As filed with the Securities and Exchange Commission on April 25, 2000
File No. _____________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
Registration Statement
Under
the Securities Act of 1933
EDISON INTERNATIONAL
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-4137452
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2244 Walnut Grove Avenue (P.O. Box 999)
Rosemead, California 91770
(Address of Principal Executive Offices)
STOCK SAVINGS PLUS PLAN
ALSO KNOWN AS THE
EDISON 401(K) SAVINGS PLAN FOR EMPLOYEES
OF PARTICIPATING EDISON
INTERNATIONAL COMPANIES
(Full title of the Plan)
Kenneth S. Stewart, Assistant General Counsel
2244 Walnut Grove Avenue (P.O. Box 800)
Rosemead, California 91770
(Name and address of agent for service)
(626) 302-6601
(Telephone number, including area code, of agent for service)
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Proposed Proposed Amount
Amount maximum maximum of
Title of securities to be offering price aggregate registration
to be registered(1) registered per share offering price(2) fee
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par value 20,000,000 shs. $17.9375 $358,750,000 $94,710
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
(2) Estimated pursuant to Rules 457(c) and 457(h), solely for the purpose of
calculating the registration fee, on the basis of the average of the high
and low prices of Edison International Common Stock reported in the
consolidated reporting system as of April 20, 2000.
================================================================================
<PAGE>
PART II
Reason for Registration Statement
This Registration Statement is filed to register 20,000,000 additional
shares of Edison International common stock to be issued and sold under the
Stock Savings Plus Plan ("Plan").
Item 3. Incorporation of Certain Documents by Reference
The following documents filed with the Securities and Exchange Commission
("Commission") by Edison International or by the Plan are incorporated by
reference in this Registration Statement:
1. (a) Annual Report of Edison International on Form 10-K for the year
ended December 31, 1999.
(b) Annual Report of the Plan on Form 11-K for the year ended
December 31, 1998.
2. The "Description of Registrant's Securities to be Registered" on pages
4-5 of the Registration of Securities of Certain Successor Issuers on Form 8-B
filed by SCEcorp (predecessor company) on May 20, 1988.
All documents subsequently filed by Edison International or the Plan
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 subsequent to the date of this Registration Statement and prior to the
filing of a post-effective amendment to the Registration Statement which
indicates that all securities offered thereby have been sold or which
deregisters all such securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing such documents. Any statement contained herein or in a
document all or a portion of which is incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained herein or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Capital Stock
Not Applicable.
Item 5. Interest of Named Experts and Counsel
Counsel for the registrant, Kenneth S. Stewart, is a salaried employee of
Southern California Edison Company, which is a subsidiary of Edison
International, and he shares in the benefits accruing to such employees. As of
March 31, 2000, Mr. Stewart had a direct or indirect interest in 43,626.5 shares
of Edison International's Common Stock. These shares include those credited and
conditionally credited to his accounts as of such date with the trustees of the
Plan and the agent for a dividend reinvestment plan, as well as shares subject
to nonqualified stock options awarded under incentive compensation plans.
Item 6. Indemnification of Directors and Officers
Section 317 of the California Corporations code provides that a corporation
shall have the power to indemnify any person who was or is a party or is
threatened to be made a party to any proceeding or action by reason of the fact
that he or she is or was a director, officer, employee or other agent of such
corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or other enterprise.
Section 317 also grants authority to a corporation to include in its articles of
incorporation indemnification provisions in excess of that permitted in Section
317, subject to certain limitations.
1
<PAGE>
Article Sixth of the Restated Articles of Incorporation of Edison
International authorizes Edison International to provide indemnification of
directors, officers, employees, and other agents through bylaw provisions,
agreements with agents, votes of shareholders or disinterested directors, or
otherwise, in excess of the indemnification otherwise permitted by Section 317
of the California Corporations Code, subject only to the applicable limits set
forth in Section 204 of the California Corporations Code.
Article VI of the Amended Bylaws of Edison International contains
provisions implementing the authority granted in Article Sixth of the Articles
of Incorporation. The Amended Bylaws provide for the indemnification of any
director or officer of Edison International, or any person acting at the request
of Edison International as a director, officer, employee or agent of another
corporation or other enterprise, for any threatened, pending or completed
action, suit or proceeding to the fullest extent permissible under California
law and the Restated Articles of Incorporation of Edison International, subject
to the terms of any agreement between Edison International and such a person;
provided that, no such person shall be indemnified: (i) except to the extent
that the aggregate of losses to be indemnified exceeds the amount of such losses
for which the director or officer is paid pursuant to any director's or
officer's liability insurance policy maintained by Edison International; (ii) on
account of any suit in which judgment is rendered for an accounting of profits
made from the purchase or sale of securities of Edison International pursuant to
Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or
similar provisions of any federal, state or local statutory law; (iii) if a
court of competent jurisdiction finally determines that the indemnification is
unlawful; (iv) for acts or omissions involving intentional misconduct or knowing
and culpable violation of law; (v) for acts or omissions that the director or
officer believes to be contrary to the best interests of Edison International or
its shareholders, or that involve the absence of good faith; (vi) for any
transaction from which the director or officer derived an improper personal
benefit; (vii) for acts or omissions that show a reckless disregard for the
director's of officer's duty to Edison International or its shareholders in
circumstances in which the director or officer was aware, or should have been
aware, in the ordinary course of performing his or her duties, of a risk of
serious injury to Edison International or its shareholders; (viii) for acts or
omissions that constitute an unexcused pattern of inattention that amount to an
abdication of the director's or officer's duties to Edison International or its
shareholders; (ix) for costs, charges, expenses, liabilities and losses arising
under Section 310 or 316 of the California Corporations Code; or (x) as to
circumstances in which indemnity is expressly prohibited by Section 317 of the
California Corporations Code. The exclusions set forth in clauses (iv) through
(ix) above shall apply only to indemnification with regard to any action brought
by or in the right of Edison International for breach of duty to Edison
International or its shareholders. The Amended Bylaws of Edison International
also provide that Edison International shall indemnify any director or officer
in connection with (a) a proceeding (or part thereof) initiated by him or her
only if such proceeding (or part thereof) was authorized by the Board of
Directors or (b) a proceeding (or part thereof), other than a proceeding by or
in the name of Edison International to procure a judgment in its favor, only if
any settlement of such a proceeding is approved in writing by Edison
International. Indemnification shall cover all costs, charges, expenses,
liabilities and losses, including attorneys' fees, judgments, fines, ERISA
excise taxes, or penalties and amounts paid or to be paid in settlement,
reasonably incurred or suffered by the director or officer.
Edison International has directors' and officers' liability insurance
policies in force insuring directors and officers of Edison International and
its subsidiaries. Edison International has also entered into written agreements
with each of its directors incorporating the indemnification provisions of the
Amended Bylaws.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
See Exhibit Index.
The registrant undertakes that it has submitted or will submit the Plan and
any amendments thereto to the Internal Revenue Service ("IRS") in a timely
manner and has made or will make all changes required by the IRS in order to
qualify the Plan.
2
<PAGE>
Item 9. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii)To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) of this section do not
apply if the registration statement is on Form S-3, Form S-8 or Form F-3, and
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
the time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13 (a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in item 6 above, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
3
<PAGE>
SIGNATURES
The Registrant
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Rosemead, State of California, on the 25th day of
April, 2000.
Edison International
By Kenneth S. Stewart
---------------------------
Kenneth S. Stewart
Assistant General Counsel
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Principal Executive Officer:
John E. Bryson* Chairman of the Board,
President, Chief Executive
Officer and Director April 25, 2000
Principal Financial Officer:
Theodore F. Craver, Jr.* Senior Vice President,
Treasurer and Chief
Financial Officer April 25, 2000
Controller or Principal Accounting Officer:
Thomas M. Noonan* Vice President
and Controller April 25, 2000
Majority of Board of Directors:
John Bryson* Director April 25, 2000
Warren Christopher* Director April 25, 2000
Stephen E. Frank* Director April 25, 2000
Joan C. Hanley* Director April 25, 2000
Carl F. Huntsinger* Director April 25, 2000
Charles D. Miller* Director April 25, 2000
Luis G. Nogales* Director April 25, 2000
Ronald L. Olson* Director April 25, 2000
James M. Rosser* Director April 25, 2000
Robert H. Smith* Director April 25, 2000
Thomas C. Sutton* Director April 25, 2000
Daniel M. Tellep* Director April 25, 2000
Edward Zapanta* Director April 25, 2000
*By Kenneth S. Stewart
--------------------------------------------
(Kenneth S. Stewart, Attorney-in-Fact)
4
<PAGE>
The Plan
Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the Plan) have duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Rosemead, State of California, on the 25th day
of April, 2000.
STOCK SAVINGS PLUS PLAN
By Thomas M. Noonan
-----------------------------
Thomas M. Noonan
Interim Chair of the Employee
Benefits/Health Care Committee
5
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
4.1 Restated Articles of Incorporation of Edison International dated May 7,
1996 (File No. 1-9936 filed as Exhibit 3.1 to Form 10-K for the year ended
December 31, 1998)*
4.2 Certificate of Determination of Series A Junior Participating Cumulative
Preferred Stock of Edison International dated November 21, 1996 (Form 8-A
dated November 21, 1996)*
4.3 Amended Bylaws of Edison International as adopted by the Board of Directors
on February 17, 2000 (File No. 1-9936 filed as Exhibit 3.3 to Form 10-K for
the year ended December 31, 1999)*
4.4 SSPP Plan document entitled "Southern California Edison Company Stock
Savings Plus Plan"
5 Opinion of Counsel
23.1 Consent of Counsel (see Opinion of Counsel)
23.2 Consent of Independent Public Accountants
24.1 Power of Attorney
24.2 Certified copy of Resolution of Board of Directors
- ---------------
* Incorporated by reference pursuant to Rule 411(c) under the Securities Act of
1933.
Southern California Edison Company
STOCK SAVINGS PLUS PLAN
Also Referred to as the
EDISON 401(K) SAVINGS PLAN
for Employees of Participating
EDISON INTERNATIONAL
Companies
As Restated Effective
February 1, 2000
<PAGE>
Stock Savings Plus Plan
Table of Contents
ARTICLE 1 ESTABLISHMENT OF THE PLAN...........................................1
1.01 ESTABLISHMENT OF PLAN.............................................1
1.02 EFFECTIVE DATE OF PLAN............................................1
1.03 DESIGNATION OF PLAN...............................................1
ARTICLE 2 DEFINITIONS.........................................................1
ARTICLE 3 ELIGIBILITY AND PARTICIPATION.......................................9
3.01 ENTRY OR REENTRY INTO PLAN....................................... 9
3.02 PARTICIPATION....................................................10
3.03 LEASED EMPLOYEES.................................................10
3.04 QUALIFIED MILITARY SERVICE.......................................10
ARTICLE 4 ENROLLMENT IN PLAN.................................................10
4.01 ENROLLMENT.......................................................10
4.02 ACCEPTANCE OF PLAN BY PARTICIPANT................................10
ARTICLE 5 PARTICIPANT DEFERRALS AND POST-TAX CONTRIBUTIONS...................11
5.01 DEFERRAL PERCENTAGE..............................................11
5.02 EARNINGS REDUCTION AGREEMENT.....................................11
5.03 INITIAL DEFERRAL ELECTION........................................11
5.04 POST-TAX CONTRIBUTIONS...........................................11
5.05 INACTIVE PARTICIPATION...........................................11
5.06 LIMITATIONS......................................................12
ARTICLE 6 CHANGE OR REVOCATION OF PARTICIPANT ELECTIONS......................12
6.01 CHANGE OF PARTICIPANT ELECTIONS..................................12
6.02 REVOCATION OF PARTICIPANT ELECTIONS..............................12
ARTICLE 7 COMPANY CONTRIBUTIONS..............................................12
7.01 CONTRIBUTION OF PARTICIPANT DEFERRALS............................12
7.02 MATCHING CONTRIBUTIONS...........................................12
7.03 PROFIT/GAIN SHARING CONTRIBUTIONS................................13
7.04 QUALIFIED NONELECTIVE CONTRIBUTIONS..............................15
7.05 LIMITATIONS......................................................15
ARTICLE 8 TRANSFERS AND ROLLOVERS FROM OTHER PLANS...........................15
8.01 EMPLOYEE ROLLOVER CONTRIBUTIONS..................................15
ARTICLE 9 PAYMENT TO TRUSTEE and allocations.................................16
9.01 PAYMENT TO TRUSTEE...............................................16
9.02 ALLOCATION OF CONTRIBUTIONS......................................16
ARTICLE 10 LIMITATIONS.......................................................17
10.01 SECTION 415 LIMITATIONS ON ANNUAL ADDITIONS......................17
10.02 SECTION 401(K)(3) LIMITATIONS....................................20
10.03 CODE SECTION 401(M) LIMITS.......................................25
10.04 SECTION 402(G) LIMITATIONS.......................................29
<PAGE>
Stock Savings Plus Plan
Table of Contents
ARTICLE 11 ACCOUNTING FOR PARTICIPANT INTERESTS..............................30
11.01 INDIVIDUAL ACCOUNTS..............................................30
11.02 ACCOUNTING FOR INVESTMENTS.......................................30
11.03 VALUATION OF ACCOUNTS............................................30
11.04 PARTICIPANT STATEMENTS...........................................31
ARTICLE 12 INVESTMENT OF TRUST ASSETS........................................31
12.01 INVESTMENT OF FUTURE CONTRIBUTIONS...............................31
12.02 INVESTMENT OF ACCUMULATED CONTRIBUTIONS..........................32
ARTICLE 13 VESTING...........................................................32
13.01 VESTING OF DEFERRALS AND POST-TAX CONTRIBUTIONS..................32
13.02 VESTING OF COMPANY CONTRIBUTIONS.................................32
13.03 VESTING OF PLAN TRANSFERS AND ROLLOVER CONTRIBUTIONS.............33
13.04 FORFEITURE, REPAYMENT AND VESTING FOLLOWING RE-EMPLOYMENT........33
Article 14 PLAN LOANS........................................................34
14.01 ELIGIBILITY......................................................34
14.02 LOAN PROCEDURES..................................................34
ARTICLE 15 DIRECT ROLLOVERS AND QUALIFIED DOMESTIC RELATIONS ORDERS..........39
15.01 DIRECT ROLLOVERS.................................................39
15.02 DISTRIBUTIONS DUE TO QUALIFIED DOMESTIC RELATIONS ORDERS.........40
ARTICLE 16 WITHDRAWAL DURING EMPLOYMENT......................................40
16.01 WITHDRAWAL FROM THE POST-TAX ACCOUNT.............................40
16.02 WITHDRAWAL FROM THE PRE-TAX ACCOUNT..............................40
16.03 AGE 70-1/2 WITHDRAWALS...........................................41
16.04 DISBURSEMENT OF WITHDRAWALS......................................41
16.05 MINIMUM AND MAXIMUM WITHDRAWAL...................................41
16.06 PROPORTIONAL WITHDRAWAL REQUIREMENT..............................42
16.07 NO WITHDRAWAL FROM THE COMPANY CONTRIBUTION ACCOUNT..............42
ARTICLE 17 PLAN DISTRIBUTIONS................................................42
17.01 REQUIRED BEGINNING DATE AND MINIMUM DISTRIBUTIONS................42
17.02 DISTRIBUTIONS DUE TO RETIREMENT..................................42
17.03 DISTRIBUTIONS OTHER THAN RETIREMENT..............................43
17.04 FORM OF DISTRIBUTION.............................................43
17.05 FRACTIONAL SHARES OF STOCK.......................................44
17.06 BENEFICIARY IN THE EVENT OF DEATH................................44
17.07 UNLOCATED PARTICIPANT............................................46
ARTICLE 18 TOP-HEAVY PROVISIONS..............................................46
18.01 TOP-HEAVY DETERMINATION..........................................46
18.02 PROVISIONS APPLICABLE IF PLAN IS TOP-HEAVY.......................48
ARTICLE 19 ADMINISTRATION....................................................48
19.01 ADMINISTRATION DIRECTED BY THE COMMITTEE.........................48
19.02 COST OF ADMINISTRATION...........................................49
<PAGE>
Stock Savings Plus Plan
Table of Contents
ARTICLE 20 CLAIMS AND APPEAL PROCEDURES......................................49
20.01 PRESENTATION OF CLAIMS...........................................49
20.02 DETERMINATION BY THE SECRETARY...................................49
20.03 APPEAL PROCEDURE.................................................50
20.04 EFFECT OF SEPARATE LABOR CONTRACT................................50
20.05 CONFLICTS BETWEEN CLAIMANTS......................................50
ARTICLE 21 LIABILITY LIMITED.................................................51
ARTICLE 22 EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION OR MERGER OF PLAN.......51
22.01 EXCLUSIVE BENEFIT................................................51
22.02 AMENDMENT OF PLAN................................................51
22.03 TERMINATION OF PLAN OR COMPLETE DISCONTINUANCE OF
CONTRIBUTIONS....................................................52
22.04 MERGER OF PLAN...................................................52
22.05 SALE OF PROPERTY.................................................52
22.06 PERMISSIBLE REVERSIONS...........................................52
ARTICLE 23 VOTING STOCK......................................................53
ARTICLE 24 INALIENABILITY....................................................53
ARTICLE 25 INVESTMENT FUNDS, VOTING, AND ESOP................................53
25.01 ESTABLISHMENT OF FUNDS...........................................53
25.02 INVESTMENT OF THE TRUST..........................................54
25.03 ADDITIONAL PROVISIONS REGARDING ESOP PLAN........................54
ARTICLE 26 SPECIAL TERMS AND CONDITIONS......................................55
26.01 EAST COAST CAPITAL ACQUISITION...................................55
26.02 WESTEC ACQUISITION...............................................55
26.03 EME HOMER CITY GENERATION, L.P...................................55
26.04 TEAMSTERS AUTOMOTIVE, INDUSTRIAL & ALLIED
WORKERS LOCAL NO. 495............................................56
26.05 JOHN STEWART COMPANY.............................................57
26.06 MIDWEST GENERATION PROJECT.......................................57
26.07 OTHER ADOPTING COMPANIES APPROVED TO PARTICIPATE.................58
ARTICLE 27 MISCELLANEOUS PROVISIONS..........................................59
27.01 APPLICABLE LAW...................................................59
27.02 SEVERABILITY.....................................................59
27.03 NONBUSINESS DAY TRANSACTION DATES................................59
27.04 CAPTIONS.........................................................59
<PAGE>
SOUTHERN CALIFORNIA EDISON COMPANY
STOCK SAVINGS PLUS PLAN
As Restated Effective February 1, 2000
ARTICLE 1
ESTABLISHMENT OF THE PLAN
1.01 Establishment of Plan
The Sponsor continues this Plan for the administration and distribution of
contributions made for the purpose of providing retirement benefits for eligible
Employees. This Plan is an amended plan, in restated form, the original plan
being established as the Southern California Edison Company Employee Stock
Purchase Plan on January 1, 1964 and subsequently renamed the Southern
California Edison Company Stock Savings Plus Plan.
1.02 Effective Date of Plan
The effective date of the Plan as restated is February 1, 2000, except as
otherwise provided in the text of the Plan.
1.03 Designation of Plan
This Plan is a stock bonus plan with a cash or deferred arrangement and profit
sharing provision. The Plan and related trust are intended to qualify under
Sections 401 and 501 of the Code, respectively. The Plan is intended to qualify
under Section 404(c) of the Employee Retirement Income Security Act of 1974.
Effective February 26, 1998, the portion of the Plan consisting of the Edison
International Stock Fund (the ESOP Plan) is intended to qualify under Section
4975(e)(7) of the Code as an "employee stock ownership plan".
