Document:

dmtk-ex101_14.htm

Exhibit 10.1

DermTech, Inc.

CHANGE IN CONTROL AND SEVERANCE PLAN 

Article 1. Introduction

The Board of Directors (the “Board”) of DermTech, Inc., a Delaware corporation (“DermTech” or the “Company”), considers the maintenance of a sound management to be essential to protecting and enhancing the best interests of the Company and its stockholders. In this connection, the Company recognizes that the possibility of a Change in Control (as hereinafter defined) may exist from time to time, and that this possibility, and the uncertainty and questions it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its stockholders. Accordingly, the Board has determined that appropriate steps should be taken to encourage the continued attention and dedication of members of the Company’s management to their assigned duties without the distraction which may arise from the possibility of a Change in Control of the Company. This Change in Control and Severance Plan (this “Plan”) was adopted by the Board of DermTech on March 29, 2021 (the “Effective Date”). Each participant who is provided benefits under this Plan (“Participant”) shall be eligible to receive payments from the Plan only if he or she has signed the Participation Agreement in the form attached in Exhibit A to this Plan (a “Participation Agreement”). References to this Plan shall include any individual’s Participation Agreement, as applicable.

Article 2. Definitions

(a)    “Board” means the Company’s Board of Directors.

(b)    “Cause” means (i) the Participant has been convicted of, or has pleaded guilty or nolo contendere to, any felony or crime involving moral turpitude, (ii) the Participant has committed any act of fraud, embezzlement, theft, misappropriation of funds, breach of fiduciary duty or other willful act of material dishonesty against the Company that results in material harm to the Company, or (iii) the Participant has engaged in willful misconduct which is injurious to the Company or materially failed or refused to perform the material duties lawfully and reasonably assigned to the Participant or has performed such material duties with gross negligence or has breached any material term or condition of this Plan, the Participant’s Employee Confidential Information and Inventions Agreement with the Company or any other material agreement with the Company, in any case after written notice by the Company of such misconduct, performance issue, gross negligence or breach of terms or conditions and an opportunity to cure within thirty (30) days of such written notice thereof from the Company, unless such misconduct, performance issue, gross negligence or breach is, by its nature, not curable.

(c)    “Change in Control” means the occurrence of any of the following events: (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total voting power represented by the Company’s then outstanding voting securities; or (ii) the consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets; or (iii) the consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation. 

(d)   “Change in Control Period” means the period commencing three (3) months prior to a Change in Control (only if after a Potential Change in Control) and ending twelve (12) months following a Change in Control.

(e)    “Code” means the Internal Revenue Code of 1986, as amended. 

(f)    “Disability” has the meaning set forth in Section 22(e)(3) of the Code.

 

 

 

(g)    “Equity Awards” means all options to purchase shares of Company common stock as well as any and all other stock-based awards granted to the Participant, including but not limited to stock bonus awards, restricted stock, restricted stock units or stock appreciation rights.

(h)    “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(i)    “Good Reason” has the meaning identified in the applicable Participation Agreement.

(j)    “Participant” An individual who qualifies as such pursuant to Section 4.1.

(j)    “Potential Change in Control” means the date of execution of a definitive agreement providing for a Change in Control if such transaction is consummated.

(k)    “Qualifying Termination” means a termination of employment resulting from (i) a termination by the Company of the Participant’s employment for any reason other than Cause, death or Disability, or (ii) if within (12) months following a Change in Control, a voluntary resignation by the Participant of his or her employment for Good Reason (as defined in the Participation Agreement, if any such definition exists; provided that if such definition of Good Reason does not exist in such Participation Agreement for such Participant, then part (ii) of this definition shall be disregarded). Termination due to Participant’s death or Participant’s Disability will in no event constitute a Qualifying Termination.

(l)    “Separation Benefits” The benefits described in this Plan that are provided to qualifying Participants under the Plan.

 

Article 3. Term of Agreement

Except to the extent renewed as set forth in this Section 3, this Plan, and each Participation Agreement, shall terminate upon the three (3) year anniversary of the Effective Date (as amended or extended, the “Expiration Date”) and any individual Participation Agreement shall terminate upon the earlier of (i) the date the Participant’s employment with the Company terminates for a reason other than a Qualifying Termination as described below or (ii) the date the Company has met all of its obligations under this Plan following a Qualifying Termination of the Participant’s employment; provided, that, if there occurs a Potential Change in Control on or before the Expiration Date, then this Plan shall remain in effect until any benefits under this Plan are no longer capable of being earned as a result of a Qualifying Termination as described below. This Plan shall be extended for an additional year upon each Expiration Date (each a “Renewal Date”), unless pursuant to a resolution adopted by the Board prior to the Renewal Date the Company determines not to so extend the Plan. 

 

Article 4. Eligibility

4.1 Participation. Participants in the Plan are elected officers of the Company who are at or above the level of Vice President; provided that such Participants will not be entitled to Separation Benefits if they are not at or above the level of Vice President (i) at the time of the Qualifying Termination if the Qualifying Termination is prior to a Change in Control or (ii) at the time of the Change in Control; provided, further that any reduction of a Participant’s position prior to, but in connection with, a Change in Control shall be of no effect for purposes of this Section 4.1. 

4.2 Duration of Participation. A Participant shall only cease to be a Participant in the Plan as a result of an amendment or termination of the Plan complying with Article 3 and 9 of the Plan, or when he ceases to be an Employee or no longer qualifies as a Participant under Section 4.1, unless, at the time he ceases to be an Employee or no longer qualifies as a Participant under Section 4.1, such Participant is entitled to payment of a Separation Benefit as provided in the Plan or there has been an event or occurrence constituting Good Reason that would enable the Participant to terminate his employment and receive a Separation Benefit. A Participant entitled to payment of a Separation Benefit or any other amounts under the Plan shall remain a Participant in the Plan until the full amount of the Separation Benefit and any other amounts payable under the Plan have been paid to the Participant.

 

 

 

 Article 5. Severance Benefit

Any other provision of this Plan notwithstanding, Participant’s receipt of any payments or benefits under this Section 5 is subject to Participant’s delivery to the Company of a general release (in a form prescribed by the Company) of all known and unknown claims that he or she may then have against the Company or persons affiliated with the Company (the “Release”), and satisfaction of all conditions to make the Release effective, within sixty (60) days following Participant’s Qualifying Termination (such sixty (60) day period, the “Release Period”). In no event will any payment or benefits under this Plan be paid or provided until the Release becomes effective and irrevocable.

Payment of the severance and/or bonus payment, if any, payable pursuant to Section 5(a)(i) and Section 5(b)(i) and (ii)(II), as applicable, shall be made in a single lump sum payment, within thirty (30) days following expiration of the Release Period provided that: if the Release Period crosses a tax year, then provision of the severance and/or bonus payment shall be delayed until the second tax year. Payment of the bonus amount, if any, payable pursuant to Section 5(a)(ii) or 5(b)(ii)(I) shall be payable on the first payroll date following the final determination of such bonus amount for other bonus recipients generally, but not later than March 15th of the year following such Qualifying Termination.

(a)    Other than During a Change in Control Period. If the Participant is subject to a Qualifying Termination other than during a Change in Control Period, the Participant shall be entitled to the following:

(i)    Severance Payments. The Company shall pay the Participant the Severance Multiple (Other than During a Change in Control Period) as defined in the Participant’s Participation Agreement. To the extent the foregoing amount is payable under Section 5(b), it will not be paid under this Section 5(a).

 

(ii)    Bonus Payments. The Company shall pay the Participant the Bonus Amount (Other than During a Change in Control Period) as defined in the Participation Agreement. To the extent the foregoing amount is payable under Section 5(b), it will not be paid under this Section 5(a).

(iii)    Health Care Benefit. If the Participant elects to continue his or her health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) following the termination of his or her employment, then the Company shall pay the balance of the Participant’s monthly premium under COBRA, with the Participant paying the same contribution level as previously paid under the Company’s employee health insurance coverage, until the earliest of (A) the COBRA Continuation Period (Other than During a Change in Control Period) as defined in the Participation Agreement, (B) the date when the Participant receives similar coverage with a new employer or (C) the expiration of the Participant’s continuation coverage under COBRA.

(iv)    Equity.  Each of Participant’s then-outstanding unvested Equity Awards, other than Performance Awards (as defined below), shall accelerate and become vested and exercisable or settled with respect to the Acceleration Multiple (Other than During a Change in Control Period). With respect to awards that would otherwise vest only upon satisfaction of performance criteria (“Performance Awards”), the vesting will accelerate as set forth in the terms of the applicable Performance Award agreement. 

