PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (Amendment No. )
Filed by the Registrant X __ Confidential, For Use of the
Filed by a Party Other Commission Only (as permitted
that Registrant __ Rule 14a-6(e)(2))
Check the appropriate box:
___ Preliminary Proxy Statement
X Definitive Proxy Statement
___ Definitive Additional Materials
___ Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
EDISON INTERNATIONAL
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
___ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11(set forth the amount on which the filing fee is
calculated and state how it was determined):
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__ Fee paid previously with preliminary materials:
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__ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration at Statement no.:
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(3) Filing Party:
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(4) Date Filed:
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[GRAPHIC OMITTED] [GRAPHIC OMITTED]
EDISON INTERNATIONAL SOUTHERN CALIFORNIA EDISON COMPANY
An Edison International Company
JOINT NOTICE OF ANNUAL MEETINGS OF SHAREHOLDERS
AND
JOINT PROXY STATEMENT
ANNUAL MEETINGS
APRIL 20, 2000
<PAGE>
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
EDISON INTERNATIONAL SOUTHERN CALIFORNIA EDISON COMPANY
An Edison International Company
March 13, 2000
Dear Shareholder:
You are invited to attend the Edison International and Southern
California Edison Company ("SCE") annual meetings of shareholders. The meetings
will be held jointly on Thursday, April 20, 2000, at The Industry Hills Sheraton
Resort and Conference Center, One Industry Hills Parkway, City of Industry,
California, at 10:00 a.m., Pacific Time.
You may note on the inside back cover of the 1999 Annual Report that
we had originally planned to hold the annual meetings in Chicago, in recognition
of our significant 1999 acquisitions of power generation facilities in Illinois.
However, in light of recent developments that have resulted in a large drop
in our Edison International Common stock price, we decided to hold the
meetings in Southern California to provide an opportunity for a larger number
of you to meet with us.
Your voting instructions and the applicable 1999 Annual Report are
enclosed with this Joint Proxy Statement. The Joint Proxy Statement discusses
the matter to be considered at the annual meetings. At the meetings,
shareholders of Edison International and SCE will elect Directors who will be
responsible for the direction of company affairs until the next annual meetings.
Your Board of Directors and Management recommend that you vote "FOR"
the nominees for Directors listed in the Joint Proxy Statement.
Whether or not you expect to attend the annual meetings, it is
important that your shares be represented. If you hold shares in both Edison
International and SCE, you will receive a proxy card for each company.
We are pleased to offer you options to vote your shares by mail,
telephone or the Internet. To vote by mail, you may complete, sign, date and
return the enclosed proxy card in the envelope provided. If you hold shares in
your own name, or through the Edison International Dividend Reinvestment and
Stock Purchase Plan or the SCE Stock Savings Plus Plan, you may vote by
telephone or via the Internet by following the instructions on your proxy card.
There is a special number assigned to you on the proxy card to safeguard your
vote. Voting by telephone and the
<PAGE>
Internet is available 24 hours a day, 7 days a week, except that Stock Savings
Plus Plan shareholders must vote by 5:00 p.m., Eastern Time, on April 17, 2000.
If you hold your shares in an account with a broker or other nominee, you will
receive separate instructions from that nominee which may also allow telephone
and Internet voting.
Your continued interest in the business of Edison International and SCE
is appreciated.
John E. Bryson Stephen E. Frank
Chairman of the Board, President Chairman of the Board, President
and Chief Executive Officer and Chief Executive Officer
Edison International Southern California Edison Company
IMPORTANT
In order to assure a quorum of shareholders at the annual meetings,
please complete, sign, date and mail the enclosed card promptly; or (if
available to you) give your instructions by telephone or the Internet as
described on the enclosed card. If you mail the enclosed card, please sign (do
not print) your name exactly as it appears on the card. When signing as
attorney, executor, administrator, trustee or guardian, include your full title.
Please have an authorized officer whose title is indicated sign for
corporations, charitable institutions and governmental units. For partnerships,
have a partner sign and indicate partnership status.
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[GRAPHIC OMITTED] [GRAPHIC OMITTED]
EDISON INTERNATIONAL SOUTHERN CALIFORNIA EDISON COMPANY
An Edison International Company
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JOINT NOTICE OF ANNUAL MEETINGS
OF SHAREHOLDERS
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Date: Thursday, April 20, 2000
Time: 10:00 a.m., Pacific Time
Place: The Industry Hills Sheraton Resort and Conference Center,
One Industry Hills Parkway, City of Industry, California
Matters to be voted upon by Edison International and Southern California Edison
Company ("SCE") shareholders:
o Election of 13 and 12 Directors, respectively - The names of the Director
nominees are:
John E. Bryson* Ronald L. Olson
Warren Christopher James M. Rosser
Stephen E. Frank Robert H. Smith
Joan C. Hanley Thomas C. Sutton
Carl F. Huntsinger Daniel M. Tellep
Charles D. Miller Edward Zapanta
Luis G. Nogales
* John E. Bryson is a Director nominee for the
Edison International Board only.
o Any other business that may properly come before the meetings.
Record Date: Shareholders of record at the close of business on February 22,
2000, and valid proxyholders for those shareholders, are entitled
to vote at the annual meetings.
<PAGE>
Meeting Admission: The following individuals will be admitted to the meetings:
o Shareholders of record on the record date, and their spouses;
o Individuals holding written proxies executed by shareholders of record on
the record date;
o Shareholders who provide a letter or account statement from their broker or
other nominee showing that they owned stock held in the name of the broker
or other nominee on the record date, and their spouses; and
o Other individuals with the approval of the Edison International or SCE
Secretary.
Shareholders which are companies or other entities are limited to three
authorized representatives at the meetings.
Dated: March 13, 2000
For the Boards of Directors,
BEVERLY P. RYDER
-----------------------------------
BEVERLY P. RYDER, Secretary
Edison International and
Southern California Edison Company
<PAGE>
TABLE OF CONTENTS
INTRODUCTION - SOLICITATION OF PROXIES.......................................1
QUESTIONS AND ANSWERS ON VOTING, PROXIES, AND ATTENDANCE.....................2
ELECTION OF DIRECTORS, NOMINEES FOR ELECTION.................................6
BOARD COMMITTEES.............................................................8
BOARD MEETINGS AND ATTENDANCE................................................9
BOARD COMPENSATION...........................................................9
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS.........................12
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE....................13
STOCK OWNERSHIP OF CERTAIN SHAREHOLDERS.....................................14
EXECUTIVE COMPENSATION......................................................15
SUMMARY COMPENSATION TABLE................................................15
OPTION / SAR GRANTS IN 1999...............................................18
AGGREGATED OPTION / SAR EXERCISES IN 1999 AND FY-END OPTION/SAR VALUES....21
PENSION PLAN TABLE........................................................23
OTHER RETIREMENT BENEFITS.................................................24
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS...........24
COMPENSATION AND EXECUTIVE PERSONNEL COMMITTEES'
REPORT ON EXECUTIVE COMPENSATION............................................25
COMPENSATION AND EXECUTIVE PERSONNEL COMMITTEES
INTERLOCKS AND INSIDER PARTICIPATION........................................29
CERTAIN RELATIONSHIPS AND TRANSACTIONS OF NOMINEES AND EXECUTIVE OFFICERS...30
OTHER MANAGEMENT TRANSACTIONS...............................................30
FIVE-YEAR STOCK PERFORMANCE GRAPH...........................................31
INDEPENDENT PUBLIC ACCOUNTANTS..............................................32
SHAREHOLDER PROPOSALS AND NOMINATIONS FOR 2001 ANNUAL MEETINGS..............32
AVAILABILITY OF FORM 10-K AND OTHER INFORMATION.............................33
OTHER PROPOSED MATTERS......................................................33
<PAGE>
EDISON INTERNATIONAL
SOUTHERN CALIFORNIA EDISON COMPANY
2244 WALNUT GROVE AVENUE
P. O. BOX 800
ROSEMEAD, CALIFORNIA 91770
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JOINT PROXY STATEMENT
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INTRODUCTION - SOLICITATION OF PROXIES
This Joint Proxy Statement, proxy forms, voting instructions and the 1999
Annual Reports are being distributed together beginning March 13, 2000, to the
Edison International and Southern California Edison Company shareholders for
their annual meetings. The annual meetings will be held jointly on Thursday,
April 20, 2000, at The Industry Hills Sheraton Resort and Conference Center, One
Industry Hills Parkway, City of Industry, California, at 10:00 a.m., Pacific
Time. The Edison International and Southern California Edison Company Boards of
Directors are soliciting proxies from you for use at their annual meetings, or
at any adjournment or postponement of the meetings. Proxies allow properly
designated individuals to vote on your behalf at an annual meeting. This Proxy
Statement discusses the matter to be voted on at the annual meetings.
In this Proxy Statement:
o "Annual meeting" means the Edison International annual meeting of
shareholders and the Southern California Edison Company annual meeting
of shareholders, which are being held jointly.
o "SCE" means Southern California Edison Company.
o "SSPP" means the SCE employee benefit plan known as the Stock Savings
Plus Plan.
o "DRP" means the Edison International shareholder plan known as the
Dividend Reinvestment and Stock Purchase Plan.
o Holding shares in "street name" means your shares are held in an
account through your broker, bank, fiduciary, custodian or other
nominee, and you are considered the beneficial owner of those shares.
Your name does not appear on the Companies' records as a shareholder.
o Holding shares as a "registered" shareholder or "of record" means your
shares are registered in your own name directly with the Companies
rather than in street name, and that stock certificates are issued in
your own name. Shares held in your DRP plan account are also included.
1
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QUESTIONS AND ANSWERS ON VOTING, PROXIES, AND ATTENDANCE
Q: What am I voting on?
A: You are voting on the election of 13 Directors for Edison International and
12 Directors for SCE and any other matters properly brought before the
meetings. The election of Directors is Item 1 on the proxy card.
Q. Who can vote?
A. All registered shareholders at the close of business on February 22, 2000,
are entitled to vote at the meeting. Holders of Edison International's
Common Stock are entitled to one vote per share on each item of Edison
International business. On each item of SCE business, holders of SCE
Cumulative Preferred Stock are entitled to six votes per share; holders of
SCE $100 Cumulative Preferred Stock are entitled to two votes per share;
and holders of SCE Common Stock are entitled to one vote per share.
Shareholders who hold shares that are not registered in their own name will
give voting instructions to the registered shareholders. Shares held by
participants in the SSPP are registered in the name of the plan trustee.
Fractional shares, such as those held in the SSPP and in the DRP, may not
be voted. All shares of SCE Common and Preferred Stocks vote together as
one class.
Q: Who can attend the meeting?
A: All shareholders on the record date, or their duly appointed proxies, may
attend the meeting. Shareholders' spouses are also welcome. Seating,
however, is limited. If you are a registered or SSPP shareholder, an
admission pass is included with these materials. If you do not have an
admission pass, you must check in at the registration desk at the meeting.
If you are a registered shareholder, we will be able to verify your share
ownership from the share register upon presentation of proper
identification. If your shares are not registered in your name, you will
need to bring a letter or an account statement from your broker, plan
trustee or other nominee reflecting your stock ownership as of the record
date and to provide proper identification. A shareholder which is a
corporation, partnership, association or other entity is limited to three
authorized representatives at the annual meeting.
Q: How do I vote?
A: If you are a registered or SSPP shareholder, you may choose one of the
following ways to cast your vote:
o By mail: Complete, date, sign and mail the proxy/voting instruction card in
the enclosed postage prepaid envelope.
o By telephone: Call 1-877-779-8683 toll free from the U.S. and Canada.
Call 1-201-536-8073 from outside the U.S. and Canada.
o Via the Internet: Access the Edison International World Wide Web site
http://www.eproxyvote.com/eix Access the SCE World Wide Web site
http://www.eproxyvote.com/sce
Registered shareholders have a fourth option to cast their vote:
o By ballot at the meeting: Attend the annual meeting and complete a written
ballot distributed at the meeting.