ARTICLE 2
DEFINITIONS
Capitalized words and phrases used in the Plan, other than headings, will have
the following meanings unless the context indicates otherwise:
Accumulated Balance: The total amount held by the Trustee on behalf of a
Participant.
1
<PAGE>
Administrator: The administrator of the Plan is the Sponsor's Employee
Benefits/Health Care Committee. Day-to-day supervision of administrative
operations of the Plan has been delegated to the Manager of the Human Resources
Service Center. Where the term "Administrator" appears in the text of the Plan,
it refers to the Human Resources Service Center. The address of the Human
Resources Service Center is 8631 Rush Street, (P.O. Box 800), Rosemead,
California 91770.
Affiliated Company: Any corporation or entity which, along with Southern
California Edison Company, is a component member of a "controlled group" within
the meaning of Section 414(b) or (c) of the Code, or successor statutes; and/or
any corporation which is an includable corporation in an "affiliated group" of
corporations within the meaning of Section 1504 of the Code, or successor
statutes.
Automated Transaction System: An interactive system by which Participants may
obtain account information and initiate most Plan transactions. Participants may
access the Retirement Savings Connection by telephone at 877-432-7283, or
through the Internet at http://resources.hewitt.com/edison. Automated
Transaction System transactions include those initiated through a Plan
representative accessed through the Retirement Savings Connection, or if
automated access is unavailable, through the Plan Administrator.
Beneficiary: The person or persons designated by a Participant on the form
prescribed by the Sponsor for this purpose to receive any distribution due under
the Plan in the event of the death of the Participant. The Beneficiary or
Beneficiaries may be changed by the Participant at any time by filing a new
designation with the Administrator.
Board of Directors: The Board of Directors of the Southern California Edison
Company.
Break in Service: One or more consecutive Computation Periods in which or in
each of which, if there be more than one, the Employee did not complete more
than 500 Hours of Service. The following equivalency will be utilized for
purposes of crediting service under the Plan: An Employee will be credited with
190 Hours of Service for each calendar month in which he/she completes at least
one Hour of Service.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Committee: The Employee Benefits/Health Care Committee consisting of the persons
appointed from time to time by the Chief Executive Officer of the Sponsor to
serve at his/her pleasure to administer the Plan. The chair of the Committee,
similarly appointed from among the Committee members, is the agent for service
of legal process for suits against the Plan. The address of the Committee and
its chair is 8631 Rush Street, (P.O. Box 800), Rosemead, California 91770.
2
<PAGE>
Company: An Affiliated Company whose employees have been approved for
participation in the Plan by the Committee.
Company Contributions: Matching Contributions and Profit/Gain Sharing
Contributions made to the Plan by the Company on behalf of the Participant.
Company Contribution Account: The account established under Section 11.01(c).
Compensation:
(a) General Definition of Compensation: Except where specifically modified by
the terms of the Plan, a Participant's wages, salaries, fees for professional
services and other amounts received (without regard to whether or not an amount
is paid in cash) for personal services actually rendered in the course of
employment for the Company to the extent that the amounts are includable in
gross income for a Plan Year (including, but not limited to, commissions paid
salesmen, compensation for services based on a percentage of profits,
commissions on insurance premiums, tips, bonuses, fringe benefits, and
reimbursements or other expense allowances under a nonaccountable plan (as
described in Regulation Section 1.62-2(c)), but excluding:
(i) Contributions made by the Company to a plan of deferred
compensation to the extent that, before the application of the Code
Section 415 limitations to that plan, the contributions are not
includable in the gross income of the Employee for the taxable year in
which contributed. In addition, contributions made by the Company on
behalf of an Employee to a simplified employee pension described in
Code Section 408(k) are not considered as compensation for the taxable
year in which contributed. Additionally, any distributions from a plan
of deferred compensation are not considered as compensation for Code
Section 415 purposes, regardless of whether such amounts are includable
in the gross income of the Employee when distributed. However, any
amounts received by an Employee pursuant to an unfunded non-qualified
plan is permitted to be considered as compensation for Code Section 415
purposes in the year the amounts are includable in the gross income of
the Employee.
(ii) Amounts realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by an Employee
either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture.
(iii) Amounts realized from the sale, exchange or other disposition of
stock acquired under a qualified stock option.
(iv) Other amounts which receive special tax benefits, such as premiums
for group-term life insurance (but only to the extent that the premiums
are not includable in the gross income of the Employee), or
contributions made by an employer (whether or not under a salary
reduction agreement) towards the
3
<PAGE>
purchase of an annuity contract described in Code Section 403(b)
(whether or not the contributions are excludable from the
gross income of the Employee).
(b) Compensation Limitations: For Plan Years beginning in 1989 through 1994,
only the first $200,000 (or, such larger amount as may be prescribed by the
Secretary of Treasury) of a Participant's Compensation will be taken into
account under the Plan. For any Plan Year beginning prior to 1989, the $200,000
applies only if the Plan is top heavy for such Plan Year. For Plan Years
beginning after 1994, only the first $150,000 (or such larger amount as may be
prescribed by the Secretary of the Treasury) of a Participant's Compensation
will be taken into account under the Plan.
Computation Period:
(a) for purposes of determining eligibility, initially, the twelve (12)
consecutive month period beginning on the Employment Commencement Date (or if a
Break in Service has occurred, the first date thereafter on which an Hour of
Service is credited) (such period and any subsequent such period ending on
anniversary dates thereof being "Anniversary Year Computation Periods"); and
thereafter the calendar year beginning with the calendar year which commences
within the Employee's first Anniversary Year Computation Period; and
(b) for purposes of determining vesting with respect to Hours of Service
completed on or after January 1, 1996, a calendar year. Prior to January 1,
1996, the Computation Period for determining vesting was the Anniversary Year
Computation Period. Section 13.02 provides certain transition rules applicable
to determining Years of Service for 1996.
Deferral: The actual amount of a Participant's Earnings which he/she defers so
that such amount may be contributed to the Plan by the Company on his/her behalf
pursuant to Section 7.01.
Deferral Percentage: The percentage of Earnings a Participant elects to defer
under Section 5.01.
Earnings:
(a) Earnings for any payroll period of full-time Employees will be the product
of a Participant's hourly base rate of pay times 80 hours (40 hours for weekly
payrolls). Earnings for part-time employees will be the product of a
Participant's hourly base rate of pay times the Participant's regular
straight-time hours not to exceed 80 hours (40 hours for weekly payrolls).
Earnings for employees of Edison Enterprises, or its wholly-owned subsidiaries,
will include commissions. Earnings will not include amounts paid resulting from
long-term disability, overtime premium, upgrade, shift differential, bonuses,
bonus awards, subsistence pay, wage continuation, back pay, management
relocation assistance or deferred compensation other than Deferrals under the
Plan.
4
<PAGE>
(b) For Plan Years beginning in 1989 through 1994, only the first $200,000 (or,
such larger amount as may be prescribed by the Secretary of Treasury) of a
Participant's Earnings will be taken into account under the Plan. For Plan Years
beginning after 1994, only the first $150,000 (or such larger amount as may be
prescribed by the Secretary of the Treasury) of a Participant's Earnings will be
taken into account under the Plan. This Earnings limitation applies to the
combined earnings of the Employee and of any Family Member required to be
aggregated with the Employee as provided under Article 10.
Employee: A person employed by the Company, as a regular, part-time or new
normal employee unless represented for purposes of collective bargaining by a
union whose collective bargaining agreement with the Company, does not provide
for his/her participation in the Plan.
Employment Commencement Date: The first date with respect to which an Employee
is credited with an Hour of Service.
Entry Date: The first Monday of each pay period.
ESOP Plan: The portion of the Plan consisting of the Edison International Stock
Fund and constituting an employee stock ownership plan.
Family Member: The Employee's spouse and the Employee's lineal ascendants or
descendants and spouses of such lineal ascendants and descendants.
Forfeitures: The Stock and cash, including related income, which, because they
were not vested, have been forfeited due to termination of employment.
Forfeitures also include amounts declared forfeited by the Committee pursuant to
Section 17.07 relating to unlocated Participants or Beneficiaries.
Highly Compensated Employee: The term includes highly compensated active and
highly compensated former Employees.
A highly compensated active Employee includes any Employee who performs service
for the Company during the determination year and who, during the look-back
year: (a) received compensation from the Company in excess of $75,000 (as
adjusted pursuant to Code Section 415(d)); (b) received compensation from the
Company in excess of $50,000 (as adjusted pursuant to Code Section 415(d)) and
was a member of the top-paid group for such year; or (c) was an officer of the
Company and received compensation during such year that is greater than 50
percent of the dollar limitation in effect under Code Section 415(b)(1)(A) of
the Code. The term Highly Compensated Employee also includes (a) Employees who
are both (i) described in the preceding sentence if the term "determination
year" is substituted for the term "look-back year" and (ii) are one of the 100
Employees who received the most compensation from the Company during the
determination year; and (b) Employees who are five-percent owners at any time
during the look-back year or determination year.
5
<PAGE>
The number of officers shall be limited to the lesser of (a) 50 employees; or
(b) the greater of three employees or ten percent of all employees. If no
officer has satisfied the compensation requirement of (c) above, during either a
determination year or a look-back year, the highest paid officer for such year
shall be treated as a Highly Compensated Employee.
A highly compensated former Employee includes any Employee who separated from
service (or was deemed to have separated) prior to the determination year,
performs no service for the Company during the determination year, and was a
highly compensated active Employee for either the separation year or any
determination year ending on or after the Employee's 55th birthday.
For purposes of this Section, the "determination year" is the Plan Year. The
"look-back year" is the 12-month period immediately preceding the determination
year. The "top-paid group" for any Plan Year is the top 20 percent of Employees
ranked on the basis of compensation paid. "Compensation" is the amount
determined in accordance with the definition of that term in this Article 2 plus
any amount contributed by the Company on behalf of a Participant pursuant to a
salary reduction agreement and which is not includable in gross income under
Sections 125, 402(a)(8), 402(h) or 403(b) of the Code.
If an Employee is, during a determination year or a look-back year, a Family
Member of either a five-percent owner who is an active or former Employee or a
Highly Compensated Employee who is one of the ten most highly compensated
Employees ranked on the basis of Compensation paid by the Company during such
year, then the Family Member and the five-percent owner or top-ten highly
compensated Employee shall be aggregated. In such case, the Family Member and
the five-percent owner or top-ten highly compensated Employee shall be treated
as a single Employee receiving Compensation and Plan contributions or benefits
equal to the sum of the Compensation and contributions or benefits of the Family
Member and the five-percent owner or top-ten highly compensated Employee.
The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees in the top-paid group,
the top 100 Employees, the number of Employees treated as officers and the
Compensation that is considered, will be made in accordance with Code Section
414(q) and the Regulations thereunder.
Hour of Service:
(a) Each hour for which an Employee is directly or indirectly paid, or entitled
to payment, by the Company for the performance of his/her duties as an Employee
during the applicable Computation Period;
6
<PAGE>
(b) to the extent not included in (a), each hour for which back pay,
irrespective of mitigation of damages, is awarded or agreed to be paid to the
Employee by the Company;
(c) each hour for which an Employee receives pay for authorized absences (e.g.,
vacation, paid time off, disabilities caused by industrial accident or
industrial illness) but excluding any hour of absence resulting from
non-industrial accident or illness (i) prior to the completion of six months of
active and continuous service with the Company or (ii) following the exhaustion
of the Employee's sick time allowance credits under the Comprehensive Disability
Plan;
(d) each hour of absence without compensation during authorized absences not in
excess of 30 consecutive calendar days or during periods of absence for military
leave;
(e) each hour of absence resulting from non-industrial accident or illness,
occurring at any time, for which an Employee receives any extended disability
payment under the Comprehensive Disability Plan, or the Long Term Disability
Plan, or any successor plan maintained by the Company for Employees; and
(f) each hour of absence for maternity or paternity reasons which would
otherwise be credited to the individual but for such absence, but no more than
501 Hours of Service will be credited under this Subsection during any
Computation Period for any single continuous period during which the Employee
performs no duties. For purposes of this Subsection, an absence from work for
maternity or paternity reasons means an absence (1) by reason of the pregnancy
of the individual, (2) by reason of the birth of a child of the individual, (3)
by reason of the placement of a child with the individual in connection with the
adoption of such child by such individual, or (4) for purposes of caring for
such child for a period beginning immediately following such birth or placement.
The Hours of Service credited under this Subsection (f) will be credited in the
Computation Period in which the absence begins if necessary to prevent a Break
in Service in that period, otherwise the Hours of Service will be credited to
the immediately following Computation Period.
(g) In crediting the above Hours of Service, each hour will be determined and
credited in accordance with Department of Labor Regulations 2530.200b-2(b) and
(c) which are incorporated herein by reference.
Investment Fund(s): One or more investment media identified in Section 25.01
which are selected from time to time by the Committee for the investment of the
account balances of Participants pursuant to Article 12.
Leased Employee: means any person who is not an Employee of the recipient, who,
pursuant to an agreement between the Employer, and any other person, has
performed services for the Employer (or any related persons determined in
accordance with Section 414(n)(6) of the Code) on a substantially full-time
basis for a period of at least
7
<PAGE>
one year and such services are of a type historically performed by Employees in
the business field of the Employer.
Market Close: The closing time for the New York Stock Exchange on any business
day, typically 1:00 p.m. Pacific Time.
Matching Contributions: The contributions the Company makes to the Plan in
accordance with Section 7.02.
Month: Any calendar month.
Non-Highly Compensated Employee: An Employee who is neither a Highly Compensated
Employee nor a Family Member of a Highly-Compensated Employee.
Normal Retirement Age: The first of the month in which a Participant attains age
65.
Participant(s): Any Employee who is participating in the Plan by making
Deferrals or Post-Tax Contributions thereto; any Employee, former Employee,
Beneficiary or former spouse of an Employee who has any Stock or cash held in
the Trust to which he/she is or may become entitled; or any Employee or former
Employee who has received all Stock or cash previously held in the Trust to
which he/she is entitled but who has not incurred a Break in Service.
Permanent and Total Disability: For purposes of the Plan, an Employee
Participant will be considered Permanently and Totally Disabled when the
Participant is so determined by the Committee.
Plan: The Stock Savings Plus Plan of the Company, as amended from time to time,
previously known as the Employee Stock Purchase Plan. The Plan is also
informally known as the Edison 401(k) Savings Plan.
Plan Year: The fiscal year of the Plan beginning January 1 and ending December
31.
Post-Tax Account: The account established under Subsection 11.01(a).
Post-Tax Contribution: Participant contributions to the Plan made on an
after-tax basis pursuant to Section 5.04.
Profit/Gain Sharing Contributions: Company contributions to the Plan made
pursuant to Section 7.03.
Profit/Gain Sharing Account: The account established under Subsection 11.01(e).
Pre-Tax Account: The account established under Subsection 11.01(b).
QDRO: Qualified Domestic Relations Order as defined by Section 414(p) of the
Code.
8
<PAGE>
Quarter: Any calendar quarter.
Retirement: Termination of service with the Employer under the terms of the 1958
Retirement Plan or other Company pension plans.
As to Plan benefits awarded in a dissolution of marriage proceeding to a former
Spouse, "Retirement" also includes a date of distribution elected by the former
Spouse which is on or after the earliest date on which the Participant could
have retired under the terms of the 1958 Retirement Plan or other Company
pension plans.
Rollover Account: The account established under Subsection 11.01(d).
Secretary: The person appointed by the Committee with authority specified in
Article 19 and with such other duties as may be prescribed by the Committee.
Sponsor: Southern California Edison Company.
Spouse: A Participant's lawful husband or wife.
Stock: Edison International common stock.
Trust: The trust established by agreement between the Sponsor and the Trustee
for the purpose of holding the assets of the Plan on behalf of Participants and
from which all Plan distributions are made.
Trustee: State Street Bank and Trust Company has been selected and appointed to
serve as Trustee of the Plan subject to the Sponsor's rights under the trust
agreement to remove a trustee and appoint a successor.
Year of Service: A Computation Period in which an Employee completes not less
than l,000 Hours of Service with an Affiliated Company, a predecessor employer,
or as a leased employee of the Company as defined by Section 414(n) of the Code.
The following equivalency will be utilized for purposes of crediting service
under the Plan: an Employee will be credited with 190 Hours of Service for each
calendar month in which he/she completes at least one Hour of Service.
ARTICLE 3
ELIGIBILITY AND PARTICIPATION
3.01 Entry or Reentry Into Plan
(a) An Employee is eligible to become a Participant in the Plan upon employment
or reemployment with the Company. There is no maximum nor minimum age
requirement for eligibility. Participation will commence following enrollment as
provided in Article 4.
9
<PAGE>
(b) An Employee who retires from his/her employment, but is re-employed by the
Company, may participate in the Plan subject to the conditions in Subsections
(b) and (c), above.
(c) An Employee who terminates his/her employment, but is re-employed by the
Company prior to incurring a Break in Service, may resume participation as soon
as practicable following reemployment.
(d) An Employee who retires from his/her employment, but is re-employed by the
Company, may participate in the Plan.
3.02 Participation
Participation in the 401(k) and ESOP features of the Plan is entirely voluntary
and will continue until the Participant incurs a Break in Service. A Participant
who remains in the employ of the Company after attaining Normal Retirement Age
will continue to participate in the Plan and receive allocations in the same
manner as any other Participant. Participation by eligible Participants in the
Profit Sharing features of the Plan occurs automatically.
3.03 Leased Employees
Leased Employees are not eligible to participate in the Plan. Service of such
persons which would have counted as Hours of Service and Years of Service had
the individual been in an eligible classification shall count towards vesting
should the individual subsequently be employed in an eligible classification.
3.04 Qualified Military Service
Notwithstanding any provision of this Plan to the contrary, contributions,
benefits and service credit with respect to qualified military service will be
provided in accordance with Section 414(u)(4) of the Code.
ARTICLE 4
ENROLLMENT IN PLAN
4.01 Enrollment
An eligible Employee will be mailed a personal identification number shortly
after beginning employment in an eligible classification. Upon receipt of the
personal identification number, enrollment may be initiated at any time
thereafter by calling the applicable Automated Transaction System. Participation
will begin as soon as practicable, but no later than the second Entry Date
following such enrollment.
4.02 Acceptance of Plan by Participant
The Participant's enrollment in the Plan through the applicable Automated
Transaction System will constitute his/her acceptance of the terms and
provisions of the Plan.
10
<PAGE>
ARTICLE 5
PARTICIPANT DEFERRALS AND POST-TAX CONTRIBUTIONS
5.01 Deferral Percentage
(a) Except as provided in Subsection (b) and Sections 5.05 and 5.06, each
eligible Participant may defer from 1 to 19 percent of his/her Earnings, in
whole percentage increments only, which would otherwise be payable to him/her
for each payroll period by electing to have the amount deferred to the Plan
instead of receiving it in cash.
(b) Notwithstanding anything in this Plan to the contrary, no more than $10,000
in Deferrals will be allocated to a Participant's account for any calendar year
under this Plan, or any other qualified plan maintained by the Company. A
Participant's deferral of Earnings will be discontinued automatically when the
amount elected to be deferred under this Plan for any payroll period would cause
his/her aggregate Deferrals for the year under this Plan to exceed the annual
limit for the calendar year. The $10,000 limit will be adjusted by the cost of
living adjustment factor prescribed by the Secretary of Treasury under Code
Section 415(d) of the Code.
5.02 Earnings Reduction Agreement
A Participant's election to defer a percentage of his/her Earnings under Section
5.01 will constitute the Participant's agreement to a reduction in his/her
compensation equal to the selected percentage in consideration of the agreement
of the Company to contribute such amount to the Plan on behalf of the
Participant. An election to defer Earnings may not be made with respect to
Earnings which are available to the Participant at the time his/her election is
made.
