EDISON INTERNATIONAL 2006 Long-Term Incentives Terms and Conditions

1.

LONG-TERM INCENTIVES

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Nonqualified stock options to purchase shares of EIX Common Stock (“EIX Options”) as described in Section 3, such options to be awarded under the Equity Compensation Plan (the “ECP”) or the 2000 Equity Plan (collectively, the “Plans”);

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Dividend equivalents to be awarded under the ECP as described in Section 4, such dividend equivalents to be paid in cash (“Dividend Equivalents”); and

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Contingent EIX performance units (“Performance Shares”), 50% of which will be payable in the form of Stock Payments and 50% of which will be payable in cash, such Performance Shares to include related dividend equivalents payable in cash (“PS Dividends”), in each case as described in Section 5.

2.

VESTING OF LTI

2.1

EIX Options and Dividend Equivalents. The EIX Options and Dividend Equivalents vest over a four-year period as described in this Section 2 (the “Vesting Period”). The effective “initial vesting date” will be January 2 of the year following the date of the grant, or six months after the date of the grant, whichever date is later. The EIX Options and Dividend Equivalents will vest as follows:

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On the initial vesting date, one-fourth of the award will vest.

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On January 2, 2008, an additional one-fourth of the award will vest.

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On January 2, 2009, an additional one-fourth of the award will vest.

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On January 2, 2010, the balance of the award will vest.

2.2

Performance Shares and PS Dividends. The Performance Shares and related PS Dividends will vest and become payable to the extent earned as determined at the end of the three-calendar-year period commencing on January 1, 2006, and ending December 31, 2008 (the “Performance Period”), subject to the provisions of Section 5.

2.3

Continuance of Employment/Service Required. The vesting schedule requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the LTI and the rights and benefits thereunder. Employment or service for only a portion of the vesting period, even if a substantial portion, will not entitle the Holder to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services except as provided in Section 8 below.

3.

EIX OPTIONS

3.1

Exercise Price. The exercise price of an EIX Option stated in the award certificate is the average of the high and low sales prices of EIX Common Stock on the New York Stock Exchange for the effective date of the award.

3.2

Cumulative Exercisability; Term of Option. The vested portions of the EIX Options will accumulate to the extent not exercised, and be exercisable by the Holder subject to the provisions of this Section 3 and Sections 8 and 9, in whole or in part, in any subsequent period but not later than January 4, 2016.

3.3

Method of Exercise. The Holder may exercise an EIX Option by providing written notice to EIX on the form prescribed by the Committee for this purpose accompanied by full payment of the applicable exercise price. Payment must be in cash or its equivalent acceptable to EIX. At the discretion of the Holder, EIX Common Stock valued on the exercise date at a per share price equal to the average of the high and low sales prices of EIX Common Stock on the New York Stock Exchange may be used to pay the exercise price, provided the Company can comply with any legal requirements and any shares used to pay the exercise price that were initially acquired from the Company have been owned by the Holder for more than six months. A broker-assisted "cashless" exercise may be accommodated for EIX Options at the discretion of EIX. Until payment is accepted, the Holder will have no rights in the optioned stock. The provisions of Section 11 must be satisfied as a condition precedent to the effectiveness of any purported exercise.

4.

DIVIDEND EQUIVALENTS

4.1

Dividend Equivalent Account. A Dividend Equivalent account will be established on behalf of the Holder. During the five-year period commencing January 3, 2006 and ending December 31, 2010, for each dividend declared on EIX Common Stock with an ex-dividend date on or after the date of grant, this account will be credited with the amount of dividends that would have been paid on the number of shares of EIX Common Stock covered by the Holder’s corresponding EIX Option award except as provided below. The Dividend Equivalents will be credited on the ex-dividend date for EIX Options held on that date unless the Dividend Equivalent has previously been terminated. Dividend Equivalents will accumulate in this account without interest. This account will be reduced by the amount of any Dividend Equivalents that are paid or terminated.

