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 September 30, 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 October 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
 
 
 


i





 
 
Part I, Item 3
Part I, Item 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Part I, Item 4
 
 
 
 
 
 
Part II, Item 1
Part II, Item 5
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 
BRRBA
 
Base Revenue Requirement Balancing Account
CAA
 
Clean Air Act
CAISO
 
California Independent System Operator
CARB
 
California Air Resources Board
Competitive Businesses
 
businesses focused on providing energy solutions, 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 that advises and provides energy solutions to large energy users
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., a wholly owned subsidiary of Edison International and the parent company of EME and Edison Capital
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 filed with the SEC in connection with Edison International's and SCE's Annual Shareholders' Meeting 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
MWdc
 
megawatts measured for solar projects representing the accumulated peak capacity of all the solar modules
MWh
 
megawatt-hours


iii





NAAQS
 
national ambient air quality standards
NEIL
 
Nuclear Electric Insurance Limited
NEM
 
net energy metering
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
SoCore Energy LLC
 
a subsidiary of Edison Energy Group that provides solar energy solutions
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 the determinations of authorized rates of return or return on equity, outcome of San Onofre CPUC proceedings and delays in regulatory actions;
•
ability of Edison International or SCE to borrow funds and access the capital markets on reasonable terms;
•
risks associated with cost allocation, including the potential movement of costs to bundled customers, caused by the ability of cities, counties and certain other public agencies to generate and/or purchase electricity for their local residents and businesses, along with other 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 Edison International's and SCE's critical assets and personnel and the cybersecurity of Edison International's and 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 NERC, CAISO, WECC and similar regulatory bodies in 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;

1





•
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;
•
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 nine months ended September 30, 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 nine months ended September 30, 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




















(This page has been left blank intentionally.)


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 solutions to commercial and industrial customers, including distributed energy 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 September 30,
 
 
 
Nine months ended September 30,
 
 
(in millions)
2016
 
2015
 
Change
 
2016
 
2015
 
Change
Net income (loss) attributable to Edison International
 
 
 
 
 
 
 
 
 
 
Continuing operations
 
 
 
 
 
 
 
 
 
 
 
SCE
$
435

 
$
389

 
$
46

 
$
1,037

 
$
1,079

 
$
(42
)
Edison International Parent and Other
(16
)
 
(11
)
 
(5
)
 
(71
)
 
(23
)
 
(48
)
Discontinued operations
—

 
43

 
(43
)
 
(1
)
 
43

 
(44
)
Edison International
419

 
421

 
(2
)
 
965

 
1,099

 
(134
)
Less: Non-core items
 
 
 
 
 
 
 
 
 
 
 
     SCE
—

 
—

 
—

 
—

 
—

 
—

     Edison International Parent and Other
—

 
1

 
(1
)
 
5

 
7

 
(2
)
     Discontinued operations
—

 
43

 
(43
)
 
(1
)
 
43

 
(44
)
Total non-core items
—

 
44

 
(44
)
 
4

 
50

 
(46
)
Core earnings (losses)
 
 
 
 
 
 
 
 
 
 
 
SCE
435

 
389

 
46

 
1,037

 
1,079

 
(42
)
Edison International Parent and Other
(16
)
 
(12
)
 
(4
)
 
(76
)
 
(30
)
 
(46
)
Edison International
$
419

 
$
377

 
$
42

 
$
961

 
$
1,049

 
$
(88
)
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 non-core items. Non-core items include 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 earnings for the three months ended September 30, 2016 increased by $46 million , primarily due to increased revenue from the timing of the implementation of the 2015 proposed GRC decision and incremental return on pole loading rate base, partially offset by higher income tax expense.

4





SCE’s earnings for the nine months ended September 30, 2016 decreased by $42 million , which includes lower income tax benefits partially offset by an increase in revenue from the escalation mechanism set forth in the 2015 GRC decision and the 2016 incremental return on the pole loading rate base.
During the nine months ended September 30, 2015, SCE recorded $100 million of income tax benefits from revisions to liabilities for uncertain tax positions (see "Results of Operations—SCE" for further information).
During the first six months 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 revenue refunds to customers which totaled $451 million to reflect the final decision in the 2015 GRC. In the third quarter of 2015, SCE recorded a revenue refund of $233 million as a result of receiving the proposed GRC decision, of which a total of $70 million ($41 million after-tax) was attributable to the first six months of 2015. In addition, SCE's results of operations for the three and nine months ended September 30, 2016 included an increase in revenue of approximately $46 million ($27 million after-tax) and $142 million ($84 million after-tax), respectively, 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.
Edison International Parent and Other losses from continuing operations for the third quarter and nine months ended September 30, 2016 increased by $5 million and $48 million , respectively. Losses for the third quarter consisted of $4 million of higher core losses and $1 million of lower non-core earnings. Losses for the nine months ended September 30, 2016 consisted of $46 million of higher core losses and $2 million of lower non-core earnings. During the second quarter of 2016, Edison International Parent and Other recorded an after-tax charge of $13 million related to the buy-out of an earn-out provision with the former shareholders of a company acquired by Edison Energy at the end of 2015. The buy-out was completed, together with modification to employment contracts, in order to align long-term incentive compensation. In addition, core losses for the three and nine months ended September 30, 2016 included higher operating and development costs and lower revenue and gross margin from the sale of solar systems at Edison Energy Group. Results during 2015 included income from Edison Capital's investments in affordable housing projects which were sold at the end of 2015.
Consolidated non-core items included:
•
Income of $1 million for the three months ended September 30, 2015 and income of $5 million and $7 million for the nine months ended September 30, 2016 and 2015, respectively. The income was related to losses (net of distributions) 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."
•
Income from discontinued operations, net of tax, of $43 million for the three and nine months ended September 30, 2015. The income was due to $16 million in insurance recoveries ($28 million pre-tax) related to the EME bankruptcy and $27 million of income tax benefits based on filing of the 2014 tax returns in the third quarter of 2015.
2018 General Rate Case
In September 2016, SCE filed its 2018 GRC application for the three-year period 2018 – 2020, which requested a 2018 revenue requirement of $5.885 billion, an increase of $222 million over the projected 2017 GRC authorized revenue requirement. In addition, SCE requested $48 million in one-time balancing and memorandum account recoveries. This represents a 2.7% increase over presently authorized total rates. SCE's 2018 GRC request also includes proposed revenue requirement increases of $533 million in 2019 and $570 million in 2020. For 2019 and 2020, respectively, these represent 4.2% and 5.2% increases over presently authorized total rates.
The capital programs requested in SCE's 2018 GRC are focused on safety and reliability through investments in the distribution grid to replace aging equipment and enhance capabilities to integrate increasing amounts of Distributed Energy Resources ("DER"). For further information, see "—Capital Program" below.
SCE's 2018 GRC request identifies areas of reduced operating cost to partially mitigate the customer rate impacts of the request.

5





SCE requested that the CPUC issue a final decision by the end of 2017. If the schedule for a final decision is delayed, SCE will request the CPUC to issue an order directing that the authorized requirement changes be effective January 1, 2018. SCE cannot predict the revenue requirement the CPUC will ultimately authorize for 2018 through 2020 or forecast the timing of a final decision.
Capital Program
Based on the 2018 GRC request, SCE forecasts capital expenditures of up to $23.3 billion for 2016 – 2020. The requested CPUC capital expenditures include traditional capital spending, such as infrastructure replacement and maintenance, expansions and additions due to load growth and work requested by customers, as well as expenditures for grid modernization to support improved safety and reliability and increased levels of distributed energy resources. Traditional capital spending for 2016 – 2017 reflects SCE's forecast capital expenditures for CPUC and FERC capital projects. Also included in 2016 and 2017 capital expenditures is the approval of a memorandum account to facilitate recovery in rates of grid modernization expenditures. Traditional capital expenditures for 2018 – 2020 reflect the amounts requested in the 2018 GRC filing and FERC capital projects. The CPUC has approved 81%, 89% and 92% of the traditional capital expenditures requested in the 2009, 2012 and 2015 GRC decisions, respectively. While SCE cannot predict the level of traditional capital spending that will be approved in the 2018 GRC decision, management is not aware of factors that would cause the percentage of SCE's request that is ultimately approved to be materially different from what has been approved in recent GRC decisions.
As noted above, SCE has requested approval from the CPUC to establish a memorandum account to facilitate the recovery in rates of 2016 – 2017 grid modernization capital expenditures. Failure to obtain CPUC approval of this memorandum account, or a similar cost recording mechanism, by the end of 2016 or early 2017 could delay or reduce SCE’s 2018 – 2020 grid modernization capital expenditures. SCE does not have prior approval experience with grid modernization capital expenditures and, therefore, is unable to predict an expected outcome. Forecasted expenditures for FERC capital projects is subject to timely receipt of permitting, licensing and regulatory approvals (see "Liquidity and Capital Resources—SCE—Capital Investment Plan" for details on major transmission projects). The following table sets forth a summary of capital expenditures for 2016 – 2020 on the basis described above:
(in millions)
 
2016
2017
2018
2019
2020
Total 2016 – 2020
Traditional capital expenditures
 
 
 
 
 
 
 
Transmission
 
$
536

$
1,037

$
912

$
1,035

$
900

$
4,420

Distribution 1
 
2,965

3,053

3,214

3,153

3,096

15,481

Generation
 
235

203

225

216

206

1,085

Total requested 2  traditional capital expenditures
 
$
3,736

$
4,293

$
4,351

$
4,404

$
4,202

$
20,986

Grid modernization capital expenditures
 
$
26

$
182

$
637

$
751

$
714

$
2,310

Total capital expenditures
 
$
3,762

$
4,475

$
4,988

$
5,155

$
4,916

$
23,296

1
Includes $12 million Charge Ready Pilot (2016) and $69 million of Energy Storage (2016 – 2020).
2 Capital expenditures for 2016 and 2017 reflect management's expectations based on the 2015 GRC decision.
Capital expenditures for traditional capital expenditures projects under CPUC jurisdiction for 2016 and 2017 are recovered through the authorized revenue requirement in SCE's 2015 GRC. The 2018 – 2020 capital expenditures are included in the 2018 GRC application request discussed above. Recovery for 2016 – 2020 planned expenditures for projects under FERC jurisdiction will be pursued through FERC-authorized mechanisms. For further information regarding the capital program, see "Liquidity and Capital Resources—SCE—Capital Investment Plan."
SCE’s estimated weighted average annual rate base for 2016 – 2020 using the capital expenditures set forth in the table above is as follows:
(in millions)
2016
 
2017
2018
2019
2020
Rate base for requested traditional capital expenditures
$
24,943

 
$
26,440

$
29,348

$
31,585

$
33,739

Rate base for requested grid modernization capital expenditures
—

 
—

279

802

1,398

Total rate base
$
24,943

 
$
26,440

$
29,627

$
32,387

$
35,137

The rate base above does not reflect reductions from the amounts requested in the 2018 GRC that may be included in a final decision.
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 certain 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.
The following table is a summary of SCE's results of operations for the periods indicated.
Three months ended September 30, 2016 versus September 30, 2015
 
Three months ended September 30, 2016
Three months ended September 30, 2015
(in millions)
Earning
Activities
Cost-
Recovery
Activities
Total
Consolidated
Earning
Activities
Cost-
Recovery
Activities
Total
Consolidated
Operating revenue
$
1,811

$
1,941

$
3,752

$
1,711

$
2,046

$
3,757

Purchased power and fuel
—

1,719

1,719

—

1,785

1,785

Operation and maintenance
481

221

702

498

258

756

Depreciation, decommissioning and amortization
519

—

519

504

2

506

Property and other taxes
91

—

91

84

—

84

Total operating expenses
1,091

1,940

3,031

1,086

2,045

3,131

Operating income
720

1

721

625

1

626

Interest expense
(136
)
(1
)
(137
)
(130
)
(1
)
(131
)
Other income and expenses
23

—

23

14



14

Income before income taxes
607

—

607

509

—

509

Income tax expense
141

—

141

92

—

92

Net income
466

—

466

417

—

417

Preferred and preference stock dividend requirements
31

—

31

28

—

28

Net income available for common stock
$
435

$
—

$
435

$
389

$
—

$
389

Core earnings 1
 
 
$
435

 
 
$
389

Non-core earnings
 
 
—

 
 
—

Total SCE GAAP earnings
 
 
$
435

 
 
$
389

1  
See use of non-GAAP financial measures in "Management Overview—Highlights of Operating Results."
Earning Activities
Earning activities were primarily affected by the following:
•
Higher operating revenue of $100 million primarily due to the following:
•
An increase in CPUC revenue of approximately $116 million primarily due to the implementation of the 2015 GRC decision.

6





During the third quarter of 2016, SCE increased authorized revenue approximately $46 million based on the escalation mechanism set forth in the 2015 GRC decision. In the third quarter of 2015, SCE recorded an estimated revenue refund to customers based on the proposed decision of which $70 million is attributable to the first and second quarters of 2015 (see "Management Overview—Highlights of Operating Results" above for further information).
•
An increase in FERC-related revenue of $17 million primarily due to higher operating costs including amortization of the regulatory asset associated with the Coolwater-Lugo transmission project (see "Liquidity and Capital Resources—SCE—Capital Investment Plan—Major Transmission Projects—Coolwater-Lugo" for further information).
•
An increase of $21 million primarily due to tax benefits recognized in 2015 related to net operating loss carrybacks for San Onofre decommissioning costs, resulting in a reduction in revenue in 2015 (offset in income taxes).
•
A decrease in revenue of approximately $54 million for 2016 incremental tax benefits recognized through the tax accounting memorandum account ("TAMA") and the pole loading balancing account (offset in income taxes as discussed below).
•
An increase in revenue of $17 million ($10 million after-tax) related to the 2016 incremental return on the pole loading rate base in the pole loading balancing account.
•
Lower operation and maintenance costs of $17 million primarily related to lower outside service costs and lower labor costs due to workforce reductions. These lower costs were partially offset by increased transmission and distribution costs for fire storm and drought related activities.
•
Higher depreciation, decommissioning and amortization expense of $15 million primarily related to depreciation on transmission and distribution investments and amortization of the regulatory asset related to the Coolwater-Lugo transmission project, as discussed above.
•
Higher other income and expenses of $9 million primarily due to higher insurance benefits in 2016. See "Notes to Consolidated Financial Statements—Note 14. Interest and Other Income and Other Expenses" for further details.
•
Higher income taxes of $49 million primarily due to higher pre-tax income. Included in income taxes is $32 million of 2016 incremental tax benefits for TAMA and the pole loading balancing accounts (offset in revenue above) offset by lower income tax benefits in 2016 on other property-related items.
Cost-Recovery Activities
Cost-recovery activities were primarily affected by the following:
•
Lower purchased power and fuel costs of $66 million primarily driven by lower load related to cooler weather.
•
Lower operation and maintenance expense of $37 million primarily due to lower transmission access charges and lower spending on various public purpose programs.

7





The following table is a summary of SCE's results of operations for the periods indicated.
Nine months ended September 30, 2016 versus September 30, 2015
 
Nine months ended September 30, 2016
Nine months ended September 30, 2015
(in millions)
Earning
Activities
Cost-
Recovery
Activities
Total
Consolidated
Earning
Activities
Cost-
Recovery
Activities
Total
Consolidated
Operating revenue
$
4,842

$
4,114

$
8,956

$
4,870

$
4,296

$
9,166

Purchased power and fuel
—

3,576

3,576

—

3,648

3,648

Operation and maintenance
1,456

537

1,993

1,455

646

2,101

Depreciation, decommissioning and amortization
1,497

—

1,497

1,448

1

1,449

Property and other taxes
268

—

268

254

—

254

Total operating expenses
3,221

4,113

7,334

3,157

4,295

7,452

Operating income
1,621

1

1,622

1,713

1

1,714

Interest expense
(401
)
(1
)
(402
)
(397
)
(1
)
(398
)
Other income and expenses
71

—

71

54

—

54

Income before income taxes
1,291

—

1,291

1,370

—

1,370

Income tax expense
162

—

162

207

—

207

Net income
1,129

—

1,129

1,163

—

1,163

Preferred and preference stock dividend requirements
92

—

92

84

—

84

Net income available for common stock
$
1,037

$
—

$
1,037

$
1,079

$
—

$
1,079

Core earnings 1




$
1,037





$
1,079

Non-core earnings




—





—

Total SCE GAAP earnings




$
1,037





$
1,079

1  
See use of non-GAAP financial measures in "Management Overview—Highlights of Operating Results."
Earning Activities
Earning activities were primarily affected by the following:
•
Lower operating revenue of $28 million primarily due to the following:
•
During the second quarter of 2016, SCE recorded a revenue refund to customers of $133 million for 2012 – 2014 incremental tax benefits related to repair deductions (offset in income taxes as discussed below). This revenue refund resulted from the CPUC's approval of SCE's request to refund incremental tax repair deductions that were not addressed in SCE's 2015 GRC decision. See "Liquidity and Capital Resources—SCE—Regulatory Proceedings—Tax Repair Deductions and Memorandum Account" for further information.
•
A decrease in revenue of approximately $148 million for 2016 incremental tax benefits recognized through the tax accounting memorandum account ("TAMA") and the pole loading balancing account (offset in income taxes as discussed below).
•
An increase in revenue of $43 million ($25 million after-tax) related to the 2016 incremental return on the pole loading rate base recorded through the pole loading balancing account.
•
An increase in CPUC revenue of approximately $142 million primarily related to the increase in authorized revenue from the escalation mechanism set forth in the 2015 GRC decision (see "Management Overview—Highlights of Operating Results" above for further information).
•
An increase in FERC-related revenue of $49 million primarily related to higher operating costs including amortization of the regulatory asset associated with the Coolwater-Lugo transmission project and rate base growth partially offset by a $15 million increase in 2015 revenue due to a change in estimate under the FERC formula rate mechanism.
•
An increase of $35 million primarily due to tax benefits recognized in 2015 related to net operating loss carrybacks for San Onofre decommissioning costs resulting in a reduction in revenue in 2015 (offset in income taxes).
•
Higher operation and maintenance expense primarily due to an increase of $28 million related to transmission and distribution costs for rain and fire storm-related activities and drought related activities offset by lower labor and other costs due to the workforce reductions.

8





•
Higher depreciation, decommissioning and amortization expense of $49 million primarily related to depreciation on transmission and distribution investments and amortization of the regulatory asset related to the Coolwater-Lugo plant, as discussed above.
•
Higher property and other taxes of $14 million primarily due to higher property assessed values in 2016.
•
Higher other income and expenses of $17 million primarily due to higher insurance benefits in 2016 and lower advertising expense in 2016. See "Notes to Consolidated Financial Statements—Note 14. Interest and Other Income and Other Expenses" for details.
•
Lower income taxes of $45 million primarily due to lower pre-tax income and the following discrete items:
•
Higher income tax benefits in 2016 primarily related to $79 million related to the flow-through of incremental tax benefits for 2012 – 2014 to customers and $88 million of 2016 incremental tax benefits for TAMA and pole loading balancing accounts (both offset in revenue above). These items were partially offset by lower tax benefits on other property-related items in 2016.
•
A change in liabilities related to uncertain tax positions related to repair deductions, which resulted in income tax benefits of $100 million during the second quarter of 2015.
Cost-Recovery Activities
Cost-recovery activities were primarily affected by the following:
•
Lower purchased power and fuel of $72 million primarily due to lower load related to cooler weather.
•
Lower operation and maintenance expense of $109 million primarily due to lower transmission access charges, and lower spending on various public purpose programs.
Supplemental Operating Revenue Information
SCE's retail billed and unbilled revenue (excluding wholesale sales and balancing account overcollections/undercollections) was $3.7 billion and $8.6 billion for the three and nine months ended September 30, 2016, respectively, compared to $4.3 billion and $9.7 billion for the respective periods in 2015.
Retail billed and unbilled revenue for the three and nine months ended September 30, 2016 reflects a rate decrease of $437 million and $858 million and a sales volume decrease of $232 million and $251 million, respectively. The rate decreases for both periods were due to implementations of the 2016 ERRA rate decrease and the 2015 GRC decision in January 2016. The sales volume decreases for both periods were due to lower load requirements related to cooler weather experienced in the third quarter of 2016 compared to the same period last 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 expense increased by $49 million and decreased by $45 million for the three and nine months ended September 30, 2016, respectively, compared to the same periods in 2015.
The effective tax rates were 23.2% and 18.1% for the three months ended September 30, 2016 and 2015, respectively. The effective tax rates were 12.5% and 15.1% for the nine months ended September 30, 2016 and 2015, respectively. SCE's effective tax rate is lower than the statutory rate primarily due to income tax benefits related to repair deductions, mainly due to flow-through income tax benefits recorded through balancing accounts. The decrease in the effective tax rate from 2015 to 2016 for the nine months ended September 30, 2016 is mainly due to the $133 million revenue refund to customers partially offset by revisions in liabilities related to uncertain tax positions.
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.

9





Income from Continuing Operations
The following table summarizes the results of Edison International Parent and Other:
 
Three months ended September 30,
 
Nine months ended September 30,
(in millions)
2016
 
2015
 
2016
 
2015
Edison Energy Group and subsidiaries 1
$
(6
)
 
$
(3
)
 
$
(30
)
 
$
(3
)
Edison Mission Group and subsidiaries
—

 
1

 
(4
)
 
13

Corporate expenses and other 2
(10
)
 
(9
)
 
(37
)
 
(33
)
Total Edison International Parent and Other
$
(16
)
 
$
(11
)
 
$
(71
)
 
$
(23
)
1  
Includes income of $5 million for the nine months ended September 30, 2016 compared to income of $1 million and $7 million for the three and nine months ended September 30, 2015 related to losses (net of distributions) allocated to tax equity investors under the HLBV accounting method.
2  
Includes interest expense (pre-tax) of $10 million and $7 million for the three months ended September 30, 2016 and 2015, respectively, and $27 million and $21 million for the nine months ended September 30, 2016 and 2015, respectively.
The loss from continuing operations of Edison International Parent and Other increased $5 million and $48 million for the three and nine months ended September 30, 2016, respectively, compared to the same periods in 2015. The increase in the loss for the first nine months of 2016 was primarily due to:
•
An increase in losses of Edison Energy Group from a $13 million after-tax charge during the second quarter of 2016 from a buy-out of an earn-out provision contained in one of the 2015 acquisitions. The buy-out was completed, together with modification to employment contracts, in order to align long-term incentive compensation. In addition, there were higher operating and development expenses and lower revenue and gross margin from the sale of solar systems for the three and nine months ended September 30, 2016. The results during the first nine months of 2016 include the three businesses acquired by Edison Energy in December 2015 and expanded sales and support personnel. Revenue for Edison Energy Group for the three and nine months ended September 30, 2016 was $15 million and $30 million, respectively, compared to $7 million and $16 million for the respective periods in 2015.
•
A decrease in income from Edison Mission Group and subsidiaries of $17 million for the nine months ended September 30, 2016 primarily due to income related to affordable housing projects in 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.
Income (Loss) from Discontinued Operations (Net of Tax)
Loss from discontinued operations, net of tax, was $1 million for the nine months ended September 30, 2016 compared to income of $43 million for the three and nine months ended September 30, 2015. The 2015 income was due to $27 million of income tax benefits based on filing of the 2014 tax returns in the third quarter of 2015 and $16 million in insurance recoveries ($28 million pre-tax) related to the EME bankruptcy.
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.
In the next 12 months, SCE expects to fund its obligations, capital expenditures and dividends using 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.

10





Available Liquidity
At September 30, 2016 , SCE had approximately $2.35 billion available under its $ 2.75 billion multi-year revolving credit facility. For further details, see "Notes to Consolidated Financial Statements—Note 5. Debt and Credit Agreements."
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  September 30, 2016 , SCE's debt to total capitalization ratio was 0.43 to 1.
Regulatory Proceedings
San Onofre CPUC Proceedings
In May 2016, and in consideration of the CPUC's December 2015 decision sanctioning SCE for failing to disclose ex parte communications relevant to the San Onofre OII, the Assigned Commissioner and ALJ issued a ruling to reopen the record upon which the CPUC had, in November 2014, approved the San Onofre OII Settlement Agreement among SCE, TURN, ORA, SDG&E, the Coalition of California Utility Employees, and Friends of the Earth. See "Notes to Consolidated Financial Statements—Note 11. Commitments and Contingencies—Contingencies—San Onofre Related Matters—San Onofre CPUC Proceedings" for more information.
Energy Efficiency Incentive Mechanism
In September 2016, SCE filed a request for energy efficiency incentives of approximately $11 million related to Part 2 of its 2014 program year and approximately $12 million related to Part 1 of its 2015 program year. SCE expects a decision on these requests in the fourth quarter of 2016. There is no assurance that the CPUC will make an award for any given year.
In August 2016, a proposed settlement agreement between TURN, ORA and SCE was filed with the CPUC related to the rehearing of prior CPUC decisions for $74.5 million of incentive awards that SCE received for savings achieved by its 2006 – 2008 energy efficiency programs. The settlement agreement fully resolves the disputes as they relate to SCE in exchange for SCE refunding approximately $13.5 million of the incentives awarded over a three year period or, at SCE's option, for SCE making a one-time credit of the present value of that amount to the BRRBA. The CPUC issued a final decision approving the settlement agreement in October 2016.
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. The portion affected is the only significant portion of SCE’s distribution network that is arranged in a network configuration. In July 2016, the CPUC initiated an investigation ("Long Beach OII") of these events and their causes based on an investigation by the CPUC's Safety and Enforcement Division ("SED"). The SED investigation, among other things, identified problems with maintenance, inspection, and management of SCE's Long Beach electrical system, and emergency response and communications capabilities. The Long Beach OII will consider whether SCE violated statutes, rules or regulations, maintained adequate, accurate, and complete records, and provided sufficient emergency response and communications to various parties during the power outages. While SCE believes it is probable that penalties will be assessed, neither the CPUC nor SED has proposed a penalty amount. Consequently, although potential penalties in this matter could be significant, SCE is currently unable to estimate their amount. See "Notes to Consolidated Financial Statements—Note 11. Commitments and Contingencies—Contingencies—Long Beach Service Interruptions" for more information.
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.

11





FERC Formula Rates
In June 2016, SCE provided its preliminary 2017 annual transmission revenue requirement update to interested parties. The update provided support for an increase in SCE's transmission revenue requirement of $98 million or 9% over amounts currently authorized in rates. The increase is mainly due to the completion of several major transmission projects and an underrecovery in rates for revenue in 2015, which is being recovered through the formula rate true up process. SCE expects to file its 2017 annual update with the FERC by December 1, 2016 and the proposed rates would be effective January 1, 2017.
Tax Repair Deductions and Memorandum Account
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 December 31, 2015 consolidated statement 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 BRRBA by $234 million in future periods subject to the timing and final outcome of audits that may be conducted by tax authorities. The refunds will result in flowing incremental tax benefits for 2012 – 2014 to customers. SCE refunded $133 million during the second quarter of 2016. SCE did not 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
A summary of SCE's large transmission and substation projects during the next five years is presented below:
Project Name
Project Lifecycle Phase
Direct Expenditures (in millions) 1
Remaining Investment (in millions) 1
Scheduled In-Service Date
Tehachapi 4-11
Construction
$2,450
$179
2016 –  2017
West of Devers
Licensing
$1,075
$1,031
2021
Mesa Substation
Licensing
$608
$592
2020 – 2021
Alberhill System
Licensing
$397
$361
2021
Riverside Transmission Reliability
Licensing
$233
$230
2021
Eldorado-Lugo-Mohave Upgrade

Planning
$269
$266
2019
1  
Direct expenditures include direct labor, land and contract costs incurred for the respective projects and exclude overhead costs that are included in the capital expenditures forecasted for remaining investment.
Tehachapi
The Tehachapi Project consists of new and upgraded electric transmission lines and substations between eastern Kern County and San Bernardino County and was undertaken to bring renewable resources in Kern County to energy consumers in the Los Angeles basin and the California energy grid. The project consists of eleven segments. Segments 1-3 were placed in service beginning in 2009 through 2013. For more information, see "Liquidity and Capital Resources—SCE—Capital Investment Plan—Major Transmission Projects—Tehachapi" in the year-ended 2015 MD&A.

12





West of Devers
In August 2016, the CPUC approved 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. ORA filed an Application for Rehearing in September 2016 stating that the August 2016 decision failed to follow the California Environmental Quality Act when it approved SCE’s project and should have approved the alternative project with the amended scope. SCE does not know when the CPUC will issue a decision on the Application. As a result of the delay in receipt of project approval from the CPUC, SCE is evaluating possible delays in the timing of project capital expenditures.
Mesa Substation
The Mesa Substation Project consists of demolishing the existing 220 kV Mesa Substation and constructing a new 500 kV substation. The Mesa Substation project would address reliability concerns by providing additional transmission import capability, allowing greater flexibility in the siting of new generation, and reducing the total amount of new generation required to meet local reliability needs in the Western Los Angeles Basin area. SCE has filed its permit to construct the project with the CPUC and the project is included in the current 2016 – 2020 capital investment plan.
In October 2016, the CPUC issued a final environmental impact report that identified project alternatives as being environmentally superior to SCE’s proposed project. The $608 million estimated cost for this project reflects the scope proposed by SCE. Any possible project delays or cost increases that may result from a CPUC approval of an alternative scope have not been reflected in the capital investment plan table above.
Alberhill System
The Alberhill System Project consists of constructing a new 500-kV substation, two 500-kV transmission lines to connect the proposed substation to the existing Serrano-Valley 500-kV transmission line, telecommunication equipment and subtransmission lines in unincorporated and incorporated portions of western Riverside County. The Project was designed to meet long-term forecasted electrical demand in the proposed Alberhill Project area and to increase electrical system reliability. In April 2016, the CPUC issued a draft environmental impact report that identified an alternative substation site. The $397 million estimated cost for this project reflects the scope proposed by SCE. Any possible project delays or cost increases that may result from a CPUC approval of an alternative scope have not been reflected in the capital investment plan table above.
Riverside Transmission Reliability
The Riverside Transmission Reliability Project is a joint project between SCE and Riverside Public Utilities (RPU), the municipal utility department of the City of Riverside. While RPU would be responsible for constructing some of the Project's facilities within Riverside, SCE's portion of the Project consists of constructing upgrades to its system, including a new 230-kV Substation; certain interconnection and telecommunication facilities and transmission lines in the cities of Riverside, Jurupa Valley and Norco and in portions of unincorporated Riverside County. The purpose of the Project is to provide RPU and its customers with adequate transmission capacity to serve existing and projected load, to provide for long-term system capacity for load growth, and to provide needed system reliability. Due to changed circumstances since the time the Project was originally developed, in July 2016 SCE informed the CPUC that it now supports a revised description of the Project. The CPUC is reviewing the revised Project and is expected to commence a supplemental environmental review in the fourth quarter of 2016. As a result of the delay in receipt of project approval from the CPUC, SCE is evaluating possible delays in the timing of project capital expenditures.
Eldorado-Lugo-Mohave Upgrade
The Eldorado-Lugo-Mohave Upgrade Project will increase capacity on existing transmission lines to allow additional renewable energy to flow from Nevada to southern California. The Project would modify SCE’s existing Eldorado, Lugo, and Mohave electrical substations to accommodate the increased current flow from Nevada to southern California; increase the power flow through the existing 500 kV transmission lines by constructing two new capacitors along the lines; raise transmission tower heights to meet ground clearance requirements, and install communication wire on our transmission lines to allow for communication between existing SCE substations.
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

13





through the FERC transmission formula rate. In May 2016, the FERC issued an order finding that the project was cancelled for reasons beyond SCE's control, and granted SCE recovery of 100% of the prudently-incurred costs of the project, as proposed by SCE but set for hearing and settlement the $8.5 million in overhead costs assigned by SCE to the project to determine whether these costs are reasonable.
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 September 30, 2016 , SCE's 13-month weighted-average common equity component of total capitalization was 50.4% and the maximum additional dividend that SCE could pay to Edison International under this limitation was approximately $567 million, resulting in a restriction on net assets of approximately $13.8 billion.
In the third 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 September 30, 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.
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 September 30, 2016 .
(in millions)
 
 
Collateral posted as of September 30, 2016 1
 
$
163

Incremental collateral requirements for power procurement contracts resulting from a potential downgrade of SCE's credit rating to below investment grade
 
19

Incremental collateral requirements for power procurement contracts resulting from adverse market price movement 2
 
3

Posted and potential collateral requirements
 
$
185

1  
Net collateral provided to counterparties and other brokers consisted of $1 million  of cash which was offset against net derivative liabilities in the consolidated balance sheets, $ 4 million of cash reflected in "Other current assets" on the consolidated balance sheets and $158 million in letters of credit and surety bonds.
2  
Incremental collateral requirements were based on potential changes in SCE's forward positions as of September 30, 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 pay dividends to common shareholders are dependent on dividends from SCE, realization of tax benefits and access to bank and capital markets. Edison International may also 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.
At September 30, 2016, Edison International Parent had $732 million available under its $ 1.25 billion multi-year revolving credit facility. For further details, see "Notes to Consolidated Financial Statements—Note 5. Debt and Credit Agreements."
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 September 30, 2016, Edison International Parent's consolidated debt to total capitalization ratio was 0.46 to 1.

14





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 made the final payment of $214 million in September 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.
Historical Cash Flows
Southern California Edison Company
 
Nine months ended September 30,
(in millions)
2016
 
2015
Net cash provided by operating activities
$
2,836

 
$
2,951

Net cash used in financing activities
(380
)
 
(96
)
Net cash used in investing activities
(2,443
)
 
(2,855
)
Net increase in cash and cash equivalents
$
13

 
$
—

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 nine months ended September 30, 2016 and 2015.
 
Nine months ended September 30,
 
Change in cash flows
(in millions)
2016
2015
 
2016/2015
Net income
$
1,129

$
1,163

 
 
Non-cash items 1
1,606

1,307

 
 
    Subtotal
$
2,735

$
2,470

 
$
265

Changes in cash flow resulting from working capital 2
(32
)
(682
)
 
650

Derivative assets and liabilities, net
15

25

 
(10
)
Regulatory assets and liabilities, net
189

1,318

 
(1,129
)
Other noncurrent assets and liabilities, net 3
(71
)
(180
)
 
109

Net cash provided by operating activities
$
2,836

$
2,951

 
$
(115
)
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.

15





Net cash provided by operating activities was impacted by the following:
•
Net cash for working capital was $(32) million and $(682) million during the nine months ended September 30, 2016 and 2015, respectively. The net cash for each period was primarily related to seasonal usage, which resulted in timing of receipts from customers of $(230) million and $(825) during 2016 and 2015, respectively, and timing of disbursements for purchased power of $190 million and $180 million during 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 nine months of 2016 and 2015, cash flows were impacted by the following:
•
Lower cash due to a decrease in ERRA overcollections for fuel and purchased power of $231 million during the first nine 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. Higher cash due to a decrease in ERRA undercollections for fuel and purchased power of $1.1 billion during the first nine months of 2015 primarily due to lower power and gas prices experienced in 2015 and the 2015 application of 2013 and 2014 nuclear decommissioning costs refunds against ERRA undercollections.
•
The BRRBA tracks differences between amounts authorized by the CPUC in the GRC proceedings and amounts billed to customers. BRRBA overcollections increased $190 million in the first nine months of 2016. The increase to BRRBA resulted from a $206 million reclassification from TAMA to BRRBA to refund customers and a refund to customers of $133 million for 2012 – 2014 incremental tax benefits related to repair deductions. See "Liquidity and Capital Resources—SCE—Regulatory Proceedings—Tax Repair Deductions and Memorandum Account" for further information. The increase to BRRBA overcollections from refunding tax benefits was partially offset by the implementation of the 2015 GRC decision in January 2016.
•
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 $ 300 million during the first nine months of 2016 due to higher funding and lower spending for these programs. Overcollections decreased by $120 million during the first nine 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 decreased by $ 143 million during the first nine months of 2016 primarily due to a $206 million reclassification from TAMA to BRRBA to refund customers as discussed above, partially offset by higher tax repair deductions than forecasted in rates.
•
During the second quarter of 2016, the Department of Energy litigation memorandum account was established to track a refund of $122 million received by SCE in May 2016 from the federal government related to the Department of Energy's failure to meet its obligation to begin accepting spent nuclear fuel from San Onofre. These 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. See "Notes to Consolidated Financial Statements—Note 11. Commitments and Contingencies—Contingencies—Spent Nuclear Fuel" for further discussion.
•
Net cash provided by regulatory assets and liabilities also consisted of a cash inflow of $318 million in 2015 due to the revenue collected from customers that was estimated to be refunded as part of the 2015 GRC proposed decision.
•
Cash flows used in other noncurrent assets and liabilities were $71 million and $180 million in the first nine 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 $125 million and $129 million for the nine months ended September 30, 2016 and 2015, respectively (such costs were recorded as a reduction of SCE's asset retirement obligation).

16





Net Cash Used in Financing Activities
The following table summarizes cash provided by financing activities for the nine months ended September 30, 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."
 
