.05 per share if redeemed thereafter and on or before February 28, 1973; and $25.80 per share if redeemed thereafter; together, in each case, with an amount equal to all accumulated and unpaid dividends to and including the date of redemption.

(C) The liquidation preferences payable with respect to shares of such series in the event of voluntary liquidation, dissolution or winding up of the affairs of this corporation shall be the same as the redemption price for shares of such series current on the date of the commencement of the proceedings for





such voluntary liquidation, dissolution or winding up, including an amount equal to all accumulated and unpaid dividends thereon to and including the date of distribution or payment.”

IN WITNESS WHEREOF this certificate is made under the seal of said Southern California Edison Company and signed by Harold Quinton, its President, and T. J. Gamble, its Secretary, this 10th day of February 1958.


HAROLD QUINTON
---------------------------------
(Harold Quinton)
President of Southern California
Edison Company


T. J. GAMBLE
---------------------------------
(T. J. Gamble)
Secretary of
Southern California Edison Company


STATE OF CALIFORNIA      )
)      ss. COUNTY OF LOS ANGELES )

Harold Quinton and T. J. Gamble, being first duly sworn, each for himself deposes and says:

That Harold Quinton is and was at all of the times mentioned in the foregoing Certificate, the
President of Southern California Edison Company, the California corporation therein mentioned, and T. J.
Gamble is, and was at all of said times, the Secretary of said corporation; that each has read said Certificate and that the matters set forth therein are true of his own knowledge, and that the signatures purporting to be the signatures of said President and Secretary thereto are the genuine signatures of said President and Secretary, respectively.


HAROLD QUINTON
------------------------------------ (Harold Quinton)

T. J. GAMBLE
------------------------------------
(T. J. Gamble)

Subscribed and sworn to before me this 10th day of February, 1958.






BARBARA ROWE
------------------------------------
Notary Public in and for the County
of Los Angeles, State of California

(NOTARIAL SEAL)


My Commission Expires June 14, 1958.







CERTIFICATE OF DETERMINATION OF PREFERENCES OF THE
SERIES A PREFERENCE STOCK

SOUTHERN CALIFORNIA EDISON COMPANY


We, the undersigned, being the Vice President and Treasurer 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 Executive Committee of the Board of Directors at a meeting duly held on April 20, 2005, in the City of Rosemead, State of California, at which meeting a quorum was present and acting throughout, did duly adopt the following resolutions authorizing and providing for the creation of a series of said shares of Preference Stock to be known as Series A Preference Stock, consisting of 4,000,000 shares, none of the shares of such series having been issued:

“NOW, THEREFORE, BE IT RESOLVED, that 4,000,000 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 A Preference Stock”; and

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

1.
Dividends

(a)      The holders of record of the Series A Preference Stock (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 a duly authorized committee thereof (the “Board”), in its sole discretion out of funds legally available therefor, non-cumulative quarterly cash dividends which will accrue from and including April 27, 2005 and will be payable on January 31, April 30, July 31 and October 31 of each year (each, a “Dividend Payment Date”), commencing July 31, 2005. Through April 30, 2010, the annual rate of

1




dividends will be 5.349% of the Liquidation Preference. After April 30, 2010, the annual rate of dividends will be the Applicable Rate from time to time in effect. The Applicable Rate per annum for each dividend period beginning after April 30, 2010 is described below in Section 1(b). If a Dividend Payment Date 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. Dividends payable on the Series A Preference Stock for the initial dividend period and any period less 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 such period. The amount of dividends per share payable on the initial Dividend Payment Date and at redemption will be calculated to the fourth digit after the decimal point. “Liquidation Preference” means $100 per share of Series A Preference Stock..

(b)      Determination of the Applicable Rate.

(i)      For each dividend period beginning after April 30, 2010, the Calculation Agent (as defined below) shall calculate the Applicable Rate and the amount of dividends payable on each quarterly Dividend Payment Date. Promptly upon such determination, the Calculation Agent shall notify us of the Applicable Rate for such dividend period. The Applicable Rate determined by the Calculation Agent, absent manifest error, shall be binding and conclusive upon the beneficial owners and Holders of the Series A Preference Stock and us.

(ii)      The “Applicable Rate” for any dividend period will be 1.45% plus the highest of the 3-month LIBOR Rate, the 10-year Treasury CMT and the 30-year Treasury CMT (each as defined below and collectively referred to as the “Benchmark Rates”) for such dividend period. In the event that the Calculation Agent determines in good faith that for any reason:

(1)      any one of the Benchmark Rates cannot be determined for any dividend period, the Applicable Rate for such dividend period will be equal to the higher of whichever two of such rates can be so determined;

(2)      only one of the Benchmark Rates can be determined for any dividend period, the Applicable Rate for such dividend period will be equal to whichever such rate can be so determined; or

(3)      none of the Benchmark Rates can be determined for any dividend period, the Applicable Rate for the preceding dividend period will be continued for such dividend period.

(iii)      The “3-month LIBOR Rate” means, for each dividend period, the arithmetic average of the daily quotes for deposits for U.S. Dollars having a term of three months for the preceding two full weeks, as published on each Business Day during the relevant Calendar Period (as defined below) immediately preceding the dividend period for which the Applicable Rate is being determined. Such quotes will be taken from the Bloomberg interest rate page most nearly corresponding to Telerate Page 3750 (or such other page as may replace such page for the purpose of displaying comparable rates) at approximately 11:00 a.m. London time on the relevant date. If such rate does not appear on the Bloomberg interest rate page (currently found on page “BBAM”) most nearly corresponding to Telerate Page 3750 (or such other page as may replace such page for the purpose of displaying comparable rates) on the Dividend Determination Date (as defined below), the 3-month LIBOR Rate will be the arithmetic mean of the rates quoted by each of Citigroup Global Markets Inc., Lehman Brothers Inc. and J.P.

2




Morgan Securities Inc., or their successors, at approximately 11:00 a.m., New York City time, on the Dividend Determination Date for loans in U.S. Dollars to leading European banks for a period of three months.

(iv)      The “10-year Treasury CMT” means the rate determined in accordance with the following provisions:

(1)      With respect to any Dividend Determination Date and the dividend period that begins immediately thereafter, the 10-year Treasury CMT means the rate displayed on the Bloomberg interest rate page (currently found on page “H15T10Y Index,” and when calculating the 30-year Treasury CMT, the sum of the rate displayed on the Bloomberg interest rate page currently found on page “H15T20Y Index” and the extrapolation factor found on page “H15TFACT”) most nearly corresponding to Telerate Page 7051 containing the caption “Federal Reserve U.S. H.15 T Note Treasury Constant Maturity” and the column for the Designated CMT Maturity Index (as defined below).

(2)      If such rate is no longer displayed on the page described in (1) above, or is not so displayed by 3:00 p.m., New York City time, on the applicable Dividend Determination Date, then the 10-year Treasury CMT for such Dividend Determination Date will be such treasury constant maturity rate for the Designated CMT Maturity Index as is published in H.15(519).

(3)      If such rate is no longer displayed on the page described in (2) above, or if not published by 3:00 p.m., New York City time, on the applicable Dividend Determination Date, then the 10-year Treasury CMT for such Dividend Determination Date will be such constant maturity treasury rate for the Designated CMT Maturity Index (or other United States Treasury rate for the Designated CMT Maturity Index) for the applicable Dividend Determination Date with respect to such dividend reset date as may then be published by either the Board of Governors of the Federal Reserve System or the United States Department of the Treasury that the Calculation Agent determines to be comparable to the rate formerly displayed on the Bloomberg interest rate page most nearly corresponding to the Telerate Page 7051 and published in H.15(519).

(4)      If such information described in (3) above is not provided by 3:00 p.m., New York City time, on the applicable Dividend Determination Date, then the 10-year Treasury CMT for such Dividend Determination Date will be calculated by the Calculation Agent and will be a yield to maturity, based on the arithmetic mean of the secondary market offered rates as of approximately 3:30 p.m., New York City time, on such Dividend Determination Date reported, according to their written records, by three leading primary United States government securities dealers in The City of New York (each, a “Reference Dealer”) (from Citigroup Global Markets Inc., Lehman Brothers Inc., J.P. Morgan Securities Inc., Credit Suisse First Boston LLC and UBS Securities LLC, or their successors (provided that if two or more of the foregoing combine by merger or some other means, then the number of Reference Dealers whose quotes will be considered shall be reduced accordingly), and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest)), for the most recently issued direct non-callable fixed rate obligations of the United States (“Treasury Debentures”) with an original maturity of

3




approximately the Designated CMT Maturity Index and a remaining term to maturity of not less than such Designated CMT Maturity Index minus one year.

(5)      If the Calculation Agent is unable to obtain three such Treasury Debentures quotations described in (4) above, then the 10-year Treasury CMT for the applicable Dividend Determination Date will be calculated by the Calculation Agent and will be a yield to maturity based on the arithmetic mean of the secondary market offered rates as of approximately 3:30 p.m., New York City time, on the applicable Dividend Determination Date of three Reference Dealers in The City of New York (from Citigroup Global Markets Inc., Lehman Brothers Inc., J.P. Morgan Securities Inc., Credit Suisse First Boston LLC and UBS Securities LLC, or their successors (provided that if two or more of the foregoing combine by merger or some other means, then the number of Reference Dealers whose quotes will be considered shall be reduced accordingly), and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest)), for Treasury Debentures with an original maturity of the number of years that is the next highest to the Designated CMT Maturity Index and a remaining term to maturity closest to the Designated CMT Maturity Index and in an amount of at least $100 million.

(6)      If three or four (and not five) of such Reference Dealers are quoting as set forth in (4) and (5) above, then the 10-year Treasury CMT will be based on the arithmetic mean of the offered rates obtained and neither the highest nor lowest of such quotes will be eliminated; provided, however, that if fewer than three Reference Dealers selected by the Calculation Agent are quoting as set forth above, then the 10-year Treasury CMT with respect to the applicable Dividend Determination Date will remain the 10-year Treasury CMT for the immediately preceding dividend period. If two Treasury Debentures with an original maturity as described in the second preceding sentence have remaining terms to maturity equally close to the Designated CMT Maturity Index, then the quotes for the Treasury Debentures with the shorter remaining term to maturity will be used.

(v)      The “30-year Treasury CMT” has the meaning specified under the definition of 10-year Treasury CMT, except that the Designated CMT Maturity Index for the 30-year Treasury CMT shall be 30 years.

(vi)      The 3-month LIBOR Rate, the 10-year Treasury CMT and the 30-year Treasury CMT shall each be rounded to the nearest hundredth of a percent.

(vii)      The Applicable Rate with respect to each dividend period will be calculated as promptly as practicable by the Calculation Agent according to the appropriate method described above.

(viii)      Other Definitions. As used in this Section 1, the following terms shall have the following meanings:

(1)      “Bloomberg” means Bloomberg Financial Markets Commodities News.

(2)      “Business Day” means a day other than (i) a Saturday or Sunday; (ii) a day on which banks in New York, New York are authorized or obligated

4




by law or executive order to remain closed; or (iii) a day on which our principal executive office is closed for business.

(3)      “Calculation Agent” means Wells Fargo Bank, N.A., or any other firm appointed by us, acting as calculation agent.

(4)      “Calendar Period” means a period of 180 calendar days.

(5)      “Designated CMT Maturity Index” means the original period to maturity of the U.S. Treasury securities (10 years) with respect to which the 10-year Treasury CMT will be calculated.

(6)      “Dividend Determination Date” means the second Business Day immediately preceding the first day of the relevant dividend period.

(7)      “Telerate Page 3750” means the display designated on page 3750 on MoneyLine Telerate (or such other page as may replace the 3750 page on the 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. Dollars deposits).

(8)      “Telerate Page 7051” means the display on MoneyLine Telerate (or any successor service), on such page (or any other page as may replace such page on that service), for the purpose of displaying Treasury Constant Maturities as reported in H.15(519).

(c)      So long as any shares of Series A Preference Stock 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 A Preference Stock), whether in cash or property, may be paid or declared or set apart, nor may any distribution be made on the Common Stock, nor may any shares of Common Stock be purchased, redeemed or otherwise acquired for value by the Corporation, unless dividends have been declared and paid or set apart on the Series A Preference Stock for the then-current quarterly dividend period; provided, however, that the foregoing dividend preference shall not be cumulative and shall not in any way create any claim or right in favor of the Holders of Series A Preference Stock in the event that dividends have not been declared or paid or set apart on the Series A Preference Stock in respect of any prior dividend period. If the full dividend on the Series A Preference Stock is not paid for any quarterly dividend period, the Holders of Series A Preference Stock will have no claim in respect of the unpaid amount so long as no dividend (other than those referred to above) is paid on the Common Stock (or any other stock of the Corporation ranking, as to the payment of dividends, junior to the Series A Preference Stock) for such dividend period.

(d)      The Board may, in its discretion, choose to pay dividends on the Series A Preference Stock 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 A Preference Stock).

(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 A Preference Stock for any period unless full dividends have been declared and paid or set apart for payment on the Series A Preference Stock for the then-current quarterly dividend period. When dividends are not paid in full upon the Series A

5




Preference Stock and all other classes or series of stock of the Corporation, if any, ranking, as to the payment of dividends, equally with the Series A Preference Stock, all dividends declared upon shares of Series A Preference Stock and all such other stock of the Corporation will be declared pro rata so that the amount of dividends declared per share of Series A Preference Stock and all such other stock will in all cases bear to each other the same ratio that accrued dividends per share of Series A Preference Stock (but without, in the case of non-cumulative shares, accumulation of unpaid dividends for prior dividend periods) and such other stock bear to each other.

(f)      No dividends may be declared or paid or set apart for payment on any shares of Series A Preference Stock 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, prior to the Series A Preference Stock.

(g)      Holders of Series A Preference Stock 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 any sum in lieu of interest, in respect of any dividend payment.

2.
Liquidation Rights

(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 shares of the Series A Preference Stock will be entitled to receive out of the assets of the Corporation or proceeds thereof available for distribution to stockholders, 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 A Preference Stock), the Liquidation Value 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, but without accumulation of unpaid dividends on the Series A Preference Stock for prior dividend periods.

(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 A Preference Stock 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, on a parity with the Series A Preference Stock, the assets will be distributed to the Holders of Series A Preference Stock 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 preferred stock, accumulation of unpaid dividends for prior dividend periods).

(c)      Notwithstanding the foregoing, Holders of Series A Preference Stock 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, prior to the Series A Preference Stock 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

6




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 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, the Holders of Series A Preference Stock will not be entitled to any further participation in any distribution of assets by the Corporation.

3.
Voting Rights

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

(a)      So long as any shares of Series A Preference Stock are outstanding, the consent of the Holders of at least a majority of the Series A Preference Stock 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 A Preference Stock; 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 A Preference Stock.

provided, however, that no such consent of the Holders of the Series A Preference Stock 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 shares of Series A Preference Stock at the time outstanding.

(b)      On matters requiring their consent, the Holders of Series A Preference Stock will be entitled to one vote per share.

4.
Redemption

(a)      The Series A Preference Stock shall not be redeemable prior to April 30, 2010. On or after that date, 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 may redeem the Series A Preference Stock, in whole or in part, at any time or from time to time, 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) from the Dividend Payment Date immediately preceding the redemption date to but excluding the redemption date, but without accumulation of unpaid dividends on the Series A Preference Stock for prior dividend periods; provided, however that any redemption that would reduce the principal amount of the Series A Preference Stock outstanding to $50 million or less in the aggregate would be restricted to a redemption in whole only. If less than all of the outstanding shares of Series A Preference Stock are to be redeemed, the Corporation will select the

7




shares to be redeemed from the outstanding shares not previously called for redemption by lot or pro rata (as nearly as possible) or by any other method that the Board in its sole discretion deems equitable.

(b)      In the event the Corporation shall redeem any or all of the Series A Preference Stock as aforesaid, the Corporation will give notice of any such redemption to Holders of Series A Preference Stock not 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 of Series A Preference Stock shall not affect the validity of the proceedings for the redemption of shares of any other Holder of Series A Preference Stock being redeemed.

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

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

(e)      Any shares of Series A Preference Stock 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 Series A Preference Stock, 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, a fund sufficient to redeem the 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 shares, the redemption price thereof, then from and after the date of such deposit (although prior to the date fixed for redemption) such shares so called shall be deemed to be redeemed and dividends thereon shall cease to accrue after said date fixed for redemption and such deposit shall be deemed to constitute full payment of said shares to the Holders thereof and thereafter said shares shall no longer be deemed to be outstanding, and the Holders thereof shall cease to be shareholders with respect to such 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 shares without interest.

(a) 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.

5.
Rank

The Series A Preference Stock 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 A Preference Stock with respect to

8




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 A Preference Stock 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 A Preference Stock with respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation.”

IN WITNESS WHEREOF, the undersigned have executed this Certificate in Rosemead, California on April 20, 2005.


Robert C. Boada __________
Robert C. Boada
Vice President and Treasurer


Mary C. Simpson _________
Mary C. Simpson
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 April 20, 2005.


Robert C. Boada __________
Robert C. Boada


Mary C. Simpson _________
Mary C. Simpson


9




CERTIFICATE OF DETERMINATION OF PREFERENCES OF THE
SERIES B PREFERENCE STOCK

SOUTHERN CALIFORNIA EDISON COMPANY


We, the undersigned, being the Vice President and Treasurer 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 Executive Committee of the Board of Directors at a meeting duly held on September 14, 2005, in the City of Rosemead, State of California, at which meeting a quorum was present and acting throughout, did duly adopt the following resolutions authorizing and providing for the creation of a series of said shares of Preference Stock to be known as Series B Preference Stock, consisting of 2,000,000 shares, none of the shares of such series having been issued:

“NOW, THEREFORE, BE IT RESOLVED, that 2,000,000 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 B Preference Stock”; and

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

1.
Dividends

(a)      The holders of record of the Series B Preference Stock (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 a duly authorized committee thereof (the “Board”), in its sole discretion out of funds legally available therefor, non-cumulative quarterly cash dividends which will accrue from and including September 21, 2005 and will be payable on September 30, December 31, March 31 and June 30 of each year (each, a “Dividend Payment Date”), commencing December 31, 2005, at the annual rate of

1




6.125% of the Liquidation Preference. If a Dividend Payment Date 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. Dividends payable on the Series B Preference Stock for the initial dividend period and any period less 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 such period. “Liquidation Preference” means $100 per share of Series B Preference Stock.

(b)      So long as any shares of Series B Preference Stock 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 B Preference Stock), whether in cash or property, may be paid or declared or set apart, nor may any distribution be made on the Common Stock, nor may any shares of Common Stock be purchased, redeemed or otherwise acquired for value by the Corporation, unless dividends have been declared and paid or set apart on the Series B Preference Stock for the then-current quarterly dividend period; provided, however, that the foregoing dividend preference shall not be cumulative and shall not in any way create any claim or right in favor of the Holders of Series B Preference Stock in the event that dividends have not been declared or paid or set apart on the Series B Preference Stock in respect of any prior dividend period. If the full dividend on the Series B Preference Stock is not paid for any quarterly dividend period, the Holders of Series B Preference Stock will have no claim in respect of the unpaid amount so long as no dividend (other than those referred to above) is paid on the Common Stock (or any other stock of the Corporation ranking, as to the payment of dividends, junior to the Series B Preference Stock) for such dividend period.

(c)      The Board may, in its discretion, choose to pay dividends on the Series B Preference Stock 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 B Preference Stock).

(d)      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 B Preference Stock for any period unless full dividends have been declared and paid or set apart for payment on the Series B Preference Stock for the then-current quarterly dividend period. When dividends are not paid in full upon the Series B Preference Stock and all other classes or series of stock of the Corporation, if any, ranking, as to the payment of dividends, equally with the Series B Preference Stock, all dividends declared upon shares of Series B Preference Stock and all such other stock of the Corporation will be declared pro rata so that the amount of dividends declared per share of Series B Preference Stock and all such other stock will in all cases bear to each other the same ratio that accrued dividends per share of Series B Preference Stock (but without, in the case of non-cumulative shares, accumulation of unpaid dividends for prior dividend periods) and such other stock bear to each other.

(e)      No dividends may be declared or paid or set apart for payment on any shares of Series B Preference Stock 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, prior to the Series B Preference Stock.

(f)      Holders of Series B Preference Stock 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 any sum in lieu of interest, in respect of any dividend payment.


2




2.
Liquidation Rights

(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 shares of the Series B Preference Stock will be entitled to receive out of the assets of the Corporation or proceeds thereof available for distribution to stockholders, 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 B Preference Stock), the Liquidation Value 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, but without accumulation of unpaid dividends on the Series B Preference Stock for prior dividend periods.

(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 B Preference Stock 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, on a parity with the Series B Preference Stock, the assets will be distributed to the Holders of Series B Preference Stock 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 preferred stock, accumulation of unpaid dividends for prior dividend periods).

(c)      Notwithstanding the foregoing, Holders of Series B Preference Stock 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, prior to the Series B Preference Stock 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 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, the Holders of Series B Preference Stock will not be entitled to any further participation in any distribution of assets by the Corporation.

3.
Voting Rights

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

(a)      So long as any shares of Series B Preference Stock are outstanding, the consent of the Holders of at least a majority of the Series B Preference Stock 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

3




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 B Preference Stock; 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 B Preference Stock.

provided, however, that no such consent of the Holders of the Series B Preference Stock 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 shares of Series B Preference Stock at the time outstanding.

(b)      On matters requiring their consent, the Holders of Series B Preference Stock will be entitled to one vote per share.

4.
Redemption

(a)      The Series B Preference Stock shall not be redeemable prior to September 30, 2010. On or after that date, 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 may redeem the Series B Preference Stock, in whole or in part, at any time or from time to time, 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) from the Dividend Payment Date immediately preceding the redemption date to but excluding the redemption date, but without accumulation of unpaid dividends on the Series B Preference Stock for prior dividend periods; provided, however that any redemption that would reduce the principal amount of the Series B Preference Stock outstanding to $50 million or less in the aggregate would be restricted to a redemption in whole only. If less than all of the outstanding shares of Series B Preference Stock are to be redeemed, the Corporation will select the shares to be redeemed from the outstanding shares not previously called for redemption by lot or pro rata (as nearly as possible) or by any other method that the Board in its sole discretion deems equitable.

(b)      In the event the Corporation shall redeem any or all of the Series B Preference Stock as aforesaid, the Corporation will give notice of any such redemption to Holders of Series B Preference Stock not 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 of Series B Preference Stock shall not affect the validity of the proceedings for the redemption of shares of any other Holder of Series B Preference Stock being redeemed.

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


4




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

(e)      Any shares of Series B Preference Stock 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 Series B Preference Stock, 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, a fund sufficient to redeem the 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 shares, the redemption price thereof, then from and after the date of such deposit (although prior to the date fixed for redemption) such shares so called shall be deemed to be redeemed and dividends thereon shall cease to accrue after said date fixed for redemption and such deposit shall be deemed to constitute full payment of said shares to the Holders thereof and thereafter said shares shall no longer be deemed to be outstanding, and the Holders thereof shall cease to be shareholders with respect to such 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 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.

5.
Rank

The Series B Preference Stock 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 B Preference Stock 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 B Preference Stock 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 B Preference Stock with respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation.”



5




IN WITNESS WHEREOF, the undersigned have executed this Certificate in Rosemead, California on September 14, 2005.


Thomas M. Noonan __________
Thomas M. Noonan
Senior Vice President and Chief
Financial Officer


Mary C. Simpson _________
Mary C. Simpson
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 September 14, 2005.


Thomas M. Noonan _______
Thomas M. Noonan


Mary C. Simpson _________
Mary C. Simpson


6




CERTIFICATE OF DETERMINATION OF PREFERENCES OF THE
SERIES C 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 January 17, 2005, the following resolutions authorizing and providing for the creation of a series of said shares of Preference Stock to be known as Series C Preference Stock, consisting of 2,000,000 shares, none of the shares of such series having been issued:

“NOW, THEREFORE, BE IT RESOLVED, that 2,000,000 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 C Preference Stock”; and

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

1.
Dividends

(a)      The holders of record of the Series C Preference Stock (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 a duly authorized committee thereof (the “Board”), in its sole discretion out of funds legally available therefor, non-cumulative quarterly cash dividends which will accrue from and including January 24, 2006, and will be payable on January 31, April 30, July 31 and October 31 of each year (each, a “Dividend Payment Date”), commencing April 30, 2006, at the annual rate of 6.00% of the Liquidation Preference. If a Dividend Payment Date 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

7




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. Dividends payable on the Series C Preference Stock for the initial dividend period and any period less 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 such period. “Liquidation Preference” means $100 per share of Series C Preference Stock.

(b)      So long as any shares of Series C Preference Stock 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 C Preference Stock), whether in cash or property, may be paid or declared or set apart, nor may any distribution be made on the Common Stock, nor may any shares of Common Stock be purchased, redeemed or otherwise acquired for value by the Corporation, unless dividends have been declared and paid or set apart on the Series C Preference Stock for the then-current quarterly dividend period; provided, however, that the foregoing dividend preference shall not be cumulative and shall not in any way create any claim or right in favor of the Holders of Series C Preference Stock in the event that dividends have not been declared or paid or set apart on the Series C Preference Stock in respect of any prior dividend period. If the full dividend on the Series C Preference Stock is not paid for any quarterly dividend period, the Holders of Series C Preference Stock will have no claim in respect of the unpaid amount so long as no dividend (other than those referred to above) is paid on the Common Stock (or any other stock of the Corporation ranking, as to the payment of dividends, junior to the Series C Preference Stock) for such dividend period.

(c)      The Board may, in its discretion, choose to pay dividends on the Series C Preference Stock 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 C Preference Stock).

(d)      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 C Preference Stock for any period unless full dividends have been declared and paid or set apart for payment on the Series C Preference Stock for the then-current quarterly dividend period. When dividends are not paid in full upon the Series C Preference Stock and all other classes or series of stock of the Corporation, if any, ranking, as to the payment of dividends, equally with the Series C Preference Stock, all dividends declared upon shares of Series C Preference Stock and all such other stock of the Corporation will be declared pro rata so that the amount of dividends declared per share of Series C Preference Stock and all such other stock will in all cases bear to each other the same ratio that accrued dividends per share of Series C Preference Stock (but without, in the case of non-cumulative shares, accumulation of unpaid dividends for prior dividend periods) and such other stock bear to each other.

(e)      No dividends may be declared or paid or set apart for payment on any shares of Series C Preference Stock 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, prior to the Series C Preference Stock.

(f)      Holders of Series C Preference Stock 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 any sum in lieu of interest, in respect of any dividend payment.



8




2.
Liquidation Rights

(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 shares of the Series C Preference Stock will be entitled to receive out of the assets of the Corporation or proceeds thereof available for distribution to stockholders, 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 C Preference Stock), the Liquidation Value 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, but without accumulation of unpaid dividends on the Series C Preference Stock for prior dividend periods.