5.03 Initial Deferral Election
A Participant's initial deferral election will be made at the time of Plan
enrollment through the applicable Automated Transaction System. Use of the
Participant's personal identification number to initiate such deferrals will
constitute the Participant's authorization for the Company to deduct such
amounts from the Participant's compensation.
5.04 Post-Tax Contributions
If a Participant's Deferral Percentage is reduced by operation of the limitation
rules of Section 10.02, the Participant may elect to contribute to the Plan, on
a post-tax basis, a whole percentage of his/her Earnings no greater than such
reduction. This election will be made in the manner and on the form prescribed
by the Sponsor for this purpose. Post-tax contributions may also be permitted
pursuant to Section 13.04(b).
5.05 Inactive Participation
A Participant may not make Deferrals or Post-Tax Contributions under the Plan
after he/she terminates employment or otherwise becomes ineligible to
participate in the Plan.
11
<PAGE>
5.06 Limitations
Notwithstanding the above, Deferrals and Post-Tax Contributions will be limited
as provided in Article 10 to comply with the requirements of Sections 401(k),
402(g) and 415 of the Code.
ARTICLE 6
CHANGE OR REVOCATION OF PARTICIPANT ELECTIONS
6.01 Change of Participant Elections
(a) Except as provided in Article 10, the election(s) made under Article 5 will
remain in effect, notwithstanding any change in the Participant's Earnings, as
long as the Participant remains eligible or until he/she changes or revokes
his/her election(s).
(b) A Participant may increase or decrease his/her Deferral Percentage in whole
percentage increments at any time through the applicable Automated Transaction
System. In the case of a decrease, Post-Tax Contributions (if any) will be
reduced prior to Deferrals.
An election to increase or decrease a Deferral Percentage will be effective
within two pay periods.
6.02 Revocation of Participant Elections
A Participant may revoke his/her election(s) at any time and thereby discontinue
making Deferrals and Post-Tax Contributions through the applicable Automated
Transaction System. The revocation will be effective within two payroll periods.
Such a revocation does not terminate participation in the Plan. Participant
Deferrals will resume within two pay periods following the date the Participant
makes a new Deferral election through the applicable Automated Transaction
System.
ARTICLE 7
COMPANY CONTRIBUTIONS
7.01 Contribution of Participant Deferrals
In consideration of each Participant's election and agreement under Sections
5.01 and 5.02, respectively, the Company will contribute to the Plan on behalf
of the Participant an amount equal to his/her Deferrals.
7.02 Matching Contributions
(a) Except as provided in Subsection (b), the Company will also contribute to
the Plan out of its net operating revenues as an operating expense an amount
equal to the aggregate Company Matching Contributions as determined under this
Subsection (a). Such contributions will include matching contributions of
Affiliate Companies. The Plan provides Company Matching Contribution rates of 0,
65, 75, or 100 percent of eligible
12
<PAGE>
Participant contributions depending on the Participant's Company or the terms of
any applicable collective bargaining agreement.
(i) Unless otherwise provided in this Section or Article 26, for each
dollar of Deferrals and Post-Tax Contributions contributed to the Plan
up to 6 percent of the Participant's Earnings, 75 cents of Company
Matching Contributions will be contributed to the Plan on the
Participant's behalf. The maximum Company Matching Contribution under
this Paragraph is 4.5% of a Participant's Earnings. This Company
Matching Contribution rate applies to Participants represented for
collective bargaining purposes by International Brotherhood of
Electrical Workers, Local Union No. 47, the Utility Workers Union of
America, Local Union No. 246 or the Utility Workers Union of America,
Local Union No. 246A (San Onofre Firefighters Association) effective
January 1, 2000.
(ii) For each dollar of Deferrals and Post-Tax Contributions
contributed to the Plan up to 6 percent of Earnings by a Participant
employed by Edison Mission Energy, Edison Enterprises or their
participating subsidiaries, one dollar of Company Matching
Contributions will be contributed to the Plan on the Participant's
behalf except as provided in Article 26. The maximum Company Matching
Contribution under this Paragraph is 6% of a Participant's Earnings.
(b) Company contributions during a Month will be reduced by an amount equal to
any Forfeitures occurring during the prior Month.
(c) Company Matching Contributions on behalf of Participants are determined each
pay period in accordance with Subsection (a). In the case of Participants whose
Deferrals and Post-Tax Contributions to the Plan are discontinued or reduced at
the election of the Participant or as a result of limitations imposed by
Sections 401(a)(17) or 402(g) of the Code, Matching Contributions will continue
to be made in subsequent pay periods during Participant's employment to the
extent necessary to ensure that the Participant's year-to-date Matching
Contributions equal the lesser of (i) the product of the applicable Company
Matching Contribution percentage multiplied by the sum of the Participant's
year-to-date Deferrals and Post-Tax Contributions to the SSPP, or (ii) the
product of the Participant's year-to-date Earnings multiplied by the
Participant's maximum Company Matching Contribution expressed as a percentage of
Earnings, regardless of the amount of Deferrals or Post-Tax Contributions the
Participant makes to the Plan in that particular pay period. This subsection (c)
is not applicable to Participants covered by a collective bargaining agreement
unless this provision is specifically included in such agreement.
7.03 Profit/Gain Sharing Contributions
(a) Except as provided below, employees of Edison Mission Energy, Edison
Enterprises and their participating subsidiaries are eligible for two types of
Profit/Gain Sharing Contributions:
13
<PAGE>
(i) Fixed Profit/Gain Sharing. This is comprised of a 3%
Profit/Gain Sharing Contribution each pay period to the Plan
on behalf of eligible Employees.
(ii) Variable Profit/Gain Sharing. This is comprised of an additional
annual Profit/Gain Sharing Contribution to the Plan on behalf of
eligible Employees if certain business objectives are reached. The
annual variable profit/gain sharing rate will likely be different
between Edison Mission Energy and Edison Enterprises.
(b) Profit/gain sharing contributions are based on employee Earnings as
determined under the Plan. Notwithstanding the foregoing, for an eligible
Employee receiving LTD benefits, fixed Profit/Gain Sharing Contributions are
based on the Employee's Earnings rate immediately prior to the disability. This
does not apply to annual variable Profit/Gain Sharing Contributions which will
only be made to the Plan on behalf of eligible Employees to the extent they have
Earnings during the year. LTD benefits are not included in Earnings.
(c) Eligibility.
(i) Fixed Profit/Gain Sharing. Effective the first pay period ending on
or after April 1, 1999, an Employee is eligible for a fixed Profit/Gain
Sharing Contribution for a pay period if all of the following apply (i)
the Employee has Earnings during the pay period, (ii) the Employee is
employed at Edison Mission Energy or Edison Enterprises at the end of
the pay period, (iii) the Employee's status code is active, LTD or paid
leave of absence (PAYLOA) or the Employee dies during the pay period
and the prior status was active, LTD or PAYLOA; (iv) the Employee is
not represented for collective bargaining purposes by IBEW Local 459,
or CWA Local 9586, and (v) if employed by Edison Enterprises, the
Employee's benefit program code was equal to BEN on March 31, 1999 or
the Employee was eligible for Profit/Gain Sharing at another Affiliate
immediately prior to joining Edison Enterprises.
(ii) Variable Profit/Gain Sharing. An Employee is eligible for a
variable Profit/Gain Sharing Contribution if all of the following
apply: (i) the Employee has Earnings during the year; (ii) the Employee
was employed at Edison Mission Energy or Edison Enterprises during the
year, (iii) at the end of the year, the Employee's status is active or
PAYLOA or the Employee died during the year and the prior status was
active or PAYLOA; (iv) while employed at Edison Mission Energy or
Edison Enterprises during the year, the Employee is not represented for
collective bargaining purposes by IBEW Local 459, or CWA Local 9586,
and (v) if employed by Edison Enterprises, the Employee's benefit
program code was equal to BEN. Edison Mission Energy or Edison
Enterprises Employees who transfer to another Affiliated Company during
the year will be eligible for a pro rata variable Profit/Gain Sharing
Contribution based on their Earnings for the year at the participating
company.
14
<PAGE>
(d) All Profit/Gain Sharing Contributions will be invested according to
Participant investment elections for new contributions under the Plan. If the
Employee is not a Plan Participant at the time of the contribution, the
Profit/Gain Sharing Contributions will be invested in the Edison International
Stock Fund. Those Employees, and any other Participant receiving Profit/Gain
Sharing Contributions, may diversify their balances among the Plan Funds on a
daily basis.
(e) Variable Profit/Gain Sharing Contribution percents will be determined and
posted to Employee accounts the following year. Only Earnings while the Employee
was eligible for the fixed Profit/Gain Sharing Contribution will be considered
for determining the variable Profit/Gain Sharing Contribution.
7.04 Qualified Nonelective Contributions
To the extent necessary to satisfy the Code Section 401(k)(3) or 401(m) limits,
the Sponsor may determine in its discretion whether a Qualified Nonelective
Contribution shall be made to the Trust for a Plan year; and if so, the amount
to be contributed by each Company (which amount may vary among Companies).
Qualified Nonelective Contributions shall be fully vested and subject to the
same distribution rules as Deferrals. Qualified Nonelective Contributions are
not eligible for hardship withdrawals.
7.05 Limitations
Notwithstanding the above, Company contributions with respect to any Participant
will be limited in the manner described in Article 10 to comply with the
applicable requirements of Sections 415 and 401(k) of the Code. For Code Section
415 purposes, the annual Profit/Gain Sharing Contribution will be considered a
contribution made in the previous Plan Year.
ARTICLE 8
TRANSFERS AND ROLLOVERS FROM OTHER PLANS
8.01 Employee Rollover Contributions
(a) With the consent of the Administrator and subject to the terms and
conditions of this Section 8.01, any Employee may contribute to the Plan an
"eligible rollover distribution," as that term is defined by Section 402(c)(4)
of the Code, from the Southern California Edison Company Retirement Plan.
Participants may rollover eligible rollover distributions from another qualified
plan (includes rollovers via a "conduit" individual retirement account).
Previous Plan participation or eligibility is not required. The Administrator
may require the Employee to provide satisfactory evidence that the proposed
transfer is in fact an eligible rollover distribution.
(b) Rollover contributions to this Plan must be in cash. Any Rollover
Contributions will be invested directly in the Funds designated by the
Participant on his/her rollover contribution request. Rollover contributions
will be accounted for in a separate Rollover Account and will be fully vested at
all times and not subject to forfeiture. In all other respects, the rollover
contribution will be subject to the same Plan administrative
15
<PAGE>
provisions, including withdrawal and distribution restrictions, as would apply
to Participant Deferrals.
(c) Notwithstanding the requirement that rollovers to the Plan be made in cash,
in the event of the acquisition, merger, asset purchase or other similar
transaction involving an Affiliated Company as a result of which new employees
eligible to participate in the Plan are acquired or hired, the Plan may accept
as part of an otherwise valid direct rollover of such an employee's total
account balance from the former employer's qualified plan any outstanding plan
loans and notes. Loan rollovers are subject to the consent of the Secretary and
any conditions the Secretary may impose for the efficient administration of the
Plan including a valid assignment of the note by the former employer's plan, the
employee's written acknowledgment of such assignment and the employee's
authorization of payroll deductions and any loan reamortization necessary to
conform the loan to Company payroll periods and repay the remaining loan balance
over the original term of the loan.
(d) If an Employee makes a rollover contribution, the Employee will be treated
as a Participant for all purposes of the Plan even if the Employee is not a
Participant for purposes of making Deferrals or contributions to the Plan under
Article 5 or sharing in Company Matching Contributions under Article 7.
ARTICLE 9
PAYMENT TO TRUSTEE AND ALLOCATIONS
9.01 Payment to Trustee
All Participant Deferrals and Post-Tax Contributions, together with Company
Matching Contributions and fixed Profit/Gain Sharing Contributions, will be paid
to the Trustee each pay period, or as soon thereafter as practicable, to be
invested and held for distribution in accordance with Article 25. If variable
Profit/Gain Sharing Contributions are made, they will be paid to the Trustee
during the Plan Year following the year they are earned.
9.02 Allocation of Contributions
The Deferrals and Post-Tax Contributions of each Participant paid to the Trustee
will be credited to the account of that Participant. Concurrent therewith, or as
soon as practicable thereafter, and subject to the limitations of Article 10,
each Participant will be credited with the Company Matching Contributions as
provided in Section 7.02, and if applicable, the Fixed Profit/Gain Sharing
contribution as provided in Section 7.03. Variable Profit/Gain Sharing
contributions will be credited to the account of each eligible Participant at
the time the contribution is paid to the Trustee, or as soon thereafter as
practicable.
16
<PAGE>
ARTICLE 10
LIMITATIONS
10.01 Section 415 Limitations on Annual Additions
(a) Notwithstanding any other provision herein to the contrary, Annual Additions
to the Plan on behalf of any Participant will not exceed the lesser of the
Maximum Permissible Amount or any other limitation contained in this Plan.
(b) Definitions
(i) "Annual additions" for any Plan Year will mean the sum of the
following amounts allocated to a Participant's accounts for any Plan
Year for all defined contribution plans maintained by the Company:
(A) All Company contributions;
(B) Forfeitures; and
(C) All Employee contributions.
Except to the extent provided in Treasury regulations, Annual Additions
include excess contributions described in Section 401(k) and excess
aggregate contributions described in Section 401(m), regardless of
whether the Plan distributes or forfeits such excess amounts.Excess
deferrals under Code Section 402(g) are not Annual Additions unless
distributed after the correction period described in Code Section
402(g). Annual Additions also include any excess amounts reapplied to
reduce Company Contributions under this Article. Amounts allocated
after March 31, 1984, to an individual medical account (as defined
under Code Section 415(l)(2)) included as part of a defined benefit
plan maintained by the Company are Annual Additions. Furthermore,
Annual Additions include contributions paid or accrued after December
31, 1985, for taxable years after December 31, 1985, attributable to
postretirement medical benefits allocated to a separated account of a
key employee (as defined in Code Section 419A(d)(3)) under a welfare
benefit fund (as defined in Code Section 419(e)) maintained by the
Company, but only for purposes of the dollar limitation applicable to
the Maximum Permissible Amount.
(ii) "Maximum Permissible Amount" - the lesser of (a) 25 percent of the
Participant's Compensation from the Company for the Plan Year, or (b)
$30,000 (or, if greater, one-fourth of the defined benefit dollar
limitation under Code Section 415(b)(1)(A) as adjusted for
cost-of-living increases).
(c) If the Annual Additions with respect to a Participant would cause the
Maximum Permissible Amount to be exceeded for any Plan Year, the aggregate of
the Annual Additions to this Plan and the Annual Additions to any other defined
contribution plan of
17
<PAGE>
the Company will be reduced, until the Annual Additions no longer exceed the
Maximum Permissible Amount, in the following order of priority effective January
1, 1999:
(i) Refund any Post-Tax Contributions and income attributable thereto
made by the Participant to this Plan which are not matched by Company
contributions to the extent that such contributions would be aggregated
with the Annual Addition to this Plan;
(ii) Refund any Deferrals and income attributable thereto made by the
Participant to this Plan which are not matched by Company contributions
to the extent that such contributions would be aggregated with the
Annual Addition to this Plan;
(iii) Refund all other Post-Tax Contributions and income attributable
thereto made by the Participant to this Plan to the extent that such
contributions would be aggregated with the Annual Addition to this Plan
and forfeit Company contributions attributable to such Post-Tax
Contributions;
(iv) Refund all other Deferrals and income attributable thereto made by
the Participant to this Plan to the extent that such contributions
would be aggregated with the Annual Addition to this Plan and forfeit
Company contributions attributable to such Deferrals;
(v) Reduce the Participant's allocation of Profit/Gain Sharing
Contributions and income attributable thereto to the extent that such
contributions would be aggregated with the Annual Addition to this
Plan. Such reduction will be held unallocated and used to reduce
employer contributions for all Participants in the following limitation
year;
(vi) Reduce the Participant's allocation of forfeitures under this Plan
for the Plan Year in which the excess occurs. Such reduction will be
held unallocated and used to reduce employer contributions for all
Participants in the following limitation year;
(vii) Reduce the Participant's allocation of other Matching
Contributions under this Plan for the Plan Year in which the excess
occurs. Such reduction will be held unallocated and used to reduce
employer contributions for all Participants in the following limitation
year;
(viii) Refund any contributions made by the Participant to any other
defined contribution plan of the Company for the Plan Year in which the
excess occurs to the extent that such contribution would be aggregated
with the Annual Addition to this Plan;
18
<PAGE>
(ix) Reduce the Participant's allocation of Company contributions under
any other defined contribution plan of the Company for the Plan Year
following the Plan Year in which the excess occurs. Such reduction will
be allocated in accordance with the provisions of Section 9.02 to the
Company Contribution Accounts of Participants who are not affected by
the limitation of Subsection (a) of this Section; and
(x) In the event that after the above refunds and reductions are made
amounts are still available which may not be allocated hereunder, such
amounts will be held in a suspense account. Amounts held in a suspense
account will be allocated to the Company Contribution Accounts of
Participants at the first possible time when such allocation would not
violate the provisions of Section 415 of the Code or other applicable
law. Such allocation will take place prior to the allocation of any
amounts arising from any other source, including forfeitures for the
subsequent year. Until such suspense account is reallocated in its
entirety, no Company contributions may be made for a Plan Year in which
the suspense account has not been exhausted.
Notwithstanding any other provision of the Plan or Trust Agreement to
the contrary, if the Company terminates the Plan and the amounts held
in the suspense account cannot be allocated to the Company Contribution
Accounts of the Participants upon termination of the Plan, the amount
then standing in the suspense account will revert to the Company.
(d) For years prior to January 1, 2000, if an Employee is a Participant in both
a defined contribution plan and a defined benefit plan maintained by the Company
the sum of the defined contribution plan fraction and the defined benefit plan
fraction pertaining to such Employee will not exceed 1.0.
(i) The defined benefit plan fraction for any Plan Year is a fraction,
the numerator of which is the Participant's projected annual benefit
under the defined benefit Plan (determined as of the close of the Plan
Year) and the denominator of which is the lesser of:
(A) the product of 1.25 multiplied by the dollar limitation in
effect under Section 415(b)(1)(A) of Code for such Plan
Year, or
(B) the product of 1.4 multiplied by the amount which may be
taken into account under Section 415(b)(1)(B) of the Code
with respect to such Employee under the Plan for such Plan
Year.
(ii) The defined contribution plan fraction for any Plan Year is a
fraction, the numerator of which is the sum of the Annual Additions to
the Participant's accounts in such Plan Year and for each prior Plan
Year and the denominator of which is the sum of the lesser of the
following amounts determined for such Plan Year and for each prior Year
of Service with the Company:
19
<PAGE>
(A) the product of 1.25 multiplied by the dollar limitation in
effect under Section 415(c)(1)(A) of the Code for such Plan
Year (determined without regard to Subsection (c)(6), or
(B) the product of 1.4, multiplied by the amount which may be
taken into account under Section 415(c)(1)(b) of the Code ,
(or Subsection (c)(7) or (8), if applicable) with respect to
such individual under such plan for such Plan Year.
(iii) For any Plan Year in which the limitations of Subsection (d) will
be exceeded for any Participant for the Plan Year, the Participant's
benefit under any defined benefit plan maintained by the Company will
be reduced until such limitations are met. If, after the Participant's
benefit under any defined benefit plans maintained by the Company are
reduced, the limitations of Subsection (d) are still exceeded, the
Annual Additions will be reduced in accordance with the provisions of
Subsection (c).