Nine months ended September 30,
(in millions)
2016
 
2015
Issuances of first and refunding mortgage bonds, net
$
—

 
$
1,287

Issuances of pollution control bonds, net
—

 
128

Long-term debt matured or repurchased
(81
)
 
(761
)
Issuances of preference stock, net
294

 
319

Redemptions of preference stock
(125
)
 
(325
)
Short-term debt financing, net
189

 
(251
)
Payments of common stock dividends to Edison International
(510
)
 
(441
)
Payments of preferred and preference stock dividends
(97
)
 
(91
)
Other
(50
)
 
39

Net cash used in financing activities
$
(380
)
 
$
(96
)
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 $ 2.7 billion and $3.1 billion for the nine months ended September 30, 2016 and 2015 , respectively, primarily related to transmission, distribution and generation investments. The decrease in capital expenditures during 2016 was primarily due to lower FERC capital spending. Net proceeds of nuclear decommissioning trust investments were $159 million and $242 million for the nine months ended September 30, 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 proceeds from sale of nuclear decommissioning trust investments was used to pay 2013 and 2014 decommissioning costs less net earnings during the period. In addition, during the third quarter of 2016, SCE received proceeds of $140 million for the available cash surrender value of life insurance policies. The proceeds were used for general corporate purposes.
Nuclear Decommissioning Trusts
SCE's statement of cash flows includes activities of the Nuclear Decommissioning Trusts, which are reflected in the following line items:
 
Nine months ended September 30,
(in millions)
2016
 
2015
Net cash used in operating activities:
   Nuclear decommissioning trusts
$
(159
)
 
$
(249
)
Net cash flow from investing activities:
   Proceeds from sale of investments
2,075

 
2,507

   Purchases of investments
(1,916
)
 
(2,265
)
Net cash impact
$
—

 
$
(7
)
Net cash used in 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. During the nine months ended September 30, 2015, SCE made a contribution of $7 million to the non-qualified decommissioning trust pursuant to a CPUC decision related to decommissioning costs for San Onofre Unit 1.

17





In future periods, decommissioning costs of San Onofre will increase significantly. Beginning in March 2016, funds for decommissioning costs are requested from the nuclear decommissioning trusts one month in advance. Decommissioning disbursements are funded from sales of investments of the nuclear decommissioning trusts. 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.
 
Nine months ended September 30,
(in millions)
2016
 
2015
Net cash used in operating activities
$
(336
)
 
$
(118
)
Net cash provided by financing activities
280

 
122

Net cash used in investing activities
(34
)
 
(2
)
Net (decrease) increase in cash and cash equivalents
$
(90
)
 
$
2

Net Cash Used in Operating Activities
Net cash used in operating activities was impacted by the following:
•
$214 million and $204 million of cash payments made to the Reorganization Trust in September 2016 and 2015, respectively, related to the EME Settlement Agreement. See "Notes to Consolidated Financial Statements—Note 15. Discontinued Operations—EME Chapter 11 Bankruptcy" for further information.
•
$122 million receipt of intercompany tax-allocation payments in 2015.
•
$21 million outflow in June 2016 related to the buy-out of an earn-out provision with the former shareholders of a company acquired by Edison Energy in 2015. See "Results of Operations—Edison International Parent and Other—Income from Continuing Operations" for further information.
•
$101 million cash outflow from operating activities in 2016 compared to $36 million cash outflow in 2015 due to the timing of payments and receipts relating to interest and operating costs.
Net Cash Provided by Financing Activities
Net cash provided by financing activities was as follows:
 
Nine months ended September 30,
(in millions)
2016
 
2015
Dividends paid to Edison International common shareholders
$
(469
)
 
$
(408
)
Dividends received from SCE
510

 
441

Payment for stock-based compensation
(53
)
 
(116
)
Receipt from stock option exercises
30

 
65

Long-term debt issuance, net
397

 
—

Short-term debt financing, net
(129
)
 
139

Other
(6
)
 
1

Net cash provided by financing activities
$
280

 
$
122


18





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 September 30, 2016, SCE had identified 19 material sites for remediation and recorded an estimated minimum liability of $130 million . SCE expects to recover 90% of its remediation costs at certain sites. See "Notes to Consolidated Financial Statements—Note 11. Commitments and Contingencies—Contingencies—Environmental Remediation" 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 September 30, 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 September 30, 2016, the amount of balance sheet exposure as described above broken down by the credit ratings of SCE's counterparties, was as follows:
 
September 30, 2016
(in millions)
Exposure 2
 
Collateral
 
Net Exposure
S&P Credit Rating 1
 
 
 
 
 
A or higher
$
125

 
$
—

 
$
125

Not rated
6

 
(16
)
 
—

Total
$
131

 
$
(16
)
 
$
125

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.

19





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.
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 is subject to extensive regulation and the risk of adverse regulatory decisions and changes in applicable regulations or legislation.
SCE operates in a highly regulated environment. SCE's business is subject to extensive federal, state and local energy, environmental and other laws and regulations. Among other things, the CPUC regulates SCE's retail rates and capital structure, and the FERC regulates SCE's wholesale rates. The NRC regulates the decommissioning of San Onofre. The construction, planning, and siting of SCE's power plants and transmission lines in California are also subject to regulation by the CPUC.
SCE must periodically apply for licenses and permits from these various regulatory authorities and abide by their respective orders. Should SCE be unsuccessful in obtaining necessary licenses or permits or should these regulatory authorities initiate any investigations or enforcement actions or impose penalties or disallowances on SCE, SCE's business could be materially affected. The process of obtaining licenses and permits from regulatory authorities may be delayed or defeated by concerted community opposition and such delay or defeat could have a material effect on SCE's business.
In September 2016, the California Governor signed into law several CPUC reform bills that establish rules governing, among other subjects, communications between the CPUC officials, staff and the regulated utilities. Changes to the rules and processes around ex parte communications could result in delayed decisions, increased investigations, enforcement actions and penalties. In addition, the CPUC or other parties may initiate investigations of past communications between public utilities, including SCE, and CPUC officials and staff that could result in reopening completed proceedings for reconsideration.
In addition, existing regulations may be revised or reinterpreted and new laws and regulations may be adopted or become applicable to SCE, or its facilities or operations, in a manner that may have a detrimental effect on SCE's business or result in significant additional costs. In addition, regulations adopted via the public initiative or legislative process may apply to SCE, or its facilities or operations, in a manner that may have a detrimental effect on SCE's business or result in significant additional costs.
Competitive and Market Risks
The electricity industry is undergoing change, including increased competition, technological advancements, and political and regulatory developments
California utilities are experiencing increasing deployment of distributed energy resources, such as solar, energy storage, energy efficiency and demand response technologies. This growth will eventually require modernization of the electric distribution grid to, among other things, accommodate two-way flows of electricity and increase the grid's capacity to interconnect distributed energy resources. To this end, the CPUC is conducting proceedings to: evaluate changes to the planning and operation of the electric distribution grid in order to prepare for higher penetration of distributed energy resources; consider future grid modernization and grid reinforcement investments; evaluate if traditional grid investments can be deferred by distributed energy resources, and if feasible, what, if any, compensation would be appropriate; and clarify the role of the electric distribution grid operator. The outcome of these proceedings is unknown. These changes could materially affect SCE's business model and its financial condition and results of operations.

20





Customer-owned generation itself reduces the amount of electricity those customers purchase from utilities and has the effect of increasing utility rates unless customer rates are designed to allocate the costs of the distribution grid across all customers that benefit from their use. For example, customers in California that generate their own power do not currently pay all transmission and distribution charges and non-bypassable charges, subject to limitations, which result in increased utility rates for those customers who do not own their generation. Such increases influence the public discussion regarding changes in the electric utility business model.
In addition, the FERC has adopted changes that have opened transmission development to competition from independent developers, allowing such developers to compete with incumbent utilities for the construction and operation of transmission facilities. For more information, see "Business—SCE—Competition" in the 2015 Form 10-K.
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.

21





FINANCIAL STATEMENTS
Consolidated Statements of Income
Edison International
 

 
 

 
Three months ended September 30,

Nine months ended September 30,
(in millions, except per-share amounts, unaudited)
2016
 
2015
 
2016

2015
Total operating revenue
$
3,767

 
$
3,763

 
$
8,985


$
9,183

Purchased power and fuel
1,719

 
1,785

 
3,576


3,648

Operation and maintenance
740

 
780

 
2,090


2,159

Depreciation, decommissioning and amortization
521

 
506

 
1,504


1,451

Property and other taxes
92

 
84

 
269

 
255

Impairment and other charges
—

 
—

 
21


—

Total operating expenses
3,072

 
3,155

 
7,460


7,513

Operating income
695

 
608

 
1,525


1,670

Interest and other income
32

 
32

 
97


114

Interest expense
(147
)
 
(138
)
 
(431
)

(420
)
Other expenses
(9
)
 
(15
)
 
(29
)

(40
)
Income from continuing operations before income taxes
571

 
487

 
1,162


1,324

Income tax expense
122

 
82

 
113


195

Income from continuing operations
449

 
405

 
1,049


1,129

Income (loss) from discontinued operations, net of tax
—

 
43

 
(1
)
 
43

Net income
449

 
448

 
1,048


1,172

Preferred and preference stock dividend requirements of SCE
31

 
28

 
92


84

Other noncontrolling interests
(1
)
 
(1
)
 
(9
)
 
(11
)
Net income attributable to Edison International common shareholders
$
419

 
$
421

 
$
965


$
1,099

Amounts attributable to Edison International common shareholders:
 
 
 
 



Income from continuing operations, net of tax
$
419

 
$
378

 
$
966


$
1,056

Income (loss) from discontinued operations, net of tax
—

 
43

 
(1
)

43

Net income attributable to Edison International common shareholders
$
419

 
$
421

 
$
965


$
1,099

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



Weighted-average shares of common stock outstanding
326

 
326

 
326


326

Continuing operations
$
1.29

 
$
1.16

 
$
2.96


$
3.24

Discontinued operations
—

 
0.13

 
—


0.13

Total
$
1.29

 
$
1.29

 
$
2.96


$
3.37

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



Weighted-average shares of common stock outstanding, including effect of dilutive securities
329

 
328

 
329


329

Continuing operations
$
1.27

 
$
1.15

 
$
2.94


$
3.21

Discontinued operations
—

 
0.13

 
—


0.13

Total
$
1.27

 
$
1.28

 
$
2.94


$
3.34

Dividends declared per common share
$
0.4800

 
$
0.4175

 
$
1.4400


$
1.2525


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

22






Consolidated Statements of Comprehensive Income
 
 
Edison International
 
 
 
 
 
 
Three months ended September 30,
 
Nine months ended September 30,
(in millions, unaudited)
2016
 
2015
 
2016
 
2015
Net income
$
449

 
$
448

 
$
1,048

 
$
1,172

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

 
2

 
5

 
4

Other
—

 
(1
)
 
—

 
(1
)
Other comprehensive income, net of tax
2

 
1

 
5

 
3

Comprehensive income
451

 
449

 
1,053

 
1,175

Less: Comprehensive income attributable to noncontrolling interests
30

 
27

 
81

 
73

Comprehensive income attributable to Edison International
$
421

 
$
422

 
$
972

 
$
1,102



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

23





Consolidated Balance Sheets
Edison International
 






(in millions, unaudited)
September 30,
2016

December 31,
2015
ASSETS
 

 
Cash and cash equivalents
$
84


$
161

Receivables, less allowances of $58 and $62 for uncollectible accounts at respective dates
999


771

Accrued unbilled revenue
570


565

Inventory
310


267

Derivative assets
60


79

Regulatory assets
321


560

Other current assets
261


251

Total current assets
2,605


2,654

Nuclear decommissioning trusts
4,376


4,331

Other investments
76


203

Total investments
4,452


4,534

Utility property, plant and equipment, less accumulated depreciation and amortization of $8,753 and $8,548 at respective dates
36,064


34,945

Nonutility property, plant and equipment, less accumulated depreciation of $96 and $85 at respective dates
167


140

Total property, plant and equipment
36,231


35,085

Derivative assets
67


84

Regulatory assets
7,844


7,512

Other long-term assets
358


360

Total long-term assets
8,269


7,956

















































 
 
 
 
Total assets
$
51,557


$
50,229



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

24





Consolidated Balance Sheets

Edison International
 


 

 
(in millions, except share amounts, unaudited)

September 30,
2016

December 31,
2015
LIABILITIES AND EQUITY

 

 
Short-term debt

$
757


$
695

Current portion of long-term debt

881


295

Accounts payable

1,180


1,310

Accrued taxes

130


72

Customer deposits

264


242

Derivative liabilities

223


218

Regulatory liabilities

1,030


1,128

Other current liabilities

877


967

Total current liabilities

5,342


4,927

Long-term debt

10,407


10,883

Deferred income taxes and credits

8,177


7,480

Derivative liabilities

1,070


1,100

Pensions and benefits

1,776


1,759

Asset retirement obligations

2,592


2,764

Regulatory liabilities

6,020


5,676

Other deferred credits and other long-term liabilities

2,168


2,246

Total deferred credits and other liabilities

21,803


21,025

Total liabilities

37,552


36,835

Commitments and contingencies (Note 11)






Redeemable noncontrolling interest
 
—

 
6

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

2,503


2,484

Accumulated other comprehensive loss

(51
)

(56
)
Retained earnings

9,362


8,940

Total Edison International's common shareholders' equity

11,814


11,368

Noncontrolling interests –  preferred and preference stock of SCE

2,191


2,020

Total equity

14,005


13,388















Total liabilities and equity

$
51,557


$
50,229



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

25





Consolidated Statements of Cash Flows
Edison International
 



Nine months ended September 30,
(in millions, unaudited)
2016

2015
Cash flows from operating activities:
 

 
Net income
$
1,048


$
1,172

Less: (Loss) income from discontinued operations
(1
)

43

Income from continuing operations
1,049


1,129

Adjustments to reconcile to net cash provided by operating activities:


 
Depreciation, decommissioning and amortization
1,575


1,515

Allowance for equity during construction
(58
)

(63
)
Deferred income taxes and investment tax credits
127


202

Other
17


(5
)
Nuclear decommissioning trusts
(159
)
 
(249
)
EME settlement payments, net of insurance proceeds
(209
)

(176
)
Changes in operating assets and liabilities:


 
Receivables
(235
)

(412
)
Inventory
(43
)

10

Accounts payable
151


164

Prepaid and accrued taxes
56

 
(18
)
Other current assets and liabilities
(68
)

(572
)
Derivative assets and liabilities, net
15


25

Regulatory assets and liabilities, net
189


1,318

Other noncurrent assets and liabilities
93


(35
)
Net cash provided by operating activities
2,500


2,833

Cash flows from financing activities:
 

 
Long-term debt issued or remarketed, net of discount and issuance costs of $3 and $16 for respective periods
397


1,415

Long-term debt matured
(83
)

(761
)
Preference stock issued, net
294


319

Preference stock redeemed
(125
)

(325
)
Short-term debt financing, net
60


(112
)
Dividends to noncontrolling interests
(98
)

(91
)
Dividends paid
(469
)

(408
)
Other
(76
)
 
(11
)
Net cash provided by financing activities
(100
)

26

Cash flows from investing activities:
 

 
Capital expenditures
(2,773
)

(3,134
)
Proceeds from sale of nuclear decommissioning trust investments
2,075


2,507

Purchases of nuclear decommissioning trust investments
(1,916
)

(2,265
)
Life insurance policy proceeds
140

 
—

Other
(3
)

35

Net cash used in investing activities
(2,477
)

(2,857
)
Net (decrease) increase in cash and cash equivalents
(77
)

2

Cash and cash equivalents at beginning of period
161


132

Cash and cash equivalents at end of period
$
84


$
134


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

26





Consolidated Statements of Income
Southern California Edison Company

 
 
 
 
 
 
 
 
Three months ended September 30,
 
Nine months ended September 30,
(in millions, unaudited)
2016
 
2015
 
2016
 
2015
Operating revenue
$
3,752

 
$
3,757

 
$
8,956

 
$
9,166

Purchased power and fuel
1,719

 
1,785

 
3,576

 
3,648

Operation and maintenance
702

 
756

 
1,993

 
2,101

Depreciation, decommissioning and amortization
519

 
506

 
1,497

 
1,449

Property and other taxes
91

 
84

 
268

 
254

Total operating expenses
3,031


3,131


7,334

 
7,452

Operating income
721


626


1,622

 
1,714

Interest and other income
32

 
29

 
97

 
93

Interest expense
(137
)
 
(131
)
 
(402
)
 
(398
)
Other expenses
(9
)
 
(15
)
 
(26
)
 
(39
)
Income before income taxes
607


509


1,291

 
1,370

Income tax expense
141

 
92

 
162

 
207

Net income
466


417


1,129

 
1,163

Less: Preferred and preference stock dividend requirements
31

 
28

 
92

 
84

Net income available for common stock
$
435


$
389


$
1,037

 
$
1,079


Consolidated Statements of Comprehensive Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended September 30,
 
Nine months ended September 30,
(in millions, unaudited)
2016
 
2015
 
2016
 
2015
Net income
$
466

 
$
417

 
$
1,129

 
$
1,163

Other comprehensive income, net of tax:
 
 
 
 
 
 
 
Pension and postretirement benefits other than pensions:
 
 
 
 
 
 
 
Net loss arising during the period plus amortization included in net income
1

 
1

 
3

 
3

Other comprehensive income, net of tax
1

 
1

 
3

 
3

Comprehensive income
$
467

 
$
418

 
$
1,132

 
$
1,166



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

27





Consolidated Balance Sheets
Southern California Edison Company
(in millions, unaudited)
September 30,
2016
 
December 31, 2015
ASSETS
 
 
 
Cash and cash equivalents
$
39

 
$
26

Receivables, less allowances of $58 and $62 for uncollectible accounts at respective dates
980

 
724

Accrued unbilled revenue
569

 
564

Inventory
251

 
256

Derivative assets
60

 
79

Regulatory assets
321

 
560

Other current assets
223

 
234

Total current assets
2,443

 
2,443

Nuclear decommissioning trusts
4,376

 
4,331

Other investments
41

 
168

Total investments
4,417

 
4,499

Utility property, plant and equipment, less accumulated depreciation and amortization of $8,753 and $8,548 at respective dates
36,064

 
34,945

Nonutility property, plant and equipment, less accumulated depreciation of $87 and $81 at respective dates
76

 
73

Total property, plant and equipment
36,140

 
35,018

Derivative assets
67

 
84

Regulatory assets
7,844

 
7,512

Other long-term assets
231

 
239

Total long-term assets
8,142

 
7,835

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
51,142

 
$
49,795


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

28





Consolidated Balance Sheets
Southern California Edison Company
(in millions, except share amounts, unaudited)
September 30,
2016
 
December 31, 2015
LIABILITIES AND EQUITY
 
 
 
Short-term debt
$
239

 
$
49

Current portion of long-term debt
479

 
79

Accounts payable
1,172

 
1,299

Accrued taxes
156

 
46

Customer deposits
264

 
242

Derivative liabilities
223

 
218

Regulatory liabilities
1,030

 
1,128

Other current liabilities
675

 
760

Total current liabilities
4,238

 
3,821

Long-term debt
9,987

 
10,460

Deferred income taxes and credits
9,765

 
9,073

Derivative liabilities
1,069

 
1,100

Pensions and benefits
1,293

 
1,284

Asset retirement obligations
2,590

 
2,762

Regulatory liabilities
6,020

 
5,676

Other deferred credits and other long-term liabilities
1,848

 
1,947

Total deferred credits and other liabilities
22,585

 
21,842

Total liabilities
36,810

 
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
658

 
652

Accumulated other comprehensive loss
(19
)
 
(22
)
Retained earnings
9,280

 
8,804

Total common shareholder's equity
12,087

 
11,602

Preferred and preference stock
2,245

 
2,070

Total equity
14,332

 
13,672

Total liabilities and equity
$
51,142

 
$
49,795



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

29





Consolidated Statements of Cash Flows
Southern California Edison Company
 
Nine months ended September 30,
(in millions, unaudited)
2016
 
2015
Cash flows from operating activities:
 
 
 
Net income
$
1,129

 
$
1,163

Adjustments to reconcile to net cash provided by operating activities:
 
 
 
Depreciation, decommissioning and amortization
1,564

 
1,509

Allowance for equity during construction
(58
)
 
(63
)
Deferred income taxes and investment tax credits
93

 
(149
)
Other
7

 
10

Nuclear decommissioning trusts
(159
)
 
(249
)
Changes in operating assets and liabilities:
 
 
 
Receivables
(256
)
 
(436
)
Inventory
5

 
21

Accounts payable
152

 
192

Prepaid and accrued taxes
111

 
99

Other current assets and liabilities
(44
)
 
(558
)
Derivative assets and liabilities, net
15

 
25

Regulatory assets and liabilities, net
189

 
1,318

Other noncurrent assets and liabilities
88

 
69

Net cash provided by operating activities
2,836

 
2,951

Cash flows from financing activities:
 
 
 
Long-term debt issued or remarketed, net of discount and issuance costs of $16 for the nine months ended September 30, 2015
—

 
1,415

Long-term debt matured
(81
)
 
(761
)
Preference stock issued, net
294

 
319

Preference stock redeemed
(125
)
 
(325
)
Short-term debt financing, net
189

 
(251
)
Dividends paid
(607
)
 
(532
)
Other
(50
)
 
39

Net cash used in financing activities
(380
)
 
(96
)
Cash flows from investing activities:
 
 
 
Capital expenditures
(2,747
)
 
(3,121
)
Proceeds from sale of nuclear decommissioning trust investments
2,075

 
2,507

Purchases of nuclear decommissioning trust investments
(1,916
)
 
(2,265
)
Life insurance policy proceeds
140

 
—

Other
5

 
24

Net cash used in investing activities
(2,443
)

(2,855
)
Net increase in cash and cash equivalents
13

 
—

Cash and cash equivalents, beginning of period
26

 
38

Cash and cash equivalents, end of period
$
39

 
$
38


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

30





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 solutions 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- and nine-month periods ended September 30, 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)
 
September 30,
2016
 
December 31, 2015
 
September 30,
2016
 
December 31, 2015
Money market funds
 
$
39

 
$
37

 
$
18

 
$
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)
 
September 30,
2016
 
December 31, 2015
 
September 30,
2016
 
December 31, 2015
Book balances reclassified to accounts payable
 
$
130

 
$
162

 
$
128

 
$
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.

31





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 nine months of 2015, pending the outcome of the final decision in the 2015 GRC, SCE recognized revenue from CPUC activities largely based on the revenue requirement set forth in the 2015 proposed GRC decision received in September 2015. In the fourth quarter of 2015, SCE implemented the final 2015 GRC decision.
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 September 30,
 
Nine months ended September 30,
(in millions, except per-share amounts)
 
2016
 
2015
 
2016
 
2015
Basic earnings per share – continuing operations:
 
 
 
 
 
 
 
 
Income from continuing operations attributable to common shareholders
 
$
419

 
$
378

 
$
966

 
$
1,056

Participating securities dividends
 
—

 
—

 
—

 
(1
)
Income from continuing operations available to common shareholders
 
$
419

 
$
378

 
$
966

 
$
1,055

Weighted average common shares outstanding
 
326

 
326

 
326

 
326

Basic earnings per share – continuing operations
 
$
1.29

 
$
1.16

 
$
2.96

 
$
3.24

Diluted earnings per share – continuing operations:
 
 
 
 
 
 
 
 
Income from continuing operations available to common shareholders
 
$
419

 
$
378

 
$
966

 
$
1,055

Income impact of assumed conversions
 
—

 
—

 
—

 
1

Income from continuing operations available to common shareholders and assumed conversions
 
$
419

 
$
378

 
$
966

 
$
1,056

Weighted average common shares outstanding
 
326

 
326

 
326

 
326

Incremental shares from assumed conversions
 
3

 
2

 
3

 
3

Adjusted weighted average shares – diluted
 
329

 
328

 
329

 
329

Diluted earnings per share – continuing operations
 
$
1.27

 
$
1.15

 
$
2.94

 
$
3.21

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 42,890 and 2,054,876 shares of common stock for the three months ended September 30, 2016 and 2015 , respectively, and 166,057 and 2,054,876 shares for the nine months ended September 30, 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.
Goodwill

Edison International assesses goodwill through annual goodwill impairment tests, at the reporting unit level, as of October 1st of each year.  As of September 30, 2016, goodwill is comprised of $78 million at the Edison Energy reporting unit and $22 million at the SoCore Energy reporting unit. Edison International will update these tests between annual tests if events occur or circumstances change such that it is more likely than not that the fair value of a reporting unit is below its carrying value.

32





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 reduction 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 September 30, 2016, the amount of debt issuance costs that are reflected as a reduction of "Long-term debt" was $73 million for SCE and $79 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 reduction of "Long-term debt" was $77 million for SCE and $81 million for Edison International.
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 guidance and cannot determine the impact of this standard at this time. Edison International and SCE anticipate adopting the standard using the modified retrospective application which means that Edison International and SCE 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. SCE, as a regulated entity, is permitted to continue to have straight-line expense for finance leases, assuming the rate recovery is based upon current payments. 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. In addition, as part of this new guidance an entity should recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period, subject to normal valuation allowance considerations. The new standard also will revise reporting on the statement of cash flows. Edison International and SCE are planning to adopt this standard using the modified retrospective approach, effective January 1, 2016. As a result, when adopted, all excess tax benefits resulting from 2016 stock option exercises will be reflected in the income statement. If Edison International and SCE had adopted this new standard in the current period, income tax expense for the nine months ended September 30, 2016 would have been reduced by approximately $18 million and $13 million , respectively. In addition, upon adoption, Edison International and SCE will record an increase to beginning

33





retained earnings for pre-2016 stock option exercises that had not been previously recorded in equity ( $42 million and $6 million for Edison International and SCE, respectively).
On June 16, 2016, the FASB issued an accounting standards update to amend the guidance on the impairment of financial instruments. The new guidance adds an impairment model, known as the current expected credit loss model, which was based on expected losses rather than incurred losses. This guidance applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and loan commitments. However, available-for-sale debt securities are excluded from the model's scope. This guidance is effective on January 1, 2020, but early adoption no earlier than January 1, 2019 is permitted. Edison International and SCE are currently evaluating this new guidance.
On August 26, 2016, the FASB issued an accounting standards update to amend the guidance on the presentation and classification of certain cash receipts and cash payments in the statement of cash flows to reduce diversity in practice. This guidance addresses eight specific cash flow classification issues, including debt prepayment or extinguishment costs, proceeds from the settlement of corporate-owned life insurance, and distributions received from equity method investments. This standard also clarifies the application of the predominance principle where cash receipts and payments have aspects of more than one class of cash flows. The new standard is effective on January 1, 2018, but early adoption is permitted. Edison International and SCE are currently evaluating this new guidance.
Note 2.    Consolidated Statements of Changes in Equity
The following table provides Edison International's changes in equity for the nine months ended September 30, 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
—

 
—

 
965

 
965

 
92

 
1,057

Other comprehensive income
—

 
5

 
—

 
5

 
—

 
5

Common stock dividends declared ($1.4400 per share)
—

 
—

 
(469
)
 
(469
)
 
—

 
(469
)
Dividends to noncontrolling interests
—

 
—

 
—

 
—

 
(92
)
 
(92
)
Stock-based compensation
1

 
—

 
(72
)
 
(71
)
 
—

 
(71
)
Non-cash stock-based compensation
18

 
—

 
—

 
18

 
—

 
18

Issuance of preference stock
—

 
—

 
—

 
—

 
294

 
294

Redemption of preference stock
—

 
—

 
(2
)
 
(2
)
 
(123
)
 
(125
)
Balance at September 30, 2016
$
2,503

 
$
(51
)
 
$
9,362

 
$
11,814

 
$
2,191

 
$
14,005

The following table provides Edison International's changes in equity for the nine months ended September 30, 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
—

 
—

 
1,099

 
1,099

 
84

 
1,183

Other comprehensive loss
—

 
3

 
—

 
3

 
—

 
3

Common stock dividends declared ($1.2525 per share)
—

 
—

 
(408
)
 
(408
)
 
—

 
(408
)
Dividends to noncontrolling interests
—

 
—

 
—

 
—

 
(84
)
 
(84
)
Stock-based compensation
13

 
—

 
(80
)
 
(67
)
 
—

 
(67
)
Non-cash stock-based compensation
17

 
—

 
—

 
17

 
—

 
17

Issuance of preference stock
—

 
—

 
—

 
—

 
319

 
319

Redemption of preference stock
—

 
—

 
(4
)
 
(4
)
 
(321
)
 
(325
)
Balance at September 30, 2015
$
2,475

 
$
(55
)
 
$
9,180

 
$
11,600

 
$
2,020

 
$
13,620


34





The following table provides SCE's changes in equity for the nine months ended September 30, 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
—

 
—

 
—

 
1,129

 
—

 
1,129

Other comprehensive income
—

 
—

 
3

 
—

 
—

 
3

Dividends declared on common stock
—

 
—

 
—

 
(510
)
 
—

 
(510
)
Dividends declared on preferred and preference stock
—

 
—

 
—

 
(92
)
 
—

 
(92
)
Stock-based compensation
—

 
2

 
—

 
(49
)
 
—

 
(47
)
Non-cash stock-based compensation
—

 
8

 
—

 
—

 
—

 
8

Issuance of preference stock
—

 
(6
)
 
—

 
—

 
300

 
294

Redemption of preference stock
—

 
2

 
—

 
(2
)
 
(125
)
 
(125
)
Balance at September 30, 2016
$
2,168

 
$
658

 
$
(19
)
 
$
9,280

 
$
2,245

 
$
14,332

The following table provides SCE's changes in equity for the nine months ended September 30, 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
—

 
—

 
—

 
1,163

 
—

 
1,163

Other comprehensive income
—

 
—

 
3

 
—

 
—

 
3

Dividends declared on common stock
—

 
—

 
—

 
(441
)
 
—

 
(441
)
Dividends declared on preferred and preference stock
—

 
—

 
—

 
(84
)
 
—

 
(84
)
Stock-based compensation
—

 
28

 
—

 
(31
)
 
—

 
(3
)
Non-cash stock-based compensation
—

 
10

 
—

 
—

 
—

 
10

Issuance of preference stock
—

 
(6
)
 
—

 
—

 
325

 
319

Redemption of preference stock
—

 
4

 
—

 
(4
)
 
(325
)
 
(325
)
Balance at September 30, 2015
$
2,168

 
$
654

 
$
(25
)
 
$
9,057

 
$
2,070

 
$
13,924

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.

35





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 4,349  MW and 4,062  MW at September 30, 2016 and 2015 , respectively, and the amounts that SCE paid to these projects were $313 million and $270 million for the three months ended September 30, 2016 and 2015 , respectively, and $ 532 million and $ 451 million for nine months ended September 30, 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 if and when 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 September 30, 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 September 30, 2016 consisted of investments of $300 million in the Series K Preference Stock, $300 million of trust securities, and $10,000 of common stock.

36





The following table provides a summary of the trusts' income statements:
 
 
Three months ended September 30,
(in millions)
 
Trust I
 
Trust II
 
Trust III
 
Trust IV
 
Trust V
2016
 
 
 
 
 
 
 
 
 
 
Dividend income
 
$
7

 
$
5

 
$
4

 
$
4

 
$
4

Dividend distributions
 
7

 
5

 
4

 
4

 
4

2015
 
 
 
 
 
 
 
 
 
 
Dividend income
 
$
7


$
5


$
4

 
$
2

 
*

Dividend distributions
 
7


5


4

 
2

 
*

 
 
Nine months ended September 30,
(in millions)
 
Trust I
 
Trust II
 
Trust III
 
Trust IV
 
Trust V
2016
 
 
 
 
 
 
 
 
 
 
Dividend income
 
$
20

 
$
15

 
$
12

 
$
13

 
$
9

Dividend distributions
 
20

 
15

 
12

 
13

 
9

2015
 


 


 


 

 

Dividend income
 
$
20

 
$
15

 
$
12

 
$
2

 
*

Dividend distributions
 
20

 
15

 
12

 
2

 
*

* 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 September 30, 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's 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 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.

37





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.
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:
 
September 30, 2016
(in millions)
Level 1
 
Level 2
 
Level 3
 
Netting
and
Collateral 1
 
Total
Assets at fair value
 
 
 
 
 
 
 
 
 
Derivative contracts
$
—

 
$
—

 
$
127

 
$
—

 
$
127

Other
33

 
—

 
—

 
—

 
33

Nuclear decommissioning trusts:
 
 
 
 
 
 
 
 
 
Stocks 2
1,538

 
—

 
—

 
—

 
1,538

Fixed Income 3
833

 
1,935

 
—

 
—

 
2,768

Short-term investments, primarily cash equivalents
50

 
59

 
—

 
—

 
109

Subtotal of nuclear decommissioning trusts 4
2,421

 
1,994

 
—

 
—

 
4,415

Total assets
2,454

 
1,994

 
127

 
—

 
4,575

Liabilities at fair value
 
 
 
 
 
 
 
 
 
Derivative contracts
—

 
3

 
1,290

 
(1
)
 
1,292

Total liabilities
—

 
3

 
1,290

 
(1
)
 
1,292

Net assets (liabilities)
$
2,454

 
$
1,991

 
$
(1,163
)
 
$
1

 
$
3,283

 
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 September 30, 2016 and December 31, 2015 .
3  
Includes corporate bonds, which were diversified and included collateralized mortgage obligations and other asset backed securities of $83 million and $111 million at September 30, 2016 and December 31, 2015 , respectively.
4  
Excludes net payables of $39 million and net payables of $24 million at September 30, 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.

38





Edison International Parent and Other
Edison International Parent and Other assets measured at fair value consisted of money market funds of $ 21 million and $29 million at September 30, 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 September 30,
 
Nine months ended
September 30,
(in millions)
 
2016
 
2015
 
2016
 
2015
Fair value of net liabilities at beginning of period
 
$
(1,170
)
 
$
(1,044
)
 
$
(1,148
)
 
$
(902
)
Total realized/unrealized gains (losses):
 
 
 
 
 
 
 
 
Included in regulatory assets and liabilities 1
 
8

 
(49
)
 
(14
)
 
(191
)
Settlements
 
(1
)
 
—

 
(1
)
 
—

Fair value of net liabilities at end of period
 
$
(1,163
)
 
$
(1,093
)
 
$
(1,163
)
 
$
(1,093
)
Change during the period in unrealized gains and losses related to assets and liabilities held at the end of the period
 
$
(57
)
 
$
(94
)
 
$
(122
)
 
$
(249
)
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 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
 
 
 
 
 
September 30, 2016
$
125

 
$
—

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
 
 
 
 
 
 
September 30, 2016
3

 
1,286

Option model
Volatility of gas prices
14% - 46% (20%)
 
 
 
 
 
Volatility of power prices
27% - 43% (30%)
 
 
 
 
 
Power prices
$24.03 - $48.40 ($34.30)
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.

39





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:
 
 
September 30, 2016
 
December 31, 2015
(in millions)
 
Carrying
Value 1
 
Fair
Value
 
Carrying
Value 1
 
Fair
Value
SCE
 
$
10,466

 
$
12,419

 
$
10,539

 
$
11,592

Edison International
 
11,288

 
13,266

 
11,178

 
12,252

1  
Carrying value is net of debt issuance costs.
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.

40





Note 5.    Debt and Credit Agreements
Long-Term Debt
During the first quarter of 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. During the third quarter of 2016, SCE and Edison International Parent extended the maturity dates to 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.
At September 30, 2016 , SCE's outstanding commercial paper, net of discount, was $239 million at a weighted-average interest rate of 0.60% . At September 30, 2016 , letters of credit issued under SCE's credit facility aggregated $157 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 September 30, 2016 , Edison International Parent's outstanding commercial paper, net of discount, was $518 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.

41





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 $15 million and $38 million as of September 30, 2016 and December 31, 2015 , respectively. SCE has posted $12 million collateral at September 30, 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 September 30, 2016 , SCE would be required to post $16 million of additional collateral related to outstanding payables that are net of collateral already posted.
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:
 
 
September 30, 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
 
$
62

 
$
67

 
$
129

 
$
226

 
$
1,069

 
$
1,295

 
$
1,166

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

 
(2
)
 
(2
)
 
—

 
(2
)
 
—

Cash collateral posted 1
 
—

 
—

 
—

 
(1
)
 
—

 
(1
)
 
(1
)
Net amounts presented in the consolidated balance sheets
 
$
60

 
$
67

 
$
127

 
$
223

 
$
1,069

 
$
1,292

 
$
1,165

 
 
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 September 30, 2016 and December 31, 2015 , SCE had posted $4 million and $31 million , respectively, of cash 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.