(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 C Preference Stock 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, on a parity with the Series C Preference Stock, the assets will be distributed to the Holders of Series C Preference Stock 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 preferred stock, accumulation of unpaid dividends for prior dividend periods).

(c)      Notwithstanding the foregoing, Holders of Series C Preference Stock 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, prior to the Series C Preference Stock 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 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, the Holders of Series C Preference Stock will not be entitled to any further participation in any distribution of assets by the Corporation.

3.
Voting Rights

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

(a)      So long as any shares of Series C Preference Stock are outstanding, the consent of the Holders of at least a majority of the Series C Preference Stock 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

9




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 C Preference Stock; 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 C Preference Stock.

provided, however, that no such consent of the Holders of the Series C Preference Stock 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 shares of Series C Preference Stock at the time outstanding.

(b)      On matters requiring their consent, the Holders of Series C Preference Stock will be entitled to one vote per share.

4.
Redemption

(a)      The Series C Preference Stock shall not be redeemable prior to January 31, 2011. On or after that date, 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 may redeem the Series C Preference Stock, in whole or in part, at any time or from time to time, 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) from the Dividend Payment Date immediately preceding the redemption date to but excluding the redemption date, but without accumulation of unpaid dividends on the Series C Preference Stock for prior dividend periods; provided, however that any redemption that would reduce the principal amount of the Series C Preference Stock outstanding to $50 million or less in the aggregate would be restricted to a redemption in whole only. If less than all of the outstanding shares of Series C Preference Stock are to be redeemed, the Corporation will select the shares to be redeemed from the outstanding shares not previously called for redemption by lot or pro rata (as nearly as possible) or by any other method that the Board in its sole discretion deems equitable.

(b)      In the event the Corporation shall redeem any or all of the Series C Preference Stock as aforesaid, the Corporation will give notice of any such redemption to Holders of Series C Preference Stock not 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 of Series C Preference Stock shall not affect the validity of the proceedings for the redemption of shares of any other Holder of Series C Preference Stock being redeemed.

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


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

(e)      Any shares of Series C Preference Stock 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 Series C Preference Stock, 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, a fund sufficient to redeem the 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 shares, the redemption price thereof, then from and after the date of such deposit (although prior to the date fixed for redemption) such shares so called shall be deemed to be redeemed and dividends thereon shall cease to accrue after said date fixed for redemption and such deposit shall be deemed to constitute full payment of said shares to the Holders thereof and thereafter said shares shall no longer be deemed to be outstanding, and the Holders thereof shall cease to be shareholders with respect to such 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 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.

5.
Rank

The Series C Preference Stock 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 C Preference Stock 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 C Preference Stock 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 C Preference Stock 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 January 17, 2006.


Robert C. Boada __________
Robert C. Boada
Vice President


Mary C. Simpson _________
Mary C. Simpson
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 January 17, 2006.


Robert C. Boada __________
Robert C. Boada


Mary C. Simpson _________
Mary C. Simpson



12





CERTIFICATE OF DETERMINATION OF PREFERENCES OF THE
SERIES D 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
March 7, 2011, the following resolutions authorizing and providing for the creation of a series of said shares of Preference Stock to be known as Series D Preference Stock, consisting of 1,250,000 shares, none of the shares of such series having been issued:

“NOW, THEREFORE, BE IT RESOLVED, that 1,250,000 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 D Preference Stock”; and

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

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1.    Dividends

(a)    The holders of record of the Series D Preference Stock (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 (the “Board”), in its sole discretion out of funds legally available therefor, cumulative quarterly cash dividends which will accrue from and including March 10, 2011, and will be payable on March 1, June 1, September 1 and December 1 of each year (each, a “Dividend Payment Date”), commencing June 1, 2011, at the annual rate of 6.50% of the Liquidation Preference. Such dividends shall be cumulative without compounding from the date of issue whether or not earned or declared. If a Dividend Payment Date 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. Dividends payable on the Series D Preference Stock for the initial dividend period and any period less 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 such period. “Liquidation Preference” means $100 per share of Series D Preference Stock.

(b)    So long as any shares of Series D Preference Stock 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 D Preference Stock), whether in cash or property, may be paid or declared or set apart, nor may any distribution be made on the Common Stock, nor may any shares of Common Stock be purchased, redeemed or otherwise acquired for value by the Corporation, unless all dividends on the Series D Preference Stock for the then-current quarterly dividend and all past quarterly dividend periods shall have been declared and paid or set apart.

(c)    The Board may, in its discretion, choose to pay dividends on the Series D Preference Stock 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 D Preference Stock).

(d)    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 D Preference Stock for any period unless full dividends have been declared and paid or set apart for payment on the Series D Preference Stock for the then-current quarterly dividend period and all past quarterly dividend periods. When dividends are not paid in full upon the Series D Preference Stock and all other classes or series of stock of the Corporation, if any, ranking, as to the payment of dividends, equally with the Series D Preference Stock, all dividends declared upon shares of Series D Preference Stock and all such other stock of the Corporation will be declared pro rata so that the amount of dividends declared per share of Series D Preference Stock and all such other stock will in



2




all cases bear to each other the same ratio that accrued dividends per share of Series D Preference Stock (but without, in the case of non-cumulative shares, accumulation of unpaid dividends for prior dividend periods) and such other stock bear to each other.

(e)    No dividends may be declared or paid or set apart for payment on any shares of Series D Preference Stock 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 D Preference Stock.

(f)    Holders of Series D Preference Stock 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 any sum in lieu of interest, in respect of any dividend payment.

2.    Liquidation Rights

(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 shares of the Series D Preference Stock will be entitled to receive out of the assets of the Corporation or proceeds thereof available for distribution to stockholders, 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 D Preference Stock), 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 D Preference Stock for all past quarterly dividend periods.

(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 D Preference Stock 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, on a parity with the Series D Preference Stock, the assets will be distributed to the Holders of Series D Preference Stock 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 D Preference Stock 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 D Preference Stock have been paid all amounts to which such classes or series are entitled.



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(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 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, the Holders of Series D Preference Stock will not be entitled to any further participation in any distribution of assets by the Corporation.

3.    Voting Rights

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

(a)    So long as any shares of Series D Preference Stock are outstanding, the consent of the Holders of at least a majority of the Series D Preference Stock 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 D Preference Stock; 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 D Preference Stock.

provided, however, that no such consent of the Holders of the Series D Preference Stock 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 shares of Series D Preference Stock at the time outstanding.

(b)
On matters requiring their consent, the Holders of Series D Preference Stock will be entitled to one vote per share.



4




4.    Redemption

(a)    The Series D Preference Stock shall not be redeemable prior to March 1, 2016. On or after that date, 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 may redeem the Series D Preference Stock, in whole or in part, at any time or from time to time, 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) from the Dividend Payment Date immediately preceding the redemption date to but excluding the redemption date, plus unpaid dividends on the Series D Preference Stock for all past quarterly dividend periods, if any; provided, however that any redemption that would reduce the principal amount of the Series D Preference Stock outstanding to $50 million or less in the aggregate would be restricted to a redemption in whole only. If less than all of the outstanding shares of Series D Preference Stock are to be redeemed, the Corporation will select the shares to be redeemed from the outstanding shares not previously called for redemption by lot or pro rata (as nearly as possible) or by any other method that the Board in its sole discretion deems equitable.

(b)    In the event the Corporation shall redeem any or all of the Series D Preference Stock as aforesaid, the Corporation will give notice of any such redemption to Holders of Series D Preference Stock not 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 of Series D Preference Stock shall not affect the validity of the proceedings for the redemption of shares of any other Holder of Series D Preference Stock being redeemed.

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

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

(e)    Any shares of Series D Preference Stock 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 Series D Preference Stock, with any bank or trust company having a capital,


5





surplus and undivided profits aggregating at least five million dollars ($5,000,000), as a trust fund, a fund sufficient to redeem the 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 shares, the redemption price thereof, then from and after the date of such deposit (although prior to the date fixed for redemption) such shares so called shall be deemed to be redeemed and dividends thereon shall cease to accrue after said date fixed for redemption and such deposit shall be deemed to constitute full payment of said shares to the Holders thereof and thereafter said shares shall no longer be deemed to be outstanding, and the Holders thereof shall cease to be shareholders with respect to such 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 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.

5.    Rank

The Series D Preference Stock 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 D Preference Stock 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 D Preference Stock 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 D Preference Stock with respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation.”



6




IN WITNESS WHEREOF, the undersigned have executed this Certificate in Rosemead, California on March 7, 2011.



/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 March 7, 2011.



/s/ Robert C. Boada
_____________________________
Robert C. Boada

/s/ George T. Tabata
______________________________
George T. Tabata





7





CERTIFICATE OF DETERMINATION OF PREFERENCES OF THE
SERIES E 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 January 11, 2012, the following resolutions authorizing and providing for the creation of a series of said shares of Preference Stock to be known as Series E Preference Stock, consisting of 250,000 shares, none of the shares of such series having been issued:

“NOW, THEREFORE, BE IT RESOLVED, that 250,000 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 E Preference Stock” (the “Shares”).

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


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1.    Dividends

(a)    The holders of record of the 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 (the “Board”), in its sole discretion out of funds legally available therefor, cumulative cash dividends at a rate equal to (1) 6.250% per annum of the Liquidation Preference for each semi-annual dividend period from the issue date of the Shares to, but excluding, February 1, 2022 (the “Fixed Rate Period”), and (2) the three-month LIBOR rate plus 4.199% per annum of the Liquidation Preference, for each quarterly dividend period from February 1, 2022 through the redemption date of the Shares, if any (the “Floating Rate Period”). Such dividends shall be cumulative without compounding or interest from the date of issue whether or not earned or declared. “Liquidation Preference” means $1,000 per Share.

(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 banking day prior to the beginning of the dividend period, which date is the “dividend determination date” for the dividend period. The Calculation Agent then will add three-month LIBOR as determined on the dividend determination date and the applicable spread set forth above. Absent manifest error, the Calculation Agent’s determination of the dividend rate for a dividend period for the Shares will be binding and conclusive. A “London banking day” is any day on which dealings in deposits in U.S. dollars are transacted in the London interbank market. The term “three-month LIBOR” means the London interbank offered rate for deposits in U.S. dollars having an index maturity of three months in amounts of at least $1,000,000, as that rate appears on Reuters screen page “LIBOR01” at approximately 11:00 a.m., London time, on the relevant dividend determination date. If no offered rate appears on Reuters screen page “LIBOR01” on the relevant dividend determination date at approximately 11:00 a.m., London time, then the Calculation Agent, after consultation with the Corporation, will select four major banks in the London interbank market and will request each of their principal London offices to provide a quotation of the rate at which three-month deposits in U.S. dollars in amounts of at least $1,000,000 are offered by it to prime banks in the London interbank market, on that date and at that time, that is representative of single transactions at that time. If at least two quotations are provided, three-month LIBOR will be the arithmetic average (rounded upward if necessary to the nearest .00001 of 1%) of the quotations provided. Otherwise, the Calculation Agent will select three major banks in New York City and will request each of them to provide a quotation of the rate offered by it at approximately 11:00 a.m., New York City time, on the dividend determination date for loans in U.S. dollars to leading European banks having an index maturity of three months for the applicable dividend period in an amount of at least $1,000,000 that is representative of single transactions at that time. If three quotations are provided, three-month LIBOR will be the arithmetic average (rounded upward if necessary to the nearest .00001 of 1%) of the quotations provided. Otherwise, three-month


2




LIBOR for the next dividend period will be equal to three-month LIBOR in effect for the then-current dividend period. “Calculation Agent” means Wells Fargo Bank, N.A., or another firm appointed by the Corporation, acting as Calculation Agent.

(b)    When, as and if declared by the Board, during the Fixed Rate Period, we will pay dividends on the Shares semi-annually, in arrears, on February 1 and August 1 of each year, beginning on August 1, 2012 and ending on February 1, 2022, and during the Floating Rate Period, we will pay dividends on the Shares quarterly, in arrears, on February 1, May 1, August 1 and November 1 of each year, beginning on May 1, 2022 (each such date, a “Dividend Payment Date”). If any date on which dividends would otherwise be payable is not a Business Day, then the Dividend Payment Date will be the next Business Day without any adjustment to the amount of dividends paid. A “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.

(c)    A dividend period is the period from and including a Dividend Payment Date to but excluding the next Dividend Payment Date, except that the initial dividend period will commence on and include the original issue date of the Shares. Dividends payable on the Shares for the Fixed Rate Period will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends payable on the Shares for the Floating Rate Period will be computed based on the actual number of days in a dividend period and a 360-day year. Dollar amounts resulting from that calculation will be rounded to the nearest cent, with one-half cent being rounded upward.

(d)    Dividends will be payable to Holders on the applicable record date, which shall be a date not exceeding 60 days before the applicable payment date as shall
be fixed by the Board.

(e)    So long as any 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 Shares), whether in cash or property, may be paid or declared or set apart, nor may any distribution be made on the Common Stock, nor may any shares of Common Stock be purchased, redeemed or otherwise acquired for value by the Corporation, unless all dividends on the Shares for the then-current dividend period and all past dividend periods shall have been declared and paid or set apart.

(f)    The Board may, in its discretion, choose to pay dividends on the 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 Shares).

(g)    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


3





Shares for any period unless full dividends have been declared and paid or set apart for payment on the Shares for the then-current dividend period and all past dividend periods. When dividends are not paid in full upon the Shares and all other classes or series of stock of the Corporation, if any, ranking, as to the payment of dividends, equally with the Shares, all dividends declared upon the Shares and all such other stock of the Corporation will be declared pro rata so that the amount of dividends declared per Share of Series E Preference Stock and all such other stock will in all cases bear to each other the same ratio that accrued dividends per share of Series E Preference Stock (but without, in the case of non- cumulative shares, accumulation of unpaid dividends for prior dividend periods) and such other stock bear to each other.

(h)    No dividends may be declared or paid or set apart for payment on any 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 Shares.

(i)    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 any sum in lieu of interest, in respect of any dividend payment.

2.    Liquidation Rights

(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 Shares will be entitled to receive out of the assets of the Corporation or proceeds thereof available for distribution to stockholders, 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 Shares), the Liquidation Preference per Share plus an amount equal to the accrued and unpaid dividend (whether or not declared) for the then-current dividend period accrued to but excluding the date of such liquidation payment, plus unpaid dividends on the Shares for all past dividend periods.

(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 E Preference Stock 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, on a parity with the Shares, the assets will be distributed to the Holders of Series E Preference Stock 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 E Preference Stock will not be entitled to be paid any amount in respect of a dissolution, liquidation or

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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 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 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, the Holders will not be entitled to any further participation in any distribution of assets by the Corporation.

3.    Voting Rights

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

(a)    So long as any Shares are outstanding, the consent of the Holders of at least a majority of the 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 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 Shares.

provided, however, that no such consent of the Holders of the Series E Preference Stock 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 Shares at the time outstanding.

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


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4.    Redemption

(a)    The Shares shall not be redeemable prior to February 1, 2022. On or after that date, 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 may redeem the Shares, in whole or in part, at any time or from time to time, 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) from the Dividend Payment Date immediately preceding the redemption date to but excluding the redemption date, plus unpaid dividends on the Shares for all past dividend periods, if any; provided, however that any redemption that would reduce the Liquidation Preference of the Shares outstanding to $50 million or less in the aggregate would be restricted to a redemption in whole only. If less than all of the outstanding Shares are to be redeemed, the Corporation will select the Shares to be redeemed from the outstanding Shares not previously called for redemption by lot or pro rata (as nearly as possible) or by any other method that the Board in its sole discretion deems equitable.

(b)    In the event the Corporation shall redeem any or all of the 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 Shares of any other Holder being redeemed.

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

(d)    The 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 Shares.

(e)    Any 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 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, a fund sufficient to redeem the 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 Shares, the redemption price thereof, then from and after the date of such deposit

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(although prior to the date fixed for redemption) such Shares so called shall be deemed to be redeemed and dividends thereon shall cease to accrue after said date fixed for redemption and such deposit shall be deemed to constitute full payment of said Shares to the Holders thereof and thereafter said shares shall no longer be deemed to be outstanding, and the Holders thereof shall cease to be shareholders with respect to such 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 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.

5.    Rank

The 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 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 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 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 January 11, 2012.

/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 January 11, 2012.



/s/ Robert C. Boada
___________________________
Robert C. Boada

/s/ George T. Tabata
___________________________
George T. Tabata




8




CERTIFICATE OF INCREASE IN AUTHORIZED SHARES OF SERIES E 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 pursuant to Section 401(c) of the California Corporations Code:

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 January 11, 2012 resolutions authorizing and providing for the creation of a series of shares of Preference Stock to be known as Series E Preference Stock, such series initially consisting of 250,000 shares.

THIRD: Acting pursuant to the authority designated in the Articles and delegated by the Board of Directors of the Corporation, the Pricing Committee of the Board of Directors did duly adopt on January 30, 2012, the following resolutions designating an additional 100,000 shares of Preference Stock as Series E Preference Stock, with the result that the Corporation shall now have authorized an aggregate of 350,000 shares of Series E Preference Stock, all of which shall constitute a single series of Preference Stock:

“NOW, THEREFORE, BE IT RESOLVED, that an additional 100,000 shares of the presently authorized but unissued Preference Stock, no par value, are hereby determined to be and shall be of a series of said Preference Stock designated as the “Series E Preference Stock.”

BE IT FURTHER RESOLVED, that the rights, preferences, privileges and restrictions of shares of such series shall be as set forth in the Certificate of Determination of Preferences of the Series E Preference Stock, and all such shares shall constitute a single series of Preference Stock.”

FOURTH: The first two paragraphs of the SECOND section of the Certificate of Determination of Preferences of the Series E Preference Stock are hereby amended and restated in their entirety to read as follows:

“SECOND: Acting pursuant to the authority delegated by the Board of Directors of the Corporation, the Pricing Committee of the Board of Directors has duly adopted the following resolutions authorizing and providing for the creation of a series of said shares of Preference Stock to be known as Series E Preference Stock, consisting of 350,000 shares:

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NOW, THEREFORE, BE IT RESOLVED, that 350,000 shares of the presently authorized but unissued Preference Stock, no par value, are hereby determined to be and shall be of a series of said Preference Stock hereby designated as the "Series E Preference Stock" (the "Shares")."

FIFTH: The number of shares of Series E Preference Stock outstanding is 250,000 and the amount of the increase in the number of shares constituting Series E Preference Stock is 100,000.


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IN WITNESS WHEREOF, the undersigned have executed this Certificate in Rosemead, California on January 30, 2012.


/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 January 30, 2012.


/s/ Robert C. Boada
Robert C. Boada


/s/ George T. Tabata
George T. Tabata




11




CERTIFICATE OF DETERMINATION OF PREFERENCES OF THE SERIES F 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 May 11, 2012, the following resolutions authorizing and providing for the creation of a series of said shares of Preference Stock to be known as Series F Preference Stock, consisting of 200,004 shares, none of the shares of such series having been issued:

“NOW, THEREFORE, BE IT RESOLVED, that 200,004 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 F Preference Stock” (the “Series F Shares”); and

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

1.    Dividends

(a)    The holders of record of the Series F 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 which will accrue from and including May 17, 2012, and, if declared, will be payable on March 15, June 15, September 15 and December 15 of each year (each, a “Dividend Payment Date”), commencing September 15, 2012, at the annual rate of 5.625% of the Liquidation Preference. 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 F Shares not paid on a Dividend Payment Date and accrued. If a Dividend Payment Date 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. Dividends payable on the Series F Shares for any period from but including a Dividend Payment Date to but excluding the next succeeding Dividend Payment Date (a “Dividend 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 F Shares for the initial Dividend Period

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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. “Liquidation Preference” means $2,500.00 per share of the Series F 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.
(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 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 F 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 F 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 F 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 F 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 F 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 F Shares for any period unless full dividends have been declared and paid or set apart for payment on the Series F Shares for the then-current quarterly Dividend Period and all past quarterly Dividend Periods. When dividends are not paid in full upon the Series F 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 F Shares, all dividends declared upon the Series F Shares and all such other stock of the Corporation will be declared pro rata so that the amount of dividends declared for the Series F Shares and all such other stock will in all cases bear to each other the same ratio that accrued dividends for the Series F 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 F 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 F 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 F Shares which may be in arrears.
2.    Liquidation Rights
(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 F 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 F 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 F Shares for all past quarterly Dividend Periods, if any.

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(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 F 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 F Shares, the assets will be distributed to the Holders of Series F 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 F 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 F 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 F 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 F Shares shall have no voting rights except as set forth in this Section 3 or as otherwise provided by California law:
(a)    So long as any Series F Shares are outstanding, the consent of the Holders of at least a majority of the Series F 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 F 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 F Shares.
provided, however, that no such consent of the Holders of Series F 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 F 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 F Shares shall be redeemable (i) at the option of the Corporation at any time or from time to time on or after June 15, 2017 (an “Optional Redemption”) and (ii) at the option of the Corporation exercisable prior to June 15, 2017, if the Holder of all the Series F Shares is SCE Trust I or another Delaware

3




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 F Shares, in whole or in part, in the event of an Optional Redemption and (z) may redeem the Series F 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 F Shares for all past quarterly Dividend Periods, if any. If less than all of the outstanding Series F Shares are to be redeemed in an Optional Redemption, the Corporation will select the Series F Shares to be redeemed from the outstanding Series F 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 F 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 F 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 F Shares called for redemption shall cease to accrue and such Series F Shares called for redemption will no longer be deemed outstanding, and all rights of the Holders thereof will cease.

(d)    The Series F 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 F Shares.

(e)    Any Series F 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 F 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 F 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 F Shares, the redemption price thereof, then from and after the date of such deposit (although prior to the date fixed for redemption) such Series F 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 F Shares to the Holders thereof and thereafter said Series F Shares shall no longer be deemed to be outstanding, and the Holders thereof shall cease to be shareholders with respect to such Series F 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 F 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 terms in the Declaration of Trust of SCE Trust I, a Delaware statutory trust (the “Trust”), to be dated as of May 17, 2012, 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.

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5.    Rank

The Series F 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 F 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 F 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 F Shares with respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation.

5




IN WITNESS WHEREOF, the undersigned have executed this Certificate in Rosemead, California on May 11, 2012.

/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 May 11, 2012.


/s/ Robert C. Boada
Robert C. Boada


/s/ George T. Tabata
George T. Tabata



6





CERTIFICATE OF DETERMINATION OF PREFERENCES OF THE
SERIES G 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 January 23, 2013, the following resolutions authorizing and providing for the creation of a series of said shares of Preference Stock to be known as Series G Preference Stock, consisting of 160,004 shares, none of the shares of such series having been issued:

“NOW, THEREFORE, BE IT RESOLVED, that 160,004 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 G Preference Stock” (the “Series G Shares”); and

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


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1.    Dividends

(a)    The holders of record of the Series G 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 which will accrue from and including January 29, 2013, and, if declared, will be payable on March 15, June 15, September 15 and December 15 of each year (each, a “Dividend Payment Date”), commencing June 15, 2013, at the annual rate of 5.10% of the Liquidation Preference. 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 G Shares not paid on a Dividend Payment Date and accrued. If a Dividend Payment Date 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. Dividends payable on the Series G Shares for any period from but including a Dividend Payment Date to but excluding the next succeeding Dividend Payment Date (a “Dividend 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 G 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. “Liquidation Preference” means $2,500.00 per share of the Series G 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.

(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 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 G 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 G 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 G Shares for the then-current quarterly Dividend Period and all past quarterly Dividend Periods shall have been declared and paid or set apart.

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(d)    The Board may, in its discretion, choose to pay dividends on the Series G 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 G 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 G Shares for any period unless full dividends have been declared and paid or set apart for payment on the Series G Shares for the then-current quarterly Dividend Period and all past quarterly Dividend Periods. When dividends are not paid in full upon the Series G 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 G Shares, all dividends declared upon the Series G Shares and all such other stock of the Corporation will be declared pro rata so that the amount of dividends declared for the Series G Shares and all such other stock will in all cases bear to each other the same ratio that accrued dividends for the Series G 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 G 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 G 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 G Shares which may be in arrears.

2.    Liquidation Rights

(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 G 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 G 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 G 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 G


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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 G Shares, the assets will be distributed to the Holders of Series G 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 G 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 G 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 G 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 G Shares shall have no voting rights except as set forth in this Section 3 or as otherwise provided by California law:

(a)    So long as any Series G Shares are outstanding, the consent of the Holders of at least a majority of the Series G 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 G 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 G Shares.


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provided, however, that no such consent of the Holders of Series G 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 G 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 G Shares shall be redeemable (i) at the option of the Corporation at any time or from time to time on or after March 15, 2018 (an “Optional Redemption”) and (ii) at the option of the Corporation exercisable prior to March 15, 2018, if the Holder of all the Series G Shares is SCE Trust II 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 G Shares, in whole or in part, in the event of an Optional Redemption and (z) may redeem the Series G 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 G Shares for all past quarterly Dividend Periods, if any. If less than all of the outstanding Series G Shares are to be redeemed in an Optional Redemption, the Corporation will select the Series G Shares to be redeemed from the outstanding Series G 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 G 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 G 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 G Shares called for redemption shall cease to accrue and such Series G Shares called for redemption will no longer be deemed outstanding, and all rights of the Holders thereof will cease.

(d)    The Series G 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 G Shares.


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(e)    Any Series G 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 G 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 G 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 G Shares, the redemption price thereof, then from and after the date of such deposit (although prior to the date fixed for redemption) such Series G 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 G Shares to the Holders thereof and thereafter said Series G Shares shall no longer be deemed to be outstanding, and the Holders thereof shall cease to be shareholders with respect to such Series G 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 G 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 terms in the Declaration of Trust of SCE Trust II, a Delaware statutory trust (the “Trust”), to be dated as of January 29, 2013, 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 G 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 G Shares with respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation;


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(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 G 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 G 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 January 24, 2013.

/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 January 24, 2013.

/s/ Robert C. Boada
___________________________
Robert C. Boada

/s/ George T. Tabata
____________________________
George T. Tabata







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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:



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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

6





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


7




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.