(b)    During a Change in Control Period. If the Participant is subject to a Qualifying Termination during a Change in Control Period, the Participant shall be entitled to the following:

(i)    Severance Payments. The Company shall pay the Participant the Severance Multiple (During a Change in Control Period) as defined in the Participation Agreement. To the extent the foregoing amount is payable under Section 5(a), it will not be paid under this Section 5(b).

(ii)    Bonus Payments. The Company shall pay the Participant the Pro Rata Bonus Amount (During a Change in Control Period) as defined in the Participation Agreement. To the extent the foregoing amount is payable under Section 5(a), it will not be paid under this Section 5(b).

 

 

(iii)    Health Care Benefit. If the Participant elects to continue his or her health insurance coverage under COBRA following the termination of his or her employment, then the Company shall pay the balance of the Participant’s monthly premium under COBRA, with the Participant paying the same contribution level as previously paid under the Company’s employee health insurance coverage, until the earliest of (1) the COBRA Continuation Period (During a Change in Control Period) as defined in the Participation Agreement, (2) the date when the Participant receives similar coverage with a new employer or (3) the expiration of the Participant’s continuation coverage under COBRA.

(iv)    Equity.

(1)    Each of Participant’s then-outstanding unvested Equity Awards, other than Performance Awards, shall accelerate and become vested and exercisable or settled with respect to the Acceleration Multiple (During a Change in Control Period). With respect to Performance Awards, the vesting will accelerate as set forth in the terms of the applicable Performance Award agreement. Subject to Section 5(d), the accelerated vesting described above shall be effective as of the Qualifying Termination; provided, that, if the Qualified Termination during a Change in Control Period occurs prior to the Change in Control, then any unvested portion of the terminated Participant’s Equity Awards will remain outstanding for three (3) months following the Qualifying Termination (provided that in no event will the terminated Participant’s Equity Awards remain outstanding beyond the expiration of the Equity Award’s maximum term). In the event that the proposed Change in Control is terminated without having been completed, any unvested portion of the terminated Participant’s Equity Awards automatically will be forfeited.

(2)    Notwithstanding anything to the contrary, if the successor or acquiring corporation (if any) of the Company refuses to assume, convert, replace or substitute Participant’s unvested Equity Awards, as provided in Section 25(b) of the Company’s 2020 Equity Incentive Plan (the “2020 Plan”), in connection with a Corporate Transaction (as defined in the Plan), or as provided in the comparable section of a similar equity compensation plan of the Company (and together with the 2020 Plan, the “Equity Plans”) then notwithstanding any other provision in this Plan, the Equity Plans or any Equity Award Agreement to the contrary, each of Participant’s then-outstanding and unvested Equity Awards, other than Performance Awards, that are not assumed, converted, replaced or substituted, shall accelerate and become vested and exercisable as to 100% of the then-unvested shares subject to the Equity Awards effective immediately prior to the Change in Control, as applicable and terminate to the extent not exercised (as applicable) upon the Change in Control. With respect to Performance Awards, the vesting for such Performance Awards will accelerate only as set forth in the terms of the applicable Performance Award agreement.

(c)    Special Cash Payments in Lieu of COBRA Premiums. Notwithstanding Section 5(a)(iii) or Section 5(b)(iii) above, if the Participant is eligible for, and the Company determines, in its sole discretion, that it cannot pay, the COBRA premiums without a substantial risk of violating applicable law (including Section 2716 of the Public Health Service Act), the Company instead shall pay to the Participant a fully taxable cash payment equal to the applicable COBRA premiums (including premiums for the Participant and the Participant’s eligible dependents who have elected and remain enrolled in such COBRA coverage), subject to applicable tax withholdings (such amount, the “Special Cash Payment”), for the remainder of the period the Participant remains eligible for the benefit under Section 5(a)(iii) or Section 5(b)(iii) above. The Participant may, but is not obligated to, use such Special Cash Payments toward the cost of COBRA premiums. Notwithstanding the foregoing, the number of months included in the Special Cash Payment to be paid, in any case, shall be reduced by the number of months of COBRA premiums previously paid by the Company.

(d)    Accrued Compensation and Benefits. In connection with any termination of employment prior to, upon or following a Change in Control (whether or not a Qualifying Termination), the Company shall pay Participant’s earned but unpaid base salary and other vested but unpaid cash entitlements for the period through and including the termination of employment, including unused earned vacation pay and unreimbursed documented business expenses incurred by Participant through and including the date of termination (collectively “Accrued Compensation and Expenses”), as required by law and the applicable Company plan or policy. In addition, Participant shall be entitled to any other vested benefits earned by Participant for the period through and including the termination date of Participant’s employment under any other employee benefit plans and arrangements maintained by the Company, in accordance with the terms of such plans and arrangements, except as modified herein (collectively “Accrued Benefits”). Any Accrued Compensation and Expenses to which the Participant is 

 

 

entitled shall be paid to the Participant in cash as soon as administratively practicable after the termination, and, in any event, no later than two and one-half (2-1/2) months after the end of the taxable year of the Participant in which the termination occurs. Any Accrued Benefits to which the Participant is entitled shall be paid to the Participant as provided in the relevant plans and arrangement.

 

Article 6. Covenants

(a)    Non-Competition. The Participant agrees that, during his or her employment with the Company, he or she shall not engage in any other employment, consulting or other business activity (whether full-time or part-time) that would create a conflict of interest with the Company.

(b)    Non-Solicitation. The Participant agrees that, during his or her employment with the Company and for a one (1) year period thereafter, her or she will not directly or indirectly solicit away employees or consultants of the Company for his or her own benefit or for the benefit of any other person or entity, nor will the Participant encourage or assist others to do so.

 

(c)    Cooperation and Non-Disparagement. The Participant agrees that, during the twelve (12) month period following his or her cessation of employment, he or she shall cooperate with the Company in every reasonable respect and shall use his or her best efforts to assist the Company with the transition of Participant’s duties to his or her successor. The Participant further agrees that, during this twelve (12) month period, he or she shall not in any way or by any means disparage the Company, the members of the Board or the Company’s officers and employees.

This Article 6 shall in no manner limit obligations of the Participant under any other agreement, including the Employee Proprietary Information and Inventions Agreement (which shall remain in full effect pursuant to its terms following Participant’s termination, between the Company and the Participant in any manner); provided, that, to the extent the terms of this Article 6 directly conflict with the terms of any such agreement, the agreement containing the most Company-favorable terms that are enforceable shall govern.

  

Article 7. Successors

(a)    Company’s Successors. The Company shall require any successor (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets, by an agreement in substance and form satisfactory to the Participant, to assume this Plan and to agree expressly to perform this Plan in the same manner and to the same extent as the Company would be required to perform it in the absence of a succession. For all purposes under this Plan, the term “Company” shall include any successor to the Company’s business and/or assets or which becomes bound by this Plan by operation of law.

(b)    Participant’s Successors. This Plan and all rights of the Participant hereunder shall inure to the benefit of, and be enforceable by, the Participant’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

 

Article 8. Golden Parachute Taxes

(a)    Best After-Tax Result. In the event that any payment or benefit received or to be received by Participant pursuant to this Plan or otherwise (“Payments”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code and (ii) but for this subsection (a), be subject to the excise tax imposed by Section 4999 of the Code, any successor provisions, or any comparable federal, state, local or foreign excise tax (“Excise Tax”), then, subject to the provisions of Section 8(b) hereof, such Payments shall be either (A) provided in full pursuant to the terms of this Plan or any other applicable agreement, or (B) provided as to such lesser extent which would result in no portion of such Payments being subject to the Excise Tax (“Reduced Amount”), whichever of the foregoing amounts, taking into account the applicable federal, state, local and foreign income, employment and other taxes and 

 

 

the Excise Tax (including, without limitation, any interest or penalties on such taxes), results in the receipt by Participant, on an after-tax basis, of the greatest amount of payments and benefits provided for hereunder or otherwise, notwithstanding that all or some portion of such Payments may be subject to the Excise Tax. Unless the Company and Participant otherwise agree in writing, any determination required under this Section shall be made by independent tax counsel designated by the Company and reasonably acceptable to Participant (“Independent Tax Counsel”), whose determination shall be conclusive and binding upon Participant and the Company for all purposes. For purposes of making the calculations required under this Section 8(a), Independent Tax Counsel may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code; provided that Independent Tax Counsel shall assume that Participant pays all taxes at the highest marginal rate. The Company and Participant shall furnish to Independent Tax Counsel such information and documents as Independent Tax Counsel may reasonably request in order to make a determination under this Section. The Company shall bear all costs that Independent Tax Counsel may reasonably incur in connection with any calculations contemplated by this Section. In the event that Section 8(a)(ii)(B) above applies, then based on the information provided to Participant and the Company by Independent Tax Counsel, Participant may, in Participant’s sole discretion and within 30 days of the date on which Participant is provided with the information prepared by Independent Tax Counsel, determine which and how much of the Payments (including the accelerated vesting of equity compensation awards) to be otherwise received by Participant shall be eliminated or reduced (as long as after such determination the value (as calculated by Independent Tax Counsel in accordance with the provisions of Sections 280G and 4999 of the Code) of the amounts payable or distributable to Participant equals the Reduced Amount). If the Internal Revenue Service (the “IRS”) determines that any Payment is subject to the Excise Tax, then Section 8(b) hereof shall apply, and the enforcement of Section 8(b) shall be the exclusive remedy to the Company.