(iv) Where this Plan and a pre-TEFRA defined benefit plan are
aggregated, a permanent adjustment will be made to the numerator of the
defined contribution fraction to ensure that the sum of the defined
contribution fraction and defined benefit fraction will not exceed 1.0
as of the effective date of TEFRA. This adjustment will be made when
the sum of the defined contribution fraction and the defined benefit
fraction exceeds 1.0 for the 1984 limitation year as a result of either
benefit accruals or Annual Additions in excess of TEFRA Section 415
limits for the 1983 limitation year.
(e) For purposes of the limitations of this Section, all qualified defined
contribution plans of the Company whether or not terminated, will be treated as
one defined contribution plan, and all qualified defined benefit plans of the
Company whether or not terminated, will be treated as one defined benefit plan.
(f) In the case of a pre-1983 Participant whose current accrued benefit, as of
the close of the 1982 limitation year, exceeds the dollar limitation of Code
Section 415(b) of the Code as amended by TEFRA, then, with respect to such
participant, the applicable dollar limitation is the Participant's current
accrued benefit for purposes of applying the limitations of Code Section 415(b),
and prior to January 1, 2000, Code Section 415(e).
10.02 Section 401(k)(3) Limitations
(a) In General. Deferrals made under the Plan are subject to the limitations on
elective contributions of Code Section 401(k)(3), as more fully described below.
The Plan provisions related to these limits are to be interpreted and applied in
accordance with Code Sections 401(k)(3) and 401(a)(4), and in such manner as to
satisfy such other requirements relating to Code Section 401(k) as may be
prescribed by the Secretary of the Treasury from time to time. The provisions
included in this Section
20
<PAGE>
10.02 pursuant to the Small Business Job Protection Act of 1996 are adopted
effective January 1, 1997.
(b) Actual Deferral Ratios. For each Plan year, the Administrator will determine
the "actual deferral ratio" for each Participant who is eligible to make
Deferrals. The actual deferral ratio shall be the ratio of elective
contributions (plus any Qualified Nonelective Contributions treated as elective
contributions) made on behalf of the Participant for the Plan Year to the
Participant's Compensation for the applicable period. For purposes of
determining a Participant's actual deferral ratio:
(i) Elective contributions will be taken into account only if
both of the following requirements are satisfied:
(A) The elective contributions are allocated to the
Participant's account as of a date within the plan Year, are
not contingent upon participation in the Plan or performance
of services on any date subsequent to that date, and are
actually paid to the Trust no later than the end of the
12-month period immediately following the Plan Year to which
the elective contributions relate; and
(B) The elective contributions relate to Earnings that either
would have been received by the Participant in the plan year
but for the Participant's election to defer under the Plan,
or is attributable to services performed in the Plan year
and, but for the election to defer, would have been received
by the Participant's Participant within 2-1/2 months after
the close of the Plan Year.
To the extent elective contributions that meet the requirements of (A)
and (B) above constitute excess deferrals described in Subsection
10.04, they will be taken into account for each Highly Compensated
Employee, but will not be taken into account for any Participant who is
not a highly Compensated Employee.
(ii) In the case of a Participant who is a Highly Compensated Employee
for the Plan Year and is eligible to have elective contributions (and
Qualified Nonelective Contributions, to the extent treated as elective
contributions) allocated to his or her accounts under two or more cash
or deferred arrangements described in Code Section 401(k) maintained by
an Affiliated Company, the Participant's actual deferral ratio will be
determined as if such elective contributions (and Qualified Nonelective
Contributions, to the extent treated as elective contributions) are
made under a single arrangement, and if two or more of the cash or
deferred arrangements have different Plan Years, all cash or deferred
arrangements ending with or within the same calendar year will be
treated as a single arrangement.
(iii) The applicable period for determining Compensation for each
Participant for a Plan Year will be the 12-month period ending on the
last day of the Plan
21
<PAGE>
Year; provided that effective January 1, 1999 and to the extent
permitted under Income Tax Regulations, the Administrator
may choose, on a uniform basis, to treat as the applicable period only
that portion of the Plan Year during which the individual was a
Participant.
(iv) Qualified Nonelective Contributions made on behalf of Participants
who are eligible to receive elective contributions shall be treated as
elective contributions to the extent permitted by Income Tax Regulation
Section 1.401(k)-1(b)(5).
(v) In the event that the Plan satisfies the requirements of Code
Section 401(k), 410(a)(4), or 410(b) only if aggregated with one or
more other plans with the same plan year, or if one or more other plans
with the same Plan Year satisfy such Code sections only if aggregated
with this Plan, then this section shall be applied by determining the
actual deferral ratios as if all such plans were a single plan.
(vi) An Employee who would be a Participant but for the failure to make
elective contributions shall be treated as a Participant on whose
behalf no elective contributions are made.
(vii) Elective contributions made on behalf of Participants who are not
Highly Compensated Employees that could be used to satisfy the Code
Section 401(k)(3) limits but are not necessary to be taken into account
in order to satisfy such limits, may instead be taken into account for
purposes of the Code Section 401(m) limits to the extent permitted by
Income Tax regulation Section 1.401(m)-1(b)(5).
(c) Actual Deferral Percentage Limitation. For any Plan Year, the actual
deferral ratios for all Highly Compensated Employees eligible to receive
elective contributions under the Plan shall be averaged to determine the actual
deferral percentage for the highly compensated group, and the actual deferral
ratios for all Employees who are not Highly Compensated Employees but are
eligible to receive elective contributions under the Plan shall be averaged to
determine the actual deferral percentage for the nonhighly compensated group.
The actual deferral percentages must satisfy one of the following tests:
(i) The actual deferral percentage for the highly compensated group
does not exceed 125 percent of the actual deferral percentage for all
other eligible Employees, or
(ii) The excess of the actual deferral percentage for the highly
compensated group over the actual deferral percentage for the nonhighly
compensated group does not exceed two percentage points, and the actual
deferral percentage for the highly compensated group does not exceed
twice the actual deferral percentage of the nonhighly compensated
group.
22
<PAGE>
The tests in (i) and (ii) above shall be applied using the actual deferral
percentage for the highly compensated group for the current Plan Year and the
actual deferral percentage for the nonhighly compensated group for the
immediately preceding Plan Year (taking into account the nonhighly compensated
group that existed during such preceding Plan Year). Notwithstanding the
foregoing, in satisfying the above tests, the Administrator may elect, to the
extent permitted by Code Section 401(k)(3), applicable regulations and Internal
Revenue Service guidance, to use the actual deferral percentage for the
nonhighly compensated group determined for the current Plan Year. The current
Plan Year method was used in 1997 and 1999, the preceding Plan Year method was
used in 1998. The Plan will subsequently be amended to adopt the methodology to
be used for 2000 and future years.
(d) Adjustments by Administrator. If, prior to the time all elective
contributions for a Plan Year have been contributed to the Trust, the
Administrator determines that Deferrals are being made at a rate which will
cause the ss.401(k)(3) limits to be exceeded for the Plan Year, effective
January 1, 1999, the Administrator may, in its sole discretion, limit the amount
of Deferrals to be made with respect to one or more Highly Compensated Employees
for the balance of the Plan Year by suspending or reducing Deferral elections to
the extent the Administrator deems appropriate. Any Deferrals that would
otherwise be made to the Trust shall instead be paid to the affected Participant
in cash.
(e) Excess Contributions. If the Code Section 401(k)(3) limits have not been met
for a Plan Year after all contributions for the Plan Year have been made, the
Administrator will determine the amount of excess contributions with respect to
Participants who are Highly Compensated Employees. To do so, the Administrator
will perform the following computation (which shall be used solely to determine
the aggregate amount to be distributed under paragraph (f) below and not the
amount to be distributed to any individual): first, the actual deferral ratio of
the Highly Compensated Employee with the highest actual deferral ratio shall be
reduced to the extent necessary to (i) enable the Plan to satisfy the
ss.401(k)(3) limits or (ii) cause such employee's actual referral ratio to equal
the actual deferral ratio of the Highly Compensated Employee with the next
highest actual deferral ratio, and then this process will be repeated until the
Plan satisfies the ss.401(k)(3) limits. This Subsection (e) as restated is
effective January 1, 1997.
(f) Distribution Of Excess Contributions. The aggregate amount of reductions
determined under Subsection (e) above shall be distributed, first, to the Highly
Compensated Employees with the highest dollar amounts of elective contributions,
pro rata, in an amount equal to the lesser of (i) the total amount of excess
contributions for the Plan Year determined under Subsection (e) above or (ii)
the amount necessary to cause the amount of such Employees' elective
contributions to equal the amount of elective contributions of the Highly
Compensated Employees with the next highest dollar amount of elective
contributions. This process is repeated until the aggregate amount distributed
under this Subsection (f) equals the amount of excess contributions
23
<PAGE>
determined under Subsection (e) above. Income on excess contributions shall be
distributed in accordance with applicable Income Tax Regulations. The income or
loss for the period between the end of the year and the date of distribution
allocable to excess elective contributions for the year will be disregarded.
This Subsection (f) as restated is effective January 1, 1997.
(g) Special Rule. For purposes of distributing excess elective contributions,
the amount of excess elective contributions that may be distributed with respect
to a Highly Compensated Employee for a Plan Year shall be reduced by the amount
of excess elective contributions previously distributed to the Highly
Compensated Employee for his or her taxable year ending with or within such Plan
Year.
(h) Recordkeeping Requirement. The Administrator shall maintain such records as
are necessary to demonstrate compliance with the Code Section 401(k)(3) limits
including the extent to which Qualified Nonelective Contributions are taken into
account in determining the actual deferral ratios.
(i) Effect on Matching Contributions. A Participant's elective contributions
which are returned as a result of the Code Section 401(k)(3) limits for a Plan
Year will not be taken into account in determining the amount of Matching
Contributions to be made for the Participant's benefit for the Year. To the
extent Matching Contributions have already been made with respect to the
Deferrals at the time the Deferrals are determined to be excess contributions,
the Matching Contributions will be distributed to the Participant at the same
time as the Deferrals are returned; provided, however, that to the extent the
Participant is not fully vested in the Matching Contributions, the Participant
will forfeit the portion of the Matching Contributions that are not vested.
(j) Excise Tax Where Failure To Correct. If the excess contributions are not
corrected within 2-1/2 months after the close of the Plan Year to which they
relate, the Companies will be liable for a 10% tax on the amount of excess
contributions attributable to them, to the extent provided by Code Section 4979.
Qualified Nonelective Contributions properly taken into account under this
Section for the Plan Year may enable the Plan to avoid having excess
contributions, even if the contributions are made after the close of the 2-1/2
month period.
(k) Effective January 1, 1999, the Actual Deferral Percentage test can be
applied by taking into consideration only those Employees who have attained age
21 and completed one Year of Service by the last day of the Plan Year plus those
Employees who have not met such requirements who are Highly Compensated
Employees.
(l) For purposes of the calculations under this section, "Plan" means the
portion of the Plan other than the portion that is the ESOP Plan.
24
<PAGE>
10.03 Code Section 401(m) Limits
(a) In General. Matching Contributions and Post Tax Contributions made under the
Plan are subject to the limits of Section 401(m) of the Code, as more fully
described below. The Plan provisions relating to the Code Section 401(m) limits
are to be interpreted and applied in accordance with Sections 401(m) and
401(a)(4) of the Code, and in such manner as to satisfy such other requirements
relating to Section 401(m) as may be prescribed by the Secretary of the Treasury
from time to time. The provisions included in this Section 10.03 pursuant to the
Small Business Job Protection Act of 1996 are adopted effective January 1, 1997.
(b) Actual Contribution Ratios. For each Plan Year, the Administrator will
determine the "actual contribution ratio" for each Participant who is eligible
for Matching Contributions. The actual contribution ratio shall be the ratio of
the sum of the Matching Contributions, Post-Tax Contributions and Qualified
Nonelective Contributions which are not treated as Elective Contributions made
on behalf of the Participant for the Plan Year, to the Participant's
Compensation for the applicable period. For purposes of determining a
Participant's actual contribution ratio:
(i) A Matching Contribution will be taken into account only if the
contribution is allocated to a Participant's Account as of a date
within the Plan Year, is actually paid to the Trust no later than 12
months after the close of the Plan Year, and is made on behalf of a
Participant on account of theParticipant's Deferrals or Post-Tax
Contributions for the Plan Year.
(ii) In the case of a Participant who is a Highly Compensated Employee
for the Plan Year and is eligible to have Matching Contributions or
employee contributions (including amounts treated as matching
contributions) allocated to his or her accounts under two or more plans
maintained by an Affiliated Company which may be aggregated for
purposes of Sections 410(b) and 401(a)(4) of the Code, the
Participant's actual contribution ratio will be determined as if such
contributions are made under a single plan, and if two or more of the
plans have different Plan Years, all plans ending with or within the
same calendar year will be treated as a single plan.
(iii) Effective January 1, 1999, the applicable period for determining
Compensation for each Participant for a Plan Year shall be the 12-month
period ending on the last day of such Plan Year; provided that, to the
extent permitted under Income Tax Regulations, the Administrator may
choose, on a uniform basis, to treat as the applicable period only that
portion of the Plan Year during which the individual was a Participant.
(iv) Elective Contributions not applied to satisfy the Code Section
401(k)(3) limits and Qualified Nonelective Contributions not treated as
Elective Contributions may be treated as Matching Contributions to the
extent permitted by Income Tax Regulation Section 401(m)-1(b)(5).
25
<PAGE>
(v) In the event that the Plan satisfies the requirements of Sections
401(k), 410(a)(4), or 410(b) of the Code only if aggregated with one or
more other plans with the same Plan Year, or if one or more other plans
with the same Plan Year satisfy such Code sections only if aggregated
with this Plan, then this Subsection shall be applied by determining
the actual contribution ratios as if all such plans were a single plan.
(c) Actual Contribution Percentages. The actual contribution ratios for all
Highly Compensated Employees who are eligible for Matching Contributions or to
make Post-Tax Contributions for a Plan Year shall be averaged to determine the
actual contribution percentage for the highly compensated group for the Plan
Year, and the actual contribution ratios for all Employees who are not Highly
Compensated Employees but are eligible for Matching Contributions or to make
Post-Tax Contributions for the Plan Year shall be averaged to determine the
actual contribution percentage for the nonhighly compensated group for the Plan
Year. The actual contribution percentages must satisfy at least one of the
following tests:
(i) The actual contribution percentage for the highly compensated
group does not exceed 125% of the actual contribution percentage for
the nonhighly compensated group; or
(ii) The excess of the actual contribution percentage for the highly
compensated group over the actual contribution percentage for the
nonhighly compensated group does not exceed two percentage points and
the actual contribution percentage for the highly compensated group
does not exceed twice the actual contribution percentage of the
nonhighly compensated group.
The tests in (i) and (ii) above shall be applied using the actual contribution
percentage for the highly compensated group for the current Plan Year and the
contribution percentage for the nonhighly compensated group for the immediately
preceding Plan Year (taking into account the nonhighly compensated group that
existed during such preceding Plan Year). Notwithstanding the foregoing, in
satisfying the above tests, the Administrator may elect, in accordance with
Section 401(m)(2) of the Code, applicable regulations and Internal Revenue
Service guidance, to use the actual contribution percentage for the nonhighly
compensated group calculated for the current Plan Year. The current Plan Year
method was used in 1997 and 1999, the preceding Plan Year method was used in
1998. The Plan will subsequently be amended to adopt the methodology to be used
for 2000 and future years.
(d) Multiple Use Test. In the event that (i) the actual deferral percentage and
actual contribution percentage for the highly compensated group each exceeds
125% of the respective actual deferral percentage or actual contribution
percentage for the nonhighly compensated group, and (ii) the sum of the actual
deferral percentage and the actual contribution percentage for highly
compensated group exceeds the "aggregate limit" within the meaning of Income Tax
Regulation Section 1.401(m)-
26
<PAGE>
2(b)(3), the Administrator will reduce the actual contribution ratios of Highly
Compensated Employees who had both an actual deferral ratio and an actual
contribution ratio for the Plan Year to the extent required by such section and
in the same manner as descried in paragraphs (f) and (g) below.
(e) Adjustments by Administrator. If, prior to the time all Matching
Contributions and Post-Tax Contributions for a Plan Year have been contributed
to the Trust, the Administrator determines that such contributions are being
made at a rate which will cause the Code Section 401(m) limits to be exceeded
for the Plan Year, the Administrator may, in its sole discretion, limit the
amount of such contributions to be made with respect to one or more Highly
Compensated Employees for the balance of the Plan Year by limiting the amount of
such contributions to the extent the Administrator deems appropriate. This
Subsection (e) as restated is effective January 1, 1999.
(f) Excess Aggregate Contributions. If the Code Section 401(m) limits have not
been satisfied for a Plan Year after all contributions for the Plan Year have
been made, the excess of the aggregate amount of the Matching Contributions (and
any Qualified Nonelective Contributions, Post-Tax Contributions or Elective
Contributions taken into account in computing the actual contribution
percentages) actually made on behalf of Highly Compensated Employees for the
Plan Year over the maximum amount of such contributions permitted under Section
401(m)(2)(A) of the Code shall be considered to be "excess aggregate
contributions." The Administrator shall determine the amount of excess aggregate
contributions. To do so, the Administrator will perform the following
computation (which shall be used solely the determine the aggregate amount to be
distributed under paragraph (g) below and not the amount to be distributed to
any individual): first, the actual contribution ratio of the Highly Compensated
Employee with the highest actual contribution ratio shall be reduced to the
extent necessary to (i) enable the Plan to satisfy the Code Section 401(m)
limits or (ii) cause such employee's actual contribution ratio to equal the
actual contribution ratio of the Highly Compensated Employee with the next
highest actual contribution ratio, and then this process will be repeated until
the Plan satisfies the Code Section 401(m) limits. In no event will excess
aggregate contributions remain unallocated or be allocated to a suspense account
for allocation in a future Plan Year. This Subsection (f) as restated is
effective January 1, 1997.
(g) Distribution Of Excess Aggregate Contributions. The aggregate amount of
reductions determined under Subsection (f) above shall be distributed, first, to
the Highly Compensated Employees with the highest dollar amounts of Matching
Contributions (and any Qualified Nonelective Contributions, Post-Tax
Contributions or elective contributions taken into account in computing actual
contribution percentages), pro rata, in an amount equal to the lesser of (i) the
total amount of excess aggregate contributions for the Plan Year determined
under Subsection (f) above, or (ii) the amount necessary to cause the amount of
such Employees' Matching Contributions (and any Qualified Nonelective
Contributions, Post-Tax Contributions or elective contributions taken into
account in computing actual contribution percentages) to equal
27
<PAGE>
the amount of the Matching Contributions (and any Qualified Nonelective
Contributions, Post-Tax Contributions or elective contributions taken into
account in computing actual contribution percentages) of the Highly compensated
Employees with the next highest dollar amount of Matching Contributions (and any
Qualified Nonelective Contributions, Post-Tax Contributions or elective
contributions taken into account in computing actual contribution percentages).
This process is repeated until the aggregate amount distributed under this
Subsection (g) equals the amount of excess aggregate contributions determined
under Subsection (f) above. Income on excess aggregate contributions shall be
distributed in accordance with applicable Regulations. The income or loss for
the period between the end of the year and the date of distribution allocable to
excess aggregate contributions for the year will be disregarded. Distribution of
excess aggregate contributions for each Highly Compensated Employee shall be
made first from any Post-Tax Contributions along with any related Matching
Contributions, next from any Qualified Nonelective Contributions and finally
from other Matching Contributions. Such distribution will be made after the
close of Plan Year to which the contributions relate, but within 12 months after
the close of such Plan Year. Excess aggregate contributions will be treated as
employer contributions for purposes of Sections 401(a)(4), 404 and 415 of the
Code even if distributed from the Plan. Notwithstanding the foregoing, to the
extent a Participant would receive a distribution of excess aggregate
contributions pursuant to this Section which relate to Matching Contributions in
which the Participant does not have a vested interest, such portion of the
excess aggregate contributions will be forfeited.