8




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


9





CERTIFICATE OF DETERMINATION OF PREFERENCES OF THE
SERIES J 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 August 17, 2015, the following resolutions authorizing and providing for the creation of a series of said shares of Preference Stock to be known as Series J Preference Stock, consisting of 130,004 shares, none of the shares of such series having been issued:

“NOW, THEREFORE, BE IT RESOLVED, that 130,004 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 J Preference Stock” (the “Series J Shares”); and

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

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1.
Dividends

(a)    The holders of record of the Series J 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) 5.375% of the Liquidation Preference for each Dividend Period (as defined below) from, and including, the issue date of the Series J Shares to, but excluding, September 15, 2025 (the “Fixed Rate Period”), and (2) the three-month LIBOR rate plus 3.132% of the Liquidation Preference, for each Dividend Period from, and including, September 15, 2025 through, but excluding, the redemption date of the Series J Shares, if any (the “Floating Rate Period”). When, as and if declared by the Board, we will pay dividends on the Series J Shares quarterly, in arrears, on March 15, June 15, September 15 and December 15 of each year (each, a “Dividend Payment Date”), commencing December 15, 2015. 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 J 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 unless that day falls in the next calendar month, in which case the Dividend Payment Date will be the immediately preceding Business Day, and the related dividend will be calculated as set forth below using the actual number of days elapsed in the period. Dividends payable on the Series J 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 J 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 J 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 J 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 Dividend Period, which date is the “Dividend Determination Date” for the

2




Dividend Period. The Calculation Agent then will add 3.132% 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 J 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 days before the applicable payment date. Dividends not declared with respect to a specific

3




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 J 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 J 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 J 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 J 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 J 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 J Shares for any period unless full dividends have been declared and paid or set apart for payment on the Series J Shares for the then-current quarterly Dividend Period and all past quarterly Dividend Periods. When dividends are not paid in full upon the Series J 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 J Shares, all dividends declared upon the Series J Shares and all such other stock of the Corporation will be declared pro rata so that the amount of dividends declared for the Series J Shares and all such other stock will in all cases bear to each other the same ratio that accrued dividends for the Series J 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 J 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 J 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 J Shares which may be in arrears.


4





2.
Liquidation Rights

(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 J 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 J 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 J 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 J 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 J Shares, the assets will be distributed to the Holders of Series J 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 J 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 J 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 J 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.


5





3.
Voting Rights

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

(a)    So long as any Series J Shares are outstanding, the consent of the Holders of at least a majority of the Series J 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 J 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 J Shares with respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation.

provided, however, that no such consent of the Holders of Series J 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 J 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 J Shares shall be redeemable (i) at the option of the Corporation at any time or from time to time on or after September 15, 2025 (an “Optional Redemption”) and (ii) at the option of the Corporation exercisable prior to September 15, 2025, if the Holder of all the Series J Shares is SCE Trust IV 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 J Shares, in whole or in part, in the event of an Optional Redemption and (z) may redeem the Series J Shares in whole but not in part upon occurrence of a Special Event Redemption, in each

6




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 J Shares for all past quarterly Dividend Periods, if any. If less than all of the outstanding Series J Shares are to be redeemed in an Optional Redemption, the Corporation will select the Series J Shares to be redeemed from the outstanding Series J 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 J 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 J 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 J Shares called for redemption shall cease to accrue and such Series J Shares called for redemption will no longer be deemed outstanding, and all rights of the Holders thereof will cease.

(d)    The Series J 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 J Shares.

(e)    Any Series J 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 J 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 J 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 J Shares, the redemption price thereof, then from and after the date of such deposit (although prior to the date fixed for redemption) such Series J 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 J Shares to the Holders thereof and thereafter said Series J Shares shall no longer be deemed to be outstanding, and the Holders thereof shall cease to be shareholders with respect to such Series J 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 J Shares without interest.


7




(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 terms in the Declaration of Trust of SCE Trust IV, a Delaware statutory trust (the “Trust”), to be dated as of August 24, 2015, 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 J 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 J 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 J 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 J Shares with respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation.



8




IN WITNESS WHEREOF, the undersigned have executed this Certificate in Rosemead, California on August 18, 2015.

/s/ William M. Petmecky, III
__________________________
William M. Petmecky, III
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 August 18, 2015.

/s/ William M. Petmecky, III
__________________________
William M. Petmecky, III
Vice President

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




9






CERTIFICATE OF DETERMINATION OF PREFERENCES OF THE
SERIES K 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 March 1, 2016, the following resolutions authorizing and providing for the creation of a series of said shares of Preference Stock to be known as Series K Preference Stock, consisting of 120,004 shares, none of the shares of such series having been issued:

“NOW, THEREFORE, BE IT RESOLVED, that 120,004 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 K Preference Stock” (the “Series K Shares”); and

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

1





1.
Dividends

(a)      The holders of record of the Series K 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) 5.45% of the Liquidation Preference for each Dividend Period (as defined below) from, and including, the issue date of the Series K Shares to, but excluding, March 15, 2026 (the “Fixed Rate Period”), and (2) the three-month LIBOR rate plus 3.79% of the Liquidation Preference, for each Dividend Period from, and including, March 15, 2026 through, but excluding, the redemption date of the Series K Shares, if any (the “Floating Rate Period”). When, as and if declared by the Board, we will pay dividends on the Series K 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, 2016. 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 K 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 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 K 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 K 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 K 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 K 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 Dividend Period, which date is the “Dividend Determination Date” for the Dividend Period. The Calculation Agent then will add 3.79% to three-

2




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 K Shares will be binding and conclusive.
(ii)      The term “three-month LIBOR” means (a) the offered quotation for three-month dollar deposits as such rate appears: (i) on Reuters screen 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 LIBOR as determined using the foregoing methods for the first day before the Dividend Determination Date on which LIBOR can be so determined. “Reuters screen 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 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 K Shares shall be outstanding, no dividend (other than dividends or distributions paid in shares of, or options, warrants or rights to

3




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 K 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 K 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 K 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 K 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 K Shares for any period unless full dividends have been declared and paid or set apart for payment on the Series K Shares for the then-current quarterly Dividend Period and all past quarterly Dividend Periods. When dividends are not paid in full upon the Series K 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 K Shares, all dividends declared upon the Series K Shares and all such other stock of the Corporation will be declared pro rata so that the amount of dividends declared for the Series K Shares and all such other stock will in all cases bear to each other the same ratio that accrued dividends for the Series K 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 K 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 K 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 K Shares which may be in arrears.


4




2.
Liquidation Rights

(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 K 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 K 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 K 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 K 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 K Shares, the assets will be distributed to the Holders of Series K 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 K 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 K 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 K 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.

5





3.
Voting Rights

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

(a)      So long as any Series K Shares are outstanding, the consent of the Holders of at least a majority of the Series K 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 K 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 K Shares with respect to payment of dividends and distribution of assets upon liquidation, dissolution or winding up of the Corporation.

provided, however, that no such consent of the Holders of Series K 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 K 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 K Shares shall be redeemable (i) at the option of the Corporation at any time or from time to time on or after March 15, 2026 (an “Optional Redemption”) and (ii) at the option of the Corporation exercisable prior to March 15, 2026, if the Holder of all the Series K Shares is SCE Trust V 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 K Shares, in whole or in part, in the event of an Optional Redemption and (z) may redeem the Series K Shares in whole but not in part upon occurrence of a Special Event Redemption, in each case out of funds

6





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 K Shares for all past quarterly Dividend Periods, if any. If less than all of the outstanding Series K Shares are to be redeemed in an Optional Redemption, the Corporation will select the Series K Shares to be redeemed from the outstanding Series K 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 K 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 K 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 K Shares called for redemption shall cease to accrue and such Series K Shares called for redemption will no longer be deemed outstanding, and all rights of the Holders thereof will cease.

(d)      The Series K 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 K Shares.

(e)      Any Series K 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 K 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 K 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 K Shares, the redemption price thereof, then from and after the date of such deposit (although prior to the date fixed for redemption) such Series K 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 K Shares to the Holders thereof and thereafter said Series K Shares shall no longer be deemed to be outstanding, and the Holders thereof shall cease to be shareholders with respect to such Series K 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 K Shares without interest.

7





(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 terms in the Amended and Restated Declaration of Trust of SCE Trust V, a Delaware statutory trust (the “Trust”), to be dated as of March 8, 2016, 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 K 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 K 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 K 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 K 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 March 2, 2016.


/s/ William M. Petmecky, III
__________________________
William M. Petmecky, III
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 March 2, 2016.


/s/ William M. Petmecky, III
__________________________
William M. Petmecky, III
Vice President

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




9

Exhibit 10.1

EDISON INTERNATIONAL
2008 EXECUTIVE SEVERANCE PLAN
Amended and Restated Effective
February 24, 2016



TABLE OF CONTENTS

Page


PREAMBLE
1
ARTICLE 1 DEFINITIONS
1
ARTICLE 2 SEVERANCE BENEFITS
5
 
2.1
 
Right to Severance Benefits
5
 
2.2
 
Right to Change in Control Severance Benefits
5
 
2.3
 
Severance Benefit - Termination by Employer Without Cause (Other than a Qualifying Termination Event or Termination due to the Eligible Employee’s Disability)
6
 
 
2.3.1
Cash Benefit
6
 
 
2.3.2
Health Care Coverage Benefit
7
 
 
2.3.3
[Reserved]
7
 
 
2.3.4
Survivor Benefit Plan Extension
8
 
 
2.3.5
Outplacement Benefit
8
 
 
2.3.6
Educational Assistance Benefit
8
 
 
2.3.7
[Reserved]
8
 
2.4
 
Change in Control Severance Benefits
8
 
 
2.4.1
Senior Officer Enhanced Benefit
8
 
 
2.4.2
Certain Additional Enhanced Benefits
9
 
2.5
 
Termination for Other Reasons
9
 
2.6
 
Termination and Repayment of Benefits
10
 
2.7
 
Notice of Termination
11
ARTICLE 3 TAXES
11
ARTICLE 4 [RESERVED]
11
ARTICLE 5 BENEFICIARY DESIGNATION
11
ARTICLE 6 CONDITIONS RELATED TO BENEFITS
12
 
6.1
 
Nonassignability
12
 
6.2
 
No Right to Assets
12
 
6.3
 
Payment of Obligations Absolute
13
 
6.4
 
Other Benefit Plans
13
 
6.5
 
Incapacity
14
 
6.6
 
Six Month Delay
14
 
6.7
 
Termination of Employment
14

i
TABLE OF CONTENTS
(continued)
Page


 
6.8
 
Re-Employment
14
ARTICLE 7 CLAIMS AND REVIEW PROCEDURES
15
 
7.1
 
Claims Procedures
15
 
7.2
 
Dispute Arbitration
15
ARTICLE 8 SUCCESSORS AND ASSIGNMENT
16
 
8.1
 
Successors to an Employer
16
 
8.2
 
Sale, Spin-Off, or Liquidation of an Employer
17
ARTICLE 9 ADMINISTRATION OF THE PLAN
17
 
9.1
 
Administrator Action
17
 
9.2
 
Powers and Duties of the Administrator
17
 
9.3
 
Plan Interpretation
18
 
9.4
 
Information
18
 
9.5
 
Compensation, Expenses and Indemnity
18
ARTICLE 10 MISCELLANEOUS
19
 
10.1
 
Release and Agreement
19
 
10.2
 
Term of the Plan
19
 
10.3
 
Employment Status
20
 
10.4
 
Gender, Singular and Plural
20
 
10.5
 
Validity
20
 
10.6
 
Modification
21
 
10.7
 
Notice
21
 
10.8
 
Applicable Law
21
 
10.9
 
WARN Act
21
 
10.10
 
Statutes and Regulations
22


ii



EDISON INTERNATIONAL
2008 EXECUTIVE SEVERANCE PLAN
PREAMBLE
Edison International hereby amends and restates the Edison International Executive Severance Plan effective February 24, 2016. This Plan is intended to be an “employee benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.
The purpose of this Plan is to provide for continuity in the management and operations of the Employers by offering Eligible Employees of the Affiliates employment protection and financial security.
ARTICLE 1
DEFINITIONS
Capitalized terms in the text of the Plan are defined as follows:
Administrator means the Compensation and Executive Personnel Committee of the Board of Directors of EIX.
Affiliate means EIX or any corporation or entity which (i) along with EIX, is a component member of a “controlled group of corporations’ within the meaning of Section 414(b) of the Code, and (ii) has approved the participation of its Executives in the Plan.
Beneficiary means the person or persons or entity designated as such in accordance with Article 5 of the Plan.
Board means the Board of Directors of EIX.
Cause means the occurrence of either or both of the following:
(1) The Eligible Employee’s conviction for, or pleading guilty or nolo contendere to, committing an act of fraud, embezzlement, theft, or other act constituting a felony; or
(2) The willful engaging by the Eligible Employee in misconduct that:
(i) if the event giving rise to the termination of the Eligible Employee’s employment does not occur during a Protected Period, is in violation of EIX’s and/or the Eligible Employee’s Employer’s policies and practices applicable to the Eligible Employee from time to time; or
(ii) if the event giving rise to the termination of the Eligible Employee’s employment occurs during a Protected Period, would have resulted in the termination of the Eligible Employee’s employment by EIX or the Eligible Employee’s Employer under EIX’s

1



and/or the Eligible Employee’s Employer’s policies and practices applicable to the Eligible Employee in effect immediately prior to the start of the Protected Period.
However, no act or failure to act, on the Eligible Employee’s part, shall be considered “willful” unless done, or omitted to be done, by the Eligible Employee not in good faith and without reasonable belief that his or her action or omission was in the best interest of EIX and his or her Employer.
CEO means the Chief Executive Officer of EIX.
Change in Control means a change in control shall be deemed to have occurred as of the first day that any one or more of the following conditions shall have been satisfied:
(1)      Any Person (other than a trustee or other fiduciary holding securities under an employee benefit plan of EIX) becomes the Beneficial Owner, directly or indirectly, of securities of EIX representing thirty percent (30%) or more of the combined voting power of EIX’s then outstanding securities. For purposes of this clause, “Person” shall mean any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), except that such term shall not include one or more underwriters acquiring newly-issued voting securities (or securities convertible into voting securities) directly from EIX with a view towards distribution; and the term “Beneficial Owner” shall mean as defined under Rule 13d-3 promulgated under the Exchange Act.
(2)      On any day after the Effective Date (the “Reference Date”) Continuing Directors cease for any reason to constitute a majority of the Board. A director is a “Continuing Director” if he or she either:
(i)      was a member of the Board on the applicable Initial Date (an “Initial Director”); or
(ii)      was elected to the Board, or was nominated for election by EIX’s shareholders, by a vote of at least two-thirds (2/3) of the Initial Directors then in office.
A member of the Board who was not a director on the applicable Initial Date shall be deemed to be an Initial Director for purposes of clause (ii) above if his or her election, or nomination for election by EIX’s shareholders, was approved by a vote of at least two-thirds (2/3) of the Initial Directors (including directors elected after the applicable Initial Date who are deemed to be Initial Directors by application of this provision) then in office. For these purposes, “Initial Date” means the later of (i) the Effective Date or (ii) the date that is two years before the Reference Date.
(3)      EIX is liquidated; all or substantially all of EIX’s assets are sold in one or a series of related transactions; or EIX is merged, consolidated, or reorganized with or involving any other corporation, other than a merger, consolidation, or reorganization that results in the voting securities of EIX outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the combined voting power of the voting securities of EIX (or such surviving entity) outstanding immediately after such merger, consolidation, or reorganization. Notwithstanding the foregoing, a bankruptcy of EIX or a sale or spin-off of an affiliate of EIX

2



(short of a dissolution of EIX or a liquidation of substantially all of EIX’s assets, determined on an aggregate basis) will not constitute a Change in Control of EIX.
(4)      The consummation of such other transaction that the Board may, in its discretion in the circumstances, declare to be a Change in Control of EIX for purposes of this Plan.
COBRA means the health care continuation coverage requirements set forth in Section 4980B of the Code.
Code means the Internal Revenue Code of 1986, as amended.
Disability means the Eligible Employee (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months or (ii) is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, receiving income replacement benefits for a period of not less than three months under a plan covering employees of the Employer.
Effective Date means December 31, 2008.
EIX means Edison International, or any successor thereto as provided in Section 8.1.
Eligible Employee means an Executive of an Affiliate or an employee of an Affiliate who was an Executive of an Affiliate after a Potential Change in Control (unless and until the Board declares in good faith that the circumstances giving rise to the Potential Change in Control will not result in an actual Change in Control or an actual Change in Control occurs) or during a Protected Period.
Employer means the Affiliate employing the Eligible Employee. As the context may require, an Eligible Employee’s Employer means the Employer that employs or last employed the Eligible Employee.
Exchange Act means the United States Securities Exchange Act of 1934, as amended.
Executive means an Employee of an Affiliate who is designated an Executive by the chief executive officer of that Affiliate or who is elected as a Vice President or officer of higher rank by the board of that Affiliate or the Board of EIX.
Executive Retirement Plan means the EIX 2008 Executive Retirement Plan, as amended from time to time, or any similar or successor plan sponsored by an Employer.


_____________________________
1 Effective December 31, 2013, no EME Individual shall be an “Eligible Employee” under this Plan. For this purpose, EME’s employees, EME’s former employees, and their respective beneficiaries are collectively referred to as “EME Individuals,” and “EME” refers to Edison Mission Energy and its subsidiaries.

3



Good Reason means, without the Eligible Employee’s express written consent, the occurrence of any one or more of the following during the Protected Period:
(1)
A material diminution in the Eligible Employee’s authorities, duties, and/or responsibilities.
(2)      A material diminution by the Eligible Employee’s Employer of the Eligible Employee’s Salary as in effect on the Effective Date, or as the same shall be increased from time to time.
(3)      The relocation of the Eligible Employee’s principal office more than 50 miles from the Eligible Employee’s principal office.
(4)      Any other action or inaction that constitutes a material breach by the Employer of the agreement under which the Eligible Employee provides services.
The foregoing events shall only constitute “Good Reason” if the Eligible Employee provides notice to the Employer of the existence of the condition within 90 days of its initial existence and the Employer does not remedy the condition within 30 days.
Person shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a group as contemplated by Sections 13(d)(3) and 14(d)(2) thereof.
Plan means the EIX 2008 Executive Severance Plan.
Potential Change in Control shall be deemed to have occurred as of the first day that any one or more of the following conditions shall have been satisfied:
(1)      Any Person (other than a trustee or other fiduciary holding securities under an employee benefit plan of EIX or of an EIX affiliate):
(iii)      announces an intention to take action which, if consummated, would result in a Change in Control; or
(iv)      becomes the Beneficial Owner, directly or indirectly, of securities of EIX representing fifteen percent (15%) or more of the combined voting power of EIX’s then outstanding securities. For purposes of this clause, “Person” (and “group” as used in the definition of Person) shall not include one or more underwriters acquiring newly-issued voting securities (or securities convertible into voting securities) directly from EIX with a view towards distribution.
(2)      EIX enters into an agreement that, if consummated, would result in a Change in Control.
(3)      The Board declares that a Potential Change in Control has occurred for purposes of this Plan.
Protected Period means the period related to a Change in Control that is deemed to commence on the date that is six months before the date of the actual Change in Control and end on the date that is two years after the Change in Control.

4



Qualifying Termination Event means, as to an Eligible Employee, the occurrence of one or both of the following events within the Protected Period corresponding to a Change in Control:
(1)      A termination of the Eligible Employee’s employment by his or her Employer, without the Eligible Employee’s consent, for reasons other than Cause or Disability; or
(2)      A termination of employment by the Eligible Employee for Good Reason; provided that the termination of employment is in no event later than two years following the initial existence of the Good Reason condition.
Retiree Health Care Program means, as to an Eligible Employee, the Eligible Employee’s Employer’s retiree health care program (if any).
Salary means the Eligible Employee’s basic pay from the Employer (excluding bonuses, special awards, commissions, severance pay, and other non-regular forms of compensation).
Separation from Service occurs when an Eligible Employee dies, retires, or otherwise has a termination of employment from the Employer that constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1), without regard to the optional alternative definitions available thereunder.
Target Bonus Percentage means the target, stated as a percentage of salary, fixed by the CEO of the Employer or by the Administrator for the bonus to be awarded to the Eligible Employee pursuant to the terms of the Executive Incentive Compensation Plan, the 2007 Performance Incentive Plan or a successor plan governing annual executive bonuses.
Termination Date means, in the case of an Eligible Employee who becomes entitled to benefits under this Plan, the day on which the Eligible Employee incurs a Separation from Service in connection with the event that entitles the Eligible Employee to such benefits.
ARTICLE 2
SEVERANCE BENEFITS
2.1      Right to Severance Benefits
Subject to Sections 2.6, 8.2, 10.1, and 10.9, an Eligible Employee shall be entitled to receive from his or her Employer the benefits described in Section 2.3 if the Eligible Employee’s employment by his or her Employer is terminated by the Employer without Cause (and other than due to the Eligible Employee’s Disability). Notwithstanding anything else contained herein to the contrary, an Eligible Employee shall not be entitled to receive the benefits described in Section 2.3 if the Eligible Employee is entitled to benefits under or as described in Section 2.2.
2.2      Right to Change in Control Severance Benefits
Subject to Sections 2.6, 8.2, 10.1, and 10.9, an Eligible Employee shall be entitled to receive the benefits described in Section 2.4 if the Eligible Employee incurs a Qualifying Termination Event. If more than one Qualifying Termination Event occurs with respect to an Eligible Employee, such events shall constitute a single Qualifying Termination Event and the provisions

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of Section 2.4 shall apply with respect to the Eligible Employee only once. An Eligible Employee’s continued employment shall not constitute a consent to, or a waiver of rights with respect to, any circumstances constituting Good Reason for purposes of determining if a Qualifying Termination Event has occurred with respect to the Eligible Employee.
2.3      Severance Benefit - Termination by Employer Without Cause (Other than a Qualifying Termination Event or Termination due to the Eligible Employee’s Disability)
In the event that an Eligible Employee becomes entitled to receive benefits in accordance with Section 2.1, then the Eligible Employee shall be entitled to the benefits described in Sections 2.3.1 through 2.3.6 below.
2.3.1      Cash Benefit
The Eligible Employee’s Employer shall pay to the Eligible Employee a non-discounted cash amount equal to the sum of the following:
(a)      an amount equal to the greater of:
(1)      one times the highest annualized rate of the Eligible Employee’s Salary in effect at any time during the 24-month period ending on the Eligible Employee’s Termination Date, or
(2)      one times the highest weekly rate of the Eligible Employee’s Salary in effect at any time during the 24-month period ending on the Eligible Employee’s Termination Date multiplied by the number of weeks that would have been used (if the Eligible Employee had not been an Executive) to determine the Eligible Employee’s cash severance benefit under the non-executive severance plan (if any) maintained by the Eligible Employee’s Employer and as in effect on the Eligible Employee’s Termination Date;
(b)      except as provided in EIX’s 2008 Executive Bonus Program (or successor annual bonus program for the relevant year) as to an Eligible Employee who is covered by such program, in the calendar year in which the Eligible Employee’s Termination Date occurs, a pro rata portion (based on the number of weekdays that elapsed in the calendar year in which the Eligible Employee’s Termination Date occurs between the start of that calendar year and the Eligible Employee’s Termination Date) of the Eligible Employee’s highest Target Bonus Percentage in effect at any time during the 24-month period ending on the Eligible Employee’s Termination Date multiplied by the Eligible Employee’s highest annualized Salary in effect at any time during such 24-month period; and
(c)      an amount equal to one times the highest annualized rate of the Eligible Employee’s Salary in effect at any time during the 24-month period ending on the Eligible Employee’s Termination Date times the Eligible Employee’s highest Target Bonus Percentage in effect at any time during the 24-month period ending on the Eligible Employee’s Termination Date.
The amount determined under this Section 2.3.1 shall be paid as a lump sum without notice or demand within 65 days following the date of the Eligible Employee’s Separation from Service,

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but only if EIX has timely received from the Eligible Employee the agreement referenced in Section 10.1.
2.3.2      Health Care Coverage Benefit
(a)      The Eligible Employee will be eligible to participate in the Retiree Health Care Program if, under the terms of the non-executive severance plan (if any) maintained by the Eligible Employee’s Employer and as in effect on the Eligible Employee’s Termination Date, the Eligible Employee would otherwise have been eligible (if he or she had not been an Executive) for participation in the Retiree Health Care Program by virtue of his or her age and service. For purposes of clarity, any healthcare benefits and subsidy (as opposed to eligibility) will be determined under the Retiree Health Care Program and not the non-executive severance plan.
(b)      If the Eligible Employee is not eligible for the Retiree Health Care Program in accordance with Section 2.3.2(a), is not otherwise eligible for the Retiree Health Care Program, or his or her Employer does not maintain a retiree health care program, the Eligible Employee will receive an extension of health care coverage for a period following the Eligible Employee’s Termination Date that is the greater of 12 months or the extension period for which the Eligible Employee would have been eligible (if he or she had not been an Executive) under the non-executive severance program (if any) maintained by the Eligible Employee’s Employer and as in effect on the Eligible Employee’s Termination Date but in no event longer than the maximum period the Eligible Employee would be entitled to continuation coverage under COBRA. Any continued coverage in accordance with the preceding sentence shall be on terms similar to those as in effect under the Eligible Employee’s Employer’s health care program in effect with respect to the Eligible Employee immediately before the termination of his or her employment and based on the Eligible Employee’s coverage elections in effect at such time, provided that the actual healthcare benefits and subsidy will be determined under the Eligible Employee’s Employer’s healthcare program as it may be amended from time to time. Notwithstanding Section 6.3 to the contrary, EIX and/or the Eligible Employee’s Employer, as applicable, shall not be obligated to continue such coverage if the Eligible Employee obtains similar coverage from any successor employer or from a health insurance exchange. EIX and/or the Eligible Employee’s Employer, as applicable, shall give the Eligible Employee the required COBRA benefit continuation notice prior to (and the Eligible Employee’s eligibility for continuation benefits under COBRA shall commence as of) the end of the applicable period determined as set forth above.
(c)      An Eligible Employee’s coverage under the Retiree Health Care Program pursuant to Section 2.3.2(a) is subject to the Eligible Employee’s Employer’s ability to amend and/or terminate coverage under its Retiree Health Care Program from time to time.  In the event that an Eligible Employee is covered under a Retiree Health Care Program pursuant to Section 2.3.2(a) and, in the period of time contemplated by Section 2.3.2(b) for the extension of health care coverage pursuant to such section, the Eligible Employee’s Employer terminates its Retiree Health Care Program, the Eligible Employee shall be entitled to an extension of coverage under and pursuant to Section 2.3.2(b) for the balance of the extension period contemplated by Section 2.3.2(b) and following the cessation of the Eligible Employee’s coverage under the Retiree Health Care Program.
2.3.3      [Reserved]