(b)    Adjustments. If, notwithstanding any reduction described in Section 8(a) hereof (or in the absence of any such reduction), the IRS determines that Participant is liable for the Excise Tax as a result of the receipt of one or more Payments, then Participant shall be obligated to surrender or pay back to the Company, within 120 days after a final IRS determination, an amount of such payments or benefits equal to the “Repayment Amount.” The Repayment Amount with respect to such Payments shall be the smallest such amount, if any, as shall be required to be surrendered or paid to the Company so that Participant’s net proceeds with respect to such Payments (after taking into account the payment of the Excise Tax imposed on such Payments) shall be maximized. Notwithstanding the foregoing, the Repayment Amount with respect to such Payments shall be zero if a Repayment Amount of more than zero would not eliminate the Excise Tax imposed on such Payments or if a Repayment Amount of more than zero would not maximize the net amount received by Participant from the Payments. If the Excise Tax is not eliminated pursuant to this Section 8(b), Participant shall pay the Excise Tax.

 

Article 9. Miscellaneous Provisions

(a)    Administration and Interpretation. This Plan will be administered by the Board of Directors of the Company (the “Board”), or a committee designated by the Board. Subject to the general purposes, terms and conditions of this Plan, and to the direction of the Board, or the committee, the Board will have full power to implement and carry out this Plan, including but not limited to the ability to (i) construe and interpret this Plan, any Participation Agreement and any other agreement or document executed pursuant to this Plan, (ii) prescribe, amend and rescind rules and regulations relating to this Plan or any Participation Agreement, (iii) select persons to receive and execute Participation Agreements, (iv) make all other determinations necessary or advisable for the administration of this Plan; and (v) delegate any of the foregoing to a subcommittee consisting of one or more executive officers pursuant to a specific delegation as permitted by applicable law. Any determination made by the Board with respect to this Plan or any Participation Agreement shall be made in its sole discretion, and such determination shall be final and binding on the Company and all persons having an interest in any Participation Agreement under this Plan. Any dispute regarding the interpretation of this Plan or any Participation Agreement shall be submitted by the Participant or Company to the Board, or committee, for review. The resolution of such a dispute by the Board, or committee, shall be final and binding on the Company and the Participant. The Board, or committee, shall review and resolve disputes with respect to this Plan or Participation Agreements with Participant s, and such resolution shall be final and binding and conclusive.

 

 

(b)    Section 409A. For purposes of Section 409A of the Code, if the Company determines that Participant is a “specified employee” under Code Section 409A(a)(2)(B)(i) at the time of a separation from service, then (i) the severance benefits under Article 5, to the extent subject to Code Section 409A, will commence during the seventh month after the Participant’s separation from service and (ii) will be paid in a lump sum on the earliest practicable date permitted by Section 409A(a)(2) of the Code. Any termination of Participant’s employment is intended to constitute a separation from service and will be determined consistent with the rules relating to a “separation from service” as such term is defined in Treasury Regulation Section 1.409A-1. It is intended that each installment of the payments provided hereunder constitute separate “payments” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i). It is further intended that payments hereunder satisfy, to the greatest extent possible, the exemption from the application of Section 409A of the Code (and any state law of similar effect) provided under Treasury Regulation Section 1.409A-1(b)(4) (as a “short-term deferral”). To the extent that any provision of this Plan is ambiguous as to its compliance with Section 409A of the Code, the provision will be read in such a manner so that all payments hereunder comply with Section 409A of the Code. Except as otherwise expressly provided herein, to the extent any expense reimbursement or the provision of any in-kind benefit under this Plan is determined to be subject to Section 409A of the Code, the amount of any such expenses eligible for reimbursement, or the provision of any in-kind benefit, in one calendar year shall not affect the expenses eligible for reimbursement in any other taxable year (except for any lifetime or other aggregate limitation applicable to medical expenses), in no event shall any expenses be reimbursed after the last day of the calendar year following the calendar year in which Participant incurred such expenses, and in no event shall any right to reimbursement or the provision of any in-kind benefit be subject to liquidation or exchange for another benefit.

(c)    Dispute Resolution. To ensure rapid and economical resolution of any and all disputes that might arise in connection with this Plan, Participant and the Company agree that any and all disputes, claims, and causes of action, in law or equity, arising from or relating to this Plan or its enforcement, performance, breach, or interpretation, will be resolved solely and exclusively by final, binding, and confidential arbitration, by a single arbitrator, in San Diego, California, and conducted by the American Arbitration Association under its then-existing employment rules and procedures. Nothing in this section, however, is intended to prevent either party from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. Each party to an arbitration or litigation hereunder shall be responsible for the payment of its own attorneys’ fees.

(d)    Notice. Notices and all other communications contemplated by this Plan shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid or deposited with Federal Express Corporation, with shipping charges prepaid. In the case of the Participant, mailed notices shall be addressed to him or her at the home address which he or she most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary.

 

(e)    Other Severance Arrangements. The Company may have previously provided Participant with certain change of control (including “single-trigger” and/or “double-trigger” acceleration) and/or severance arrangements prior to the Effective Date (the “Prior Severance Arrangements”); provided, however, that the assumption by the Company of any change of control and/or severance arrangements for an Participant in connection with the acquisition of another company by the Company shall not be considered Prior Severance Arrangements.  Except as otherwise specified herein (including the Prior Severance Arrangements), this Plan represents the entire agreement between Participant and the Company with respect to any and all severance arrangements, vesting acceleration arrangements and post-termination stock option exercise period arrangements, and supersedes and replaces any and all prior verbal or written discussions, negotiations and/or agreements between the Participant and the Company relating to the subject matter hereof, including but not limited to, any and all prior agreements governing any Equity Award, severance and salary continuation arrangements, programs and plans which were previously offered by the Company to the Participant, and change in control and severance arrangements pursuant to an employment agreement or offer letter, and Participant hereby waives Participant’s rights to any and all such other severance or acceleration payments or benefits, as applicable.

(f)    Amendment; Waiver. Any amendment or waiver of this Plan prior to the Expiration Date that is adverse to the Participant must be agreed to in writing by the Participant. No waiver by either party of any breach of, or of compliance with, any condition or provision of this Plan by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

 

 

(g)    Choice of Law. The validity, interpretation, construction and performance of this Plan shall be governed by the laws of the State of California (other than their choice-of-law provisions).

(h)    Severability. The invalidity or unenforceability of any provision or provisions of this Plan shall not affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect.

(i)    No Retention Rights. Nothing in this Plan shall confer upon the Participant any right to continue in service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company or any subsidiary of the Company or of the Participant, which rights are hereby expressly reserved by each, to terminate his or her service at any time and for any reason, with or without Cause.

(j)    Withholding Taxes. All payments made under this Plan shall be subject to reduction to reflect taxes or other charges required to be withheld by law.

 

 

 

 

 

Exhibit A

PARTICIPATION AGREEMENT TO THE

CHANGE IN CONTROL AND SEVERANCE PLAN

This Participation Agreement by and between [                    ] (the “Participant”) incorporates by reference and is governed by the Change in Control and Severance Plan and DermTech, Inc., a Delaware corporation (the “Company”). The Participant hereby consents to the terms and conditions of the Change in Control and Severance Plan, the provisions of which are incorporated herein by reference, and the following additional terms.