42





The following table summarizes the components of SCE's economic hedging activity:
 
 
Three months ended September 30,
 
Nine months ended September 30,
(in millions)
 
2016
 
2015
 
2016
 
2015
Realized losses
 
$
(1
)
 
$
(28
)
 
$
(53
)
 
$
(103
)
Unrealized (losses) gains
 
(2
)
 
(67
)
 
6

 
(152
)
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
 
September 30, 2016
 
December 31, 2015
Electricity options, swaps and forwards
 
GWh
 
1,872

 
6,221
Natural gas options, swaps and forwards
 
Bcf
 
13

 
32
Congestion revenue rights
 
GWh
 
85,430

 
109,740
Tolling arrangements
 
GWh
 
63,654

 
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:
 
Three months ended September 30,
 
Nine months ended September 30,

(in millions)
2016
 
2015
 
2016
 
2015
Edison International:
 
 
 
 
 
 
 
Income from continuing operations before income taxes
$
571

 
$
487

 
$
1,162

 
$
1,324

Provision for income tax at federal statutory rate of 35%
200

 
170

 
407

 
463

Increase in income tax from:
 
 
 
 
 
 
 
State tax, net of federal benefit
20

 
6

 
30

 
23

Property-related 1
(79
)
 
(79
)
 
(296
)
 
(207
)
Change related to uncertain tax positions
(5
)
 
10

 
(4
)
 
(53
)
Other
(14
)
 
(25
)
 
(24
)
 
(31
)
Total income tax (benefit) expense from continuing operations
$
122

 
$
82

 
$
113

 
$
195

Effective tax rate
21.4
%
 
16.8
%
 
9.7
%
 
14.7
%
SCE:
 
 
 
 
 
 
 
Income from continuing operations before income taxes
$
607

 
$
509

 
$
1,291

 
$
1,370

Provision for income tax at federal statutory rate of 35%
212

 
178

 
452

 
480

Increase in income tax from:
 
 
 
 
 
 
 
State tax, net of federal benefit
25

 
8

 
40

 
23

Property-related 1
(79
)
 
(79
)
 
(296
)
 
(207
)
Change related to uncertain tax positions
(7
)
 
9

 
(9
)
 
(56
)
Other
(10
)
 
(24
)
 
(25
)
 
(33
)
Total income tax (benefit) expense from continuing operations
$
141

 
$
92

 
$
162

 
$
207

Effective tax rate
23.2
%
 
18.1
%
 
12.5
%
 
15.1
%
1  
During the second quarter of 2016, SCE recorded $79 million for 2012 – 2014 incremental tax benefits related to repair deductions, which were flowed-through to customers ( $133 million pre-tax).

43





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.
Repair Deductions
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 December 31, 2015 consolidated statement 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 ("BRRBA") by $234 million in future periods subject to the timing and final outcome of audits that may be conducted by tax authorities. The refunds will result in flowing incremental tax benefits for 2012 – 2014 to customers. SCE refunded $133 million ( $79 million after-tax) during the second quarter of 2016. SCE did not 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.
Tax Disputes
Tax Years 2007 – 2012
Edison International has reached a tentative settlement agreement with the IRS for the 2007 – 2012 tax years. The final agreement, when approved, is not expected to have a material impact on the financial statements.
During the second quarter of 2015, the Company received the IRS Revenue Agent Report for the 2010 – 2012 tax years. Edison International's and SCE's tax reserves were re-measured at that time and $94 million and $100 million , respectively, of income tax benefits were recorded in the comparable quarter for the prior year.

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 $98 million during the nine months ended September 30, 2016, which includes contributions of $81 million by SCE. Edison International expects to make contributions of $22 million during the remainder of 2016 , which includes $14 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.

44





Pension expense components for continuing operations are:
 
Three months ended September 30,
 
Nine months ended September 30,
(in millions)
2016
 
2015
 
2016
 
2015
Edison International:
 
 
 
 
 
 
 
Service cost
$
39

 
$
35

 
$
117

 
$
105

Interest cost
44

 
41

 
132

 
124

Expected return on plan assets
(56
)
 
(57
)
 
(168
)
 
(171
)
Amortization of prior service cost
1

 
1

 
3

 
3

Amortization of net loss 1
9

 
9

 
27

 
27

Expense under accounting standards
$
37

 
$
29

 
$
111

 
$
88

Regulatory adjustment
(9
)
 
(2
)
 
(27
)
 
(4
)
Total expense recognized
$
28

 
$
27

 
$
84

 
$
84

SCE:
 
 
 
 
 
 
 
Service cost
$
38

 
$
35

 
$
114

 
$
104

Interest cost
41

 
38

 
123

 
113

Expected return on plan assets
(53
)
 
(53
)
 
(159
)
 
(160
)
Amortization of prior service cost
1

 
1

 
3

 
4

Amortization of net loss 1
8

 
7

 
24

 
22

Expense under accounting standards
$
35

 
$
28

 
$
105

 
$
83

Regulatory adjustment
(9
)
 
(2
)
 
(27
)
 
(4
)
Total expense recognized
$
26

 
$
26

 
$
78

 
$
79

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 September 30, 2016, and  $9 million and $5 million , respectively, for the nine months ended September 30, 2016. The amount reclassified for Edison International and SCE was $4 million and $2 million , respectively, for the three months ended September 30, 2015 and $11 million and $6 million , respectively, for the nine months ended September 30, 2015.
Postretirement Benefits Other Than Pensions
Edison International made contributions of $25 million during the nine months ended September 30, 2016 and expects to make contributions of $8 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. 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.

45





PBOP expense components for continuing operations are:
 
Three months ended September 30,
 
Nine months ended September 30,
(in millions)
2016
 
2015
 
2016
 
2015
Edison International:
 
 
 
 
 
 
 
Service cost
$
10

 
$
12

 
$
30

 
$
36

Interest cost
26

 
29

 
78

 
86

Expected return on plan assets
(28
)
 
(28
)
 
(84
)
 
(85
)
Amortization of prior service cost
(1
)
 
(3
)
 
(3
)
 
(9
)
Amortization of net loss
—

 
5

 
—

 
17

Total expense
$
7

 
$
15

 
$
21

 
$
45

SCE:
 
 
 
 
 
 
 
Service cost
$
10

 
$
12

 
$
30

 
$
36

Interest cost
26

 
28

 
78

 
84

Expected return on plan assets
(28
)
 
(28
)
 
(84
)
 
(84
)
Amortization of prior service cost
(1
)
 
(3
)
 
(3
)
 
(9
)
Amortization of net loss
—

 
6

 
—

 
17

Total expense
$
7

 
$
15

 
$
21

 
$
44

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 nine months ended September 30, 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
 
21

Payments
 
(34
)
Balance at September 30, 2016
 
$
9

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.

46





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)
 
September 30,
2016
 
December 31,
2015
 
September 30,
2016
 
December 31, 2015
Stocks
—
 
$
321

 
$
304

 
$
1,538

 
$
1,460

Municipal bonds
2054
 
653

 
691

 
813

 
840

U.S. government and agency securities
2055
 
1,114

 
1,070

 
1,215

 
1,128

Corporate bonds
2057
 
656

 
708

 
740

 
755

Short-term investments and receivables/payables 1
One-year
 
67

 
144

 
70

 
148

Total
 
 
$
2,811

 
$
2,917

 
$
4,376

 
$
4,331

1
Short-term investments include $81 million of repurchase agreements payable by financial institutions which earn interest, are fully secured by U.S. Treasury securities and matured by January 5, 2016 as of December 31, 2015 .
Trust fund earnings (based on specific identification) increase the trust fund balance and the ARO regulatory liability. Unrealized holding gains, net of losses, were $1.6 billion and $1.4 billion at September 30, 2016 and December 31, 2015 , respectively.
The following table sets forth a summary of changes in the fair value of the trust:
 
 
Three months ended September 30,
 
Nine months ended September 30,
(in millions)
 
2016
 
2015
 
2016
 
2015
Balance at beginning of period
 
$
4,344

 
$
4,836

 
$
4,331

 
$
4,799

Gross realized gains
 
18

 
183

 
61

 
215

Gross realized losses
 
(1
)
 
(10
)
 
(5
)
 
(15
)
Unrealized gains (losses), net
 
32

 
(316
)
 
153

 
(343
)
Other-than-temporary impairments
 
(2
)
 
(10
)
 
(10
)
 
(22
)
Interest and dividends
 
28

 
28

 
88

 
88

Contributions
 
—

 
—

 
—

 
7

Income taxes
 
(5
)
 
—

 
(47
)
 
(14
)
Decommissioning disbursements
 
(38
)
 
(319
)
 
(192
)
 
(319
)
Administrative expenses and other
 
—

 
(4
)
 
(3
)
 
(8
)
Balance at end of period
 
$
4,376

 
$
4,388

 
$
4,376

 
$
4,388

Trust assets are used to pay income taxes as the Trust files separate income tax returns from SCE. Deferred tax liabilities related to net unrealized gains at September 30, 2016 were $383 million . Accordingly, the fair value of Trust assets available to pay future decommissioning costs, net of deferred income taxes, totaled $4.0 billion at September 30, 2016 . Due to regulatory mechanisms, changes in assets of the trusts from income or loss items have no impact on operating revenue or earnings.

47





Acquisitions
During the third quarter, a subsidiary of SoCore Energy agreed to acquire equity interests in up to 20 solar garden development projects in Minnesota as part of the SunEdison bankruptcy proceedings, subject to certain conditions. The exclusivity period on six of the projects expired in October 2016 under the terms of the agreement and consequently, the projects were not acquired. There are 14 remaining projects totaling 94 MWdc with a purchase price up to $41.9 million , if all projects achieve the required conditions. SoCore Energy would also reimburse SunEdison up to $8.7 million of project specific interconnection costs. Not all of the projects are expected to achieve the closing conditions. Three of these development projects ( 21 MWdc) are expected to be acquired in the fourth quarter of 2016. SoCore Energy expects to fund construction costs and arrange third-party tax equity and debt financing by completion of construction.
Note 10.    Regulatory Assets and Liabilities
Regulatory Assets
SCE's regulatory assets included on the consolidated balance sheets are:
(in millions)
September 30,
2016
 
December 31,
2015
Current:
 
 
 
Regulatory balancing accounts
$
135

 
$
382

Energy derivatives
167

 
159

Other
19

 
19

Total current
321

 
560

Long-term:
 
 
 
Deferred income taxes, net
4,346

 
3,757

Pensions and other postretirement benefits
829

 
849

Energy derivatives
1,010

 
1,027

Unamortized investments, net
143

 
182

San Onofre
899

 
1,043

Unamortized loss on reacquired debt
189

 
201

Regulatory balancing accounts
36

 
36

Environmental remediation
128

 
129

Other
264

 
288

Total long-term
7,844

 
7,512

Total regulatory assets
$
8,165

 
$
8,072


48





Regulatory Liabilities
SCE's regulatory liabilities included on the consolidated balance sheets are:
(in millions)
September 30,
2016
 
December 31,
2015
Current:
 
 
 
Regulatory balancing accounts
$
999

 
$
1,106

Other
31

 
22

Total current
1,030

 
1,128

Long-term:
 
 
 
Costs of removal
2,842

 
2,781

Recoveries in excess of ARO liabilities 1
1,769

 
1,502

Regulatory balancing accounts
1,348

 
1,314

Other
61

 
79

Total long-term
6,020

 
5,676

Total regulatory liabilities
$
7,050

 
$
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)
September 30,
2016
 
December 31,
2015
Asset (liability)
 
 
 
Energy resource recovery account
$
(208
)
 
$
(439
)
New system generation balancing account
(7
)
 
(171
)
Public purpose programs and energy efficiency programs
(983
)
 
(683
)
Tax accounting memorandum account and pole loading balancing account
(105
)
 
(248
)
Base rate recovery balancing account
(509
)
 
(319
)
   Department of Energy litigation memorandum account 1

(122
)
 
—

   Greenhouse gas auction revenue
(77
)
 
(75
)
FERC balancing accounts
(87
)
 
74

Other
(78
)
 
(141
)
Liability
$
(2,176
)
 
$
(2,002
)
1
Represents proceeds from the Department of Energy resulting from its failure to meet its obligation to begin accepting spent nuclear fuel from San Onofre. Damages recovered are subject to CPUC review as to how these amounts would be distributed among customers, shareholders, or to offset fuel decommissioning or storage costs. See Note 11 for further discussion.

49





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, financial position 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.
San Onofre CPUC Proceedings
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. In May 2016, and in consideration of the CPUC's December 2015 decision sanctioning SCE for failing to disclose ex parte communications relevant to the San Onofre OII, the Assigned Commissioner and ALJ issued a ruling to reopen the record upon which the CPUC had, in November 2014, approved the San Onofre OII Settlement Agreement among SCE, TURN, ORA, SDG&E, the Coalition of California Utility Employees, and Friends of the Earth. The ruling also established a ban on all ex parte communications in the proceeding. The ruling established a briefing schedule for parties to address whether, in light of the ex parte rules violations, the San Onofre OII Settlement Agreement remains reasonable, consistent with the law and in the public interest, which is the standard the CPUC applies in reviewing settlements submitted for approval. In comments filed with the CPUC in July 2016, SCE asserts that the San Onofre OII Settlement Agreement continues to meet this standard and therefore should not be disturbed. A number of parties, however, have asked the CPUC in their comments to either modify the San Onofre OII Settlement Agreement or vacate its previous approval of the settlement and reinstate the San Onofre OII for further proceedings. SCE is unable to predict the outcome of this matter. 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.

50





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. In December 2015, the CPUC issued a decision fining SCE for violations of the CPUC ethics rule and failure to disclose ex parte communications relevant to the San Onofre OII. In May 2016, the CPUC issued an order reopening the record to review the San Onofre OII Settlement Agreement against its standards for approving settlements, in light of its December 2015 decision imposing fines against SCE. The record remains open and CPUC’s review of the San Onofre OII Settlement Agreement is pending.
In July 2015, a purported securities class action lawsuit was filed in federal court against Edison International, its then Chief Executive Officer and its then Chief Financial Officer. The complaint 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 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. On September 14, 2016, the Court granted defendants’ motion to dismiss the complaint, with an opportunity for plaintiff to amend the complaint. Plaintiff filed an amended complaint in October 2016.
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. On September 14, 2016, the Court granted defendants’ motion to dismiss the complaint, with an opportunity for plaintiff to amend the complaint. Plaintiff did not file an amended complaint by the required date.
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. The California state court action is currently on hold in light of the pending federal suits discussed above.
In November 2015, a purported securities class action lawsuit was filed in federal court against Edison International, its then Chief Executive Officer and its 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. In July 2016, the federal court granted the defendants' motion to dismiss the lawsuit with an opportunity for the plaintiff to amend her complaint. Plaintiff filed an amended complaint in July 2016, and defendants filed a motion to dismiss in August 2016. Defendants’ motion will be heard by the court in November 2016.
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 replacement steam generators. MHI warranted the replacement steam generators 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

51





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 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.
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 that, if there is a recovery, it will equal or exceed the litigation costs incurred to pursue the recovery.
Energy Efficiency Incentive Mechanism
In August 2016, a proposed settlement agreement between TURN, ORA and SCE was filed with the CPUC related to the rehearing of prior CPUC decisions for $74.5 million of incentive awards that SCE received for savings achieved by its 2006 – 2008 energy efficiency programs. The settlement agreement fully resolves the disputes as they relate to SCE in exchange for SCE refunding approximately $13.5 million of the incentives awarded over a three year period or, at SCE's option, for SCE making a one-time credit of the present value of that amount to the BRRBA. The CPUC issued a final decision approving the settlement agreement in October 2016.
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. The portion affected is the only significant portion of SCE’s distribution network that is arranged in a network configuration. No personal injuries have been reported in connection with these events and, subject to applicable deductibles, SCE is generally insured against customer claims arising from 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 network system, and a lack of sophisticated controls needed to more efficiently and effectively prevent and respond to the cascading events that occurred. In July 2016, the CPUC initiated an investigation ("Long Beach OII") of these events and their causes based on an investigation by the CPUC's Safety and Enforcement Division ("SED"). The SED investigation, among other things, identified problems with maintenance, inspection, and management of SCE's Long Beach electrical system, and emergency response and communications capabilities. The Long Beach OII will consider whether SCE violated statutes, rules or regulations, maintained adequate, accurate, and complete records, and provided sufficient emergency response and communications to various parties during the power outages. SCE has been directed to show cause at hearings why the CPUC should not find it in violation of the

52





relevant statutes, rules and regulations. A hearing on the Long Beach OII has been scheduled for February 2017. While SCE believes it is probable that penalties will be assessed, neither the CPUC nor SED has proposed a penalty amount. Consequently, although potential penalties in this matter could be significant, SCE is currently unable to estimate their amount.
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 September 30, 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 $130 million , including $78 million related to San Onofre. In addition to these sites, SCE also has 39 immaterial sites for which the total minimum recorded liability was $4 million . Of the $134 million total environmental remediation liability for SCE, $128 million has been recorded as a regulatory asset. SCE expects to recover $46 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 $166 million and $8 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.
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 four years are expected to range from $7 million to $24 million . Costs incurred for the nine months ended September 30, 2016 and 2015 were $3 million and $5 million , respectively.
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 $52 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 $13.4 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.

53





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 duration of the wildfire season and the risk of severe wildfire events. SCE has approximately $1 billion of insurance coverage for wildfire liabilities for the period ending on May 31, 2017. SCE has a self-insured retention of $10 million per wildfire occurrence. SCE or its contractors 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 or its contractors' 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 , including reimbursement for legal costs (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. The first such claim covering damages for 2014 and 2015 was filed on September 30, 2016 for $56.4 million . 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.
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 if not so redeemed, 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:
 
Three months ended September 30,
 
Nine months ended September 30,
(in millions)
2016
 
2015
 
2016
 
2015
Beginning balance
$
(53
)
 
$
(56
)
 
$
(56
)
 
$
(58
)
Pension and PBOP – net loss:
 
 
 
 

 
 
Other comprehensive loss before reclassifications
—

 
—

 
—

 
(4
)
    Reclassified from accumulated other comprehensive loss 1
2

 
2

 
5

 
8

Other
—

 
(1
)
 
—

 
(1
)
Change
2

 
1

 
5

 
3

Ending Balance
$
(51
)
 
$
(55
)
 
$
(51
)
 
$
(55
)
1  
These items are included in the computation of net periodic pension and PBOP expense. See Note 8 for additional information.

54





SCE's accumulated other comprehensive loss, net of tax consist of:
 
Three months ended September 30,
 
Nine months ended September 30,
(in millions)
2016
 
2015
 
2016
 
2015
Beginning balance
$
(20
)
 
$
(26
)
 
$
(22
)
 
$
(28
)
Pension and PBOP – net loss:
 
 
 
 
 
 
 
Other comprehensive loss before reclassifications
—

 
—

 
—

 
(1
)
    Reclassified from accumulated other comprehensive loss 1
1

 
1

 
3

 
4

Change
1

 
1

 
3

 
3

Ending Balance
$
(19
)
 
$
(25
)
 
$
(19
)
 
$
(25
)
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 September 30,
 
Nine months ended September 30,
(in millions)
 
2016
 
2015
 
2016
 
2015
SCE interest and other income:
 
 
 
 
 
 
 
 
Equity allowance for funds used during construction
 
$
16

 
$
21

 
$
58

 
$
63

Increase in cash surrender value of life insurance policies and life insurance benefits
 
12

 
5

 
29

 
22

Interest income
 
1

 
1

 
4

 
4

Other
 
3

 
2

 
6

 
4

Total SCE interest and other income
 
32

 
29

 
97

 
93

Other income of Edison International Parent and Other 1
 
—

 
3

 
—

 
21

Total Edison International interest and other income
 
$
32

 
$
32

 
$
97

 
$
114

SCE other expenses:
 
 
 
 
 
 
 
 
Civic, political and related activities and donations
 
6

 
8

 
$
19

 
$
21

Other
 
3

 
7

 
7

 
18

Total SCE other expenses
 
9

 
15

 
26

 
39

Other expense of Edison International Parent and Other
 
—

 
—

 
3

 
1

Total Edison International other expenses
 
$
9

 
$
15

 
$
29

 
$
40

1  
Reflects Edison Capital's income related to the sale of affordable housing projects for the three and nine months ended September 30, 2015.
Note 15.    Discontinued Operations
EME Chapter 11 Bankruptcy
In December 2012, EME and certain of its wholly-owned subsidiaries filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division. The Amended Plan of Reorganization, including the EME Settlement Agreement, was completed on April 1, 2014 with the sale of substantially all of EME's assets to NRG Energy, Inc. and the transactions called for in the EME Settlement Agreement, including an initial cash payment to the Reorganization Trust of $225 million in April 2014. For further discussion of the EME Settlement Agreement, see the 2015 Form 10-K, "Notes to Consolidated Financial Statements —Note 15."
In August 2014, Edison International entered into an amendment of the EME Settlement Agreement that finalized the remaining matters related to the EME Settlement including setting the amount of the two installment payments. Edison International made an installment payment of $204 million in September 2015 and made the remaining $214 million payment in September 2016.

55





Loss from discontinued operations, net of tax, was $1 million for the nine months ended September 30, 2016. Income from discontinued operations, net of tax, was $43 million for the three- and nine-month periods in 2015. The 2015 income was due to $27 million of income tax benefits based on filing of the 2014 tax returns in the third quarter of 2015 and $16 million in insurance recoveries ( $28 million pre-tax) related to EME bankruptcy.
Note 16.    Supplemental Cash Flows Information
Supplemental cash flows information for continuing operations is:
 
Edison International
 
SCE
 
Nine months ended September 30,
(in millions)
2016
 
2015
 
2016
 
2015
Cash payments for interest and taxes:
 
 
 
 
 
 
 
Interest, net of amounts capitalized
$
417

 
$
434

 
$
408

 
$
409

Tax payments, net
12

 
3

 
35

 
125

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

 
$
136

 
$
—

 
$
147

Preferred and preference stock
1

 
—

 
1

 
—

   Details of debt exchange:
 
 
 
 
 
 
 
 Pollution-control bonds redeemed (2.875%)
$
—

 
$
(203
)
 
$
—

 
$
(203
)
 Pollution-control bonds issued (1.875%)
—

 
203

 
—

 
203

SCE's accrued capital expenditures at September 30, 2016 and 2015 were $268 million and $403 million , respectively. Accrued capital expenditures will be included as an investing activity in the consolidated statements of cash flow in the period paid.
During the second quarter of 2015, SCE amended a power contract classified as a capital lease, which resulted in a reduction in the lease obligation and asset by $ 147 million .
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 and SCE's respective Chief Executive Officers and Chief Financial Officers, 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 third quarter of 2016. Based on that evaluation, Edison International's and SCE's respective Chief Executive Officers and Chief Financial Officers 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 third 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.

56





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 alleged that SCE had violated provisions of the Streambed Alteration Agreement and certain conditions of the federal Clean Water Act Certification. SCE disputed these allegations, but agreed with the regulatory agencies to settle the matter for $3 million without admitting wrongdoing.
OTHER INFORMATION
Amendment of Bylaws
On October 27, 2016, the Boards of Directors of Edison International and SCE amended each company’s Bylaws to: (i) permit the Board of Directors to change the date of the annual meeting of shareholders in Article II, Section 2; (ii) eliminate provisions in Article II, Section 7 and Article V, Section 1 that restate provisions in the California Corporations Code; (iii) revise provisions in Article III, Section 1 and Article V, Sections 3 and 4 related to the powers of the Board of Directors that are generally duplicative of other provisions; (iv) update the descriptions of officer duties in Article IV; and (v) make other minor clarifications and refinements. The foregoing description of the amendments to the Bylaws is qualified in its entirety by reference to the revised Bylaws, which are filed as Exhibits 3.1 and 3.2 to this report.
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 third 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
July 1, 2016 to July 31, 2016
134,419

 
 
$
77.17

 
 
—
 
—
August 1, 2016 to August 31, 2016
190,183

 
 
75.76

 
 
—
 
—
September 1, 2016 to September 30, 2016
170,875

 
 
73.12

 
 
—
 
—
Total
495,477

 
 
$
75.23

 
 
—
 
—
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.

57





EXHIBITS
Exhibit
Number
 
Description
 
 
 
3.1
 
Edison International Bylaws, as amended effective October 27, 2016
3.2
 
Southern California Edison Company Bylaws, as amended effective October 27, 2016

10.1**
 
Edison International 2008 Executive Retirement Plan, as amended and restated effective August 24, 2016

 
 
 
10.2**
 
Edison International Executive Incentive Compensation Plan, as amended and restated effective August 24, 2016

 
 
 
10.3**
 
Southern California Edison Company Executive Supplemental Benefit Program, as amended effective August 24, 2016


 
 
 
10.4**
 
Edison International and Southern California Edison Company Director Compensation Schedule, as adopted August 25, 2016

 
 
 
10.5**
 
Edison International 2008 Executive Severance Plan, as amended and restated effective August 24, 2016

 
 
 
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 September 30, 2016, filed on November 1, 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 September 30, 2016, filed on November 1, 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) of Form 10-K.


58





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:
November 1, 2016
 
Date:
November 1, 2016


59

Exhibit 3.1















BYLAWS

OF

EDISON INTERNATIONAL

(AS AMENDED EFFECTIVE OCTOBER 27, 2016)







INDEX
Page
ARTICLE I – PRINCIPAL EXECUTIVE OFFICE
Section 1. Principal Executive Office    1
ARTICLE II – SHAREHOLDERS
Section 1. Meeting Locations    1
Section 2. Annual Meetings    1
Section 3. Special Meetings    1
Section 4. Notice of Annual or Special Meeting    2
Section 5. Quorum    5
Section 6. Adjourned Meeting and Notice Thereof    5
Section 7. Voting    5
Section 8. Record Date    6
Section 9. Consent of Absentees    7
Section 10. Action Without Meeting    7
Section 11. Proxies    7
Section 12. Inspectors of Election    7
Section 13. Proxy Access for Director Nominations    8
ARTICLE III – DIRECTORS
Section 1. Powers    15
Section 2. Number of Directors    15
Section 3. Election and Term of Office    15
Section 4. Vacancies    15
Section 5. Place of Meeting    16
Section 6. Organization Meeting    16
Section 7. Special Meetings and Other Regular Meetings    16
Section 8. Quorum    17
Section 9. Participation in Meetings by Conference Telephone    17
Section 10. Waiver of Notice    17
Section 11. Adjournment    17






Section 12. Fees and Compensation    18
Section 13. Action Without Meeting    18
Section 14. Rights of Inspection    18
Section 15. Committees    18
Section 16. Chair of the Board    19
ARTICLE IV – OFFICERS
Section 1. Officers    19
Section 2. Election    20
Section 3. Reserved    20
Section 4. Removal and Resignation    20
Section 5. Appointment of Other Officers    20
Section 6. Vacancies    20
Section 7. Compensation    20
Section 8. Reserved    21
Section 9. Chief Executive Officer’s Duties; Succession to Such Duties
in Chief Executive Officer’s Absence or Disability    21
Section 10. President’s Duties    21
Section 11. Chief Financial Officer’s Duties    21
Section 12. Vice Presidents’ Duties    21
Section 13. General Counsel’s Duties    21
Section 14. Associate General Counsel’s and Assistant General
Counsel’s Duties    21
Section 15. Controller’s Duties    22
Section 16. Assistant Controllers’ Duties    22
Section 17. Treasurer’s Duties    22
Section 18. Assistant Treasurers’ Duties    22
Section 19. Secretary’s Duties    22
Section 20. Assistant Secretaries’ Duties    23
Section 21. Secretary Pro Tempore    23
Section 22. Reserved    23
Section 23. Performance of Duties    23

ii



ARTICLE V – OTHER PROVISIONS
Section 1. Inspection of Corporate Records    23
Section 2. Inspection of Bylaws    23
Section 3. Contracts and Other Instruments, Loans, Notes
and Deposits of Funds    23
Section 4. Certificates of Stock and Uncertificated Stock    24
Section 5. Transfer Agent, Transfer Clerk and Registrar    25
Section 6. Representation of Shares of Other Corporations    25
Section 7. Stock Purchase Plans    25
Section 8. Fiscal Year and Subdivisions    26
Section 9. Construction and Definitions    26
ARTICLE VI – INDEMNIFICATION
Section 1. Indemnification of Directors and Officers of the Corporation    26
Section 2. Indemnification of Directors, Officers, Employees, and Agents
other than Directors and Officers of the Corporation    27
Section 3. Right of Directors and Officers to Bring Suit    28
Section 4. Successful Defense    28
Section 5. Non-Exclusivity of Rights    28
Section 6. Insurance    28
Section 7. Expenses as a Witness    28
Section 8. Indemnity Agreements    29
Section 9. Separability    29
Section 10. Effect of Repeal or Modification    29
ARTICLE VII – EMERGENCY PROVISIONS
Section 1. General    29
Section 2. Notice of Meetings    29
Section 3. Quorum    30
ARTICLE VIII – AMENDMENTS
Section 1. Amendments    30


iii



BYLAWS

OF

EDISON INTERNATIONAL

(As Amended Effective October 27, 2016)

ARTICLE I – PRINCIPAL EXECUTIVE OFFICE

Section 1.    Principal Executive Office.

The principal executive office of the Corporation is hereby fixed and located at 2244 Walnut Grove Avenue, in the City of Rosemead, County of Los Angeles, State of California. The Board of Directors is hereby granted full power and authority to change said principal executive office from one location to another.

ARTICLE II – SHAREHOLDERS

Section 1.    Meeting Locations.

All meetings of shareholders shall be held at the principal executive office of the corporation or at such other place or places within or without the State of California as may be designated by the Board of Directors (the “Board”) or specified in the notice of the meeting. In the event such places shall prove inadequate in capacity for any meeting of shareholders, an adjournment may be taken to and the meeting held at such other place of adequate capacity as may be designated by the officer of the corporation presiding at such meeting.

Section 2.    Annual Meetings.

Annual meetings of shareholders shall be held on the fourth Thursday of the month of April of each year, or on such other date as the Board shall designate, to elect directors to hold office for the year next ensuing and until their successors shall be elected, and to consider and act upon such other matters as may lawfully be presented to such meeting; provided, however, that should said day fall upon a legal holiday, then any such annual meeting of shareholders shall be held at such designated time and place on the next day thereafter ensuing which is not a legal holiday.

Section 3.    Special Meetings.

Special meetings of the shareholders may be called at any time by the Board, the Chair of the Board, the Chief Executive Officer, the President, or upon written request of any three members of the Board, or by the holders of shares entitled to cast not less than ten percent of the votes at such meeting. Upon request in writing to the Chair of the Board,

1



the Chief Executive Officer, the President, any Vice President or the Secretary by any person (other than the Board) entitled to call a special meeting of shareholders, the Secretary forthwith shall cause notice to be given to the shareholders entitled to vote that a meeting will be held at a time requested by the person or persons calling the meeting, not less than thirty-five nor more than sixty days after the receipt of the request. If the notice is not given within twenty days after receipt of the request, the persons entitled to call the meeting may give the notice.

Se c tion 4.    Notice of Annual or Special Meeting.
(a)    Written notice of each annual or special meeting of shareholders shall be given not less than ten (or if sent by third-class mail, thirty) nor more than sixty days before the date of the meeting to each shareholder entitled to vote thereat. Such notice shall state the place, date, and hour of the meeting and (i) in the case of a special meeting, the general nature of the business to be transacted, and no other business may be transacted, or (ii) in the case of an annual meeting, those matters which the Board, at the time of the mailing of the notice, intends to present for action by the shareholders, but, subject to the provisions of applicable law and these Bylaws, any proper matter may be presented at an annual meeting for such action. The notice of any special or annual meeting at which directors are to be elected shall include the names of nominees intended at the time of the notice to be presented by the Board for election.
(b)    For any matter to be presented by a shareholder at an annual meeting, including the nomination of any person (other than a person nominated by or at the direction of the Board) for election to the Board, written notice must be received by the Secretary of the corporation from the shareholder not more than one hundred eighty days nor less than one hundred twenty days prior to the first anniversary of the date on which the proxy materials for the prior year’s annual meeting were first released to shareholders by the corporation; provided however, that in the event the annual meeting to which the shareholder’s written notice relates is to be held on a date which is more than thirty days earlier or later than the date of the annual meeting specified in these Bylaws, the notice from a shareholder must be received by the Secretary not earlier than two hundred twenty days prior to the date of the annual meeting to which the shareholder’s notice relates nor later than one hundred sixty days prior to the date of such annual meeting, unless less than one hundred seventy days’ prior public announcement of the date of such meeting is first made by the corporation, in which event notice by the shareholder to be timely must be received not later than the close of business on the tenth day following the date of such public announcement. As used in these Bylaws, (i) the “close of business” shall mean 5:00 p.m. local time at the principal executive offices of the corporation on any calendar day and (ii) “public announcement” shall include disclosure in a press release or in a document publicly filed by the corporation with the Securities and Exchange Commission (the “SEC”) pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules and regulations promulgated thereunder.
For any nomination to be presented by a shareholder at a special meeting called by the corporation at which directors are to be elected, written notice must be received by the Secretary of the corporation from the shareholder not more than one hundred eighty days

2



nor less than one hundred twenty days prior to the date of the special meeting, unless less than one hundred thirty days’ prior public announcement of the date of the meeting is made, in which event notice by the shareholder to be timely must be received not later than the close of business on the tenth day following the date of such public announcement of the meeting date and the nominee names intended to be presented by the Board for election. The shareholder’s notice to the Secretary shall set forth the information required by Section 4(c) of this Article and shall be updated and supplemented as required by that section.
(c)    The shareholder’s notice to the Secretary shall set forth:
(i)     a brief description of each matter to be presented at the annual meeting by the shareholder (including the text of any resolutions proposed for consideration and in the event the matter includes a proposal to amend these Bylaws, the language of the proposed amendment);
(ii)     the name and address, including where applicable as they appear on the corporation’s books, of the shareholder, the beneficial owner, if any, on whose behalf the nomination or proposal is made, and their respective affiliates or associates or others acting in concert therewith (together, the “Proponents”);
(iii)     the class and number of shares of the corporation which are held of record by the Proponents;
(iv)     as to the Proponents making the nomination or proposal, (A) the class and number of shares of the corporation which are beneficially owned by the Proponents, (B) a description of any agreement, arrangement or understanding with respect to the nomination or proposal between or among the Proponents and any other person and (C) a description of any agreement, arrangement or understanding that has been entered into as of the date of the shareholder’s notice by or on behalf of any of the Proponents, the effect or intent of which is to mitigate loss, manage risk or benefit from changes in the share price of any class of shares of the corporation, or maintain, increase or decrease the voting power of the Proponents, with respect to shares of the corporation; and
(v)     any material interest in the matters to be presented of the Proponents.
Any shareholder who intends to nominate a candidate for election as a director shall also set forth in such a notice (i) the name, age, business address and residence address of each nominee that he or she intends to nominate at the meeting, (ii) the principal occupation or employment of each nominee, (iii) the class and number of shares of the corporation which are held of record, or beneficially owned, by each nominee, and (iv) any other information concerning the nominee that would be required under the rules of the SEC, including any information required in a proxy statement soliciting proxies for the election of the nominee in an election contest. The notice shall also include a consent, signed by the shareholder’s nominees, to serve as a director of the corporation if elected.
In addition to the information required in a shareholder’s notice under this Section 4(c), the corporation may require each nominee to furnish such additional

3



information as reasonably requested by the corporation to determine the eligibility of the nominee to serve as a director. A shareholder’s notice shall, if necessary, be updated and supplemented within five business days after the record date for the meeting and the information provided or required to be provided in such notice shall be current as of the record date for the meeting.
(d)    Notwithstanding anything in these Bylaws to the contrary, and subject to the provisions of any applicable law, no business shall be conducted at a meeting except in accordance with the procedures set forth in this Section 4, which shall be the exclusive means for a shareholder to propose any matter at a meeting of shareholders (other than a proposal included in the corporation’s proxy materials pursuant to and in compliance with Rule 14a-8 under the Exchange Act). In no event shall an adjournment, recess or postponement of a meeting commence a new time period (or extend any time period) for the giving of a shareholder’s notice as described above. The Board (and any other person or body authorized by the Board) shall have the power and authority to determine whether a nomination or proposal was made or proposed in accordance with the procedures set forth in this Section 4. If any nomination or proposal is not in compliance with this Section 4, then except as otherwise required by law, the chair of the meeting shall have the power to declare that such nomination or proposal shall be disregarded. Notwithstanding the foregoing provisions of this Section 4, unless otherwise required by law or otherwise determined by the chair of the meeting or the Board, if the shareholder (or a qualified representative of the shareholder, as defined below) does not appear at the meeting of shareholders to present its nomination or proposal, such nomination or proposal shall be disregarded.
To be considered a qualified representative of the shareholder, a person must be a duly authorized officer, manager or partner of such shareholder or must be authorized by a writing executed by such shareholder or an electronic transmission delivered by such shareholder to act for such shareholder as proxy at the meeting of shareholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of shareholders.
(e)    Notice of a shareholders’ meeting shall be given either personally or by first-class mail (or, if the outstanding shares of the corporation are held of record by 500 or more persons on the record date for the meeting, notice may be given by third-class mail) or by other means of written communication, addressed to the shareholder at the address of such shareholder appearing on the books of the corporation or given by the shareholder to the corporation for the purpose of notice; or, if no such address appears or is given, at the place where the principal executive office of the corporation is located or by publication at least once in a newspaper of general circulation in the county in which the principal executive office is located. Notice by mail shall be deemed to have been given at the time a written notice is deposited in the United States mails, postage prepaid. Any other written notice shall be deemed to have been given at the time it is personally delivered to the recipient or is delivered to a common carrier for transmission, or actually transmitted by the person giving the notice by electronic means, to the recipient.

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Section 5.    Quorum.

A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at any meeting of shareholders. The affirmative vote of a majority of the shares represented and voting at a duly held meeting at which a quorum is present (which shares voting affirmatively also constitute at least a majority of the required quorum) shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by law or the Articles; provided, however, that the shareholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to have less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum.

Section 6.    Adjourned Meeting and Notice Thereof.