If you vote by telephone or via the Internet, follow the instructions on the
enclosed card. You will be asked to enter a specially assigned control number on
the proxy card. Additionally, if you vote by telephone, you will receive
recorded instructions, and if you vote via the Internet, an electronic proxy
card. Voting by telephone
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and via the Internet is available 24 hours a day, seven days a week, except
for SSPP shareholders who must vote by 5:00 p.m., Eastern Time, on April
17, 2000.
By voting by mail, telephone or the Internet, you will authorize the
individuals named on the proxy card, referred to as the proxies, or the
SSPP trustee to vote your shares according to your instructions. You are
also authorizing those persons to vote your shares on any other matter
presented at the meeting.
If you hold shares in street name, you will provide voting instructions as
follows:
o By mail: On cards received from your broker or other nominee.
o By telephone or via the Internet: If offered by your broker or other
nominee.
o By ballot at the meeting: If you request a legal proxy from your
broker or other nominee and deliver the proxy to the inspector of
election before or at the meeting.
Under California law, you may transmit a proxy by telephone or via the
Internet if authorized by you or your attorney in fact. SHAREHOLDERS WHO
VOTE BY TELEPHONE OR OVER THE INTERNET SHOULD NOT MAIL THE PROXY CARD.
Q: What happens if I return my proxy or vote by mail, telephone or the
Internet, but I do not indicate my voting preference?
A: If you return your proxy or vote by mail and do not indicate how you wish
to vote for the nominees for Director, the proxies and SSPP trustee will
vote FOR election of all the nominees for Director (Item 1). If you enter
your control number by telephone or the Internet and do not indicate how
you wish to vote for the nominees for Director, your shares will not be
voted.
Q: What happens if I do not return my proxy or provide voting instructions?
A: If you are a registered shareholder and you do not deliver voting
instructions to a designated proxy or cast a ballot at the annual meeting,
your shares will not be voted. If you are an SSPP shareholder and you do
not deliver voting instructions to the trustee, the trustee may vote your
shares as it chooses. If you hold your shares in street name and you do not
instruct your broker or other nominee how to vote your shares, the
registered owner may be authorized to vote your shares as it chooses on the
matter to be considered at the meeting. If your broker lacks this
discretionary authority to vote on an item and properly indicates this to
us, we call this a "broker nonvote" on that item.
Q: What if I vote and then change my mind?
A: If you are a registered shareholder, you can revoke your proxy by:
o Writing to the company Secretary;
o Voting again via mail, telephone or the Internet; or
o Voting in person at the annual meeting.
Your last vote will be the vote that is counted.
If you are an SSPP shareholder, you can revoke your voting instructions by
voting again via mail, telephone or the Internet by 5:00 p.m., Eastern
Time, on April 17, 2000.
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If you hold shares in street name, you should contact the registered
shareholder before the annual meeting to determine whether you can change
your voting instructions.
Q: How many votes do you need to hold the meeting?
A: As of the record date, February 22, 2000, Edison International had
347,213,906 shares of Edison International Common Stock outstanding and
entitled to vote. SCE had 5,150,198 shares of Cumulative Preferred Stock,
2,557,000 shares of $100 Cumulative Preferred Stock, and 434,888,104 shares
of SCE Common Stock outstanding and entitled to vote.
The holders of the Edison International Common Stock have the right to cast
a total of 347,213,906 votes. The holders of the SCE Cumulative Preferred
Stock have the right to cast a total of 30,901,188 votes, the holders of
the SCE $100 Cumulative Preferred Stock have the right to cast a total of
5,114,000 votes, and the holder of the SCE Common Stock, Edison
International, has the right to cast a total of 434,888,104 votes. Voting
together as a class, the SCE shareholders have the right to cast a total of
470,903,292 votes.
A quorum is required to transact business at the annual meeting. The
presence at the annual meeting, in person or by proxy, of shareholders
entitled to cast at least a majority of the votes which all shareholders
are entitled to cast constitutes a quorum. If you properly return your
proxy by mail, by telephone or via the Internet, you will be considered
part of the quorum, even if you abstain from voting or withhold votes, and
the proxies will vote your shares as you have indicated. If a broker or
other nominee holding your shares in street name votes your shares or
returns a properly executed proxy representing your shares, your shares
will be considered as present and part of the quorum, even if your broker
or other nominee does not indicate a voting preference, or otherwise
abstains or withholds votes, on any or all matters.
Q: What vote is required to adopt the proposal at the meeting?
A: On Item 1, the Election of Directors, the 13 and 12 nominees receiving the
highest number of affirmative or "FOR" votes will be elected as Directors
of Edison International and SCE, respectively. Votes withheld for any of
the nominees, abstentions or broker nonvotes will have the effect of
reducing the number of affirmative votes a candidate might otherwise have
received.
Q: Who will count the votes?
A: EquiServe Trust Company, N.A., will tabulate the votes and act as the
inspector of election. To protect the confidentiality of votes cast under
the SSPP, Edison International will not have access to any of the SSPP
shareholders' voting instructions, and SSPP voting results will only be
reported in the aggregate.
Q: What shares are included on the proxy card?
A: If you hold shares in both Edison International and SCE, you will receive a
card for each company. The shares listed on your card(s) represent all the
shares of common stock and preferred stock registered in your name (as
distinguished from those held in street name), all whole shares held in the
DRP, and all whole shares held in the SSPP. You will receive separate cards
from your broker or other nominee if you hold shares in street name.
Q: What does it mean if I get more than one proxy card?
A: It indicates that your shares are held in more than one account, such as
two brokerage accounts, and registered in different names. You should vote
each of the proxy cards to ensure that all of your shares are voted. If you
are a registered shareholder and hold shares in more than one shareholder
account, or you share an address with other registered shareholders, you
may be receiving multiple copies of our Annual Report to Shareholders. You
can save the Companies money if you direct us to discontinue mailing
multiple reports by marking the appropriate box on the enclosed proxy card,
or follow the instructions provided when you vote by telephone or
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over the Internet. Eliminating redundant mailings will not affect your
receipt of future proxy statements and proxy cards. To resume the mailing
of an Annual Report to a particular account, you may call Norwest Bank
Minnesota, N.A., at 1-800-347-8625.
Q: How much did this proxy solicitation cost?
A: Edison International and SCE have retained Corporate Investment
Communications, Inc., to solicit proxies from shareholders at an estimated
fee of $10,000 plus expenses. (This fee does not include the costs of
printing and mailing the proxy materials.) Edison International and SCE
will pay all proxy solicitation costs. Some of the directors, officers and
other employees of Edison International and/or SCE also may solicit proxies
personally, by mail, by telephone or by other electronic means for no
additional compensation, except for customary overtime pay. Edison
International and SCE will also reimburse brokers and other nominees for
their reasonable out-of-pocket expenses for forwarding proxy materials to
the beneficial owners of their stocks and obtaining voting instructions.
Q: Whom can I call with any questions?
A: You may call Norwest Bank at 1-800-347-8625 or visit their
World Wide Web site at http://www.norwest.com/business-stocktransfer
Q: How does the Board recommend I vote?
A: The Edison International and SCE Boards recommend the election of their
nominees for Directors listed in this Proxy Statement.
5
<PAGE>
ELECTION OF DIRECTORS
Item 1 on Proxy Card
NOMINEES FOR ELECTION
Thirteen and twelve Directors will be elected to the Edison International
and SCE Boards, respectively, to hold office until the next annual meeting. This
reflects a reduction in the size of the Edison International Board due to the
retirement of one Director, Mr. Winston H. Chen, and a reduction in SCE Board
size due to Mr. Chen's retirement and the resignation of one Director, Mr. John
E. Bryson. Should any of the nominees become unavailable to stand for election
as a Director, the proxies will have the authority to vote for substitute
nominees as they choose.
The nominees for Directors of Edison International and SCE are the same,
except for Mr. Bryson who is a nominee for the Edison International Board only.
A brief biography of each nominee is presented below.
JOHN E. BRYSON*
Chairman of the Board, President and Chief Executive Officer of Edison
International and Chairman of the Board of Edison Mission Energy (electric power
generation; a nonutility subsidiary of Edison International) (since 2000);
Chairman of the Board and Chief Executive Officer of Edison International and
SCE (1990-1999)
Mr. Bryson has been a Director of Edison International since 1990. He is a
Director of The Boeing Company, The Times Mirror Company, and Pacific American
Income Shares, Inc. and LM Institutional Fund Advisors I, Inc. Mr. Bryson is a
graduate of Stanford University and Yale Law School. Age 56.
WARREN CHRISTOPHER
Senior Partner of the law firm of O'Melveny & Myers (1958-1967, 1969-1977,
1981-1993, and since 1997); U. S. Secretary of State (1993-1997)
Mr. Christopher has been a Director of SCE from August 1971 through January
1977, from June 1981 through January 1993, and from May 1997 to date. He has
been a Director of Edison International from April 1988 through January 1993 and
from May 1997 to date. Mr. Christopher is a graduate of the University of
Southern California and Stanford Law School. Age 74.
STEPHEN E. FRANK
Chairman, President and Chief Executive Officer of SCE (since 2000);
President and Chief Operating Officer of SCE (1995-1999);
President and Chief Operating Officer of Florida Power and Light Company
(1990-1995)
Mr. Frank has been a Director of Edison International and SCE since 1995. He is
a Director of Washington Mutual, Inc., and UNOVA, Inc. Mr. Frank is a graduate
of Dartmouth College and received his MBA degree from the University of
Michigan. Age 58.
JOAN C. HANLEY
General Partner and Manager of Miramonte Vineyards (1973-1998)
Mrs. Hanley has been a Director of SCE since 1980 and a Director of Edison
International since 1988. Mrs. Hanley is a graduate of the University of
Washington. Age 67.
CARL F. HUNTSINGER
General Partner of DAE Limited Partnership, Ltd. (agricultural management)
(since 1986)
Mr. Huntsinger has been a Director of SCE since 1983 and a Director of Edison
International since 1988. Mr. Huntsinger is a graduate of the Massachusetts
Institute of Technology. Age 70.
- ------------
* John E. Bryson is a nominee for Director of Edison International only.
6
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CHARLES D. MILLER
Chairman of the Board of Avery Dennison Corporation (manufacturer of
self-adhesive products) (since 1998); Chairman of the Board and Chief Executive
Officer of Avery Dennison Corporation (1983-1998)
Mr. Miller has been a Director of SCE since 1987 and a Director of Edison
International since 1988. He is a Director of Nationwide Health Properties
(Chairman), Pacific Life Insurance Company, The Air Group, Mellon Financial
Group-West Coast, and Korn/Ferry International. He graduated from Johns Hopkins
University. Age 71.
LUIS G. NOGALES
President of Nogales Partners (a private equity investment company) (since 1990)
Mr. Nogales has been a Director of Edison International and SCE since 1993. He
is a Director of Adolph Coors Company, Kaufman and Broad Home Corporation, and
Kaufman and Broad, France. Mr. Nogales is a graduate of San Diego State
University and Stanford Law School. Age 56.
RONALD L. OLSON
Partner of the law firm of Munger, Tolles and Olson (since 1970)
Mr. Olson has been a Director of Edison International and SCE since 1995. He is
a Director of Berkshire Hathaway, Inc., and Pacific American Income Shares, Inc.
and LM Institutional Fund Advisors I, Inc. Mr. Olson is a graduate of Drake
University and University of Michigan Law School and holds a Diploma in Law from
Oxford University. Age 58.
JAMES M. ROSSER
President of California State University, Los Angeles (since 1979)
Dr. Rosser has been a Director of SCE since 1985 and a Director of Edison
International since 1988. He is a Director of Sanwa Bank. Dr. Rosser holds three
degrees from Southern Illinois University. Age 60.
ROBERT H. SMITH
Managing Director of Smith & Crowley, Inc. (merchant banking) (since 1992)
Mr. Smith has been a Director of SCE since 1987 and a Director of Edison
International since 1988. Mr. Smith is a graduate of the University of Southern
California and holds a Law Degree from Van Norman University. Age 64.
THOMAS C. SUTTON
Chairman of the Board and Chief Executive Officer of Pacific Life Insurance
Company (since 1990)
Mr. Sutton has been a Director of Edison International and SCE since 1995.