QUALIFYING TERMINATION OTHER THAN DURING A CHANGE IN CONTROL PERIOD

Severance Multiple (Other than During a Change in Control Period)

As used in Section 5(a)(i) of the Plan, the “Severance Multiple (Other than During a Change in Control Period)” shall mean: [    ] months of the Participant’s base salary at the rate in effect when the Qualifying Termination occurred (or immediately prior to a reduction in the base salary that gave rise to Good Reason).

Bonus Amount (Other than During a Change in Control Period)

As used in Section 5(a)(ii) of the Plan, the “Bonus Amount (Other than During a Change in Control Period)” shall mean: The pro-rata portion (determined based on the number of days the Participant is employed by the Company during the bonus performance period) of the Participant’s annual bonus that the Company determines was actually earned at the conclusion of the bonus performance period.

COBRA Continuation Period (Other than During a Change in Control Period)

As used in Section 5(a)(iii) of the Plan, the “COBRA Continuation Period (Other than During a Change in Control Period)” shall mean: [    ] months.

Acceleration Multiple (Other than During a Change in Control Period)

As used in Section 5(b)(iv) of the Plan, the “Acceleration Percentage (Other than During a Change in Control Period)” shall mean: [   ] months of the then-unvested shares subject thereto.

Months to Exercise Vested Stock Options (Other than During a Change in Control Period)

The “Months to Exercise Vested Stock Options (Other than During a Change in Control Period)” shall mean: [   ] months following the termination date.

QUALIFYING TERMINATION DURING A CHANGE IN CONTROL PERIOD

Severance Multiple (During a Change in Control Period)

As used in Section 5(b)(i) of the Plan, the “Severance Multiple (During a Change in Control Period)” shall mean: [    ] months of the Participant’s base salary at the rate in effect when the Qualifying Termination (or immediately prior to a reduction in the base salary that gave rise to Good Reason) occurred or when the Change in Control occurred, whichever is greater.

 

 

Pro Rata Bonus Amount (During a Change in Control Period)

As used in Section 5(b)(ii) of the Plan, the “Pro Rata Bonus Amount (During a Change in Control Period)” shall mean: The pro-rata portion (determined based on the number of days the Participant is employed by the Company during the bonus performance period) of the Participant’s annual bonus that the Company determines was actually earned at the conclusion of the bonus performance period.

COBRA Continuation Period (During a Change in Control Period)

As used in Section 5(b)(iii) of the Plan, the “COBRA Continuation Period (During a Change in Control Period)” shall mean: [    ] months.

Acceleration Multiple (During a Change in Control Period)

As used in Section 5(b)(iv) of the Plan, the “Acceleration Percentage (During a Change in Control Period)” shall mean: [100]% of the then-unvested shares subject thereto.

Months to Exercise Vested Stock Options (During a Change in Control Period)

The “Months to Exercise Vested Stock Options (During a Change in Control Period)” shall mean: [   ] months following the termination date.

“Good Reason” means the occurrence of any of the following events or conditions, without Participant’s express written consent:

(i)    a material reduction in Participant’s base salary as an employee of the Company;

(ii)    a material reduction in the Participant’s duties, responsibilities or authority at the Company including, without limitation, changes in Participant reporting structure resulting from a Change in Control transaction;

(iii)    a change in the geographic location at which Participant must perform services that results in an increase in the one-way commute of Participant by more than 50 miles; or

(iv)    a material breach of this agreement by the Company or a successor of the Company.  

With respect to each of subsection (i), (ii), (iii) and (iv) above, Participant must provide notice to the Company of the condition giving rise to “Good Reason” within one hundred twenty (120) days of their knowledge of the existence of such condition, and the Company will have thirty (30) days following such notice to remedy such condition. Participant must resign Participant’s employment no later than thirty (30) days following expiration of the Company’s thirty (30) day cure period.

 

SIGNATURE PAGE FOLLOWS

 

 

SIGNATURE PAGE TO THE PARTICIPATION AGREEMENT TO THE

CHANGE IN CONTROL AND SEVERANCE PLAN

 

IN WITNESS WHEREOF, each of the parties has executed this Participation Agreement to the Change in Control and Severance Plan, in the case of the Company by its duly authorized officer, as of the day and year first above written.

 

DermTech, Inc.

By: 

Name:

Title:

Signature: 

Name:Exhibit 4.1

 

 

DUKE ENERGY CAROLINAS, LLC

 

TO

 

THE BANK OF NEW YORK MELLON TRUST COMPANY,
N.A.,

Trustee

 

ONE-HUNDRED AND FIFTH SUPPLEMENTAL INDENTURE

 

Dated as of April 1, 2021

 

 

 

CREATING TWO SERIES OF FIRST AND REFUNDING

MORTGAGE BONDS

 

$550,000,000 FIRST AND REFUNDING MORTGAGE BONDS,
2.55% SERIES DUE 2031

$450,000,000
FIRST AND REFUNDING MORTGAGE BONDS, 3.45% SERIES DUE 2051

 

 

 

SUPPLEMENTAL TO

FIRST AND REFUNDING MORTGAGE

DATED AS OF December 1, 1927

 

 

Drawn By and Return To:

Hunton Andrews Kurth LLP

200 Park Avenue

New York, New York 10166

Attention: Brendan P. Harney

 

    

     

    

 

SUPPLEMENTAL INDENTURE, bearing
date as of the 1 day of April, 2021, made and entered into by and between Duke Energy Carolinas, LLC, a limited liability company duly
organized and existing under the laws of the State of North Carolina, hereinafter called the “Company”, party of the first
part, and The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A.), a national banking
association, having a corporate trust office at 4655 Salisbury Road, Suite 300, Jacksonville, Florida 32256, hereinafter called the
 “Trustee”, as Trustee, party of the second part. The Trustee is the successor to JPMorgan Chase Bank, N.A. (formerly known
as The Chase Manhattan Bank, formerly known as Chemical Bank (successor to Morgan Guaranty Trust Company of New York)), as Trustee.

 

WHEREAS the Company’s
predecessor is Duke Energy Corporation (formerly known as Duke Power Company), a corporation organized under the laws of the State of
North Carolina, which converted its form of organization on April 3, 2006 from a North Carolina corporation to a North Carolina limited
liability company named “Duke Power Company LLC,” which changed its name to Duke Energy Carolinas, LLC on October 1,
2006; and

 

WHEREAS Duke Power Company,
a New Jersey corporation, hereinafter called the “New Jersey Company”, duly executed and delivered its First and Refunding
Mortgage, dated as of December 1, 1927, to Guaranty Trust Company of New York, as Trustee, to secure its First and Refunding Mortgage
Gold Bonds, to be issued from time to time in series as provided in said Mortgage, and has from time to time duly executed and delivered
supplemental indentures, including supplemental indentures dated as of September 1, 1947 and February 1, 1949, to Guaranty Trust
Company of New York (the corporate name of which has been changed to Morgan Guaranty Trust Company of New York), as Trustee, and a supplemental
indenture dated as of February 1, 1960 to Morgan Guaranty Trust Company of New York, as Trustee, supplementing and modifying said
Mortgage (said Mortgage, as so supplemented and modified by the supplemental indentures dated as of September 1, 1947, February 1,
1949 and February 1, 1960, being hereinafter referred to as the “original indenture”); and

 

    1

     

    

 