Any shareholders’ meeting, whether or not a quorum is present, may be adjourned from time to time by the vote of a majority of the shares, the holders of which are either present in person or represented by proxy thereat, but in the absence of a quorum (except as provided in Section 5 of this Article) no other business may be transacted at such meeting.

It shall not be necessary to give any notice of the time and place of the adjourned meeting or of the business to be transacted thereat, other than by announcement at the meeting at which such adjournment is taken. At the adjourned meeting, the corporation may transact any business which might have been transacted at the original meeting. However, when any shareholders’ meeting is adjourned for more than forty-five days or, if after adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be given as in the case of an original meeting.

Section 7.    Voting.

The shareholders entitled to notice of any meeting or to vote at any such meeting shall be only persons in whose name shares stand on the stock records of the corporation on the record date determined in accordance with Section 8 of this Article.

Voting shall in all cases be subject to the provisions of Chapter 7 of the California General Corporation Law (or any successor provisions), and to the following provisions.

No shareholder of any class of stock of this corporation shall be entitled to cumulate votes at any election of directors of this corporation.

Elections for directors need not be by ballot; provided, however, that all elections for directors must be by ballot upon demand made by a shareholder at the meeting and before the voting begins.
-In any uncontested election of directors, approval of the shareholders (as defined in Section 153 of the California General Corporation Law) shall be required to elect a director.

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If an incumbent director fails to be elected by approval of the shareholders in an uncontested election, then, unless the incumbent director has earlier resigned, the term of the incumbent director shall end on the date that is the earlier of 90 days after the date on which the voting results are determined pursuant to Section 707 of the California General Corporation Law or the date on which the Board selects a person to fill the office held by that director in accordance with the procedures set forth in Article III, Section 4 of these Bylaws and Section 305 of the California General Corporation Law.

In any election of directors that is not an uncontested election, the candidates receiving the highest number of affirmative votes of the shares entitled to be voted for them up to the number of directors to be elected by such shares shall be elected, and votes against a director and votes withheld shall have no legal effect.

For purposes of these Bylaws, an “uncontested election” means an election of directors of this corporation in which the number of candidates for election does not exceed the number of directors to be elected by the shareholders at that election, determined at the expiration of the time fixed under Article II, Section 4 of these Bylaws requiring advance notification of director candidates, or for special meetings of shareholders, at the date notice of the meeting is given or at a time fixed by the Board that is not more than 14 days before notice of the meeting is given.

Section 8.    Record Date.

The Board may fix, in advance, a record date for the determination of the shareholders entitled to notice of any meeting or to vote or entitled to receive payment of any dividend or other distribution, or any allotment of rights, or to exercise rights in respect of any other lawful action. The record date so fixed shall be not more than sixty days nor less than ten days prior to the date of the meeting nor more than sixty days prior to any other action. When a record date is so fixed, only shareholders of record at the close of business on that date are entitled to notice of and to vote at the meeting or to receive the dividend, distribution, or allotment of rights, or to exercise the rights, as the case may be, notwithstanding any transfer of shares on the books of the corporation after the record date, except as otherwise provided by law or these Bylaws. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting unless the Board fixes a new record date for the adjourned meeting. The Board shall fix a new record date if the meeting is adjourned for more than forty-five days.

If no record date is fixed by the Board, the record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the business day next preceding the day on which notice is given or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held. The record date for determining shareholders for any purpose other than as set forth in this Section 8 or Section 10 of this Article shall be at the close of business on the day on which the Board adopts the resolution relating thereto, or the sixtieth day prior to the date of such other action, whichever is later.

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Section 9.    Consent of Absentees.

The transactions of any meeting of shareholders, however called and noticed, and wherever held, are as valid as though had at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy, and if, either before or after the meeting, each of the persons entitled to vote, not present in person or by proxy, signs a written waiver of notice or a consent to the holding of the meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Neither the business to be transacted at nor the purpose of any regular or special meeting of shareholders need be specified in any written waiver of notice, consent to the holding of the meeting or approval of the minutes thereof, except as provided in Section 601 (f) of the California General Corporation Law.

Section 10.    Action Without Meeting.

Subject to Section 603 of the California General Corporation Law, any action which, under any provision of the California General Corporation Law, may be taken at any annual or special meeting of shareholders may be taken without a meeting and without prior notice if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Unless a record date for voting purposes be fixed as provided in Section 8 of this Article, the record date for determining shareholders entitled to give consent pursuant to this Section 10, when no prior action by the Board has been taken, shall be the day on which the first written consent is given.
Section 11.    Proxies.

Every person entitled to vote shares has the right to do so either in person or by one or more persons, not to exceed three, designated by a proxy authorized by such shareholder or the shareholder’s attorney in fact and filed with the corporation, in accordance with Section 178 of the California General Corporation Law. Subject to the following sentence, any proxy duly authorized continues in full force and effect until revoked by the person authorizing it prior to the vote pursuant thereto by a writing delivered to the corporation stating that the proxy is revoked or by a subsequent proxy authorized by the person authorizing the prior proxy and presented to the meeting, or by attendance at the meeting and voting in person by the person authorizing the proxy; provided, however, that a proxy is not revoked by the death or incapacity of the maker unless, before the vote is counted, written notice of such death or incapacity is received by this corporation. No proxy shall be valid after the expiration of eleven months from the date of its authorization unless otherwise provided in the proxy.

Section 12.    Inspectors of Election.

In advance of any meeting of shareholders, the Board may appoint any persons other than nominees as inspectors of election to act at such meeting and any adjournment

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thereof. If inspectors of election are not so appointed, or if any persons so appointed fail to appear in person or by telephone or refuse to act, the chair of any such meeting may, and on the request of any shareholder or shareholder’s proxy shall, make such appointments at the meeting. The number of inspectors shall be either one or three. If appointed at a meeting on the request of one or more shareholders or proxies, the majority of shares present shall determine whether one or three inspectors are to be appointed.

The duties of such inspectors shall be as prescribed by Section 707(b) of the California General Corporation Law and shall include: determining the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, and the authenticity, validity and effect of proxies; receiving votes, ballots or consents; hearing and determining all challenges and questions in any way arising in connection with the right to vote; counting and tabulating all votes or consents; determining when the polls shall close; determining the result; and doing such acts as may be proper to conduct the election or vote with fairness to all shareholders. If there are three inspectors of election, the decision, act or certificate of a majority is effective in all respects as the decision, act or certificate of all. Any report or certificate made by the inspectors of election is prima facie evidence of the facts stated therein.

Section 13.    Proxy Access for Director Nominations.
(a)     Subject to the terms and conditions of these Bylaws, in connection with an annual meeting of shareholders at which directors are to be elected, the corporation will include in its proxy statement and on its form of proxy the name of a nominee for election to the Board submitted pursuant to this Section 13 (a “Shareholder Nominee”), and will include in its proxy statement the “Required Information” (as defined in Section 13(d)), if:
(i)     the Shareholder Nominee satisfies the eligibility requirements in this Section 13;
(ii)     the Shareholder Nominee is identified in a timely notice (the “Shareholder Notice”) that satisfies this Section 13 and is delivered by a shareholder that qualifies as, or is acting on behalf of, an Eligible Shareholder (as defined in Section 13(b));
(iii)     the Eligible Shareholder expressly elects at the time of the delivery of the Shareholder Notice to have the Shareholder Nominee included in the corporation’s proxy materials; and
(iv)     the additional requirements of these Bylaws are met.
The maximum number of Shareholder Nominees submitted by all Eligible Shareholders that may be included in the corporation’s proxy materials pursuant to this Section 13 shall not exceed the greater of (i) two or (ii) twenty percent of the number of directors in office as of the last day on which a Shareholder Notice may be received by the Secretary pursuant to this Section 13 with respect to the annual meeting, or if such amount is not a whole number, the closest whole number (rounding down) below twenty percent (such resulting number, the “Permitted Number”); provided that the Permitted Number shall be reduced by (i) any Shareholder Nominee whose name was submitted for inclusion

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in the corporation’s proxy materials pursuant to this Section 13 but who the Board of Directors decides to nominate as a Board nominee and (ii) any nominees who were previously elected to the Board as Shareholder Nominees at any of the preceding two annual meetings and who are nominated for election at such annual meeting by the Board as a Board nominee.
(b)     To qualify as an “Eligible Shareholder,” a shareholder or a group as described in this Section 13(b) must:
(i)     own and have owned (as defined in Section 13(c)), continuously for at least three years as of the date of the Shareholder Notice, a number of shares that represents at least three percent of the outstanding shares of the corporation that are entitled to vote in the election of directors as of the date of the Shareholder Notice (the “Required Shares”); and
(ii)     thereafter continue to own the Required Shares through such annual meeting of shareholders.
For purposes of satisfying the ownership requirements of this Section 13(b), a group of no more than twenty shareholders and/or beneficial owners may aggregate the number of shares that each group member has owned continuously for at least three years as of the date of the Shareholder Notice. No shareholder or beneficial owner, alone or together with any of its affiliates, may individually or as a member of a group qualify as more than one Eligible Shareholder under this Section 13. A group of funds that are under common management and investment control shall be treated as one shareholder or beneficial owner. Whenever an Eligible Shareholder consists of a group of shareholders and/or beneficial owners, any and all requirements and obligations (including the requirements to provide any information, representation or agreement pursuant to Section 13(e)) for an Eligible Shareholder set forth in this Section 13 must be satisfied by and as to each such shareholder or beneficial owner, except that shares may be aggregated as specified in this Section 13(b).
(c)     For purposes of this Section 13:
(i)     a shareholder or beneficial owner shall be deemed to “own” only those outstanding shares (including shares held in the name of a nominee or other intermediary) as to which such person possesses both (A) the full voting and investment rights pertaining to the shares and (B) the full economic interest in (including the opportunity for profit and risk of loss on) such shares. As a result, the number of shares calculated in accordance with clauses (A) and (B) shall not include any shares (1) sold by such person or any of its affiliates in any transaction that has not been settled or closed, (2) borrowed by such person or any of its affiliates for any purposes or purchased by such person or any of its affiliates pursuant to an agreement to resell, or (3) subject to any option, warrant, forward contract, swap, contract of sale, or other derivative or similar agreement entered into by such person or any of its affiliates, whether any such instrument or agreement is to be settled with shares or with cash based on the notional amount or value of outstanding shares, in any such case which instrument or agreement has, or is intended to have, or if exercised would have, the purpose or effect of (x) reducing in any manner, to

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any extent or at any time in the future, such person’s or its affiliates’ full right to vote or direct the voting of any such shares, and/or (y) hedging, offsetting, or altering to any degree any gain or loss arising from the full economic ownership of such shares by such person or its affiliate. The terms “owned,” “owning” and other variations of the word “own,” when used in this Section 13, shall have correlative meanings; and
(ii)     A shareholder or beneficial owner’s ownership of shares shall be deemed to continue during any period in which the person has loaned such shares provided that the person has the power to recall such loaned shares on five business days’ notice.
(d)     For purposes of this Section 13, the “Required Information” that the corporation will include in its proxy statement is:
(i)     the information set forth in the Schedule 14N provided with the Shareholder Notice concerning each Shareholder Nominee and the Eligible Shareholder that is required to be disclosed in the corporation’s proxy statement by the applicable requirements of the Exchange Act and the rules and regulations thereunder; and
(ii)     if the Eligible Shareholder so elects, a written statement of the Eligible Shareholder (or, in the case of a group, a written statement of the group), not to exceed 500 words, in support of each Shareholder Nominee, which must be provided at the same time as the Shareholder Notice for inclusion in the corporation’s proxy statement for the annual meeting (the “Statement”).
The corporation may omit from its proxy materials any information or Statement that it, in good faith, believes is untrue in any material respect (or omits a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading), would violate any applicable law, rule, regulation or listing standard or would constitute abusive and offensive language. Nothing in this Section 13 shall limit the corporation’s ability to solicit against and include in its proxy materials its own statements relating to any Eligible Shareholder or Shareholder Nominee.
(e)     The Shareholder Notice shall set forth all information, representations and agreements required under Section 4(c) of this Article (and for such purposes, references in Section 4(c) to any Proponents that are a “beneficial owner” (including any affiliates or associates or others acting in concert therewith), on whose behalf the nomination is made shall be deemed to refer to the “Eligible Shareholder”). In addition, such Shareholder Notice shall also include:
(i)     a copy of the Schedule 14N filed with the SEC under the Exchange Act;
(ii)     a statement of the Eligible Shareholder, which statement shall also be included in the Schedule 14N filed with the SEC: (A) setting forth and certifying to the number of shares the Eligible Shareholder owns and has owned (as defined in Section 13(c) of these Bylaws) continuously for at least three years as of the date of the Shareholder Notice, (B) agreeing to continue to own such shares through the annual meeting, and

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(C) regarding whether it intends to maintain ownership of the Required Shares for at least one year following the annual meeting;
(iii)     the written agreement of the Eligible Shareholder addressed to the corporation, setting forth the following additional agreements, representations, and warranties:
(A)     it will provide (1) the information required under Section 4(c) of this Article as of the record date, (2) notification in writing verifying the Eligible Shareholder’s continuous ownership of the Required Shares as of the record date, and (3) immediate notice to the corporation if the Eligible Shareholder ceases to own the Required Shares prior to the annual meeting of shareholders;
(B)     it (1) acquired the Required Shares in the ordinary course of business and not with the intent to change or influence control at the corporation, and does not presently have any such intent, (2) has not nominated and will not nominate for election to the Board at the annual meeting any person other than the Shareholder Nominee(s) being nominated pursuant to this Section 13, (3) has not engaged and will not engage in, and has not been and will not be a participant (as defined in Item 4 of Exchange Act Schedule 14A) in, a solicitation within the meaning of Exchange Act Rule 14a-1(l), in support of the election of any individual as a director at the annual meeting other than its Shareholder Nominee or a nominee of the Board, and (4) will not distribute to any shareholder any form of proxy for the annual meeting other than the form distributed by the corporation;
(C)     it will (1) assume all liability stemming from any legal or regulatory violation arising out of the Eligible Shareholder’s communications with the shareholders of the corporation or out of the information that the Eligible Shareholder provided to the corporation, (2) indemnify and hold harmless the corporation and each of its directors, officers and employees individually against any liability, loss or damages in connection with any threatened or pending action, suit or proceeding, whether legal, administrative or investigative, against the corporation or any of its directors, officers or employees arising out of any nomination submitted by the Eligible Shareholder pursuant to this Section 13, (3) comply with all laws, rules, regulations and listing standards applicable to any solicitation in connection with the annual meeting, and (4) promptly provide to the corporation prior to the day of the annual meeting such additional information as reasonably requested by the corporation; and
(iv)     in the case of a nomination by a group, the designation by all group members of one group member that is authorized to act on behalf of all members of the group with respect to the nomination and matters related thereto, including withdrawal of the nomination.
(f)     To be timely under this Section 13, the Shareholder Notice must be received by the Secretary, from a shareholder, at the principal executive offices of the corporation in accordance with the time frames applicable to annual meetings under Section 4(b) of this Article. In no event shall an adjournment, recess or postponement of a meeting commence a new time period (or extend any time period) for the giving of a shareholder’s notice as described above.

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(g)     An Eligible Shareholder must:
(i)     within five business days after the date of the Shareholder Notice, provide to the corporation one or more written statements from the shareholder(s) of the Required Shares and from each intermediary through which the Required Shares are or have been held, in each case during the requisite three-year holding period, specifying the number of shares that the Eligible Shareholder owns, and has owned continuously in compliance with this Section 13;
(ii)     file with the SEC any solicitation or other communication by or on behalf of the Eligible Shareholder relating to the corporation’s annual meeting of shareholders, one or more of the corporation’s directors or director nominees or any Shareholder Nominee, regardless of whether any such filing is required under Exchange Act Regulation 14A or whether any exemption from filing is available for such solicitation or other communication under Exchange Act Regulation 14A; and
(iii)     in the case of any group, within five business days after the date of the Shareholder Notice, provide to the corporation documentation reasonably satisfactory to the corporation demonstrating that the number of shareholders and/or beneficial owners within such group does not exceed twenty, including that a group of funds qualifies as one shareholder or beneficial owner within the meaning of Section 13(b).
The information provided pursuant to this Section 13(g) shall be deemed part of the Shareholder Notice for purposes of this Section 13.
(h)     Within the time period for delivery of the Shareholder Notice, a written representation and agreement of each Shareholder Nominee shall be received by the Secretary, which shall be signed by each Shareholder Nominee and shall represent and agree that such Shareholder Nominee:
(i)     consents to being named in the corporation’s proxy statement and form of proxy as a nominee;
(ii)     is not and will not become a party to any agreement, arrangement, or understanding with, and has not given any commitment or assurance to, any person or entity as to how such Shareholder Nominee, if elected as a director, will act or vote on any issue or question that has not been disclosed to the corporation in such representation;
(iii)     is not and will not become a party to any agreement, arrangement, or understanding with any person or entity other than the corporation with respect to any direct or indirect compensation, reimbursement, or indemnification in connection with service or action as a director that has not been disclosed to the corporation in such representation and
(iv)     if elected as a director, will comply with all of the corporation’s corporate governance, conflict of interest, and stock ownership and trading policies and guidelines, and any other corporation policies and guidelines applicable to directors.

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At the request of the corporation, the Shareholder Nominee must promptly, but in any event within five business days after such request, submit all completed and signed questionnaires required of the corporation’s directors and provide to the corporation such other information as it may reasonably request. The corporation may request such additional information as necessary to permit the Board to determine if each Shareholder Nominee satisfies the requirements of this Section 13.
(i)     In the event any information or communications provided by the Eligible Shareholder or any Shareholder Nominees to the corporation or its shareholders is not, when provided, or thereafter ceases to be, true, correct and complete in all material respects (including omitting a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading), such Eligible Shareholder or Shareholder Nominee, as the case may be, shall promptly notify the Secretary and provide the information that is required to make such information or communication true, correct, complete and not misleading; provided that any such notification shall not be deemed to cure any defect or limit the corporation’s right to omit a Shareholder Nominee from its proxy materials as provided in this Section 13.
(j)     The corporation may omit from its proxy materials any Shareholder Nominee, and such nomination shall be disregarded and no vote on such Shareholder Nominee will occur, notwithstanding that proxies in respect of such vote may have been received by the corporation, if:
(i)     the Eligible Shareholder or Shareholder Nominee breaches any of its respective agreements, representations, or warranties set forth in the Shareholder Notice (or otherwise submitted pursuant to this Section 13), any of the information in the Shareholder Notice (or otherwise submitted pursuant to this Section 13) was not, when provided, true, correct and complete, or the requirements of this Section 13 have otherwise not been met;
(ii)     the Shareholder Nominee (A) is not independent under any applicable stock exchange listing standards or SEC rules, and any publicly disclosed standards used by the Board in determining and disclosing the independence of the corporation’s directors, (B) does not qualify as independent under the audit committee independence requirements set forth in the rules of the principal U.S. exchange on which shares of the corporation are listed, as a “non-employee director” under Exchange Act Rule 16b-3 or as an “outside director” for the purposes of Section 162(m) of the Internal Revenue Code (or any successor provision), (C) is an officer or director of a public utility or public utility holding company, (D) fails to meet the general criteria of the guidelines for nomination as a director set forth in the corporation’s Corporate Governance Guidelines, (E) is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses) or has been convicted in a criminal proceeding (excluding traffic violations and other minor offenses) within the past ten years, or (F) is subject to any order of the type specified in Rule 506(d) of Regulation D promulgated under the Securities Act of 1933, as amended;

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(iii)     the corporation has received a notice (whether or not subsequently withdrawn) that a shareholder intends to nominate any candidate for election to the Board pursuant to Section 4 of this Article;
(iv)     the election of the Shareholder Nominee to the Board would cause the corporation or the Shareholder Nominee to violate the Articles of Incorporation of the corporation, these Bylaws, any applicable law, rule, regulation or listing standard; or
(v)     the Eligible Shareholder or applicable Shareholder Nominee fails to comply with any obligation pursuant to these Bylaws.

(k)     In the event that the number of Shareholder Nominees submitted by Eligible Shareholders pursuant to this Section 13 exceeds the Permitted Number, the corporation shall determine which Shareholder Nominees shall be included in the corporation’s proxy materials as follows: each Eligible Shareholder will select one Shareholder Nominee for inclusion in the corporation’s proxy materials until the Permitted Number is reached, going in order of the amount (largest to smallest) of shares of the corporation each Eligible Shareholder disclosed as owned in its respective Shareholder Notice. If the Permitted Number is not reached after each Eligible Shareholder has selected one Shareholder Nominee, this selection process will continue as many times as necessary, following the same order each time, until the Permitted Number is reached. Following such determination, if any Shareholder Nominee who satisfies the eligibility requirements in this Section 13 thereafter is nominated by the Board, thereafter is not included in the corporation’s proxy materials or thereafter is not submitted for director election for any reason (including the Eligible Shareholder’s or Shareholder Nominee’s failure to comply with this Section 13), no other nominee or nominees shall be included in the corporation’s proxy materials or otherwise submitted for director election in substitution thereof.
(l)     The Board (and any other person or body authorized by the Board) shall have the power and authority to interpret this Section 13 and to make any and all determinations necessary or advisable to apply this Section 13, including the power to determine whether any and all requirements of this Section 13 have been satisfied. Any such interpretation or determination adopted in good faith by the Board (or any other person or body authorized by the Board) shall be binding on all persons, including the corporation and its shareholders or beneficial owners. Notwithstanding the foregoing provisions of this Section 13, unless otherwise required by law or otherwise determined by the chair of the meeting or the Board, if the shareholder (or a qualified representative of the shareholder does not appear at the annual meeting of shareholders of the corporation to present its Shareholder Nominee or Shareholder Nominees, such nomination or nominations shall be disregarded. This Section 13 shall be the exclusive method for shareholders to include nominees for director election in the corporation’s proxy materials.



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ARTICLE III – DIRECTORS

Section 1.    Powers.

Subject to limitations of the Articles, of these Bylaws and of the California General Corporation Law relating to action required to be approved by the shareholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board. The Board may delegate the management of the day-to-day operation of the business of the corporation provided that the business and affairs of the corporation shall be managed and all corporate powers shall be exercised under the ultimate direction of the Board.

Section 2.    Number of Directors.

The authorized number of directors shall be not less than nine nor more than seventeen until changed by amendment of the Articles or by a Bylaw duly adopted by the shareholders. The exact number of directors shall be fixed, within the limits specified, by the Board by adoption of a resolution or by the shareholders in the same manner provided in these Bylaws for the amendment thereof.

Section 3.    Election and Term of Office.

The directors shall be elected at each annual meeting of the shareholders, subject to Article II, Section 7 of these Bylaws, but if any such annual meeting is not held or no vote is taken on the election of directors thereat, the directors may be elected at any special meeting of shareholders held for that purpose. Subject to Article II, Section 7 of these Bylaws, each director shall hold office until the next annual meeting and until a successor has been elected and qualified.

Section 4.    Vacancies.

Any director may resign effective upon giving written notice to the Chair of the Board, the Chief Executive Officer, the President, the Secretary or the Board, unless the notice specifies a later time for the effectiveness of such resignation. If the resignation is effective at a future time, a successor may be elected to take office when the resignation becomes effective.
Vacancies in the Board, except those existing as a result of a removal of a director, may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director, and each director so elected shall hold office until the next annual meeting and, subject to Article II, Section 7 of these Bylaws, until such director’s successor has been elected and qualified. Vacancies existing as a result of a removal of a director may be filled by the shareholders as provided by law. Any vacancy on the Board resulting from any expiration of the term of an incumbent director as provided in Article II, Section 7 of these Bylaws shall be deemed to have been created by resignation, and not removal, of the incumbent director.

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A vacancy or vacancies in the Board shall be deemed to exist in case of the death, resignation or removal of any director, or if the authorized number of directors be increased, or if the shareholders fail, at any annual or special meeting of shareholders at which any director or directors are elected, to elect the full authorized number of directors to be voted for at that meeting.
The Board may declare vacant the office of a director who has been declared of unsound mind by an order of court or convicted of a felony.
The shareholders may elect a director or directors at any time to fill any vacancy or vacancies not filled by the directors. Any such election by written consent other than to fill a vacancy created by removal requires the consent of a majority of the outstanding shares entitled to vote.

No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of the director’s term of office.

Section 5.    Place of Meeting.

Regular or special meetings of the Board shall be held at any place within or without the State of California which has been designated from time to time by the Board, specified in the notice of the meeting, or as otherwise provided in these Bylaws. In the absence of such designation, regular meetings shall be held at the principal executive office of the corporation.
Section 6.    Organization Meeting.

Promptly following each annual meeting of shareholders the Board shall hold a regular meeting for the purpose of organization, election of officers and the transaction of other business.
Section 7.    Special Meetings and Other Regular Meetings.

Special meetings and regular meetings other than organization meetings of the Board for any purpose or purposes may be called at any time by the Chair of the Board, the Chief Executive Officer, the President, any Vice President, the Secretary or by any three directors then in office.
Such meetings of the Board shall be held upon four days’ notice by mail or twenty-four hours’ notice delivered personally or by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, telegraph, telex, facsimile, electronic mail or other similar means of communication. Any such notice shall be addressed or delivered to each director at such director’s address, telephone number, telex number, facsimile number, E-mail address, or other designated location(s), as shown upon the records of the corporation or as may have been given to the corporation by the director for purposes of notice or, if such information is not shown on

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such records or is not readily ascertainable, at the place in which the meetings of the directors are regularly held. The notice need not specify the purpose of such meeting.
Notice by mail shall be deemed to have been given at the time a written notice is deposited in the United States mail, postage prepaid. Any other written notice shall be deemed to have been given at the time it is personally delivered to the recipient or is delivered to a common carrier for transmission, or actually transmitted by the person giving the notice by electronic means to the recipient. Oral notice shall be deemed to have been given at the time it is communicated, in person or by telephone, wireless, or other similar means, to the recipient or to a person at the office of the recipient who the person giving the notice has reason to believe will promptly communicate it to the recipient, or actually transmitted to the recipient by the person giving the notice by a system or technology designed to record and communicate messages.

Section 8.    Quorum.

One-third of the number of authorized directors constitutes a quorum of the Board for the transaction of business, except to adjourn as provided in Section ll of this Article. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board, unless a greater number is required by law or by the Articles; provided, however, that a meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for such meeting.
Section 9.    Participation in Meetings by Conference Telephone.

Members of the Board may participate in a meeting through use of conference telephone or similar communications equipment, so long as all members participating in such meeting can hear one another. Such participation constitutes presence in person at such meeting.
Section 10.    Waiver of Notice.

The transactions of any meeting of the Board, however called and noticed or wherever held, are as valid as though had at a meeting duly held after regular call and notice if a quorum is present and if, either before or after the meeting, each of the directors not present signs a written waiver of notice, a consent to holding such meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.
Section 11.    Adjournment.

A majority of the directors present, whether or not a quorum is present, may adjourn any directors’ meeting to another time and place. Notice of the time and place of holding an adjourned meeting need not be given to absent directors if the time and place is fixed at the meeting adjourned. If the meeting is adjourned for more than twenty-four hours, notice

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of any adjournment to another time or place shall be given prior to the time of the adjourned meeting to the directors who were not present at the time of the adjournment.
Section 12.    Fees and Compensation.

Directors and members of committees may receive such compensation, if any, for their services, and such reimbursement for expenses, as may be fixed or determined by the Board.
Section 13.    Action Without Meeting.

Any action required or permitted to be taken by the Board may be taken without a meeting if all members of the Board shall individually or collectively consent in writing to such action. Such written consent or consents shall have the same force and effect as a unanimous vote of the Board and shall be filed with the minutes of the proceedings of the Board.

Section 14.    Rights of Inspection.

Every director shall have the absolute right at any reasonable time to inspect and copy all books, records and documents of every kind and to inspect the physical properties of the corporation and also of its subsidiary corporations, domestic or foreign. Such inspection by a director may be made in person or by agent or attorney and includes the right to copy and make extracts.

Section 15.    Committees.

The Board may appoint one or more committees, each consisting of two or more directors, to serve at the pleasure of the Board. The Board may delegate to such committees any or all of the authority of the Board except with respect to:

(a)    The approval of any action for which the California General Corporation Law also requires shareholders’ approval or approval of the outstanding shares;

(b)    The filling of vacancies on the Board or in any committee;

(c)    The fixing of compensation of the directors for serving on the Board or on any committee;

(d)    The amendment or repeal of Bylaws or the adoption of new Bylaws;

(e)    The amendment or repeal of any resolution of the Board which by its express terms is not so amendable or repealable;

(f)    A distribution to the shareholders of the corporation except at a rate or in a periodic amount or within a price range determined by the Board; or

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(g)    The appointment of other committees of the Board or the members thereof.

Any such committee, or any member or alternate member thereof, must be appointed by resolution adopted by a majority of the exact number of authorized directors as specified in Section 2 of this Article. The Board shall have the power to prescribe the manner and timing of giving of notice of regular or special meetings of any committee and the manner in which proceedings of any committee shall be conducted. In the absence of any such prescription, such committee shall have the power to prescribe the manner in which its proceedings shall be conducted. Unless the Board or such committee shall otherwise provide, the regular and special meetings and other actions of any such committee shall be governed by the provisions of this Article applicable to meetings and actions of the Board. Minutes shall be kept of each meeting of each committee.

Section 16.    Chair of the Board.

The Chair of the Board shall be a director and shall preside at meetings of the Board and meetings of the shareholders, unless otherwise unavailable, and shall have such other powers and shall be subject to such other duties as the Board may from time to time provide or as may be provided by these Bylaws. Notwithstanding anything to the contrary contained herein or in the California General Corporation Law, the Chair of the Board is not, solely by virtue of that title, an officer of the corporation, and a person holding the title of Chair of the Board need not otherwise be an officer of the corporation.
In the absence or disability of the Chair of the Board, one of the following shall act, in the order indicated, as chair of the Board at meetings of the Board: first, the Chief Executive Officer, if a member of the Board; second, the President, if a member of the Board; third, a Vice President, if any, who is a member of the Board, in order of election; and, fourth, any member of the Board who is designated by the Board as a temporary chair to preside at any such meeting of the Board.

ARTICLE IV – OFFICERS

Section 1.    Officers.

The officers of the corporation shall be a Chief Executive Officer, a President, a Chief Financial Officer, one or more Vice Presidents, a General Counsel and a Secretary. The corporation may also have, at the discretion of the Board, one or more Associate General Counsel, one or more Assistant General Counsel, a Controller, one or more Assistant Controllers, a Treasurer, one or more Assistant Treasurers and one or more Assistant Secretaries, and such other officers as may be elected or appointed in accordance with Section 5 of this Article. The Board or the Chief Executive Officer may confer a special title upon any Vice President not specified herein.


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Section 2.    Election.

The officers of the corporation, except such officers as may be elected or appointed in accordance with the provisions of Section 5 or Section 6 of this Article, shall be chosen annually by, and shall serve at the pleasure of the Board, and shall hold their respective offices until their resignation, removal, or other disqualification from service, or until their respective successors shall be elected.

Section 3.    Reserved.

Section 4.    Removal and Resignation.

Any officer may be removed, either with or without cause, by the Board at any time or by any officer upon whom such power of removal may be conferred by the Board. Any such removal shall be without prejudice to the rights, if any, of the officer under any contract of employment of the officer.

Any officer may resign at any time by giving written notice to the corporation, but without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 5.    Appointment of Other Officers.

The Board may appoint such other officers as the business of the corporation may require, each of whom shall hold office for such period, have such authority, and perform such duties as are provided in the Bylaws or as the Board may from time to time determine.

Section 6.    Vacancies.

A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled at any time deemed appropriate by the Board in the manner prescribed in these Bylaws for regular election or appointment to such office.

Section 7.     Compensation.

The compensation of the Chief Executive Officer, President, Chief Financial Officer, Vice Presidents, General Counsel, Controller, Treasurer and Secretary of the corporation shall be fixed by the Board. Compensation of all other officers shall be as approved from time to time by the Chief Executive Officer or such other officers to whom the Chief Executive Officer may delegate such authority.


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Section 8.    Reserved.

Section 9.
Chief Executive Officer’s Duties; Succession to Such Duties in Chief Executive Officer’s Absence or Disability.

The Chief Executive Officer shall be the chief executive officer of the corporation. Subject to the control of the Board, the Chief Executive Officer shall have charge of the business of the corporation. The Chief Executive Officer shall keep the Board fully informed, and shall freely consult them concerning the business of the corporation.

In the absence or disability of the Chief Executive Officer, the President shall act as the chief executive officer of the corporation; in the absence or disability of the Chief Executive Officer and the President, the next in order of election by the Board of the Vice Presidents shall act as chief executive officer of the corporation.
    
Section 10.    President’s Duties.

The President shall perform such duties as the Chief Executive Officer shall delegate or assign to such officer.

Section 11.    Chief Financial Officer’s Duties.
The Chief Financial Officer of the corporation shall be responsible for all financial matters concerning the corporation, and shall perform such duties as are usually incident to such office and such other duties as the Chief Executive Officer shall designate. If the corporation does not have a currently elected and acting Controller, the Chief Financial Officer shall also be the chief accounting officer of the corporation.

Section 12.    Vice Presidents’ Duties.

The Vice Presidents shall perform such duties as the Chief Executive Officer shall designate.

Section 13.    General Counsel’s Duties.

The General Counsel shall be responsible for all legal matters concerning the corporation, and shall perform such duties as are usually incident to such office and such other duties as the Chief Executive Officer shall designate.

Section 14.
Associate General Counsel’s and Assistant General Counsel’s Duties.

The Associate General Counsel and the Assistant General Counsel shall perform such duties as the General Counsel shall designate, and in the absence or disability of the General Counsel, the next in order of election by the Board of the Associate General Counsel or, if there is no currently elected and acting Associate General Counsel, the Assistant General Counsel, shall perform the duties of the General Counsel.

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Section 15.    Controller’s Duties.
The Controller shall be the chief accounting officer of the corporation and shall be responsible for all accounting matters concerning the corporation and shall perform such duties as are usually incident to such office and such other duties as the Chief Executive Officer shall designate.

Section 16.    Assistant Controllers’ Duties.

The Assistant Controllers shall perform such duties as the Controller shall designate, and in the absence or disability of the Controller, the next in order of election by the Board of the Assistant Controllers shall perform such duties of the Controller as the Chief Executive Officer or the Chief Financial Officer shall designate.

Section 17.    Treasurer’s Duties.

The Treasurer shall be responsible for keeping in custody or control all money, stocks, bonds, evidences of debt, securities and other items of value that may belong to, or be in the possession or control of, the corporation, and to dispose of the same in such manner as the Board or the Chief Executive Officer may direct, and shall perform such duties as are usually incident to such office and such other duties as the Chief Executive Officer shall designate. In the absence or disability of the Chief Financial Officer, the Treasurer shall perform the duties of the Chief Financial Officer.

Section 18.    Assistant Treasurers’ Duties.
The Assistant Treasurers shall perform such duties as the Treasurer shall designate, and in the absence or disability of the Treasurer, the Assistant Treasurers, in order of election to that office by the Board, shall perform the duties of the Treasurer.
Section 19.    Secretary’s Duties.
The Secretary shall keep or cause to be kept full and complete records of the proceedings of shareholders, the Board and its committees at all meetings and shall affix the corporate seal and attest by signing copies of any part thereof when required. The Secretary shall be the custodian of the corporate seal and shall affix it to such instruments and attest to the same as may be required. The Secretary shall serve or cause to be served by publication or otherwise, as may be required, all notices of meetings and of other corporate acts that may by law or otherwise be required to be served, and shall make or cause to be made and filed in the principal executive office of the corporation, the necessary certificate or proofs thereof. An affidavit of mailing of any notice of a shareholders’ meeting or of any report, in accordance with the provisions of Section 601(b) of the California General Corporation Law, executed by the Secretary shall be prima facie evidence of the fact that such notice or report had been duly given. The Secretary shall keep all records required by the California General Corporation Law. The Secretary shall generally perform the duties as are usually incident to such office and such other duties as the Chief Executive Officer shall designate.

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Section 20.    Assistant Secretaries’ Duties.

Assistant Secretaries shall perform such duties as the Secretary shall designate, and in the absence or disability of the Secretary, the Assistant Secretaries, in the order of election to that office by the Board, shall perform the duties of the Secretary.

Section 21.    Secretary Pro Tempore.

At any meeting of the Board or of the shareholders from which the Secretary is absent, a Secretary pro tempore may be appointed and act.

Section 22.    Reserved.
    
Section 23.    Performance of Duties.

Officers shall perform the duties of their respective offices as stated in these Bylaws, and such additional duties as the Board shall designate.


ARTICLE V – OTHER PROVISIONS

Section 1.    Inspection of Corporate Records.
A shareholder or holder of a voting trust certificate may inspect the corporation’s records only in accordance with the provisions of Chapter 16 of the California General Corporation Law (or any successor provisions).
Section 2.    Inspection of Bylaws.

The corporation shall keep in its principal executive office the original or a copy of these Bylaws as amended to date, which shall be open to inspection by shareholders at all reasonable times during office hours.

Section 3.
Contracts and Other Instruments, Loans, Notes and Deposits of Funds.