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2.3.4      Survivor Benefit Plan Extension
If the Eligible Employee was eligible to participate in the EIX 2008 Executive Survivor Benefit Plan (or predecessor plan) at any point during the 12 months preceding the Eligible Employee’s Termination Date, the Eligible Employee will be entitled to continued coverage under such Survivor Benefit Plan until the first to occur of (1) the end of the one-year period commencing on the Eligible Employee’s Termination Date or (2) the termination of the EIX 2008 Executive Survivor Benefit Plan at 11:59 p.m. Pacific time on December 31, 2016.
2.3.5      Outplacement Benefit
The Eligible Employee shall be entitled to reimbursement of up to $20,000 for reasonable outplacement costs incurred in the two-year period commencing on his or her Termination Date. Any such reimbursements shall be paid to the Eligible Employee by the end of the third taxable year of the Eligible Employee following the taxable year in which the Eligible Employee’s Separation from Service occurred.
2.3.6      Educational Assistance Benefit
The Eligible Employee shall be entitled to the educational assistance benefit to which he or she would have been entitled (if he or she had not been an executive) under the non-executive severance plan, if any, maintained by his or her Employer and as in effect on the Eligible Employee’s Termination Date. To the extent any educational assistance benefits or reimbursements are taxable to the Eligible Employee and provide for a deferral of compensation within the meaning of Section 409A of the Code, any such reimbursements or benefits shall be paid to the Eligible Employee on or before the last day of the Eligible Employee’s taxable year following the taxable year in which the expense was incurred, shall not be subject to liquidation or exchange for other benefits and the reimbursements or benefits that the Eligible Employee receives in one taxable year shall not affect the amount of reimbursements or benefits that the Eligible Employee receives in any other taxable year.
2.3.7      [Reserved]
2.4      Change in Control Severance Benefits
If an Eligible Employee incurs a Qualifying Termination Event, the Eligible Employee shall be entitled to the benefits described in Sections 2.3.1 through 2.3.6 above, subject to the following subsections of this Section 2.4.
2.4.1      Senior Officer Enhanced Benefit
If the Eligible Employee was a Senior Vice President or an officer of higher rank of EIX, Southern California Edison Company, Edison Energy Group, Inc., or Edison Energy Support Services, LLC within the 12 month period preceding his or her Termination Date but is not covered by Section 2.4.2, then the Eligible Employee will be entitled to the benefit modifications described in this Section 2.4.1. “Two times” will be substituted for “one times” in Section 2.3.1, including for purposes of determining the Eligible Employee’s benefit under Section 2.3.1(c). “Two-year period” will be substituted for “one-year period” in Section 2.3.4. “$30,000” will be

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substituted for “$20,000” in Section 2.3.5. Benefits under Section 2.3.2 will be extended to the maximum period permitted under COBRA.
2.4.2      Certain Additional Enhanced Benefits
If the Eligible Employee was the Chief Executive Officer of EIX, the President of Southern California Edison Company or Edison Energy Group, Inc., or the General Counsel or Chief Financial Officer of EIX within the 12 month period preceding his or her Termination Date, then the Eligible Employee will be entitled to the benefit modifications described in this Section 2.4.2. “Three times” will be substituted for “one times” in Section 2.3.1, including for purposes of determining the Eligible Employee’s benefit under Section 2.3.1(c). “Three-year period” will be substituted for “one-year period” in Section 2.3.4. “$50,000” will be substituted for “$20,000” in Section 2.3.5. Benefits under Section 2.3.2 will be extended to the maximum period permitted under COBRA.
2.5      Termination for Other Reasons
Except as expressly provided below, EIX and an Eligible Employee’s Employer shall have no obligations (or no further obligations, as the case may be) to the Eligible Employee under this Plan if:
(a)      the Eligible Employee’s employment is terminated by his or her Employer for Cause;
(b)      the Eligible Employee terminates his or her employment with his or her Employer during a Protected Period other than for Good Reason;
(c)      the Eligible Employee’s employment by his or her Employer terminates due to the Eligible Employee’s Disability or death;
(d)      the Eligible Employee terminates his or her employment with his or her Employer for any reason if the termination occurs outside of a Protected Period; or
(e)      the Eligible Employee is employed by an Employer that is sold, spun off, or liquidated and the Eligible Employee is no longer covered by this Plan as provided in Section 8.2 or the Eligible Employee does not timely comply with Section 10.1.
Notwithstanding anything else contained herein to the contrary, a termination of an Eligible Employee’s employment on account of the Eligible Employee reaching mandatory retirement age, as such age may be defined from time to time in policies adopted by EIX or his or her Employer prior to the commencement of the Protected Period, to the extent such policies are applicable to the Eligible Employee immediately prior to the commencement of the Protected Period and to the extent such policies are consistent with applicable law, shall not entitle the Eligible Employee to the benefits described in Section 2.3 and shall not be a Qualifying Termination Event unless the Eligible Employee was otherwise able to terminate employment for Good Reason immediately prior to his or her retirement and his or her retirement occurred during a Protected Period.

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2.6      Termination and Repayment of Benefits
EIX or the Eligible Employee’s Employer may terminate (or cause there to be terminated, as the case may be) any benefits otherwise payable or to be paid (or to be provided, as the case may be) to the Eligible Employee under this Plan, and/or may require the Eligible Employee to repay any benefits previously paid or provided to the Eligible Employee under this Plan, and EIX and the Eligible Employee’s Employer shall have no obligations (or no further obligations, as the case may be) to the Eligible Employee with respect thereto, if:
(a)      at the time of the termination of the Eligible Employee’s employment, there existed Cause for the Eligible Employee’s Employer to terminate the Eligible Employee’s employment (regardless of whether such Employer knew of the circumstances that constituted Cause at the time of such termination or first became aware of such circumstances after such termination, and regardless of whether the termination of employment was characterized as being for Cause at the time of such termination); or
(b)    during the period of the Eligible Employee’s employment by his or her Employer or at any time thereafter, the Eligible Employee committed or engaged in a breach of confidentiality, or an unauthorized disclosure or use of inside information, trade secrets or other confidential information of EIX or any of its affiliates; or
(c)    during the period of the Eligible Employee’s employment by his or her Employer or at any time thereafter, the Eligible Employee breached any no-solicitation obligation owed to EIX or any of its affiliates. (For purposes of clarity, the no-solicitation obligations covered by this Section 2.6(c) include, without limitation, those obligations set forth in Section 7 of the form of Severance Agreement attached hereto as Exhibit A, as those obligations are set forth in the Eligible Employee’s Severance Agreement.)
Any determination by EIX or the Eligible Employee’s Employer that the Eligible Employee’s benefits are to be terminated and/or repaid pursuant to this Section 2.6 shall be communicated to the Eligible Employee in writing. Such writing shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for such determination.
However, as to an Eligible Employee who is otherwise eligible for benefits pursuant to Section 2.3 or 2.4, and who satisfies the requirements of Section 10.1, the Eligible Employee’s minimum aggregate benefit pursuant to Section 2.3.1 (“Minimum Benefit”) shall be the lesser of (i) Ten Thousand Dollars ($10,000), or (ii) the amount of the Eligible Employee’s benefit otherwise determined pursuant to Section 2.3.1 (giving effect to any adjustment thereto pursuant to Section 2.4, if applicable in the circumstances). A termination of benefits pursuant to this Section 2.6 shall not cause the Eligible Employee’s aggregate benefit pursuant to Section 2.3.1 to be less than the applicable Minimum Benefit, nor shall a repayment of benefits required under this Section 2.6 require the Eligible Employee to repay the amount of his or her Minimum Benefit.
The provisions of this Section 2.6 are not in any way in limitation of any other right or remedy, (at law or otherwise, to obtain specific performance, injunctive relief, other appropriate relief and/or damages) otherwise available to EIX or any of its affiliates in the circumstances. Furthermore, the provisions of this Section 2.6 do not in any way limit any obligation

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(confidentiality, no-solicitation or otherwise) owed by any Eligible Employee to EIX or any of its affiliates.
2.7      Notice of Termination
Any termination of an Eligible Employee’s employment by his or her Employer for Cause or by an Eligible Employee for Good Reason shall be communicated by Notice of Termination. For purposes of this Plan, a “Notice of Termination” shall mean a written notice which shall indicate the specific termination provision in this Plan relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Eligible Employee’s employment under the provision so indicated. The Notice of Termination shall be effective on the date specified in Section 10.7 of this Plan. Any Notice of Termination remains subject to the provisions of Section 2.6.
ARTICLE 3
TAXES
EIX and/or the Eligible Employee’s Employer, as applicable, has the right to withhold from any amount otherwise payable to an Eligible Employee under or pursuant to this Plan the amount of any taxes that EIX or such Employer may legally be required to withhold with respect to such payment (including, without limitation, any United States Federal taxes, and any other state, city, or local taxes). In the event that tax withholding is required with respect to amounts or benefits payable or deliverable by EIX or the Eligible Employee’s Employer to an Eligible Employee and EIX or the Employer cannot satisfy its tax withholding obligations in the manner described in the preceding sentence, EIX or the Employer may require the Eligible Employee to pay or provide for the payment of such required tax withholding as a condition to the payment or delivery of such amounts or benefits. Each Eligible Employee, former Eligible Employee and Beneficiary shall be solely responsible for all income and employment taxes arising in connection with participation in this Plan or benefits hereunder.
ARTICLE 4
[RESERVED]
ARTICLE 5
BENEFICIARY DESIGNATION
The Eligible Employee will have the right, at any time, to designate any person or persons as Beneficiary (both primary and contingent) to whom payment under the Plan will be made in the event of the Eligible Employee’s death. The Beneficiary designation will be effective when it is submitted to the Administrator during the Eligible Employee’s lifetime in accordance with procedures established by the Administrator.
The submission of a new Beneficiary designation will cancel all prior Beneficiary designations. Any finalized divorce or marriage of an Eligible Employee subsequent to the date of a Beneficiary designation will revoke such designation, unless in the case of divorce the previous spouse was not designated as a Beneficiary, and unless in the case of marriage the Eligible Employee’s new spouse has previously been designated as Beneficiary. The spouse of a married

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Eligible Employee must consent in writing to any designation of a Beneficiary other than the spouse.
If an Eligible Employee fails to designate a Beneficiary as provided above, or if the Beneficiary designation is revoked by marriage, divorce, or otherwise without execution of a new designation, or if every person designated as Beneficiary predeceases the Eligible Employee, then the Administrator will direct the distribution of the benefits to the Eligible Employee’s estate. If a primary Beneficiary dies after commencement of payments to the Beneficiary but prior to completion of benefits under this Plan, and no contingent Beneficiary has been designated by the Eligible Employee, any remaining payments will be paid to the primary Beneficiary’s Beneficiary, if one has been designated, or to the Beneficiary’s estate.
ARTICLE 6
CONDITIONS RELATED TO BENEFITS
6.1      Nonassignability
The benefits provided under the Plan may not be alienated, assigned, transferred, pledged or hypothecated by or to any person or entity, at any time or any manner whatsoever. These benefits will be exempt from the claims of creditors of any Eligible Employee or other claimants and from all orders, decrees, levies, garnishment or executions against any Eligible Employee to the fullest extent allowed by law.
6.2      No Right to Assets
The benefits paid under the Plan will be paid from the general funds of the Employer who last employs the Eligible Employee immediately prior to the time that the Eligible Employee becomes entitled to benefits hereunder, and the Eligible Employee and any Beneficiary will be no more than unsecured general creditors of the Employer with no special or prior right to any assets of the Employer for payment of any obligations hereunder. Neither the Eligible Employee nor the Beneficiary will have a claim to benefits from any other Affiliate. EIX is not a guarantor of the benefit obligations of other participating Affiliates. By participating in, and by accepting any benefits under, this Plan, Eligible Employees consent to EIX sponsorship of this Plan, but acknowledge that EIX is not a guarantor of the benefit obligations of other participating Affiliates. Each Affiliate is responsible for payment of the accrued benefits under this Plan with respect to its own Eligible Employees subject to the terms and conditions set forth herein. Notwithstanding the foregoing or anything in the definition of “Employer” to the contrary, and at the sole discretion of EIX, EIX may determine that for purposes of benefits payable under this Plan, EIX shall be deemed to be the Employer obligated to pay such benefits. Such an election by EIX may be made, in EIX’s sole discretion, as to all Plan benefits, as to only certain benefits, and/or as to only certain Affiliates or Eligible Employees, and will be deemed an assumption of the specified benefit obligations of the applicable Affiliates. Subject to the further provisions hereof, EIX will be solely obligated to pay any such benefits and no Eligible Employee (or Beneficiary) will have a claim as to any other Affiliate with respect to such benefits. Upon an election by EIX under this Section 6.2, benefits covered by the election will be paid from the general funds of EIX (and not the Affiliate that would otherwise pay the benefits), provided that EIX may require that as between EIX and the Affiliate that would otherwise pay such benefits,

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the Affiliate will be responsible to pay EIX for the assumption of such obligations in accordance with funding arrangements determined by EIX at the time of election or any time thereafter. To the extent such Affiliate fails to comply with such funding arrangements or obtains any refund or offset of payments made from the Affiliate to EIX without the consent of EIX, the Affiliate that would otherwise be responsible for payment of benefits to the applicable Eligible Employee will remain responsible for such benefits. EIX will effectuate any such election pursuant to this Section 6.2 by providing written notice to the Administrator and the applicable Affiliates regarding the effective date of such election, and the benefits, Affiliates and Eligible Employees for which the election is applicable. The funding arrangements established by EIX at the time of its election, or from time to time thereafter, will set forth the method by which the Affiliates will remit funds to EIX in consideration of benefit obligations that are assumed by EIX.
6.3      Payment of Obligations Absolute
Subject to the Eligible Employee’s timely compliance with Section 10.1 and the agreement contemplated thereby, each Employer’s obligation to make the payments and the arrangements provided for herein shall be absolute and unconditional, and shall not be affected by any circumstances, including, without limitation, any offset, counterclaim, recoupment, defense, or other right which the Employer may have against the Eligible Employee or anyone else. Each and every payment made hereunder by an Employer shall be final, and the Employer shall not seek to recover all or any part of such payment from the Eligible Employee or from whomsoever may be entitled thereto, for any reasons whatsoever, except as otherwise provided in Article 7 and subject to the Eligible Employee’s timely compliance with Section 10.1 and the agreement contemplated thereby. Eligible Employees shall not be obligated to seek other employment in mitigation of the amounts payable or arrangements made under any provision of this Plan, and the obtaining of any such other employment shall in no event effect any reduction of an Employer’s obligations to make the payments and arrangements required to be made under this Plan except as provided in Section 2.3.2(b). The foregoing provisions of this Section 6.3 are subject to the provisions of Section 2.6 and Section 10.9.
6.4      Other Benefit Plans
All payments, benefits and amounts provided under this Plan shall be in addition to and not in substitution for any pension rights under EIX’s or other Employer’s tax-qualified pension plans in which the Eligible Employee participates, and any disability, workers’ compensation or EIX or other Employer benefit plan distribution that an Eligible Employee is entitled to, under the terms of any such plan, at the time his or her employment by his or her Employer terminates. Notwithstanding the foregoing, this Plan shall not create an inference that any duplicate payments shall be required, and notwithstanding anything else contained herein to the contrary, any severance benefits otherwise payable or deliverable under this Plan to a Participant shall be offset or reduced by the amount of severance benefits payable or deliverable to the Participant under any other plan, program, or agreement of or with EIX, the Participant’s Employer, or their respective Affiliates. Payments received by a person under this Plan shall not be deemed a part of the person’s compensation for purposes of determining the person’s benefits under any employee welfare, pension or other benefit plan or arrangement, if any, provided by an Employer, except where explicitly provided under the terms of such plan or arrangement.

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6.5      Incapacity
If any person entitled to payments under this Plan is incapacitated and unable to use such payments in his or her own best interest, EIX may direct that payments (or any portion) be made to that person’s legal guardian or conservator, or that person’s spouse, as an alternative to payment to the person unable to use the payments. EIX will have no obligation to supervise the use of such payments, and court-appointed guardianship or conservatorship may be required.
6.6      Six Month Delay
Notwithstanding any other provisions of the plan, any payment or benefit otherwise required to be made after an Eligible Employee’s Separation from Service that the Employer reasonably determines is subject to Section 409A(a)(2)(B)(i) of the Code shall not be paid until the earlier of (1) six months after the date of the Eligible Employee’s Separation from Service or (2) the Eligible Employee’s death.
6.7      Termination of Employment
Notwithstanding anything else contained herein to the contrary, a Participant shall not be deemed to have terminated employment or had a Separation from Service if his or her employment by an Employer terminates but he or she continues as an employee of another Affiliate.
6.8      Re-Employment
Notwithstanding anything else contained herein to the contrary, a Participant shall have no right to severance benefits hereunder (pursuant to Sections 2.3 or 2.4 or otherwise) with respect to a termination of his or her employment if, in connection with such termination, he or she is otherwise entitled to severance benefits under this Plan but, prior to the payment or delivery (or commencement of payment or delivery, as the case may be) of such benefits, the Participant becomes re-employed by his or her Employer or by another Affiliate. Notwithstanding anything else contained herein to the contrary, a Participant’s right to continuing or additional benefits under this Plan (including any right to continue participating in or receive benefits under a plan as provided for in Section 2.3) shall automatically terminate (but the Participant shall have no obligation to re-pay benefits previously paid) if the Participant becomes re-employed by his or her Employer or by another Affiliate. If a Participant is re-employed and his or her employment is subsequently terminated and the Participant again becomes entitled to severance benefits under the terms of this Plan in connection with such later termination of employment, the amount of cash severance payments otherwise payable to the Participant pursuant to Section 2.3.1 in connection with such later termination of employment shall be reduced by the amount of any severance payments paid under this Plan to the Participant within the 24 months prior to such later termination of employment in connection with any prior termination of his or her employment.

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ARTICLE 7
CLAIMS AND REVIEW PROCEDURES
7.1      Claims Procedures
(a)      The Administrator will notify an Eligible Employee or his or her Beneficiary (or person submitting a claim on behalf of an Eligible Employee or Beneficiary) (a “claimant”) in writing, within 90 days after his or her written application for benefits, of his or her eligibility or noneligibility for benefits under the Plan. If the Administrator determines that a claimant is not eligible for benefits or full benefits, the notice will set forth (1) the specific reasons for the denial, (2) a specific reference to the provisions of the Plan on which the denial is based, (3) a description of any additional information or material necessary for the claimant to perfect his or her claim, and a description of why it is needed, and (4) an explanation of the Plan’s claims review procedure and other appropriate information as to the steps to be taken if the claimant wishes to have the claim reviewed. If the Administrator determines that there are special circumstances requiring additional time to make a decision, the Administrator will notify the claimant of the special circumstances and the date by which a decision is expected to be made, and may extend the time for up to an additional 90-day period.
(b)      If a claimant is determined by the Administrator not to be eligible for benefits, or if the claimant believes that he or she is entitled to greater or different benefits, the claimant will have the opportunity to have the claim reviewed by the Administrator by filing a petition for review with the Administrator within 60 days after receipt of the notice issued by the Administrator. Said petition will state the specific reasons which the claimant believes entitle him or her to benefits or to greater or different benefits. Within 60 days after receipt by the Administrator of the petition, the Administrator will afford the claimant (and counsel, if any) an opportunity to present his or her position to the Administrator in writing, and the claimant (or counsel) will have the right to review the pertinent documents. The Administrator will notify the claimant of its decision in writing within the 60-day period, stating specifically the basis of its decision, written in a manner calculated to be understood by the claimant and the specific provisions of the Plan on which the decision is based. If, due to special circumstances (for example, because of the need for a hearing), the 60-day period is not sufficient, the decision may be deferred for up to another 60-day period at the election of the Administrator, but notice of this deferral will be given to the claimant. In the event of the death of the Eligible Employee, the same procedures will apply to the Eligible Employee’s Beneficiaries.
7.2      Dispute Arbitration
(a)      Effective as to any claims filed on or after June 19, 2014, final and binding arbitration under this Section 7.2 shall be the sole remedy available to a claimant after he or she has exhausted the claim and review procedures set forth in Section 7.1. Furthermore, exhaustion by the claimant of the claim and review procedures set forth in Section 7.1 is a mandatory prerequisite for binding arbitration under this Section 7.2. Any arbitration or civil action brought prior to the exhaustion of the claim and review procedures set forth in Section 7.1 shall be remanded to the Administrator to permit the claim and review procedures to be exhausted.

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(b)      After a claimant has exhausted the claim and review procedures set forth in Section 7.1, if the claimant is determined by the Administrator not to be eligible for benefits, or if the claimant believes that he or she is entitled to greater or different benefits, the claimant may submit his or her claim to final and binding arbitration under this Section 7.2.
Any arbitration under this Section 7.2 will be held in Los Angeles County, California, in accordance with the then-current JAMS Arbitration Rules and Procedures for Employment Disputes (“JAMS Rules”) and under the Federal Arbitration Act. The arbitration shall be before a sole arbitrator, selected by mutual agreement of the parties. If the parties are unable to agree upon an arbitrator, the arbitrator shall be selected by striking in accordance with the then-current JAMS Rules from a list of arbitrators supplied by JAMS. Any and all claims and/or defenses that would otherwise be available in a court of law will be fully available to the parties. The arbitrator selected pursuant to this paragraph (the “Arbitrator”) may order such discovery as is necessary for a full and fair exploration of the issues and dispute, consistent with the expedited nature of arbitration. The Arbitrator shall apply applicable substantive law to resolve the dispute. To the fullest extent provided by federal law, the decision rendered by the Administrator pursuant to the claim and review procedures set forth in Section 7.1 shall be upheld by the Arbitrator unless the Arbitrator determines that the Administrator abused its discretion. Notwithstanding the preceding sentence, if (1) a Change in Control occurs, then a claim review decision rendered by the Administrator within the three years following the Change in Control shall, if it is challenged by the claimant in accordance with this Section 7.2, be subject to de novo review by the Arbitrator, or (2) if the claimant is determined by the Administrator not to be eligible for benefits on account of the Administrator’s determination as to whether Cause, Disability or Good Reason exists, then such decision rendered by the Administrator as to whether Cause, Disability or Good Reason exists shall, if it is challenged by the claimant in accordance with this Section 7.2, be subject to de novo review by the Arbitrator. Subject to the applicable standard of review in the preceding two sentences, the Arbitrator may grant any award or relief available under applicable law that the Arbitrator deems just and equitable.
At the conclusion of the arbitration, the Arbitrator shall issue a written decision that sets forth the essential findings and conclusions upon which the Arbitrator’s award or decision is based. Any award or relief granted by the Arbitrator hereunder shall be final and binding on the parties hereto, and may be enforced by any court of competent jurisdiction. All costs unique to arbitration (e.g., the Arbitrator’s fees and room fees) shall be paid by the Administrator. The parties shall otherwise bear their own costs (e.g., attorneys’ fees, expert fees, witness fees, etc.). If, however, any party prevails on a statutory claim that affords the prevailing party attorneys’ fees and costs, then the Arbitrator may award reasonable fees and costs to the prevailing party.
ARTICLE 8
SUCCESSORS AND ASSIGNMENT
8.1      Successors to an Employer
Subject to Section 8.2, each Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) of all or substantially all of the business and/or assets of the Employer or of any division or subsidiary thereof (the business and/or assets of which constitute at least fifty percent (50%) of the total business and/or assets of the Employer)

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to expressly assume and agree to perform the Employer’s obligations under this Plan in the same manner and to the same extent that the Employer would be required to perform them if such succession had not taken place.
8.2      Sale, Spin-Off, or Liquidation of an Employer
Except as provided in the following two sentences, if EIX sells (regardless of whether pursuant to a stock sale or sale of all or substantially all of the business and/or assets of the Employer), spins-off or liquidates an Employer (other than EIX), this Plan shall be deemed to have been terminated as to all Eligible Employees employed by that Employer and such Eligible Employees shall have no further rights under this Plan and shall have no right to any payment or benefits under this Plan in respect of such termination. If such a sale, spin-off or liquidation occurs after a Potential Change in Control has occurred (and the Board has not declared in good faith that the circumstances giving rise to the Potential Change in Control will not result in an actual Change in Control) or during a Protected Period, the preceding sentence shall not apply with respect to any Eligible Employee who was employed immediately prior to the Potential Change in Control or start of the Protected Period, as applicable, by EIX or an Employer other than the Employer that is sold, spun off, or liquidated. The first sentence of this Section 8.2 will not apply to an Eligible Employee if (i) the Employer has entered a written agreement with the Eligible Employee, (ii) the agreement has been approved by the CEO or the senior officer of EIX responsible for Human Resources (or by EIX’s director responsible for executive compensation if EIX does not have an officer responsible for Human Resources other than the CEO), (iii) the agreement provides specific conditions under which the Eligible Employee will be eligible for the benefits described in Section 2.3 in connection with the sale or spin-off of the Employer, and (iv) those conditions are met.
ARTICLE 9
ADMINISTRATION OF THE PLAN
9.1      Administrator Action
The Administrator shall act at meetings by affirmative vote of a majority of the members of the Administrator. Any action permitted to be taken at a meeting may be taken without a meeting if, prior to such action, a written consent to the action is signed by all members of the Administrator and such written consent is filed with the minutes of the proceedings of the Administrator. A member of the Administrator shall not vote or act upon any matter which relates solely to himself or herself as an Eligible Employee. The Chairman or any other member or members of the Administrator designated by the Chairman may execute any certificate or other written direction on behalf of the Administrator.
9.2      Powers and Duties of the Administrator
The Administrator shall enforce this Plan in accordance with its terms, shall be charged with the general administration of this Plan, and shall have all powers necessary to accomplish its purposes, including, but not by way of limitation, the power and authority to do the following:
(a)      To determine eligibility for and participation in this Plan;

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(b)      To construe and interpret the terms and provisions of this Plan;
(c)      To compute and certify to the amount and kind of benefits payable to Eligible Employees and their Beneficiaries, and to determine the amount of withholding taxes to be deducted pursuant to Article 3;
(d)      To maintain all records that may be necessary for the administration of this Plan;
(e)      To provide for the disclosure of all information and the filing or provision of all reports and statements to Eligible Employees, Beneficiaries or governmental agencies as shall be required by law;
(f)      To make and publish such rules for the regulation of this Plan and procedures for the administration of this Plan as are not inconsistent with the terms hereof; and
(g)      To appoint a plan administrator or any other agent (which may include, without limitation, one or more employees of EIX), and to delegate to them such powers and duties in connection with the administration of this Plan as the Administrator may from time to time prescribe.
9.3      Plan Interpretation
The Administrator will administer the Plan and interpret, construe and apply its provisions in accordance with its terms and will provide direction and oversight as necessary to management, staff, or contractors to whom day-to-day Plan operations may be delegated. The Administrator will establish, adopt or revise such rules and regulations as it may deem necessary or advisable for the administration of the Plan. The Administrator will interpret and construe the Plan to comply with Section 409A of the Code. All decisions of the Administrator will be final and binding.
9.4      Information
To enable the Administrator to perform its functions, each Employer shall supply full and timely information to the Administrator on all matters relating to the compensation of all Eligible Employees, their death or other cause of termination, and such other pertinent facts as the Administrator may require.
9.5      Compensation, Expenses and Indemnity
The members of the Administrator shall serve without additional compensation for their services hereunder beyond that which they are entitled as authorized by the Board. The Administrator is authorized at the expense of EIX to employ such legal counsel as it may deem advisable to assist in the performance of its duties hereunder. EIX shall pay expenses and fees in connection with the administration of this Plan. To the extent permitted by applicable law, EIX shall indemnify and save harmless the Administrator and each member thereof, the Board and each member thereof, and delegates of the Administrator who are employees of EIX against any and all expenses, liabilities and claims, including legal fees to defend against such liabilities and claims arising out of their discharge in good faith of responsibilities under or incident to this Plan, other