WHEREAS bonds of a series
known as the “First and Refunding Mortgage Bonds, 2.65% Series Due 1977” (herein called “bonds of the 2.65% Series”),
bonds of a series known as the “First and Refunding Mortgage Bonds, 2 7/8% Series Due 1979” (herein called “bonds
of the 1979 Series”), bonds of a series known as the “First and Refunding Mortgage Bonds, 6 3/8% Series Due 1998”
(herein called “bonds of the 1998 Series”), bonds of a series known as the “First and Refunding Mortgage Bonds, Pollution
Control Facilities Revenue Refunding Series Due 2014” (herein called “bonds of the 1990 Pollution Control Series”),
bonds of a series known as the “First and Refunding Mortgage Bonds, City of Greensboro Series Due 2027” (herein called
 “bonds of the 2027 City of Greensboro Series”), bonds of a series known as the “First and Refunding Mortgage Bonds,
Medium-Term Notes Series” (herein called “bonds of the Medium-Term Notes Series”), bonds of a series known as the “First
and Refunding Mortgage Bonds, 6 5/8% Series B Due 2003” (herein called “bonds of the 2003 Series B”), bonds
of a series known as the “First and Refunding Mortgage Bonds, 6 3/8% Series Due 2008” (herein called “bonds of
the 2008 Series”), bonds of a series known as the “First and Refunding Mortgage Bonds, 5 7/8% Series C Due 2003”
(herein called “bonds of the 2003 Series C”), bonds of a series known as the “First and Refunding Mortgage Bonds,
Pollution Control Facilities Revenue Refunding Series Due 2014” (herein called “bonds of the 1993 Pollution Control Series”),
bonds of a series known as the “First and Refunding Mortgage Bonds, 6 1/4% Series B 2004” (herein called “bonds
of the 2004 Series B”), bonds of a series known as the “First and Refunding Mortgage Bonds, 7% Series Due 2033”
(herein called “bonds of the 2033 Series”), bonds of a series known as the “First and Refunding Mortgage Bonds, 6 7/8%
Series B Due 2023” (herein called “bonds of the 2023 Series B”), bonds of a series known as the “First
and Refunding Mortgage Bonds, 6 3/4% Series Due 2025” (herein called “bonds of the 2025 Series”), bonds of a series
known as the “First and Refunding Mortgage Bonds, 7 7/8% Series Due 2024” (herein called “bonds of the 2024 Series”),
bonds of a series known as the “First and Refunding Mortgage Bonds, 7 1/2% Series B Due 2025” (herein called “bonds
of the 2025 Series B”), bonds of a series known as the “First and Refunding Mortgage Bonds, 7 1/2% Series Due 1999”
(herein called “bonds of the 1999 Series”), bonds of a series known as the “First and Refunding Mortgage Bonds, 7% Series Due
2000” (herein called “bonds of the 2000 Series”), bonds of a series known as the “First and Refunding Mortgage
Bonds, 7% Series B Due 2000” (herein called “bonds of the 2000 Series B”), bonds of a series known as the
 “First and Refunding Mortgage Bonds, 6.625% Series Due 2003” (herein called “bonds of the 2003 Series”),
bonds of a series known as the “First and Refunding Mortgage Bonds, 9 5/8% Series Due 2020” (herein called “bonds
of the 9 5/8% Series due 2020”), bonds of a series known as the “First and Refunding Mortgage Bonds, 8 3/4% Series Due
2021” (herein called “bonds of the 2021 Series”), bonds of a series known as “First and Refunding Mortgage Bonds,
7% Series Due 2005” (herein called “bonds of the 2005 Series”), bonds of a series known as “First and Refunding
Mortgage Bonds, 3.75% Series A Due 2008” (herein called “bonds of the 3.75% Series A”), bonds of series known
as “First and Refunding Mortgage Bonds, 3.75% Series B Due 2008” (herein called “bonds of the 3.75% Series B,”
and together with the bonds of the 3.75% Series A, the “bonds of the 3.75% Series”), bonds of a series known as “First
and Refunding Mortgage Bonds, 7 3/8% Series Due 2023” (herein called “bonds of the 7 3/8% Series”), bonds of a
series known as “First and Refunding Mortgage Bonds, 4 1/2% Series Due 2010” (herein called “bonds of the 4 1/2%
Series”), bonds of a series known as “First and Refunding Mortgage Bonds, 5.30% Series Due 2015” (herein called
 “bonds of the 5.30% Series”), bonds of a series known as “First and Refunding Mortgage Bonds, 5.25% Series Due
2018” (herein called “bonds of the 5.25% Series”), bonds of a series known as “First and Refunding Mortgage Bonds,
6.00% Series Due 2038” (herein called “bonds of the 6.00% Series”), bonds of a series known as “First and
Refunding Mortgage Bonds, 2007A Pledge Series Due 2040” (herein called “bonds of the 2007A Pledge Series”), bonds
of a series known as “First and Refunding Mortgage Bonds, 2007B Pledge Series Due 2040” (herein called “bonds of
the 2007B Pledge Series”), bonds of a series known as “First and Refunding Mortgage Bonds, 5.10% Series B Due 2018”
(herein called “bonds of the 5.10% Series”), bonds of a series known as “First and Refunding Mortgage Bonds, 6.05% Series B
Due 2038” (herein called “bonds of the 6.05% Series”), bonds of a series known as “First and Refunding Mortgage
Bonds, 7.00% Series C Due 2018 (herein called “bonds of the 2018 Series C”), bonds of a series known as “First
and Refunding Mortgage Bonds, 5.30% Series Due 2040” (herein called “bonds of the 2040 Series”), bonds of a series
known as “First and Refunding Mortgage Bonds, 4.30% Series due 2020”(herein called “bonds of the 2020 Series”),
bonds of a series known as “First and Refunding Mortgage Bonds, Solid Waste Disposal Revenue Bonds Series 2010A Due 2031”
(herein called “bonds of the 2010A Solid Waste Disposal Series”), bonds of a series known as “First and Refunding Mortgage
Bonds, Solid Waste Disposal Revenue Bonds Series 2010B Due 2031” (herein called “bonds of the 2010B Solid Waste Disposal
Series”), bonds of a series known as “First and Refunding Mortgage Bonds, Solid Waste Disposal Revenue Bonds Series 2010C
Due 2040” (herein called “bonds of the 2010C Solid Waste Disposal Series”), bonds of a series known as “First
and Refunding Mortgage Bonds, Solid Waste Disposal Revenue Bonds Series 2010D Due 2040 (herein called “bonds of the 2010D Solid
Waste Disposal Series”), bonds of a series known as “First and Refunding Mortgage Bonds, 3.90% Series due 2021”
(herein called “bonds of the 3.90% Series”), bonds of a series known as “First and Refunding Mortgage Bonds, 1.75% Series due
2016” (herein called “bonds of the 1.75% Series”), bonds of a series known as “First and Refunding Mortgage Bonds,
4.25% Series due 2041” (herein called “bonds of the 4.25% Series”), bonds of a series known as “First and
Refunding Mortgage Bonds, 4.00% Series due 2042” (herein called “bonds of the 4.00% Series”), bonds of a series
known as “First and Refunding Mortgage Bonds, 3.75% Series due 2045” (herein called “bonds of the 3.75% Series due
2045”), bonds of a series known as “First and Refunding Mortgage Bonds, 2.500% Series due 2023” (herein called
 “bonds of the 2.500% Series due 2023”), bonds of a series known as “First and Refunding Mortgage Bonds, 3.875%
Series due 2046” (herein called “bonds of the 3.875% Series due 2046”), bonds of a series known as “First
and Refunding Mortgage Bonds, 2.95% Series due 2026” (herein called “bonds of the 2.95% Series due 2026”),
bonds of a series known as “First and Refunding Mortgage Bonds, 3.70% Series due 2047” (herein called “bonds of
the 3.70% Series due 2047”), bonds of a series known as “First and Refunding Mortgage Bonds, 3.05% Series due 2023”
(herein called “bonds of the 3.05% Series due 2023”), bonds of a series known as “First and Refunding Mortgage
Bonds, 3.95% Series due 2048 (herein called “bonds of the 3.95% Series due 2048”), bonds of a series known as “First
and Refunding Mortgage Bonds, 3.35% Series due 2022” (herein called “bonds of the 3.35% Series due 2022”),
bonds of a series known as “First and Refunding Mortgage Bonds, 3.95% Series due 2028” (herein called “bonds of
the 3.95% Series due 2028”), bonds of a series known as “First and Refunding Mortgage Bonds, 2.45% Series due 2029”
(herein called “bonds of the 2.45% Series due 2029”), bonds of a series known as “First and Refunding Mortgage
Bonds, 3.20% Series due 2049” (herein called “bonds of the 3.20% Series due 2049”), bonds of a series known
as “First and Refunding Mortgage Bonds, 2.45% Series due 2030” (herein called “bonds of the 2.45% Series due
2030”) and such other bonds that have heretofore been issued and (except for bonds of the 2.65% Series, bonds of the 1979 Series,
bonds of the 1998 Series, bonds of the 1990 Pollution Control Series, bonds of the Medium Term Notes Series, bonds of the 2003 Series B,
bonds of the 2008 Series, bonds of the 2003 Series C, bonds of the 1993 Pollution Control Series, bonds of the 2004 Series B,
bonds of the 2033 Series, bonds of the 2023 Series B, bonds of the 2025 Series, bonds of the 2024 Series, bonds of the 2025 Series B,
bonds of the 1999 Series, bonds of the 2000 Series, bonds of the 2000 Series B, bonds of the 2003 Series, bonds of the 9 5/8% Series due
2020, bonds of the 2021 Series, bonds of the 2005 Series, bonds of the 3.75% Series, bonds of the 7 3/8% Series, bonds of the 2007A Pledge
Series, bonds of the 2007B Pledge Series, bonds of the 4 1/2% Series, bonds of the 5.30% Series, bonds of a series known as “First
and Refunding Mortgage Bonds, Pollution Control Facilities Revenue Refunding Series Due 2017,” bonds of the 1.75% Series, bonds
of the 5.25% Series, bonds of the 5.10% Series, bonds of the 2018 Series C, bonds of the 2020 Series, bonds of the 2007A Pledge Series,
bonds of the 2007B Pledge Series, bonds of the 2010A Solid Waste Disposal Series, bonds of the 2010B Solid Waste Disposal Series, and
other such bonds which have been redeemed or retired in their entirety) are the only bonds now outstanding under the original indenture
as heretofore supplemented; and