He is a Director of Newhall Land & Farming Company, The Irvine Company, and
PIMCO Advisors, L.P. Mr. Sutton is a graduate of the University of Toronto. Age
57.
DANIEL M. TELLEP
Chairman of the Board and Chief Executive Officer of Lockheed Martin Corporation
(aerospace industry) (1996); Chairman and Chief Executive Officer of Lockheed
Martin Corporation (1995)
Mr. Tellep has been a Director of Edison International and SCE since 1992.
He is a Director of Wells Fargo Bank, N.A. Mr. Tellep holds two degrees from the
University of California at Berkeley and has completed studies at Harvard
University. Age 68.
EDWARD ZAPANTA
Private Practice Physician (neurosurgical care) (since 1970)
Dr. Zapanta has been a Director of SCE since 1984 and a Director of Edison
International since 1988. He is a Director of The Times Mirror Company and
EastWest Bancorp, Inc. Dr. Zapanta attended the University of California at Los
Angeles and is a graduate of the University of Southern California School of
Medicine. Age 60.
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BOARD COMMITTEES
The Edison International and SCE Board Committees are the Audit Committee,
Compensation and Executive Personnel Committee, Executive Committee, Finance
Committee and Nominating Committee. The composition of each Committee is the
same for Edison International and SCE, except for the Executive Committee. Each
Committee held the same number of meetings in 1999, unless otherwise indicated
in the table below. This table describes the Boards' Committees.
<TABLE>
<CAPTION>
NUMBER OF
COMMITTEE NAME MEETINGS
AND MEMBERS COMMITTEE FUNCTIONS IN 1999
-------------- ------------------- ---------
<S> <C> <C> <C>
Audit o Meets regularly with management, the independent public 4
accountants, and the internal auditors to make inquiries
Daniel M. Tellep, Chair regarding the manner in which the responsibilities of
Winston H. Chen each are being discharged
Carl F. Huntsinger
Charles D. Miller o Recommends to the Boards the annual appointment of the
Thomas C. Sutton independent public accountants
Edward Zapanta
o Reviews with the independent public
accountants the scope of audit and
other engagements and the related
fees, the accounting principles being
applied in financial reporting, and
the adequacy of internal accounting
controls
o Monitors legal proceedings,
environmental compliance, health and
safety compliance, information
technology security, legal
compliance, and compliance with
business ethics programs
Compensation and o Reviews the performance and compensation of the Executive 8
Executive Personnel Officers and approves appropriate adjustments
Charles D. Miller, Chair o Participates in executive succession planning and
Luis G. Nogales management development
Robert H. Smith
Thomas C. Sutton o Has additional duties described in the "Compensation and
Daniel M. Tellep Executive Personnel Committees' Report on Executive
Compensation" below
Executive o Has all the authority of the Boards between meetings
Edison International except to the extent limited by the California General Edison
Warren Christopher, Chair Corporation International: 1
John E. Bryson
Carl F. Huntsinger
James M. Rosser
Edward Zapanta
SCE SCE: 0
Warren Christopher, Chair
Stephen E. Frank *
Carl F. Huntsinger
James M. Rosser
Edward Zapanta
</TABLE>
* Effective January 1, 2000.
8
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<TABLE>
<CAPTION>
NUMBER OF
COMMITTEE NAME MEETINGS
AND MEMBERS COMMITTEE FUNCTIONS IN 1999
-------------- ------------------- --------
<S> <C> <C> <C>
Finance o Regularly reviews the financial structure of their 3
respective company
Luis G. Nogales, Chair
Winston H. Chen o The Edison International Finance Committee reviews the
Joan C. Hanley financial planning process and investment outlook for
Ronald L. Olson Edison International and its nonutility subsidiaries, and
Robert H. Smith approves certain committed investments
o The SCE Finance Committee reviews the
five-year capital expenditure
outlook, financing plans, total
revenue requirements, and earnings
trends of SCE as well as approving
certain capital projects
Nominating o Periodically consults with management, reviews 0*
shareholder suggestions of Director candidates, and makes
Joan C. Hanley, Chair recommendations regarding Board composition and selection
Warren Christopher of candidates for election
Ronald L. Olson
James M. Rosser
Robert H. Smith
</TABLE>
* The Nominating Committees met in December 1998 to consider candidates for
the 1999 Annual Shareholders' Meeting and in February 2000 to consider
candidates for the 2000 Annual Shareholders' Meeting.
For consideration by the Nominating Committees, shareholder suggestions for
Director candidates should be submitted in writing to the Secretary of Edison
International and/or SCE. The deadlines and additional procedures for
shareholder nominations are in "Shareholder Proposals and Nominations for 2001
Annual Meetings" below.
BOARD MEETINGS AND ATTENDANCE
During 1999, the Edison International Board met 9 times, and the SCE Board
met 7 times.
During 1999, all current Directors attended 75% or more of all Edison
International and SCE Board and applicable Committees' meetings.
BOARD COMPENSATION
Directors who are employees of Edison International or SCE are not paid
additional compensation for serving as Directors. Non-employee Directors are
compensated as described below.
9
<PAGE>
Fees
During 1999, each non-employee Director was paid as follows:
o an annual Board retainer of $25,000,
o $1,500 for each Board meeting attended,
o $1,500 for any other business meetings attended as a Director,
o an annual retainer of $3,000 to Board Committee chairpersons,
o an annual Executive Committee retainer of $2,000 to Executive
Committee members, and
o $1,000 for each Committee meeting attended.
Non-employee Directors serve on both the Edison International Board and the
SCE Board and the same Committees of each Board. Non-employee Directors receive
only one retainer and, if the meetings of the Boards or the same Committees of
each company are held concurrently, they receive only one meeting fee. It is the
usual practice of Edison International and SCE that meetings of the Edison
International and SCE Boards, and of corresponding Committees, are held together
and a single meeting fee is paid to each non-employee Director for each set of
meetings. Non-employee Directors are reimbursed for out-of-pocket expenses they
incur serving as Directors.
Equity Compensation Plan
The Edison International Equity Compensation Plan was approved by the
Edison International shareholders in 1998. Under this plan, each non-employee
Director of Edison International and SCE is automatically granted upon election
or reelection to the Boards:
o 500 shares of Edison International Common Stock, and
o 300 deferred stock units.
Directors serving on both Boards receive only one award of stock and
deferred stock units per year. The deferred stock units are credited to the
Director's deferred compensation plan account. Each stock unit represents the
value of one share of Edison International Common Stock. Stock units accrue
dividends that are converted to additional stock units under the plan. The
deferred stock units will be distributed in cash in a lump sum upon the
Director's retirement from the Boards unless the Director's request to receive
distribution in the form of installments over 5, 10, or 15 years was previously
approved. Resignation prior to retirement will result in a lump sum payment.
Retirement Plan
Service accruals under the Edison International and SCE non-employee
Director retirement plans ceased at the end of 1997 for Directors elected or
re-elected to the Boards in 1998.
Deferred Compensation Plans
SCE
SCE Directors were permitted to defer compensation earned from October 1,
1985, through December 31, 1989 under the terms of the SCE 1985 Deferred
Compensation Plan for Directors. These amounts are deferred until the
participant ceases to be a Director, dies or attains a predetermined age of at
least 65, but not greater than 72. The
10
<PAGE>
account may be paid in installments of 10 or 15 equal annual installments or 120
or 180 equal monthly installments. If a participant dies before payments have
begun, his or her beneficiary will receive the account payments over the term
elected by the participant. In addition, the beneficiary will receive annual
payments equal to 75% of the participant's total deferred commitment for ten
years. If a participant dies after payments have begun, the remainder of his or
her account will continue to be paid to the beneficiary. Following the
completion of these payments, if the beneficiary is the surviving spouse, the
person will be entitled to a five-year certain life annuity equal to 50% of the
payments the participant had been receiving. If the beneficiary is someone other
than a spouse, the payments will be made for five years only. All amounts
payable under this plan are treated as unsecured obligations of SCE.
Edison International
Edison International Directors are eligible to defer up to 100% of their
Board compensation, including any retainers, and any meeting fees under the
Edison International Director Deferred Compensation Plan. A grantor trust has
been adopted to fund the deferred compensation liability. Amounts may be
deferred until a specified year, retirement, death or discontinuance of service
as a Director. Compensation deferred until a specified year is paid as a single
lump sum. Compensation deferred until retirement or death may be paid as a
single lump sum, in monthly installments of 60, 120, or 180 months, or in a
combination of a partial lump sum and installments. Deferred Compensation is
paid as a single lump sum or in three annual installments upon any other
discontinuance of service as a Director. All amounts payable under this plan are
treated as obligations of Edison International.
Preferential interest (interest considered under the SEC rules to be at
above-market rates) was credited during 1999 to the plan accounts of the
following Directors under the SCE 1985 Deferred Compensation Plan for Directors
and the Edison International Director Deferred Compensation Plan:
Preferential Interest
--------------------------
1985 Plan Director DCP
($) ($)
Warren Christopher 9,593 0
Joan C. Hanley 60,998 0
Carl F. Huntsinger 60,998 3,335
Ronald L. Olson 0 1,065
James M. Rosser 60,998 3,363
E. L. Shannon, Jr.* 0 939*
Robert H. Smith 0 1,281
Thomas C. Sutton 0 605
James D. Watkins* 0 482*
Edward Zapanta 60,998 177
* Messrs. Shannon and Watkins retired from the Boards on April 15, 1999.
Information is provided only for the period they served as Directors.
Mr. Christopher was re-elected as a Director of Edison International and
SCE in 1997 following distinguished service as U. S. Secretary of State.
Assuming Mr. Christopher continues to be nominated and elected to serve on the
respective Boards of Edison International and SCE, Director age restrictions
have been waived until April 2002. Retirement and deferred compensation benefit
payments attributable to his prior service as a Director will continue to be
paid. Any additional benefits accruing during his current term as a Director
will be payable to Mr. Christopher in accordance with the terms of the plans in
effect at the time of his subsequent retirement.
11
<PAGE>
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table shows the number of equity securities of Edison
International, SCE and Mission Capital, L.P., an affiliate of Edison Mission
Energy, beneficially owned as of December 31, 1999, by the respective Directors
and Executive Officers of Edison International and SCE. The table includes
shares that can be acquired through February 29, 2000, through the exercise of
stock options. Unless otherwise noted, each individual has sole voting and
investment power.
<TABLE>
<CAPTION>
Amount and Nature of Beneficial Ownership (1)
Company and Total Shares
Name Class of Stock Options SSPP Shares(2) Beneficially Owned(3)
- ---------------- -------------------------------- ------- ------------- ---------------------
<S> <C> <C> <C>
John E. Bryson (4) Edison International Common Stock 712,151 15,293 752,053 (5)
Winston H. Chen Edison International Common Stock 72,000
Warren Christopher Edison International Common Stock 2,591 (6)
Bryant C. Danner (4) Edison International Common Stock 216,726 2,576 221,302
Alan J. Fohrer (4) Edison International Common Stock 211,026 27,374 238,900
Stephen E. Frank Edison International Common Stock 281,026 286,026
Joan C. Hanley Edison International Common Stock 8,460 (6)
Carl F. Huntsinger Edison International Common Stock 8,113 (7)
Thomas R. McDaniel Edison International Common Stock 72,449
Charles D. Miller Edison International Common Stock 11,136 (8)
Luis G. Nogales Edison International Common Stock 2,866
Ronald L. Olson Edison International Common Stock 23,371 (9)
Harold B. Ray Edison International Common Stock 80,301 2,149 82,950
James M. Rosser Edison International Common Stock 7,600 (7)
Robert H. Smith Edison International Common Stock 8,621 (10)
Thomas C. Sutton Edison International Common Stock 9,236 (6)
Daniel M. Tellep Edison International Common Stock 11,348 (6)
Edward Zapanta Edison International Common Stock 11,364 (6)
All Directors and Executive Officers
of Edison International as a group (31 individuals)
Edison International Common Stock 2,367,329 120,720 2,708,834 (11)
Mission Capital MIPS 2,478 (12)
All Directors and Executive Officers
of SCE as a group (25 individuals)
Edison International Common Stock 1,933,475 95,987 2,241,930 (11)
</TABLE>
(1) No Director owns, no named Executive Officer owns, nor do the Directors
and Executive Officers of Edison International or SCE as a group own in
excess of 1% of the outstanding shares of any class of Edison
International's, SCE's or Mission Capital, L.P.'s outstanding equity
securities.