The Chief Executive Officer, the President, or a Vice President, either alone or with the Secretary or an Assistant Secretary, or the Secretary alone, shall execute in the name of the corporation such written instruments as may be authorized by the Board and, without special direction of the Board, such instruments as transactions of the ordinary business of the corporation may require and, such officers without the special direction of the Board may authenticate, attest or countersign any such instruments when deemed appropriate. The Board may authorize any person, persons, entity, entities, attorney, attorneys, attorney-in-fact, attorneys-in-fact, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances.

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No loans shall be contracted on behalf of the corporation and no promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations or other evidences of indebtedness or securities therefor shall be issued in its name unless authorized by the Board as it may direct. Such authority may be general or confined to specific instances.

All checks, drafts, or other similar orders for the payment of money, notes, or other such evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, agent or agents of the corporation and in such manner as the Board or Chief Executive Officer may direct.

Unless authorized by the Board or these Bylaws, no officer, agent, employee or any other person or persons shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or amount.

All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies, or other depositories as the Board may direct.

Section 4.    Certificates of Stock and Uncertificated Stock.

The Board may authorize the issuance of shares of the corporation’s stock, upon such terms and for such consideration as may be lawful. Shares of the corporation’s stock may be certificated or uncertificated, as provided under California law. All certificates of stock of the corporation shall be numbered and shall be entered in the books of the corporation as they are issued. Every certificate of stock of the corporation shall be signed in the name of the corporation by the President, or a Vice President and by the Chief Financial Officer, the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, certifying the number of shares and the class or series of shares owned by the shareholder. Any or all of the signatures on the certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person were an officer, transfer agent or registrar at the date of issue.

Certificates for shares and uncertificated shares may be used prior to full payment under such restrictions and for such purposes as the Board may provide; provided, however, that on any certificate issued to represent any partly paid shares, or, for uncertificated shares, on the initial transaction statement for such partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated.
Except as provided in this Section, no new certificate for shares and no uncertificated shares shall be issued in lieu of an old certificate unless the latter is surrendered and canceled at the same time. However, if any certificate for shares is alleged to have been lost, stolen or destroyed, a new certificate or uncertificated shares in lieu thereof shall be issued if the shareholder (a) so requests before the corporation has notice

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that the old certificate has been acquired by a bona fide purchaser, (b) if required by the corporation, files with the corporation a bond or other adequate security sufficient to indemnify it against any claim that may be made against it (including expense or liability) on account of the alleged loss, theft or destruction of such certificate or the issuance of such new certificate or uncertificated shares, and (c) satisfies any other reasonable requirements imposed by the corporation.

Transfers of shares of stock of the corporation shall be made on the books of the corporation only by the record holder of such stock, or by an attorney lawfully constituted in writing, and in the case of stock represented by a certificate, upon surrender of the certificate.

Section 5.    Transfer Agent, Transfer Clerk and Registrar.

The Board may, from time to time, appoint transfer agents, transfer clerks, and stock registrars to transfer and register the shares of capital stock of the corporation, and may provide that no certificate of capital stock shall be valid without the signature of the stock transfer agent or transfer clerk, and stock registrar.

Section 6.    Representation of Shares of Other Corporations.

The Chief Executive Officer or any other officer or officers authorized by the Board or the Chief Executive Officer are each authorized to vote, represent and exercise on behalf of the corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of the corporation. The authority herein granted may be exercised either by any such officer in person or by any other person authorized so to do by proxy or power of attorney duly executed by said officer.

Section 7.    Stock Purchase Plans.

The corporation may adopt and carry out a stock purchase plan or agreement or stock option plan or agreement providing for the issue and sale for such consideration as may be fixed of its unissued shares, or of issued shares acquired, to one or more of the employees or directors of the corporation or of a subsidiary or to a trustee on their behalf and for the payment for such shares in installments or at one time, and may provide for such shares in installments or at one time, and may provide for aiding any such persons in paying for such shares by compensation for services rendered, promissory notes or otherwise.

Any such stock purchase plan or agreement or stock option plan or agreement may include, among other features, the fixing of eligibility for participation therein, the class and price of shares to be issued or sold under the plan or agreement, the number of shares which may be subscribed for, the method of payment therefor, the reservation of title until full payment therefor, the effect of the termination of employment and option or obligation on the part of the corporation to repurchase the shares upon termination of employment, restrictions upon transfer of the shares, the time limits of and termination of the plan, and

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any other matters, not in violation of applicable law, as may be included in the plan as approved or authorized by the Board or any committee of the Board.

Section 8.    Fiscal Year and Subdivisions.

The calendar year shall be the corporate fiscal year of the corporation. For the purpose of paying dividends, for making reports and for the convenient transaction of the business of the corporation, the Board may divide the fiscal year into appropriate subdivisions.

Section 9.    Construction and Definitions.

Unless the context otherwise requires, the general provisions, rules of construction and definitions contained in the General Provisions of the California Corporations Code and in the California General Corporation Law shall govern the construction of these Bylaws.


ARTICLE VI – INDEMNIFICATION

Section 1.    Indemnification of Directors and Officers of the Corporation.

Each person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, formal or informal, whether brought in the name of the corporation or otherwise and whether of a civil, criminal, administrative or investigative nature (hereinafter a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the corporation or is or was a director or officer of the corporation serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is an alleged action or inaction in an official capacity or in any other capacity while serving as a director or officer, shall, subject to the terms of any agreement between the corporation and such person, be indemnified and held harmless by the corporation to the fullest extent permissible under California law and the corporation’s Articles of Incorporation, against all costs, charges, expenses, liabilities and losses (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith, and such indemnification shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that (A) the corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of the corporation; (B) the corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) other than a proceeding by or in the name of the corporation to procure a judgment in its favor only if any settlement of such a proceeding is approved in writing by the corporation; (C) that no such person

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shall be indemnified (i) except to the extent that the aggregate of losses to be indemnified exceeds the amount of such losses for which the director or officer is paid pursuant to any directors’ and officers’ liability insurance policy maintained by the corporation; (ii) on account of any suit in which judgment is rendered against such person for an accounting of profits made from the purchase or sale by such person of securities of the corporation pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state or local statutory law; (iii) if a court of competent jurisdiction finally determines that any indemnification hereunder is unlawful; and (iv) as to circumstances in which indemnity is expressly prohibited by Section 317 of the General Corporation Law of California (the “Law”); and (D) that no such person shall be indemnified with regard to any action brought by or in the right of the corporation for breach of duty to the corporation and its shareholders (a) for acts or omissions involving intentional misconduct or knowing and culpable violation of law; (b) for acts or omissions that the director or officer believes to be contrary to the best interests of the corporation or its shareholders or that involve the absence of good faith on the part of the director or officer; (c) for any transaction from which the director or officer derived an improper personal benefit; (d) for acts or omissions that show a reckless disregard for the director’s or officer’s duty to the corporation or its shareholders in circumstances in which the director or officer was aware, or should have been aware, in the ordinary course of performing his or her duties, of a risk of serious injury to the corporation or its shareholders; (e) for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director’s or officer’s duties to the corporation or its shareholders; and (f) for costs, charges, expenses, liabilities and losses arising under Section 310 or 316 of the Law. The right to indemnification conferred in this Article shall include the right to be paid by the corporation expenses incurred in defending any proceeding in advance of its final disposition; provided, however, that if the Law permits the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, such advances shall be made only upon delivery to the corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts to the corporation if it shall be ultimately determined that such person is not entitled to be indemnified.

Section 2.      Indemnification of Directors, Officers, Employees, and Agents other
than Directors and Officers of the Corporation.
A person who was or is a party or is threatened to be made a party to or is involved in any proceeding by reason of the fact that he or she is or was an employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such action is an alleged action or inaction in an official capacity or in any other capacity while serving as a director, officer, employee or agent, may, subject to the terms of any agreement between the corporation and such person, be indemnified and held harmless by the corporation to the fullest extent permitted by California law and the corporation’s Articles of Incorporation, against all costs, charges, expenses, liabilities and losses,

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(including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith.

Section 3.      Right of Directors and Officers to Bring Suit.
If a claim under Section 1 of this Article is not paid in full by the corporation within 30 days after a written claim has been received by the corporation, the claimant may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall also be entitled to be paid the expense of prosecuting such claim. Neither the failure of the corporation (including its Board, independent legal counsel, or its shareholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is permissible in the circumstances because he or she has met the applicable standard of conduct, if any, nor an actual determination by the corporation (including its Board, independent legal counsel, or its shareholders) that the claimant has not met the applicable standard of conduct, shall be a defense to the action or create a presumption for the purpose of an action that the claimant has not met the applicable standard of conduct.

Section 4.      Successful Defense.

Notwithstanding any other provision of this Article, to the extent that a director or officer has been successful on the merits or otherwise (including the dismissal of an action without prejudice or the settlement of a proceeding or action without admission of liability) in defense of any proceeding referred to in Section 1 or in defense of any claim, issue or matter therein, he or she shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred in connection therewith.

Section 5.      Non-Exclusivity of Rights.
The right to indemnification provided by this Article shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, bylaw, agreement, vote of shareholders or disinterested directors or otherwise.
Section 6.      Insurance.

The corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the corporation would have the power to indemnify such person against such expense, liability or loss under the Law.
Section 7.      Expenses as a Witness.

To the extent that any director, officer, employee or agent of the corporation is by reason of such position, or a position with another entity at the request of the corporation, a witness in any action, suit or proceeding, he or she shall be indemnified against all costs

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and expenses actually and reasonably incurred by him or her on his or her behalf in connection therewith.

Section 8.      Indemnity Agreements.

The corporation may enter into agreements with any director, officer, employee or agent of the corporation providing for indemnification to the fullest extent permissible under the Law and the corporation’s Articles of Incorporation.

Section 9.      Separability.

Each and every paragraph, sentence, term and provision of this Article is separate and distinct so that if any paragraph, sentence, term or provision hereof shall be held to be invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect the validity or enforceability of any other paragraph, sentence, term or provision hereof. To the extent required, any paragraph, sentence, term or provision of this Article may be modified by a court of competent jurisdiction to preserve its validity and to provide the claimant with, subject to the limitations set forth in this Article and any agreement between the corporation and claimant, the broadest possible indemnification permitted under applicable law.

Section 10.      Effect of Repeal or Modification.

Any repeal or modification of this Article shall not adversely affect any right of indemnification of a director or officer existing at the time of such repeal or modification with respect to any action or omission occurring prior to such repeal or modification.


ARTICLE VII – EMERGENCY PROVISIONS

Section 1.    General.

The provisions of this Article shall be operative only during a national emergency declared by the President of the United States or the person performing the President’s functions, or in the event of a nuclear, atomic or other attack on the United States or on a locality in which the corporation conducts its business or customarily holds meetings of its Board of Directors or shareholders, or during the existence of any catastrophe, disaster or other similar emergency condition.

Section 2.    Notice of Meetings.
Special meetings and regular meetings of the Board may be held upon one hour’s notice delivered in any manner permitted in Article III, Section 7 of these Bylaws.




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Section 3.    Quorum.

The number of directors necessary to constitute a quorum shall be one‑third of the authorized number of directors, or such other minimum number required by law or lawful decree then in force, whichever number is less.


ARTICLE VIII – AMENDMENTS

Section 1.    Amendments.

These Bylaws may be amended or repealed either by approval of the outstanding shares or by the approval of the Board; provided, however, that a Bylaw specifying or changing a fixed number of directors or the maximum or minimum number or changing from a fixed to a variable Board or vice versa may only be adopted by approval of the outstanding shares. The exact number of directors within the maximum and minimum number specified in these Bylaws may be amended by the Board alone.



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Exhibit 3.2
















BYLAWS

OF

SOUTHERN CALIFORNIA EDISON COMPANY

(AS AMENDED EFFECTIVE OCTOBER 27, 2016)






INDEX
Page
ARTICLE I – PRINCIPAL EXECUTIVE OFFICE
Section 1. Principal Executive Office    1
ARTICLE II – SHAREHOLDERS
Section 1. Meeting Locations    1
Section 2. Annual Meetings    1
Section 3. Special Meetings    1
Section 4. Notice of Annual or Special Meeting    2
Section 5. Quorum    3
Section 6. Adjourned Meeting and Notice Thereof    3
Section 7. Voting    3
Section 8. Record Date    4
Section 9. Consent of Absentees    5
Section 10. Action Without Meeting    5
Section 11. Proxies    5
Section 12. Inspectors of Election    6
ARTICLE III – DIRECTORS
Section 1. Powers    6
Section 2. Number of Directors    6
Section 3. Election and Term of Office    6
Section 4. Vacancies    7
Section 5. Place of Meeting    7
Section 6. Organization Meeting    7
Section 7. Special Meetings and Other Regular Meetings    8
Section 8. Quorum    8
Section 9. Participation in Meetings by Conference Telephone    8
Section 10. Waiver of Notice    8
Section 11. Adjournment    9
Section 12. Fees and Compensation    9
Section 13. Action Without Meeting    9

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Section 14. Rights of Inspection    9
Section 15. Committees    9
ARTICLE IV – OFFICERS
Section 1. Officers    10
Section 2. Election    10
Section 3. Eligibility of Chair    10
Section 4. Removal and Resignation    10
Section 5. Appointment of Other Officers    11
Section 6. Vacancies    11
Section 7. Compensation    11
Section 8. Reserved    11
Section 9. Chair’s Duties; Succession    11
Section 10. Chief Executive Officer’s Duties; Succession    12
Section 11. President’s Duties    12
Section 12. Chief Financial Officer’s Duties    12
Section 13. Vice Presidents’ Duties    12
Section 14. General Counsel’s Duties    12
Section 15. Associate General Counsel’s and Assistant General
Counsel’s Duties    12
Section 16. Controller’s Duties    12
Section 17. Assistant Controllers’ Duties    13
Section 18. Treasurer’s Duties    13
Section 19. Assistant Treasurers’ Duties    13
Section 20. Secretary’s Duties    13
Section 21. Assistant Secretaries’ Duties    13
Section 22. Secretary Pro Tempore    14
Section 23. Reserved    14
Section 24. Performance of Duties    14
ARTICLE V – OTHER PROVISIONS
Section 1. Inspection of Corporate Records    14
Section 2. Inspection of Bylaws    14

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Section 3. Contracts and Other Instruments, Loans, Notes
and Deposits of Funds    14
Section 4. Certificates of Stock and Uncertificated Stock    15
Section 5. Transfer Agent, Transfer Clerk and Registrar    16
Section 6. Representation of Shares of Other Corporations    16
Section 7. Stock Purchase Plans    16
Section 8. Fiscal Year and Subdivisions    16
Section 9. Construction and Definitions    16
ARTICLE VI – INDEMNIFICATION
Section 1. Indemnification of Directors and Officers of the Corporation    17
Section 2. Indemnification of Directors, Officers, Employees, and Agents
other than Directors and Officers of the Corporation    18
Section 3. Right of Directors and Officers to Bring Suit    18
Section 4. Successful Defense    18
Section 5. Non-Exclusivity of Rights    19
Section 6. Insurance    19
Section 7. Expenses as a Witness    19
Section 8. Indemnity Agreements    19
Section 9. Separability    19
Section 10. Effect of Repeal or Modification    19
ARTICLE VII – EMERGENCY PROVISIONS
Section 1. General    20
Section 2. Notice of Meetings    20
Section 3. Quorum    20
ARTICLE VIII – AMENDMENTS
Section 1. Amendments    20



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BYLAWS

OF

SOUTHERN CALIFORNIA EDISON COMPANY

(As Amended Effective October 27, 2016)


ARTICLE I – PRINCIPAL EXECUTIVE OFFICE

Section 1.    Principal Executive Office.

The principal executive office of the corporation is hereby fixed and located at 2244 Walnut Grove Avenue, in the City of Rosemead, County of Los Angeles, State of California. The Board of Directors is hereby granted full power and authority to change said principal executive office from one location to another.

ARTICLE II – SHAREHOLDERS

Section 1.    Meeting Locations.

All meetings of shareholders shall be held at the principal executive office of the corporation or at such other place or places within or without the State of California as may be designated by the Board of Directors (the "Board") or specified in the notice of the meeting. In the event such places shall prove inadequate in capacity for any meeting of shareholders, an adjournment may be taken to and the meeting held at such other place of adequate capacity as may be designated by the officer of the corporation presiding at such meeting.

Section 2.    Annual Meetings.

Annual meetings of shareholders shall be held on the fourth Thursday of the month of April of each year, or on such other date as the Board shall designate, to elect directors to hold office for the year next ensuing and until their successors shall be elected, and to consider and act upon such other matters as may lawfully be presented to such meeting; provided, however, that should said day fall upon a legal holiday, then any such annual meeting of shareholders shall be held at such designated time and place on the next day thereafter ensuing which is not a legal holiday.

Section 3.    Special Meetings.

Special meetings of the shareholders may be called at any time by the Board, the Chair of the Board, the Chief Executive Officer, the President, or upon written request of any three members of the Board, or by the holders of shares entitled to cast not less than ten percent of the votes at such meeting.  Upon request in writing to the Chair of the Board, the Chief Executive Officer, the President, any Vice President or the Secretary by any person (other than the Board) entitled to call a special meeting of shareholders, the Secretary forthwith shall cause notice to be given to the shareholders entitled to vote that a meeting will be held at a time requested by the person or

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persons calling the meeting, not less than thirty-five nor more than sixty days after the receipt of the request. If the notice is not given within twenty days after receipt of the request, the persons entitled to call the meeting may give the notice.

Section 4.    Notice of Annual or Special Meeting.

Written notice of each annual or special meeting of shareholders shall be given not less than ten (or if sent by third-class mail, thirty) nor more than sixty days before the date of the meeting to each shareholder entitled to vote thereat.  Such notice shall state the place, date, and hour of the meeting and (i) in the case of a special meeting, the general nature of the business to be transacted, and no other business may be transacted, or (ii) in the case of an annual meeting, those matters which the Board, at the time of the mailing of the notice, intends to present for action by the shareholders, but, subject to the provisions of applicable law and these Bylaws, any proper matter may be presented at an annual meeting for such action. The notice of any special or annual meeting at which directors are to be elected shall include the names of nominees intended at the time of the notice to be presented by the Board for election. For any matter to be presented by a shareholder at an annual meeting, including the nomination of any person (other than a person nominated by or at the direction of the Board) for election to the Board, written notice must be received by the Secretary of the corporation from the shareholder not more than one hundred eighty days nor less than one hundred twenty days prior to the date on which the proxy materials for the prior year’s annual meeting were first released to shareholders by the corporation; provided however, that in the event the annual meeting to which the shareholder’s written notice relates is to be held on a date which is more than thirty days earlier or later than the date of the annual meeting specified in these Bylaws, the notice from a shareholder must be received by the Secretary not earlier than two hundred twenty days prior to the date of the annual meeting to which the shareholder’s notice relates nor later than one hundred sixty days prior to the date of such annual meeting, unless less than one hundred seventy days’ prior public disclosure of the date of the meeting is made by the earliest possible quarterly report on Form 10-Q, or, if impracticable, any means reasonably calculated to inform shareholders including without limitation a report on Form 8-K, a press release or publication once in a newspaper of general circulation in the county in which the principal executive office is located, in which event notice by the shareholder to be timely must be received not later than the close of business on the tenth day following the date of such public disclosure. The shareholder’s notice to the Secretary shall set forth (a) a brief description of each matter to be presented at the annual meeting by the shareholder; (b) the name and address, as they appear on the corporation’s books, of the shareholder; (c) the class and number of shares of the corporation which are beneficially owned by the shareholder; and (d) any material interest of the shareholder in the matters to be presented.  Any shareholder who intends to nominate a candidate for election as a director shall also set forth in such a notice (i) the name, age, business address and residence address of each nominee that he or she intends to nominate at the meeting, (ii) the principal occupation or employment of each nominee, (iii) the class and number of shares of capital stock of the corporation beneficially owned by each nominee, and (iv) any other information concerning the nominee that would be required under the rules of the Securities and Exchange Commission in a proxy statement soliciting proxies for the election of the nominee. The notice shall also include a consent, signed by the shareholder’s nominees, to serve as a director of the corporation if elected.  Notwithstanding anything in these Bylaws to the contrary, and subject to the provisions of any applicable law, no business shall be conducted at a special or annual meeting except in accordance with the procedures set forth in this Section 4.

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Notice of a shareholders’ meeting shall be given either personally or by first-class mail (or, if the outstanding shares of the corporation are held of record by 500 or more persons on the record date for the meeting, by third-class mail) or by other means of written communication, addressed to the shareholder at the address of such shareholder appearing on the books of the corporation or given by the shareholder to the corporation for the purpose of notice; or, if no such address appears or is given, at the place where the principal executive office of the corporation is located or by publication at least once in a newspaper of general circulation in the county in which the principal executive office is located. Notice by mail shall be deemed to have been given at the time a written notice is deposited in the United States mails, postage prepaid. Any other written notice shall be deemed to have been given at the time it is personally delivered to the recipient or is delivered to a common carrier for transmission, or actually transmitted by the person giving the notice by electronic means, to the recipient.

Section 5.    Quorum.

A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at any meeting of shareholders. The affirmative vote of a majority of the shares represented and voting at a duly held meeting at which a quorum is present (which shares voting affirmatively also constitute at least a majority of the required quorum) shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by law or the Articles; provided, however, that the shareholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to have less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum.

Section 6.    Adjourned Meeting and Notice Thereof.

Any shareholders’ meeting, whether or not a quorum is present, may be adjourned from time to time by the vote of a majority of the shares, the holders of which are either present in person or represented by proxy thereat, but in the absence of a quorum (except as provided in Section 5 of this Article) no other business may be transacted at such meeting.

It shall not be necessary to give any notice of the time and place of the adjourned meeting or of the business to be transacted thereat, other than by announcement at the meeting at which such adjournment is taken. At the adjourned meeting, the corporation may transact any business which might have been transacted at the original meeting. However, when any shareholders’ meeting is adjourned for more than forty-five days or, if after adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be given as in the case of an original meeting.

Section 7.    Voting.

The shareholders entitled to notice of any meeting or to vote at any such meeting shall be only persons in whose name shares stand on the stock records of the corporation on the record date determined in accordance with Section 8 of this Article.

Voting shall in all cases be subject to the provisions of Chapter 7 of the California General Corporation Law (or any successor provisions), and to the following provisions.


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No shareholder of any class of stock of this corporation shall be entitled to cumulate votes at any election of directors of this corporation.

Elections for directors need not be by ballot; provided, however, that all elections for directors must be by ballot upon demand made by a shareholder at the meeting and before the voting begins.

In any uncontested election of directors, approval of the shareholders (as defined in Section 153 of the California General Corporation Law) shall be required to elect a director.  If an incumbent director fails to be elected by approval of the shareholders in an uncontested election, then, unless the incumbent director has earlier resigned, the term of the incumbent director shall end on the date that is the earlier of 90 days after the date on which the voting results are determined pursuant to Section 707 of the California General Corporation Law or the date on which the Board selects a person to fill the office held by that director in accordance with the procedures set forth in Article III, Section 4 of these Bylaws and Section 305 of the California General Corporation Law.

In any election of directors that is not an uncontested election, the candidates receiving the highest number of affirmative votes of the shares entitled to be voted for them up to the number of directors to be elected by such shares shall be elected, and votes against a director and votes withheld shall have no legal effect.

For purposes of these Bylaws, an “uncontested election” means an election of directors of this corporation in which the number of candidates for election does not exceed the number of directors to be elected by the shareholders at that election, determined at the expiration of the time fixed under Article II, Section 4 of these Bylaws requiring advance notification of director candidates, or for special meetings of shareholders, at the date notice of the meeting is given or at a time fixed by the Board that is not more than 14 days before notice of the meeting is given.

Section 8.    Record Date.

The Board may fix, in advance, a record date for the determination of the shareholders entitled to notice of any meeting or to vote or entitled to receive payment of any dividend or other distribution, or any allotment of rights, or to exercise rights in respect of any other lawful action. The record date so fixed shall be not more than sixty days nor less than ten days prior to the date of the meeting nor more than sixty days prior to any other action. When a record date is so fixed, only shareholders of record at the close of business on that date are entitled to notice of and to vote at the meeting or to receive the dividend, distribution, or allotment of rights, or to exercise the rights, as the case may be, notwithstanding any transfer of shares on the books of the corporation after the record date, except as otherwise provided by law or these Bylaws. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting unless the Board fixes a new record date for the adjourned meeting. The Board shall fix a new record date if the meeting is adjourned for more than forty-five days.

If no record date is fixed by the Board, the record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the business day next preceding the day on which notice is given or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held. The record

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date for determining shareholders for any purpose other than as set forth in this Section 8 or Section 10 of this Article shall be at the close of business on the day on which the Board adopts the resolution relating thereto, or the sixtieth day prior to the date of such other action, whichever is later.

Section 9.    Consent of Absentees.

The transactions of any meeting of shareholders, however called and noticed, and wherever held, are as valid as though had at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy, and if, either before or after the meeting, each of the persons entitled to vote, not present in person or by proxy, signs a written waiver of notice or a consent to the holding of the meeting or an approval of the minutes thereof. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Neither the business to be transacted at nor the purpose of any regular or special meeting of shareholders need be specified in any written waiver of notice, consent to the holding of the meeting or approval of the minutes thereof, except as provided in Section 601(f) of the California General Corporation Law.

Section 10.    Action Without Meeting.

Subject to Section 603 of the California General Corporation Law, any action which, under any provision of the California General Corporation Law, may be taken at any annual or special meeting of shareholders may be taken without a meeting and without prior notice if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Unless a record date for voting purposes be fixed as provided in Section 8 of this Article, the record date for determining shareholders entitled to give consent pursuant to this Section 10, when no prior action by the Board has been taken, shall be the day on which the first written consent is given.


Section 11.    Proxies.

Every person entitled to vote shares has the right to do so either in person or by one or more persons, not to exceed three, designated by a proxy authorized by such shareholder or the shareholder’s attorney in fact and filed with the corporation, in accordance with Section 178 of the California General Corporation Law. Subject to the following sentence, any proxy duly authorized continues in full force and effect until revoked by the person authorizing it prior to the vote pursuant thereto by a writing delivered to the corporation stating that the proxy is revoked or by a subsequent proxy authorized by the person authorizing the prior proxy and presented to the meeting, or by attendance at the meeting and voting in person by the person authorizing the proxy; provided, however, that a proxy is not revoked by the death or incapacity of the maker unless, before the vote is counted, written notice of such death or incapacity is received by this corporation. No proxy shall be valid after the expiration of eleven months from the date of its authorization unless otherwise provided in the proxy.



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Section 12.    Inspectors of Election.

In advance of any meeting of shareholders, the Board may appoint any persons other than nominees as inspectors of election to act at such meeting and any adjournment thereof. If inspectors of election are not so appointed, or if any persons so appointed fail to appear in person or by telephone or refuse to act, the chair of any such meeting may, and on the request of any shareholder or shareholder’s proxy shall, make such appointments at the meeting. The number of inspectors shall be either one or three. If appointed at a meeting on the request of one or more shareholders or proxies, the majority of shares present shall determine whether one or three inspectors are to be appointed.

The duties of such inspectors shall be as prescribed by Section 707(b) of the California General Corporation Law and shall include: determining the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, and the authenticity, validity and effect of proxies; receiving votes, ballots or consents; hearing and determining all challenges and questions in any way arising in connection with the right to vote; counting and tabulating all votes or consents; determining when the polls shall close; determining the result; and doing such acts as may be proper to conduct the election or vote with fairness to all shareholders. If there are three inspectors of election, the decision, act or certificate of a majority is effective in all respects as the decision, act or certificate of all. Any report or certificate made by the inspectors of election is prima facie evidence of the facts stated therein.

ARTICLE III – DIRECTORS

Section 1.    Powers.

Subject to limitations of the Articles, of these Bylaws and of the California General Corporation Law relating to action required to be approved by the shareholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board. The Board may delegate the management of the day-to-day operation of the business of the corporation provided that the business and affairs of the corporation shall be managed and all corporate powers shall be exercised under the ultimate direction of the Board.

Section 2.    Number of Directors.

The authorized number of directors shall be not less than nine nor more than seventeen until changed by amendment of the Articles or by a Bylaw duly adopted by the shareholders. The exact number of directors shall be fixed, within the limits specified, by the Board by adoption of a resolution or by the shareholders in the same manner provided in these Bylaws for the amendment thereof.

Section 3.    Election and Term of Office.

The directors shall be elected at each annual meeting of the shareholders, subject to Article II, Section 7 of these Bylaws, but if any such annual meeting is not held or no vote is taken on the election of directors thereat, the directors may be elected at any special meeting of shareholders held for that purpose. Subject to Article II, Section 7 of these Bylaws, each director shall hold


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office until the next annual meeting and until a successor has been elected and qualified.

Section 4.    Vacancies.

Any director may resign effective upon giving written notice to the Chair of the Board, the Chief Executive Officer, the President, the Secretary or the Board, unless the notice specifies a later time for the effectiveness of such resignation. If the resignation is effective at a future time, a successor may be elected to take office when the resignation becomes effective.

Vacancies in the Board, except those existing as a result of a removal of a director, may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director, and each director so elected shall hold office until the next annual meeting and, subject to Article II, Section 7 of these Bylaws, until such director’s successor has been elected and qualified. Vacancies existing as a result of a removal of a director may be filled by the shareholders as provided by law. Any vacancy on the Board resulting from any expiration of the term of an incumbent director as provided in Article II, Section 7 of these Bylaws shall be deemed to have been created by resignation, and not removal, of the incumbent director.

A vacancy or vacancies in the Board shall be deemed to exist in case of the death, resignation or removal of any director, or if the authorized number of directors be increased, or if the shareholders fail, at any annual or special meeting of shareholders at which any director or directors are elected, to elect the full authorized number of directors to be voted for at that meeting.

The Board may declare vacant the office of a director who has been declared of unsound mind by an order of court or convicted of a felony.

The shareholders may elect a director or directors at any time to fill any vacancy or vacancies not filled by the directors. Any such election by written consent other than to fill a vacancy created by removal requires the consent of a majority of the outstanding shares entitled to vote.

No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of the director’s term of office.

Section 5.    Place of Meeting.

Regular or special meetings of the Board shall be held at any place within or without the State of California which has been designated from time to time by the Board, specified in the notice of the meeting, or as otherwise provided in these Bylaws. In the absence of such designation, regular meetings shall be held at the principal executive office of the corporation.

Section 6.    Organization Meeting.

Promptly following each annual meeting of shareholders the Board shall hold a regular meeting for the purpose of organization, election of officers and the transaction of other business.




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Section 7.    Special Meetings and Other Regular Meetings.

Special meetings and regular meetings other than organization meetings of the Board for any purpose or purposes may be called at any time by the Chair of the Board, the Chief Executive Officer, the President, any Vice President, the Secretary or by any two directors.

Such meetings of the Board shall be held upon four days’ notice by mail or twenty-four hours’ notice delivered personally or by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, telegraph, telex, facsimile, electronic mail or other similar means of communication. Any such notice shall be addressed or delivered to each director at such director’s address, telephone number, telex number, facsimile number, E-mail address, or other designated location(s), as shown upon the records of the corporation or as may have been given to the corporation by the director for purposes of notice or, if such information is not shown on such records or is not readily ascertainable, at the place in which the meetings of the directors are regularly held. The notice need not specify the purpose of such meeting.

Notice by mail shall be deemed to have been given at the time a written notice is deposited in the United States mail, postage prepaid. Any other written notice shall be deemed to have been given at the time it is personally delivered to the recipient or is delivered to a common carrier for transmission, or actually transmitted by the person giving the notice by electronic means to the recipient.  Oral notice shall be deemed to have been given at the time it is communicated, in person or by telephone, wireless, or other similar means, to the recipient or to a person at the office of the recipient who the person giving the notice has reason to believe will promptly communicate it to the recipient, or actually transmitted to the recipient by the person giving the notice by a system or technology designed to record and communicate messages.

Section 8.    Quorum.

One-third of the number of authorized directors constitutes a quorum of the Board for the transaction of business, except to adjourn as provided in Section ll of this Article. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board, unless a greater number is required by law or by the Articles; provided, however, that a meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for such meeting.

Section 9.    Participation in Meetings by Conference Telephone.

Members of the Board may participate in a meeting through use of conference telephone or similar communications equipment, so long as all members participating in such meeting can hear one another. Such participation constitutes presence in person at such meeting.

Section 10.    Waiver of Notice.

The transactions of any meeting of the Board, however called and noticed or wherever held, are as valid as though had at a meeting duly held after regular call and notice if a quorum is present and if, either before or after the meeting, each of the directors not present signs a written waiver of notice, a consent to holding such meeting or an approval of the minutes thereof. All

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such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting.

Section 11.    Adjournment.

A majority of the directors present, whether or not a quorum is present, may adjourn any directors’ meeting to another time and place. Notice of the time and place of holding an adjourned meeting need not be given to absent directors if the time and place is fixed at the meeting adjourned. If the meeting is adjourned for more than twenty-four hours, notice of any adjournment to another time or place shall be given prior to the time of the adjourned meeting to the directors who were not present at the time of the adjournment.

Section 12.    Fees and Compensation.

Directors and members of committees may receive such compensation, if any, for their services, and such reimbursement for expenses, as may be fixed or determined by the Board.

Section 13.    Action Without Meeting.

Any action required or permitted to be taken by the Board may be taken without a meeting if all members of the Board shall individually or collectively consent in writing to such action. Such written consent or consents shall have the same force and effect as a unanimous vote of the Board and shall be filed with the minutes of the proceedings of the Board.

Section 14.    Rights of Inspection.

Every director shall have the absolute right at any reasonable time to inspect and copy all books, records and documents of every kind and to inspect the physical properties of the corporation and also of its subsidiary corporations, domestic or foreign. Such inspection by a director may be made in person or by agent or attorney and includes the right to copy and make extracts.

Section 15.    Committees.

The Board may appoint one or more committees, each consisting of two or more directors, to serve at the pleasure of the Board. The Board may delegate to such committees any or all of the authority of the Board except with respect to:

(a)    The approval of any action for which the California General Corporation Law also requires shareholders’ approval or approval of the outstanding shares;

(b)    The filling of vacancies on the Board or in any committee;

(c)    The fixing of compensation of the directors for serving on the Board or on any committee;

(d)    The amendment or repeal of Bylaws or the adoption of new Bylaws;

(e)    The amendment or repeal of any resolution of the Board which by its express terms is not so amendable or repealable;


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(f)    A distribution to the shareholders of the corporation except at a rate or in a periodic amount or within a price range determined by the Board; or

(g)    The appointment of other committees of the Board or the members thereof.

Any such committee, or any member or alternate member thereof, must be appointed by resolution adopted by a majority of the exact number of authorized directors as specified in Section 2 of this Article. The Board shall have the power to prescribe the manner and timing of giving of notice of regular or special meetings of any committee and the manner in which proceedings of any committee shall be conducted. In the absence of any such prescription, such committee shall have the power to prescribe the manner in which its proceedings shall be conducted. Unless the Board or such committee shall otherwise provide, the regular and special meetings and other actions of any such committee shall be governed by the provisions of this Article applicable to meetings and actions of the Board.  Minutes shall be kept of each meeting of each committee.


ARTICLE IV – OFFICERS

Section 1.    Officers.

The officers of the corporation shall be a President, a Chief Financial Officer, a Controller, a Secretary and a Treasurer. At the discretion of the Board, the corporation may also have a Chair of the Board (who may or may not be an officer), a Chief Executive Officer, one or more Vice Presidents, a General Counsel, one or more Associate General Counsel, one or more Assistant General Counsel, one or more Assistant Controllers, one or more Assistant Treasurers, one or more Assistant Secretaries, and such other officers as may be elected or appointed in accordance with Section 5 of this Article. The Board or the Chief Executive Officer may confer a special title upon any Vice President not specified herein. Any number of offices of the corporation may be held by the same person.

Section 2.    Election.

The officers of the corporation, except such officers as may be elected or appointed in accordance with the provisions of Section 5 or Section 6 of this Article, shall be chosen annually by, and shall serve at the pleasure of the Board, and shall hold their respective offices until their resignation, removal, or other disqualification from service, or until their respective successors shall be elected.

Section 3.    Eligibility of Chair.

No person shall be eligible for the office of Chair of the Board unless such person is a member of the Board of the corporation; any other officer may or may not be a director.

Section 4.    Removal and Resignation.

Any officer may be removed, either with or without cause, by the Board at any time or by any officer upon whom such power of removal may be conferred by the Board. Any such removal

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shall be without prejudice to the rights, if any, of the officer under any contract of employment of the officer.

Any officer may resign at any time by giving written notice to the corporation, but without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 5.    Appointment of Other Officers.

The Board may appoint such other officers as the business of the corporation may require, each of whom shall hold office for such period, have such authority, and perform such duties as are provided in the Bylaws or as the Board may from time to time determine.

Section 6.    Vacancies.

A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled at any time deemed appropriate by the Board in the manner prescribed in these Bylaws for regular election or appointment to such office.

Section 7.    Compensation.

The compensation of the Chief Executive Officer, the President, Chief Financial Officer, Vice Presidents, General Counsel, Controller, Treasurer and Secretary of the corporation shall be fixed by the Board. Compensation of all other officers shall be as approved from time to time by the Chief Executive Officer or such other officers to whom the Chief Executive Officer may delegate such authority.

Section 8.    Reserved.

Section 9.    Chair’s Duties; Succession.