(h) Recordkeeping Requirement. The Administrator shall maintain such records as
are necessary to demonstrate compliance with the Code Section 401(m) limits,
including the extent to which elective contributions and Qualified Nonelective
Contributions are taken into account in determining the actual contribution
ratios.
(i) Excise Tax Where Failure To Correct. If the excess aggregate contributions
are not corrected within 2-1/2 months after the close of the Plan Year to which
they relate, the Companies will be liable for a 10% excise tax on the amount of
excess aggregate contributions attributable to them, to the extent provided by
Section 4979 of the Code. Qualified-Nonelective Contributions properly taken
into account under this Section for the Plan Year may enable the Plan to avoid
having excess aggregate contributions, even if the contributions are made after
the close of the 2-1/2 month period.
(j) Effective January 1, 1999, the Actual Contribution Percentage test can be
applied by taking into consideration only those Employees who have attained age
21 and completed one Year of Service by the last day of the Plan Year plus those
Employees who have not met such requirements who are Highly Compensated
Employees.
(k) For purposes of the calculations under this section, "Plan" means the
portion of the Plan other than the portion that is the ESOP Plan.
28
<PAGE>
10.04 Section 402(g) Limitations
(a) If a Participant's deferred compensation under this Plan together with any
elective deferrals (as defined in Income Tax Regulation Section 1.402(g)-1(b))
under another qualified cash or deferred arrangement (as defined in Code Section
401(k)), a simplified employee pension (as defined in Code Section 408(k)), a
salary reduction arrangement (within the meaning of Code Section 3121(a)(5)(D)),
a deferred compensation plan under Code Section 457, or a trust described in
Code Section 501(c)(18), cumulatively exceed the limitation imposed by Code
Section 402(g) (as adjusted annually in accordance with the method provided in
Code Section 415(d) and related regulations) for such Participant's taxable
year, the Participant may, not later than March 1 following the close of the
Participant's taxable year, certify to the Administrator in writing the amount
of such excess and request that his/her Deferrals under this Plan be reduced by
an amount specified by the Participant. (If the excess is attributable solely to
plans maintained by the Company, such written certification will be deemed to
have been made.) In such event, the Administrator may direct the Trustee
to distribute the excess amount (and any income allocable to such excess amount)
to the Participant not later than the first April 15th following the close of
the Participant's taxable year. The income or loss allocable to the excess
Deferral amount shall be calculated in the same manner as earnings on actual
deferral percentage refunds specified in Section 10.02(f).
(b) Any distribution of less than the entire amount of the Participant's
Deferrals and income for the year shall be treated as a pro rata distribution of
excess Deferrals and income. The amount distributed shall not exceed the
Participant's Deferrals for the taxable year plus allocable income and loss.
Notwithstanding the above, a Participant's excess Deferrals shall be reduced,
but not below zero, by any distribution of excess annual additions pursuant to
Section 10.01.
(c) The Plan may make a correcting distribution of excess deferrals and
allocable income or loss attributable to plans of the Company on or before the
last day of the Participant's taxable year provided each of the following
conditions are met:
(i) the distribution must be made after the date on which the Plan
received the excess Deferral;
(ii)the Administrator must designate the distribution as an excess
Deferral on behalf of the Participant; and
(iii) the Plan must designate the distribution as a distribution
of excess Deferrals.
(d) Any distribution made pursuant to this Section 10.05 shall be made first
from unmatched Deferrals and, thereafter, from Deferrals which are matched.
Matching Contributions which relate to such distributed Deferrals shall be
forfeited.
29
<PAGE>
ARTICLE 11
ACCOUNTING FOR PARTICIPANT INTERESTS
11.01 Individual Accounts
The following accounts will be kept at the direction of the Committee for each
Participant, along with such subaccounts as are necessary to maintain an
accurate record of the interest of each Participant in the Plan:
(a) Post-Tax Account. This account will include Participant contributions made
to the Plan prior to January 1, 1984, subsequent Post-Tax Contributions, and the
earnings and/or losses attributable thereto.
(b) Pre-Tax Account. This account will include Deferrals contributed to the Plan
in accordance with Section 5.01 together with earnings and/or losses
attributable thereto.
(c) Company Contribution Account. This account will include Company Matching
Contributions in accordance with Section 7.02 together with earnings and/or
losses attributable thereto.
(d) Rollover Account. This account will include rollover contributions made on
behalf of the Employee from other qualified retirement plans pursuant to Section
8.01.
(e) Profit/Gain Sharing Account. This account will include Profit/Gain Sharing
Contributions made on behalf of eligible Employees in accordance with Section
7.03 together with earnings and/or losses attributable thereto.
Participant accounts may be kept in dollars or in units or both, as determined
in accordance with generally accepted principles of trust accounting. The
information maintained will be sufficient to determine the number of shares of
Stock that are allocated to Participant accounts as of any valuation date and
the tax status of distributions with respect to matters such as the
determination of net unrealized appreciation on shares of Stock that may be
distributed.
11.02 Accounting for Investments
Each Participant who has any interest in an Investment Fund will have an
undivided proportionate interest. The Committee will cause the records to be
maintained relative to a Participant's account so that there may be determined
as of any date the current value of the Participant's account in the Trust and
the adjustments from the previous valuation date that have produced the current
value.
11.03 Valuation of Accounts
Within 90 days after the end of each Plan Year, the Trustee will value the
assets of the Trust on the basis of fair market values as of the close of the
Plan Year.
30
<PAGE>
The recordkeeper will value Plan accounts on a daily basis in accordance with
generally accepted trust accounting principles. Accounts of Participants will be
credited with contributions and debited with withdrawals and distributions. The
recordkeeper shall also adjust the net credit balances of the Participant
accounts in the respective Investment Funds of the Trust, upward and downward,
on a pro rata basis (using reasonable assumptions regarding the availability of
current period contributions, withdrawals, and distributions, for purposes of
sharing in current period earnings and investment gains or losses), so that such
net credit balances will equal the net worth of each Investment Fund of the
Trust as of that date. The net worth of an Investment Fund will be determined by
the Trustee and reported to the recordkeeper under procedures approved by the
Committee or its delegate, by subtracting from the fair market value of assets
held in such Investment Fund any expenses, withdrawals, distributions and
transfers chargeable to that Investment Fund which have been incurred but not
yet paid. All determinations made by the Trustee with respect to fair market
values and net worth will be made in accordance with generally accepted
principles of trust accounting, and the accounting based thereon, in accordance
with procedures approved by the Committee or its delegate, will be conclusive
and binding upon all persons having an interest under the Plan.
11.04 Participant Statements
Each Participant will receive a quarterly statement of his/her participation in
the Plan as of the end of the prior Quarter.
ARTICLE 12
INVESTMENT OF TRUST ASSETS
12.01 Investment of Future Contributions
(a) Initial Election. The Trustee will invest future Deferrals, Post-Tax
Contributions, Matching Contributions and Profit/Gain Sharing Contributions in
the Investment Funds designated by the Participant on his/her initial
enrollment. If no election is made upon enrollment, these future contributions
will be invested in the Edison International Stock Fund. Such amounts, and the
related earnings, will remain invested in the Edison International Stock Fund
subject to the provisions of Section 12.02. Notwithstanding the foregoing, IRS
Voluntary Compliance Resolution Program remedial Company contributions will be
initially invested in the Money Market Fund on behalf of affected Participants.
(b) Changing Investment Elections. Future contributions will be invested
according to the Participant's last valid election until a new election is made.
The Participant may change his/her election through the applicable Automated
Transaction System. Elections made by Market Close on a business day will be
effective that day. If the election is made after Market Close, the election
will be effective the following business day. Participant elections are made by
indicating the
31
<PAGE>
percentage, stated in whole percentage increments, of his/her future
contributions which he/she elects to invest in any of the Investment Funds.
(c) Timing of Investments. The Trustee will immediately invest Participant and
Company contributions in those Investment Funds which do not have specific
investment entry windows. For those Investment Funds with specific investment
entry windows, the Trustee will hold the contributions in a short-term
investment fund until the earliest date the contributions can be deposited in
the Investment Fund selected by the Participant.
12.02 Investment of Accumulated Contributions
Each Participant may elect the percentage, stated in whole percentage
increments, of his/her Accumulated Balance which he/she wants to invest in any
of the Investment Funds. Elections may be made through the applicable Automated
Transaction System. Elections made by Market Close on a business day will be
effective that day. If the election is made after Market Close, the election
will be effective the following business day. The Participant may transfer
amounts from any Investment Fund to any other Investment Fund. The allocations
between Investment Funds will be made based on the prices of the Investment
Funds as of Market Close on the effective date. If the Participant does not
timely advise the Administrator of any change in his/her investment allocation,
then his/her Accumulated Balance will remain invested as it was without
adjustments for changes in the market value of the Investment Funds.
Furthermore, all contributions and related income added to a Participant's
Accumulated Balance subsequent to the effective date of his/her last valid
election under this Section will remain invested as elected until the
Participant makes a new election through the applicable Automated Transaction
System indicating otherwise.
ARTICLE 13
VESTING
13.01 Vesting of Deferrals and Post-Tax Contributions
The entire amount of a Participant's Deferrals and Post-Tax Contributions,
including any stock, cash and related income, is unconditionally vested in the
Participant.
13.02 Vesting of Company Contributions
Company Contributions and any Stock and cash attributable thereto, including
related income, dividends, stock splits or other rights, are only conditionally
credited to the Participant until they vest or are forfeited. Company
Contributions will fully vest in a Participant when he/she completes the Years
of Service with the Company indicated on the vesting schedule below, or, if
earlier while an active employee, when the Participant attains Normal Retirement
Age, dies, or becomes Permanently and Totally Disabled. All of a Participant's
Years of Service will be counted for vesting purposes. The vesting schedule is
as follows:
32
<PAGE>
Vesting Schedule
Years of Service with Percent of Nonforfeitable
the Company Accrued Benefit
------------------------ ----------------------------
Less than One 0
One or more 20
Two or more 40
Three or more 60
Four or more 80
Five or More 100
For purposes of vesting under this Plan, in the event that a Participant
performs 1,000 Hours of Service in the anniversary year Computation Period
(defined in Article 2) ending in 1996, and 1,000 Hours of Service in the 1996
calendar year Computation Period, such Participant will be credited with two
Years of Service.
The nonforfeitable percentage of a Participant's right to Company Contributions
in the Plan will not be reduced as a result of any direct or indirect amendment
to the Plan. If the Plan is amended to change or modify any vesting schedule,
each Participant who has completed three Years of Service as of the end of the
election period described below may elect to have his/her nonforfeitable
percentage determined without regard to such amendment. The election period
referred to in the preceding sentence will begin on the date such amendment is
adopted and will end on the latest of the following dates:
(a) the date which is 60 days after the date on which such amendment is adopted;
(b) the date which is 60 days after the date on which such amendment becomes
effective; or
(c) the date which is 60 days after the date on which the Participant is issued
written notice of such amendment.
An election under this Section may be made only by an individual who is a
Participant at the time such election is made, and once made, the election will
be irrevocable.
13.03 Vesting of Plan Transfers and Rollover Contributions
Funds received by this Plan from another qualified retirement plan by rollover
or transfer will remain unconditionally vested in the Participant.
13.04 Forfeiture, Repayment and Vesting Following Re-employment
(a) Forfeiture. If a Participant terminates his/her employment at a time when
the Company Contributions credited to his/her account have not vested, the
portion not
33
<PAGE>
vested will be forfeited upon the earlier of (i) the date of distribution, or
(ii) the date the Participant incurs five consecutive one-year Breaks In
Service.
(b) Repayment. A Participant whose employment has terminated and who has
received a distribution will have the right to repay to the Plan the full amount
of the distribution received by him/her and thereby restore any forfeited
amounts to his/her account. Such repayment must be made before the earlier of
five years after the first date on which the Participant is subsequently
re-employed by the Company or the close of the first period of five consecutive
one-year Breaks In Service commencing after the withdrawal. The provisions of
this Subsection will apply only in the event that the Participant repays the
full amount of the distribution in a single payment within the time period
provided. Upon such a full repayment, the Sponsor will restore to the
Participant's Account an amount equal to the amount of Company Contributions
forfeited at the time of such distribution unadjusted by any subsequent losses
or gains.
(c) Vesting Following Re-employment. Years of Service prior to the date of
employment termination will be recognized for purposes of this Article.
Article 14
PLAN LOANS
14.01 Eligibility
Participants who are Employees, and other Participants who are
parties-in-interest, as defined by the Employee Retirement Income Security Act,
are eligible for Plan loans.
14.02 Loan Procedures
(a) Types of Loans Available
(i) General Purpose Loan. A loan for any purpose with repayment from
one to four years. Repayment may be extended under certain
circumstances as provided in this Article.
(ii) Residential Loan. A loan for the purchase of the Participant's
principal residence with repayment from one to 15 years.
Repayment may be extended under certain circumstances as provided in
this Article.
(b) Loan Procedures
(i) Administration. Plan Loans will be administered by the Secretary.
The Administrator will process loan requests under the direction
of the Secretary. Loans will be approved or denied based on
the conditions and limitations of this Article.
(ii) Loan Initiation. A Plan Participant may request a loan by
submitting a request through the applicable Automated Transaction
System. Loan requests
34
<PAGE>
may only be initiated by the Participant by using his or her
personal identification number to access the applicable
Automated Transaction System unless the Administrator confirms the
Participant does not have access to this system and authorizes an
alternate method to submit the request. The Participant must specify
the type of loan, the amount of the loan and the number of Months for
repayment subject to the limitations of this Article. The Participant
will electronically approve the terms and conditions of the loan,
payroll deductions and repayment schedule. Endorsement of the loan
check will reaffirm his or her agreement with the terms and conditions
of the loan. The applicable Automated Transaction System will provide
immediate approval of general purpose loan requests meeting the
eligibility requirements of this Article. Approval of Residential loans
is contingent upon submission of valid supporting documentation as
described in Paragraph (iii).
(iii) Loan Processing. A general purpose loan will be effective the day
of the request if the request is made prior to Market Close on a
business day, or the following business day if the request is made
later than Market Close. The Administrator will send the Participant a
promissory note/disclosure statement with the loan terms and conditions
to be retained by the Participant. Participants requesting a
residential loan must return the completed confirmation notice along
with valid supporting documentation substantiating the purchase of the
primary residence and the amount requested within 30 days of the
initial request, or the loan request will be canceled. The
Administrator will then review the loan request for compliance with
this Article. Once the residential loan documentation has been
approved, the loan will be effective. The Participant may cancel the
loan request through the applicable Automated Transaction System. The
cancellation may be made any time prior to Market Close on the
effective date.
(iv) Loan Funding and Repayment. Loan proceeds checks are processed
each week for loans approved that week. When the loan is approved, a
check for the amount borrowed will be sent to the Participant within
two weeks. Repayment by payroll deduction of interest and principal
will begin approximately four to six weeks following the effective date
of the loan. The repayments will be reinvested in the Participant's
account in accordance with the last valid election on file for
investment of future contributions.
(c) Loan Amount Limitations
(i) The Participant may borrow up to 50% of the vested account balance
with a minimum loan amount of $1,000 and a maximum loan amount of
$50,000. For general purpose loans, the maximum loan amount available
will be reduced if necessary to ensure that the loan payment will not
exceed 25% of the Participant's gross pay per pay period (total hours
times the hourly rate plus any commissions paid). The maximum loan
amount of $50,000 may be further reduced by IRS rules.
35
<PAGE>
(ii) The Participant's ability to repay the loan, based on available
"take-home" funds per paycheck, may also limit the maximum amount of
loans available.
(iii) Loan proceeds will be distributed proportionately from each
Investment Fund, excluding any fund subject to restricted access.
(d) Number of Loans. Only one loan may be taken each calendar year with a limit
of two outstanding loans at anytime. No more than one residential loan may be
outstanding at one time. Defaulted loans of active Employees are considered
outstanding for this purpose unless repaid to the Plan.
(e) Interest Rate. The interest rate charged for a loan will be the lowest prime
rate as published in the Wall Street Journal on the first business day of the
month in which the loan is applied for plus one percent, rounded down to the
nearest quarter percent. The interest rate is a fixed rate for the term of the
loan.
(f) Payment of Loans. Loan repayments are made through equal payroll deductions
throughout the life of the loan. Repayments by participants on an authorized
leave of absence or approved Union leave of absence, by terminated Participants,
or by participants on layoff are discussed in Subsections (i), (j) and (k)
below. A defined grace period applies to loan repayments for loans initiated
after March 11, 1999 (or for SCE IBEW and UWUA participants for loans initiated
after February 1, 2000). For loans on a bi-weekly repayment schedule, the
maximum period a scheduled payment may remain unpaid before a default occurs is
seven bi-weekly pay periods. For loans on a weekly repayment schedule, the
maximum period is thirteen weekly pay periods.
Payoff of the full outstanding balance may be initiated at any time through the
applicable Automated Transaction System. Partial payoff will not be permitted.
(g) Non-Payment of Loan (Default). A loan is immediately due and payable as of
the last day of the month in which a default occurs. A Plan loan will be
considered in default if a scheduled payment is not made prior to the end of the
applicable grace period.
Loans are secured by the Participant's account balance. When a loan is in
default, the outstanding loan balance will be treated as a taxable distribution
from the Plan which will be reported as such to the appropriate taxing
authorities. The Participant will incur ordinary income taxes on the amount and
may incur additional federal and state early distribution penalties.
A loan will also be considered in default under the following circumstances:
(i) When the maximum loan term has been reached.
36
<PAGE>
(ii) When a Participant returns to active payroll after an authorized
leave of absence or an approved Union leave of absence and fails to
agree to the reamortization of his/her loan when it is necessary to do
so.
(iii) When a Participant whose loan payment has been suspended fails to
return to work from an authorized leave of absence or an approved Union
leave of absence before the earlier of:
(A) The end of the 12-month suspension period as discussed in
Subsection (h), or
(B) The date the maximum loan term has been reached.
(iv) When a Participant terminates employment and does not repay the
loan balance, except in the case of a Participant who is eligible to
continue loan amortization payments as provided in Subsection (j) below
and elects to do so.
(v) When a Participant who is eligible to continue loan amortization
payments after termination of employment as provided in Subsection (j)
below and elects to do so, the earlier of
(A) the end of the applicable grace period following the
Participant's failure to make a scheduled payment if such
amount remains unpaid at that time, or
(B) the date the Participant's request for distribution of
his/her Plan balance is effective.
The Administrator will take the following actions for loans in default:
When a loan has been determined to be in default, it becomes immediately due and
payable. If repayment of the loan is not made in full, the outstanding balance
will be considered a taxable distribution subject to ordinary income taxes and
any applicable federal and state early distribution penalties. A loan of an
active Employee that has been treated as a taxable distribution will still be
considered an outstanding loan for purposes of this Article. Outstanding taxed
loans may be repaid at any time on a post-tax basis.
(h) Authorized Leave of Absence. The obligation to repay a loan and the accrual
of interest on the loan of a Participant who is on an authorized leave of
absence with insufficient earnings to amortize the loan may be suspended for up
to 12 months subject to the conditions and limitations of Section 72(p)(2)(C) of
the Code and the related regulations. Upon return to active payroll from an
authorized leave of absence, the payroll withholding obligation for loan
repayment will recommence. The term of a loan may be extended by adding the
period for which payroll deductions were suspended as a result of the authorized
leave of absence to the balance of the
37
<PAGE>
remaining loan period, as long as the term does not exceed the maximum specified
in Subsection (a).