(2) SSPP shares for which instructions are not received from any plan
participant may be voted by the SSPP Trustee as it chooses.
(3) Includes amounts listed in the first two columns. Does not include 625.13
deferred stock units held by each non-employee Director and described
under "Board Compensation - Equity Compensation Plan" above. Even though
these stock units are deemed invested in Edison International Common
Stock, they cannot be voted or sold but track the performance of the
underlying stock.
(4) Effective January 1, 2000, Mr. Bryson is a Director and Executive Officer
of Edison International only, and Messrs. Danner and Fohrer are Executive
Officers of Edison International only.
12
<PAGE>
(5) Includes 8,000 shares held as co-trustee of trust with shared voting and
investment power, 6,000 shares held as trustee of trust with shared voting
and sole investment power, 10,409 shares held as co-trustee and
co-beneficiary of trust with shared voting and investment power, and 200
shares held by spouse with shared voting and investment power.
(6) Held as co-trustee and co-beneficiary of trust with shared voting and
investment power.
(7) Held as trustee of trust with shared voting and sole investment power.
(8) Includes 10,136 held as co-trustee and co-beneficiary of trust with shared
voting and investment power, and 1,000 shares held in a foundation with
shared voting and investment power which are not deemed beneficially owned
under Section 16 of the Securities Exchange Act of 1934.
(9) Includes 3,371 shares held as co-trustee and co-beneficiary of trust with
shared voting and investment power, and 10,000 shares held in a foundation
with shared voting and investment power which are not deemed beneficially
owned under Section 16 of the Securities Exchange Act.
(10) Includes 5,400 shares held as co-trustee and co-beneficiary of trust with
shared voting and sole investment power, 2,221 shares held by daughter
with shared voting and investment power, and 1,000 shares held by spouse
with shared voting and investment power.
(11) Includes 59,634 shares held as co-trustee and co-beneficiary of trust with
shared voting and investment power, 8,000 shares held as co-trustee of
trust with shared voting and investment power, 27,113 shares held by
trustee of trust with shared voting and sole investment power, 1,200
shares held by spouse with shared voting and investment power, 2,221
shares held by daughter with shared voting and investment power, and
11,000 shares held in a foundation with shared voting and investment
power.
(12) Monthly Income Preferred Securities ("MIPS") issued by Mission Capital,
L.P. Includes 280 shares held by spouse with shared voting and investment
power, and 8 shares held as co-trustee and co-beneficiary with shared
voting and investment power.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Edison International and SCE Directors and certain officers, and persons
who own more than 10% of a registered class of Edison International's or SCE's
equity securities, are required to file ownership reports and changes in
ownership of such securities with the SEC and one designated national securities
exchange under Section 16(a) of the Securities Exchange Act. Based on a review
of the reports and written representations from the Directors and those
officers, Edison International and SCE believe that all Section 16(a) filing
requirements were met during 1999, except that Mr. Stephen E. Pazian, a former
officer, failed to file one report for one 1999 Edison International Common
Stock transaction, and Mr. Bryson filed one late report for one 1998 Edison
International Common Stock transaction. Mr. Pazian's transaction was a stock
option grant from Edison International under the Equity Compensation Plan. Mr.
Bryson's transaction was a transfer of stock from his parents' trust to his
mother's trust, for which he is a co-trustee. Both transactions were exempt from
liability under Section 16(b) of the Securities Exchange Act.
13
<PAGE>
STOCK OWNERSHIP OF CERTAIN SHAREHOLDERS
The following are the only shareholders known by Edison International or
SCE to beneficially own more than 5% of any class of either Companies' voting
securities as of December 31, 1999:
<TABLE>
<CAPTION>
------------------------------------- -------------------------------------- ------------------- ------------
Amount and
Nature of
Beneficial Percent
Class of Stock Name and Address of Shareholder Ownership of Class
------------------------------------- -------------------------------------- ------------------- ------------
<S> <C> <C> <C>
SCE Common Stock Edison International 434,888,104 (1) 100%
2244 Walnut Grove Avenue
Rosemead, California 91770
33,226,340 (2)
Edison International Common Stock State Street Bank and Trust Company 9.57%
105 Rosemont Avenue
Westwood, Massachusetts 02090
------------------------------------- -------------------------------------- ------------------- ------------
</TABLE>
(1) Edison International became the holder of all issued and outstanding
shares of SCE Common Stock on July 1, 1988, when it became the holding
company of SCE. Edison International has sole voting and investment power
over these shares.
(2) This information is based on a Schedule 13G, dated February 8, 2000, filed
with the SEC. Acting in various fiduciary capacities, State Street reports
that at December 31, 1999, it had sole voting power over 5,626,473 shares,
sole investment power over 33,144,123 shares, shared voting power over
27,090,050 shares, and shared investment power over 82,217 shares. Of the
total number of shares shown, 27,030,760 shares of the class, or 7.8%, are
held as the SSPP Trustee. SSPP shares are voted in accordance with
instructions given by participants, whether vested or not. SSPP shares for
which instructions are not received may be voted by the Trustee as it
chooses. SSPP participants may not vote or give instructions how to vote
fractional shares.
14
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE (1)
The following table presents information regarding compensation of the
Chief Executive Officer of Edison International and SCE ("CEO"), and the other
four most highly compensated Executive Officers of Edison International and SCE,
for services rendered during 1997, 1998 and 1999. These individuals are referred
to as "Named Officers" in this Joint Proxy Statement.
<TABLE>
<CAPTION>
Long-Term Compensation
----------------------
Annual Compensation
-------------------
Pay-
Awards outs
(a) (b) (c) (d) (e) (f) (g) (h) (i)
- ------------------------------------------------------------------------------------------------------------------------
Other Re- Securities All
Annual stricted Underlying LTIP Other
Compen- Stock Options/ Pay- Compen-
Name and Salary Bonus sation(3) Award(s) SARs(4) outs sation(5)
Principal Position(2) Year ($) ($) ($) ($) (#) ($) ($)
- -------------------- ---- ------ ----- -------- -------- ---------- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John E. Bryson, Chairman 1999 900,000 1,260,000 78,422(6) -- 267,800 -- 461,909
of the Board and CEO of 1998 860,000 1,000,000 70,550 -- 160,000 -- 481,899
Edison International and SCE 1997 810,000 850,500 50,196 -- 157,700 -- 224,337
Stephen E. Frank, 1999 593,000 711,600 1,114 -- 117,700 -- 49,793
President and Chief 1998 565,000 559,400 1,109 -- 69,600 -- 61,255
Operating Officer of SCE 1997 540,000 437,400 1,474 -- 78,000 -- 38,509
Bryant C. Danner, Executive
Vice President and General 1999 435,000 534,000 84,187 -- 83,100 -- 44,328
Counsel of Edison 1998 415,000 433,500 77,935 -- 44,700 -- 70,530
International and SCE 1997 395,000 364,500 50,231 -- 46,400 -- 40,346
Alan J. Fohrer, Executive
Vice President and Chief 1999 397,000 486,000 -- -- 83,100 -- 39,310
Financial Officer of Edison 1998 367,000 393,800 -- -- 44,700 -- 60,810
International and SCE 1997 342,000 340,000 -- -- 46,400 -- 34,662
Thomas R. McDaniel, 1999 385,000 462,000 2,002 -- 40,600 -- 44,194
President and CEO 1998 345,000 414,000 3,043 -- 31,800 -- 56,999
of Edison Capital 1997 310,000 372,000 3,119 -- 33,200 -- 24,937
Harold B. Ray, 1999 372,000 446,400 -- -- 73,800 -- 43,176
Executive Vice President 1998 355,000 372,000 -- -- 43,700 -- 54,294
of SCE 1997 335,000 271,350 -- -- 40,000 -- 28,509
</TABLE>
(1) For Edison International, the Named Officers for 1999 are John E. Bryson,
Stephen E. Frank, Bryant C. Danner, Alan J. Fohrer, and Thomas R. McDaniel.
For SCE, the Named Officers for 1999 are John E. Bryson, Stephen E. Frank,
Bryant C. Danner, Alan J. Fohrer and Harold B. Ray. Compensation
information is provided for years in which the Named Officer served as an
Executive Officer.
15
<PAGE>
(2) The principal positions shown are at December 31, 1999. As of January 1,
2000, Mr. Bryson resigned as Chairman and CEO of SCE and became President,
in addition to Chairman and CEO, of Edison International; Mr. Frank became
Chairman and CEO, in addition to President, of SCE; and, Messrs. Danner and
Fohrer resigned their SCE positions. On January 17, 2000, Mr. Fohrer
resigned his Edison International positions and was elected President and
CEO of Edison Mission Energy.
(3) Includes perquisites if in total they exceed the lesser of $50,000 or 10%
of annual salary and bonus, plus reimbursed taxes. Each perquisite
exceeding 25% of the total is separately described in footnotes below.
(4) The amounts shown in Column (g) are comprised of Edison International
nonqualified stock options, Edison Mission Energy affiliate options and
Edison Capital affiliate options (collectively, "Option Awards"). No stock
appreciation rights ("SARs") have been awarded. The Edison Mission Energy
and Edison Capital affiliate options are based on hypothetical shares of
affiliate stock linked to the value of each company's portfolio of
investments. The terms and conditions for the 1999 Option Awards are
described in footnotes to the table below entitled "Options/SAR Grants in
1999."
The following table shows the amount of each type of Option Award granted
to the Named Officers:
1999 1998 1997
------- ------- -------
John E. Bryson
Edison International 267,800 160,000 128,000
Edison Mission Energy 0 0 14,500
Edison Capital 0 0 15,200
Stephen E. Frank
Edison International 117,700 69,600 78,000
Bryant C. Danner
Edison International 83,100 44,700 38,000
Edison Mission Energy 0 0 4,100
Edison Capital 0 0 4,300
Alan J. Fohrer
Edison International 83,100 44,700 38,000
Edison Mission Energy 0 0 4,100
Edison Capital 0 0 4,300
Thomas R. McDaniel
Edison International 16,700 9,300 9,000
Edison Capital 23,900 22,500 24,200
Harold B. Ray
Edison International 73,800 43,700 40,000
In December 1999, Messrs. Bryson, Danner and Fohrer elected to relinquish
the Edison Mission Energy and Edison Capital affiliate options granted to
them in past years, including those shown above that were granted in 1997,
and forego all of the accrued gains they would otherwise have received
under those options.
16
<PAGE>
(5) The amounts shown in column (i) include contributions in 1999 to the SSPP
and a supplemental plan for eligible participants who are affected by SSPP
participation limits imposed on higher paid individuals by federal tax law,
preferential interest [that portion of interest that is considered under
SEC rules to be at above-market rates] accrued in 1999 on deferred
compensation, vacation sale proceeds, Employee Stock Ownership Plan
("ESOP") dividend incentives (the ESOP is a component of the SSPP),
electric vehicle incentives, and benefit forfeiture allocations in the
following amounts:
<TABLE>
<CAPTION>
ESOP Electric Benefit
Plan Preferential Vacation Dividend Vehicle Forfeiture
Contributions Interest Sold Incentives Incentives Allocations
($) ($) ($) ($) ($) ($)
------------- ------------ -------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
John E. Bryson 59,363 400,708 0 1,593 0 245
Stephen E. Frank 36,946 11,647 0 0 1,200 0
Bryant C. Danner 28,451 15,877 0 0 0 0
Alan J. Fohrer 26,110 13,116 0 0 0 84
Thomas R. McDaniel 26,370 9,843 7,405 516 0 60
Harold B. Ray 13,560 22,230 7,155 220 0 12
</TABLE>
(6) Includes $26,978 which is the cost of providing Mr. Bryson's benefits under
the Executive Survivor Benefit Plan.
17
<PAGE>
OPTION / SAR GRANTS IN 1999
The following table presents information regarding Edison International
stock options and Edison Capital affiliate options granted pursuant to the
Edison International Equity Compensation Plan during 1999 to the Named Officers.