The Chair of the Board shall preside at all meetings of the Board and shall have such other duties as from time to time may be conferred upon or assigned to such office by the Board, these Bylaws or the law, and all such powers and duties shall be vested in the Chief Executive Officer while he or she is a member of the Board unless a separate Chair of the Board is appointed by the Board.

In the absence or disability of the Chair of the Board, one of the following shall act, in the order indicated, as chair of meetings of the Board: first, any member of the Board who has been designated by the Board as a lead director; second, the Chief Executive Officer, if a Board member; third, the President, if a Board member; fourth, a Vice President, if any, who is a Board member, in order of election; and, fifth, any Board member designated by the Board as a temporary Chair to preside at any such Board meeting.



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Section 10.    Chief Executive Officer’s Duties; Succession.

The Chief Executive Officer shall be the chief executive officer of the corporation. Subject to the control of the Board, the Chief Executive Officer shall have charge of the business of the corporation. The Chief Executive Officer shall keep the Board fully informed, and shall freely consult them concerning the business of the corporation.

In the absence or disability of the Chief Executive Officer, the President shall act as the Chief Executive Officer of the corporation. In the absence or disability of the Chief Executive Officer and President, the next in order of election by the Board of the Vice Presidents shall act as the Chief Executive Officer of the corporation.

Section 11.    President’s Duties.

If a separate Chief Executive Officer is not appointed by the Board, the President shall be the chief executive officer of the corporation. If a separate Chief Executive Officer is appointed by the Board, the President shall perform such duties as the Chief Executive Officer shall assign to such officer.

Section 12.    Chief Financial Officer’s Duties.

The Chief Financial Officer of the corporation shall be responsible for all financial matters concerning the corporation, and shall perform such duties as are usually incident to such office and such other duties as the Chief Executive Officer shall designate. If the corporation does not have a currently elected and acting Controller, the Chief Financial Officer shall also be the chief accounting officer of the corporation.

Section 13.    Vice Presidents’ Duties.

The Vice Presidents shall perform such duties as the Chief Executive Officer shall designate.

Section 14.    General Counsel’s Duties.

The General Counsel shall be responsible for all legal matters concerning the corporation, and shall perform such duties as are usually incident to such office and such other duties as the Chief Executive Officer shall designate.

Section 15.    Associate General Counsel’s and Assistant General Counsel’s Duties.

The Associate General Counsel and the Assistant General Counsel shall perform such duties as the General Counsel shall designate, and in the absence or disability of the General Counsel, the next in order of election to by the Board of the Associate General Counsel or, if there is no currently elected and acting Associate General Counsel, the Assistant General Counsel shall perform the duties of the General Counsel.

Section 16.    Controller’s Duties.

The Controller shall be the chief accounting officer of the corporation and shall be

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responsible for all accounting matters concerning the corporation and shall perform such duties as are usually incident to such office and such other duties as the Chief Executive Officer shall designate.

Section 17.    Assistant Controllers’ Duties.

The Assistant Controllers shall perform such duties as the Controller shall designate, and in the absence or disability of the Controller, the Assistant Controllers, in order of election to that office by the Board, shall perform such duties of the Controller as the Chief Executive Officer or the Chief Financial Officer shall designate.

Section 18.    Treasurer’s Duties.

The Treasurer shall be responsible for keeping in custody or control all money, stocks, bonds, evidences of debt, securities and other items of value that may belong to, or be in the possession or control of, the corporation, and to dispose of the same in such manner as the Board or the Chief Executive Officer may direct, and shall perform such duties as are usually incident to such office and such other duties as the Chief Executive Officer shall designate. In the absence or disability of the Chief Financial Officer, the Treasurer shall perform the duties of the Chief Financial Officer.

Section 19.    Assistant Treasurers’ Duties.

The Assistant Treasurers shall perform such duties as the Treasurer shall designate, and in the absence or disability of the Treasurer, the Assistant Treasurers, in order of election to that office by the Board, shall perform the duties of the Treasurer.

Section 20.    Secretary’s Duties.

The Secretary shall keep or cause to be kept full and complete records of the proceedings of shareholders, the Board and its committees at all meetings. The Secretary shall keep, or cause to be kept, a copy of the Bylaws of the corporation at the principal office in accordance with Section 213 of the California General Corporation Law. The Secretary shall be the custodian of the corporate seal and shall affix it to such instruments and attest to the same as may be required. The Secretary shall serve or cause to be served by publication or otherwise, as may be required, all notices of meetings and of other corporate acts that may by law or otherwise be required to be served, and shall make or cause to be made and filed in the principal executive office of the corporation, the necessary certificate or proofs thereof. An affidavit of mailing of any notice of a shareholders’ meeting or of any report, in accordance with the provisions of Section 601(b) of the California General Corporation Law, executed by the Secretary shall be prima facie evidence of the fact that such notice or report had been duly given. The Secretary shall keep all records required by the California General Corporation Law. The Secretary shall generally perform the duties as are usually incident to such office and such other duties as the Chief Executive Officer shall designate.

Section 21.    Assistant Secretaries’ Duties.

Assistant Secretaries shall perform such duties as the Secretary shall designate, and in the absence or disability of the Secretary, the Assistant Secretaries, in the order of election to that



13


office by the Board, shall perform the duties of the Secretary.

Section 22.    Secretary Pro Tempore.

At any meeting of the Board or of the shareholders from which the Secretary is absent, a Secretary pro tempore may be appointed and act.

Section 23.    Reserved.

Section 24.    Performance of Duties.

Officers shall perform the duties of their respective offices as stated in these Bylaws, and such additional duties as the Board shall designate.


ARTICLE V – OTHER PROVISIONS

Section 1.    Inspection of Corporate Records.

A shareholder or holder of a voting trust certificate may only inspect the corporation’s records only in accordance with the provisions of Chapter 16 of the California General Corporation Law (or any successor provisions).

Section 2.    Inspection of Bylaws.

The corporation shall keep in its principal executive office the original or a copy of these Bylaws as amended to date, which shall be open to inspection by shareholders at all reasonable times during office hours.

Section 3.    Contracts and Other Instruments, Loans, Notes and Deposits of Funds.

The Chief Executive Officer, the President or a Vice President, either alone or with the Secretary or an Assistant Secretary, or the Secretary alone, shall execute in the name of the corporation such written instruments as may be authorized by the Board and, without special direction of the Board, such instruments as transactions of the ordinary business of the corporation may require and, such officers without the special direction of the Board may authenticate, attest or countersign any such instruments when deemed appropriate. The Board may authorize any person, persons, entity, entities, attorney, attorneys, attorney-in-fact, attorneys-in-fact, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances.

No loans shall be contracted on behalf of the corporation and no promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations or other evidences of indebtedness or securities therefor shall be issued in its name unless authorized by the Board as it may direct. Such authority may be general or confined to specific instances.

All checks, drafts, or other similar orders for the payment of money, notes, or other such evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, agent or agents of the corporation and in such manner as the Board or the Chief


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Executive Officer may direct.

Unless authorized by the Board or these Bylaws, no officer, agent, employee or any other person or persons shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or amount.

All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies, or other depositories as the Board may direct.

Section 4.    Certificates of Stock and Uncertificated Stock.

The Board may authorize the issuance of shares of the corporation’s stock, upon such terms and for such consideration as may be lawful. Shares of the corporation’s stock may be certificated or uncertificated, as provided under California law. All certificates of stock of the corporation shall be numbered and shall be entered in the books of the corporation as they are issued. Every certificate of stock of the corporation shall be signed in the name of the corporation by the Chair of the Board, the President, or a Vice President and by the Chief Financial Officer, the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, certifying the number of shares and the class or series of shares owned by the shareholder. Any or all of the signatures on the certificate may be facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if such person were an officer, transfer agent or registrar at the date of issue.

Certificates for shares and uncertificated shares may be used prior to full payment under such restrictions and for such purposes as the Board may provide; provided, however, that on any certificate issued to represent any partly paid shares, or, for uncertificated shares, on the initial transaction statement for such partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated.

Except as provided in this Section, no new certificate for shares and no uncertificated shares shall be issued in lieu of an old certificate unless the latter is surrendered and canceled at the same time. However, if any certificate for shares is alleged to have been lost, stolen or destroyed, a new certificate or uncertificated shares in lieu thereof shall be issued if the shareholder (a) so requests before the corporation has notice that the old certificate has been acquired by a bona fide purchaser, (b) if required by the corporation, files with the corporation a bond or other adequate security sufficient to indemnify it against any claim that may be made against it (including expense or liability) on account of the alleged loss, theft or destruction of such certificate or the issuance of such new certificate or uncertificated shares, and (c) satisfies any other reasonable requirements imposed by the corporation.

Transfers of shares of stock of the corporation shall be made on the books of the corporation only by the record holder of such stock, or by an attorney lawfully constituted in writing, and in the case of stock represented by a certificate, upon surrender of the certificate.



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Section 5.    Transfer Agent, Transfer Clerk and Registrar.

The Board may, from time to time, appoint transfer agents, transfer clerks, and stock registrars to transfer and register the shares of capital stock of the corporation, and may provide that no certificate of capital stock shall be valid without the signature of the stock transfer agent or transfer clerk, and stock registrar.

Section 6.    Representation of Shares of Other Corporations.

The Chief Executive Officer or any other officer or officers authorized by the Board or the Chief Executive Officer are each authorized to vote, represent and exercise on behalf of the corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of the corporation. The authority herein granted may be exercised either by any such officer in person or by any other person authorized so to do by proxy or power of attorney duly executed by said officer.

Section 7.    Stock Purchase Plans.

The corporation may adopt and carry out a stock purchase plan or agreement or stock option plan or agreement providing for the issue and sale for such consideration as may be fixed of its unissued shares, or of issued shares acquired, to one or more of the employees or directors of the corporation or of a subsidiary or to a trustee on their behalf and for the payment for such shares in installments or at one time, and may provide for such shares in installments or at one time, and may provide for aiding any such persons in paying for such shares by compensation for services rendered, promissory notes or otherwise.

Any such stock purchase plan or agreement or stock option plan or agreement may include, among other features, the fixing of eligibility for participation therein, the class and price of shares to be issued or sold under the plan or agreement, the number of shares which may be subscribed for, the method of payment therefor, the reservation of title until full payment therefor, the effect of the termination of employment and option or obligation on the part of the corporation to repurchase the shares upon termination of employment, restrictions upon transfer of the shares, the time limits of and termination of the plan, and any other matters, not in violation of applicable law, as may be included in the plan as approved or authorized by the Board or any committee of the Board.

Section 8.    Fiscal Year and Subdivisions.

The calendar year shall be the corporate fiscal year of the corporation.  For the purpose of paying dividends, for making reports and for the convenient transaction of the business of the corporation, the Board may divide the fiscal year into appropriate subdivisions.

Section 9.    Construction and Definitions.

Unless the context otherwise requires, the general provisions, rules of construction and definitions contained in the General Provisions of the California Corporations Code and in the California General Corporation Law shall govern the construction of these Bylaws.



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ARTICLE VI – INDEMNIFICATION

Section 1.    Indemnification of Directors and Officers of the Corporation.

Each person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, formal or informal, whether brought in the name of the corporation or otherwise and whether of a civil, criminal, administrative or investigative nature (hereinafter a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the corporation or is or was a director or officer of the corporation serving at the request of the corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is an alleged action or inaction in an official capacity or in any other capacity while serving as a director or officer, shall, subject to the terms of any agreement between the corporation and such person, be indemnified and held harmless by the corporation to the fullest extent permissible under California law and the corporation’s Articles of Incorporation, against all costs, charges, expenses, liabilities and losses (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith, and such indemnification shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that (A) the corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of the corporation; (B) the corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) other than a proceeding by or in the name of the corporation to procure a judgment in its favor only if any settlement of such a proceeding is approved in writing by the corporation; (C) that no such person shall be indemnified (i) except to the extent that the aggregate of losses to be indemnified exceeds the amount of such losses for which the director or officer is paid pursuant to any directors’ and officers’ liability insurance policy maintained by the corporation; (ii) on account of any suit in which judgment is rendered against such person for an accounting of profits made from the purchase or sale by such person of securities of the corporation pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state or local statutory law; (iii) if a court of competent jurisdiction finally determines that any indemnification hereunder is unlawful; and (iv) as to circumstances in which indemnity is expressly prohibited by Section 317 of the California General Corporation Law; and (D) that no such person shall be indemnified with regard to any action brought by or in the right of the corporation for breach of duty to the corporation and its shareholders (a) for acts or omissions involving intentional misconduct or knowing and culpable violation of law; (b) for acts or omissions that the director or officer believes to be contrary to the best interests of the corporation or its shareholders or that involve the absence of good faith on the part of the director or officer; (c) for any transaction from which the director or officer derived an improper personal benefit; (d) for acts or omissions that show a reckless disregard for the director’s or officer’s duty to the corporation or its shareholders in circumstances in which the director or officer was aware, or should have been aware, in the ordinary course of performing his or her duties, of a risk of serious injury to the corporation or its shareholders; (e) for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director’s or officer’s duties to the corporation or its shareholders; and (f) for costs, charges, expenses, liabilities and losses arising under Section 310 or 316 of the California General Corporation Law. The right to



17


indemnification conferred in this Article shall include the right to be paid by the corporation expenses incurred in defending any proceeding in advance of its final disposition; provided, however, that if the California General Corporation Law permits the payment of such expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such person while a director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, such advances shall be made only upon delivery to the corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts to the corporation if it shall be ultimately determined that such person is not entitled to be indemnified.

Section 2.
Indemnification of Directors, Officers, Employees, and Agents other than Directors and Officers of the Corporation.

A person who was or is a party or is threatened to be made a party to or is involved in any proceeding by reason of the fact that he or she is or was an employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such action is an alleged action or inaction in an official capacity or in any other capacity while serving as a director, officer, employee or agent, may, subject to the terms of any agreement between the corporation and such person, be indemnified and held harmless by the corporation to the fullest extent permitted by California law and the corporation’s Articles of Incorporation, against all costs, charges, expenses, liabilities and losses, (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith.

Section 3.    Right of Directors and Officers to Bring Suit.

If a claim under Section 1 of this Article is not paid in full by the corporation within 30 days after a written claim has been received by the corporation, the claimant may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall also be entitled to be paid the expense of prosecuting such claim. Neither the failure of the corporation (including its Board, independent legal counsel, or its shareholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is permissible in the circumstances because he or she has met the applicable standard of conduct, if any, nor an actual determination by the corporation (including its Board, independent legal counsel, or its shareholders) that the claimant has not met the applicable standard of conduct, shall be a defense to the action or create a presumption for the purpose of an action that the claimant has not met the applicable standard of conduct.

Section 4.    Successful Defense.

Notwithstanding any other provision of this Article, to the extent that a director or officer has been successful on the merits or otherwise (including the dismissal of an action without prejudice or the settlement of a proceeding or action without admission of liability) in defense of any proceeding referred to in Section 1 of this Article or in defense of any claim, issue or matter therein, he or she shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred in  connection therewith.

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Section 5.    Non-Exclusivity of Rights.

The right to indemnification provided by this Article shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, bylaw, agreement, vote of shareholders or disinterested directors or otherwise.

Section 6.    Insurance.

The corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the corporation would have the power to indemnify such person against such expense, liability or loss under the California General Corporation Law.

Section 7.    Expenses as a Witness.

To the extent that any director, officer, employee or agent of the corporation is by reason of such position, or a position with another entity at the request of the corporation, a witness in any action, suit or proceeding, he or she shall be indemnified against all costs and expenses actually and reasonably incurred by him or her on his or her behalf in connection therewith.

Section 8.    Indemnity Agreements.

The corporation may enter into agreements with any director, officer, employee or agent of the corporation providing for indemnification to the fullest extent permissible under the California General Corporation Law and the corporation’s Articles of Incorporation.

Section 9.    Separability.

Each and every paragraph, sentence, term and provision of this Article is separate and distinct so that if any paragraph, sentence, term or provision hereof shall be held to be invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect the validity or enforceability of any other paragraph, sentence, term or provision hereof. To the extent required, any paragraph, sentence, term or provision of this Article may be modified by a court of competent jurisdiction to preserve its validity and to provide the claimant with, subject to the limitations set forth in this Article and any agreement between the corporation and claimant, the broadest possible indemnification permitted under applicable law.

Section 10.    Effect of Repeal or Modification.

Any repeal or modification of this Article shall not adversely affect any right of indemnification of a director or officer existing at the time of such repeal or modification with respect to any action or omission occurring prior to such repeal or modification.





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ARTICLE VII – EMERGENCY PROVISIONS

Section 1.    General.

The provisions of this Article shall be operative only during a national emergency declared by the President of the United States or the person performing the President’s functions, or in the event of a nuclear, atomic or other attack on the United States or on a locality in which the corporation conducts its business or customarily holds meetings of its Board of Directors or shareholders, or during the existence of any catastrophe, disaster or other similar emergency condition.

Section 2.    Notice of Meetings.

Special meetings and regular meetings of the Board may be held upon one hour’s notice delivered in any manner permitted in Article III, Section 7 of these Bylaws.

Section 3.    Quorum.

The number of directors necessary to constitute a quorum shall be one-third of the authorized number of directors, or such other minimum number required by law or lawful decree then in force, whichever number is less.


ARTICLE VIII – AMENDMENTS

Section 1.    Amendments.

These Bylaws may be amended or repealed either by approval of the outstanding shares or by the approval of the Board; provided, however, that a Bylaw specifying or changing a fixed number of directors or the maximum or minimum number or changing from a fixed to a variable Board or vice versa may only be adopted by approval of the outstanding shares. The exact number of directors within the maximum and minimum number specified in these Bylaws may be amended by the Board alone.


20

Exhibit 10.1








EDISON INTERNATIONAL

2008 EXECUTIVE RETIREMENT PLAN











Amended and Restated Effective
August 24, 2016



TABLE OF CONTENTS



PREAMBLE
1
ARTICLE 1 DEFINITIONS
1
ARTICLE 2 PARTICIPATION
5
ARTICLE 3 BENEFIT DETERMINATION AND VESTING
6
3.1
Overview
6
3.2
Benefit Features
6
3.3
Benefit Computation
7
3.4
Executive Retirement Account Credits
10
3.5
Vesting
11
3.6
Adjustment for Final Bonus
11
3.7
Valuation Date Notional Account
11
ARTICLE 4 PAYMENT ELECTIONS
11
4.1
Primary Payment Election
11
4.2
Contingent Payment Elections
13
4.3
Changes to Payment Elections
14
4.4
Small Benefit Exception
14
4.5
Six-Month Delay in Payment for Specified Employees
15
4.6
Conflict of Interest Exception, Etc.
15
ARTICLE 5 SURVIVOR BENEFITS
15
5.1
Payment
15
5.2
Benefit Computation
15
ARTICLE 6 BENEFICIARY DESIGNATION
16
ARTICLE 7 CONDITIONS RELATED TO BENEFITS
16
7.1
Nonassignability
16
7.2
Unforeseeable Emergency
16
7.3
No Right to Assets
17
7.4
Protective Provisions
17
7.5
Constructive Receipt
18
7.6
Withholding
18
7.7
Incapacity
18
ARTICLE 8 PLAN ADMINISTRATION
18

i
TABLE OF CONTENTS



8.1
Plan Interpretation
18
8.2
Limited Liability
18
ARTICLE 9 AMENDMENT OR TERMINATION OF PLAN
19
9.1
Authority to Amend or Terminate
19
9.2
Limitations
19
ARTICLE 10 CLAIMS AND REVIEW PROCEDURES
19
10.1
Claims Procedure for Claims Other Than Due to Disability
19
10.2
Claims Procedure for Claims Due to Disability
20
10.3
Dispute Arbitration
21
ARTICLE 11 MISCELLANEOUS
22
11.1
Participation in Other Plans
22
11.2
Relationship to Qualified Plan
22
11.3
Forfeiture
23
11.4
Successors
23
11.5
Trust
23
11.6
Employment Not Guaranteed
23
11.7
Gender, Singular and Plural
23
11.8
Captions
23
11.9
Validity
23
11.1
Waiver of Breach
24
11.11
Applicable Law
24
11.12
Notice
24
11.13
ERISA Plan
24
11.14
Statutes and Regulations
24


ii


EDISON INTERNATIONAL
2008 EXECUTIVE RETIREMENT PLAN
Amended and Restated Effective August 24, 2016
PREAMBLE
The purpose of this Plan is to provide supplemental retirement benefits to Participants and surviving spouses or other designated Beneficiaries of such Participants.
This Plan applies to benefits that are accrued or vested after December 31, 2004, and is intended to comply with Section 409A of the Internal Revenue Code and the regulations promulgated thereunder. Benefits that were accrued and vested prior to 2005 shall be paid under the Predecessor Plan in accordance with the terms therein, and shall not be subject to any of the terms of this Plan. In no event shall a Participant receive benefits under this Plan and the Predecessor Plan with respect to the same years of service.
ARTICLE 1
DEFINITIONS
Capitalized terms in the text of the Plan are defined as follows:
401(k) Earnings means the Participant’s “Earnings” taken into account for purposes of determining “Deferrals” under the Savings Plan, with “Earnings” and “Deferrals” having the meanings set forth in the Savings Plan.
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 6 of the Plan.
Benefit Feature means one of the levels of benefit under the Plan as described in Section 3.2(a).
Board means the Board of Directors of EIX.
Bonus means the dollar amount of bonus (if any) awarded by the Employer to the Participant pursuant to the terms of the Executive Incentive Compensation Plan, the 2007 Performance Incentive Plan, or a successor plan governing annual executive bonuses.


1


Change in Control means a Change in Control of EIX as defined in the Severance Plan.
Code means the Internal Revenue Code of 1986, as amended.
Contingent Event means the Participant’s Disability or death while employed by an Affiliate or Separation from Service for other reasons if such event occurs prior to the Participant’s Retirement.
Contingent Payment Election means an election regarding the time and form of payment made or deemed made in accordance with Section 4.2.
Crediting Rate means the rate at which interest will be credited when interest at the “Crediting Rate” is specified pursuant the Plan. If the Valuation Date for a Participant is before 2018, the Crediting Rate will be the interest crediting rate in effect for the Qualified Plan. If the Valuation Date for a Participant is after 2017, the Crediting Rate will be determined annually in advance of the calendar year and will be equal to the average monthly Moody’s Corporate Bond Yield for Baa Public Utility Bonds for the 60 months preceding September 1st of the prior year. Notwithstanding the foregoing, EIX reserves the right to prospectively change the definition of Crediting Rate.
Disability means the Participant (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.
EIX means Edison International.
Employer means the Affiliate employing the Participant. Notwithstanding the foregoing, with respect to a particular Participant’s benefits under the Plan, for purposes of determining which Affiliate is obligated to pay such benefits, Employer as to such Participant and benefits means the Affiliate employing the Participant upon the Participant’s Separation from Service (or, as to any distribution of any benefit under the Plan prior to the Participant’s Separation from Service, the Affiliate employing the Participant at the time of such distribution).
ERISA means the Employee Retirement Income Security Act of 1974, as amended.
Executive means an employee of an Affiliate who is designated an Executive by the Chief Executive Officer (“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.
Executive Profit Sharing Credits mean the amounts the Employer would have contributed to the Savings Plan if the Participant were not subject to Sections 415 and 401(a)(17) of the Code and if the Participant’s elective deferrals under the EIX 2008 Executive Deferred Compensation Plan or predecessor or successor plans governing nonqualified deferrals were included in the definition of Earnings under the Savings Plan.

2


Executive Retirement Account or ERA means the notional cash balance account established for record keeping purposes for a Participant pursuant to Section 3.4 of the Plan.
Executive Retirement Account Credits or ERA Credits means the amounts credited to a Participant’s Executive Retirement Account under Section 3.4 of the Plan.
Executive Retirement Account Salary Base or ERA Salary Base means the amount (if any) by which the Participant’s Salary for the applicable calendar year exceeds his or her 401(k) Earnings for that year.
Executive Retirement Account Salary Base Differential or ERA Salary Base Differential means the amount (if any) by which (1) the Participant’s annual rate of Salary in effect immediately prior to the Participant’s Separation from Service exceeds (2) the Participant’s annual rate of 401(k) Earnings in effect immediately prior to the Participant’s Separation from Service.
Officer means the CEOs, Presidents, Executive Vice Presidents, Senior Vice Presidents and elected Vice Presidents of EIX and its Affiliates. Other employees of EIX and its Affiliates, including officers who are not elected Vice Presidents or above, shall not be treated as Officers for purposes of the Plan, unless the Administrator specifically designates any such employee as an Officer for purposes of the Plan.
Participant means either (1) an employee of an Affiliate, who (i) is a U.S. employee or an expatriate and is based and paid in the U.S.; (ii) has been designated as an Executive by the Administrator, the Affiliate’s board or the Affiliate’s CEO for purposes of the Plan; and (iii) qualifies as a member of the “select group of management or highly compensated employees” under ERISA; or (2) a person who has a vested benefit under the Plan by virtue of prior employment as an Executive of an Affiliate, which vested benefit has not yet been completely distributed.
Payment Election means a Primary Payment Election or a Contingent Payment Election. Payment Elections shall be made on a form and in a manner prescribed by the Administrator, which may include electronic elections.
Plan means the EIX 2008 Executive Retirement Plan.
Predecessor Plan means the Southern California Edison Company Executive Retirement Plan.
Primary Payment Election means an election regarding the time and form of payments made or deemed made in accordance with Section 4.1.
Profit Sharing means the programs under which some Affiliates have made profit sharing or gain sharing contributions to the Savings Plan.
Qualified Plan means the Southern California Edison Company Retirement Plan, or a successor plan, intended to qualify under Section 401(a) of the Code.

3


Retirement means Separation from Service upon attainment of at least age 55 with at least 5 Years of Service.
Salary means the Participant’s basic pay from the Employer (excluding Bonuses, special awards, commissions, severance pay, and other non-regular forms of compensation) before reductions for deferrals under the Savings Plan or the EIX 2008 Executive Deferred Compensation Plan or predecessor or successor plans governing deferral of salary.
Savings Plan means the Edison 401(k) Savings Plan, or a successor plan.
Separation from Service occurs when a Participant 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.
Severance Plan means the EIX 2008 Executive Severance Plan (or any similar successor plan).
Similar Plan means a plan required to be aggregated with this Plan under Treasury Regulation Section 1.409A-1(c)(2)(i).
Specified Employee means a Participant who is designated as an elected Vice President or above by the Administrator, using the identification date and methods determined by the Administrator.
Target Bonus Amount means, as to a particular Participant, the amount obtained by multiplying (1) the stated target bonus percentage (as a percentage of salary) in effect immediately prior to the Participant’s Separation from Service for the bonus to be awarded to the Participant pursuant to the terms of the Executive Incentive Compensation Plan, the 2007 Performance Incentive Plan, or a successor plan governing annual executive bonuses, multiplied by (2) the Participant’s annual rate of Salary in effect immediately prior to the Participant’s Separation from Service.
Termination of Employment means the voluntary or involuntary Separation from Service for any reason other than Retirement or death.
Total Compensation means (i) for Participants not eligible for Benefit Feature (iii), the monthly average Salary based on the Participant’s 36 highest consecutive months of Salary, and (ii) for Participants eligible for Benefit Feature (iii), the monthly average Salary plus Bonus based on the 36 consecutive months in which the Participant had the highest combination of Salary and Bonus. The 36 months need not be consecutive for individuals who were Participants in the Predecessor Plan and eligible for Benefit Feature (iii) before January 1, 2008. For purposes of determining the highest 36 months for Participants eligible for Benefit Feature (iii), each of the Participant’s annual Bonuses will be spread evenly over the months worked in the years in which the Bonuses were earned. If a vested individual terminates prior to Retirement and was no longer an Officer or designated Executive at the time employment was terminated, the Plan benefit described in Section 3.3(a) will be based on the Participant’s Total Compensation and

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service determined as of the last date of the Participant’s status as an Officer or designated Executive.
Unforeseeable Emergency means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s Beneficiary, or the Participant’s spouse or dependent (as defined in Code Section 152, without regard to Sections 152(b)(1), (b)(2) and (d)(1)(B)); loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, as a result of a natural disaster); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the Participant’s control.
Valuation Date means the date as of which the Participant’s benefit will be calculated, and is the first day of the month following the month in which the final day of employment falls prior to Separation from Service, death or Disability, except that if the Participant’s Separation from Service is a Termination of Employment, the Valuation Date is the later of (1) the first day of the month of the Participant’s 55th birthday or (2) the first day of the month following the month in which the Participant’s final day of employment occurs prior to Termination of Employment.
Year of Service means a year of service as determined in accordance with the terms of the Qualified Plan. For Participants grandfathered in the defined-benefit final average pay benefit feature of the Qualified Plan (other than any such grandfathered Participants who were hired by an Affiliate or its subsidiaries in 1999 from Commonwealth Edison Company), years of service will be determined according to the same rules applicable to such benefit. For all other Participants, years of service will be determined according to the rules applicable to the cash‑balance feature of the Qualified Plan. A Participant’s prior service with Commonwealth Edison Company will be recognized for purposes of this Plan if the individual was a Participant on or before April 1, 2012 and was hired by an Affiliate (or its subsidiaries) in 1999 from Commonwealth Edison Company in connection with an acquisition transaction involving Edison Mission Energy. A Participant’s prior service with Citizens Power LLC will be recognized for purposes of this Plan if the individual was a Participant on or before April 1, 2012 and was hired by an Affiliate (or its subsidiaries) in 2000 in connection with the acquisition of Citizens Power LLC by Edison Mission Energy.
ARTICLE 2
PARTICIPATION
Individuals are eligible to participate in the Plan when they become Officers or are designated as Executives by the Affiliate’s board or the Affiliate’s CEO for purposes of this Plan. Participation in the Plan will continue as long as the individual remains an Officer or a designated Executive (subject to any applicable Plan restrictions) or has a vested benefit under the Plan that has not been completely paid out.


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ARTICLE 3
BENEFIT DETERMINATION AND VESTING
3.1
Overview
(a)      Benefits under the Plan will be payable with respect to any vested Participant following Retirement or the occurrence of a Contingent Event to the extent a benefit under the Plan is determined to exist by calculations as provided under the applicable provisions of this Article 3. Effective January 1, 2018, an ERA Credits feature has been added to the Plan as provided in Section 3.4 below. Prior to such date, a Participant’s benefit under the Plan will be determined as provided in Sections 3.2 and 3.3 hereof. From and after such date, a Participant’s benefit under the Plan will be determined as provided below in this Section 3.1. In each case, the Participant’s benefit will be subject to vesting, as provided in Section 3.5, and to the provisions of Sections 3.6 and 3.7.
(b)      If a Participant was an Officer or a designated Executive at any time prior to January 1, 2018, the Participant’s benefit under the Plan (subject to vesting as provided in Section 3.5) will be equal to the lesser of the amounts determined under paragraphs (i) and (ii) of this Section 3.1(b), determined based on lump sum values as of the applicable Valuation Date.
(i)      The Participant’s total benefit as determined under Sections 3.2 and 3.3 below, taking into account the Participant’s Total Compensation and Years of Service accrued at any time (whether before or after January 1, 2018). Such determination will be made without regard to Section 3.3(c) and will not include any ERA Credits under Section 3.4.
(ii)      The Participant’s total benefit determined as the sum of (x) the Participant’s total benefit as determined under Sections 3.2 and 3.3 below (giving effect to Section 3.3(c) below), and (y) the amounts credited to the Participant’s Executive Retirement Account.
(c)      If a Participant first becomes an Officer or a designated Executive on or after January 1, 2018, the Participant will be eligible only to receive ERA Credits (and earnings thereon) to the Participant’s Executive Retirement Account as provided in Section 3.4 and will not be eligible for any benefits under Sections 3.2 and 3.3.
(d)      Notwithstanding any Plan provisions to the contrary, if a Participant who has experienced a Separation from Service is rehired on or after January 1, 2018 and becomes an Officer or designated Executive, the Participant will be treated for additional benefit accrual purposes as if he or she was a new participant in the Plan: he or she will be eligible to receive additional ERA Credits (and earnings thereon) as provided in Section 3.4, but will not be eligible for any additional benefit accruals under Sections 3.2 and 3.3.
3.2
Benefit Features
(a)      The Plan provides a supplemental retirement benefit calculated in accordance with Section 3.3 below. This supplemental retirement benefit incorporates the following Benefit Features:

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(i)      Recognition of the amount of Salary that is not recognized for purposes of calculating benefits under the Qualified Plan or Profit Sharing contributions to the Savings Plan due to limits imposed by the Code under Sections 415(b) or 401(a)(17).
(ii)      Recognition of deferred Salary that is not recognized for purposes of calculating benefits under the Qualified Plan or Profit Sharing contributions to the Savings Plan.
(iii)      Recognition of Bonuses that are not recognized for purposes of calculating benefits under the Qualified Plan.
(b)      Participants who are Officers on the date of their termination of employment are eligible for all three Benefit Features. Other Participants are eligible for Benefit Features (i) and (ii) only; provided, however, as to a Participant who was once an Officer but who is not described in the immediately preceding sentence, such Participant shall be eligible for Benefit Features (i) and (ii) only, but his or her benefits shall not be less than if the Participant had terminated employment on December 11, 2012 and had Bonuses recognized for purposes of determining his or her benefits as of December 11, 2012.
(c)      Participants in the Predecessor Plan on December 31, 1994 and Participants who were CEOs, Presidents, Executive Vice Presidents or Senior Vice Presidents of EIX or its Affiliates or elected Vice Presidents of EIX, Southern California Edison Company or Edison Capital prior to January 1, 2006, are also eligible for all three Benefit Features and an additional 0.75% benefit accrual for each Year of Service up to ten Years of Service (this additional 0.75% benefit accrual is taken into account when calculating the value of the single life annuity benefit for purposes of Section 3.3(b)), unless they were participants in the Predecessor Plan on December 31, 1992 and elected not to participate in the Executive Disability and Survivor Benefit Program, in which case they are eligible for all three Benefit Features but not for the additional 0.75% benefit accrual.
(d)      Notwithstanding the above, elected Vice Presidents of Edison Mission Energy, Edison Mission Marketing and Trading, and Midwest Generation whose Separation from Service occurred prior to January 1, 2006, are eligible for Benefit Features (i) and (ii) only.
(e)      Notwithstanding anything to the contrary in this Section 3.2, the three Benefit Features in this Section 3.2 and the additional 0.75% benefit accrual in Section 3.2(c) are subject to the provisions of Section 3.1.
3.3
Benefit Computation
(a)    EIX will calculate at the time of a Participant’s death, Disability or Separation from Service the amount of any benefit payable under the Plan. The benefit payable under this Section 3.3 will be the greater of (1) the value of the single life annuity calculated pursuant to Section 3.3(b), reduced by (i) the value of the single life annuity (unreduced for a contingent annuitant) payable to the Participant under the terms of the Qualified Plan, or other Affiliate defined benefit plan, after taking into account any applicable restrictions or limitations as to such payments required by the Code or other applicable law or the terms of the Qualified Plan, or other applicable Affiliate defined benefit plan; (ii) the actuarial single life annuity value, as


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defined in the Qualified Plan, of the Participant’s Profit Sharing Account under the Savings Plan, or a successor plan; and (iii) the portion of the Participant’s Social Security benefit specified in the Qualified Plan or (2) the actuarial single life annuity value of the notional account derived from any Executive Profit Sharing Credits allocated to the Participant plus earnings thereon.
(b)      The Participant’s Total Compensation and Years of Service will be used to calculate the value of the single life annuity benefit based on the “Supplemental A” formula set forth in Section 4.02(a) of the Qualified Plan, including Subsection (1) but excluding Subsection (2), and Section 4.12(b) of the Qualified Plan (provided, however, that individuals who become Participants after December 31, 2016 shall not be entitled to a benefit in this Plan based on the benefit formula in Section 4.12(b) of the Qualified Plan), and also, in the case of Disability, Exhibit B of the Qualified Plan, or, in the case of Termination of Employment, Exhibit G of the Qualified Plan, notwithstanding the Participant’s eligibility for such benefits under the terms of the Qualified Plan.
(c)      Notwithstanding the foregoing, for purposes of determining a Participant’s benefit under clause (x) of Section 3.1(b)(ii), the “Supplemental A” formula set forth in Section 4.02(a) of the Qualified Plan used to determine the value of the Participant’s single life annuity benefit as provided in Section 3.3(b) with respect to any Years of Service accrued after December 31, 2017 shall be modified as follows: “one percent (1%)” shall replace “one and three-quarters percent (1-3/4%)” as applied to the Participant’s Total Compensation for each of the Participant’s first thirty (30) Years of Service; and “one-half of one percent (0.5%)” shall replace “one percent (1%)” as applied to the Participant’s Total Compensation for each of the Participant’s Years of Service in excess of thirty (30).
(d)      If a Participant is entitled to benefits under the Severance Plan or any similar successor plan as in effect upon the Participant’s Separation from Service, and has satisfied all conditions for such benefits, then an additional Year of Service credit (in the case of a Qualifying Termination Event associated with a Change in Control as defined in the Severance Plan, two years for Senior Vice Presidents and Executive Vice Presidents of EIX, Southern California Edison Company, or Edison Energy Group, Inc., but three years for the most senior officer of EIX, the most senior officer of Southern California Edison Company, the most senior officer of Edison Energy Group, Inc., the General Counsel of EIX, and the Chief Financial Officer of EIX) and an additional year of age (in the case of a Qualifying Termination Event associated with a Change in Control as defined in the Severance Plan, two years for Senior Vice Presidents and Executive Vice Presidents of EIX, Southern California Edison Company, or Edison Energy Group, Inc., but three years for the most senior officer of EIX, the most senior officer of Southern California Edison Company, the most senior officer of Edison Energy Group, Inc., the General Counsel of EIX, and the Chief Financial Officer of EIX) shall be included for purposes of the benefit calculation under Section 3.3(b), including in applying the benefit formula under the Qualified Plan for grandfathered employees who are not yet age 55 but who have 68 points. The value added by this severance enhancement shall be the difference between (i) the gross benefit calculated as described in Section 3.3(b) but with the additional age and service credits, before any reduction for benefits under other plans pursuant to Section 3.3(a), and (ii) the unenhanced gross benefit calculated under Section 3.3(b). Notwithstanding anything to the contrary in this Section 3.3(d), if a Participant becomes entitled to benefits under the Severance Plan or any similar successor plan and is subsequently rehired as an Executive prior to the date

8


lump sum payments or initial installment or annuity payments commence, the Participant shall not be entitled to any additional Year of Service or age credits under this Section 3.3.
(e)      Participants who are also eligible for Profit Sharing may receive Executive Profit Sharing Credits. If any Profit Sharing contribution is reduced because a portion of the Participant’s Salary is excluded either because of nonqualified Salary deferrals or the limits imposed by Sections 415 and 401(a)(17) of the Code, the amount by which the contribution was reduced will be credited to a notional Executive Profit Sharing Credit account under the Plan as of the date of the Profit Sharing contribution. Amounts in this notional account will earn notional interest at the rates in effect for cash balance interest credits in the Qualified Plan, credited daily and compounded annually. The resulting notional Executive Profit Sharing Credit amount will be taken into account in calculating the benefit described in Section 3.3(a).
(f)      The lump sum value of the benefit payable under Sections 3.3 as of the Valuation Date will be actuarially determined as the present value of the Participant’s single life annuity benefit under Section 3.3 as of that date, using the discount rate and mortality table then in effect for lump sum determination in the Qualified Plan, except that the lump sum value may not be less than the value of the notional Executive Profit Sharing Credit account balance as of that date.
(g)      A vested Participant who remains employed with an Affiliate until Retirement but is no longer an Officer or designated Executive will retain a Section 3.3 benefit based on the Participant’s Total Compensation and service determined as of the last date of the Participant’s eligible status and reduced by the amounts specified in Section 3.3(a) determined upon the Participant’s Retirement.
(h)      As to a Participant whose Separation from Service occurs after December 31, 2016, the following additional rules shall apply in calculating the amount of any benefit payable under the Plan with respect to the Participant’s accrued but unused Sick Time Allowance Credits (as that term is used in the Qualified Plan):
(i)      In applying the benefit formula set forth in Section 4.12(b) of the Qualified Plan, the Participant’s accrued but unused Sick Time Allowance Credits taken into account for purposes of this Section 3.3 shall be the lesser of (a) the Participant’s accrued but unused Sick Time Allowance Credits as of December 31, 2016, or (b) the Participant’s accrued but unused Sick Time Allowance Credits as of the Participant’s Separation from Service.
(ii)      The form and timing of payment of the benefit attributable to such accrued but unused Sick Time Allowance Credits shall be deemed to be calculated under Section 4.12(b) of the Qualified Plan as in effect on January 1, 2015 (disregarding, for example, any change in the Qualified Plan that takes effect after that date to provide for such benefit to be paid in a single lump sum).
(i)      Notwithstanding anything to the contrary in this Section 3.3, the benefits calculated pursuant to this Section 3.3 are subject to the provisions of Section 3.1.