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than expenses and liabilities arising out of willful misconduct. This indemnity shall not preclude such further indemnities as may be available under insurance purchased by EIX or provided by EIX under any bylaw, agreement or otherwise, as such indemnities are permitted under state law.
ARTICLE 10
MISCELLANEOUS
10.1      Release and Agreement
Notwithstanding anything else contained herein to the contrary, each Employer’s obligation to pay benefits to an Eligible Employee is subject to the condition precedent that the Eligible Employee execute, not later than 45 days after the Eligible Employee’s receipt of the Severance Agreement, a valid and effective Severance Agreement in the form attached hereto as Exhibit A (or such other form, which is substantially the same as the form attached hereto as Exhibit A, as the Administrator may require) and such executed agreement is received by EIX and the Eligible Employee’s Employer no later than 52 days after the Eligible Employee’s receipt of the Severance Agreement and is not revoked by the Eligible Employee or otherwise rendered unenforceable by the Eligible Employee. EIX will provide the applicable form of Severance Agreement to the Eligible Employee on or before the seventh day following the Eligible Employee’s Termination Date. EIX may modify the form of Severance Agreement from time to time to comply with applicable laws, rules and regulations. If the 45-day period for the Eligible Employee to consider the Severance Agreement plus any revocation period afforded by applicable law (together, the “Release Period”) spans two different calendar years, payment of the cash severance benefits pursuant to Section 2.3.1 (including any enhancement thereto pursuant to Section 2.4.1), shall be made within the period of time prescribed by Section 2.3.1 but in the second of those two calendar years and, to the extent required to avoid any tax, penalty or interest under Section 409A of the Code, any benefit payment or reimbursement pursuant to Sections 2.3.2 through 2.3.6 (including any enhancement thereto pursuant to Sections 2.4.1 and 2.4.2) that would otherwise be paid in the first of those two years shall not be paid until the second of those two years.
10.2      Term of the Plan
(a)      This Plan will commence on the Effective Date and shall continue in effect through December 31, 2009. However, at the end of such initial period and, if extended, at the end of each additional year thereafter, the term of this Plan shall be extended automatically for one additional year, unless the Administrator (or the Board) delivers written notice at least six months prior to the end of such term, or extended term, to each Eligible Employee that this Plan will not be extended, and if such notice is timely given this Plan will terminate at the end of the term then in progress; provided, however, that this provision for automatic extension shall have no application following a Potential Change in Control (unless and until the Board declares in good faith that the circumstances giving rise to the Potential Change in Control will not result in an actual Change in Control) or a Change in Control, in which case the provisions of Section 10.2(b) or Section 10.2(c), respectively, shall apply.
(b)      If a Potential Change in Control occurs, the Administrator (or the Board) may not give notice that the term of this Plan will not be extended, or will not be further extended, as the case

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may be, unless and until the Board declares in good faith that the circumstances giving rise to the Potential Change in Control will not result in an actual Change in Control or an actual Change in Control occurs.
(c)      In the event a Change in Control occurs during the initial or any extended term, this Plan will remain in effect for the longer of: twenty-four months beyond the month in which such Change in Control occurred; or
(1)      as to any Eligible Employee who incurs a Qualifying Termination Event, until all obligations of each Employer hereunder to that Eligible Employee have been fulfilled. Any subsequent Change in Control (“Subsequent Change in Control”) that occurs during the initial or any extended term shall also continue the term of this Plan until the later of:
(i)      twenty-four months beyond the month in which such Subsequent Change in Control occurred; or
(ii)      as to any Eligible Employee who incurs a Qualifying Termination Event, until all obligations of each Employer hereunder have been fulfilled to that Eligible Employee; provided, however, that if a Subsequent Change in Control occurs, it shall only be considered a Change in Control under this Plan if it occurs no later than twenty-four months after the immediately preceding Change in Control or Subsequent Change in Control.
(d)      The foregoing provisions of this Section 10.2 are subject to the provisions of Section 8.2 as to any Eligible Employee that is employed by an Employer that is sold or spun-off by EIX.
10.3      Employment Status
Except as may be provided under any other written agreement between an Eligible Employee and his or her Employer, the employment of the Eligible Employee by his or her Employer is “at will,” and may be terminated by either the Eligible Employee or the Employer at any time, subject to applicable law. Payments made under this Plan shall not give any person the right to any benefits provided to persons retained in an Employer’s employ (such as, without limitation, health and dental benefits). Except as may otherwise be required by law or set forth specifically in such plans or as otherwise expressly provided in this Plan, such benefits shall terminate as of the date the Eligible Employee’s employment by an Employer terminates.
10.4      Gender, Singular and Plural
All pronouns and variations thereof will be deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons may require. As the context may require, the singular may be read as the plural and the plural as the singular.
10.5      Validity
If any provision of the Plan is held invalid, void or unenforceable, the same will not affect, in any respect whatsoever, the validity of any other provisions of the Plan.

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10.6      Modification
The Administrator or the Board may from time to time amend this Plan in any way it determines to be advisable; provided, however, that no such amendment shall be effective without the consent of each affected Eligible Employee (or the Eligible Employee’s legal representative) if it is adopted (a) after a Potential Change in Control (unless and until the Board determines in good faith that the circumstances giving rise to the Potential Change in Control will not result in an actual Change in Control or an actual Change in Control occurs), or (b) during a Protected Period. No provision of this Plan may be waived unless as to an Eligible Employee such waiver is agreed to in writing and signed by the Eligible Employee (or the Eligible Employee’s legal representative) and by an authorized member of the Administrator (or the Board) or its designee or legal representative.
10.7      Notice
For purposes of this Plan, notices, including Notice of Termination, and all other communications provided for in this Plan shall be in writing and shall be deemed to have been duly given when delivered or on the date stamped as received by the U.S. Postal Service for delivery by certified or registered mail, postage prepaid and addressed:
(a)      if to the Eligible Employee, to his or her latest address as reflected on the records of EIX or his or her Employer, and
(b)      if to an Employer, to the attention of EIX’s Corporate Secretary at the address of EIX’s principal executive offices; or to such other address as either party may furnish to the other in writing for the delivery of notices to that party, with specific reference to this Plan and the importance of the notice, except that a notice of change of address shall be effective only upon receipt by the other party.
10.8      Applicable Law
The Plan will be governed and construed in accordance with the laws of California except where the laws of California are preempted by ERISA.
10.9      WARN Act
Benefits payable under this Plan are intended to satisfy, where applicable, any EIX or other Employer’s obligations under the Federal Worker Adjustment and Retraining Notification Act (“WARN”) and any similar obligations that EIX or any other Employer may have under any successor or other federal or state severance pay or pay continuation benefit statute (“Similar Severance Pay Law”). If it is determined that severance or pay continuation obligations to or for the benefit of the Eligible Employee exist under WARN or Similar Severance Pay Law that are in addition to benefits payable under this Plan (the “Additional Payments”), then the Eligible Employee’s entitlement to benefits payable in cash pursuant to Section 2.3 or 2.4 shall be reduced by an aggregate amount equal to the aggregate Additional Payments that it is determined the Eligible Employee is entitled to receive, provided that the reduction shall not cause the Eligible Employee’s aggregate benefit pursuant to Section 2.3.1 (giving effect to any adjustment thereto pursuant to Section 2.4, if applicable under the circumstances) to be less than the

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applicable Minimum Benefit. The Eligible Employee shall repay any amounts paid under this Plan to which he or she was not entitled after giving effect to the preceding sentence.
10.10      Statutes and Regulations
Any reference to a statute or regulation herein shall include any successor to such statute or regulation.
IN WITNESS WHEREOF , EIX has caused its duly authorized executive to execute this amended and restated Plan effective February 24, 2016.

EDISON INTERNATIONAL

/s/ Jacqueline Trapp
    
Jacqueline Trapp
Director, Executive Talent and Rewards



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EXHIBIT A
SEVERANCE AGREEMENT
This Severance Agreement (this “Agreement”) is made as of the _____ day of __________, 20___, by and between [name], an individual (the “Individual”), and Edison International, a California corporation (the “Company”), it provides for a termination date of [date—usually the day after the last day on payroll] (the “Termination Date”), and it is a severance agreement that includes a release, a confidentiality agreement, and an agreement not to solicit employees or customers, and certain other terms and conditions.
RECITALS
A.    The Individual and the Company have reached agreement on the termination of the Individual's employment by the Company and/or one or more of its current or former subsidiaries or affiliates (collectively, the Company and its current or former subsidiaries and affiliates are referred to herein as the “Company Group”).
B.    The Individual and the Company further desire to resolve all pending and potential actions and issues between the Individual and each member of the Company Group without the further expenditure of time and expense of litigation and, for that reason, have entered into this Agreement.
C.    The Company maintains the Edison International 2008 Executive Severance Plan (the “Plan”). The Company's (and/or another member of the Company Group's) obligation to pay or continue paying severance benefits to the Individual under and in accordance with the terms of the Plan, which benefits are summarized and attached to this Agreement as Exhibit A (the “Severance Benefits”), is subject to the requirement that the Company timely receive this Agreement from the Individual and that the Individual does not revoke or otherwise render this Agreement unenforceable.
AGREEMENT
In consideration of the covenants undertaken and the releases contained in this Agreement, and the Individual's right to receive the Severance Benefits, the Individual and the Company agree as follows:
1.      Termination of Employment
The Individual and the Company agree that the Individual's employment by the Company and/or one or more of the other members of the Company Group is terminated effective the Termination Date. Accordingly, the Individual hereby resigns any and all of his or her positions, offices, and/or directorships with each entity in the Company Group and any employment agreement(s) between the Individual and one or more members of the Company Group be, and they hereby are, terminated effective the Termination Date.

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2.      Severance Benefit
The Company and/or the appropriate member of the Company Group will pay to the Individual the Severance Benefits in accordance with the terms of the Plan.
3.      Release by the Individual
Except for those obligations created by or arising out of this Agreement, the Individual on behalf of himself or herself, his or her descendants, dependents, heirs, executors, administrators, assigns, and successors, and each of them, hereby covenants not to sue and fully releases and discharges the Company, its parent (if any), the Company's subsidiaries and affiliates, past and present, and each of them, as well as its and their trustees, directors, officers, agents, attorneys, insurers, employees, benefit plans, benefit plan fiduciaries, stockholders, representatives, assigns, and successors, past and present, and each of them, hereinafter together and collectively referred to as “Releasees,” with respect to and from any and all claims, wages, demands, rights, liens, agreements, contracts, covenants, actions, suits, causes of action, obligations, debts, costs, expenses, attorneys' fees, damages, judgments, orders and liabilities of whatever kind or nature in law, equity or otherwise, whether now known or unknown, suspected or unsuspected, and whether or not concealed or hidden, which he or she now owns or holds or he or she has at any time heretofore owned or held or may in the future hold as against said Releasees, arising out of or in any way connected with the Individual's employment relationship with any member of the Company Group, or the termination of his or her employment or any other transactions, occurrences, acts or omissions or any loss, damage or injury whatever, known or unknown, suspected or unsuspected, resulting from any act or omission by or on the part of said Releasees, or any of them, committed or omitted prior to the date of this Agreement including, without limiting the generality of the foregoing, any claim under Section 1981 of the Civil Rights Act of 1866, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Family and Medical Leave Act of 1993, the Worker Adjustment and Retraining Notification Act, the California Fair Employment and Housing Act, the California Family Rights Act, the California Worker Adjustment and Retraining Notification Act, the California Labor Code, any other claim under any other federal, state or local law or regulation, and any other claim for severance pay, bonus or incentive pay, sick leave, holiday pay, vacation pay, life insurance, health or medical insurance or any other fringe benefit, medical expenses, or disability (except vested benefits that the Individual may be entitled to receive as outlined in Exhibit A hereto, or vested benefits that the Individual may be entitled to receive, if any, under and in accordance with the terms of the Southern California Edison Company Retirement Plan or other qualified Company Group pension plan, Edison 401(k) Savings Plan, Medical Program, Dental Program, Vision Care Plan, Health Care Reimbursement Account Program, Dependent Care Reimbursement Account Program, and Employee Assistance Program). Exhibit A is incorporated herein by this reference. Nothing in this Agreement should be construed to release claims that cannot be released as a matter of law.
4.      Known and Unknown Claims
It is the intention of the Individual and the Company in executing this instrument that the same shall be effective as a bar to each and every claim, demand and cause of action hereinabove specified. In furtherance of this intention, the Individual hereby expressly waives

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any and all rights and benefits conferred upon him or her by the provisions of SECTION 1542 OF THE CALIFORNIA CIVIL CODE and expressly consents that this Agreement shall be given full force and effect according to each and all of its express terms and provisions, including those related to unknown and unsuspected claims, demands and causes of action, if any, as well as those relating to any other claims, demands and causes of action hereinabove specified. SECTION 1542 provides: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.” The Individual acknowledges that he or she may hereafter discover claims or facts in addition to or different from those which he or she now knows or believes to exist with respect to the subject matter of this Agreement and which, if known or suspected at the time of executing this Agreement, may have materially affected this settlement. Nevertheless, the Individual hereby waives any right, claim or cause of action that might arise as a result of such different or additional claims or facts. The Individual acknowledges that he or she understands the significance and consequence of such release and such specific waiver of SECTION 1542.
5.      Other Waiver by the Individual
The Individual expressly acknowledges and agrees that, by entering into this Agreement, he or she is waiving any and all rights or claims that he or she may have arising under the Age Discrimination in Employment Act of 1967, as amended, which have arisen on or before the date of execution of this Agreement.
6.      Confidentiality
The Individual represents and covenants that he or she has not previously and that he or she will not at any time, unless compelled by lawful process, disclose or use for his or her own benefit or purposes or the benefit or purposes of any other person, firm, partnership, joint venture, association, corporation or other business organization, entity or enterprise other than the Company, any trade secrets, or other confidential data or information relating to customers, development programs, costs, marketing, trading, investment, sales activities, promotion, credit and financial data, financing methods, or plans of any member of the Company Group; provided that the foregoing shall not apply to information which is generally known to the industry or the public other than as a result of the Individual's breach of this covenant. The Individual agrees that he or she will return to the Company immediately all memoranda, books, papers, plans, information, letters and other data, and all copies thereof or therefrom, in any way relating to the business of any entity within the Company Group, except that he or she may retain personal notes, notebooks and diaries that do not contain confidential information of the type described in the preceding sentence. The Individual further agrees that he or she will not retain or use for his or her account at any time any trade names, trademark or other proprietary business designation used or owned in connection with the business of any entity within the Company Group.
7.      No Solicitation
The Individual represents and covenants that he or she has not previously and that during the period commencing on the date hereof and ending on the second anniversary of the

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date hereof (the “Limitation Period”) he or she will not influence or attempt to influence customers of any entity within the Company Group (as it may now or in the future be composed), either directly or indirectly, to divert their business away from the Company Group to any individual, partnership, firm, corporation or other entity then in competition with the business of any entity within the Company Group. The Individual represents and covenants that he or she has not previously and that he or she will not at any time during the Limitation Period directly or indirectly solicit any person who is then, or at any time within six months prior thereto was, an employee of an entity within the Company Group who earned annually $25,000 or more as an employee of such entity during the last six months of his or her own employment to work for any business, individual, partnership, firm, corporation, or other entity then in competition with the business of any entity within the Company Group.
8.      Representations by the Individual
The Individual further expressly acknowledges, represents, and agrees that:
a.      He or she was not otherwise entitled to the Severance Benefits (in the event that the Individual is entitled to severance or pay continuation benefits under any federal or state law, including without limitation the Worker Adjustment and Retraining Notification Act ("WARN") or similar state law, the Individual acknowledges, represents and agrees that he or she was not otherwise entitled the level of Severance Benefits being offered and that such benefits exceed the minimum required statutory level of benefits that he or she may have otherwise been entitled to);
b.      His or her right to receive the Severance Benefits is consideration for his or her agreements herein and the Severance Benefits (to the extent that they exceed any minimum required statutory level of benefits under WARN or otherwise) would not be paid if he or she did not execute and deliver this Agreement;
c.      If, despite the Individual's release of claims as stated herein, it is determined that other severance or pay continuation obligations to or for the benefit of the Individual exist under WARN or similar state law (the “Additional Payments”), the Individual's entitlement to the Severance Benefits payable in cash shall be reduced by an aggregate amount equal to the aggregate Additional Payments that it is determined the Individual is entitled to receive, provided that the Individual will be entitled to the Minimum Benefit specified in Section 2.6 of the Plan, which Minimum Benefit the Individual agrees is, in and of itself, good and sufficient consideration for the Individual’s agreements and releases set forth in this Agreement;
d.      To the extent the Individual receives cash Severance Benefits that the Individual was not entitled to receive for any reason (including, without limitation, due to reduction for the Additional Payments), the Individual acknowledges, represents and agrees that he or she will promptly return the full amount of the excess payments;
e.      The restrictions on him or her which are set forth in Sections 6 and 7 are reasonable;

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f.      The Severance Benefits are subject to termination or reduction pursuant to Sections 2.6 and 10.9 of the Plan, provided that in all cases the Individual will be entitled to the Minimum Benefit specified in Section 2.6 of the Plan, which Minimum Benefit the Individual agrees is, in and of itself, good and sufficient consideration for the Individual’s agreements and releases set forth in this Agreement;
g.      He or she was orally advised by the Company and is hereby advised in writing by this Agreement to consult with an attorney before signing this Agreement;
h.      He or she was given a copy of this Agreement prior to the date of its execution, and informed that he or she had up to forty-five (45) days within which to consider the Agreement; if he or she signs this Agreement before the end of such forty-five (45) day period, he or she will have done so voluntarily and with full knowledge that he or she is waiving his or her right to have forty-five (45) days to consider this Agreement; and in the event that there are any changes to this Agreement, he or she agrees that no changes, whether material or immaterial, will restart the running of the forty-five (45) day period;
i.      He or she was informed that he or she has seven (7) days following the date of execution of the Agreement in which to revoke the Agreement; and
j.      He or she has had the opportunity to consult with his or her advisors and attorneys regarding this Agreement (including, without limitation, its terms, conditions, and effects) and represents that he or she has so consulted with such advisors and attorneys.
9.      Confidentiality of the Agreement
The parties agree that the terms and conditions of this Agreement shall remain confidential as between the parties and they shall not, except as required by law, disclose them to any other person other than family members, and legal and financial advisors. Without limiting the generality of the foregoing, the parties will not respond to or in any way participate in or contribute to any public discussion, notice or other publicity concerning, or in any way relating to, execution of this Agreement or the events (including any negotiations) which led to the termination of the Individual's employment. Without limiting the generality of the foregoing, the Individual specifically agrees that he or she shall not disclose information regarding this Agreement or the termination of his or her employment to any current or former employee of any entity in the Company Group (other than the Company's executive officers), except to the extent required by law or authorized in writing by the Company's General Counsel. The Individual hereby agrees that disclosure by him or her of any of the terms and conditions of this Agreement in violation of the foregoing shall constitute and be treated as a material breach of this Agreement.
10.      No Prior Assignment or Transfer
The Individual warrants and represents to the Company that he or she has not heretofore assigned or transferred to any person not a party to this Agreement any released matter or any part or portion thereof and he or she shall defend, indemnify and hold harmless the Releasees from and against any claim (including the payment of attorneys' fees and costs

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actually incurred whether or not litigation is commenced) based on or in connection with or arising out of any such assignment or transfer made, purported or claimed.
11.      No Further Employment Rights
The Individual and the Company acknowledge that any employment relationship between the Individual and the Company Group terminated on the Termination Date, and that they have no further employment or contractual relationship except as may arise out of this Agreement and that the Individual waives any right or claim to reinstatement as an employee of any member of the Company Group. In the event any member of the Company Group receives inquiries about the Individual from prospective employers, such member shall provide to such persons or entities only the following information: confirmation of the Individual's employment dates, position history, salary history, and that the Individual's employment with the Company Group was mutually terminated.
12.      Taxes
The Individual agrees that he or she shall be exclusively liable for the payment of all federal and state taxes which may be due as the result of the consideration that he or she receives pursuant to this Agreement and the Individual hereby represents that he or she shall make payments on such taxes at the time and in the amount required of him or her. In addition, the Individual hereby agrees fully to defend, indemnify and hold harmless Releasees and each of them from payment of taxes or penalties that are required of them by any government agency at any time as the result of payment of the consideration set forth herein. The Individual further agrees to provide the Releasees and each of them with any tax information that they or it may reasonably request.
13.      Beneficiaries and Successors
Each Releasee shall be deemed to be a beneficiary of the Individual's promises and representations made herein. In the event of a merger, consolidation, or transfer or sale of all or substantially all of the assets of the Company with or to any other individual(s) or entity, this Agreement shall inure to the benefit of such successor. In the event of a merger, transfer or sale of the stock or assets of an entity in the Company Group that results in such entity not continuing as a member of the Company Group, the Individual's promises and representations made herein shall continue to inure to the benefit of such entity as well as the Company.
14.      Entire Agreement
This instrument constitutes and contains the entire agreement and understanding concerning the Individual's relationship with the Company Group, the termination of the Individual's employment, and the other subject matters addressed herein between the parties, and supersedes and replaces all prior negotiations and all agreements proposed or otherwise, whether written or oral, concerning the subject matters hereof. This is an integrated document.
Notwithstanding the foregoing paragraph, any obligations of the Individual regarding confidentiality, trade secrets, inventions, no solicitation, or similar matters under an

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existing agreement or policy to which the Individual is a party or otherwise bound (“Additional Obligations”) shall continue in effect and, to that end, such Additional Obligations are outside of the scope of the foregoing paragraph. The provisions of this Agreement pertaining to confidentiality, trade secrets, inventions, no solicitation, or similar matters are in addition to (and not in lieu of) any such Additional Obligations.
15.      Revocability
The Individual may revoke this Agreement in its entirety during the seven (7) days following execution of this Agreement by the Individual. Any revocation of this Agreement must be in writing, clearly state that it is a revocation of this Agreement, and be hand delivered to, or delivered in such a manner to ensure receipt by, the General Counsel of the Company during the revocation period. This Agreement will become effective, enforceable, and irrevocable upon seven (7) days following its execution by the Individual, unless it is revoked during the seven-day period.
16.      Severability
If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of this Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable.
17.      Governing Law
This Agreement shall be deemed to have been executed and delivered within the State of California, and the rights and obligations of the parties hereunder shall be construed and enforced in accordance with, and governed by, the laws of the State of California without regard to principles of conflict of laws.
18.      Mandatory Arbitration
Except for the injunctive relief provided for in the last paragraph of this Section 18, any dispute or controversy between the Individual, on the one hand, and the Company (or any other Releasee), on the other hand, in any way arising out of, related to, or connected with this Agreement or the subject matter thereof, or arising out of or related to any other dispute between the Individual and the Company or any other member of the Company Group, now or in the future, shall be resolved through: (a) the claims and arbitration provisions contained in Article 7 of the Plan, to the extent the dispute or controversy involves the Severance Benefits or any other benefits under the Plan; (b) the claims and dispute resolution provisions of the applicable benefit plan, to the extent the dispute or controversy involves any claim not released under this Agreement with respect to a benefit plan that is (i) sponsored or maintained by the Company or any other member of the Company Group and (ii) subject to the Employee Retirement Income Security Act of 1974; or (c) final and binding arbitration in accordance with the arbitration provisions in the following paragraph, for other disputes or controversies.

A-7




Any arbitration under this Section 18 will be held in Los Angeles County, California, in accordance with the then-current JAMS Arbitration Rules and Procedures for Employment Disputes (“JAMS Rules”) and under the Federal Arbitration Act. The arbitration shall be before a sole arbitrator, selected by mutual agreement of the parties. If the parties are unable to agree upon an arbitrator, the arbitrator shall be selected by striking in accordance with the then-current JAMS Rules from a list of arbitrators supplied by JAMS. Any and all claims and/or defenses that would otherwise be available in a court of law will be fully available to the parties. The arbitrator selected pursuant to this paragraph (the “Arbitrator”) may order such discovery as is necessary for a full and fair exploration of the issues and dispute, consistent with the expedited nature of arbitration. The Arbitrator shall apply applicable substantive law to resolve the dispute. At the conclusion of the arbitration, the Arbitrator shall issue a written decision that sets forth the essential findings and conclusions upon which the Arbitrator’s award or decision is based. Any award or relief granted by the Arbitrator hereunder shall be final and binding on the parties hereto, and may be enforced by any court of competent jurisdiction. All costs unique to arbitration (e.g., the Arbitrator’s fees and room fees) shall be paid by the Company. The parties shall otherwise bear their own costs (e.g., attorneys’ fees, expert fees, witness fees, etc.). If, however, any party prevails on a statutory claim that affords the prevailing party attorneys’ fees and costs, then the Arbitrator may award reasonable fees and costs to the prevailing party.
It is further agreed that the Company will or would suffer irreparable injury if the Individual were to breach Section 6 or 7 of this Agreement and that, regardless of the dispute resolution provisions set forth in the foregoing paragraphs, the Company would by reason of such breach or potential breach be entitled to injunctive relief in a court of appropriate jurisdiction, and the Individual further consents and stipulates to the entry of such injunctive relief in such a court prohibiting the Individual from engaging in any act, conduct, or relationship in violation of, or that would reasonably result in a violation of, this Agreement.
19.      Counterparts, Headings
This Agreement may be executed in counterparts, and each counterpart, when executed, shall have the efficacy of a signed original. Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose. The headings in this Agreement are only for convenience and ease of reference and are not to be considered in construction or interpretation.
20.      Waiver, Amendment
Failure to insist upon strict compliance with any of the terms, covenants, or conditions hereof shall not be deemed a waiver of such term, covenant, or condition, nor shall any waiver or relinquishment of, or failure to insist upon strict compliance with, any right or power hereunder at any one or more times be deemed a waiver or relinquishment of such right or power at any other time or times. No waiver shall be binding unless in writing and signed by the party waiving the breach. No amendment of any term or provision of this Agreement shall be binding unless in writing and signed by all parties to this Agreement.