No Edison Mission Energy affiliate options were awarded to the Named Officers
during 1999. No SARs were granted under the Equity Compensation Plan to any
participant during 1999.
<TABLE>
<CAPTION>
Grant Date
Individual Grants Value
-----------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f)
Number of % of Total
Securities Options/SARs Grant
Underlying Granted to Exercise Date
Options/SARs Employees or Base Present
Granted (1)(2)(3) in 1999 Price Expiration Value (5)
Name (#) (%) ($/Sh) Date (4) ($)
----------------- ------------ ----------- ---------- ----------
John E. Bryson
<S> <C> <C> <C> <C> <C>
Edison International 267,800 9% 28.125 01/02/2009 1,171,292
Stephen E. Frank
Edison International 117,700 4% 28.125 01/02/2009 514,792
Bryant C. Danner
Edison International 83,100 3% 28.125 01/02/2009 363,457
Alan J. Fohrer
Edison International 83,100 3% 28.125 01/02/2009 363,457
Thomas R. McDaniel
Edison International 16,700 1% 28.125 01/02/2009 73,042
Edison Capital 23,900 21% 207.2246 01/02/2009 202,911
Harold B. Ray
Edison International 73,800 2% 28.125 01/02/2009 322,782
</TABLE>
(1) Each Edison International nonqualified stock option granted in 1999 may be
exercised to purchase one share of Edison International Common Stock.
One-half of the value granted in the form of Edison International stock
options included dividend equivalents equal to the dividends that would
have been paid on that number of shares of Edison International Common
Stock. Dividend equivalents will be credited following the first three
years of the option term if certain Edison International performance
criteria discussed below are met. Dividend equivalents accumulate without
interest. Once earned and vested, the dividend equivalents are payable in
cash (i) upon the request of the holder prior to the final year of the
option term, (ii) upon the exercise of the related option, or (iii) at the
end of the option term regardless of whether the related option is
exercised. After such payment, however, no additional dividend equivalents
will accrue on the related option.
The dividend equivalent performance criteria are measured by Edison
International Common Stock total shareholder return. If the average
quarterly percentile ranking of Edison International's total shareholder
return is less than the 60th percentile of that of the companies comprising
the Dow Jones Electric Utilities Index, the dividend equivalents are
reduced; if the Edison International total shareholder return ranking is
less than the 25th percentile, the dividend equivalents are canceled. For
rankings between the 60th and 25th percentiles, the dividend equivalents
are prorated. The total shareholder return is measured at the end of the
initial three-year period and will set the percentage payable for the
entire term. If less than 100% of the dividend equivalents are earned, the
unearned portion may be restored later in the option term if Edison
International's cumulative total shareholder return ranking for the option
term attains at least the 60th percentile.
18
<PAGE>
(2) Each Edison Capital affiliate option may be exercised to realize any
appreciation in the deemed value of one hypothetical share of Edison
Capital affiliate stock over the annually escalated exercise price. The
deemed value of the Edison Capital stock is determined by formula linked to
the value of Edison Capital portfolio investments less general and
administrative cash costs. The deemed value is recalculated annually. For
this purpose, 5 million shares of Edison Capital affiliate stock are deemed
to be outstanding. The exercise price of each affiliate option is initially
set equal to the deemed value of one share of the affiliate stock on the
date of grant and is annually escalated on a compound basis thereafter by a
factor reflecting the affiliate's approximate cost of capital during the
year as determined by the Compensation and Executive Personnel Committee of
Edison International. The annual escalation factor will be adjusted
prospectively by the Edison International Compensation Committee for
significant changes in the affiliate's cost of capital. If the deemed value
of a share of Edison Capital stock exceeds the corresponding exercise price
for any year during the option term, the executive may exercise the vested
portion of the options during a 60-day annual exercise window and be paid
in cash the difference between the exercise price and the deemed value of
the affiliate shares.
(3) The Option Awards are subject to a four-year vesting period with one-fourth
of the total award vesting and becoming exercisable on January 2, 2000;
January 2, 2001; January 2, 2002 and January 2, 2003. The Option Awards of
certain senior executives, including the Named Officers, are transferable
to a spouse, child or grandchild. If an executive retires, dies, or
terminates employment following a permanent and total disability during the
four-year vesting period, the unvested Option Awards will vest and be
exercisable to the extent of 1/48 of the grant for each full month of
service during the vesting period. Unvested Option Awards of any person who
has served in the past on the Southern California Edison Management
Committee will vest and be exercisable upon his or her retirement, death,
or permanent and total disability. (Messrs. Bryson, Danner, Fohrer and Ray
have served as members of the SCE Management Committee which was dissolved
in 1993.) Upon retirement, death or permanent and total disability, the
vested Option Awards may continue to be exercised within their original
term by the recipient or beneficiary. If an executive is terminated other
than by retirement, death or permanent and total disability, Option Awards
which had vested as of the prior anniversary date of the grant are
forfeited unless exercised within 180 days of the date of termination in
the case of Edison International stock options, or during the next 60-day
exercise period in the case of Edison Capital affiliate options. All
unvested Option Awards are forfeited on the date of termination.
Appropriate and proportionate adjustments may be made by the Edison
International Compensation Committee to outstanding Edison International
stock options to reflect any impact resulting from various corporate events
such as reorganizations, stock splits and so forth. If Edison International
is not the surviving corporation in such a reorganization, all Option
Awards then outstanding will become vested and be exercisable unless
provisions are made as part of the transaction to continue the Equity
Compensation Plan or to assume or substitute options of the successor
corporation with appropriate adjustments as to the number and price of the
options. Notwithstanding the foregoing, upon a change of control of Edison
International after the occurrence of a "Distribution Date" under the
Rights Agreement approved by the Edison International Board of Directors on
November 21, 1996, and amended on September 16, 1999, the options will vest
and will remain exercisable for at least two years following the
Distribution Date. A Distribution Date is generally the date a person
acquires 20% or more of the Common Stock of Edison International, or a date
specified by the Edison International Board of Directors after commencement
of a tender offer for 20% or more of such stock.
The Edison International Compensation Committee administers the Equity
Compensation Plan and has sole discretion to determine all terms and
conditions of any grant, subject to plan limits. It may substitute cash
that is equivalent in value to the Option Awards and, with the consent of
the executive, may amend the terms of any award agreement, including the
post-termination term, and the vesting schedule.
(4) The expiration date of the Option Awards is January 2, 2009; however, the
final 60-day exercise period of the Edison Capital affiliate options will
occur during the second quarter of that year. The Option Awards are subject
to earlier expiration upon termination of employment as described in
footnote (3) above.
19
<PAGE>
(5) The grant date value of each Edison International stock option was
calculated as the sum of two numbers: the option value and the dividend
equivalent value. The option value was calculated to be $3.30 per option
share using the Black-Scholes stock option pricing model. In making this
calculation, it was assumed that the average exercise period was seven
years, the volatility rate was 18%, the risk-free rate of return was 4.75%,
the historic average dividend yield was 5.38% and the stock price and
exercise price were $28.125.
The dividend equivalent value of each Edison International stock option
granted in 1999 was calculated to be $3.37. This dividend equivalent value
was calculated by (a) summing the dividends (without reinvestment) over the
assumed seven-year duration of the related stock option at the annual
dividend rate of $1.04 in effect on January 1, 1999, and (b) discounting
that sum to its present value assuming a discount rate of 11.60%, which was
SCE's authorized return on common equity in 1999. This calculation does not
reflect any reduction in value for the risk that Edison International
performance measures may not be met. The calculation of the present value
of the dividend equivalents is not a prediction of future dividends or
dividend policy, and there is no assurance that the value of the dividend
equivalents realized by an executive will be at or near the value
calculated as described above. Only a portion of the Edison International
stock options granted in 1999 was associated with dividend equivalents.
The aggregate estimated grant date value of the Edison International stock
options and the related dividend equivalents awarded in 1999 were:
Option Dividend Equivalent
Value Value
($) ($)
------- -------------------
John E. Bryson 883,740 287,552
Stephen E. Frank 388,410 126,382
Bryant C. Danner 274,230 89,227
Alan J. Fohrer 274,230 89,227
Thomas R. McDaniel 55,110 17,932
Harold B. Ray 243,540 79,242
The value of an Edison Capital affiliate option was calculated to be $8.49,
using the Black-Scholes stock option pricing model assuming an average
exercise period of seven years, a volatility rate of 10.07%, a risk-free
rate of return of 4.43%, a dividend yield of 0% and an exercise price of
$349.4317. These assumptions are based on average values of a group of peer
companies adjusted for differences in capital structure.
The actual value that an executive may realize will depend on various
factors on the date the option is exercised, so there is no assurance that
the value realized by an executive will be at or near the grant date value
estimated by the Black-Scholes model. The estimated values under that model
are based on certain assumptions and are not a prediction of future stock
price.
20
<PAGE>
AGGREGATED OPTION / SAR EXERCISES IN 1999
AND FY-END OPTION / SAR VALUES
The following table presents information regarding the exercise of Edison
International stock options and Edison Capital affiliate options during 1999 by
any of the Named Officers, and regarding unexercised options held at year-end
1999 by any of the Named Officers. No Edison Mission Energy affiliate options
were held by any of the Named Officers at year-end 1999. No SARs were exercised
during 1999 or held at year-end 1999 by any of the Named Officers.
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
- ----------------------------------------------------------------------------------------------------------
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options / SARs Options / SARs at
Shares at FY-End (1) FY-End (1)(2)
Acquired Value (#) ($)
on Exercise Realized Exercisable / Exercisable /
Name (#) ($) Unexercisable Unexercisable
- ------------ ----------- -------- -------------- ---------------
John E. Bryson(3)
<S> <C> <C> <C> <C>
Edison International 21,000 346,080(4) 562,534/430,466 4,011,348/274,662
Stephen E. Frank
Edison International - - 208,200/195,900 1,534,475/167,375
Bryant C. Danner(3)
Edison International - - 172,109/129,291 1,222,950/81,537
Alan J. Fohrer(3)
Edison International - - 166,409/129,291 1,240,350/81,537
Thomas R. McDaniel
Edison International - 174,540(5) 56,525/26,675 325,556/19,313
Edison Capital - - 70,969/48,841 6,072,165/1,486,400
Harold B. Ray
Edison International 38,200 522,003(6) 37,592/119,908 171,669/85,831
</TABLE>
(1) Each Edison International stock option may be exercised for one share of
Edison International Common Stock at an exercise price equal to the fair
market value of the underlying Common Stock on the date the option was
granted. Dividend equivalents which may accrue on the Edison International
stock options accumulate without interest and are paid in cash. Each Edison
Capital affiliate option represents a right to exercise an option to
realize any appreciation in the deemed value of one hypothetical share of
Edison Capital affiliate stock. The option terms for current year awards
are discussed in footnote (1) in the table above entitled "Option/SAR
Grants in 1999."
(2) Edison International stock options have been treated as "in-the-money" if
the fair market value of the underlying stock at year-end 1999 exceeded the
exercise price of the options. The dollar amounts shown for Edison
International stock options are the differences between (i) the fair market
value of the Edison International Common Stock underlying all unexercised
"in-the-money" options at year-end 1999 and (ii) the exercise prices of
those options.
21
<PAGE>
The aggregate value at year-end 1999 of all accrued dividend equivalents,
exercisable and unexercisable, for the Named Officers was:
$/$
------------
John E. Bryson 2,655,119/0
Stephen E. Frank 599,080/0
Bryant C. Danner 763,443/0
Alan J. Fohrer 719,055/0
Thomas R. McDaniel 133,771/0
Harold B. Ray 0/0
Edison Capital affiliate options are considered in-the-money if the deemed
value of the Edison Capital affiliate stock, which is determined annually
by formula linked to portfolio investments, exceeds prescribed exercise
prices. The deemed value at year-end is not available until the second
quarter of the following year. Therefore, amounts shown in Column (e)
reflect the deemed value at fiscal year-end for 1998, the most recent
valuation date for affiliate option exercise purposes.