Plan Participants who have an outstanding loan balance and who are on an
approved leave of absence for union business will continue to participate in the
SSPP loan provision. This continued participation requires that Participants
make arrangements for their union to make the loan payments in advance on a
monthly basis.
(i) Termination of Employment. Upon termination of employment for any reason
(including death) except as provided in Paragraph (ii) below, any unpaid loan
becomes due and payable.
(i) If the terminated Participant chooses not to pay the outstanding
balance of the loan at termination of employment, the unpaid balance
will reduce the Participant's account balance before the termination
distribution is made. However, the unpaid loan amount will be included
as part of the termination distribution for tax reporting and
withholding purposes.
If a terminated Participant elects to defer distribution of his/her
account balance under the terms of the Plan and does not repay the loan
balance, the outstanding loan balance will be treated as a taxable
distribution 60 days after termination of employment occurs.
(ii) Notwithstanding the foregoing, a Participant who has an
outstanding loan under the Plan and who (A) retires from active service
under the terms of a qualified retirement plan maintained by the
Sponsor or an Affiliated Company, or (B) is nonrepresented and is
terminated under a severance program maintained by the Sponsor or an
Affiliated Company, may elect to continue loan amortization payments on
a bi-weekly basis thereafter in the manner prescribed by the Plan
Administrator provided such Participant has not elected to receive
distribution from the Plan or has elected to receive distribution in
the form of installment payments. If such Participant elects to
continue to make loan amortization payments and subsequently receives
distribution from the Plan of his/her remaining account balance while a
loan remains outstanding, and elects not to repay the outstanding loan
balance at that time, the unpaid loan balance will reduce the
Participant's account balance before the distribution is made. However,
the unpaid loan amount will be included as part of the distribution for
tax reporting and withholding purposes.
(j) Layoff Loans of any Participant who incurs a layoff with recall rights will
not default until the end of the applicable grace period. The grace period will
be reduced by the number of weeks any scheduled payment may already be in
arrears at the time of the layoff.
A Participant who is not recalled before the end of the applicable grace period
will be treated as terminated for purposes of this Article and will have the
same opportunity to
38
<PAGE>
pay off any outstanding loan balances as any other terminating Participant as
discussed in Subsection (i) above.
(k) Effect on Hardship Withdrawals Federal regulations require Participants who
apply for a hardship withdrawal to have exhausted all means available to relieve
the financial need, including applying for loans from plans maintained by the
Company. The Plan loan requirement for a hardship withdrawal is waived if the
loan would not reasonably alleviate the hardship and the Participant signs a
written statement to that effect.
(l) Loan repayments will be suspended under this Plan as provided under Section
414(u)(4) of the Code for Participants performing military service.
ARTICLE 15
DIRECT ROLLOVERS AND QUALIFIED DOMESTIC RELATIONS ORDERS
15.01 Direct Rollovers
(a) Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Section, a distributee may
elect, at the time and in the manner prescribed by the Administrator, to have
any portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.
(b) An eligible rollover distribution is any distribution or withdrawal of all
or any portion of the balance to the credit of the distributee, except that an
eligible rollover distribution does not include any distribution to the extent
such distribution is (i) required under Section 401(a)(9) of the Code; (ii) not
includable in gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities), or (iii) one of a
series of substantially equal periodic payments made for the life expectancy of
the distributee or for a period of 10 years or more.
(c) An eligible retirement plan is an individual retirement account described in
Section 408(a) of the Code, and individual retirement annuity described in
Section 408(b) of the Code, an annuity plan described in Section 403(a) of the
Code, or a qualified trust described in Section 401(a) of the Code, that accepts
the distributee's eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual retirement annuity.
(d) A distributee includes an employee or former employee. In addition, the
employee's or former employee's surviving spouse and the employee's or former
employee's spouse or former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former spouse.
39
<PAGE>
(e) A direct rollover is a payment by the Plan to the eligible retirement plan
specified by the distributee.
15.02 Distributions Due to Qualified Domestic Relations Orders
Unless otherwise provided in a Qualified Domestic Relations Order (QDRO),
accounts established for alternate payees pursuant to a QDRO will be subject to
complete and immediate payout on a lump sum basis at the earliest distribution
date. If the account is $5,000 or greater when established, distribution may be
deferred pursuant to the terms of the QDRO.
ARTICLE 16
WITHDRAWAL DURING EMPLOYMENT
16.01 Withdrawal From the Post-Tax Account
While employed by the Company a Participant may elect to withdraw amounts from
his/her Post-Tax Contribution Account by making a request through the applicable
Automated Transaction System. The withdrawal will be effective on that day if
the request is made by Market Close on a business day, or the following business
day if the request is made later. One withdrawal per Quarter is permitted.
Withdrawals will be paid within two weeks following the effective date, or as
soon thereafter as practicable. Withdrawals will first be drawn from Post-Tax
Employee Contributions made prior to 1987, after which withdrawals will be drawn
on a pro-rata basis between post-1986 contributions and all Post-Tax Earnings.
16.02 Withdrawal From the Pre-Tax Account
(a) While employed by the Company, a Participant may elect to withdraw amounts
from his/her Pre-Tax Account. One withdrawal per Quarter is permitted. Requests
are initiated through the applicable Automated Transaction System. Withdrawals
will be effective upon submission and approval of the required documentation.
Withdrawals from the Pre-Tax Account may only be made if the Participant meets
the conditions of hardship as described in Subsection (c). Hardship withdrawals
are limited to the amount of the Participant's Deferrals and pre-1989 earnings
on Participant Deferrals plus amounts in the Participant's Rollover Account, if
any. Company Contributions and post-1988 earnings on Participant Deferrals are
not available for withdrawal from this account.
(b) The request for withdrawal on the basis of hardship must be on the form
prescribed by the Sponsor for this purpose, and must include a written statement
setting forth the reasons for the request. The Administrator may require the
Participant to submit additional information as may be necessary to make a
determination in compliance with the standards established under Subsection (c).
(c) A withdrawal will be treated as on account of "hardship" if the withdrawal
is necessary in light of immediate and heavy financial needs of the Participant.
A
40
<PAGE>
withdrawal based upon financial hardship cannot exceed the amount required to
meet the immediate financial need created by the hardship and not reasonably
available from the other resources of the Participant, including his/her
Post-Tax Account. This amount may be increased by 50% of the approved hardship
amount up to the maximum amount available for hardship withdrawal for the
purpose of paying Federal and State income taxes and additional tax penalties
which may apply to the withdrawal. For purposes of this Section, "financial
hardship" is defined as follows:
(i) Unreimbursed medical expenses previously incurred and for which
the Participant is responsible for self, spouse, or dependents as
defined by Section 152 of the Code. Medical expense includes expenses
necessary to secure medical care;
(ii) Payment of tuition, room, board and related educational fees for
the next twelve months of post-secondary education of the Participant,
the Participant's spouse or dependents, as defined by Section 152 of
the Code;
(iii) Costs directly related to the purchase of a principal residence
(excluding mortgage payments) which the Participant will occupy on a
regular basis the majority of the time; or
(iv) Payments necessary to prevent the eviction of the Participant from
the Participant's principal residence or foreclosure on the mortgage on
that residence.
The determination of hardship will be made by the Committee or its delegate
under uniform and nondiscriminatory standards established by the Committee in
accordance with the definition of such term by the U. S. Treasury Department in
its regulations for plans qualified under Section 401(k) of the Code. The
determination may be appealed pursuant to the provisions of Article 20.
16.03 Age 70-1/2 Withdrawals
While employed by the Company any time after attaining age 70-1/2, a Participant
may request a lump sum distribution of his entire Accumulated Balance in the
Plan.
16.04 Disbursement of Withdrawals
As soon as practicable after the effective date of the withdrawal, the
Administrator will direct the Trustee to disburse the requested withdrawal.
16.05 Minimum and Maximum Withdrawal
Withdrawals under this Article will be no greater than the balance of the
Participant's Pre-Tax and Post-Tax Accounts nor, in the case of withdrawals from
the Post-Tax Account, less than the lesser of $500 or the balance of such
account.
41
<PAGE>
16.06 Proportional Withdrawal Requirement
A Participant who has allocated his/her Deferrals and Post-Tax Contributions to
more than one Investment Fund will be required to withdraw from each Investment
Fund in the same proportion his/her Deferrals and Post-Tax Contributions are
invested in the Investment Funds on the effective date of the withdrawal, except
to the extent such a withdrawal is prohibited under the terms of the investment
contract(s). Withdrawals in the form of EIX Stock will be withdrawn exclusively
from the EIX Stock Fund and are limited to the amount invested in the EIX Stock
Fund.
16.07 No Withdrawal From the Company Contribution Account
No withdrawal from the Company Contribution Account is permitted under this
Article.
ARTICLE 17
PLAN DISTRIBUTIONS
17.01 Required Beginning Date and Minimum Distributions
(a) All required distributions shall be determined and made in accordance with
the proposed regulations under Code Section 401(a)(9), including the minimum
distribution incidental benefit requirement of Section 1.401(a)(9)-2 of the
proposed regulations.
If any distribution date described under the Plan, either by Plan provision or
Participant election (or nonelection), is later than the Participant's required
beginning date, the distribution will be made no later than the required
beginning date. A Participant's required beginning date is April 1st of the
calendar year following the calendar year in which the Participant attains age
70-1/2. Notwithstanding the foregoing, benefit distributions must begin by April
1st of the first calendar year following the calendar year in which the
Participant has attained age 70-1/2 and is determined to be a five percent
owner.
(b) The minimum distribution under the Plan is a lump sum distribution of the
Participant's entire nonforfeitable account balance unless prior to the
Participant's (i) retirement or (ii) attainment of age 70-1/2, whichever occurs
later, the Participant elects distribution in the form of installment payments.
When installment payments have been elected, the Plan will pay the greater of
the requested installments or the amount determined pursuant to Code Section
401(a)(9).
17.02 Distributions Due to Retirement
When termination of employment results from the Retirement of a Participant, the
Participant may elect to take a lump sum distribution at any time thereafter
until the end of the year in which he/she reaches age 70-1/2. The Participant
who terminates employment due to Retirement is eligible to elect one of the
alternative forms of distribution described in Section 17.04(b). Distributions
will generally occur within two weeks after the effective date. If no
distribution election is made earlier, and no election is made to defer
distribution to a later date, a lump sum distribution of the Participant's
42
<PAGE>
account will be made as soon as practicable following the end of the year in
which he/she reaches age 65.
17.03 Distributions Other Than Retirement
A lump sum distribution to the Beneficiary(ies) of a deceased Participant, or to
Participants who have nonforfeitable account balances with a market value of
$5,000 or less, will occur as soon as practicable after the end of the Month in
which the Participant terminates employment, dies, or is determined to be
Permanently and Totally Disabled and exhausts benefits under the Comprehensive
Disability Plan and State Disability Insurance benefits. A Participant with a
nonforfeitable account balance greater than $5,000 who (i) terminates employment
with the Company, or (ii) is declared Permanently and Totally Disabled and
exhausts Comprehensive Disability Plan and State Disability Insurance benefits
may elect to receive a lump sum distribution. A Participant who terminates
employment with the Company with an account balance greater than $5,000 is
eligible to elect one of the alternative forms of distribution described in
Section 17.04(b). If no election is made earlier, and no election is made to
defer distribution to a later date, a lump sum distribution of the Participant's
account will be made as soon as practicable following the end of the year in
which he/she reaches age 65.
Upon termination of a Participant's employment for any reason other than
retirement or death, the Administrator will direct the Trustee to distribute
payment to the Participant of his/her nonforfeitable accrued benefit. The
Participant must consent in writing to the distribution if the present value of
the Participant's nonforfeitable account balance exceeds $5,000.
17.04 Form of Distribution
(a) Distributions from the Plan shall be made in a lump sum of the entire
nonforfeitable account balance unless an alternative form of distribution has
been elected pursuant to Subsection (b). Lump sum distributions will include all
amounts, including related income, attributable to Deferrals and contributions
(not previously withdrawn), plus all amounts, including related income,
attributable to Company Matching Contributions which have vested as provided in
Section 13.02.
(b) The following alternative forms of distribution are available to eligible
distributees identified in Sections 17.02 and 17.03 in lieu of a lump sum
distribution except as provided in Section 17.01:
(i) Partial Distributions. An eligible Participant may elect to receive
a partial distribution of his/her nonforfeitable account balance.
Partial distributions must be at least $1,000 and may be requested as
frequently as monthly, but a partial distribution may not reduce the
account balance below the greater of any outstanding loan balance or $
5,000.
43
<PAGE>
(ii) Installment Payments. An eligible Participant may elect to receive
his/her distribution in the form of installment payments. The three
installment payment options are based on (1) a fixed term, (2) a fixed
amount, or (3) life expectancy. The recipient may elect monthly,
quarterly or annual installments under each option. Installments may
not be for a duration shorter than the term of any outstanding loan.
For fixed term installment payments, the frequency and duration of the
installments are specified by the recipient, and the resulting amount
of each installment may vary depending on investment results. For fixed
amount installments, the frequency and the amount of each installment
are specified by the recipient, and the resulting duration of the
installments until the account balance is exhausted may vary depending
on investment results. For life expectancy installments, the frequency
of the installments is specified by the recipient, the duration of the
installments is determined with reference to IRS life expectancy
tables, and the resulting amount of each installment may vary depending
on investment results.
(c) Unless otherwise elected pursuant to this Subsection (c), lump sum and
partial distributions will be made in cash. The Participant or the Participant's
Beneficiary or the executor or administrator of the Participant's estate may
elect to receive distribution partially or completely in Stock to the extent the
Participant's balance is invested in the Edison International Stock Fund at the
time of distribution by submitting the prescribed form to the Administrator.
Installment payments will be paid in cash only.
(d) If a cash distribution is elected, and all or a portion of a Participant's
balance is invested in Stock, the Administrator will direct the Trustee to
distribute cash equal to the market value of the Stock on the effective date
determined as of Market Close on the effective date.
If all or part of a Participant's Accumulated Balance is invested in one or more
Investment Funds other than the Edison International Stock Fund, such amount
will be distributed in Stock or cash equal in value to the amount invested in
such Investment Funds determined as of Market Close on the effective date.
17.05 Fractional Shares of Stock
No fractional share of Stock will ever be distributed. Its value, determined in
accordance with Section 17.04(d), will be paid in cash.
17.06 Beneficiary in the Event of Death
(a) Automatic Designation of a Surviving Spouse. In the event of death of a
Participant with at least 1 Hour of Service or 1 hour of paid leave as a Plan
Participant after August 23, 1984, the Participant's nonforfeitable accrued
benefit under this Plan (reduced by any security interest held by the Plan by
reason of an outstanding loan to such Participant) will be paid in full to the
Participant's Spouse, if there is one, unless the Spouse has consented to
another designation in the manner specified in Subsection (b).
44
<PAGE>
The automatic designation of a particular person as a surviving spouse will
cease upon:
(i) Receipt of a court order allocating benefits in a divorce
proceeding and receipt of a new beneficiary designation form
from the Participant,
(ii) the death of the Spouse, or
(iii)the automatic designation of a succeeding Spouse by operation of
law (under provisions of the Retirement Equity Act of 1984).
(b) Consent of a Spouse to Designation of Another Beneficiary. A Spouse may
waive the automatic designation of Plan benefits to himself or herself by
submitting a signed and notarized consent form. The consent is effective only
for the specific other designee, is effective only as to benefits of the signing
Spouse, and continues until revoked by receipt of a new election of the signing
Spouse.
Consent forms are available from the Administrator. Each consent must:
(i) be in writing,
(ii) be signed by the Spouse,
(iii)acknowledge the effect of the consent is to designate a specific
other person is to receive the Plan benefits, and
(iv) be witnessed by a notary public.
An election to change the designee must be accompanied by a valid consent in
favor of the new designee. Any such designation or revocation will be effective
only upon receipt by the Administrator.
(c) Other Beneficiary Designations. Benefits not subject to the automatic
designation provision in Subsection (a) may be designated by the Participant, in
the event of his/her or her death, to be distributed to someone else. The
designation must be in writing on the form prescribed by the Administrator and
signed by the Participant. A Participant may change or revoke such a designation
by submission of a new designation form. Forms are available from the
Administrator.
If no designation is made under this provision, and the automatic designation
provision does not apply, Subsection (d) will govern.
Any such designation or revocation will be effective only upon receipt by the
Administrator.
45
<PAGE>
(d) Distribution Priorities. Upon the death of the Participant, his/her benefits
will be distributed according to the provisions of Subsections (a), (b), and
(c), in that order. If there is no designation in effect as to all or part of
the benefits, such amounts will be distributed to the personal representative of
the estate of the Participant for distribution according to the terms of the
will or the laws of intestate succession, as appropriate. Thereupon neither the
Committee nor the Trustee nor any other fiduciary will be under any further
liability to anyone respecting these benefits.
17.07 Unlocated Participant
The Trustee will satisfy its duty to distribute benefits by mailing Stock
registered in the name of the Participant and/or its check payable to the
Participant or Beneficiary to the address provided by the Committee. In the
event the Stock or check is returned undelivered, the Trustee will notify the
Committee and will have no obligation to locate the Participant or Beneficiary.
The Secretary will use his/her best efforts to locate the Participant or
Beneficiary and will direct the Trustee to mail the Stock and/or its check upon
ascertainment of his/her location. If, in spite of his/her best efforts, the
Administrator cannot locate the Participant or Beneficiary within three (3)
years of the Participant's Retirement, Death, Permanent and Total Disability or
termination of employment, the Committee is expressly authorized to declare a
forfeiture of the benefit of such unlocated Participant or Beneficiary. The
forfeiture will be applied to reduce Company contributions in accordance with
the provisions of Section 7.02. If a claim for benefits is subsequently made and
awarded to the unlocated Participant or Beneficiary under the provisions of
Article 20, the Company will contribute to the Plan the amount required to pay
the claim, without interest.
ARTICLE 18
TOP-HEAVY PROVISIONS
18.01 Top-Heavy Determination
(a) Each Plan Year, a determination will be made as to whether the Plan is
top-heavy and as to which Employees are Key Employees. The following definitions
apply:
"Aggregation Group" means either a Required Aggregation Group or a Permissive
Aggregation Group:
"Compensation" means the same as the term is defined in Article 2.
"Determination Date" is the last day of the preceding Plan Year, or in the first
Plan Year, the last day of such Plan Year.
"Key Employee" means an Employee or former Employee (or the Beneficiary of such
an Employee or former Employee), who at any time during the determination
period:
46
<PAGE>
(i) Was an officer of the Company having an annual Compensation from
the Company greater than 50 percent of the amount in effect under Code
Section 415(b)(1)(A) for the Plan Year;
(ii) Had annual Compensation from the Company of more than the
limitation in effect under Code Section 415(c)(1)(A) and was one of the
ten Employees owning (or was considered as owning within the meaning of
Code Section 318) the largest interests in the Company;
(iii) Owned (or was considered as owning within the meaning of Code
Section 318) more than five percent of the total combined voting power
of all stock of the Company; or
(iv) Had annual Compensation from the Company of more than $150,000 and
who would be described in (iii) above if one percent were substituted
for five percent.
For purposes of (i) above, no more than 50 Employees (or, if less, the greater
of three or ten percent of the Employees) will be treated as officers. For
purposes of (ii), if two Employees have the same interest in the Company, the
Employee having greater annual Compensation from the Company will be treated as
having the larger interest.
"Non-Key Employee" means any Employee who is not a key Employee. In addition,
any Beneficiary of a non-key Employee will be treated as a non-key employee.