 

    2

     

    

 

WHEREAS the Company has duly
executed and delivered a supplemental indenture, dated as of June 15, 1964, to Morgan Guaranty Trust Company of New York, as Trustee,
for the purpose of evidencing the succession by merger of the Company to the New Jersey Company and the assumption by the Company of the
covenants and conditions of the New Jersey Company in the original indenture and to enable the Company to have and exercise the powers
and rights of the New Jersey Company under the original indenture in accordance with the terms thereof and whereby the Company assumed
and agreed to pay duly and punctually the principal of and interest on the bonds issued under the original indenture in accordance with
the provisions of said bonds and the coupons thereto appertaining and the original indenture, and agreed to perform and fulfill all the
terms, covenants and conditions of the original indenture binding upon the New Jersey Company, and

 

WHEREAS Morgan Guaranty Trust
Company of New York resigned as Trustee under the original indenture as heretofore supplemented and Chemical Bank was appointed successor
Trustee, said resignation and appointment having taken effect on August 30, 1994 pursuant to an Instrument of Resignation, Appointment
and Acceptance dated as of August 30, 1994 among the Company, Morgan Guaranty Trust Company of New York, as Trustee, and Chemical
Bank (now known as JPMorgan Chase Bank, N.A.), as successor Trustee; and

 

WHEREAS JPMorgan Chase Bank,
N.A. resigned as Trustee and The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of New York Trust Company, N.A.)
was appointed successor Trustee, said resignation and appointment having taken effect on September 24, 2007 pursuant to an Instrument
of Resignation, Appointment and Acceptance dated as of September 24, 2007 among the Company, JPMorgan Chase Bank, N.A., as Trustee,
and The Bank of New York Mellon Trust Company, N.A., as successor Trustee; and

 

WHEREAS the Company desires
to create under the original indenture, as heretofore supplemented and as to be supplemented by this supplemental indenture, two new series
of bonds, to be known as its “First and Refunding Mortgage Bonds, 2.55% Series due 2031,” and its “First and Refunding
Mortgage Bonds, 3.45% Series due 2051,” and to determine the terms and provisions and the form of the bonds of each such series;
and

 

    3

     

    

 

WHEREAS for the purposes hereinabove
recited, and pursuant to due limited liability company action, the Company has duly determined to execute and deliver to the Trustee a
supplemental indenture in the form hereof supplementing the original indenture (the original indenture, as previously supplemented by
supplemental indentures and as hereby supplemented, being sometimes hereinafter referred to as the “Indenture”); and

 

WHEREAS all conditions and
requirements necessary to make this supplemental indenture a valid, legal and binding instrument in accordance with its terms have been
done and performed, and the execution and delivery hereof have been in all respects duly authorized:

 

NOW, THEREFORE, THIS INDENTURE
WITNESSETH:

 

That in consideration of the
premises and of the sum of one dollar duly paid by the Company to the Trustee at or before the execution and delivery of these presents,
the receipt whereof is hereby acknowledged, the Company hereby covenants and agrees with the Trustee and its successors in the trust under
the Indenture as follows:

 

PART One.

 

SECTION 1.     Bonds
of the 2.55% Series

 

Section 1.1.     The
Company hereby creates a new series of bonds to be issued under and secured by the Indenture and known as its First and Refunding Mortgage
Bonds, 2.55% Series due 2031 (herein called “bonds of the 2.55% Series”) and the Company hereby establishes, determines
and fixes the terms and provisions of the bonds of the 2.55% Series as hereinafter in this Section 1 set forth.

 

Each bond of the 2.55% Series shall
be dated the date of its authentication (except that if any such bond shall be authenticated on any interest payment date, it shall be
dated the following day) and interest shall be payable on the principal represented thereby commencing October 15, 2021, from April 15
or October 15, as the case may be, next preceding the date thereof to which interest has been paid, unless such date of authentication
is prior to October 15, 2021, in which case interest shall be payable from April 1, 2021; provided, however, that
interest shall be payable on each bond of the 2.55% Series authenticated after the record date (as defined in the next succeeding
paragraph of this Section 1.1) with respect to any interest payment date and prior to such interest payment date, only from such
interest payment date.

 

Interest on any bond of the
2.55% Series shall be paid to the person who, according to the bond register of the Company, is the registered holder of such bond
of the 2.55% Series at the close of business on the applicable record date, and such interest payments shall be made by check mailed
to such registered holder at his last address shown on such bond register or, at the option of the Company, by wire transfer at such place
and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least sixteen (16)
days prior to the date of payment by the Person entitled thereto (provided, that if the bonds of the 2.55% Series are represented
by Global Securities held by the Depositary, payment may be made pursuant to the procedures of the Depositary); provided, however,
that, if the Company shall default in the payment of the interest due on any interest payment date on any bond of the 2.55% Series, such
defaulted interest shall be paid to the registered holder of such bond (or any bond or bonds of the 2.55% Series issued upon transfer,
exchange or substitution thereof) on the date of subsequent payment of such defaulted interest or, at the election of the Company, to
the person in whose name such bond (or any bond or bonds of the 2.55% Series issued upon transfer, exchange or substitution thereof)
is registered on a subsequent record date established by notice given by mail by or on behalf of the Company to the holders of all bonds
of the 2.55% Series not less than ten (10) days preceding such subsequent record date. The term “record date” as
used in this Section 1.1 shall mean, with respect to any semi-annual interest payment date, the close of business on (i) the
business day immediately preceding such interest payment date so long as the bonds of the 2.55% Series remain in book-entry only
form or (ii) the fifteenth calendar day immediately preceding such interest payment date if any of the bonds of the 2.55% Series do
not remain in book-entry only form, in each case, whether or not a business day, or, in the case of a payment of defaulted interest, the
close of business on any subsequent record date established as provided above.

 

    4

     

    

 

Section 1.2.     All
bonds of the 2.55% Series shall mature as to principal on April 15, 2031 and shall bear interest at a rate of 2.55% per annum,
payable semi-annually on the 15th day of April and October in each year, commencing on the 15th day of
October, 2021. Interest on the bonds of the 2.55% Series will be computed on the basis of a 360-day year consisting of twelve 30-day
months.

 

Section 1.3.     The
bonds of the 2.55% Series shall be fully registered bonds, without coupons, in denominations of two thousand dollars ($2,000) and
integral multiples of one thousand dollars ($1,000) in excess thereof, all such bonds to be numbered, and shall be transferable and exchangeable
as provided in the form of bond set forth as Exhibit A to this supplemental indenture. The provisions of §1.19 and any other
provision in the Indenture in respect of coupon bonds or reservation of coupon bond numbers shall be inapplicable to the bonds of the
2.55% Series.

 

Section 1.4.     At
any time before January 15, 2031 (the “2031 Par Call Date”), the bonds of the 2.55% Series may be redeemed at the
option of the Company, in whole or in part and from time to time, at a redemption price equal to the greater of (1) 100% of the principal
amount of the bonds of the 2.55% Series to be redeemed and (2) the sum of the present values of the remaining scheduled payments
of principal and interest on the bonds of the 2.55% Series being redeemed that would be due if the bonds of the 2.55% Series matured
on the 2031 Par Call Date (exclusive of interest accrued to the redemption date) discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 15 basis points, plus, in either case, accrued
and unpaid interest on the principal amount of the bonds of the 2.55% Series being redeemed to, but excluding, the date of such redemption.
The Company shall notify the Trustee of the redemption price with respect to any redemption pursuant to this paragraph promptly after
the calculation thereof. The Trustee shall not be responsible for calculating said redemption price.