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3.4
Executive Retirement Account Credits
(a)      This Section 3.4 shall be effective January 1, 2018. For each calendar year (commencing with 2018), ERA Credits will be added by the Employer to the Participant's Executive Retirement Account in an amount equal to twelve percent (12%) of the Participant’s ERA Salary Base for the calendar year. Beginning with the 2018 Bonus (which is payable in 2019), ERA Credits will be added by the Employer to the Participant's Executive Retirement Account in an amount equal to twelve percent (12%) of the Participant’s Bonus. Notwithstanding the foregoing, no ERA Credits (other than interest credits pursuant to Section 3.4(b)) will be added with respect to ERA Salary Base or Bonus after a Participant ceases to be an Officer or designated Executive for any reason other than Retirement, death, or Disability; provided, however, that if a Participant has his or her employment transferred from an Affiliate to a non-participating affiliate of EIX, then ERA Credits will be added for the Participant’s Bonus with respect to the Participant’s employment by the Affiliate during the year in which the transfer occurred.
(b)      ERA Credits under this Section 3.4 will be credited (conditionally until vesting and subject to Section 3.4(c)) to the Executive Retirement Account at the same time the ERA Salary Base or Bonus to which the ERA Credits relate is actually paid. The Administrator will credit interest at the Crediting Rate to the Participant’s Executive Retirement Account on a daily basis, compounded annually, until the Valuation Date. No interest will be credited on ERA Credits for any date on or before the date when the ERA Salary Base or Bonus to which the ERA Credit relates is actually paid (for example, if a Participant’s 2018 Bonus is paid on February 28, 2019, the related ERA Credits will be credited as of that date and interest will begin being credited on those ERA Credits on a go-forward basis as of March 1, 2019). After the Valuation Date, interest will be credited in accordance with Section 3.7.
(c)      In the event a Participant is entitled to the benefit specified in Section 3.1(b)(i), the Participant’s Executive Retirement Account shall be disregarded and automatically cancelled.
(d)      In the event a Participant is entitled to the benefit specified in Section 3.1(b)(ii) or Section 3.1(c), the benefit attributable to the Participant’s Executive Retirement Account shall be subject to the payment election provisions of Article 4 and, if the Participant’s benefit is determined under Section 3.1(b)(ii), the Participant’s Executive Retirement Account shall be paid on the same schedule as the Participant’s benefit determined under Sections 3.2 and 3.3.
(e)      If a Participant is entitled to benefits under the Severance Plan or any similar successor plan as in effect upon the Participant’s Separation from Service, and has satisfied all conditions for such benefits, then ERA Credits will be added by the Employer to the Participant's Executive Retirement Account in an amount equal to twelve percent (12%) times the sum of (i) the Participant’s ERA Salary Base Differential plus (ii) the Participant’s Target Bonus Amount. In the case of a Qualifying Termination Event associated with a Change in Control as defined in the Severance Plan, “twelve percent (12%)” in the preceding sentence will be replaced by: “twenty-four percent (24%)” if the Participant is a Senior Vice President or Executive Vice President of EIX, Southern California Edison Company, or Edison Energy Group, Inc.; “thirty-six percent (36%)” if the Participant is the most senior officer of EIX, the most senior officer of

10


Southern California Edison Company, the most senior officer of Edison Energy Group, Inc., the General Counsel of EIX, or the Chief Financial Officer of EIX. Such ERA credits will be credited effective as of the date of the Separation from Service. Notwithstanding anything to the contrary in this Section 3.4(e), if a Participant becomes entitled to benefits under the Severance Plan or any similar successor plan and is subsequently rehired as an Executive prior to the date lump sum payments or initial installment or annuity payments commence, the additional ERA credits under this Section 3.4(e) shall be disregarded and automatically cancelled.
3.5
Vesting
The right to receive benefits under the Plan (including any amounts credited to a Participant’s Executive Retirement Account, if a Participant is entitled to such amounts under Section 3.1) will vest (i) when the Participant has completed five Years of Service with an Affiliate, (ii) upon the Participant’s Disability while employed with an Affiliate, (iii) upon the Participant’s death while employed with an Affiliate, or (iv) upon the Participant’s Separation from Service if the Participant is entitled to benefits under the Severance Plan and has satisfied all conditions for such benefits.
3.6
Adjustment for Final Bonus
If the final Bonus is determined after benefits under the Plan are paid or commenced, the benefit will be recalculated from inception (as a point of clarity, ERA Credits for the final Bonus will be credited, in accordance with and subject to Section 3.4, as of the date the Bonus is actually paid, but for purposes of Section 3.1(b) the value of those ERA Credits will be calculated as of the Valuation Date using the discount rate in effect for lump sum determination in the Qualified Plan as of the Valuation Date) and a one-time adjustment will be made to true-up payments already made, and future payments, if any, will be adjusted accordingly. Any true-up payment will be made within two and one-half months of the date the final Bonus is determined.
3.7
Valuation Date Notional Account
A notional account will be established as the Plan benefit as of the Valuation Date, with an initial value equal to the lump sum value calculated pursuant Article 3. The account will be credited with interest at the Crediting Rate on a daily basis, compounded annually, until the account has been fully paid out (or annuity payments commence, as the case may be) according to the terms of the Plan and the Participant’s Payment Election.
ARTICLE 4
PAYMENT ELECTIONS
4.1
Primary Payment Election
Each year, a Participant may make a Primary Payment Election specifying the payment schedule for the benefits to be accrued in the following Plan Year by submitting an election to the Administrator in such time and manner established by the Administrator. The election made

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in one year shall apply for subsequent years unless prior to a subsequent year the Participant submits a new payment election for the subsequent year. By way of example, benefits attributable to Bonus compensation will be treated as accrued during the Plan Year when the relevant services are performed (and not any later year when the Bonus is actually paid), and any benefits attributable to additional Year of Service or age credits triggered by a Participant’s Separation from Service under the Severance Plan will be treated as accrued during the Plan Year when the Participant’s Separation from Service occurs.
On or before December 31, 2008, Participants may make a special Primary Payment Election in accordance with the transition rule under Section 409A of the Code for Plan benefits previously scheduled to commence payment after the calendar year in which the special Primary Payment Election is made.
The choices available for a Primary Payment Election are as provided in the applicable Primary Payment Election form, but may include the following:
(a)      Joint and survivor life annuity paid in monthly installments; or
(b)      Contingent life annuity paid in monthly installments; or
(c)      Monthly installments for 60 to 180 months; or
(d)      A single lump sum; or
(e)      Two to fifteen installments paid annually; or
(f)      Any combination of the choices listed in (c), (d) and (e).
Payments under a Primary Payment Election may commence upon (i) the Participant’s Retirement, (ii) the later of the Participant’s Retirement or the first day of a specific month and year, or (iii) the first day of the month that is a specified number of months and/or years following the Participant’s Retirement or the first day of a specified month a specified number of years following the calendar year in which the Participant’s Retirement occurs (provided that if the date otherwise determined pursuant to clauses (ii) and (iii) is later than the later of the Participant’s Retirement or the month and year in which the Participant attains age 75, the date pursuant to clauses (ii) and (iii) shall be the later of the Participant’s Retirement or the month and year in which the Participant attains age 75). If the Participant elects under a Primary Payment Election to receive payment pursuant to clause (ii) and the Participant dies prior to the later of Retirement or the specified payment date, payment shall be made pursuant to the Participant’s Contingent Payment Election (if any) for the Participant’s death (regardless of whether the Participant’s death occurs while the Participant is employed by an Affiliate or thereafter).
Subject to Section 4.5, lump sum payments or initial installment or annuity payments will be made within 90 days (60 days in the case of a payment triggered by a specified payment date) of the scheduled dates, and interest will be added at the Crediting Rate to the payment amount for the days elapsed between the scheduled payment date and the actual date of payment. If the Participant’s delivery of a release would change the amount of his or her Plan benefit, and the period for the Participant to consider, execute, and revoke such release spans two different
 

12


calendar years, and the 90- or 60-day period, as applicable, specified above for the payment of any benefit contingent on such release also spans those two years, payment of the portion of the benefit contingent upon such release (and earnings thereon) shall be made in the time period otherwise specified above but in the second of those two years.
If paid in installments, the installments will be paid in amounts that will amortize the balance with interest credited at the Crediting Rate on a daily basis, compounded annually, over the period of time benefits are to be paid. For purposes of calculating installments, the account will be valued as of the Valuation Date and subsequently as of December 31 each year with installments adjusted for the next calendar year according to procedures established by the Administrator. Notwithstanding anything herein to the contrary, distribution in installments shall be treated as a single payment as of the date of the initial installment for purposes of Section 409A of the Code. If paid in monthly installments, the installments may be paid in a single check or in more than one check for any given month, provided that in either such case the total amount of the monthly payment shall not change.
If no Primary Payment Election has been made, the Primary Payment Election shall be deemed to be a joint and survivor annuity paid in monthly installments commencing upon the Participant’s Retirement (or, if earlier, the Participant’s death or Disability); provided, however, that if a Participant first becomes an Officer or a designated Executive on or after January 1, 2018, the Primary Payment Election shall be deemed (if no Primary Payment Election has been made) to be a lump sum payable upon Retirement (or, if earlier, the Participant’s death or Disability).
If the applicable Payment Election or deemed Payment Election is for payment in the form of an annuity, the annuity value of the Plan benefit will be calculated in a manner consistent with the provisions of the Qualified Plan except that this Plan will govern where its provisions under Section 3.3 (which shall also apply to Section 3.4(d) for purposes of calculating the applicable annuity value of any benefit derived from an Executive Retirement Account) are inconsistent with those of the Qualified Plan.
4.2
Contingent Payment Elections
Each year, a Participant may make Contingent Payment Elections for each of the Contingent Events of (1) the Participant’s death while employed by an Affiliate, (2) the Participant’s Disability while employed by an Affiliate, and (3) Termination of Employment for the benefits to be accrued in the following Plan Year, which election will take effect upon the first Contingent Event that occurs before the Participant’s Retirement, by submitting an election to the Administrator in such time and manner established by the Administrator. The choices available for the Contingent Payment Elections are those specified in Section 4.1 except that the references to Retirement shall instead be the applicable Contingent Event if the event is death or Disability or the first day of the month of the Participant’s 55th birthday (or, if later, Termination of Employment) if the Contingent Event is Termination of Employment. The election made in one year shall apply for subsequent years unless prior to a subsequent year the Participant submits a new Payment Election for the subsequent year.
If the Participant has made no Contingent Payment Election and a Contingent Event

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occurs prior to Retirement, the Administrator will pay the benefit as specified in the Participant’s Primary Payment Election, except that payments scheduled for payment or commencement of payment “upon Retirement,” or with a payment date determined by reference to Retirement, will be paid, commence or have payment determined by reference to the first day of the month following the date of the Contingent Event if the Contingent Event is the Participant’s death or Disability, but will be the first day of the month of the Participant’s 55th birthday (or, if later, Termination of Employment) if the Contingent Event is Termination of Employment. If a Contingent Event occurs prior to Retirement and the Participant has made neither a Primary Payment Election nor a Contingent Payment Election, the Payment Election shall be deemed to be a joint and survivor life annuity payable on the first day of the month following the date of the Contingent Event if the Contingent Event is the Participant’s death or Disability, but payable on the first day of the month of the Participant’s 55th birthday (or, if later, the first day of the month following the month in which the Participant’s final day of employment occurs prior to Termination of Employment) if the Contingent Event is Termination of Employment.
4.3
Changes to Payment Elections
Participants may change a Primary Payment Election or Contingent Payment Election, including a deemed Payment Election, by submitting a new written Payment Election to the Administrator, subject to the following conditions: (1) the new Payment Election shall not be effective unless made at least twelve months before the payment or commencement date scheduled under the prior Payment Election, (2) the new Payment Election must defer a lump sum payment or commencement of installment or life annuity payments for a period of at least five years from the date that the lump sum would have been paid or installment or life annuity payments would have commenced under the prior Payment Election and (3) the election shall not be effective until twelve months after it is filed with the Administrator. If at the time a new Payment Election is filed the Administrator determines that imposition of the five-year delay would require that a Participant’s payments begin after he or she has attained age 75, then the Participant will not be permitted to make a new Payment Election. The payment schedules available under a new Payment Election are those specified in Sections 4.1 and 4.2 (as applicable) that are available for new Payment Elections at the time the new Payment Election is made, subject to the conditions specified in this paragraph.
Participants who have elected a form of life annuity as their Primary Payment Election or Contingent Payment Election (including any deemed Payment Election) may change such election from one form of life annuity to another form of life annuity otherwise permitted by the Plan by submitting a new written Payment Election to the Administrator, subject to the following conditions: (1) the new Payment Election shall not be effective unless made before the payment or commencement date scheduled under the prior Payment Election, (2) the payment or commencement date under the prior Payment Election is not changed (or the change is made pursuant to the provisions of the preceding paragraph), and (3) the annuities are actuarially equivalent (within the meaning of Treasury Regulation Section 1.409A-2(b)(2)(ii).
4.4
Small Benefit Exception
Notwithstanding the foregoing, the Administrator may, in its sole discretion and as determined by it in writing, pay the benefits in a single lump sum if the sum of all benefits

14


payable to the Participant under this Plan and all Similar Plans is less than or equal to the applicable dollar amount under Section 402(g)(1)(B) of the Code.
4.5
Six-Month Delay in Payment for Specified Employees
Notwithstanding anything herein to the contrary, in the event that a Participant who is a Specified Employee is entitled to a distribution from the Plan due to the Participant’s Separation from Service, the lump sum payment or the commencement of installment or life annuity payments, as the case may be, may not be scheduled to occur or occur before the date that is the earlier of (1) six months following the Participant’s Separation from Service for reasons other than death or (2) the Participant’s death.
4.6
Conflict of Interest Exception, Etc.
Notwithstanding the foregoing, the Administrator may, in its sole discretion, pay benefits in a single lump sum if permitted under Treasury Regulation Section 1.409A-3(j)(4)(iii). In addition, the Administrator may, in its sole discretion, accelerate benefits if and to the extent permitted under any of the other exceptions specified in Treasury Regulation Section 1.409A-3(j)(4) to the general rule in Section 409A of the Code prohibiting accelerated payments, provided that the terms of Section 4.4 of the Plan shall govern whether benefits will be paid in a single lump sum pursuant to the small benefit exception contained in Treasury Regulation Section 1.409A-3(j)(4)(v).
ARTICLE 5
SURVIVOR BENEFITS
5.1
Payment
Following the Participant’s death, payment of the Participant’s benefit will be made to the Participant’s Beneficiary or Beneficiaries according to the payment schedule elected or deemed elected according to Article 4.
5.2
Benefit Computation
In addition, if the applicable Payment Election or deemed Payment Election is for a joint and survivor life annuity, the survivor benefit is 50% of the Participant’s annuity amount, payable only to the spouse married to the Participant at the earlier of the commencement of Plan benefit payments to the Participant or the Participant’s death, but actuarially reduced if that spouse is more than five years younger than the Participant. If the election is for a contingent life annuity, the survivor benefit will be as elected. The survivor benefit associated with a life annuity will be calculated in a manner consistent with the survivor benefit provisions of the Qualified Plan except that this Plan will govern where its provisions under Sections 3.3 and 3.4(d) are inconsistent with those of the Qualified Plan.


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ARTICLE 6
BENEFICIARY DESIGNATION
The Participant will have the right, at any time, to designate any person or persons or entity as Beneficiary (both primary and contingent) to whom payment under the Plan will be made in the event of the Participant’s death; provided that if the Participant has elected (or is deemed to have elected) a Payment Election in the form of a joint and survivor life annuity or a contingent life annuity and designates a new person or entity as Beneficiary after annuity payments have commenced, the annuity payments to such newly designated Beneficiary must be made in the same amounts and at the same times as payments would have been made to the designated Beneficiary immediately preceding the commencement of payments. The Beneficiary designation will be effective when it is submitted to the Administrator during the Participant’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 a Participant 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 Participant’s new spouse has previously been designated as Beneficiary. The spouse of a married Participant must consent in writing to any designation of a Beneficiary other than the spouse.
If a Participant 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 Participant, then the Administrator will direct the distribution of the benefits to the Participant’s estate. If a primary Beneficiary dies after the Participant’s death but prior to completion of the distribution of benefits under this Plan, and no contingent Beneficiary has been designated by the Participant, any remaining payments will be made to the primary Beneficiary’s Beneficiary, if one has been designated, or to the Beneficiary’s estate.
ARTICLE 7
CONDITIONS RELATED TO BENEFITS
7.1
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 Participant or other claimants and from all orders, decrees, levies, garnishment or executions against any Participant to the fullest extent allowed by law. Notwithstanding the foregoing, the benefit payable to a Participant may be assigned in full or in part, pursuant to a domestic relations order of a court of competent jurisdiction.
7.2
Unforeseeable Emergency
A Retired Participant, a Participant who has a Disability, or a Participant who is age 55 or older may submit a hardship distribution request to the Administrator in writing setting forth the reasons for the request. The Administrator will have the sole authority to approve or deny such

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requests. Upon a finding that the Participant has suffered an Unforeseeable Emergency, the Administrator may in its discretion, permit the Participant to accelerate distributions of benefits under the Plan in the amount reasonably necessary to alleviate the Unforeseeable Emergency.
7.3
No Right to Assets
A Participant’s benefits paid under the Plan will be paid from the general funds of the Participant’s Employer, and the Participant and any Beneficiary will be no more than unsecured general creditors of that Employer with no special or prior right to any assets of the Employer for payment of any obligations hereunder. Neither the Participant nor the Beneficiary will have a 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 Participants, 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 Participant (or Beneficiary) will have a claim as to any other Affiliate with respect to such benefits. Upon an election by EIX under this Section 7.3, 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 Participant will remain responsible for such benefits. EIX will effectuate any such election pursuant to this Section 7.3 by providing written notice to the Administrator and the applicable Affiliates regarding the effective date of such election, and the benefits, Affiliates and Participants 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. Such a method may include, but is not limited to, lump sum payment by an Affiliate to EIX of relevant benefits accrued through the date of EIX’s election based on the Projected Benefit Obligation (“PBO”) with regular periodic payments to EIX of continuing accruals; regular periodic payments by an Affiliate to EIX of benefits accrued based on the PBO beginning with the date of EIX’s election through the date such benefits become due under the Plan; lump sum payment by an Affiliate to EIX at the time benefits become due under the Plan; or intercompany payables and receivables used with funding on a “pay-as-you-go” basis.
7.4
Protective Provisions
The Participant 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

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Administrator. If the Participant refuses to cooperate, the Administrator and the Employer will have no further obligation to the Participant under the Plan.
7.5
Constructive Receipt
Notwithstanding anything to the contrary in this Plan, in the event the Administrator determines that amounts deferred under the Plan have failed to comply with Section 409A and must be recognized as income for federal income tax purposes, distribution of the amounts included in a Participant’s income will be made to such Participant. The determination of the Administrator under this Section 7.5 will be binding and conclusive.
7.6
Withholding
The Participant or the Beneficiary will make appropriate arrangements with the Administrator for satisfaction of any federal, state or local income tax withholding requirements and Social Security or other employee tax requirements applicable to the accrual or payment of benefits under the Plan. If no other arrangements are made, the Administrator may provide, at its discretion, for such withholding and tax payments as may be required.
7.7
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 8
PLAN ADMINISTRATION
8.1
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. 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.
8.2
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.


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ARTICLE 9
AMENDMENT OR TERMINATION OF PLAN
9.1
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 Participant’s account or benefits, or 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 Participant, 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.
9.2
Limitations
In the event of Plan amendment or termination which has the effect of eliminating or reducing a benefit under the Plan, the benefit payable on account of a retired Participant or Beneficiary will not be impaired, and the benefits of other Participants will not be less than the benefit to which each such Participant would have been entitled if he or she had retired immediately prior to such amendment or termination.
ARTICLE 10
CLAIMS AND REVIEW PROCEDURES
10.1
Claims Procedure for Claims Other Than Due to Disability
(a)      Except for claims due to Disability, the Administrator will notify a Participant or his or her Beneficiary (or person submitting a claim on behalf of the Participant 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


19


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 Participant, the same procedures will apply to the Participant’s Beneficiaries.
10.2
Claims Procedure for Claims Due to Disability
(a)      Within a reasonable period of time, but not later than 45 days after receipt of a claim due to Disability, the Administrator or its delegate shall notify the 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. Except as contemplated by this Section, 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.

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(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 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 10.2(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 Participant, the same procedures will apply to the Participant’s Beneficiaries.
10.3
Dispute Arbitration
(a)      Effective as to any claims filed on or after June 19, 2014, final and binding arbitration under this Section 10.3 shall be the sole remedy available to a claimant after he or she has exhausted the claim and review procedures set forth in Section 10.1. Furthermore, exhaustion by the claimant of the claim and review procedures set forth in Section 10.1 is a mandatory prerequisite for binding arbitration under this Section 10.3. Any arbitration or civil action brought prior to the exhaustion of the claim and review procedures set forth in Section 10.1 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 10.1, 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 10.3.
Any arbitration under this Section 10.3 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 10.1 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 occurs, then a claim review

21


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 10.3, 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 10.3, if the claim is for Disability benefits, the following rules apply: (1) arbitration under this Section 10.3 shall be the mandatory second level of appeal following the exhaustion by the claimant of the claim and review procedures set forth in Section 10.2, and such exhaustion is a mandatory prerequisite for arbitration under this Section 10.3—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 10.2 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 10.3 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 10.3(c), if the claim is for Disability benefits, the arbitration shall be conducted as set forth in Section 10.3(b).
ARTICLE 11
MISCELLANEOUS
11.1
Participation in Other Plans
Participation in this Plan will not limit a Participant’s ability to continue to participate in any other employee benefit program of an Employer, subject to and in accordance with the terms of the applicable employee benefit program.
11.2
Relationship to Qualified Plan
This Plan will to the fullest extent possible under currently applicable law be administered in accordance with, and where practicable according to the terms of the Qualified Plan and/or Savings Plan. Notwithstanding the foregoing, the terms of this Plan shall control benefits payable under this Plan whenever the terms of the Qualified Plan and/or Savings Plan differ from this Plan.


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11.3
Forfeiture
The payments to be made pursuant to the Plan require the Participant, for so long as the Participant remains in the active employ of the Employer, 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. In addition, the Participant will remain available during Retirement for consultation in any matter related to the affairs of the Employer. Any breach of these conditions by a Participant will result in complete forfeiture by the Participant of any further benefits under the Plan. If the Participant fails to observe any of the above conditions, or if he or she is discharged by the Employer for malfeasance or willful neglect of duty, then in any of said events, the Participant’s benefits under this Plan will terminate and will not be paid, and EIX and the Employer will have no further liability therefor.
11.4
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.
11.5
Trust
The Employers will be responsible for the payment of all benefits under the Plan. At their discretion, the Employers may establish one or more grantor trusts for the purpose of providing for payment of benefits under the Plan. The trust or trusts may be irrevocable, but an Employer’s share of the assets thereof will be subject to the claims of the Employer’s creditors. Benefits paid to the Participant from any such trust will be considered paid by the Employer for purposes of meeting the obligations of the Employer under the Plan.
11.6
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 Participant any right to continue in employment with the Employer or any other Affiliate.
11.7
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.
11.8
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.
11.9
Validity
If any provision of the Plan is held invalid, void or unenforceable, the same will not


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affect, in any respect whatsoever, the validity of any other provisions of the Plan.
11.10
Waiver of Breach
The waiver by EIX or the Administrator of any breach of any provision of the Plan by the Participant will not operate or be construed as a waiver of any subsequent breach by the Participant.
11.11
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.
11.12
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.
11.13
ERISA Plan
The Plan is intended to be an unfunded plan maintained primarily to provide deferred compensation benefits for “a select group of management or highly compensated employees” within the meaning of Sections 201, 301 and 401 of ERISA and therefore to be exempt from Parts 2, 3 and 4 of Title I of ERISA. EIX is the named fiduciary.
11.14
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 adopted this amended and restated Plan effective the 24 th day of August, 2016.
EDISON INTERNATIONAL


/s/ Jacqueline Trapp    
Jacqueline Trapp
Vice President, Human Resources




24

Exhibit 10.2

EDISON INTERNATIONAL

EXECUTIVE INCENTIVE COMPENSATION PLAN

As Amended and Restated Effective August 24, 2016


WHEREAS, it has been determined that it is in the best interest of Edison International ("EIX") and its affiliates to offer and maintain competitive executive compensation programs designed to attract and retain qualified executives;

WHEREAS, it has been determined that providing financial incentives to executives that reinforce and recognize corporate, organizational and individual performance and accomplishments will enhance the financial and operational performance of EIX and its affiliates; and

WHEREAS, it has been determined that an incentive compensation program would encourage the attainment of short-term corporate goals and objectives;

NOW, THEREFORE, the Edison International Executive Incentive Compensation Plan has been established by the Compensation and Executive Personnel Committee of the Board of Directors originally effective January 1, 1997, and made available to eligible executives of EIX and its participating affiliates subject to the following terms and conditions:

1. Definitions. When capitalized herein, the following terms are defined as indicated:

"Board" means the Board of Directors of a Company.

"CEO" means the chief executive officer of a Company.

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

"Company" means EIX or a participating affiliate.

"Committee" means the Compensation and Executive Personnel Committee of the EIX Board of Directors. Where the context requires with respect to officers and other participating employees of Southern California Edison Company, “Committee” shall also mean the Compensation and Executive Personnel Committee of the Southern California Edison Company Board of Directors.

“EIX CEO” means “the chief executive officer of EIX.”




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"Participant" means the CEO, president, executive vice presidents, senior vice presidents, elected vice presidents, and senior managers whose participation in this Plan has been approved by the Committee, the EIX CEO or the Board.

"Plan" means the Edison International Executive Incentive Compensation Plan.

2. Eligibility. To be eligible for the full amount of any incentive award, an individual must have been employed by the Company as a Participant for the entire calendar year. Pro-rata awards may be distributed to Participants who during the calendar year retired, became disabled, or had their employment transferred between a Company and a non-participating affiliate of EIX. In the event of the death of a Participant during the calendar year, a pro-rata award may be made at the discretion of the Committee, the Board, or CEO having the authority to approve the Participant's award had the death not occurred. In the event an individual first becomes a Participant after the start of the calendar year, a pro-rata award may be made at the discretion of the Committee, the Board, or CEO having the authority to approve the Participant's award.

3. Company Performance Goals. The CEOs will develop recommended Company performance goals. In consultation with the EIX CEO, the Committee will select specific performance goals for the year. The performance goals must represent relatively optimistic, but reasonably attainable goals, the accomplishment of which will contribute significantly to the attainment of Company strategic objectives.

4. Individual Incentive Award Levels. Company, organizational and individual performance relative to the pre-established goals will determine the award a Participant can receive. The Committee will establish target award levels for the year as a percentage of base salary at the time performance goals are set (and/or at such later time when the individual first becomes eligible to participate in the Plan or is eligible to receive a higher/lower target award level under the Plan because of a promotion/demotion or other approved reason). If a Participant is promoted after the Committee finalizes the performance goals for the year for purposes of Section 3 above (generally, the Committee meeting held in February each year) or otherwise becomes entitled to receive a higher/lower base salary and/or target award level under the Plan after such Committee action, that Participant’s incentive award for that year may be calculated based on the Participant's weighted average base salary and target award level, taking into account the base salary and target award level during the portion of the calendar year preceding the promotion and/or change in base salary and/or target award level, and the base salary and target award level(s) during the remainder of the calendar year. All awards are discretionary and will be based on the assessment of corporate and individual performance by the Committee or the CEO.






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5. Approval and Payment of Individual Awards. During the first quarter of the year following the completion of the calendar year, the EIX CEO, in consultation with the other CEOs, will assess the degree to which individual and corporate goals and objectives have been achieved. Incentive award recommendations for eligible officers will be developed. The Committee will receive a report from the EIX CEO as to overall Company performance, will deliberate on management recommendations, and will approve, or recommend for approval by the applicable Board, the officer awards. Awards to non-officers will be determined and approved by the CEO of each Company, or his/her designee. All decisions of the Committee, the EIX CEO, and the other CEOs regarding individual incentive awards will be final and conclusive.

Incentive award payments will be made as soon as practical following the appropriate approval (and in all events within two and one-half months after the end of the calendar year to which the award relates). Payment will be made in cash except to the extent an eligible Participant has previously elected to defer payment of some or all of the award pursuant to the terms of a deferred compensation plan of the Company. Awards made will be subject to any income or payroll tax withholding or other deductions as may be required by Federal, State or local law.

Awards under this Plan will not be considered to be salary or other compensation for the purpose of computing benefits to which the Participant may be entitled under any qualified Company retirement plan, including but not limited to the SCE Retirement Plan, the Edison 401(k) Savings Plan, or any other plan or arrangement of the Company for the benefit of its employees if such plan or arrangement is a plan qualified under Section 401(a) of the Code and is a trust exempt from Federal income tax under Section 501(a) of the Code. Awards may be considered compensation for nonqualified plan purposes depending on the terms and conditions of the particular nonqualified plan.

6. No Right to Assets. An award payable to a Participant under this Plan shall constitute an unsecured general obligation of the Participant’s employer (EIX or its affiliate, as the case may be, or, in the case of a former employee, the affiliate that last employed the Participant) (the applicable entity, the "Employer"), and no special fund or trust will be created, nor will any notes or securities be issued with respect to any awards. Participants 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. No Participant (or beneficiary of a Participant) 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, Participants 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 employees subject to the terms and conditions set forth herein.



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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 Participants, 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 Participant (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, 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 Participant will remain responsible for such benefits. EIX will effectuate any such election pursuant to this Section 6 by providing written notice to the Committee and the applicable affiliates regarding the effective date of such election, and the benefits, affiliates and Participants 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.

7. Plan Modifications and Adjustments. In order to ensure the incentive features of the Plan, avoid distortion in its operation and compensate for or reflect extraordinary changes which may have occurred during the calendar year, the Committee may make adjustments to the Company performance goals or other Plan terms and conditions before, during or after the end of the calendar year to the extent it determines appropriate in its sole discretion. Adjustments to the Plan shall be conclusive and binding upon all parties concerned. The Plan may be modified or terminated by the Committee at any time.

8. Plan Administration. This Plan and any officer awards made pursuant to it are to be approved by the Committee or the Board of the participating affiliate after review by the Committee. Each CEO, or his/her delegate, shall approve any non-officer awards. Administration of the Plan is otherwise delegated to the senior officer of EIX responsible for Human Resources (and to the EIX director responsible for executive compensation (the “EIX EC Director”) if EIX does not have an officer responsible for Human Resources other than the EIX CEO) and designees acting under his/her (or the EIX EC Director’s) direction. Such officer is authorized (and the EIX EC Director is authorized) to approve ministerial amendments to the Plan, to interpret Plan provisions, and to approve changes




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as may be required by law or regulation. No Company, Board, Committee or individual shall be liable to any person for any action taken or omitted in connection with the interpretation and administration of the Plan.

9. Successors and Assigns. This Plan shall be binding upon and inure to the benefit of the heirs, legal representatives, successors and assigns of the Company and Participant.

Notwithstanding the foregoing, any right to receive payment hereunder is hereby expressly declared to be personal, nonassignable and nontransferable, except by will, intestacy, or as otherwise required by law, and in the event of any attempted assignment, alienation or transfer of such rights contrary to the provisions hereof, the Company shall have no further liability for payments hereunder.

10. Beneficiaries. Any award approved following the death of a Participant will be made to the Participant's most recently designated beneficiary or beneficiaries under the 2007 Performance Incentive Plan (or any successor equity incentive plan) of the Company. If no beneficiary has been designated by the Participant, or if no beneficiary survives the Participant, or if a designated beneficiary should die after surviving the Participant but before the award has been paid, any award approved will be paid in a lump-sum payment to the Participant's estate as soon as practicable.

11. Capacity. If any person entitled to payments under this Plan is incapacitated and unable to use such payments in his or her own best interest, the Company 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 the payment to the person unable to use the payments. Court-appointed guardianship or conservatorship may be required by the Company before payment is made. The Company shall have no obligation to supervise the use of such payments.

12. No Right of Employment. Nothing contained herein shall be construed as conferring upon the Participant the right to continue in the employ of the Company as an officer or manager of the Company or in any other capacity.

13. Severability and Controlling Law. The various provisions of this Plan 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. This Plan shall be governed by the laws of the State of California.

14. Section 409A. This Plan shall be construed and interpreted to comply with Section 409A of the Code.






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15. Claw-Back. Notwithstanding any provision of this Plan to the contrary, this Plan, any award under this Plan, and any payment that may be made in respect of an award under this Plan, shall be subject to any recoupment, “clawback” or similar provisions of applicable law, as well as the Company’s Incentive Compensation Clawback Policy, as in effect from time to time, and any other recoupment or similar policies of the Company that may be in effect from time to time.

IN WITNESS WHEREOF, EIX has adopted this amended version of this Plan effective the 24th day of August, 2016.