(3) In December 1999, Messrs. Bryson, Danner and Fohrer elected to relinquish
the Edison Mission Energy and Edison Capital affiliate options granted to
them in 1994 - 1997 and shown in this table in past years and forego all of
the accrued gains they would otherwise have received under those options.
(4) Includes $235,200 of value from dividend equivalents.
(5) Only the dividend equivalents were exercised; the dividend equivalents were
associated with 21,000 shares.
(6) Includes $125,678 of value realized from dividend equivalents by Mr. Ray.
22
<PAGE>
PENSION PLAN TABLE (1)
The following table presents estimated gross annual benefits payable upon
retirement at age 65 to the Named Officers in the remuneration and years of
service classifications indicated.
<TABLE>
<CAPTION>
Years of Service
Annual 10 15 20 25 30 35 40
Remuneration
------------ ------- ------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
200,000 50,000 67,500 85,000 102,500 120,000 130,000 140,000
400,000 100,000 135,000 170,000 205,000 240,000 260,000 280,000
600,000 150,000 202,500 255,000 307,500 360,000 390,000 420,000
800,000 200,000 270,000 340,000 410,000 480,000 520,000 560,000
1,000,000 250,000 337,500 425,000 512,500 600,000 650,000 700,000
1,200,000 300,000 405,000 510,000 615,000 720,000 780,000 840,000
1,400,000 350,000 472,500 595,000 717,500 840,000 910,000 980,000
1,600,000 400,000 540,000 680,000 820,000 960,000 1,040,000 1,120,000
1,800,000 450,000 607,500 765,000 922,500 1,080,000 1,170,000 1,260,000
2,000,000 500,000 675,000 850,000 1,025,000 1,200,000 1,300,000 1,400,000
2,200,000 550,000 742,500 935,000 1,127,500 1,320,000 1,430,000 1,540,000
2,400,000 600,000 810,000 1,020,000 1,230,000 1,440,000 1,560,000 1,680,000
2,600,000 650,000 877,500 1,105,000 1,332,500 1,560,000 1,690,000 1,820,000
</TABLE>
The retirement plans provide monthly benefits at normal retirement age (65
years) determined by a percentage of the average of the executive's highest 36
consecutive months of regular salary and, in the case of the executive plan with
respect to senior officers, the executive's highest 36 consecutive months of
salary and bonus prior to attaining age 65. Compensation used to calculate
combined benefits under the plans is based on base salary and bonus as reported
in the "Summary Compensation Table" above. The service percentage is based on 1
3/4% per year for the first 30 years of service (52 1/2% upon completion of 30
years of service) and 1% for each year in excess of 30. Senior officers receive
an additional service percentage of 3/4 percent per year for the first ten years
(7.5% upon completion of ten years of service). The actual benefit is offset by
up to 40% of the executive's primary Social Security benefits.
The normal form of benefit is a life annuity with a 50% survivor benefit
following the death of the participant. Retirement benefits are reduced for
retirement prior to age 61. The amounts shown in the Pension Plan Table above do
not reflect reductions in retirement benefits due to the Social Security offset
or early retirement.
Messrs. Danner and Fohrer have elected to retain coverage under a prior
benefit program. This program provided, among other benefits, the
post-retirement benefits discussed in the following section. The retirement
benefits provided under the prior program are less than the benefits shown in
the Pension Plan Table in that they do not include the additional 7.5% service
percentage. To determine these reduced benefits, multiply the dollar amounts
shown in each column by the following factors: 10 years of service-70%, 15
years-78%, 20 years-82%, 25 years-85%, 30 years-88%, 35 years-88%, and 40
years-89%.
- ---------------
(1) Estimates are based on the terms of the SCE Retirement Plan, a qualified
defined benefit employee retirement plan, and the SCE Executive Retirement
Plan, a nonqualified supplemental executive retirement plan, with the
following assumptions: (i) SCE's qualified retirement plan will be
maintained, (ii) optional forms of payment which reduce benefit amounts
have not been selected, and (iii) any benefits in excess of limits
contained in the Internal Revenue Code of 1986 and any incremental
retirement benefits attributable to consideration of the annual bonus will
be paid out of the executive retirement plan as unsecured obligations of
Edison International or the participating affiliate.
23
<PAGE>
For purposes of the Executive Retirement Plan, as of December 31, 1999, Mr.
Bryson had completed 15 years of service, Mr. Frank-10 years, Mr. Danner-17
years, Mr. Fohrer-26 years, Mr. McDaniel-28 years, and Mr. Ray-29 years.
OTHER RETIREMENT BENEFITS
Additional post-retirement benefits are provided pursuant to the Survivor
Income Continuation Plan and the Survivor Income/Retirement Income Plan under
the Executive Supplemental Benefit Program. For purposes of determining the
estimated annual benefits payable under these plans upon retirement at normal
retirement age for each of the Named Officers, which is dependent upon final
compensation, the highest compensation level in the Pension Plan Table above
($2,600,000) has been used in the examples which follow.
The Survivor Income Continuation Plan provides a post-retirement survivor
benefit payable to the beneficiary of the participant following his or her
death. The benefit is approximately 24% of final compensation (salary at
retirement and the average of the three highest bonuses paid in the five years
prior to retirement) payable for ten years certain. If a Named Officer's final
annual compensation were $2,600,000, the beneficiary's estimated annual survivor
benefit would be $624,000. Messrs. Danner and Fohrer have elected coverage under
this plan.
The Supplemental Survivor Income/Retirement Income Plan provides a
post-retirement survivor benefit payable to the beneficiary of the Executive
Officer following his or her death. The benefit is 25% of final compensation
(salary at retirement and the average of the three highest bonuses paid in the
five years prior to retirement) payable for ten years certain. At retirement, an
Executive Officer has the right to elect the retirement income benefit in lieu
of the survivor income benefit. The retirement income benefit is 10% of final
compensation (salary at retirement and the average of the three highest bonuses
paid in the five years prior to retirement) payable to the participant for ten
years certain immediately following retirement. If a Named Officer's final
annual compensation were $2,600,000, the beneficiary's estimated annual survivor
benefit would be $650,000. If a Named Officer were to elect the retirement
income benefit in lieu of survivor income and had final annual compensation of
$2,600,000, the Named Officer's estimated annual benefit would be $260,000.
Messrs. Danner and Fohrer have elected coverage under this plan.
The 1985 Deferred Compensation Plan provides a post-retirement survivor
benefit. This plan allowed eligible participants in September 1985 to
voluntarily elect to defer until retirement a portion of annual salary and
annual bonuses otherwise earned and payable for the period October 1985 through
January 1990. Messrs. Bryson and Ray participate in this plan. The
post-retirement survivor benefit is 50% of the annual amount the participant had
been receiving from the plan. Survivor benefit payments begin following
completion of the deferred compensation payments. If the named beneficiary is
the executive's spouse, then survivor benefits are paid as a life annuity, five
years certain. The benefit amount will be reduced actuarially if the spouse is
more than five years younger than the executive at the time of the executive's
death. If the beneficiary is not the spouse, then benefits are paid for five
years only. The annual amounts which would be payable to the surviving
beneficiaries of Messrs. Bryson and Ray if each retired at age 65 are $1,260,020
and $46,324, respectively.
EMPLOYMENT CONTRACTS AND
TERMINATION OF EMPLOYMENT ARRANGEMENTS
Bryant C. Danner. Mr. Danner executed an employment agreement when he
joined Edison International and SCE as Senior Vice President and General Counsel
in 1992. After completing three years of service, he was credited with ten
additional years of service with SCE and Edison International for purposes of
determining benefits under the Executive Retirement Plan. Edison International
and SCE have agreed to use their best efforts to make available health care
coverage until Mr. Danner and his spouse reach age 65, with Edison International
and SCE bearing the cost over the amount an SCE retiree would pay for coverage
in the SCE group plan with the highest deductible.
24
<PAGE>
Stephen E. Frank. Mr. Frank executed an employment agreement when he joined
SCE as President and Chief Operating Officer and as a member of the Boards of
Directors of Edison International and SCE in 1995. For purposes of the Executive
Retirement Plan, he will be credited with 1.25 years of additional service for
each year of actual service up to ten years. A deferred compensation plan
account was established and credited with $250,000 which will vest when Mr.
Frank completes five years of service. He is also provided two club memberships
along with regular executive and employee benefits. If Mr. Frank's employment is
terminated involuntarily (other than for cause), he will receive a severance
payment equal to one year's salary plus bonus and the deferred compensation plan
credit discussed above will be vested on a pro rata basis.
Edward R. Muller. Mr. Muller served as the President and Chief Executive
Officer of Edison Mission Energy beginning on August 23, 1993. On January 17,
2000, Mr. Muller resigned by mutual agreement from all positions with Edison
Mission Energy and related companies. Pursuant to the agreement, Mr. Muller was
paid $500,000 as a one-time severance payment. In addition, Edison Mission
Energy agreed to make a further payment to Mr. Muller, in cancellation of his
vested Edison Mission Energy affiliate options, of $34.548 million in the
aggregate. This payment equaled an agreed upon amount per affiliate option over
the exercise prices of Mr. Muller's vested affiliate options and was accrued as
of the end of 1999 in anticipation of a contemplated exchange offer or future
affiliate option exercises. The amount is subject to upward adjustment if an
exchange offer to similarly situated individuals is completed at a higher price
per affiliate option before July 18, 2000. See "Compensation and Executive
Personnel Committees' Report on Executive Compensation - Affiliate Options."
The agreement with Mr. Muller also provides for consulting services to be
rendered by him to Edison Mission Energy for a period of up to 24 months,
subject to earlier termination under certain circumstances. During the
consulting period, Edison Mission Energy will pay Mr. Muller a consulting fee at
the rate of $300,000 per annum and his unvested Edison International stock
options will continue to vest ratably. Mr. Muller's unvested affiliate options
will also vest ratably during the consulting period and be paid out at the same
rate per affiliate option as was paid in cancellation of his vested affiliate
options, up to $1.712 million in the aggregate.
Under the agreement with Edison Mission Energy, Mr. Muller is subject to a
number of covenants, including non-competition, confidentiality,
non-solicitation, non-disparagement and non-interference.
COMPENSATION AND EXECUTIVE PERSONNEL COMMITTEES'
REPORT ON EXECUTIVE COMPENSATION (1)
The Edison International and SCE Compensation and Executive Personnel
Committees have responsibility for all executive compensation programs of the
companies. The Compensation Committees are composed of the same non-employee
directors named at the end of this report.
The Compensation Committees met jointly to consider executive compensation
matters for 1999. The Edison International Compensation Committee determines
salaries and bonuses for Edison International officers. The SCE Compensation
Committee determines salaries and bonuses for SCE officers. The salaries and
bonuses of the officers of the other Edison International subsidiaries are
determined by their respective boards of directors subject to review and
approval of the Edison International Compensation Committee to ensure
consistency with overall Edison International compensation policies. In
addition, the Edison International Compensation Committee administers the Equity
Compensation Plan pursuant to which stock options, affiliate options and
performance awards were awarded in 1999.
- ---------------------
(1) SEC filings sometimes "incorporate information by reference." This means
the Companies are referring you to information that has previously been
filed with the SEC, and that this information should be considered as part
of the filing you are reading. Unless Edison International or SCE
specifically states otherwise, this report shall not be deemed to be
incorporated by reference and shall not constitute soliciting material or
otherwise be considered filed under the Securities Act of 1933 or the
Securities Exchange Act.
25
<PAGE>
Compensation Policies
The executive compensation programs of Edison International, SCE and the
other subsidiaries adopted by the Compensation Committees are intended to
achieve three fundamental objectives: (1) attract and retain qualified
executives; (2) motivate performance to achieve specific strategic objectives of
the companies; and (3) align the interests of senior management with the
long-term interests of the companies' shareholders. At present, the basic
components of the companies' executive compensation program are base salaries,
bonuses, and long-term incentives. The companies also provide broad-based
employee benefit plans and certain other executive benefit plans.