 

At
any time on or after the 2031 Par Call Date, the bonds of the 2.55% Series may be redeemed at the option of the Company, in
whole or in part and from time to time, at a redemption price equal to 100% of the principal amount of the bonds of the 2.55% Series to
be redeemed plus accrued and unpaid interest on the principal amount being redeemed to, but excluding, the date of such redemption.

 

The bonds of the 2.55% Series are
also subject to redemption through the operation of the Replacement Fund provided in Part Two of this supplemental indenture or through
the application of moneys paid to the Trustee pursuant to the provisions of §5.05 of the Indenture, at any time or from time to time
prior to maturity, upon prior notice as hereinafter provided, at the redemption prices specified in the fifth paragraph of the reverse
side of the form of bond set forth as Exhibit A to this supplemental indenture, together with interest accrued thereon to the date
fixed for redemption thereof.

 

In the event that any redemption
date is not a business day, the Company shall pay the redemption price on the next business day without any interest or other payment
due to the delay.

 

    5

     

    

 

All
such redemptions of bonds of the 2.55% Series shall be effected as provided in Article 3 of the Indenture except that, in case
a part only of the bonds of the 2.55% Series is to be paid and redeemed, the particular bonds or part thereof shall be selected
by the Trustee in such manner as the Trustee in its uncontrolled discretion shall determine to be fair and in any case where several
bonds are registered in the same name, the Trustee may treat the aggregate principal amount so registered as if it were represented by
one bond and except that when bonds are redeemed in part only the notice given to any particular holder need state only the principal
amount of the bonds of that holder which is to be redeemed and except that notice to the holders of bonds to be redeemed shall be given
by mailing to such holders a notice of such redemption, first class mail postage prepaid, not later than the tenth day, and not earlier
than the sixtieth day, before the date fixed for redemption, at their last addresses as they shall appear upon the bond register of the
Company. Any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or
not the holder receives such notice; and failure duly to give such notice by mail, or any defect in such notice, to the holder of any
bond designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other
bond. No publication of notice of such redemption shall be required.

 

Section 1.5.     The
limit upon the aggregate principal amount of the bonds of the 2.55% Series which may be authenticated and delivered pursuant to this
supplemental indenture shall initially be $550,000,000. Notwithstanding the foregoing, the Company may, without the consent of the holders
of the bonds of the 2.55% Series, reopen the bonds of the 2.55% Series and issue an unlimited amount of additional bonds having the
same ranking, interest rate, maturity and other terms (except for the price to the public, the issue date, and, if applicable, the initial
interest accrual date and the first interest payment date) as the bonds of the 2.55% Series authenticated and delivered pursuant
to this supplemental indenture; provided, that, the Company may reopen the bonds of the 2.55% Series only if the additional bonds
issued will be fungible for United States federal income tax purposes with the bonds of the 2.55% Series authenticated and delivered
pursuant to this supplemental indenture. Any such additional bonds will be consolidated with and form a single series of bonds under the
Indenture with the bonds of the 2.55% Series authenticated and delivered pursuant to this supplemental indenture.

 

Section 1.6.     The
place or places of payment (as to principal and premium, if any, and interest), redemption, transfer, exchange and registration of the
bonds of the 2.55% Series shall be the office or offices or the agency or agencies of the Company in the Borough of Manhattan, The
City of New York, designated from time to time by the Board of Directors of the Company (provided, that if the bonds of the 2.55% Series are
represented by Global Securities held by or on behalf of the Depositary, the procedures of the Depositary may be followed for any action
under this Section 1.6).

 

Section 1.7.     The
form of the bonds of the 2.55% Series and the certificate of the Trustee to be endorsed on such bonds, respectively, shall be in
substantially the form set forth in Exhibit A hereto.

 

SECTION 2.     Bonds
of the 3.45% Series

 

Section 2.1.     The
Company hereby creates a new series of bonds to be issued under and secured by the Indenture and known as its First and Refunding Mortgage
Bonds, 3.45% Series due 2051 (herein called “bonds of the 3.45% Series”) and the Company hereby establishes, determines
and fixes the terms and provisions of the bonds of the 3.45% Series as hereinafter in this Section 2 set forth.

 

Each bond of the 3.45% Series shall
be dated the date of its authentication (except that if any such bond shall be authenticated on any interest payment date, it shall be
dated the following day) and interest shall be payable on the principal represented thereby commencing October 15, 2021, from April 15
or October 15, as the case may be, next preceding the date thereof to which interest has been paid, unless such date of authentication
is prior to October 15, 2021, in which case interest shall be payable from April 1, 2021; provided, however, that
interest shall be payable on each bond of the 3.45% Series authenticated after the record date (as defined in the next succeeding
paragraph of this Section 2.1) with respect to any interest payment date and prior to such interest payment date, only from such
interest payment date.

 

    6

     

    

 

Interest on any bond of the
3.45% Series shall be paid to the person who, according to the bond register of the Company, is the registered holder of such bond
of the 3.45% Series at the close of business on the applicable record date, and such interest payments shall be made by check mailed
to such registered holder at his last address shown on such bond register or, at the option of the Company, by wire transfer at such place
and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least sixteen (16)
days prior to the date of payment by the Person entitled thereto (provided, that if the bonds of the 3.45% Series are represented
by Global Securities held by the Depositary, payment may be made pursuant to the procedures of the Depositary); provided, however,
that, if the Company shall default in the payment of the interest due on any interest payment date on any bond of the 3.45% Series, such
defaulted interest shall be paid to the registered holder of such bond (or any bond or bonds of the 3.45% Series issued upon transfer,
exchange or substitution thereof) on the date of subsequent payment of such defaulted interest or, at the election of the Company, to
the person in whose name such bond (or any bond or bonds of the 3.45% Series issued upon transfer, exchange or substitution thereof)
is registered on a subsequent record date established by notice given by mail by or on behalf of the Company to the holders of all bonds
of the 3.45% Series not less than ten (10) days preceding such subsequent record date. The term “record date” as
used in this Section 2.1 shall mean, with respect to any semi-annual interest payment date, the close of business on (i) the
business day immediately preceding such interest payment date so long as the bonds of the 3.45% Series remain in book-entry only
form or (ii) the fifteenth calendar day immediately preceding such interest payment date if any of the bonds of the 3.45% Series do
not remain in book-entry only form, in each case, whether or not a business day, or, in the case of a payment of defaulted interest, the
close of business on any subsequent record date established as provided above.

 

Section 2.2.     All
bonds of the 3.45% Series shall mature as to principal on April 15, 2051 and shall bear interest at a rate of 3.45% per annum,
payable semi-annually on the 15th day of April and October in each year, commencing on the 15th day of
October, 2021. Interest on the bonds of the 3.45% Series will be computed on the basis of a 360-day year consisting of twelve 30-day
months.

 

Section 2.3.     The
bonds of the 3.45% Series shall be fully registered bonds, without coupons, in denominations of two thousand dollars ($2,000) and
integral multiples of one thousand dollars ($1,000) in excess thereof, all such bonds to be numbered, and shall be transferable and exchangeable
as provided in the form of bond set forth as Exhibit B to this supplemental indenture. The provisions of §1.19 and any other
provision in the Indenture in respect of coupon bonds or reservation of coupon bond numbers shall be inapplicable to the bonds of the
3.45% Series.

 

Section 2.4.     At
any time before October 15, 2050 (the “2051 Par Call Date”), the bonds of the 3.45% Series may be redeemed at the
option of the Company, in whole or in part and from time to time, at a redemption price equal to the greater of (1) 100% of the principal
amount of the bonds of the 3.45% Series to be redeemed and (2) the sum of the present values of the remaining scheduled payments
of principal and interest on the bonds of the 3.45% Series being redeemed that would be due if the bonds of the 3.45% Series matured
on the 2051 Par Call Date (exclusive of interest accrued to the redemption date) discounted to the redemption date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 20 basis points, plus, in either case, accrued
and unpaid interest on the principal amount of the bonds of the 3.45% Series being redeemed to, but excluding, the date of such redemption.
The Company shall notify the Trustee of the redemption price with respect to any redemption pursuant to this paragraph promptly after
the calculation thereof. The Trustee shall not be responsible for calculating said redemption price.

 

    7

     

    

 

At
any time on or after the 2051 Par Call Date, the bonds of the 3.45% Series may be redeemed at the option of the Company, in
whole or in part and from time to time, at a redemption price equal to 100% of the principal amount of the bonds of the 3.45% Series to
be redeemed plus accrued and unpaid interest on the principal amount being redeemed to, but excluding, the date of such redemption.