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21.      No Presumption
In entering this Agreement, the parties represent that they have had full opportunity to consult with attorneys of their own choice, that the parties have completely read and understood the terms of this Agreement and voluntarily accepted such terms. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties, and no presumption or burden of proof will arise favoring or disfavoring any party because it or its representatives drafted any of the provisions of this Agreement.
22.      Additional Acts
All parties agree to cooperate fully and to execute any and all supplementary documents and to take all additional actions that may be necessary or appropriate to give full force to the basic terms and intent of this Agreement and which are not inconsistent with its terms.
[ The remainder of this page has intentionally been left blank .]

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I have read the foregoing Agreement and I accept and agree to the provisions it contains and hereby execute it voluntarily with full understanding of its consequences.

EXECUTED on this ______ day of _________________ at          ______________________ (County and State where agreement is signed).
The Individual Signature:     
Print Name:     

EXECUTED on this ______ day of _________________ at                  ______________________ (County and State where agreement is signed).
Edison International

By:     
Print Name:     
Title:     


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Exhibit 10.2







EDISON INTERNATIONAL

2008 EXECUTIVE DISABILITY PLAN





Amended and Restated Effective
January 1, 2016




 




TABLE OF CONTENTS

PREAMBLE
1
ARTICLE 1 DEFINITIONS
1
ARTICLE 2 BENEFITS
2
ARTICLE 3 CONDITIONS RELATED TO BENEFITS
2
 
3.1 Nonassignability
2
 
3.2 No Right to Assets
3
 
3.3 Protective Provisions
3
 
3.4 Incapacity
4
ARTICLE 4 PLAN ADMINISTRATION
4
 
4.1 Plan Interpretation
4
 
4.2 Limited Liability
4
ARTICLE 5 AMENDMENT OR TERMINATION OF PLAN
4
 
5.1 Authority to Amend or Terminate
4
 
5.2 Limitations
4
ARTICLE 6 CLAIMS AND REVIEW PROCEDURES
5
 
6.1 Claims Procedure
5
 
6.2 Dispute Arbitration
6
ARTICLE 7 MISCELLANEOUS
7
 
7.1 Participation in Other Plans
7
 
7.2 Forfeiture
7
 
7.3 Successors
8
 
7.4 Employment Not Guaranteed
8
 
7.5 Gender, Singular and Plural
8
 
7.6 Captions
8
 
7.7 Validity
8
 
7.8 Waiver of Breach
8
 
7.9 Applicable Law
8
 
7.10 Notice
8
 
7.11 Statutes and Regulations
8


    




EDISON INTERNATIONAL

2008 EXECUTIVE DISABILITY PLAN

Amended and Restated Effective January 1, 2016


PREAMBLE

The purpose of this Plan is to provide supplemental disability benefits to Eligible Employees of participating Affiliates of EIX.

ARTICLE 1
DEFINITIONS

Capitalized terms in the text of the Plan are defined as follows:

Administrator means the Compensation and Executive Personnel Committee of the Board of Directors of EIX.

Affiliate means EIX or any corporation or entity which (i) along with EIX, is a component member of a "controlled group of corporations" within the meaning of Section 414(b) of the Code, and (ii) has approved the participation of its Executives in the Plan.

Board means the Board of Directors of EIX.

Change in Control means a Change in Control of EIX as defined in the EIX 2008 Executive Severance Plan (or any similar successor plan).

Code means the Internal Revenue Code of 1986, as amended.

EIX means Edison International.

Eligible Employee means an Executive of an Affiliate.

Employee Disability Plan means any plan other than this Plan that provides salary-replacement benefits to employees of Affiliates for short- or long-term disability or illness.

Employer means the Affiliate employing the Eligible Employee. Notwithstanding the foregoing, with respect to a particular Eligible Employee’s benefits under the Plan, for purposes of determining which Affiliate is obligated to pay such benefits, Employer as to

1



such Eligible Employee and benefits means the Affiliate last employing the Eligible Employee.

Executive means an employee of an Affiliate who is designated an Executive by the CEO of that Affiliate or who is elected as a Vice President or officer of higher rank by the board of that Affiliate or by the Board of EIX.

Plan means the EIX 2008 Executive Disability Plan.

Salary Rate means the basic rate of pay as fixed by the Employer (excluding bonuses, special awards, commissions, severance pay, and other non-regular forms of compensation).

ARTICLE 2
BENEFITS

To the extent that a salary replacement benefit is payable from any Employee Disability Plan because of an Eligible Employee’s absence from work for one or more days because of his or her own illness or disability, the Plan will supplement the aggregate benefit payable from Employee Disability Plans and full-pay sick leave as necessary to ensure that the Eligible Employee will receive a total salary replacement benefit amount for each such day of absence from work equal to his or her full daily Salary Rate, for up to one year from the date of initial absence for any single period of Disability, as such period is defined under the applicable Employee Disability Plan. Payment will be made on regularly scheduled paydays in the same manner as benefits are paid under the applicable Employee Disability Plan. An Eligible Employee shall cease to be eligible to participate in the Plan if he or she ceases to be employed by an Affiliate (regardless of the reason for the termination of employment); provided that, if at the time of such termination of employment the Eligible Employee has an illness or disability and is receiving (or is in the process of qualifying for) long term disability benefits under the applicable Employee Disability Plan, then the Eligible Employee’s benefits under the Plan as to that illness or disability shall continue (or, if the Eligible Employee is in the process of qualifying for long-term disability benefits, benefits under the Plan shall commence if such qualification occurs and shall continue) until the first to occur of (1) one year after the date of initial absence for the period of Disability in effect at termination of employment, as such period of Disability is defined under the applicable Employee Disability Plan or (2) the date a salary replacement benefit is no longer payable from the applicable Employee Disability Plan.
ARTICLE 3
CONDITIONS RELATED TO BENEFITS
3.1 Nonassignability
The benefits provided under the Plan may not be alienated, assigned, transferred, pledged or hypothecated by or to any person or entity, at any time or in any manner

2



whatsoever. These benefits will be exempt from the claims of creditors of any Eligible Employee or other claimants and from all orders, decrees, levies, garnishment or executions against any Eligible Employee to the fullest extent allowed by law. Notwithstanding the foregoing, the benefit payable to an Eligible Employee may be assigned in full or in part, pursuant to a domestic relations order of a court of competent jurisdiction.
3.2 No Right to Assets
An Eligible Employee’s benefits paid under the Plan will be paid from the general funds of the Eligible Employee’s Employer, and the Eligible Employee will be no more than an unsecured general creditor of that Employer with no special or prior right to any assets of the Employer for payment of any obligations hereunder. The Eligible Employee will have no claim to benefits from any other Affiliate. Notwithstanding the foregoing or anything in the definition of “Employer” to the contrary, and at the sole discretion of EIX, EIX may determine that for purposes of benefits payable under the Plan, EIX shall be deemed to be the Employer obligated to pay such benefits. Such an election by EIX may be made, in EIX’s sole discretion, as to all Plan benefits, as to only certain benefits, and/or as to only certain Affiliates or Eligible Employees, and will be deemed an assumption of the specified benefit obligations of the applicable Affiliates. Subject to the further provisions hereof, EIX will be solely obligated to pay any such benefits and no Eligible Employee will have a claim as to any other Affiliate with respect to such benefits. Upon an election by EIX under this Section 3.2, benefits covered by the election will be paid from the general funds of EIX (and not the Affiliate that would otherwise pay the benefits), provided that EIX may require that as between EIX and the Affiliate that would otherwise pay such benefits, the Affiliate will be responsible to pay EIX for the assumption of such obligations in accordance with funding arrangements determined by EIX at the time of election or any time thereafter. To the extent such Affiliate fails to comply with such funding arrangements or obtains any refund or offset of payments made from the Affiliate to EIX without the consent of EIX, the Affiliate that would otherwise be responsible for payment of benefits to the applicable Eligible Employee will remain responsible for such benefits. EIX will effectuate any such election pursuant to this Section 3.2 by providing written notice to the Administrator and the applicable Affiliates regarding the effective date of such election, and the benefits, Affiliates and Eligible Employees for which the election is applicable. The funding arrangements established by EIX at the time of its election, or from time to time thereafter, will set forth the method by which the Affiliates will remit funds to EIX in consideration of Plan benefit obligations that are assumed by EIX.
3.3 Protective Provisions
The Eligible Employee will cooperate with the Administrator by furnishing any and all information requested by the Administrator, in order to facilitate the payment of benefits hereunder, taking such physical examinations as the Administrator may deem necessary and signing such consents to insure or taking such other actions as may be requested by the Administrator. If the Eligible Employee refuses to cooperate, the Administrator and the Employer will have no further obligation under the Plan.

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3.4 Incapacity
If any person entitled to payments under this Plan is incapacitated and unable to use such payments in his or her own best interest, EIX may direct that payments (or any portion) be made to that person’s legal guardian or conservator, or that person’s spouse, as an alternative to payment to the person unable to use the payments. EIX will have no obligation to supervise the use of such payments, and court-appointed guardianship or conservatorship may be required.
ARTICLE 4
PLAN ADMINISTRATION
4.1 Plan Interpretation
The Administrator will administer the Plan and interpret, construe and apply its provisions in accordance with its terms and will provide direction and oversight as necessary to management, staff, or contractors to whom day-to-day Plan operations may be delegated. The Administrator will establish, adopt or revise such rules and regulations as it may deem necessary or advisable for the administration of the Plan. All decisions of the Administrator will be final and binding.
4.2 Limited Liability
Neither the Administrator, nor any of its members or designees, will be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Plan.
ARTICLE 5
AMENDMENT OR TERMINATION OF PLAN
5.1 Authority to Amend or Terminate
The Administrator will have full power and authority to prospectively modify or terminate this Plan, and the Administrator's interpretations, constructions and actions, including any determination of the amount or recipient of the payment to be made, will be binding and conclusive on all persons for all purposes. Absent the consent of the Eligible Employee, however, the Administrator will in no event have any authority to modify this section. However, no such amendment or termination will apply to any person who has then qualified for or is receiving benefits under this Plan.
5.2 Limitations
In the event of Plan amendment or termination which has the effect of eliminating or reducing a benefit under the Plan, the benefits of Eligible Employees will not be less than the benefits to which such Eligible Employees would have been entitled immediately prior to such amendment or termination of the Plan.


4



ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1 Claims Procedure

(a) Within a reasonable period of time, but not later than 45 days after receipt of a claim, the Administrator or its delegate shall notify the Eligible Employee (or person submitting a claim on behalf of the Eligible Employee) (a “claimant”) of any adverse benefit determination on the claim, unless circumstances beyond the Plan’s control require an extension of time for processing the claim. In no event may the extension period exceed 30 days from the end of the initial 45-day period. If an extension is necessary, the Administrator or its delegate shall provide the claimant with a written notice to this effect prior to the expiration of the initial 45-day period. The notice shall describe the circumstances requiring the extension and the date by which the Administrator or its delegate expects to render a determination on the claim. If, prior to the end of the first 30-day extension period, the Administrator or its delegate determines that, due to circumstances beyond the control of the Plan, a decision cannot be rendered within that extension period, the period for making the determination may be extended for an additional 30 days, so long as the Administrator or its delegate notifies the claimant, prior to the expiration of the first 30-day extension period, of the circumstances requiring the extension and the date as of which the Administrator or its delegate expects to render a decision. This notice of extension shall specifically describe the standards on which entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim, and the additional information needed to resolve those issues, and that the claimant has at least 45 days within which to provide the specified information.

(b) In the case of an adverse benefit determination, the Administrator or its delegate shall provide to the claimant written or electronic notification setting forth in a manner calculated to be understood by the claimant (i) the specific reason or reasons for the adverse benefit determination; (ii) reference to the specific Plan provisions on which the adverse benefit determination is based; (iii) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why the material or information is necessary; (iv) a description of the Plan’s claim review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse final benefit determination on review; (v) if an internal rule, guideline, protocol or similar criterion (“internal standard”) was relied upon in making the determination, a copy of the internal standard or a statement that the internal standard shall be provided to the claimant free of charge upon request; and (vi) if the determination is based on a medical necessity or experimental treatment or similar exclusion or limit, an explanation of the scientific or clinical judgment for the determination or a statement that such explanation shall be provided free of charge upon request.

(c) If a claimant is determined by the Administrator not to be eligible for benefits, or if the claimant believes that he or she is entitled to greater or different benefits, the claimant will have the opportunity to have the claim reviewed by the Administrator by filing a petition for review with the Administrator within 180 days after receipt of the notice issued by the Administrator. Said petition will state the specific reasons which the claimant believes entitle him or her to benefits or to greater or different benefits. Within 45 days after receipt by the Administrator of the petition, the Administrator will afford the claimant (and counsel, if any) an opportunity to present his or her position to the

5



Administrator in writing, and the claimant (or counsel) will have the right to review the pertinent documents. The Administrator will notify the claimant of its decision in writing within the 45-day period, stating specifically the basis of its decision, written in a manner calculated to be understood by the claimant and including the information described in Section 6.1(b) above. If, due to special circumstances (for example, because of the need for a hearing), the 45-day period is not sufficient, the decision may be deferred for up to another 45-day period at the election of the Administrator, but notice of this deferral will be given to the claimant. In the event of the death of the Eligible Employee, the same procedures will apply to the Eligible Employee’s beneficiaries.
6.2 Dispute Arbitration
(a)    Effective as to any claims filed on or after June 19, 2014, final and binding arbitration under this Section 6.2 shall be the sole remedy available to a claimant after he or she has exhausted the claim and review procedures set forth in Section 6.1. Furthermore, exhaustion by the claimant of the claim and review procedures set forth in Section 6.1 is a mandatory prerequisite for binding arbitration under this Section 6.2. Any arbitration or civil action brought prior to the exhaustion of the claim and review procedures set forth in Section 6.1 shall be remanded to the Administrator to permit the claim and review procedures to be exhausted.
(b)    After a claimant has exhausted the claim and review procedures set forth in Section 6.1, if the claimant is determined by the Administrator not to be eligible for benefits, or if the claimant believes that he or she is entitled to greater or different benefits, the claimant may submit his or her claim to final and binding arbitration under this Section 6.2.
Any arbitration under this Section 6.2 will be held in Los Angeles County, California, in accordance with the then-current JAMS Arbitration Rules and Procedures for Employment Disputes (“JAMS Rules”) and under the Federal Arbitration Act. The arbitration shall be before a sole arbitrator, selected by mutual agreement of the parties. If the parties are unable to agree upon an arbitrator, the arbitrator shall be selected by striking in accordance with the then-current JAMS Rules from a list of arbitrators supplied by JAMS. Any and all claims and/or defenses that would otherwise be available in a court of law will be fully available to the parties. The arbitrator selected pursuant to this paragraph (the “Arbitrator”) may order such discovery as is necessary for a full and fair exploration of the issues and dispute, consistent with the expedited nature of arbitration. The Arbitrator shall apply applicable substantive law to resolve the dispute. To the fullest extent provided by federal law, the decision rendered by the Administrator pursuant to the claim and review procedures set forth in Section 6.1 shall be upheld by the Arbitrator unless the Arbitrator determines that the Administrator abused its discretion. Notwithstanding the preceding sentence, if a Change in Control

6



occurs, then a claim review decision rendered by the Administrator within the three years following the Change in Control shall, if it is challenged by the claimant in accordance with this Section 6.2, be subject to de novo review by the Arbitrator. Subject to the applicable standard of review in the preceding two sentences, the Arbitrator may grant any award or relief available under applicable law that the Arbitrator deems just and equitable.
At the conclusion of the arbitration, the Arbitrator shall issue a written decision that sets forth the essential findings and conclusions upon which the Arbitrator’s award or decision is based. Any award or relief granted by the Arbitrator hereunder shall be final and binding on the parties hereto, and may be enforced by any court of competent jurisdiction. All costs unique to arbitration (e.g., the Arbitrator’s fees and room fees) shall be paid by the Administrator. The parties shall otherwise bear their own costs (e.g., attorneys’ fees, expert fees, witness fees, etc.). If, however, any party prevails on a statutory claim that affords the prevailing party attorneys’ fees and costs, then the Arbitrator may award reasonable fees and costs to the prevailing party.
(c)    Notwithstanding any contrary provisions of this Section 6.2, if the claim is for disability benefits, the following rules apply: (1) arbitration under this Section 6.2 shall be the mandatory second level of appeal following the exhaustion by the claimant of the claim and review procedures set forth in Section 6.1, and such exhaustion is a mandatory prerequisite for arbitration under this Section 6.2—any arbitration or civil action brought with respect to a claim for disability benefits prior to the exhaustion of the claim and review procedures set forth in Section 6.1 shall be remanded to the Administrator to permit the claim and review procedures to be exhausted; (2) arbitration of a claim for disability benefits under this Section 6.2 shall not be binding, and the claimant shall not be precluded from challenging the decision of the Arbitrator in a civil action brought pursuant to Section 502(a) of ERISA; and (3) except as specifically set forth in this Section 6.2(c), if the claim is for disability benefits, the arbitration shall be conducted as set forth in Section 6.2(b).

ARTICLE 7
MISCELLANEOUS
7.1 Participation in Other Plans
The Eligible Employee will continue to be entitled to participate in all employee benefit programs of the Employer as may, from time to time, be in effect.
7.2 Forfeiture
The payments to be made pursuant to the Plan require the Eligible Employee to devote substantially all of his or her time, skill, diligence and attention to the business of the Employer and not to actively engage, either directly or indirectly, in any business or other activity adverse to the best interests of the business of the Employer. Any breach of these conditions will result in complete forfeiture of benefits under the Plan, and EIX and the Employer will have no further liability therefor.

7



7.3 Successors
The rights and obligations of each Employer under the Plan will inure to the benefit of, and will be binding upon, the successors and assigns of the Employer.
7.4 Employment Not Guaranteed
Nothing contained in the Plan nor any action taken hereunder will be construed as a contract of employment or as giving any Eligible Employee any right to continue in employment with the Employer or any other Affiliate.
7.5 Gender, Singular and Plural
All pronouns and variations thereof will be deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons may require. As the context may require, the singular may be read as the plural and the plural as the singular.
7.6 Captions
The captions of the articles and sections of the Plan are for convenience only and will not control or affect the meaning or construction of any of its provisions.
7.7 Validity
If any provision of the Plan is held invalid, void or unenforceable, the same will not affect, in any respect whatsoever, the validity of any other provisions of the Plan.
7.8 Waiver of Breach
The waiver by EIX or the Administrator of any breach of any provision of the Plan by the Eligible Employee will not operate or be construed as a waiver of any subsequent breach by the Eligible Employee.
7.9 Applicable Law
The Plan will be governed and construed in accordance with the laws of California except where the laws of California are preempted by ERISA.
7.10 Notice
Any notice or filing required or permitted to be given to the Administrator under the Plan will be sufficient if in writing and hand-delivered, or sent by first class mail to the principal office of EIX, directed to the attention of the Administrator. The notice will be deemed given as of the date of delivery, or, if delivery is made by mail, as of the date shown on the postmark.
7.11 Statutes and Regulations
Any reference to a statute or regulation herein shall include any successor to such statute or regulation.




8



IN WITNESS WHEREOF , EIX has adopted this amended and restated Plan effective as of the 1 st day of January, 2016.



EDISON INTERNATIONAL

/s/ Jacqueline Trapp
__________________________________________
Jacqueline Trapp
Director, Executive Talent and Rewards





9


Exhibit 10.3

EDISON INTERNATIONAL
2016 Executive Annual Incentive Program
1.
PURPOSE
The purpose of this Edison International 2016 Executive Annual Incentive Program (this “ Program ”) is to promote the success of Edison International, a California corporation, (the “ Corporation ”), by motivating the executives selected to participate in this Program and set forth in Section 3.1 below (each, a “ Participant ”) to maximize the performance of the Corporation and rewarding them with cash bonuses directly related to such performance. This Program is intended to provide bonuses that qualify as performance-based compensation within the meaning of Section 162(m) (“ Section 162(m) ”) of the United States Internal Revenue Code of 1986, as amended (the “ Code ”). This Program is adopted under Section 5.2 of the Corporation’s 2007 Performance Incentive Plan (the “ Plan ”). Capitalized terms are defined in the Plan if not defined herein.
2.
ADMINISTRATION
This Program shall be administered by the Compensation and Executive Personnel Committee of the Board (the “ Committee ”), which shall consist solely of two or more members of the Board who are “outside directors” within the meaning of Section 162(m). Action of the Committee with respect to the administration of this Program shall be taken pursuant to a majority vote or by the unanimous written consent of its members. The Committee shall have the authority to construe and interpret this Program and any agreements or other document relating to Awards under the Program, may adopt rules and regulations relating to the administration of this Program, and shall exercise all other duties and powers conferred on it by this Program. Any decision or action of the Committee within its authority hereunder shall be conclusive and binding upon all persons. Neither the Board nor the Committee, nor any person acting at the direction thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with this Program (or any Award made under this Program).
3.
AWARDS
3.1
Award Grants; Maximum Annual Incentive Amount . Each “ Award ” granted to a Participant under this Program represents the opportunity to receive a cash payment determined under this Section 3 (an “ Annual Incentive ”), subject to the terms and conditions of this Program. The maximum amount of the Annual Incentive payable to each Participant (the “ Maximum Annual Incentive Amount ”) shall be determined by multiplying (i) the Annual Incentive Pool (as defined in Section 3.2 below), by (ii) the Participant’s “ Annual Incentive Percentage ” as set forth in the following table:
Participant
Annual Incentive Percentage
Janet Theresa Clayton
3%
Theodore F. Craver, Jr.
28%
Peter Thomas Dietrich
5%
Stuart R. Hemphill
4%
Ronald L. Litzinger
8%
John A. Murphy
6%
Ronald Owen Nichols
3%
Kevin M. Payne
3%
Pedro J. Pizarro
11%
Maria C. Rigatti
4%
William J. Scilacci, Jr.
10%
Russell C. Swartz
4%
Adam S. Umanoff
8%
Gaddi H. Vasquez
3%
In no case, however, shall the amount of any Annual Incentive exceed the applicable limit set forth in Section 5.2.3 of the Plan.


3.2
Annual Incentive Pool . As soon as practicable after the end of the Corporation’s 2016 fiscal year (the “ Performance Period ”), the Committee shall determine the amount of the Corporation’s earnings from continuing operations (after interest, taxes, depreciation and amortization, and determined on a consolidated basis) for the Performance Period (the “ Performance Level ”). The “ Annual Incentive Pool ” shall be determined by multiplying (i) the Performance Level, by (ii) three percent (3.0%). No Participant shall receive any payment under this Program unless and until the Committee has certified, by resolution or other appropriate action in writing, that the amount of the Performance Level has been accurately determined in accordance with the terms, conditions and limits of this Program and that any other material terms previously established by the Committee or set forth in this Program applicable to the Award were in fact satisfied.
3.3
Committee Discretion . Notwithstanding the foregoing provisions, the Committee shall retain discretion to reduce (but not increase) the Maximum Annual Incentive Amount otherwise payable to any one or more Participants pursuant to Sections 3.1 and 3.2. The Committee may exercise such discretion on any basis it deems appropriate (including, but not limited to, its assessment of the Corporation’s performance relative to its operating or strategic goals for the Performance Period and/or the Participant’s individual performance for such period). For purposes of clarity, if the Committee exercises its discretion to reduce the amount of any Annual Incentive payable hereunder, it may not allocate the amount of such reduction to Annual Incentives payable to other Participants.
3.4
Payment of Annual Incentives . Any Annual Incentives shall be paid as soon as practicable following the certification of the Committee’s findings under Section 3.2 and its determination of the final Annual Incentive amount (after giving effect to any exercise of its discretion to reduce Annual Incentives pursuant to Section 3.3) and in all events no later than March 15, 2017; in each case subject (i) to tax withholding pursuant to Section 4.6, and (ii) in the case of a Participant eligible to defer compensation under the EIX 2008 Executive Deferred Compensation Plan (the “ EDCP ”), to any timely deferral election the Participant may have made pursuant to the terms of the EDCP.
3.5
Termination of Employment .
(a)
Except as provided in Section 3.5(b), in the event that a Participant’s employment with the Corporation and its Subsidiaries terminates at any time during the Performance Period, the Participant’s Award will immediately terminate upon such termination of employment, and the Participant will not be entitled to any Annual Incentive payment in respect of such Award; provided that the Committee may, in its discretion, award a full or partial Annual Incentive for the Performance Period to any Participant whose termination of employment during the Performance Period is due to the Participant’s death, permanent and total disability, or Retirement (with the amount of any such Bonus not to exceed the amount the Participant would have been entitled to had he or she remained employed for the entire Performance Period). For purposes of this Section 3.5, the term “ Retirement ” with respect to a Participant shall mean a termination of the Participant’s employment on or after the first day of the month in which the Participant (A) attains age 65 or (B) attains age 61 with five “years of service,” as that term is defined in the Edison 401(k) Savings Plan.
(b)
In the event that the Participant’s employment with the Corporation and its Subsidiaries terminates during the Performance Period in circumstances that entitle the Participant to severance benefits pursuant to the Corporation’s 2008 Executive Severance Plan, and in such circumstances the Participant satisfies the applicable conditions for receiving severance benefits under that plan (including, without limitation, any requirement to execute and deliver a release of claims), then the provisions of this Section 3.5(b) shall control over Section 2.3.1(b) of the 2008 Executive Severance Plan to determine the Participant’s annual incentive for the year in which such termination of employment occurs. If a Participant’s Annual Incentive is to be determined pursuant to this Section 3.5(b), the Participant’s Annual Incentive shall equal the lesser of (A) or (B); where (A) is determined by multiplying (i) the Participant’s highest base salary rate in effect during the 24 months preceding the termination of the Participant’s employment, by (ii) the highest target annual incentive percentage in effect for the Participant during those 24 months, by (iii) a fraction (not greater than 1) the numerator of which is the number of weekdays in the Performance Period from January 1, 2016 through the Participant’s last day of employment prior to such termination and the denominator of which is the number of weekdays in the entire Performance Period; and (B) is determined by multiplying (i) the Participant’s Annual Incentive Percentage, by (ii) one and one-half percent (1.5%), by (iii) the Corporation’s earnings from continuing operations (after interest, taxes, depreciation and amortization, and determined on a consolidated basis) for the portion of the Performance Period through and ending on the last day of the month in which the Participant’s termination of employment occurs. In no case, however, shall the amount of any Annual Incentive exceed the applicable limit set forth in Section 5.2.3 of the Plan.