4.2

Timing of Payment. Dividend Equivalents will be paid on or as soon as administratively practical after the Payment Date that occurs on or next following the later of (i) the date such Dividend Equivalents are credited, or (ii) the date such Dividend Equivalents vest. A “Payment Date” shall occur on January 2 of each year; provided that if EIX has declared a dividend as of any particular January 2 for which the ex-dividend date will not occur until after that January 2, the “Payment Date” for that particular calendar year shall be the ex-dividend date corresponding to that particular dividend.

4.3

Form of Payment. Dividend Equivalents will be paid in cash; provided, however, that the Committee shall have discretion to make any such payment in the form of the number of whole shares of EIX Common Stock obtained by dividing (a) the amount of the vested Dividend Equivalents otherwise payable in cash pursuant to this Section 4, by (b) the average of the high and low sales prices per share of EIX Common Stock on the New York Stock Exchange for the date such amount becomes payable. In the event vested Dividend Equivalents are paid in shares of EIX Common Stock, any fractional shares resulting from the foregoing calculation will be paid in cash. The Dividend Equivalents are subject to termination and other conditions specified in Sections 8 and 9. Notwithstanding anything else herein to the contrary, no further Dividend Equivalents will accrue as to any EIX Option once that EIX Option is exercised, expires or otherwise terminates.

5.

PERFORMANCE SHARES AND PS DIVIDENDS

5.1

Performance Shares. Performance Shares are EIX Common Stock-based units subject to a performance measure based on the percentile ranking of EIX total shareholder return (“TSR”) among the TSRs for the stocks comprising the Comparison Group (as defined below) over the entire Performance Period. TSR is

5.2

Measurement Date. The performance measurement date will be the last business day of the Performance Period. On that date, the applicable payment multiple will be determined as provided in Section 5.1 above based on the EIX TSR percentile ranking achieved during the Performance Period.

5.3

Payment of Performance Shares. Each Performance Share earned will be worth one share of EIX Common Stock. One-half of the earned Performance Shares will be paid in EIX Common Stock as a Stock Payment under the ECP, and any fractional share will be paid in cash. The remaining one-half of the earned Performance Shares will be paid in cash; provided, however, that the Committee shall have discretion to pay such remaining one-half of the earned Performance Shares in EIX Common Stock as a Stock Payment under the ECP with any fractional shares to be paid in cash. The value of each Performance Share paid in cash will be equal to the average of the high and low sales prices per share of EIX Common Stock on the New York Stock Exchange for the measurement date. The shares of EIX Common Stock and the cash (if any) payable for the earned Performance Shares will be delivered within 30 days following the end of the Performance Period. The Performance Shares are subject to termination and other conditions specified in Sections 8 and 9, and to the provisions of Section 11.

5.4

PS Dividends Account. A PS Dividend account will be established and credited with an amount equal to each dividend declared during the Performance Period and that would have been paid on the number of shares of EIX Common Stock, including those payable in cash, equivalent to the Holder’s target Performance Share award. The PS Dividends will be credited on ex-dividend dates and will accumulate without interest. The PS Dividend payment will be determined by multiplying the amount accumulated in the account as of the measurement date by the TSR payment multiple determined under section 5.1.

5.5

Payment of PS Dividends. The PS Dividends will be paid in cash; provided, however, that the Committee shall have discretion to make such payment in the form of the number of whole shares of EIX Common Stock obtained by dividing (a) the amount of the PS Dividends otherwise payable in cash pursuant to this Section 5, by (b) the average of the high and low sales prices per share of EIX Common Stock on the New York Stock Exchange for the date such amount becomes payable. In the event vested PS Dividends are paid in shares of EIX Common Stock, any fractional shares resulting from the foregoing calculation will be

6.

DELAYED PAYMENT OR DELIVERY OF LTI GAINS

7.

TRANSFER AND BENEFICIARY