EDISON INTERNATIONAL

/s/ Jacqueline Trapp
                                                 
Jacqueline Trapp

                    Vice President, Human Resources

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Exhibit 10.3     

SOUTHERN CALIFORNIA EDISON COMPANY
EXECUTIVE SUPPLEMENTAL BENEFIT PROGRAM
As Amended August 24, 2016
This Executive Supplemental Benefit Program (“Program”) was originally effective March 15, 1978, and as thereafter amended consists of several parts or plans, each paid for by the Company: Part (A) “Survivor Income Continuation,” Part (B) “Supplemental Survivor Income,” Part (C) “Supplemental Survivor Income/Retirement Income” (which further consists of separate death benefit and retirement plans), and Part (D) “Supplemental Long-Term Disability.” Each separate part or plan that is included within this Program is intended to be a separate plan within the meaning of Section 409A of the Internal Revenue Code of 1986 (as amended, the “Code”) and Treasury Regulation Section 1.409A-1(c).
Eligible members (hereinafter referred to as “Participants”) are automatically provided coverage under the “Survivor Income Continuation” and the “Supplemental Long-Term Disability” parts of the Program. The “Supplemental Survivor Income” and the “Supplemental Survivor Income/Retirement Income” parts are in the alternative and employees who became eligible to participate irrevocably elected coverage under one or the other, but not both prior to January 1, 2005. It is the intention of the Company to continue these plans indefinitely, but they are subject to cancellation or amendment as may be required by law or as deemed appropriate by the Board of Directors except with respect to rights which have matured by reason of death, disability, or retirement of a Participant.
Individual eligibility and participation in these plans are subject to the terms and conditions set forth below and are only available to those employees whose participation was approved by the Chairman of the Board and Chief Executive Officer and who either (1) retired on or before January 1, 1993, or (2) were participants in these plans as of December 31, 1992 and did not elect in 1993 or 1994 to cease participation in these plans in favor of participation in the Executive Survivor and Disability Benefit Program. No benefits will be paid under these plans with respect to any employee who terminates his or her employment with the Company prior to retirement for any reason other than death or Separation from Service as defined in the Edison International 2008 Executive Severance Plan (the “Severance Plan”) such that the employee is eligible for benefits under the Severance Plan.
Notwithstanding the foregoing, if a Participant who is eligible under this Program becomes entitled to receive severance benefits under the Severance Plan or any similar successor plan as in effect upon the Participant’s Separation from Service, then such Participant shall be entitled to continued coverage under this Program with the same terms applicable for an eligible active employee for the one-year period commencing on the Participant’s Termination Date (as defined in the Severance Plan) (in the case of a Separation from Service during the Protected Period associated with a Change in Control due to severance or resignation for Good Reason (as such terms are defined in the Severance Plan), two years for Senior Vice Presidents and Executive Vice Presidents of Edison International, Southern California Edison Company, or Edison Energy Group, Inc., but three years for the most senior officer of Edison International, the most senior officer of Southern California Edison Company, the most senior officer of Edison Energy, Inc.,

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the General Counsel of Edison International, and the Chief Financial Officer of Edison International). If the Participant is entitled to a Retirement Income benefit under Section 4 of Part C and becomes entitled to receive severance benefits under the Severance Plan or any similar successor plan as in effect upon the Participant’s Separation from Service, then the Participant will be entitled to an additional one year of age credit beyond the Participant’s age on his or her Termination Date for purposes of the Retirement Income benefit calculation (in the case of a Separation from Service during the Protected Period associated with a Change in Control due to severance or resignation for Good Reason (as such terms are defined in the Severance Plan), two years for Senior Vice Presidents and Executive Vice Presidents of Edison International, Southern California Edison Company, or Edison Energy Group, Inc., but three years for the most senior officer of Edison International, the most senior officer of Southern California Edison Company, the most senior officer of Edison Energy Group, Inc., the General Counsel of Edison International, and the Chief Financial Officer of Edison International).
Part A.
Survivor Income Continuation Plan
1.      The basic Survivor Income Continuation benefit for Participants prior to retirement shall be an annual amount equal to 63% of the Participant’s total compensation, including final annual base salary and any Executive Incentive Compensation Awards. For purposes of the Executive Supplemental Benefit Program, the dollar amount of any Executive Incentive Compensation Awards shall be determined by applying the average percentage awards received in the three (3) highest years out of the last five (5) years (except for periods of less than three (3) years, in which case the highest percentage award received will be used). This percentage will then be applied to the Participant’s final annual base salary to arrive at a dollar amount which will be added to the Participant’s final annual base salary. This total dollar amount, rounded to the next highest thousand dollars, will be the Participant’s “Total Compensation” for purposes of the Executive Supplemental Benefit Program.
Survivor Income Continuation payments shall continue for ten (10) years following the Participant’s death. Payments shall be made in equal monthly installments commencing within 90 days following the date of death, and such payments shall be made to the Participant’s then living spouse or other designated beneficiary, if any. If, under this Survivor Income Continuation Plan, a Participant or beneficiary dies under circumstances in which benefits are payable but there is no beneficiary designation, or all other beneficiaries predeceased such Participant or designated beneficiary, any remaining payments shall be made to the estate of whomever was last receiving benefit payments.
In determining the basic benefit of 63% of Total Compensation payable for 10 years, the Company has initially assumed a 10% nominal interest rate and a 50% marginal federal income tax rate. The basic benefit percentage of 63% (or 31.5% in the case of retired participants as described below) may be increased or decreased at the sole discretion of the Company because of changes in the interest rate assumption or in the tax rate assumption. However, any such changes in the basic benefit percentage will be made by the Company so that the after-tax dollar amount payable to the survivor(s) under this Part A will, as much as possible, approximate the after-tax dollar benefits which would have been paid under the prior plan before the Program was amended on December 20, 1984.

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2.      For those employees who retire and are participating in this Part A, the basic post‑retirement Survivor Income Continuation benefit shall be an amount equal to 31.5% of the employee’s Total Compensation, including final annual base salary and any Executive Incentive Compensation Award (determined pursuant to Section 1 hereof) and shall become payable upon the death of the Participant. Any such post-retirement payments shall be made over 10 years, as described in Section 1 above.
3.      In addition to the basic benefit described in Section 1 above, a death benefit may also be available (in addition to any other benefits) if death occurs prior to retirement under circumstances which qualify as “accidental death” as defined in any master accidental death and dismemberment insurance policy which may be maintained by the Company. This accidental death benefit will be in an amount equal to a basic benefit coverage of two times the sum of the Participant’s annual base salary, plus any awards under the Executive Incentive Compensation Plan, determined according to Section 1 hereof.
Part B.
Supplemental Survivor Income Plan
1.      Eligibility
Participation in this Part shall be available to employees (i) whose participation has been approved by the Chairman of the Board and Chief Executive Officer and (ii) who executed, on a form provided pursuant hereto within the prescribed time limit and in all cases prior to January 1, 2005, an election to be covered hereunder instead of under Part C, the Supplemental Survivor Income/Retirement Income Plan. Beneficiary designations shall be made on a form provided pursuant hereto and may be modified at any time unless the designation is specified as irrevocable, in which case, no subsequent beneficiary designation shall be valid.
2.      Preretirement Benefit
Upon the death prior to retirement of a Participant, an annuity shall be payable as follows:
(a)      If the designated beneficiary is the surviving spouse of the Participant (or a spouse at the time of beneficiary designation, but not at death), the amount of this benefit will be a lifetime monthly annuity payment. The monthly amount of this benefit will be equal to one twelfth (1/12) of 25% of the sum of the Participant’s annual base salary at the time of death plus the amount of any Executive Incentive Compensation Awards (determined according to Section 1 of Part A hereof). This monthly benefit shall be paid in equal monthly installments commencing within 90 days following the date of death. Such payments will be for a minimum of ten years and, should the surviving spouse die less than ten years after the Participant, any remaining benefits will be payable to the successor beneficiary designated by the Participant or, if there be none, to the spouse’s designated beneficiary in the same manner as the payments had been made to the spouse for the remainder of any such ten year period. If the surviving spouse (or designated former spouse) is more than three years younger than the Participant, the lifetime monthly annuity benefit shall be calculated as follows: (i) the present value of the benefit payable shall be calculated as if such spouse were three years younger than the Participant; (ii) such present value shall be converted to a monthly benefit amount based on the actuarial life expectancy of the actual

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surviving spouse (or surviving designated former spouse) and shall be determined using (i) the interest rate assumption determined pursuant to Section 1 of Part A hereof, and (ii) 1983 Group Annuity Mortality table.
(b)      If the Participant designates a beneficiary or beneficiaries (other than his or her spouse or a former spouse eligible for benefits under the preceding paragraph) such beneficiary or beneficiaries will receive a monthly benefit to be determined as follows. The amount of this monthly benefit will be equal to one-twelfth (1/12) of 25% of the sum of the Participant’s annual base salary at the time of death plus the amount of any Executive Incentive Compensation Awards (determined according to Section 1 of Part A hereof). This monthly benefit shall be paid in equal monthly installments commencing within 90 days following the date of death. Such payments shall continue for a period equal to the assumed life expectancy of a spouse three years younger than the Participant at the time of the Participant’s death, using the 1983 Group Annuity Mortality table. This benefit shall be payable for a minimum of ten years, and should a beneficiary die less than ten years after the death of the Participant, any unpaid benefits remaining for this ten-year period shall be payable to the successor beneficiary designated by the Participant or, if there be none, to whomever his or her beneficiary designates.
(c)      If, under this Supplemental Survivor Income Plan, a Participant or beneficiary dies under circumstances in which benefits are payable but there is no beneficiary designation, or all other beneficiaries predeceased such Participant or designated beneficiary, any remaining payments shall be made to the estate of whomever was last receiving benefit payments.
3.      Post-retirement Benefit
Upon the death after retirement of a Participant, his or her beneficiary shall be paid a monthly benefit in an amount equal to one-twelfth (1/12) of 25% of the sum of the Participant’s annual base salary (immediately prior to retirement) plus the amount of any Executive Incentive Compensation Awards (determined according to Section 1 of Part A hereof). This monthly benefit shall be paid in equal monthly installments commencing within 90 days following the date of death. This benefit will be payable for ten years only and, should the designated beneficiary (or subsequent beneficiary) die prior to the expiration of such ten year period, any remaining payments will be continued, until exhausted, to the successor beneficiary designated by the Participant or, if there be none, to whomever the beneficiary designates.
If, under this Supplemental Survivor Income Plan, a Participant or designated beneficiary dies under circumstances in which benefits are payable but there is no beneficiary designation, or all other beneficiaries have predeceased such Participant or beneficiary, any remaining payments shall be paid to the estate of whomever was last receiving benefit payments.
Part C.
Supplemental Survivor Income/Retirement Income Plan
1.      Eligibility
Participation in this part shall be available to employees (i) whose participation has been approved by the Chairman of the Board and Chief Executive Officer and (ii) who executed, on a form provided pursuant hereto within the prescribed time limit and in all cases prior to

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January 1, 2005, an election to be covered hereunder instead of under Part B, the Supplemental Survivor Income Plan. Beneficiary designations shall be made on a form provided pursuant hereto and may be modified at any time unless the designation is specified as irrevocable, in which case, no subsequent beneficiary designation shall be valid. For the avoidance of doubt, the Supplemental Survivor Income and Retirement Income sections of this Part C are each intended as a separate plan within the meaning of Section 409A of the Code and Treasury Regulation Section 1.409A-1(c).
2.      Preretirement Benefit
Upon the death, prior to retirement of a Participant, an annuity shall be payable as follows:
(a)      If the designated beneficiary is the surviving spouse of the Participant (or a spouse at the time of beneficiary designation, but not at death), the amount of this benefit will be a lifetime monthly annuity payment. The monthly amount of this benefit will be equal to one‑twelfth (1/12) of 25% of the sum of the Participant’s annual base salary at the time of death plus the amount of any Executive Incentive Compensation Awards (determined according to Section 1 of Part A hereof). This monthly benefit shall be paid in equal monthly installments commencing within 90 days following the date of death. Such payments will be for a minimum of ten years and, should the surviving spouse die less than ten years after the Participant, any remaining unpaid benefits will be payable to the successor beneficiary designated by the Participant or, if there be none, to the spouse’s designated beneficiary in the same manner as the payments had been made to the spouse for the remainder of such ten-year period. If the surviving spouse (or designated former spouse) is more than three years younger than the Participant, the lifetime monthly benefit shall be calculated as follows: (i) the present value of the benefit payable shall be calculated as if such spouse were three years younger than the Participant; (ii) such present value shall be converted to a monthly benefit amount based on the actuarial life expectancy of the actual surviving spouse (or surviving designated former spouse) and shall be determined using (i) the interest rate assumption determined pursuant to Section 1 of Part A hereof, and (ii) the 1983 Group Annuity Mortality table.
(b)      If the Participant designates a beneficiary or beneficiaries other than his or her spouse (or a former spouse eligible for benefits under the preceding paragraph) such beneficiary or beneficiaries will receive a monthly benefit to be determined as follows. The amount of this monthly benefit will be equal to one-twelfth (1/12) of 25% of the sum of the Participant’s annual base salary at the time of death plus the amount of any Executive Incentive Compensation Awards (determined according to Section 1 of Part A hereof). This monthly benefit shall be paid in equal monthly installments commencing within 90 days following the date of death. Such payments shall continue for a period equal to the assumed life expectancy of a spouse three years younger than the Participant at the time of the Participant’s death using the 1983 Group Annuity Mortality table. This benefit shall be payable for a minimum of ten years, and should a beneficiary die less than ten years after the death of a Participant, any unpaid benefits remaining for this ten year period shall be payable to the successor beneficiary designated by the Participant or, if there be none, to whomever his or her beneficiary designates. If, under this Supplemental Survivor Income/Retirement Income Plan, a Participant or beneficiary dies under circumstances in which benefits are payable but there is no beneficiary designation, or all other beneficiaries

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predeceased such Participant or designated beneficiary, any remaining payments shall be made to the estate of whomever was last receiving benefit payments.
3.      Post-retirement Benefit
Upon the death, after retirement, of a Participant, his or her beneficiary shall be paid a monthly benefit in an amount equal to one-twelfth (1/12) of 25% of the sum of the Participant’s final annual base salary (immediately prior to retirement) plus the amount of any Executive Incentive Compensation Awards (determined according to Section 1 of Part A hereof). This monthly benefit shall be paid in equal monthly installments commencing within 90 days following the date of death.
This benefit will be payable for ten years only and, should the designated beneficiary (or subsequent beneficiary) die prior to the expiration of such ten year period, any remaining payments will be continued, until exhausted, to the successor beneficiary designated by the Participant or, if there be none, to whomever his or her beneficiary designates.
If, under this Supplemental Survivor Income/Retirement Income Plan, a Participant or designated beneficiary dies under circumstances in which benefits are payable but there is no beneficiary designation, or all other beneficiaries predeceased such Participant or designated beneficiary, any remaining payments shall be made to the estate of whomever was last receiving benefit payments.
4.      Supplemental Retirement Income Benefit
(a)      In accordance with transition rules under Section 409A of the Code, a Participant may (i) apply for a supplemental retirement annuity in lieu of the benefit which otherwise would be made available to a beneficiary under Section 3 of this Part C and/or (ii) elect whether to commence payment (A) within 90 days following the date of the Participant’s Separation from Service or (B) within 60 days following the later of the Participant’s Separation from Service or the first day of the month following the month in which the Participant attains age 61. Such application shall be submitted in writing, by December 31, 2008, to the Chief Executive Officer of Edison International, and shall include a statement of the reasons for such application. For purposes of this Program, Separation from Service shall be as defined in the Severance Plan, and shall mean the date when the Participant has a termination of employment 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.
(b)      Upon approval of the application by the Chief Executive Officer of Edison International, the Participant, if he or she retires at or after age 61, shall receive a supplemental retirement annuity in a monthly amount equal to one-twelfth (1/12) of 10% of the sum of the retired Participant’s final annual base salary plus the amount of any Executive Incentive Compensation Awards (determined according to Section 1 of Part A, hereof). The supplemental retirement annuity shall be paid in equal monthly installments commencing within 90 days following the date of the Participant’s Separation from Service, unless the Participant has timely elected to commence payment within 60 days following the later of the Participant’s Separation from Service or the first day of the month following the month in which the Participant attains age 61. The supplemental

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retirement annuity shall be payable monthly for ten years only, to the Participant or his or her designated beneficiary (or subsequent beneficiary) should he or she die prior to the exhaustion of benefits available under this option.
(c)      Effective for eligible Participants retiring on or after September 1, 1983 and after giving effect to any age credits provided for in this Program in connection with the Participant’s Separation from Service, if the Participant’s application for this optional benefit is approved and he or she retires prior to age 61 but not earlier than age 60, the benefit described under (b) shall be reduced by an amount equal to one-quarter of one percent (1/4%) for each month between his or her benefit payment commencement date and the first day of the month nearest his or her 61st birthday. For each month the benefit payment commencement date precedes age 60, the Participant’s benefit amount shall be reduced an additional one-third of one percent (1/3%).
(d)      If, under this Supplemental Survivor Income/Retirement Income Plan, a Participant or beneficiary dies under circumstances in which benefits are payable but there is no beneficiary designation, or all other beneficiaries have predeceased such Participant or beneficiary(ies), any remaining payments shall be made to the estate of whomever was last receiving benefit payments.
Part D.
Supplemental Long-Term Disability Plan
1.      To qualify for benefits under this Part D, a Participant must (i) be eligible for and (ii) qualify to receive monthly disability benefits under the Company’s Long-Term Disability Plan for Management Employees.
Eligibility for benefits under this Part D will be determined according to the eligibility standards and requirements set forth in the Company’s Long-Term Disability Plan for Management Employees.
2.      The monthly income benefit payable under this Part D to an eligible and qualified participant shall be an amount equal to one-twelfth (1/12) of 60% of the amount of any Executive Incentive Compensation Awards. For purposes of this Part D, the dollar amount of any Executive Incentive Compensation Awards shall be determined by applying the average percentage awards received in the three (3) highest years out of the last five years (except for periods of less than three (3) years, in which case the highest percentage award received will be used). This percentage will then be applied to the Participant’s final annual base salary (before his or her disability) to arrive at a dollar amount of any Executive Incentive Compensation Awards to which the 60% factor will be applied. This monthly disability benefit will be calculated as of the first of the month in which the total disability began.
3.      Payment of benefits shall commence at the same time, or as soon thereafter as practicable, as monthly income benefit payments begin under the Company’s Long-Term Disability Plan for Management Employees.
4.      Payment of benefits under this Part D shall continue until such time as monthly benefits end under the Company’s Long-Term Disability Plan for Management Employees.

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5.    To the fullest extent possible, the Company intends to administer this Part D according to the provisions of its Long-Term Disability Plan for Management Employees.
Part E.
Administration
1.      The Executive Supplemental Benefit Program described herein (comprised of Parts A, B, C and D) shall be administered by the Company, under the direction of the Vice President, Human Resources, or such other individuals as may be authorized by him or her to perform such duties. Such administration shall include the power to interpret the various Parts of the Program, and make such equitable adjustments as may be necessary to effectuate the purposes thereof.
2.      The payments to be made by the Company pursuant hereto require the Participant, for so long as the Participant remains in the active employ of the Company, to devote substantially all of his or her time, skill, diligence and attention to the business of the Company, 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 Company.
3.      In the event that the employment of the Participant by the Company is terminated for any reason other than death, disability, a Separation from Service such that the Participant is eligible for benefits under the Severance Plan, or retirement, any benefits under this Program shall thereupon terminate, and the Company shall have no further obligation hereunder. Nothing contained herein shall be construed to be a contract of employment for any term of years, nor as conferring upon the Participant the right to continue in the employ of the Company as a Management employee or in any other capacity. This Program relates exclusively to Executive Supplemental Benefits and is not intended to be an employment contract.
4.      All payments hereunder shall be paid in cash from the general funds of the Company, and no special or separate fund shall be established and no other segregation of assets shall be made to assure the payment of any benefits hereunder. Nothing contained in this Program, and no action taken pursuant to any of its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship, between the Company and the Participant, a designated beneficiary, or any other beneficiaries of the Participant, or any other person. Payments to the Participant or the Participant’s survivor or other designated beneficiary(ies) or any other beneficiary hereunder shall be made from assets which shall continue, for all purposes, to be a part of the general assets of the Company, and no person shall have by virtue of the provisions of this Program, any interest in such assets. To the extent that any person acquires a right to receive payments from the Company under the provisions hereof, such right shall be no greater than the right of any unsecured general creditor of the Company.
5.      In the event that, in its discretion, the Company purchases an insurance policy or policies insuring the life of the Participant to allow the Company to recover, in whole, or in part, the cost of providing the benefits hereunder, neither the Participant, the survivor or other designated beneficiary(ies), nor any other beneficiary shall have any rights whatsoever therein; the Company shall be the sole owner and beneficiary thereof and shall possess and may exercise all incidents of ownership therein.

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6.      Benefits under this Program shall be binding upon and inure to the benefit of the heirs, legal representatives, successors and assigns of the parties. Notwithstanding the foregoing, the right to receive payment hereunder is hereby expressly declared to be personal, nonassignable and nontransferrable, except by will, intestacy, or as otherwise required by law, and in the event of any attempted assignment, alienation or transfer of such rights contrary to the provisions hereof, the Company shall have no further liability for payments hereunder.
7.      Subject to Section 8 of Part E, the Company shall make all determinations as to rights to benefits under this Program. Any decision by the Company denying a claim by the Employee or his or her beneficiary for benefits under this Plan shall be stated in writing and delivered or mailed to the Participant or such beneficiary hereof. Such notice shall set forth the specific reasons for the denial, written in a manner that may be understood without legal or actuarial counsel. In addition, the Company shall afford a reasonable opportunity to the Participant or such beneficiary for a full and fair review of the decision denying such claim.
8.      The Board (either directly or through its designees) will have power and authority to interpret, construe, and administer this Program; provided that, the Board’s authority to interpret this Program shall not cause the Board’s decisions in this regard to be entitled to a deferential standard of review in the event that a Participant or beneficiary seeks review of the Board’s decision as described below. In addition, the Board shall have the power to prospectively modify or terminate this Program, provided that any such modification or termination does not result in the elimination of any rights that the Participant or beneficiary may have under this Program. Absent the consent of the Participant, however, the Board shall in no event have any authority to modify this section.
No member of the Board, nor its designee, shall be liable to any person for any action taken or omitted in connection with the interpretation and administration of this Program.
In the event of an amendment or termination of any Part of this Program, the benefits payable on account of a retired or deceased Participant shall not be impaired, and the benefits of other Participants shall not be less than the benefits to which each such Participant would have been entitled immediately prior to such amendment or termination of any Part (or Parts) of the Program.
Effective as to any claims filed on or after June 19, 2014, final and binding arbitration under this Section 8 shall be the sole remedy available to a Participant or beneficiary after he or she has exhausted the claim and review procedures set forth in Section 7 of Part E. Furthermore, exhaustion by the Participant or beneficiary of the claim and review procedures set forth in Section 7 of Part E is a mandatory prerequisite for binding arbitration under this Section 8. Any arbitration or civil action brought prior to the exhaustion of the claim and review procedures set forth in Section 7 of Part E shall be remanded to the Company to permit the claim and review procedures to be exhausted.
After a Participant or beneficiary has exhausted the claim and review procedures set forth in Section 7 of Part E, if the Participant or beneficiary is determined by the Company not to be eligible for benefits, or if the Participant or beneficiary believes that he or she is entitled to

9

greater or different benefits, the Participant or beneficiary may submit his or her claim to final and binding arbitration under this Section 8.
Any arbitration under this Section 8 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 Company pursuant to the claim and review procedures set forth in Section 7 of Part E shall be upheld by the Arbitrator unless the Arbitrator determines that the Company abused its discretion. Notwithstanding the preceding sentence, if a Change in Control occurs, then a claim review decision rendered by the Company within the three years following the Change in Control shall, if it is challenged by the Participant or beneficiary in accordance with this Section 8, 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 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.
Notwithstanding any contrary provisions of this Section 8, if the claim is for disability benefits, the following rules apply: (1) arbitration under this Section 8 shall be the mandatory second level of appeal following the exhaustion by the Participant or beneficiary of the claim and review procedures set forth in Section 7 of Part E, and such exhaustion is a mandatory prerequisite for arbitration under this Section 8—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 7 of Part E shall be remanded to the Company to permit the claim and review procedures to be exhausted; (2) arbitration of a claim for disability benefits under this Section 8 shall not be binding, and the Participant or beneficiary 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 8, if the claim is for disability benefits, the arbitration shall be conducted as set forth in this Section 8.
9.      If any person entitled to payments under this Program is incapacitated and unable to use such payments in his or her own best interest, the Company may direct that payments (or

10

any portion thereof) 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. The Company shall have no obligation to supervise the use of such payments, and court-appointed guardianship or conservatorship may be required.
10.      A Participant or his or her designated beneficiary or beneficiaries may submit a hardship distribution request to the Board or its designee in writing setting forth the reasons for the request. The Board or its designee will have the sole authority to approve or deny such requests. Upon a finding that the Participant has suffered an Unforeseeable Emergency, the Board or its designee may in its discretion, permit the Participant to accelerate distributions of benefits under the Plan in the amount reasonably necessary to alleviate the Unforeseeable Emergency. For purposes of Section 10 under this Part E, “Unforeseeable Emergency” means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s designated beneficiary or beneficiaries, or the Participant’s spouse or dependent (as defined in Code Section 152, without regard to Section 152(b)(1), (b)(2) and (d)(1)(B)); loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, not as a result of a natural disaster); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the Participant’s control.
11.      Notwithstanding any provision of this Program to the contrary, if the Participant is a “specified employee” as defined in Section 409A of the Code, the Participant shall not be entitled to any payments or benefits under the Program upon a termination of his or her employment until the earlier of (i) the date which is six (6) months after his or her Separation from Service for any reason other than death, or (ii) the date of the Participant’s death. Any amounts otherwise payable to the Participant following a termination okf his or her employment that are not so paid by reason of this Section 11 of Part E shall be paid as soon as practicable (and in any event within thirty (30) days) after the date that is six (6) months after the Participant’s Separation from Service (or, if earlier, the date of the Participant’s death). The provisions of this Section 11 of Part E shall only apply if, and to the extent, required to comply with Section 409A of the Code.
SOUTHERN CALIFORNIA EDISON COMPANY

/s/ Jacqueline Trapp
    
Jacqueline Trapp
Vice President, Human Resources

11
Exhibit 10.4


EDISON INTERNATIONAL AND SOUTHERN CALIFORNIA EDISON COMPANY
DIRECTOR COMPENSATION SCHEDULE

As Adopted August 25, 2016

Effective October 1, 2016, except as otherwise provided below, non-employee Directors of Edison International (“EIX”) and/or Southern California Edison Company (“SCE”) will receive the annual retainers, meeting fees, meeting expenses and equity‑based awards described below as compensation for serving as a Director. The equity-based award provisions described below are effective for Directors elected or reelected on or after August 25, 2016, provided however that the provisions below for the additional equity-based award to the Chair of the EIX Board are effective October 3, 2016.

Directors who are employees of EIX or SCE shall not receive additional compensation for serving as Directors (other than participation in the EIX Director Matching Gifts Program). Directors who serve on both the EIX Board and the SCE Board, and their corresponding Board Committees, will not receive additional compensation, including additional meeting fees for SCE business meetings held concurrently or consecutively with a corresponding EIX business meeting.

Annual Retainers
Board Retainer – Each Director will receive an annual board retainer of $110,000 to be paid in advance in quarterly installments of $27,500 for any calendar quarter or portion thereof during which the individual serves as a Director.

Board Committee Chair Retainer – Each Director who serves as the Chair of a Board Committee will receive an additional annual retainer of$15,000, except the Director who serves as the Chair of the Audit Committee will receive an additional annual retainer of $20,000 and the Director who serves as the Chair of the Compensation and Executive Personnel Committee will receive an additional annual retainer of $17,500. The Committee Chair retainers shall be paid in advance in equal quarterly installments for any calendar quarter or portion thereof during which the Director serves as a Committee Chair.

Chair of EIX Board Retainer – A non-employee Director who serves as the Chair of the EIX Board shall receive an additional annual retainer of$62,500. The retainer shall be paid in advance in equal quarterly installments for any calendar quarter or portion thereof during which the Director serves as the Chair of the EIX Board.
The quarterly retainer installments will be paid on the first business day of the calendar quarter. Initial quarterly retainer installments will be paid as soon as possible following the effective date of the election.






1
    

Meeting Fees
No meeting fee shall be paid for attending a meeting of the Board, any Board Committee, or shareholders. Each Director will receive $2,000 for each business meeting attended at the request or invitation of the Chair of the Board, on behalf of the corporation in his or her capacity as a Director. Each Director shall receive only one meeting fee for any concurrent meetings attended by the Director. Full meeting fees will be paid if the Director attends any portion of any meeting.

Meeting fees will be paid on the first business day of either the first or second month following the month in which the meeting occurred.

Meeting Expenses
Reasonable expenses incurred by a Director to attend Board meetings, Committee meetings, or business meetings attended on behalf of the corporation in his or her capacity as a Director will be promptly reimbursed upon presentation of a statement of the expenses to the Secretary. 1  

Equity-Based Awards 2  
Equity-based awards (“Awards”) will be granted under and subject to the terms of the EIX 2007 Performance Incentive Plan or a successor plan (the “Plan”), except that any award payable in cash will be deemed paid outside of the Plan. The Awards consist of fully vested Edison International deferred stock units (“DSUs”) and/or Edison International common stock (“Common Stock”). DSUs represent the value of one share of Common Stock and will be credited to the Director’s account under the EIX Director Deferred Compensation Plan and subject to the terms of that plan. DSUs include dividend equivalent rights that are converted to additional DSUs. The number of DSUs or shares of Common Stock awarded to a Director in any particular instance will be calculated by dividing the applicable equity award amount to be granted on that date (expressed in dollars and determined as set forth below, the “Award Amount”) by the fair
________________________
1 To the extent any expense reimbursements provided for in this Director Compensation Schedule are taxable to a Director and provide for a deferral of compensation within the meaning of Section 409A of the Internal Revenue Code, the Director shall complete all steps required for reimbursement so as to facilitate payment, and any such reimbursements shall be paid to the Director on or before December 31 of the calendar year following the calendar year in which the expense was incurred. Such reimbursements shall not be subject to liquidation or exchange for other benefits, and the expenses eligible for reimbursement in one calendar year shall not affect the expenses eligible for reimbursement in any other calendar year.

2 With respect to equity-based awards approved and granted under current and prior compensation plans by the EIX Board, this Director Compensation Schedule does not alter the intent of the EIX Board to have the awards and subsequent transactions by the Directors occurring pursuant to the awards continue to comply with and be exempt under Section 16(b) of the Securities Exchange Act of 1934, as amended, pursuant to Rule 16b-3 promulgated thereunder (or any successor provision thereto).







2
    

market value of a share of Common Stock as of that date, rounded up to the nearest whole share. Fair market value for these purposes shall be determined in accordance with the Plan. Each Award will be subject to terms and conditions approved in advance by the Board.

Initial Election Award – Upon the initial election of a Director to the Board, the Director will receive an award of DSUs with an aggregate Award Amount of $135,000 subject to proration as provided below, the date of grant of which shall be the effective date of such election.

Annual Reelection Award – Each Director reelected to the Board will receive Common Stock and/or DSUs with an aggregate Award Amount of $135,000, the date of grant of which shall be the date of such reelection. The portion of the award to be granted in Common Stock and/or DSUs shall be specified in advance by the Director as provided in the next paragraph.

Prior to the year the Annual Reelection Award is granted, the Director may elect to receive the award entirely in shares of Common Stock, entirely in DSUs, or in any combination of each, except that if a fractional share would result, the Common Stock portion will be rounded up to the next whole share and the DSU portion will be rounded down to the next whole DSU. If no such election is timely made by the Director for a particular year, the Director’s Annual Reelection Award (if any) for that year will be entirely Common Stock.

Additional Award to Chair of EIX Board – Upon the initial appointment of a non-employee Director as Chair of the EIX Board, the Director will receive Common Stock and/or DSUs with an aggregate Award Amount of $62,500 subject to proration as provided below. The grant date of such Additional Award for Mr. Sullivan’s appointment as Chair of the EIX Board shall be October 3, 2016. The grant date of such Additional Award in connection with the subsequent appointment of any other non-employee Director as Chair of the EIX Board shall be the effective date of such appointment.

If a non-employee Director serving as Chair of the EIX Board is reelected to the EIX Board and is reappointed or otherwise remains Chair of the EIX Board following such reelection, then that Director will receive an Additional Award of Common Stock and/or DSUs with an Award Amount of $62,500 (in addition to the Annual Reelection Award Amount of $135,000, for a total Award Amount of $197,500), the grant date of which shall be the date of such reelection.

The portion of the Additional Award to be granted in Common Stock and/or DSUs shall be subject to the Director’s election in effect (if any) for that year’s Annual Reelection







3
    

Award. 3 To the extent no such election is in effect, the Additional Award for an initial appointment as Chair shall be made in the form of DSUs and any subsequent Additional Award for that Chair shall be made in the form of Common Stock.

Proration of Certain Awards. The Initial Election and Additional Award amounts provided for above are subject to proration if the grant date of the Award occurs (i) in the second quarter of EIX’s fiscal year and after the date of EIX’s annual meeting of shareholders for that year, (ii) in the third quarter of EIX’s fiscal year, or (iii) in the fourth quarter of EIX’s fiscal year. In determining the Award Amount as to any such Award, the applicable dollar amount set forth above will be multiplied by a percentage determined in accordance with the table set forth below.

If the grant date of the award occurs:
Then the applicable percentage is:
In the first quarter of EIX’s fiscal year, or in the second quarter of EIX’s fiscal year and on or before the date of EIX’s annual meeting of shareholders for that year
100% (no proration)
In the second quarter of EIX’s fiscal year and after the date of EIX’s annual meeting of shareholders for that year
75%
In the third quarter of EIX’s fiscal year
50%
In the fourth quarter of EIX’s fiscal year
25%

However, if a non-employee Director receives an Initial Election and/or Additional Award during a particular EIX fiscal year before the date of EIX’s annual meeting of shareholders for that year, the Director will not receive that same Award Amount again if he or she is reelected as a Director in that fiscal year. 4  

EIX Affiliate Boards – SCE non-employee Directors who do not serve on the EIX Board will receive Awards equal in amount to EIX non-employee Directors if the SCE Board authorizes such compensation. Differing amounts of SCE Awards, and Awards for non‑employee directors of other EIX affiliates, may only be made with additional approval of the EIX Board.

_________________________

3 If the Director’s election is a for a combination of Common Stock and DSUs that would result in a fractional share, then the Common Stock portion will be rounded up to the next whole share and the DSU portion will be rounded down to the next whole DSU.
4 For example, if a non-employee Director is initially elected to the Board in the first quarter of EIX’s fiscal year or in the second quarter before the date of EIX’s annual meeting of shareholders for that year, and is then reelected to the Board on the date of EIX’s annual meeting of shareholders for that year, the Director would receive an Initial Award in connection with his or her initial election to the Board, but would not receive an Annual Reelection Award in connection with that annual meeting. If that Director is initially appointed as Chair of the EIX Board at that annual meeting, he or she would receive the Additional Award.







4
    



Matching Gift Program
Directors of EIX and SCE are eligible to participate in the EIX Director Matching Gifts Program.


5
    

Exhibit 10.5

EDISON INTERNATIONAL
2008 EXECUTIVE SEVERANCE PLAN
Amended and Restated Effective
August 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


i



 
 
Page

6.7

Termination of Employment
14

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 August 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.

2

                    

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.
(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. 1  
Employer means the Affiliate employing the Eligible Employee. As the context may require, an Eligible Employee’s Employer means the Employer tPlanhat 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

5

                    

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, or Edison Energy Group, Inc. 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

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“one-year period” in Section 2.3.4. “$30,000” 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.
2.4.2      Certain Additional Enhanced Benefits
If the Eligible Employee was the most senior officer of EIX, the most senior officer of Southern California Edison Company, the most senior officer of Edison Energy Group, Inc., the General Counsel of EIX, or the 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 Chair of the Administrator or any other member or members of the Administrator designated by the Chair of the Administrator 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 August 24, 2016.

EDISON INTERNATIONAL

/s/ Jacqueline Trapp
    
Jacqueline Trapp
Vice President, Human Resources



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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.

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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.
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A-9


Exhibit 31.1


CERTIFICATION


I, PEDRO J. PIZARRO, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 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: November 1, 2016

/s/ PEDRO J. PIZARRO.
PEDRO J. PIZARRO
Chief Executive Officer





Exhibit 31.1


CERTIFICATION


I, MARIA RIGATTI, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 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: November 1, 2016

/s/ MARIA RIGATTI
MARIA RIGATTI
Chief Financial Officer




Exhibit 31.2

CERTIFICATION
I, KEVIN M. PAYNE, certify that:
1.    I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 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: November 1, 2016
/s/ KEVIN M. PAYNE
KEVIN M. PAYNE
Chief Executive Officer






Exhibit 31.2

CERTIFICATION
I, WILLIAM M. PETMECKY III, certify that:
1.    I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September30, 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: November 1, 2016
/s/ WILLIAM M. PETMECKY III
WILLIAM M. PETMECKY III
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 September 30, 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 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: November 1, 2016
/s/ PEDRO J. PIZARRO
PEDRO J. PIZARRO
Chief Executive Officer
Edison International
 
/s/ MARIA RIGATTI
MARIA RIGATTI
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 September 30, 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 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: November 1, 2016
/s/ KEVIN M. PAYNE
KEVIN M. PAYNE
Chief Executive Officer
Southern California Edison Company
 
/s/ WILLIAM M. PETMECKY III
WILLIAM M. PETMECKY III
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.