Section 162(m) of the Internal Revenue Code of 1986 generally disallows a
tax deduction to public companies for compensation over $1,000,000 paid to their
chief executive officers and the four other most highly compensated executive
officers unless certain tests are met. The Compensation Committees' general
intent is to design and administer the Edison International and SCE compensation
programs in a manner that will preserve the deductibility of compensation
payments to Executive Officers. However, this goal is secondary in importance to
achievement of the companies' compensation objectives discussed above. The
Compensation Committees believe that the potential increased tax liability is of
insufficient magnitude to warrant alteration of the present compensation system
which is achieving the desired compensation objectives while retaining the
flexibility of the Compensation Committees to exercise judgment in assessing an
executive's performance.
1999 Compensation Objectives
The Compensation Committees base their compensation actions for the
companies on data gathered through independent surveys of peer group companies.
Independent compensation consultants are retained to annually review and
identify the appropriate comparison companies and to obtain and evaluate current
executive compensation data for Edison International, SCE and the other
subsidiaries. By year-end 1999, the Committees completed the transition to
greater reliance on deregulating diversified electric utilities for future
Edison International and SCE compensation comparisons. Edison International 1999
compensation planning was based on a composite peer group of 19 U.S.-based,
financially healthy electric service, telecommunication and natural gas pipeline
companies. This peer group of companies includes 13 of the companies used last
year and six new companies. Comparison utility companies were selected on the
basis of total assets and net sales. Although the peer group differs from the
Dow Jones Electric Utilities Index depicted in the Stock Performance Graph, ten
of the companies are included in the index, and the Compensation Committees
believe the constitution of the peer group provides relevant compensation data
for Edison International and SCE in view of the companies' changing business
environment. Selecting peer groups for the other subsidiaries was accomplished
by a similar process geared to identify appropriate comparison companies in
their respective industries.
The Compensation Committees' strategy for 1999 compensation planning was
established in December 1998 to generally target fixed compensation (salary and
benefits) for Edison International, SCE and the other subsidiaries at the median
level of their respective peer groups. Target annual bonus and long-term
incentive opportunities were also set at the median level of the peer groups,
with maximum annual award opportunities of 200% of target levels for significant
performance exceeding target levels. The Compensation Committees may deviate
above and below established targets in individual cases as deemed appropriate in
their discretion.
Affiliate Options
Beginning in 1994 for Edison Mission Energy and 1995 for Edison Capital,
affiliate option performance awards were established as part of the long-term
incentive compensation program for key employees of those affiliates. Each
affiliate option granted could be exercised to realize certain appreciation in
the deemed value of one hypothetical share of Edison Mission Energy or Edison
Capital stock in excess of their respective annually escalated exercise prices.
When the affiliate options were first issued, the Edison International
Compensation Committee believed that the awards were an appropriate incentive
program for executives of the affiliated companies. By the end of 1999,
26
<PAGE>
however, it was the view of the Edison International Compensation Committee that
the affiliate options had fulfilled their original purpose. While the affiliate
options had been an important contributor to the expansion of the businesses of
Edison Mission Energy and Edison Capital, they were no longer regarded as an
optimal means of providing incentives to the managers and employees of those
affiliates. Instead, the Edison International Compensation Committee concluded
that it was more appropriate that the key employees of affiliate companies have
a common interest with Edison International shareholders in the integrated
operations of the Company as reflected by the value of Edison International
Common Stock.
The operations of Edison Mission Energy and Edison Capital contributed
about 45% of Edison International's earnings in 1999 and are sufficiently large
to be reflected in the value of its stock in the future. Because of this, the
Edison International Compensation Committee determined it was no longer
appropriate to maintain a separate form of long-term incentive award at the
subsidiary level. Accordingly, there will be no further grants of affiliate
options after 1999.
For similar reasons, the Edison International Compensation Committee is
considering an exchange offer of cash and stock equivalent units (relating to
Edison International Common Stock) for outstanding affiliate options. Such an
exchange offer was reviewed and approved by the Edison International Board of
Directors at its meetings in January and February of 2000, subject to final
approval by the Edison International Compensation Committee of the offer terms
and documentation. In anticipation of the exchange offer and/or future exercises
of the affiliate options, Edison International accrued an additional $122
million at the end of the fourth quarter of 1999 which, in combination with
previously planned accruals, resulted in an accrued balance of $299 million as
of December 31, 1999.
Edison International agreed to make payments in settlement of the affiliate
options held by two officers who resigned by mutual agreement earlier this year.
It is estimated that, if the exchange offer is made on the terms being
considered and if all the remaining holders of affiliate options were to accept
the exchange offer, the total exchange price would amount to approximately $232
million, consisting of approximately $186 million for the Edison Mission Energy
affiliate options, and approximately $46 million for the Edison Capital
affiliate options. The Edison International Compensation Committee is continuing
its review of these prices and other offer terms.
As currently envisioned, approximately 89.6% of the exchange price would be
paid in cash, with some portion payable on January 2, 2001, and the balance
deferred (at the option of certain holders) under a new deferred compensation
plan. An amount equal to approximately 10.4% of the exchange price would be paid
in the form of stock equivalent units.
Officer Resignation
Edward R. Muller served as the President and Chief Executive Officer of
Edison Mission Energy beginning August 23, 1993. On January 17, 2000, Mr. Muller
and Edison Mission Energy entered into a formal agreement providing for Mr.
Muller's resignation. The terms of the agreement approved by the Edison
International Board of Directors are described in the section above entitled
"Employment Contracts And Termination Of Employment Arrangements - Edward R.
Muller".
Base Salaries
The Compensation Committees reviewed the base salaries for Mr. Bryson and
the other Executive Officers at the end of 1998. The factors considered by the
Compensation Committees at that time in setting Mr. Bryson's 1999 salary were
the relationship of his compensation to the average compensation of the other
chief executive officers of the peer group of companies, and the Compensation
Committees' judgment of Mr. Bryson's performance as CEO. In Mr. Bryson's case,
the Compensation Committees placed greater reliance on data related to
deregulating diversified electric utilities. The Committees determined that
Edison International had a good year in 1998 marked by outstanding performance
by Edison Capital and SCE. Edison Mission Energy also had a good year, but
Edison Enterprises made less progress than was targeted. Factors found to be
particularly significant in 1998 were Mr. Bryson's strong and consistent
leadership to transform the organization as the industry changes, and his
success in building an able, talented and energetic management team. His
effectiveness in building relationships and
27
<PAGE>
communicating with employees, shareholders and with people outside the company
who are important to its success, including customers and community, business,
and public leaders, was also cited. No specific weight was assigned to the
various factors considered by the Compensation Committees. The base salary
component of Mr. Bryson's compensation was raised to $900,000 which was within
3% of the average for CEOs in the peer group and within 5% of the average for
CEOs of deregulating diversified electric utilities. The 1999 base salaries
approved by the Compensation Committees for the other Executive Officers at
Edison International and SCE increased 6% over 1998 levels.
In December 1998, the Edison International Compensation Committee also
reviewed the base salaries of the Executive Officers at the other subsidiaries.
Salary actions taken by their respective boards of directors were examined in
light of the performance of the companies and survey data of competitive firms
to assure conformance with overall Edison International compensation policies.
The 1999 base salaries approved by the Compensation Committees for Executive
Officers at the other subsidiaries increased 7% over 1998 levels. After 1999
salary adjustments are taken into account, the base salaries in the aggregate of
the Executive Officers at Edison International, SCE and the other subsidiaries
are 12% above the median levels of their respective peer groups.
Bonus Compensation for 1999 Performance
Bonus compensation is determined on the basis of overall corporate
performance and the Compensation Committees' assessment of the individual
Executive Officer's performance. Target bonuses for Executive Officers for 1999
ranged from 30% of base salary for certain subsidiary vice presidents to 70% of
base salary for Mr. Bryson. Maximum opportunity levels were set at 200% of
target award levels. Awards are made in the judgment of the Compensation
Committees taking into account overall company results as guided by the specific
performance objectives described below. From time to time, the Committees may
also approve additional awards for special recognition of accomplishment and
retention purposes. Two Executive Officers received such awards for 1999
performance.
Edison International and SCE 1999 performance objectives were adopted by
the Compensation Committees prior to the beginning of the year. Three weighted
areas of achievement were identified with quantifiable target objectives for
Edison International as follows: (1) financial performance - 35%, (2) investment
value - 30%, and (3) growth - 35%. Four weighted areas of achievement were
identified with quantifiable target objectives for SCE as follows: (1) financial
performance - 25%, (2) CTC Recovery and Competitive Market Performance - 25%,
(3) Operational Excellence - 30%, and Growth in Utility Value - 20%. Financial
targets were based on earnings per share. Investment value related to the
protection of Competition Transition Charge recovery and protecting the value of
existing investments. Operational excellence goals for SCE focused on several
key objectives including achieving Y2K certification of critical assets by July
1st, achieving safety and regulatory performance goals at San Onofre, earning a
specified reliability reward, and achievement of key performance indicators.
Specific performance related goals were also adopted for each of the other
subsidiaries.
The Compensation Committees met in February 2000 to evaluate each company's
performance and to determine the 1999 bonuses for Executive Officers. They
considered whether the stated 1999 objectives for each performance goal were
attained and reviewed other significant events that occurred during the year.
The Compensation Committees determined that Edison International had a watershed
year in 1999 marked by record operating earnings. SCE, Edison Mission Energy and
Edison Capital had outstanding years, each contributing above target levels and
achieving nearly every performance objective. Only Edison Enterprises had
disappointing results.
The Compensation Committees approved a 1999 bonus of $1,260,000 for Mr.
Bryson that was 100% of his maximum potential award. In addition to evaluating
Mr. Bryson's overall performance as measured by the companies' results in
relation to the specific performance goals discussed above, the Compensation
Committees' subjective assessment of his performance as CEO was considered.
Factors found to be particularly significant in 1999 were the record performance
in attaining the established goals and objectives, the excellent year at the
utility, and Edison Mission Energy's acquisition of major generation assets in
strategic regional markets. Mr. Bryson continues to demonstrate strong
leadership in transforming the organization to meet changing industry dynamics.
28
<PAGE>
The 1999 bonuses for the other Executive Officers averaged 96% of maximum
at SCE and 63% of maximum at the other subsidiaries.
Long-Term Compensation Awards
For 1999, the Edison International Compensation Committee granted ten-year
nonqualified Edison International Common Stock options ("Edison International
Options"). Only one-half of the value granted in the form of Edison
International Options for 1999 included dividend equivalents. Because the value
that would otherwise have been allocated to dividend equivalents was allocated
to additional Edison International Options in 1999, this caused an increase in
the number of options granted to the Executive Officers. Edison Mission Energy
affiliate options and/or Edison Capital affiliate options were also awarded at
those subsidiaries. (As mentioned above, the use of affiliate options has been
discontinued for years after 1999.) A performance award structure was adopted
for Edison Enterprises which would have triggered deferred Edison International
stock units had 1999 performance targets been met. Approximately 75% of the
long-term award value of Executive Officers at other subsidiaries was allocated
to their respective companies' awards, with the balance allocated to Edison
International Options. Awards were granted to Executive Officers in the judgment
of the Edison International Compensation Committee guided by the survey results
described above and were not formula-driven. The number and value of options
granted in prior years was not a factor in the current year award determination.
Edison International Options covering a total of 1,145,200 shares, at an option
price of $28.125 per share, were granted to Executive Officers in January 1999.
Edison Mission Energy affiliate options covering a total of 18,160 shares were
granted to Executive Officers in January 1999 at a base price of $306.825 per
share. Edison Capital affiliate options covering a total of 23,900 shares were
granted to Executive Officers in January 1999 at a base price of $207.2246 per
share. The Edison International Compensation Committee approved a January 1999
award to Mr. Bryson of 267,800 Edison International Options. This award reflects
the Compensation Committees' commitment to link a significant portion of Mr.
Bryson's compensation directly to the value provided to shareholders by Edison
International stock and dividends. The target values established and the actual
awards granted to Mr. Bryson and the other Executive Officers were consistent
with the Compensation Committees' strategy described above.
Compensation and Executive Personnel Committees of the
Edison International and SCE Boards of Directors
Charles D. Miller (Chair) Luis G. Nogales
Robert H. Smith James M. Rosser*
Daniel M. Tellep Thomas C. Sutton
February 17, 2000
* Dr. Rosser ceased to be a member of the Committees on April 15, 1999. He
did not participate in deliberations and decisions of the Committees from
that date, including the determination of bonuses for 1999 performance.