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(c)
No Participant shall receive any payment under this Section 3.5 unless and until the Committee has certified, by resolution or other appropriate action in writing, the amount of the Annual Incentive due in accordance with the terms, conditions and limits of this Program. Any Annual Incentive amount due pursuant to this Section 3.5 shall be paid as soon as practicable following the Committee’s certification of such amount and in all events no later than March 15, 2017; subject (i) to tax withholding pursuant to Section 4.6, and (ii) in the case of a Participant eligible to defer compensation under the EDCP, to any timely deferral election the Participant may have made pursuant to the terms of the EDCP.
3.6
Adjustments . The Committee shall adjust the Performance Level, Annual Incentive Pool and other provisions applicable to Awards granted under this Program to the extent (if any) it determines that the adjustment is necessary or advisable to preserve the intended incentives and benefits to reflect (1) any material change in corporate capitalization, any material corporate transaction (such as a reorganization, combination, separation, merger, acquisition, or any combination of the foregoing), or any complete or partial liquidation of the Corporation, (2) any change in accounting policies or practices, (3) the effects of any special charges to the Corporation’s earnings, or (4) any other similar special circumstances.
3.7
Change in Control . If a Change in Control of EIX occurs at any time during the Performance Period, the Performance Period for all outstanding Awards will be shortened so that the Performance Period will be deemed to have ended on the last day prior to such Change in Control of EIX. The Annual Incentive Pool and the Annual Incentives payable with respect to each Award will be determined in accordance with the foregoing provisions of this Section 3 based on such shortened Performance Period. Such Annual Incentives shall be paid (subject to tax withholding pursuant to Section 4.6) as soon as practicable following the date of the Change in Control of EIX. For purposes of this Section 3.7, “ Change in Control of EIX ” shall have the meaning ascribed to such term in the Corporation’s 2016 Long-Term Incentives Terms and Conditions.
4.
GENERAL PROVISIONS
4.1
Rights of Participants .
(a)
No Right to Continued Employment . Nothing in this Program (or in any other documents evidencing any Award under this Program) will be deemed to confer on any Participant any right to continue in the employ of the Corporation or any Subsidiary or interfere in any way with the right of the Corporation or any Subsidiary to terminate his or her employment at any time.
(b)
Program Not Funded . No Participant or other person will have any right or claim to any specific funds, property or assets of the Corporation or any of its Subsidiaries by reason of any Award hereunder. To the extent that a Participant or other person acquires a right to receive payment pursuant to any Award hereunder, such right shall be no greater than the right of any unsecured general creditor of the Corporation (or applicable Subsidiary making such payment, as the case may be).
4.2
Non-Transferability of Benefits and Interests . Except as expressly provided by the Committee in accordance with the provisions of Section 162(m), all Awards are non-transferable, and no benefit payable under this Program shall be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge. This Section 4.2 shall not apply to an assignment of a contingency or payment due (a) after the death of a Participant to the deceased Participant’s legal representative or beneficiary or (b) after the disability of a Participant to the disabled Participant’s personal representative.
4.3
Force and Effect . The various provisions herein are severable in their entirety. Any determination of invalidity or unenforceability of any one provision will have no effect on the continuing force and effect of the remaining provisions.
4.4
Governing Law . This Program will be construed under the laws of the State of California.
4.5
Construction .
(a)
Section 162(m) . It is the intent of the Corporation that this Program, Awards and Annual Incentives paid hereunder will qualify as performance-based compensation or will otherwise be exempt from deductibility limitations under Section 162(m). Any provision, application or interpretation of this Program inconsistent with this intent to satisfy the standards in Section 162(m) shall be disregarded.

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(b)
Section 409A . It is the intended that Awards under this Program qualify as “short-term deferrals” within the meaning of the guidance provided by the Internal Revenue Service under Section 409A of the Code and this Program shall be interpreted consistent with that intent.
4.6
Tax Withholding . Upon the payment of any Annual Incentive, the Corporation (or applicable Subsidiary making such payment, as the case may be) shall have the right to deduct the amount of any federal, state or local taxes that the Corporation or any Subsidiary may be required to withhold with respect to such payment.
4.7
Amendment or Termination of Program . The Board or the Committee may at any time terminate, amend, modify or suspend this Program, in whole or in part. Notwithstanding the foregoing, no amendment may be effective without Board and/or shareholder approval if such approval is necessary to comply with the applicable rules of Section 162(m).
4.8
Claw-Back . Notwithstanding any provision of the Program to the contrary, the Program, any Award under the Program, and any payment of an Annual Incentive under the Program, shall be subject to any recoupment, “clawback” or similar provisions of applicable law, as well as the Corporation’s Incentive Compensation Clawback Policy, as in effect from time to time, and any other recoupment or similar policies of the Corporation that may be in effect from time to time.



4


Exhibit 10.4

EDISON INTERNATIONAL
2016 Long-Term Incentives
Terms and Conditions
1.
LONG-TERM INCENTIVES
The long-term incentive awards granted in 2016 (“ LTI ”) for eligible persons (each, a “ Holder ”) employed by Edison International (“ EIX ”) or its participating affiliates include the following:
•
Nonqualified stock options to purchase shares of EIX Common Stock (“ EIX Options ”) as described in Section 3;
•
Contingent EIX performance units (“ Performance Shares ”) as described in Section 4; and
•
Restricted EIX stock units (“ Restricted Stock Units ”) as described in Section 5.
Each of the LTI awards will be granted under the 2007 Performance Incentive Plan (the “ Plan ”) and will be subject to adjustment as provided in Section 7.1 of the Plan.
The LTI shall be subject to these 2016 Long-Term Incentives Terms and Conditions (these “ Terms ”). The LTI shall be administered by the Compensation and Executive Personnel Committee of the EIX Board of Directors (the “ Committee ”). The Committee shall have the administrative powers with respect to the LTI set forth in Section 3.2 of the Plan.
In the event EIX grants LTI to a Holder, the number of EIX Options, Performance Shares and Restricted Stock Units granted to the Holder will be set forth in a written award certificate delivered by EIX to the Holder.
2.
VESTING OF LTI
Subject to Sections 8 and 9 the following vesting and payment rules shall apply to the LTI:
2.1
EIX Options . The EIX Options will vest over a four-year period as described in this Section 2 (the “ Vesting Period ”). The effective “ initial vesting date ” will be January 3, 2017, or six months after the date of the grant, whichever date is later. The EIX Options will vest as follows:
•
On the initial vesting date, one-fourth of the award will vest.
•
On January 2, 2018, an additional one-fourth of the award will vest.
•
On January 2, 2019, an additional one-fourth of the award will vest.
•
On January 2, 2020, the balance of the award will vest.
2.2
Performance Shares . The Performance Shares will vest and become payable to the extent earned as determined at the end of the three-calendar-year period commencing on January 1, 2016, and ending December 31, 2018 (the “ Performance Period ”), subject to the provisions of Section 4.
2.3
Restricted Stock Units . The Restricted Stock Units will vest and become payable on January 2, 2019.
2.4
Continuance of Employment/Service Required . The vesting schedule requires continued employment or service through each applicable vesting date as a condition for the vesting of the applicable installment of the LTI and the rights and benefits thereunder. Employment or service for only a portion of the vesting period, even if a substantial portion, will not entitle the Holder to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services except as provided in Sections 8 and 9 below.





3.
EIX OPTIONS
3.1
Exercise Price . The exercise price of an EIX Option stated in the award certificate is the closing price (in regular trading) of a share of EIX Common Stock on the New York Stock Exchange for the effective date of the grant.
3.2
Cumulative Exercisability; Term of Option . The vested portions of the EIX Options will accumulate to the extent not exercised, and be exercisable by the Holder subject to the provisions of this Section 3 and Sections 8 and 9, in whole or in part, in any subsequent period but not later than January 2, 2026.
3.3
Method of Exercise . The Holder may exercise an EIX Option by providing written notice to EIX on the form prescribed by the Committee for this purpose, or completion of such other EIX Option exercise procedures as EIX may prescribe, accompanied by full payment of the applicable exercise price. Payment must be in cash or its equivalent acceptable to EIX. At the discretion of the Holder, EIX Common Stock valued on the exercise date at a per-share price equal to the closing price of EIX Common Stock on the New York Stock Exchange may be used to pay the exercise price, provided the Company can comply with any legal requirements. (“Companies” or “Company” means EIX and its affiliates, or any of them, as the context may require.) A broker-assisted “cashless” exercise may be accommodated for EIX Options at the discretion of EIX. Until payment is accepted, the Holder will have no rights in the optioned stock. The provisions of Section 10 must be satisfied as a condition precedent to the effectiveness of any purported exercise.
3.4
Automatic Exercise . Except as may otherwise be determined by the Committee in advance of the applicable exercise date and subject to the conditions below, the Holder’s then-outstanding vested EIX Options shall automatically be exercised by EIX on behalf of the Holder on the last day of the term of such options (including any shortened term as a result of a termination of employment or in connection with a Change in Control of EIX as provided in Articles 8 and 9), to the extent such options are not otherwise exercised on or before that date. In connection with any automatic exercise of outstanding vested EIX Options, EIX shall satisfy the exercise price of the EIX Options and the minimum applicable withholding obligation by withholding that number of EIX shares of Common Stock otherwise issuable pursuant to the options having a value (based on the closing price of EIX Common Stock on the New York Stock Exchange on the exercise date, or if no sales of EIX Common Stock were reported on the New York Stock Exchange on that date, the closing price of EIX Common Stock on the New York Stock Exchange on the next preceding day on which sales of EIX Common Stock were reported) equal to the exercise price of the EIX Options and the minimum applicable withholding obligation. Outstanding vested EIX Options shall only be automatically exercised by EIX on behalf of the Holder if (i) the EIX Options have an exercise price that is lower than the price of a share of EIX Common Stock on the New York Stock Exchange at the time of exercise so that the options are “in-the-money,” and (ii) the exercise by EIX complies with all legal requirements applicable to EIX.

4.
PERFORMANCE SHARES
4.1
Performance Shares . Performance Shares are EIX Common Stock-based units subject to a performance vesting requirement. A target number of contingent Performance Shares will be awarded on the initial grant date. Fifty percent (50%) of the grant date value (based on EIX’s valuation methodology for the award) of the contingent Performance Shares will be a target number of contingent Performance Shares subject to a performance measure based on the percentile ranking of EIX total shareholder return (“ TSR ”) among the TSRs for the stocks comprising the Comparison Group (as defined below) over the entire Performance Period (these contingent Performance Shares are referred to as the “ TSR Performance Shares ”). The other fifty percent (50%) of the grant date value (based on EIX’s valuation methodology for the award) of the contingent Performance Shares will be a target number of contingent Performance Shares subject to a performance measure based on EIX’s average core earnings per share (“ EPS ”) over the entire Performance Period (these contingent Performance Shares are referred to as the “ EPS Performance Shares ”). The TSR Performance Shares and EPS Performance Shares will be increased by any additional Performance Shares created by “reinvestment” of dividend equivalents as provided in Section 4.5.
4.2
TSR Performance Shares . The actual amount of TSR Performance Shares to be paid will depend on EIX’s TSR percentile ranking on the Performance Measurement Date (as defined herein). If EIX’s TSR is below the 25 th percentile, no TSR Performance Shares will be paid. Twenty-five percent (25%) of the target number

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of TSR Performance Shares will be paid if EIX’s TSR percentile ranking is at the 25 th percentile. The target number of TSR Performance Shares will be paid if EIX’s TSR rank is at the 50 th percentile. Two times the target number of TSR Performance Shares will be paid if EIX’s TSR percentile ranking is at the 75th percentile or higher. The payment multiple is interpolated for performance between the points indicated in the preceding three sentences on a straight-line basis with discrete intervals at every 5 th percentile.
TSR is calculated using (i) the average of the closing stock prices for the relevant stocks for the 20-trading-day period ending with the last day on which the New York Stock Exchange is open for trading preceding the first day of the Performance Period, and (ii) the average of the closing stock prices for the relevant stocks for the 20-trading-day period ending with the Performance Measurement Date. In making such determination, stock prices will be equitably and proportionately adjusted to the extent (if any) necessary to preserve the intended incentives of the awards and mitigate the impact of any stock split, stock dividend or reverse stock split occurring during the applicable period. The “ Comparison Group ” consists of the stocks comprising the Philadelphia Utility Index as the index is constituted on the Performance Measurement Date. If the Comparison Group consists of fewer than 20 stocks on the Performance Measurement Date, the stock with the median TSR for the entire Performance Period (or, if there are an even number of stocks in the Comparison Group before giving effect to this sentence, a stock deemed to have a TSR equal to the average TSR of the two stocks in the Comparison Group that fall in the middle of such group when ranked based on TSR for the entire Performance Period) shall be added back to the Comparison Group a sufficient number of times to bring the stocks comprising the Comparison Group to 20. (For purposes of clarity, if there are only 17 stocks in the Comparison Group before giving effect to the preceding sentence, the stock with the median TSR for the entire Performance Period will be added back to the Comparison Group a total of three times to bring the stocks comprising the Comparison Group to 20.) Dividends with ex-dividend dates falling inside the Performance Period will be included in the TSR calculations using the assumption that reinvestment occurs on the ex-dividend date.
The Performance Measurement Date for the TSR Performance Shares will be the last day of the Performance Period on which the New York Stock Exchange is open for trading. As of that date, the applicable payment multiple will be determined as provided above in this Section 4.2 based on the EIX TSR percentile ranking achieved during the Performance Period. No payment will be made with respect to the TSR Performance Shares unless and until the Committee has certified, by resolution or other appropriate action in writing, that the applicable EIX TSR percentile ranking has been accurately determined. The Committee shall not have discretion to pay TSR Performance Shares if the minimum EIX TSR ranking is not achieved or to pay TSR Performance Shares in excess of the amount provided above in this Section 4.2 for the applicable EIX TSR ranking.
4.3
EPS Performance Shares . The Committee shall establish an EIX EPS target for each of calendar 2016, 2017 and 2018, which are the three calendar years comprising the Performance Period. The Committee shall establish the EIX EPS target for each calendar year no later than during the first 90 days of the applicable calendar year, and while performance relating to the EIX EPS target remains substantially uncertain.
The actual amount of EPS Performance Shares to be paid will depend on EIX’s actual EPS performance achieved as a percentage of the EIX EPS target established for the calendar year. If EIX’s actual EPS for any calendar year is less than eighty percent (80%) of the EIX EPS target amount for the year, the EPS performance multiple for the calendar year will be zero (0). If EIX’s actual EPS for any calendar year is equal to eighty percent (80%) of the EIX EPS target amount for the year, the EPS performance multiple for the calendar year will be 0.25x. If EIX’s actual EPS for any calendar year is equal to one hundred percent (100%) of the EIX EPS target amount for the year, the EPS performance multiple for the calendar year will be 1.0x. If EIX’s actual EPS for any calendar year is equal to or greater than one hundred twenty percent (120%) of the EIX EPS target amount for the year, the EPS performance multiple for the calendar year will be 2.0x. Each year’s EPS performance multiple is interpolated for performance between the points indicated in the preceding three sentences on a straight-line basis with discrete intervals at every 4 th percentage point, however, the performance multiple will be equal to the lowest multiple within each interval.
Following the end of the Performance Period, the EPS performance multiples achieved for each of calendar 2016, 2017 and 2018 will be averaged (determined by including zero (0) for any year in which the EPS

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achieved was less than eighty percent (80%) of the applicable target for that year), and the resulting average EPS performance multiple achieved for the Performance Period is referred to as the “ Performance Period EPS Multiple .” The actual amount of EPS Performance Shares to be paid will be determined by multiplying the Performance Period EPS Multiple times the target number of EPS Performance Shares.
EPS is defined as “Core” earnings per share, a non-GAAP financial measure derived from basic GAAP earnings per share by excluding income or loss from discontinued operations and income or loss from significant discrete items that are not representative of ongoing earnings.
For purposes of Section 162(m) of the Code, each of calendar years 2016, 2017 and 2018 shall be treated as a separate performance period and the EIX EPS target established for each such year shall be treated as a separate performance goal. If EIX’s actual EPS for any calendar year is equal to eighty percent (80%) or more of the EIX EPS target amount for the year (the “ EPS Performance Threshold ”), then the maximum total EPS Performance Share payment (including any additional EPS Performance Shares created by “reinvestment” of dividend equivalents as provided in Section 4.5) may not exceed the lesser of (1) two hundred and fifty percent (250%) times the target number of EPS Performance Shares or (2) the maximum share limit specified in Section 5.2.3 of the Plan (such maximum payment, the “ EPS Maximum Payment ”), and the actual payment amount determined as set forth above is a reduction of the payment below the EPS Maximum Payment. No payment will be made with respect to the EPS Performance Shares unless and until the Committee has certified, by resolution or other appropriate action in writing, that the EPS Performance Threshold has been achieved. The Committee shall not have discretion to pay EPS Performance Shares if the EPS Performance Threshold is not achieved or to pay EPS Performance Shares in excess of the EPS Maximum Payment.
4.4
Payment of Performance Shares . The total number of Performance Shares that are earned pursuant to Sections 4.2, 4.3, and 4.5 will be paid in cash. The value of each whole Performance Share paid in cash will be equal to the closing price per share of EIX Common Stock on the New York Stock Exchange for the date of the Committee’s certification in Section 4.2 and Section 4.3 above, and the value of any fractional Performance Share paid in cash will also be determined based on that price. The cash payable for the earned Performance Shares will be delivered as soon as practicable for EIX following the Committee’s certification in Section 4.2 and Section 4.3 above, as applicable, and in all events no later than March 15, 2019. The Performance Shares are subject to termination and other conditions specified in Sections 8 and 9, and to the provisions of Section 10.
4.5
Dividend Equivalent Reinvestment . For each dividend on EIX Common Stock for which the ex-dividend date falls within the Performance Period and after the date of grant of the Performance Shares, the Holder of the Performance Shares will be credited with an additional number of target Performance Shares. The additional number of shares added on each ex-dividend date will be equal to (i) the per-share cash dividend paid by EIX on its Common Stock with respect to the related ex-dividend date, multiplied by (ii) the Holder’s number of target Performance Shares (including any additional target Performance Shares previously credited under this Section 4.5), divided by (iii) the closing price of a share of EIX Common Stock on the related ex-dividend date, with the result rounded to six decimal places. Any target Performance Shares added pursuant to the foregoing provisions of this Section 4.5 will be subject to the same vesting, payment, termination and other terms, conditions and restrictions as the original target Performance Shares to which they relate (including, as applicable, application of the TSR payment multiple as contemplated by Section 4.2 or the EPS performance payment multiple as contemplated by Section 4.3). No target Performance Shares will be added pursuant to this Section 4.5 with respect to any target Performance Shares which, as of the related ex-dividend date, have either become payable pursuant to Section 4.4 or terminated pursuant to Section 8.
5.
RESTRICTED STOCK UNITS
5.1
Restricted Stock Units . Restricted Stock Units are EIX Common Stock-based units that vest based on the passage of time. As soon as practicable for EIX following January 2, 2019 (and in all events within 90 days after such date), EIX will pay Restricted Stock Units that have vested, except that if the Restricted Stock Units vest pursuant to Section 8.2, 8.3, 8.4, 8.5 or 9, the Restricted Stock Units will become payable as provided in the applicable section below and as follows. Whole Restricted Stock Units that have vested will

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be paid on a one-for-one basis in EIX Common Stock under the Plan. Any fractional Restricted Stock Unit will be paid in cash based on the closing price per share of EIX Common Stock on January 2, 2019 or, as to any fractional Restricted Stock Units that have vested pursuant to Section 8.3, 8.4, 8.5 or 9 (including any payment made pursuant to Section 14.7, but excluding any payment where the time for payment is determined by reference to Section 8.2(C)), the closing price per share of EIX Common Stock on the New York Stock Exchange for the business day immediately preceding the day of payment. The Restricted Stock Units are subject to termination and other conditions specified in Sections 8 and 9, and to the provisions of Section 10.
5.2
Dividend Equivalent Reinvestment . For each dividend declared on EIX Common Stock with an ex-dividend date on or after the date an award of Restricted Stock Units is granted and before all of such Restricted Stock Units either have been paid (or converted into a cash amount, as the case may be) pursuant to Section 5.1 (including any payment made pursuant to Section 14.7) or have terminated pursuant to Section 8 or 9, the Holder of such award will be credited with an additional number of Restricted Stock Units equal to (i) the per-share cash dividend paid by EIX on its Common Stock with respect to the related ex-dividend date, multiplied by (ii) the total number of outstanding and unpaid Restricted Stock Units (including any Restricted Stock Units previously credited under this Section 5.2) subject to such award as of such ex-dividend date, divided by (iii) the closing price of a share of EIX Common Stock on the related ex-dividend date, with the result rounded to six decimal places. Any additional Restricted Stock Units credited pursuant to the foregoing provisions of this Section 5.2 will be subject to the same vesting, payment, termination and other terms, conditions and restrictions as the original Restricted Stock Units to which they relate; provided, however, that the Committee shall retain discretion to pay any Restricted Stock Units in cash rather than shares of EIX Common Stock if and to the extent that payment in shares would exceed the applicable share limits of the Plan. No crediting of Restricted Stock Units will be made pursuant to this Section 5.2 with respect to any Restricted Stock Units which, as of the related ex-dividend date, have either been paid pursuant to Section 5.1 or terminated pursuant to Section 8 or 9.
6.
DELAYED PAYMENT OR DELIVERY OF LTI GAINS
Notwithstanding any other provision herein, Holders who are eligible to defer salary under the EIX 2008 Executive Deferred Compensation Plan (the “ EDCP ”) may irrevocably elect to defer receipt of all or a part of the cash payable in respect of their earned Performance Shares pursuant to the terms of the EDCP. To make such an election, the Holder must submit a signed agreement in the form approved by, and in advance of the applicable deadline established by, the Committee. In the event of any timely deferral election, the LTI with respect to which the deferral election was made shall be paid in accordance with the terms of the EDCP.
7.
TRANSFER AND BENEFICIARY
7.1
Limitations on Transfers . Except as provided below and in Section 10, the LTI will not be transferable by the Holder and, during the lifetime of the Holder, the LTI will be exercisable only by him or her. The Holder may designate a beneficiary who, upon the death of the Holder, will be entitled to exercise the then vested portion of the LTI during the remaining term subject to the provisions of the Plan and these Terms.
7.2
Exceptions . Notwithstanding the foregoing, the LTI of the Chief Executive Officers and Presidents of EIX and Southern California Edison Company, and of the Executive Vice Presidents of EIX, are transferable to a spouse, children or grandchildren, or trusts or other vehicles established exclusively for their benefit. Any transfer request must specifically be authorized by EIX in writing and shall be subject to any conditions, restrictions or requirements as the Committee may determine. Restricted Stock Units may not, however, be transferred to the extent the transfer would violate (and result in any tax, penalty or interest under) Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”).
8.
TERMINATION OF EMPLOYMENT
8.1
General . In the event of termination of the employment of the Holder for any reason other than those specified in Sections 8.2, 8.3, 8.4 or 9, the LTI will terminate as follows: (i) the Holder’s unvested EIX Options will terminate for no value as of the date such employment terminates, (ii) the Holder’s vested EIX Options will terminate for no value 180 days from the date on which such employment terminated (or, if earlier, on the last day of the applicable EIX Option term) to the extent not theretofore exercised, (iii) the

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Holder’s unearned Performance Shares will terminate for no value as of the date such employment terminates, and (iv) the Holder’s unvested Restricted Stock Units will terminate for no value as of the date such employment terminates. Any fractional vested EIX Options will be rounded up to the next whole share.
8.2
Retirement . If the Holder terminates employment on or after the first day of the month in which he or she (i) attains age 65 or (ii) attains age 61 with five “years of service,” as that term is defined in the Edison 401(k) Savings Plan (a “ Retirement ”), then the vesting and exercise or payment provisions of this Section 8.2 will apply.
(A)
EIX Options . The EIX Options will remain outstanding and eligible to vest; provided, however, that in the event the Holder’s Retirement occurs within calendar 2016, the portion of the option that remains outstanding and eligible to vest following the Holder’s Retirement will be prorated by multiplying the total number of shares subject to the option by a fraction (not greater than 1), the numerator of which shall be the number of whole months in calendar 2016 that the Holder was employed by one or more of the Companies, and the denominator of which shall be twelve (12). In no event shall the Holder be credited with services performed during any portion of a calendar month (even if a substantial portion) if the Holder is not employed by one or more of the Companies as of the last day of such calendar month. The portion of the option not eligible to vest following the Holder’s Retirement after giving effect to the proration described in the preceding two sentences shall terminate as of the Holder’s Retirement, and the Holder shall have no further rights with respect to such terminated portion. Any fractional EIX Options eligible to vest under this Section 8.2 will be rounded up to the next whole number. EIX Options that remain outstanding and eligible to vest following Retirement will vest and become exercisable on the schedule under which they would have been vested had the Holder not retired (one-fourth of the option grant on the effective initial vesting date (January 3, 2017 or six months after the date of grant, whichever is later) and an additional one-fourth on each of January 2, 2018, January 2, 2019 and January 2, 2020), except that if the Holder dies, the then-outstanding portion of the option will immediately vest and become exercisable as of the date of the Holder’s death. In the event prorated vesting is required in connection with the Holder’s Retirement, the portion of the option that remains outstanding and eligible to vest will vest and become exercisable first on the effective initial vesting date (up to the maximum number of shares that would have vested and become exercisable on that date had no termination of employment occurred) and so on until the portion of the option that remains outstanding and eligible to vest becomes vested and exercisable, except that if the Holder dies, the then-outstanding portion of the option will immediately vest and become exercisable as of the date of the Holder’s death. Once exercisable, EIX Options will remain exercisable as provided in Section 3 for the remainder of the original EIX Option term.
(B)
Performance Shares . The Performance Shares will vest and become payable at the end of the Performance Period to the extent they would have vested and become payable if the Holder’s employment had continued through the last day of the Performance Period; provided, however, that if the Holder’s Retirement occurs within calendar 2016, the number of each of the TSR Performance Shares and EPS Performance Shares that remain outstanding and eligible to vest following the Holder’s Retirement will be prorated by multiplying the number of TSR Performance Shares or EPS Performance Shares, respectively, subject to the award by a fraction (not greater than 1), the numerator of which shall be the number of whole months in calendar 2016 that the Holder was employed by one or more of the Companies, and the denominator of which shall be twelve (12). For this purpose, the number of “whole months” shall be calculated as provided in Section 8.2(A) above. Performance Shares will be payable to the Holder on the payment date specified in Section 4.4 to the extent, as applicable, of the EIX TSR ranking achieved as specified in Section 4.2 or the Performance Period EPS Multiple achieved as specified in Section 4.3. Any unvested Performance Shares (after application of the foregoing vesting provisions) will terminate for no value.
(C)
Restricted Stock Units . The Restricted Stock Units will remain outstanding and eligible to vest following the Holder’s Retirement and will vest and be payable on or as soon as practicable for EIX following January 2, 2019 (and in all events within 90 days after such date); provided, however, that in the event the Holder’s termination of employment occurs within calendar 2016, the number of Restricted Stock Units that remain outstanding and eligible to vest following the Holder’s Retirement will be prorated by multiplying the total number of Restricted Stock Units subject to the award by a fraction (not greater

6





than 1), the numerator of which shall be the number of whole months in calendar 2016 that the Holder was employed by one or more of the Companies, and the denominator of which shall be twelve (12). For this purpose, the number of “whole months” shall be calculated as provided in Section 8.2(A) above. Any Restricted Stock Units not eligible to vest following the Holder’s Retirement (after application of the foregoing vesting provisions) will terminate for no value. Notwithstanding the foregoing provisions, if the Holder dies after Retirement and prior to the date the then outstanding Restricted Stock Units are paid, the then outstanding Restricted Stock Units will vest and be paid as soon as practicable for EIX (and in all events within 90 days) following the date of the Holder’s death.
8.3
Death or Disability . If, prior to the Holder’s termination of employment with a Company, the Holder dies or incurs a “disability” (as such term is defined for purposes of Section 409A of the Code), the provisions of this Section 8.3 will apply.
(A)
EIX Options . Any unvested EIX Options will immediately vest. The EIX Options will be exercisable immediately as of the date of such termination and will remain exercisable as provided in Section 3 for the remainder of the original EIX Option term.
(B)
Performance Shares . The Performance Shares will vest and become payable at the end of the Performance Period as provided in Section 4.4 to the extent they would have vested and become payable if the Holder’s employment had continued through the last day of the Performance Period.
(C)
Restricted Stock Units . Any unvested Restricted Stock Units will immediately vest and become payable as soon as practicable for EIX (and in all events within 90 days) after the date of the Holder’s death or disability, as applicable.
8.4
Involuntary Termination Not for Cause . Except as may otherwise be provided in Section 9, upon involuntary termination of the Holder’s employment by his or her employer not for cause (and other than due to the Holder’s death or disability), the provisions of this Section 8.4 shall apply.
(A)
EIX Options . Unvested EIX Options will vest to the extent necessary to cause the aggregate number of shares subject to vested EIX Options (including any shares acquired pursuant to previously exercised EIX Options) to equal the number of shares granted multiplied by a fraction (not greater than 1), the numerator of which is the number of whole months in the period from January 1 of the year of grant of the award through the one-year anniversary of the Holder’s last day of employment prior to termination of the Holder’s employment, and the denominator of which is forty-eight (48). For purposes of determining such fraction, no fractional month shall be taken into account. The Holder will have one year following the date of termination in which to exercise the EIX Options, or until the end of the EIX Option term, whichever occurs earlier. The Holder’s vested options will terminate for no value at the end of such period to the extent not theretofore exercised. The portion of the option not eligible to vest following the termination of the Holder’s employment after giving effect to the proration described in this Section 8.4(A) shall terminate as of the termination of the Holder’s employment, and the Holder shall have no further rights with respect to such terminated portion. Any fractional EIX Options vested under this Section 8.4(A) will be rounded up to the next whole number.
Notwithstanding anything to the contrary in the preceding paragraph, if the Holder qualifies for Retirement (as defined in Section 8.2) at the time of the termination of the Holder’s employment, or if the Holder would have satisfied the requirements for Retirement if an extra year of service and age were applied, EIX Options will (i) vest (without any proration) and become exercisable on the schedule specified in Section 8.2 and (ii) remain exercisable for the remainder of the original EIX Option term.