"Permissive Aggregation Group" means one or more plans that are not required to
be aggregated but may be aggregated if the resulting aggregation group satisfies
the requirements of Code Sections 401(a)(4) and 410.
"Required Aggregation Group" means the group of plans consisting of each plan of
the Company including terminated plans, in which a key employee is a participant
during the Plan Year containing the determination date, or any of the four
preceding Plan Years, and each other plan of the Company which enables any plan
in which a key Employee participates to meet the requirements of Code Sections
401(a)(4) or 410(b).
"Valuation Date" is the last day of each Plan Year as of which account balances
are valued for purposes of calculating the top-heavy ratio.
(b) The top-heavy ratio for a Plan year is the ratio on the determination date
for such Plan Year of (1) the present value of accrued benefits of key employees
and the sum of the aggregate account balances for key employees under this Plan
and all plans of an aggregation group to (2) the present value of accrued
benefits and the aggregate account balances for all Employees under this Plan
and all plans of an aggregation group. The Plan is top-heavy for a Plan Year and
the provisions of Section 18.02 will apply if the top-heavy ratio exceeds 60
percent.
47
<PAGE>
(c) For purposes of this Article the "aggregated group of plans" is comprised of
all qualified defined benefit and defined contribution plans of the Company.
18.02 Provisions Applicable if Plan is Top-Heavy
Notwithstanding anything else in the Plan to the contrary, the following
provisions will apply for the Plan Year if the Plan is determined to be
top-heavy under Section 18.01:
(a) Vesting. All Stock and cash conditionally credited to each Participant in
his/her Company Contribution Account will fully vest and become nonforfeitable
when he/she completes three Years of Service with the Company. Stock and cash
which vests under the provisions of this Subsection while the Plan is top-heavy
will remain so vested if the Plan ceases to be top-heavy. If the Plan ceases to
be top-heavy, the election of Section 13.02 will apply.
(b) Minimum Benefit Limitation. Each non-key Employee Participant will be
entitled to the minimum accrued benefit provided under the defined benefit plans
maintained by the Sponsor, payable monthly upon retirement at or after Normal
Retirement Age, equal to:
(i) two percent of his/her average monthly earnings during his/her
five highest-paid consecutive years of service multiplied by
(ii) the number of his/her years of service, not exceeding ten,
occurring after December 31, 1983 in which the Plan is top-heavy.
If a non-key Employee cannot receive a minimum benefit under the Sponsor's
defined benefit plans, he/she will be entitled to the minimum contribution
provided under the defined contribution plans maintained by the Sponsor equal to
3% of his/her Compensation. Such contribution will not be contingent upon (i)
attaining a certain Compensation level, (ii) completion of a Year of Service, or
(iii) making a mandatory contribution to the Plan. In addition, the minimum
contribution will not be subject to forfeiture due to withdrawal of a mandatory
Employee contribution.
(c) Section 415 Limitation. Paragraphs (2)(B) and (3)(B) of Section 415(e) of
the Code will be applied as provided under Section 10.01(d) of the Plan by
substituting "1.0" for "1.25".
ARTICLE 19
ADMINISTRATION
19.01 Administration Directed by the Committee
The Plan is administered under the direction of the Committee, which will make
such rules, regulations and decisions as it deems necessary for the uniform,
non-discriminatory and efficient administration of the Plan. The Committee is
authorized to prescribe rules governing its proceedings and has delegated the
day-to-day
48
<PAGE>
administrative operations of the Plan to the vice president responsible for
Human Resources. Direct supervision of ministerial functions, e.g., maintenance
of Participant accounts, processing of status changes, withdrawals,
distributions, loans, payroll deductions and operations of the Plan has been
delegated to the Manager of the Human Resources Service Center who also serves
as Secretary to the Committee. Both the Committee and the Secretary are
authorized to utilize persons, who may or may not be Employees, to assist in the
performance of their respective functions. Except in cases requiring
interpretation or other decisions by the Committee, the Secretary is responsible
for directing withdrawals and distributions in conformity with the status of
each Participant's accounts reflected on the books of the Plan, made by the
Trustee pursuant to Articles 15, 16 and 17, and the Trustee has no
responsibility to verify the correctness of such directions. The Secretary is
authorized to approve contribution and benefit payment adjustments as deemed
appropriate or necessary in his or her discretion pursuant to written guidelines
approved by the Chair of the Committee to correct errors that may occur from
time to time in Plan administration.
19.02 Cost of Administration
The cost of the administration of the Plan will be paid by the Company. The
fees, taxes and other expenses incurred by the Trustee in making investments are
paid out of the Investment Funds for which the investments are made as part of
the cost of the investment.
ARTICLE 20
CLAIMS AND APPEAL PROCEDURES
20.01 Presentation of Claims
The procedures established to administer the Plan are such that a formal claim
for benefits or demand for the determination of rights under the Plan is not
usually required. However, any Participant or Beneficiary desiring to do so may
submit such claim or demand in writing, addressed to the Secretary at the
address of the Committee set forth in Article 2; such writing need be in no
prescribed form, but must include the facts and statement of position necessary
to explain the claim or demand. To avoid stale claims, and in view of the
limited period of time the Sponsor retains Employee records, such claim or
demand must be submitted within a reasonable time (not exceeding 120 days) after
the claimant became aware, or reasonably should have become aware, of the
existence of facts on which such claim or demand could be based.
20.02 Determination by the Secretary
Upon receipt thereof, the Secretary will review the claim and conduct such
investigation of the facts as may be necessary to verify the same, and as soon
as practicable but within 90 days, will advise the claimant in writing of the
allowance or denial, in whole or in part, of such claim, or the determination of
rights under the Plan, as the case may be. In the event of a denial, in whole or
part, such advice will be written in a manner calculated to be understood by the
claimant and will include: (i) the specific reason or
49
<PAGE>
reasons for the denial; (ii) specific references to pertinent Plan provisions;
(iii) a description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why it is necessary; and
(iv) an explanation of the claim and review procedure. The claimant must
cooperate fully in the obtaining of all information reasonably deemed necessary
by the Secretary to investigate the merits of the claim. The claimant will have
the right to review and comment on all evidence submitted by others. Any
good-faith determination by the Secretary will be final and binding on the Plan
and the claimant unless appealed in accordance with Section 20.03 or unless such
claim becomes subject to disposition in accordance with Section 20.05.
20.03 Appeal Procedure
If the claimant is not satisfied with the Secretary's determination, the
claimant may appeal to the Committee by letter requesting review of the
determination. Such letter must be addressed to the chair of the Committee and
must be furnished within 90 days of the date of the determination of the
Secretary. Upon receipt of such letter, the Secretary will submit the claim file
to the chair. The file will be reviewed by the Committee or by a person
designated by the Committee to do so, and a determination will be made by the
Committee within 60 days of the date of the letter requesting review and will be
communicated in writing to the claimant promptly thereafter. Such decision will
be written in a manner calculated to be understood by the Participant and will
include the reasons for the decision including appropriate references to the
provisions of the Plan. The decision of the Committee will be final and binding
on the Plan and the claimant.
20.04 Effect of Separate Labor Contract
The provisions of this claim and appeal procedure are separate from any other
procedures for processing claims which might be available to a Participant by
virtue of a collective bargaining agreement between the Company and a union
representing certain of its Employees; however, nothing herein will be construed
as establishing such a separate procedure.
20.05 Conflicts Between Claimants
Notwithstanding the foregoing provisions of this Article, if at any time prior
to the payment of any benefit to any Participant or Beneficiary, the Secretary
or any member of the Committee is notified of the existence of conflicting
claims of more than one claimant to all or a portion of such benefit under
circumstances when there is no dispute that such benefit is payable to someone
by the Plan, the Secretary or the chair of the Committee may direct the
withholding of such benefit until the conflict in claims has been resolved by
agreement between the claimants, by a final judicial determination of the person
or persons entitled thereto, or by any other procedure reasonably calculated to
protect the Plan from making benefit payments more than once. If, in any case
involving conflicting claims between claimants, there is also a dispute between
one or more claimants and the Plan with respect to the benefit payable
thereunder, the Secretary may process the claim to resolve such dispute in
accordance with Section 20.02, and the same may be appealed in conformity with
Section 20.03 to
50
<PAGE>
the point where any dispute between such claimant or claimants and the Plan will
have been resolved and be subject only to final resolution of conflicting claims
of claimants in accordance with the preceding sentence.
ARTICLE 21
LIABILITY LIMITED
In administering the Plan, neither the Committee, any member thereof, the Board
of Directors, any member thereof, the Company, the Sponsor, any officer or
Employee thereof, any administrator appointed by the Committee, the Trustee, any
recordkeeper, nor any director, officer, or employee thereof, will be liable for
any acts of omission or commission, except for his/her or its own individual,
willful and intentional malfeasance or misfeasance, and except as otherwise
provided by the Employee Retirement Income Security Act of 1974. The Sponsor and
its officers and directors, each member of the Committee and the Secretary will
be entitled to rely in good faith on all tables, opinions and reports which will
be furnished by the Trustee, by any actuary, trustee, counsel or other expert
who will be employed or engaged by the Sponsor, the Committee or the Secretary.
ARTICLE 22
EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION OR MERGER OF PLAN
22.01 Exclusive Benefit
Except as provided in Article 7, 10 and Section 22.06, the Sponsor has no
beneficial interest in any Trust assets, and no part of any asset in the Trust
may ever revert to or be repaid to the Sponsor, either directly or indirectly;
nor, prior to the satisfaction of all liabilities with respect to Participants
and their Beneficiaries under the Plan, may any part of the corpus or income of
the Trust fund, or any asset of the Trust, be (at any time) used for, or
diverted to, purposes other than the exclusive benefit of Participants or their
Beneficiaries. In addition, no Participant may be denied, either directly or
indirectly, a Code Section 411(d)(6) protected benefit through the discretion of
the Sponsor, the Committee or any other party.
22.02 Amendment of Plan
(a) The Sponsor reserves the right to amend the Plan at any time. The Board of
Directors has conferred on the Committee the power to amend the Plan as it deems
appropriate. Amendments shall be in writing and must state the date to which it
is either retroactively or prospectively effective.
(b) Except as provided in Article 10 and Section 22.06, no amendment will reduce
retroactively the rights of Participants or permit the return to the Sponsor of
any part of the Trust assets held by the Trustee or the use of such Trust assets
for any purpose other than for the exclusive benefit of Participants and their
Beneficiaries. In addition, no amendment (including the adoption of this Plan as
a restatement of an existing plan) may decrease or restrict, either directly or
indirectly, a Participant's accrued benefit
51
<PAGE>
under the Plan, except to the extent permitted under Section 412(c)(8) of the
Code, nor reduce or eliminate any Section 411(d)(6) protected benefits
determined immediately prior to the adoption date (or if, later the effective
date) of the amendment. An amendment reduces or eliminates Section 411(d)(6)
protected benefits if the amendment has the effect of either (1) eliminating or
reducing an early retirement benefit or a retirement-type subsidy (as defined in
Treasury regulations), or (2) except as provided by Treasury regulations,
eliminating an optional form of benefit.
22.03 Termination of Plan or Complete Discontinuance of Contributions
Although the Sponsor has established the Plan with the intention and expectation
it will continue indefinitely, the Sponsor reserves the right to terminate the
Plan in whole or in part in accordance with its provisions at any time. In the
event of a complete termination of the Plan or a complete discontinuance of
Company contributions, all Deferrals, Post-Tax Contributions and Company
Matching Contributions will cease, and all Company Matching Contributions,
including related income, attributable thereto, which have not yet vested will
immediately vest notwithstanding any other provision of the Plan. The Trust will
continue after termination until all Trust assets held by the Trustee have been
distributed to Participants, their Beneficiaries, or their estates in accordance
with the provisions of the Plan. In the event of a termination of the Plan,
which constitutes a "partial termination" under Code Section 411(d)(3) with
respect to any class of Employees previously eligible, contributions related to
Participants in such class will cease, and such Participants' rights to Company
Matching Contributions and any income attributable thereto, which have not yet
vested will immediately vest as of the date of such partial termination.
22.04 Merger of Plan
If the Plan merges or consolidates with or transfers its assets or liabilities
to any other qualified employee benefit plan, no Participant will, solely on
account of such merger, consolidation, or transfer, be entitled to a benefit on
the day following such event which is less than the benefit to which such
Participant was entitled on the day preceding such event. For the purpose of
this Section, the benefit to which a Participant is entitled will be calculated
based upon the assumption that a termination of the Plan and distribution of the
Trust assets occurred on the day as of which the amount of the Participant's
entitlement is being determined.
22.05 Sale of Property
If a Participant's participation in the Plan is ended because a substantial
portion of the Company's property is sold or otherwise disposed of (including
disposition through dissolution, merger or consolidation), the Participant's
interest will be determined in accordance with the provisions of Section 22.03
as if the Plan had been terminated.
22.06 Permissible Reversions
Notwithstanding any other provision of the Plan, Company contributions to the
Plan made by reason of a mistake of fact may be returned to the Company within
one year
52
<PAGE>
from the date of the contribution. The amounts that may be returned are the
excess of the amounts contributed over the amounts that would have been
contributed had there not been a mistake of fact. No earnings on the mistaken
contributions may be returned to the Company and losses sustained by the Trust
after the date of contribution will proportionately reduce the amount that may
be returned to the Company.
ARTICLE 23
VOTING STOCK
The Sponsor shall send to each Participant the same proxy material that Edison
International sends to each of its registered holders of Stock before each
stockholders' meeting, together with a form addressed to the Trustee on which
the Participant can give confidential instructions on how the shares of Stock
credited and conditionally credited to each Participant shall be voted by the
Trustee. Upon timely receipt of such instructions, the Trustee shall vote the
Stock as instructed. The instructions received by the Trustee from the
Participants shall be held in strictest confidence and shall not be divulged or
released by the Trustee to the Sponsor or to any officer or Employee of the
Sponsor or any Affiliate Company. The Trustee may vote, in such manner as it
shall determine, the Stock for which it received no instructions and the shares
of issuers other than Edison International which it holds in trust.
ARTICLE 24
INALIENABILITY
The benefits provided hereunder are intended for the personal security of
persons entitled thereto under the Plan. The right of any Participant or his/her
Beneficiary in any Plan distribution or to any separate account shall not be
subject to alienation, assignment or transfer, voluntarily or involuntarily, by
operation of law or otherwise, except as may be expressly permitted herein. No
Participant may assign, transfer, or dispose of such right nor shall any such
right be subjected to attachment, execution, garnishment, sequestration or other
legal, equitable, or other process. The preceding shall also apply to the
creation, assignment, or recognition of a right to any benefit payable with
respect to a Participant pursuant to a domestic relations order, unless such
order is determined to be a QDRO, or any domestic relations order entered prior
to January 1, 1985.
ARTICLE 25
INVESTMENT FUNDS, VOTING, AND ESOP
25.01 Establishment of Funds
The Trustee shall establish and maintain the Investment Funds selected by the
Committee from time-to-time into which the Trust will be invested. Except as
otherwise provided in this Plan and the Trust Agreement, the Trustee shall
invest the Trust into each Investment Fund in whatever proportions and amounts
the Committee may direct. The Committee may direct the Trustee to establish new
Investment Funds or discontinue existing ones as well as change the investment
medium for each Investment Fund.
53
<PAGE>
Income earned by each Investment Fund shall be reinvested in the Investment Fund
unless it is otherwise impracticable. The Trustee shall invest the uninvested
income of each Investment Fund in "cash equivalents" as defined in Section
25.04(d).
25.02 Investment of the Trust
(a) Investment Fund Allocations. The Committee shall direct the investment of
the Trust in accordance with Participant elections pursuant to Article 12 of the
Plan.
As soon as practicable following receipt of Deferrals, Company Contributions,
rollovers and Post-Tax Contributions, the Trustee shall invest the amounts in
the Investment Funds in accordance with the directions of the Committee. Upon
the direction of the Committee, the Trustee shall also reallocate investments
among the Investment Funds. Such reallocations may be made, but are not required
to be made, in conjunction with and "netted against" investments of Deferrals,
Company Contributions, rollovers and Post-Tax Contributions.
(b) Stock Transactions. Stock may be acquired for the Plan (i) by direct
purchase of original issue Stock from Edison International; (ii) from
Participants allocating amounts out of the Edison International Stock Fund of
the Plan to another investment fund; or (iii) in any case the Plan is unable to
acquire Stock by (i) or (ii), through brokers on a national securities exchange
or by purchase from securities dealers or elsewhere as the Trustee or Investment
Manager may elect. The price of Stock purchased directly from Edison
International shall be the price for such Stock on the New York Stock Exchange
at Market Close on that day, or the subscription price pursuant to any offering
of rights, warrants or options made by Edison International to the public. The
price of Stock purchased from Participants allocating amounts out of the Edison
International Stock Fund of the Plan to another investment fund shall be the
price for such Stock on the New York Stock Exchange at Market Close on that day.
25.03 Additional Provisions Regarding ESOP Plan
(a) Qualifying Employer Securities. The ESOP Plan is designed to invest
primarily in Stock, which constitutes "qualifying employer securities" under
Section 4975(3)(8) of the Code.
(b) Exempt Loans. The ESOP Plan will not engage in any "exempt loan"
transactions as described in Regulation 54.4975-7(b) until such time as the Plan
is amended to comply with such Regulation.
(c) Dividends. Dividends received by the Trustee with respect to Stock held in
the ESOP Plan will be distributed to Participants based upon the number of
shares of Stock credited to them and vested as of the applicable ex-dividend
date provided, however, that such distribution will not be made to Participants
(i) who are subject to a collective bargaining agreement that does not permit
ESOP dividend payments under the Plan, (ii) who are alternate payees under a
QDRO, (iii) who are beneficiaries, or (iv) to the
54
<PAGE>
extent that they have elected (in accordance with the Administrator's
procedures) not to receive such distributions with respect to all or a portion
of the Stock credited to them. Effective with dividends declared after January
1, 2000, dividend payments will not commence automatically, the foregoing to the
contrary notwithstanding. Participants who are not receiving dividend payments,
but who wish to receive dividend payments prospectively, must make an election
(in accordance with the Administrator's procedures) to initiate dividend
payments. Effective July 1, 1999, or as soon thereafter as administratively
practicable no dividend distribution will be made for amounts of less than $10 .
Distributions of dividends to Participants will be made as soon as practicable
after receipt by the Trustee, but in no event later than 90 days after the close
of the Plan Year in which paid by Edison International. Dividends not
distributed under this subsection will be reinvested in Stock.
ARTICLE 26
SPECIAL TERMS AND CONDITIONS
26.01 East Coast Capital Acquisition
Any Employee formerly employed by East Coast Capital who was hired as a result
of its acquisition by Edison Capital, and who would otherwise have been eligible
to participate in the acquired company's 401(k) plan as of October 1, 1996,
shall be eligible to participate in the Plan on that date and his/her service
with East Coast Capital shall be recognized for vesting purposes under the Plan.
26.02 Westec Acquisition
Notwithstanding any other provision in the Plan to the contrary, and subject to
subsequent collective bargaining of the terms and conditions of participation in
the Plan, Employees represented by the Communications Workers of America, Local
9586 employed in connection with the acquisition of certain businesses from
Westec Security, Inc., or thereafter, will not be entitled to Company Matching
Contributions under Section 7.02. Such Employees will be eligible to rollover
eligible rollover distributions to the Plan from other qualified employer plans
or conduit individual retirement accounts subject to the conditions of Section
8.02. Westec service will be recognized for vesting purposes.
26.03 EME Homer City Generation, L.P.
(a) Employees of EME Homer City Generation, L.P. ("HCGLP") a limited partnership
indirectly owned by Edison Mission Energy are eligible to participate in the
Plan and enrollment shall commence as soon as practicable after they become
eligible. Participation of HCGLP Employees is subject to the provisions of this
Subsection 26.03 notwithstanding any other terms of the Plan to the contrary.