COMPENSATION AND EXECUTIVE PERSONNEL COMMITTEES
INTERLOCKS AND INSIDER PARTICIPATION
James M. Rosser was a member of the Compensation Committees until the
Committees were changed by the Boards on April 15, 1999. The other Compensation
Committees members whose names appear on the Committees' Report above were
members of the Compensation Committees during all of 1999. Under applicable SEC
rules, there were no interlocks or insider participation on the Compensation
Committees.
29
<PAGE>
CERTAIN RELATIONSHIPS AND TRANSACTIONS OF
NOMINEES AND EXECUTIVE OFFICERS
Mr. Christopher is a Senior Partner of the law firm of O'Melveny & Myers,
and Mr. Olson is a Senior Partner of the law firm of Munger, Tolles and Olson.
Both firms provided legal services to Edison International, SCE, and/or their
subsidiaries in 1999. Edison International and its subsidiaries paid Munger,
Tolles and Olson an aggregate amount of $4,143,790 for legal services. The
amount paid to O'Melveny & Myers for legal services was below the threshold
requiring disclosure by the SEC.
In 1999, WRG, a management consulting firm of which Mr. John Danner is a
partner, was paid $651,979 by SCE and $30,917 by Edison International for
consulting services provided in late 1998 and 1999. Mr. Danner is the brother of
Bryant C. Danner.
Edison International and SCE believe that any transactions described above
are comparable to those which would have been undertaken under similar
circumstances with nonaffiliated entities or persons.
OTHER MANAGEMENT TRANSACTIONS
During 1997, Edison International loaned Robert G. Foster, a Senior Vice
President of Edison International and SCE, $160,000 interest-free in connection
with his purchase of a principal residence following his relocation from SCE's
Sacramento Region Office to the Southern California Metropolitan area. Under the
terms of the loan, one-seventh of the original principal amount was forgiven in
1997, and one-seventh will be forgiven each year thereafter if Mr. Foster
remains employed with an Edison International affiliate. As of February 25,
2000, a principal balance of $91,428.55 remained outstanding. If Mr. Foster's
employment terminates before the end of the loan term, the remaining principal
balance owing will be due and payable. Interest will accrue on any remaining
principal balance at the Bank of America Prime Interest Rate after 90 days.
30
<PAGE>
FIVE-YEAR STOCK PERFORMANCE GRAPH (1) (2)
The graph below compares the yearly percentage change in the cumulative
total shareholder return on the Edison International Common Stock with the
cumulative total return of companies in the Standard and Poor's 500 Stock Index
and the Dow Jones Electric Utilities Index. The Dow Utilities Index contains 45
United States utility companies that are electric or combination (electric and
gas) companies. Both indices are published daily in The Wall Street Journal.
Edison International is included in both the S&P 500 Index and the Dow Utilities
Index.
<TABLE>
<CAPTION>
--------------------------------------------- ------------------------------------------------------------------
Cumulative Total Return
---------- ---------- ----------- ---------- ---------- ----------
12/94 12/95 12/96 12/97 12/98 12/99
--------------------------------------------- ---------- ---------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Edison International 100.00 126.03 152.34 216.98 230.84 224.15
Standard & Poor's 500 Index 100.00 137.58 169.17 225.61 290.09 351.13
Dow Jones Electric Utilities Index (U.S.) 100.00 131.57 132.92 168.19 191.98 161.63
--------------------------------------------- ---------- ---------- ----------- ---------- ---------- ----------
</TABLE>
(1) SEC filings sometimes "incorporate information by reference." This means
the Companies are referring you to information that has previously been
filed with the SEC, and that this information should be considered as part
of the filing you are reading. Unless Edison International or SCE
specifically states otherwise, this graph shall not be deemed to be
incorporated by reference and shall not constitute soliciting material or
otherwise be considered filed under the Securities Act or the Securities
Exchange Act.
(2) The historical stock performance depicted on the graph is not necessarily
indicative of future performance. The Companies do not make or endorse any
predictions as to future stock performance or dividends. This proxy
statement is not to be considered material for soliciting the purchase or
sale of either Companies' stock.
31
<PAGE>
(3) Ex-dividend dates have been used to determine the number of dividends
included in Edison International's cumulative total return calculation. The
ex-dividend date occurs several days prior to the record date for each
dividend payment, and is the date on which the stock begins trading at a
price that does not include the dividend. Edison International had three
ex-dividend dates in 1995, five ex-dividend dates in 1996, and three
ex-dividend dates in 1999 even though shareholders received four dividend
payments in each year. If four dividends were used for each year to
determine the cumulative total return, the Edison International total
returns would change as follows:
Cumulative Total Return
- -----------------------------------------------------------------------------
12/94 12/95 12/96 12/97 12/98 12/99
- -----------------------------------------------------------------------------
$100.00 $127.82 $152.37 $217.02 $230.89 $226.50
INDEPENDENT PUBLIC ACCOUNTANTS
The Edison International and SCE Boards have selected Arthur Andersen LLP
as the Companies' independent public accountants for calendar year 2000. Arthur
Andersen LLP is an international public accounting firm which provides
leadership in public utility accounting matters.
Representatives of Arthur Andersen LLP are expected to attend the annual
meeting to respond to appropriate questions and to make a statement if they
wish.
SHAREHOLDER PROPOSALS AND NOMINATIONS FOR
2001 ANNUAL MEETINGS
To be considered for inclusion in the 2001 proxy statement, shareholder
proposals for the Edison International and SCE 2001 annual meetings must be
received by November 14, 2000.
Shareholders intending to bring any other business before an annual
meeting, including Director nominations, must give written notice to the Edison
International or SCE Secretary, as the case may be, of the business to be
presented. The notice must be received at company offices within the periods,
and with the information and documents, specified in the Bylaws. A copy of the
Bylaws may be obtained by writing to the Edison International or SCE Secretary.
Assuming that the 2001 annual meetings of shareholders are held on April
19, 2001, as currently specified by the Bylaws, the period for the receipt by
the Edison International or SCE Secretary of written notice of other business to
be brought by shareholders before the 2001 annual meetings of shareholders,
including Director nominations, will begin on September 15, 2000, and end on
November 14, 2000.
32
<PAGE>
AVAILABILITY OF FORM 10-K AND OTHER INFORMATION
The Edison International and SCE 1999 Annual Reports on Form 10-K,
including the financial statements and the financial statement schedules but
excluding other exhibits, will be furnished without charge to shareholders upon
written request. This report is expected to be available for distribution after
March 30, 2000.
A copy may be requested by writing to:
Law Department, Attn: Corporate Governance
Edison International (or SCE, as the case may be)
2244 Walnut Grove Avenue, P. O. Box 800
Rosemead, California 91770
OTHER PROPOSED MATTERS
The Edison International and SCE Boards were not aware by November 9, 1999
(the latest date for shareholders to provide advance notice of business intended
to be presented at the meeting) of any other matters to be presented for action
at the meeting.
If any other matters should properly come before the meeting, including
matters incident to the conduct of the meeting, the proxies will vote the shares
in accordance with their judgment. Discretionary authority to do so is included
in the proxies.
Dated: March 13, 2000
For the Boards of Directors,
BEVERLY P. RYDER
---------------------------------
BEVERLY P. RYDER, Secretary
Edison International and
Southern California Edison Company
33
<PAGE>
X Please mark your CONTROL NO.
- --- votes as in this
example
<TABLE>
<CAPTION>
The Directors recommend a vote of "FOR" Item 1.
- ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ANNUAL MEETING
Withhold For All Nominees: 01-W.Christopher, 02-S.E.Frank, Mark here if you plan
1. Election For All For All Except 03-J.C.Hanley, 04-C.F.Huntsinger, 05-C.D.Miller, to attend the annual
of Directors 06-L.G.Nogales, 07-R.L.Olson, 08-J.M.Rosser, meeting. ----
---- ---- ---- 09-R.H.Smith, 10-T.C.Sutton, 11-D.M.Tellep,
12-E.Zapanta
ANNUAL REPORT
(INSTRUCTION: to withhold authority to vote for any individual nominee, For multiple-account
write such name(s) in the space provided below.) holders only: Mark here
to discontinue annual
- ---------------------------------------------------------------------- report mailing for this
account. ----
</TABLE>
SIGNATURE(S) ------------------------------- DATE ------------------------------
IMPORTANT: Please sign exactly as name appears on this proxy. When signing
as attorney, executor, trustee, guardian, corporate officer, etc., please
indicate full title.
- --------------------------------------------------------------------------------
Fold and Detach Here
LOGO EDISON INTERNATIONAL
EDISON INTERNATIONAL ANNUAL MEETING - APRIL 20, 2000
Edison International offers Phone or Internet
voting 24 hours a day, 7 days a week
On a touch-tone phone, call toll-free 1-877-779-8683 (outside the US and
Canada, call 201-536-8073).
o Have your proxy card and social security number ready.
o Enter the control number from the box above, just below the perforation.
o Follow the voting instructions.
o Your vote will be repeated to you, and you will be asked to confirm it.
Log onto the Internet and type: http://www.eproxyvote.com/eix
o Have your proxy card and social security number ready.
o Enter the control number from the box above, just below the perforation.
o Follow the voting instructions.
o Your vote will be repeated to you, and you will be asked to confirm it.
Your vote by phone or Internet authorizes the proxies and/or the Southern
California Edison Company Stock Savings Plus Plan Trustee, both named on the
reverse of this card, to vote your shares to the same extent as if you marked,
signed, dated and returned the proxy card. Voting instructions to the Plan
are confidential. All stock for which the Plan Trustee has not received
instructions by telephone or Internet by 5:00 p.m., Eastern Time, on
April 17, 2000, may be voted in its discretion.
If you voted by phone or Internet, please do not return the proxy card.
THANK YOU FOR VOTING!
<PAGE>
LOGO
EDISON INTERNATIONAL Proxy/Voting Instruction Card
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
JOHN E. BRYSON and ALAN J. FOHRER are hereby appointed proxies of the
undersigned with full power of substitution to vote all shares of stock the
undersigned is entitled to vote at the annual meeting of shareholders of Edison
International to be held at The Industry Hills Sheraton Resort and Conference
Center, One Industry Hills Parkway, City of Industry, California, on April 20,
2000, at 10 a.m., or at any adjournment or postponement of the meeting, with all
the powers and discretionary authority the undersigned would possess if
personally present at the meeting on the matter listed on the other side.
The shares will be voted as indicated on this card. WHERE NO INDICATION IS
SHOWN, THE SHARES REPRESENTED BY THIS CARD WILL BE VOTED FOR ITEM 1. In
addition, the appointed proxies may vote in their discretion on such other
matters as may properly come before the meeting.
VOTING INSTRUCTIONS TO THE TRUSTEE, STATE STREET BANK AND TRUST COMPANY
If I hold shares through the Southern California Edison Company Stock Savings
Plus Plan, this card also provides the following voting instructions to the
plan trustee: You are instructed to vote confidentially as described above
the shares of stock credited and conditionally credited to my account through
February 22, 2000. I understand that the stock will be voted as directed
provided the trustee receives this card by 5:00 p.m. Eastern Time, on
April 17, 2000, and all stock for which the trustee has not received
instructions by this card at the designated time may be voted in its discretion.
YOU MAY RECEIVE MORE THAN ONE SET OF PROXY MATERIALS. PLEASE MARK, SIGN, DATE
AND RETURN ALL CARDS YOU RECEIVE PROMPTLY USING THE ENCLOSED ENVELOPES.
TO VOTE BY PHONE OR THE INTERNET, PLEASE SEE THE REVERSE SIDE OF THIS CARD.
See Reverse
Side
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE.
ADMISSION TICKET
Edison International and
Southern California Edison Company
Annual Meeting of Shareholders
April 20, 2000 at 10 a.m.
Space is limited; doors open at 9:30 a.m.
Please present this ticket to attend the meeting.
THE INDUSTRY HILLS SHERATON RESORT AND CONFERENCE CENTER
One Industry Hills Parkway
City of Industry, California
MAP