(B)
Performance Shares . The Performance Shares will vest and become payable at the end of the Performance Period to the extent they would have vested and become payable if the Holder’s employment had continued through the last day of the Performance Period; provided, however, that the number of each of the TSR Performance Shares and EPS Performance Shares that remain outstanding and eligible to vest following termination of the Holder’s employment will be prorated by multiplying the number of TSR Performance Shares or EPS Performance Shares, respectively, subject to the award by a fraction (not greater than 1), the numerator of which shall be the number of whole months the Holder

7





was employed by one or more of the Companies from January 1, 2016 through the one-year anniversary of the Holder’s last day of employment prior to termination of the Holder’s employment, and the denominator of which is thirty-six (36). For purposes of determining such fraction, no fractional month shall be taken into account. Such vested Performance Shares will be payable to the Holder as provided in Section 4.4 to the extent, as applicable, of the EIX TSR ranking achieved as provided in Section 4.2 or the Performance Period EPS Multiple achieved as specified in Section 4.3. Any unvested Performance Shares (after application of the foregoing vesting provisions) will terminate for no value as of the date of the Holder’s termination of employment.
Notwithstanding anything to the contrary in the preceding paragraph, if the Holder qualifies for Retirement (as defined in Section 8.2) at the time of the termination of the Holder’s employment, or if the Holder would have satisfied the requirements for Retirement if an extra year of service and age were applied, the Performance Shares will vest (without proration) and become payable at the end of the Performance Period as provided in Section 4.4 to the extent they would have vested and become payable if the Holder’s employment had continued through the last day of the Performance Period.

(C)
Restricted Stock Units . The Restricted Stock Units will vest to the extent necessary to cause the aggregate number of vested Restricted Stock Units to equal the number of Restricted Stock Units subject to the award multiplied by a fraction (not greater than 1), the numerator of which is the number of whole months in the period from January 1 of the year of grant of the award through the one-year anniversary of the Holder’s last day of employment prior to termination of the Holder’s employment, and the denominator of which is thirty-six (36). For purposes of determining such fraction, no fractional month shall be taken into account. Any unvested Restricted Stock Units (after application of the foregoing vesting provisions) will terminate for no value as of the date of the Holder’s termination of employment. Subject to the last paragraph of this Section 8.4(C), vested Restricted Stock Units will be paid as soon as practicable for EIX (and in all events within 90 days) following the date of the Holder’s Separation from Service, if the Separation from Service occurs prior to any other applicable payment event otherwise provided for in these Terms. For purposes of the LTI, a “ Separation from Service ” means the Holder’s “separation from service” with the Company as that term is used for purposes of Section 409A of the Code.
Notwithstanding anything to the contrary in the preceding paragraph, if the Holder qualifies for Retirement (as defined in Section 8.2) at the time of the termination of the Holder’s employment, the Restricted Stock Units will vest (without any proration) and become payable at the same time provided for in Section 8.2(C).
In addition, and notwithstanding anything to the contrary in the preceding two paragraphs, if the Holder does not qualify for Retirement at the time of the termination of the Holder’s employment, but the Holder would have satisfied the requirements for Retirement if an extra year of service and age had been applied at the time of termination, then the Restricted Stock Units (i) will vest (without any proration) and (ii) will, subject to the last paragraph of this Section 8.4(C), become payable as soon as practicable for EIX (and in all events within 90 days) following the date of the Holder’s Separation from Service, if the Separation from Service occurs prior to any other applicable payment event otherwise provided for in these Terms.
If either the first or third paragraphs of this Section 8.4(C) apply and the period for payment of the Restricted Stock Units spans two calendar years, and if Section 8.4(D) applies and the period for delivery of the Holder’s release of claims and any applicable revocation period also spans those two calendar years, then the payment of the applicable Restricted Stock Units will be made (subject to the satisfaction of Section 8.4(D)) within the prescribed period of time but in the second of those two calendar years.
(D)
Conditions of Benefits . Notwithstanding the foregoing provisions, if at the time of the Holder’s involuntary termination the Holder is covered by a severance plan of EIX or any of its affiliates, the Holder shall be entitled to the accelerated vesting provided in this Section 8.4 only if the Holder satisfies the applicable conditions for receiving severance benefits under that plan (including, without limitation, any requirement to execute and deliver a release of claims) in connection with such involuntary termination. In the event that such conditions are not satisfied, the provisions of Section 8.1 above shall apply, and the Holder shall not be entitled to any accelerated vesting under this Section 8.4.

8





8.5
Effect of Change of Employer . For purposes of the LTI only, involuntary termination of employment will be deemed to occur on the date the Holder’s employing company is no longer a member of the EIX controlled group of corporations as defined in Section 1563(a) of the Code, regardless of whether the Holder’s employment continues with that entity or a successor entity outside of the EIX controlled group. A termination of employment will not be deemed to occur for purposes of the LTI if a Holder’s employment by one EIX Company terminates but immediately thereafter the Holder is employed by another EIX Company.
9.
CHANGE IN CONTROL; EARLY TERMINATION OF LTI
Notwithstanding any other provision herein, in the event of a Change in Control of EIX (as defined in Section 9.6), the provisions of this Section 9 will apply.
9.1
EIX Options . In the event the EIX Options are to terminate pursuant to Section 7.2 of the Plan in connection with a Change in Control of EIX, then upon (or, as may be necessary to effect the acceleration, immediately prior to) the Change in Control of EIX the then-outstanding and unvested EIX Options will become fully vested; provided, however, that this automatic acceleration provision will not apply with respect to any EIX Options to the extent the Committee has made a provision for the substitution, assumption, exchange or other continuation of the EIX Options. In the event of such a termination where the Committee has not provided for a cash settlement of the EIX Options as described below, the Holder of each EIX Option that is to be so terminated will be given reasonable advance notice of the impending termination and a reasonable opportunity to exercise such EIX Option in accordance with its terms before such termination (except that in no event will more than 10 days’ notice of the accelerated vesting and impending termination be required). The Committee may provide, as to each EIX Option that is to be terminated in connection with a Change in Control of EIX, to settle the EIX Option by a cash payment to the Holder of such option based upon the distribution or consideration payable to the holders of the EIX Common Stock upon or in respect of such event, such cash payment to be made as soon as practicable for EIX after the Change in Control of EIX.
9.2
Performance Shares . In the event the Performance Shares are to terminate pursuant to Section 7.2 of the Plan in connection with a Change in Control of EIX, then the Performance Period for all outstanding Performance Shares will be shortened so that the Performance Period will be deemed to have ended on the last day prior to such Change in Control of EIX, and the Performance Shares that will vest and become payable will be determined in accordance with Section 4.2 (TSR Performance Shares) or 4.3 (EPS Performance Shares) based on such shortened Performance Period (and, with respect to the EPS Performance Shares, after giving effect to a proportionate adjustment by the Committee to the EIX EPS target established for the year in which the Change in Control of EIX occurs to pro-rate such target for the portion of such year elapsed through the last day prior to such Change in Control of EIX); provided, however, that this automatic acceleration provision will not apply with respect to any Performance Shares to the extent the Committee has made a provision for the substitution, assumption, exchange or other continuation of the Performance Shares. Any Performance Shares that become subject to a shortened Performance Period pursuant to this Section 9.2 shall be paid, to the extent such Performance Shares become vested and payable after giving effect to the first sentence of this Section 9.2, to the Holder in cash as soon as practicable for EIX (and in all events within 74 days ) after the date of the Change in Control of EIX, and any such Performance Shares that do not become vested and payable shall terminate for no value as of the date of the Change in Control of EIX.
9.3
Restricted Stock Units . This Section 9.3 applies to the Restricted Stock Units notwithstanding anything to the contrary in Section 7.2 of the Plan. The Committee may not exercise any discretion to change the payment date(s) of the Restricted Stock Units except as otherwise expressly provided in this Section 9.3 or as otherwise compliant with (so as to not result in any tax, penalty or interest under) Section 409A of the Code. The Restricted Stock Units may only be terminated in connection with a Change in Control of EIX to the extent the termination satisfies the requirements of Treasury Regulation Section 1.409A-3(j)4(ix) (Plan Terminations and Liquidations). In the event the Restricted Stock Units are to terminate in connection with such an event, then upon (or, as may be necessary to effect the acceleration, immediately prior to) the Change in Control of EIX, the then-outstanding and unvested Restricted Stock Units will become fully vested. In the event the Restricted Stock Units are not to be so terminated in connection with such an event, the Committee shall make provision for the substitution, assumption, exchange or other continuation of the Restricted Stock Units in a manner that is compliant with (and does not result in any tax, penalty or interest under) Section

9





409A of the Code and the Restricted Stock Units shall be paid at the first applicable time otherwise provided in these Terms.
9.4
Severance Plan Benefits . If a Holder is a participant in the EIX 2008 Executive Severance Plan (or any similar successor plan) and experiences a Qualifying Termination Event as defined in the EIX 2008 Executive Severance Plan (or a similar employment termination under a successor plan) associated with a Change in Control as defined in the EIX 2008 Executive Severance Plan (or any similar successor plan), then (i) the Holder’s outstanding EIX Options will immediately vest, (ii) the Holder will have two years following the date of termination in which to exercise such EIX options if the Holder is a Senior Vice President or Executive Vice President (three years if the Holder is the Chief Executive Officer, General Counsel, or Chief Financial Officer of EIX, or the Chief Executive Officer or President of Southern California Edison Company or Edison Energy, Inc.), in each case subject to earlier termination at the end of the applicable option term or as provided in Section 9.1 above, (iii) any then outstanding Performance Shares shall be treated as provided for in Section 8.3(B) above, if the applicable performance period has not been shortened pursuant to Section 9.2 above, and (iv) any then outstanding Restricted Stock Units will immediately and fully vest, and will be paid as soon as practicable for EIX (and in all events within 90 days) following the date of the Holder’s Separation from Service, if vesting had not otherwise been triggered by Section 9.3 above.
9.5
Other Acceleration Rules . Any acceleration of LTI pursuant to this Section 9 will comply with applicable legal requirements and, if necessary to accomplish the purposes of the acceleration or if the circumstances require, may be deemed by the Committee to occur within a limited period of time not greater than 30 days prior to the Change in Control of EIX. Without limiting the generality of the foregoing, the Committee may deem an acceleration to occur immediately prior to the applicable event and/or reinstate the original terms of a LTI if the event giving rise to acceleration does not occur.
9.6
Definition of Change in Control of EIX . A “ Change in Control of EIX ” shall be deemed to have occurred as of the first day, after the date of grant, that any one or more of the following conditions shall have been satisfied:
(A)
Any Person (other than a trustee or other fiduciary holding securities under an employee benefit plan of EIX) becomes the Beneficial Owner, directly or indirectly, of securities of EIX representing thirty percent (30%) or more of the combined voting power of EIX’s then outstanding securities. For purposes of this clause, “ Person ” shall mean any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act, except that such term shall not include one or more underwriters acquiring newly-issued voting securities (or securities convertible into voting securities) directly from EIX with a view towards distribution; and the term “ Beneficial Owner ” shall mean as defined under Rule 13d-3 promulgated under the Exchange Act.
(B)
On any day after the date of grant (the “ Reference Date ”) Continuing Directors cease for any reason to constitute a majority of the Board. A director is a “ Continuing Director ” if he or she either:
(i)
was a member of the Board on the applicable Initial Date (an “ Initial Director ”); or
(ii)
was elected to the Board, or was nominated for election by EIX’s shareholders, by a vote of at least two-thirds (2/3) of the Initial Directors then in office.
A member of the Board who was not a director on the applicable Initial Date shall be deemed to be an Initial Director for purposes of clause (b) above if his or her election, or nomination for election by EIX’s shareholders, was approved by a vote of at least two-thirds (2/3) of the Initial Directors (including directors elected after the applicable Initial Date who are deemed to be Initial Directors by application of this provision) then in office. For these purposes, “ Initial Date ” means the later of (A) the date of grant or (B) the date that is two (2) years before the Reference Date.
(C)
EIX is liquidated; all or substantially all of EIX’s assets are sold in one or a series of related transactions; or EIX is merged, consolidated, or reorganized with or involving any other corporation, other than a merger, consolidation, or reorganization that results in the voting securities of EIX outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the combined voting power

10





of the voting securities of EIX (or such surviving entity) outstanding immediately after such merger, consolidation, or reorganization. Notwithstanding the foregoing, a bankruptcy of EIX or a sale or spin-off of an affiliate of EIX (short of a dissolution of EIX or a liquidation of substantially all of EIX’s assets, determined on an aggregate basis) will not constitute a Change in Control of EIX.
(D)
The consummation of such other transaction that the Board may, in its discretion in the circumstances, declare to be a Change in Control of EIX for purposes of the Plan.
10.
TAXES AND OTHER WITHHOLDING
Upon any exercise, vesting, payment or other taxable event with respect to any LTI, the Company shall have the right at its option to:
•
require the Holder (or the Holder’s personal representative or beneficiary, as the case may be) to pay or provide for payment of at least the minimum amount of any taxes which the Company may be required to withhold with respect to such LTI event or payment; or
•
deduct from any amount otherwise payable in cash to the Holder (or the Holder’s personal representative or beneficiary, as the case may be), with respect to any LTI or otherwise, the minimum amount of any taxes which the Company may be required to withhold.
To the extent that the payment of any LTI pursuant to exercise or vesting requires tax withholding and a sufficient amount of cash (not otherwise deferred) is not generated from the underlying transaction to satisfy such withholding obligations, EIX shall substitute a cash award for a number of shares of Common Stock otherwise issuable pursuant to the LTI, rounded up to the next whole share for fractional shares and valued in a consistent manner at their fair market value as of the date of such exercise (in the case of EIX Options) or (in the case of Restricted Stock Units) at a fair market value based on the closing price per share of EIX Common Stock on January 2, 2019 (or, as to any Restricted Stock Units that have vested pursuant to Section 8.3, 8.4, 8.5 or 9 (including any payment made pursuant to Section 14.7, but excluding any payment where the time for payment is determined by reference to Section 8.2(C)), the closing price per share of EIX Common Stock on the New York Stock Exchange for the business day immediately preceding the day of payment), as is necessary to satisfy the minimum applicable withholding obligation in connection with such transaction to the extent that such withholding amount exceeds the amount of cash generated from the underlying transaction and not otherwise deferred.
Notwithstanding the foregoing, in no event shall the shares withheld exceed the minimum whole number of shares required for tax withholding under applicable law. If for any reason EIX cannot or elects not to satisfy such withholding obligations in such manner, or if a tax withholding obligation arises in any other circumstances, the Company shall have the right to satisfy such withholding obligations, or require the Holder to satisfy such withholding obligations, as otherwise provided above.
To the extent that the payment of any LTI pursuant to exercise or vesting requires Garnishment Payments by the Company, and a sufficient amount of cash is not generated by the underlying transaction to satisfy the Garnishment Payment obligations arising from such transaction, the Company shall substitute a cash award for a number of shares of Common Stock otherwise issuable pursuant to the LTI, rounded up to the next whole share for fractional shares and valued in a consistent manner at their fair market value as of the date of such exercise (in the case of EIX Options) or (in the case of Restricted Stock Units) at a fair market value based on the closing price per share of EIX Common Stock on the New York Stock Exchange for January 2, 2019 (or, as to any Restricted Stock Units that have vested pursuant to Section 8.3, 8.4, 8.5 or 9 (including any payment made pursuant to Section 14.7, but excluding any payment where the time for payment is determined by reference to Section 8.2(C)), the closing price per share of EIX Common Stock on the New York Stock Exchange for the business day immediately preceding the day of payment), equal to the amount required by any Garnishment, less any cash received and not deferred in connection with such transaction. For this purpose, “ Garnishment ” means garnishment orders, levies, and other assessments imposed by legal authority and “ Garnishment Payments ” means payments required by the Company pursuant to any such Garnishment.

11





11.
CONTINUED EMPLOYMENT
Nothing in the award certificate or these Terms will be deemed to confer on the Holder any right to continue in the employ of EIX, any of its subsidiaries, or any other entity or interfere in any way with the right of any of them to terminate his or her employment at any time.
12.
INSIDER TRADING; SECTION 16
12.1
Insider Trading . Each Holder shall comply with all EIX notice, trading and other policies regarding transactions in and involving EIX securities (including, without limitation, policies prohibiting insider trading).
12.2
Section 16 . If an LTI is granted to a person who later becomes subject to the provisions of Section 16 of the Exchange Act (“ Section 16 ”) in respect of EIX, the LTI will immediately and automatically become subject to the requirements of Rule 16b-3(d) and/or 16b-3(e) ( the “ Rule ”) and may not be exercised, transferred or (to the extent permitted by Section 409A of the Code without triggering any tax, penalty or interest thereunder) paid until the Rule has been satisfied. Approval of these Terms is intended to satisfy the Rule. However, in its sole discretion, the Committee may take any other action to assure compliance with the requirements of the Rule, including (to the extent permitted by Section 409A of the Code without triggering any tax, penalty or interest thereunder) withholding delivery to Holder (or any other person) of any security or of any other payment in any form until the requirements of the Rule have been satisfied. The Secretary of EIX may waive compliance with the requirements of the Rule if he or she determines the transaction to be exempt from the provisions of paragraph (b) of Section 16.
12.3
Notice of Disposition . The Holder agrees that if he or she should plan to dispose of any shares of stock acquired on the exercise or payment of LTI awards (including a disposition by sale, exchange, gift or transfer of legal title) and the Holder is a person who is required to preclear EIX securities transactions, the Holder will notify EIX prior to such disposition.
13.
AMENDMENT
The LTI are subject to the terms of the Plan, as it may be amended from time to time. EIX reserves the right to amend these Terms from time to time to the extent that EIX reasonably determines that the amendment is necessary or advisable to comply with applicable laws, rules or regulations or to preserve the intended tax consequences of the applicable LTI. The LTI may not otherwise be amended or terminated (by amendment to or of the Plan or otherwise) in any manner materially adverse to the rights of the Holder of the affected LTI without such Holder’s consent.
14.
MISCELLANEOUS
14.1
Force and Effect . The various provisions herein are severable in their entirety. Any determination of invalidity or unenforceability of any one provision will have no effect on the continuing force and effect of the remaining provisions.
14.2
Governing Law . These Terms will be construed under the laws of the State of California.
14.3
Notice . Unless waived by EIX, any notice required under or relating to the LTI must be in writing, with postage prepaid, addressed to: Edison International, Attn: Corporate Secretary, P.O. Box 800, Rosemead, CA 91770.
14.4
Construction . These Terms shall be construed and interpreted to comply with Section 409A of the Code. Additionally, when any provision of this document refers to a date, including a date implied by the end of a specified period, and that date falls on a holiday or weekend, the date shall be deemed to be the immediately preceding business day on which the New York Stock Exchange is open, except that the last day of the Performance Period shall occur on December 31, 2018 and in no event shall the term of an EIX Option extend beyond its maximum 10-year term. Any determination of trading price or fair market value for purposes of these Terms shall be made consistent with the resolutions adopted by the EIX Board of Directors on July 19, 2001 entitled “Fair Market Value Measure for Equity-Based Awards.” EIX Options and Performance Shares

12





are intended to qualify as performance-based compensation exempt from the deductibility limitations of Section 162(m) of the Code and these Terms shall be construed and interpreted consistent with that intent.
14.5
Transfer Representations . The Holder agrees that any securities acquired by him or her hereunder are being acquired for his or her own account for investment and not with a view to or for sale in connection with any distribution thereof and that he or she understands that such securities may not be sold, transferred, pledged, hypothecated, alienated, or otherwise assigned or disposed of without either registration under the Securities Act of 1933 or compliance with the exemption provided by Rule 144 or another applicable exemption under such act.
14.6
Award Not Funded . The Holder will have no right or claim to any specific funds, property or assets of the Companies as to any award of LTI.
14.7
Section 409A . Notwithstanding any provision of these Terms to the contrary, if the Holder is a “specified employee” as defined in Section 409A of the Code, the Holder shall not be entitled to any payment with respect to any LTI subject to Section 409A in connection with the Holder’s Separation from Service until the earlier of (a) the date which is six (6) months after the Holder’s Separation From Service for any reason other than the Holder’s death, or (b) the date of the Holder’s death. Any amounts otherwise payable to the Holder following the Holder’s Separation From Service that are not so paid by reason of this Section 14.7 shall be paid as soon as practicable for EIX (and in all events within ninety (90) days) after the date that is six (6) months after the Holder’s Separation From Service (or, if earlier, the date of the Holder’s death). The provisions of this Section 14.7 shall only apply if, and to the extent, required to comply with Section 409A of the Code.
14.8
Claw-Back . Notwithstanding any provision of these Terms to the contrary, the LTI, as well as any shares of Common Stock, cash or other property that may be issued, delivered or paid in respect of the LTI, as well as any consideration that may be received in respect of a sale or other disposition of any such shares or property, shall be subject to any recoupment, “clawback” or similar provisions of applicable law, as well as any recoupment, “clawback” or similar policies of the Company that may be in effect from time to time.




13



Exhibit 31.1


CERTIFICATION


I, THEODORE F. CRAVER, JR., certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, of Edison International;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.    The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 2, 2016

/s/ THEODORE F. CRAVER, JR.
THEODORE F. CRAVER, JR.
Chief Executive Officer





Exhibit 31.1



CERTIFICATION


I, W. JAMES SCILACCI, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, of Edison International;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)    Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)    Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.    The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 2, 2016

/s/ W. JAMES SCILACCI
W. JAMES SCILACCI
Chief Financial Officer




Exhibit 31.2

CERTIFICATION
I, PEDRO J. PIZARRO, certify that:
1.    I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, of Southern California Edison Company;
2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.    The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:
        (a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
        (b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
        (c)   Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
        (d)   Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.    The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
        (a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
        (b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: May 2, 2016
/s/ PEDRO J. PIZARRO
PEDRO J. PIZARRO
President






Exhibit 31.2

CERTIFICATION
I, MARIA RIGATTI, certify that:
1.    I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, of Southern California Edison Company;
2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.    The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:
        (a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
        (b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
        (c)   Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
        (d)   Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.    The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
        (a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
        (b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: May 2, 2016
/s/ MARIA RIGATTI
MARIA RIGATTI
Chief Financial Officer




Exhibit 32.1






STATEMENT PURSUANT TO 18 U.S.C. SECTION 1350, AS
ENACTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 (the "Quarterly Report"), of Edison International (the "Company"), and pursuant to 18 U.S.C. Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned certifies, to the best of his knowledge, that:
1.
The Quarterly Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and
2.
The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 2, 2016
/s/ THEODORE F. CRAVER, JR.
THEODORE F. CRAVER, JR.
Chief Executive Officer
Edison International
 
/s/ W. JAMES SCILACCI
W. JAMES SCILACCI
Chief Financial Officer
Edison International

This statement accompanies the Quarterly Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.



Exhibit 32.2




STATEMENT PURSUANT TO 18 U.S.C. SECTION 1350, AS
ENACTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 (the "Quarterly Report"), of Southern California Edison Company (the "Company"), and pursuant to 18 U.S.C. Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned certifies, to the best of his or her knowledge, that:
1.
The Quarterly Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

2.
The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 2, 2016
/s/ PEDRO J. PIZARRO
PEDRO J. PIZARRO
President
Southern California Edison Company
 
/s/ MARIA RIGATTI
MARIA RIGATTI
Chief Financial Officer
Southern California Edison Company

This statement accompanies the Quarterly Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.