(b) Non-represented Employees. Participation of non-represented HCGLP Employees
shall be subject to the same terms applicable to non-represented employees of
Edison Mission Energy. For each non-represented Employee of HCGLP
55
<PAGE>
first employed on or after the closing date for the acquisition of the Homer
City Electric Generating Station ("Homer City") and on or before March 31, 1999,
his or her service recognized under a tax-qualified defined contribution plan
maintained by the previous owner of Homer City will be recognized for vesting
purposes under the Plan. Other non-represented employees of HCGLP will be
subject to the regular service accrual provisions of the Plan.
(c) Represented Employees. Participation of HCGLP Employees represented by IBEW,
Local 459 shall be subject to the provisions of this Subsection (c).
(i) For each dollar of Deferrals and Post-Tax Contributions contributed
to the Plan per pay period up to a maximum of 4 percent of the
represented Participant's Earnings, the Company will contribute 65
cents of Company Matching Contributions. The maximum Company Matching
Contribution per pay period is 2.6% of Earnings. The provisions of
Subsection 7.02(c) do not apply.
(ii) The Plan will accept eligible rollover distributions on behalf of
each represented Employee hired in connection with the acquisition of
Homer City and who is a "Transferred Union Employee" as described in
Section 6.10(b) of the Purchase Agreement, including plan loans in the
repayment phase, from other qualified employer plans or conduit
individual retirement accounts subject to the conditions of Section
8.01 applicable to persons eligible to make such rollovers.
(iii) A Transferred Union Employee as defined in Paragraph (ii) will
receive recognition of his or her service with the immediately previous
owner of Homer City, for the purpose of eligibility and vesting under
the terms of the Plan. Notwithstanding the foregoing, Company Matching
Contributions will be fully vested for such Employees at the time of
accrual. Represented Employees subsequently hired for bargaining-unit
positions at Homer City will be subject to the regular service accrual
provisions of the Plan.
26.04 Teamsters Automotive, Industrial & Allied Workers Local No. 495
Notwithstanding any other provision in the Plan to the contrary, and subject to
subsequent collective bargaining of the terms and conditions of participation in
the Plan, Employees represented for collective bargaining purposes by the
Teamsters Automotive, Industrial & Allied Workers Local No. 495 are eligible (a)
to rollover eligible rollover distributions to the Plan from other qualified
employer plans or conduit individual retirement accounts subject to the
conditions of Section 8.01, (b) for loan continuation following a reduction in
force termination pursuant to Section 14.02(i)(ii)(B), and (c) to receive
dividend payments pursuant to Section 25.04(c). The applicable collective
bargaining agreement provides for application of the matching contribution
true-up procedure specified in Subsection 7.02(c) as soon as administratively
feasible.
56
<PAGE>
26.05 John Stewart Company
Employees of the John Stewart Company which was acquired by Edison Capital on
May 30, 1997 are not eligible to participate in the Plan, but shall remain
eligible to participate in the acquired company's 401(k) plan in accordance with
the terms and conditions of that plan.
26.06 Midwest Generation Project
(a) Employees of Midwest Generation, LLC, Midwest Generation EME, LLC and the
Illinois Employees of Edison Mission Energy Fuel Services, Inc. may begin
participating in the Plan as soon as practicable after they are eligible.
(b) The following terms apply only to former Commonwealth Edison employees who
are first hired by a company listed in Subsection (a) for the Midwest Generation
Project on the project acquisition closing date:
(i) Account balances and outstanding loans under the Commonwealth
Edison Plan will be transferred to this Plan as soon as practicable
following the Midwest Generation Project closing date,
(ii)Transferred balances and subsequent Company matching and profit
sharing contributions will be 100% vested,
(iii) Up to five loans transferred from the Commonwealth Edison plan
may be continued subject to this Plan's loan default rules,
(iv) Another loan may not be requested while more than one loan remains
outstanding, and
(v) The following withdrawal and/or distribution features apply:
(A) One in-service withdrawal may be made per quarter. No
minimum withdrawal amount will apply to in-service
withdrawals.
(B) Withdrawals will be permitted from rollover accounts up to
the balance of the rollover account less outstanding loans.
(C) Participants attaining age 59-1/2 may withdraw up to the
balance of their pre-tax account less outstanding loans.
(D) A spousal beneficiary may defer distributions that have not
commenced prior to the Participant's death until the date
the Participant would have attained age 70-1/2. If the
beneficiary is a person other than the Participant's spouse,
distributions may be made over a period not longer than the
life expectancy of the beneficiary.
57
<PAGE>
(E) A spousal beneficiary may elect to receive annual
installments for up to fifteen years if distributions have
not commenced prior to the Participant's death. Within one
year of the Participant's death, a "non-spouse" beneficiary
may elect distribution in up to 15 annual installments if
distributions have not commenced prior to the Participant's
death. A trust may elect a maximum of five annual
installments. If installments are not elected, a lump sum
will be paid, although payment may be deferred up to five
years from the date of death. If distributions commenced
prior to death, beneficiary payments must continue at least
as rapidly.
(c) Employees of a company listed in Subsection (a) who are hired after the
Midwest Generation Project closing date will be subject to the regular service
accrual provisions of the Plan and will be subject to the regular vesting
requirements of Section 13.02 of the Plan and are not eligible for the special
terms described in Subsection (b).
(d) Subject to future collective bargaining, employees of Midwest Generation,
LLC represented for collective bargaining purposes by IBEW, Local 15, will be
subject to the general terms of the Plan, without regard to any special
provisions applicable to other participating employee groups, except (A) as
provided in Subsections (a) and (b) of this Section, and (B) the Company
Matching Contribution provisions of Paragraph 7.02(a)(i) will apply without
application of Subsection 7.02(c).
(e) Employees of Midwest Generation EME, LLC and non-represented employees of
Midwest Generation, LLC will be eligible for:
(i) A $1.00 Company Matching Contribution for each dollar contributed
to the Plan by the Employee (up to six percent of Earnings). The
provisions of Subsection 7.02(c) of the Plan apply to these Employees.
(ii)Profit sharing under Section 7.03 of the Plan as applicable to
Edison Mission Energy participants.
(f) Employees of Midwest Generation EME, LLC, Midwest Generation, LLC and
employees of Edison Mission Energy Fuel Services, Inc. working in Illinois will
be:
(i) Subject to the ESOP dividend pass-through provision of
Subsection 25.03(c) of the Plan, and
(ii) Eligible to rollover eligible rollover distributions from another
qualified plan in accordance with the terms of Section 8.01 of the
Plan.
26.07 Other Adopting Companies Approved to Participate
Except as otherwise provided in this Article, any company that was an Affiliated
Company prior to June 25, 1998 is deemed an adopting employer for purposes of
the Plan. In addition to those companies identified in this Article that are
subject to special
58
<PAGE>
participation terms, the following adopting employers are approved for
participation under the standard terms of the Plan:
Company Effective Date
- ------- --------------
Edison Mission Energy Fuel Services, Inc., except February 25, 1999
as to its Illinois Employees - See Section 26.06
Edison Mission Energy Marketing and Trading, Inc. February 25, 1999
Edison Mission Finance Company. May 1, 1999
Edison Mission Financial Marketing and Trading Co. May 1, 1999
Edison Material Supply LLC September 27, 1999
ARTICLE 27
MISCELLANEOUS PROVISIONS
27.01 Applicable Law
This Plan has been established under the laws of the State of California and, to
the extent such laws have not been preempted by Federal statutes, any questions,
issues, disputes or controversies arising under this Plan will be decided
according to the laws, regulations and decisions of the State of California.
27.02 Severability
In the event that any provision of this Plan will be held illegal or invalid for
any reason, such illegality or invalidity will not affect the remaining
provisions of this Plan, which will be fully severable and this Plan will be
construed and enforced as if such illegal or invalid provisions had not been
inserted.
27.03 Nonbusiness Day Transaction Dates
If the last date a written form or notice will be accepted under the terms of
the Plan to be effective falls on a weekend or other nonbusiness day, the date
will be extended to the next business day, except in the case of loan initiation
requests which must be received on the prior business day. If the last date an
applicable Automated Transaction System transaction may be completed to be
effective the following Month falls on Sunday, the transaction must be completed
by the prior Saturday.
27.04 Captions
The captions used herein are for convenience only and do not in any way limit or
amplify the terms and provisions of the Plan.
//
//
//
//
//
//
59
<PAGE>
IN WITNESS WHEREOF, the Sponsor has executed this Plan as of the date first
written above.
SOUTHERN CALIFORNIA EDISON COMPANY
EMPLOYEE BENEFITS/HEALTH CARE COMMITTEE
THOMAS M. NOONAN A. L. WHITLEY
- --------------------------------- ---------------------
THOMAS M. NOONAN A. L. WHITLEY
Interim Chair Secretary
LOGO Kenneth S. Stewart
EDISON INTERNATIONAL Assistant General Counsel
April 25, 2000
Edison International
2244 Walnut Grove Avenue
Rosemead, California 91770
Ladies and Gentlemen:
This opinion is rendered in connection with the filing of a Registration
Statement on Form S-8 ("the Registration Statement") to register 20,000,000
shares of common stock with the Securities and Exchange Commission related to
the Edison International Stock Savings Plus Plan (the "Plan"). Under the
Registration Statement, interests in the Plan ("Beneficial Interests") and
shares of Edison International Common Stock, no par value (the "Plan Shares"),
are offered and sold to employees of Edison International and its affiliates.
I am generally familiar with the organization, history and affairs of
Edison International. I am also familiar with the proceedings taken and proposed
to be taken by Edison International in connection with the proposed offering and
sale, and I have examined a form of the Registration Statement. As Assistant
General Counsel of Edison International, I have general responsibility for
supervising lawyers who may have been asked to review legal matters arising in
connection with the offering and sale of the Plan Shares and Beneficial
Interests. Accordingly, some of the matters referred to herein have not been
handled personally by me, but I have been made familiar with the facts and
circumstances and the applicable law. The opinions expressed herein are my own
or are opinions of others with which I concur.
Based upon the foregoing and subject to completion of such proceedings as
are now contemplated prior to the offering, sale and/or issuance of the
Beneficial Interests and Plan Shares, it is my opinion that, when sold and/or
issued as provided in the Registration Statement, the Beneficial Interests will
be legally issued and the Plan Shares will be duly authorized, legally issued,
fully paid and nonassessable shares of Common Stock of Edison International.
This opinion does not relate to state Blue Sky or securities laws.
I hereby consent to the references made to me, and to the use of my name,
in the Registration Statement. By giving such consent, I do not thereby admit
that I am an expert with respect to any part of the Registration Statement,
including this exhibit to the Registration Statement, within the meaning of
Section 7 of the Securities Act of 1933 or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
Kenneth S. Stewart
-------------------------------
Kenneth S. Stewart
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our reports dated February 2, 2000,
included (or incorporated by reference) in Edison International's Annual Report
on Form 10-K for the year ended December 31, 1999, and our report dated May 21,
1999 included in the Stock Savings Plus Plan for Employees of Southern
California Edison Company Form 11-K for the year ended December 31, 1998, and to
all references to our Firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Los Angeles, California
April 21, 2000
EDISON INTERNATIONAL
POWER OF ATTORNEY
The undersigned, Edison International, a California corporation, and
certain of its officers and/or directors, do each hereby constitute and appoint
BRYANT C. DANNER, THEODORE F. CRAVER, JR., THOMAS M. NOONAN, JAMES R. BERG,
BEVERLY P. RYDER, KENNETH S. STEWART, MARY C. SIMPSON, PAIGE W.R. WHITE, TIMOTHY
W. ROGERS, RAYNA M. MORRISON, BONITA J. SMITH, PEGGY A. STERN, DOUGLAS G. GREEN,
and POLLY L. GAULT or any one of them, to act severally as attorney-in-fact, for
the purpose of executing and filing with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, a registration statement or
registration statements and all amendments and/or supplements thereto for the
purposes of registering and/or continuing the registration of up to 20,000,000
shares of Common Stock of Edison International and related beneficial interests
to be offered and sold through the Stock Savings Plus Plan , granting unto said
attorneys-in-fact, and each of them, full power and authority to do every act
and thing whatsoever necessary for such purposes as fully as the undersigned or
any of them could do if personally present, hereby ratifying and approving the
acts of each of said attorneys-in-fact.
<PAGE>
Executed at Rosemead, California, as of the 20th day of April, 2000.
EDISON INTERNATIONAL
By: JOHN E. BRYSON
----------------------------------
JOHN E. BRYSON
Chairman of the Board, President,
and Chief Executive Officer
SEAL
Attest:
BEVERLY P. RYDER
- ---------------------------
BEVERLY P. RYDER
Secretary
<PAGE>
EDISON INTERNATIONAL
STOCK SAVINGS PLUS PLAN
POWER OF ATTORNEY
Principal Executive Officer and Director:
John E. Bryson
- ----------------------------
John E. Bryson Chairman of the Board,
President, Chief Executive
Officer, and Director
Principal Financial Officer:
Theodore F. Craver, Jr.
- ----------------------------
Theodore F. Craver, Jr. Senior Vice President,
Chief Financial Officer,
and Treasurer
Controller and Principal Accounting Officer:
Thomas M. Noonan
- ----------------------------
Thomas M. Noonan Vice President and Controller
Additional Directors:
Warren Christopher Director Ronald L. Olson Director
- ----------------------------- --------------------------
Warren Christopher Ronald L. Olson
Stephen E. Frank Director James M. Rosser Director
- ----------------------------- --------------------------
Stephen E. Frank James M. Rosser
Joan C. Hanley Director Robert H. Smith Director
- ----------------------------- --------------------------
Joan C. Hanley Robert H. Smith
Carl F. Huntsinger Director Thomas C. Sutton Director
- ----------------------------- --------------------------
Carl F. Huntsinger Thomas C. Sutton
Charles D. Miller Director Daniel M. Tellep Director
- ----------------------------- --------------------------
Charles D. Miller Daniel M. Tellep
Luis G. Nogales Director Edward Zapanta Director
- ----------------------------- --------------------------
Luis G. Nogales Edward Zapanta
I, Bonita J. Smith, Assistance Secretary of Edison International, certify
that the attached is an accurate and complete copy of a resolution of the Board
of Directors of the corporation, duly adopted at a meeting of its Board of
Directors held on April 20, 2000.
Dated: April 24, 2000
SEAL
Bonita J. Smith
---------------
Bonita J. Smith
Assistant Secretary
Edison International
<PAGE>
RESOLUTION OF THE BOARD OF DIRECTORS OF
EDISON INTERNATIONAL
Adopted: April 20, 2000
RE: AUTHORIZATION OF ADDITIONAL PLAN SHARES
WHEREAS, this Board of Directors, pursuant to a resolution entitled
"Authorization of Additional Plan Shares" adopted on December 9, 1999 (the
"December Resolution"), authorized the offering, issuance, and sale of
10,000,000 shares of common stock of this corporation through the Stock Savings
Plus Plan, as it may be amended from time to time ("SSPP"), which is maintained
for the benefit of employees of this corporation and its subsidiaries;
WHEREAS, it is desirable to increase the amount of shares of common stock
authorized for offering, issuance and sale through the SSPP;
WHEREAS, it is necessary under the rules and regulations of the Securities
and Exchange Commission ("SEC") to register such shares under the Securities Act
of 1933, as amended ("Securities Act"); and
WHEREAS, it is desirable to list shares to be newly issued on the New York
Stock Exchange, Inc., and the Pacific Exchange, Inc. (such exchanges being
hereinafter collectively referred to as the "Exchanges");
NOW, THEREFORE, BE IT RESOLVED, that this Board of Directors hereby
authorizes the offering, issuance and sale of an aggregate amount of up to
20,000,000 additional shares of common stock ("New SSPP Shares") of this
corporation pursuant to the terms of the SSPP, the New SSPP Shares to be either:
(i) originally issued and sold to the agent or trustee for the SSPP at such
times as the Chief Financial Officer, the Treasurer or any Assistant Treasurer,
acting alone, may determine to be advisable in view of the capital requirements
of this corporation and its subsidiaries and at prices determined in accordance
with formulas contained in the SSPP; provided that such formulas shall be based
upon market prices at specified times or over specified periods so as to
approximate the effect of selling shares on the open market; or (ii) purchased
on the open market by the agent or trustee for the SSPP whenever New SSPP Shares
are not issued and made available by this corporation for purchase.
<PAGE>
BE IT FURTHER RESOLVED, that each of the officers of this corporation is
authorized to prepare and file or cause to be prepared and filed one or more
Registration Statements on Form S-8 or other appropriate form, together with all
documents required as exhibits thereto and any and all amendments and/or
supplements deemed necessary or appropriate by such officer or officers for the
registration and continued registration with the SEC under the Securities Act of
the offering and sale of the New SSPP Shares and related beneficial interests
pursuant to the terms and conditions of the SSPP.
BE IT FURTHER RESOLVED, that for the purpose of listing New SSPP Shares
that will be newly issued on each of the Exchanges, each of the officers of this
corporation is authorized to execute and file or cause to be filed with the
Exchanges, in the name and on behalf of this corporation, listing applications
(including any amendments or supplements thereto), and such other filings,
instruments, and documents as such officer or counsel of this corporation shall
deem necessary or convenient to effect or maintain, or otherwise in connection
with, those listings and to make such appearances before such commissions or
governmental agencies as such officer shall deem appropriate.
BE IT FURTHER RESOLVED, that each of the officers of this corporation is
authorized to execute and deliver on behalf of this corporation and in its name
a power of attorney or powers of attorney appointing Bryant C. Danner, Theodore
F. Craver, Jr., Thomas M. Noonan, James R. Berg, Beverly P. Ryder, Kenneth S.
Stewart, Mary C. Simpson, Paige W. R. White, Timothy W. Rogers, Rayna M.
Morrison, Bonita J. Smith, Peggy A. Stern, Douglas G. Green, and Polly L. Gault
or any one of them, to act severally as attorney-in-fact for this corporation
for the purpose of executing, signing, filing or causing to be filed with the
SEC on behalf of this corporation one or more registration statements for the
New SSPP Shares and related beneficial interests, and any and all amendments and
supplements to any of the foregoing, together with any other documents related
thereto.
BE IT FURTHER RESOLVED, that each of the officers of this corporation is
authorized and directed, in the name and on behalf of this corporation or
otherwise, to execute and file, or cause to be filed, such consents to service
of process, powers of attorney, applications and other documents with
authorities of such states or other jurisdictions and to do such other acts and
things as the officer or officers may deem to be necessary or appropriate to
comply with the securities, Blue Sky or similar laws of such states or
jurisdictions; provided, however, that this corporation shall not thereby
qualify as a foreign corporation in such states or jurisdictions.
<PAGE>
BE IT FURTHER RESOLVED, that each of the officers of this corporation is
authorized to take such other actions, including but not limited to the payment
of any fees, taxes, or other expenses, and to cause to be prepared and to
execute and deliver such documents as in the judgment of the officer or officers
acting, or of counsel for this corporation, may be necessary or appropriate to
carry out the intent of the foregoing provisions of this resolution.
BE IT FURTHER RESOLVED, that any actions taken by such officers prior to
the date of this meeting that are within the authority conferred hereby are
ratified, confirmed and approved in all respects as the act and deed of this
corporation.
BE IT FURTHER RESOLVED, that the December Resolution is superseded in full
by this resolution.
Approved:
John E. Bryson
- ---------------------
John E. Bryson
Chairman of the Board
Bryant C. Danner
- ---------------------
Bryant C. Danner
Executive Vice President and General Counsel