 

The bonds of the 3.45% Series are
also subject to redemption through the operation of the Replacement Fund provided in Part Two of this supplemental indenture or through
the application of moneys paid to the Trustee pursuant to the provisions of §5.05 of the Indenture, at any time or from time to time
prior to maturity, upon prior notice as hereinafter provided, at the redemption prices specified in the fifth paragraph of the reverse
side of the form of bond set forth as Exhibit B to this supplemental indenture, together with interest accrued thereon to the date
fixed for redemption thereof.

 

In the event that any redemption
date is not a business day, the Company shall pay the redemption price on the next business day without any interest or other payment
due to the delay.

 

All
such redemptions of bonds of the 3.45% Series shall be effected as provided in Article 3 of the Indenture except that, in case
a part only of the bonds of the 3.45% Series is to be paid and redeemed, the particular bonds or part thereof shall be selected by
the Trustee in such manner as the Trustee in its uncontrolled discretion shall determine to be fair and in any case where several bonds
are registered in the same name, the Trustee may treat the aggregate principal amount so registered as if it were represented by one bond
and except that when bonds are redeemed in part only the notice given to any particular holder need state only the principal amount
of the bonds of that holder which is to be redeemed and except that notice to the holders of bonds to be redeemed shall be given by mailing
to such holders a notice of such redemption, first class mail postage prepaid, not later than the tenth day, and not earlier than the
sixtieth day, before the date fixed for redemption, at their last addresses as they shall appear upon the bond register of the Company.
Any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the holder
receives such notice; and failure duly to give such notice by mail, or any defect in such notice, to the holder of any bond designated
for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other bond. No publication
of notice of such redemption shall be required.

 

Section 2.5.     The
limit upon the aggregate principal amount of the bonds of the 3.45% Series which may be authenticated and delivered pursuant to this
supplemental indenture shall initially be $450,000,000. Notwithstanding the foregoing, the Company may, without the consent of the holders
of the bonds of the 3.45% Series, reopen the bonds of the 3.45% Series and issue an unlimited amount of additional bonds having the
same ranking, interest rate, maturity and other terms (except for the price to the public, the issue date, and, if applicable, the initial
interest accrual date and the first interest payment date) as the bonds of the 3.45% Series authenticated and delivered pursuant
to this supplemental indenture; provided, that, the Company may reopen the bonds of the 3.45% Series only if the additional bonds
issued will be fungible for United States federal income tax purposes with the bonds of the 3.45% Series authenticated and delivered
pursuant to this supplemental indenture. Any such additional bonds will be consolidated with and form a single series of bonds under the
Indenture with the bonds of the 3.45% Series authenticated and delivered pursuant to this supplemental indenture.

 

Section 2.6.     The
place or places of payment (as to principal and premium, if any, and interest), redemption, transfer, exchange and registration of the
bonds of the 3.45% Series shall be the office or offices or the agency or agencies of the Company in the Borough of Manhattan, The
City of New York, designated from time to time by the Board of Directors of the Company (provided, that if the bonds of the 3.45% Series are
represented by Global Securities held by or on behalf of the Depositary, the procedures of the Depositary may be followed for any action
under this Section 2.6).

 

    8

     

    

 

Section 2.7.     The
form of the bonds of the 3.45% Series and the certificate of the Trustee to be endorsed on such bonds, respectively, shall be in
substantially the form set forth in Exhibit B hereto.

 

PART Two.

 

REPLACEMENT FUND.

 

SECTION 1.     So
long as any of the bonds of the 2.55% Series or the 3.45% Series are outstanding, the Company will continue to maintain the
Replacement Fund set forth in, and in accordance with the applicable terms and conditions now contained in, Part Two of the supplemental
indenture dated as of February 1, 1949, and the covenants on the part of the Company contained in such Part Two shall continue
and remain in full force and effect, whether or not bonds of the 1979 Series are outstanding and to the same extent as though the
words “or any bonds of the 2.55% Series or the 3.45% Series” were inserted after the word “Series” appearing
in the second line of Section 1 and the second line of Section 4 of said Part Two of said supplemental indenture dated
as of February 1, 1949.

 

SECTION 2.     If
at any time (a) any of the bonds of the 2.55% Series or the 3.45% Series  are outstanding and (b) no Outstanding Mortgage
Bonds (as defined in Section 1 of Part Three of this supplemental indenture) entitled to the benefit of the Replacement Fund
are outstanding and (c) cash which shall have been deposited with the Trustee pursuant to such Replacement Fund shall not within
five years from the date of deposit thereof have been paid out, or used or set aside by the Trustee for the payment, purchase or redemption
of bonds, pursuant to such Replacement Fund, such cash shall, if in excess of fifty thousand dollars ($50,000), be applied to the redemption
of bonds of the 2.55% Series and the 3.45% Series on a pro rata basis as between such series in an aggregate principal amount
sufficient to exhaust as nearly as possible the full amount of such cash. Anything in Section 5 of Part Two of the aforesaid
supplemental indenture dated as of February 1, 1949, in Section 3 of Part Two of the supplemental indentures dated as of
May 1, 1993, July 1, 1993, August 1, 1993, August 20, 1993, May 1, 1994, February 25, 2003, March 21,
2003 and September 23, 2003, in Section 3 of Part Three of the supplemental indenture dated as of March 1, 1990 and
in Section 5 of Part Four of the supplemental indenture dated as of March 1, 1993 to the contrary notwithstanding, no cash
shall be paid over to the Company thereunder if at the time any bonds of the 2.55% Series or the 3.45% Series are then outstanding,
and such cash shall in such event be applied as in this Part Two set forth.

 

SECTION 3.     Whenever
all of the bonds of the 2.55% Series or the 3.45% Series and all of the Outstanding Mortgage Bonds entitled to the benefit of
the Replacement Fund shall have been paid, purchased or redeemed, the Trustee shall, upon application of the Company, pay to or upon the
order of the Company all cash theretofore deposited with the Trustee pursuant to the provisions of the Replacement Fund and not previously
disposed of pursuant to the provisions of the Replacement Fund, and shall deliver to the Company any bonds which shall theretofore have
been deposited with the Trustee pursuant to the provisions of the Replacement Fund or paid, purchased or redeemed pursuant to the provisions
of the Replacement Fund.

 

PART Three.

 

ADDITIONAL COVENANTS OF THE COMPANY

 

SECTION 1.     Whether
or not the covenants on the part of the Company contained in Part Three of the supplemental indenture dated as of February 1,
1949 are modified with the consent of the holders of bonds of the 2027 City of Greensboro Series, the 6.00% Series, the 6.05% Series,
the 2040 Series, the 2020 Series, the 2010C Solid Waste Disposal Series, the 2010D Solid Waste Disposal Series, the 3.90% Series, the
4.25% Series or the 4.00% Series (collectively, the “Outstanding Mortgage Bonds”), such covenants on the part of
the Company contained in said Part Three shall continue and remain in full force and effect so long as any of the bonds of the 2.55%
Series or the 3.45% Series are outstanding and to the same extent as though the words “or so long as any bonds of the
2.55% Series or the 3.45% Series are outstanding” were inserted after the words “so long as any of the bonds of
the 1979 Series or any bonds of the 2.65% Series are outstanding” wherever such words appear in said Part Three of
the supplemental indenture dated as of February 1, 1949.

 

    9

     

    

 

SECTION 2.     Whether
or not the second sentence of paragraph (a) of §2.08 of the original indenture (making certain provisions for the definition
of the term “net amount” applicable while bonds of the 2.65% Series were outstanding and which was originally set forth
in Section 4 of Article One of the supplemental indenture dated as of September 1, 1947 and which is corrected and clarified
by Section 2 of Part Four of the supplemental indenture dated as of February 1, 1968) is modified with the consent of the
holders of any of the Outstanding Mortgage Bonds, said sentence shall continue and remain in full force and effect so long as any bonds
of the 2.55% Series or the 3.45% Series are outstanding, and with the same force and effect as though said sentence had stated
that such provisions were to be applicable so long as any of the bonds of the 2.55% Series or the 3.45% Series are outstanding.

 

PART Four.

 

GLOBAL SECURITIES; TRANSFER AND EXCHANGE

 

SECTION 1.     The
bonds of the 2.55% Series shall initially be issued in the form of one or more Global Securities registered in the name of the Depositary
(which initially shall be The Depository Trust Company) or its nominee. Except under the limited circumstances described below, bonds
of the 2.55% Series represented by such Global Security or Global Securities shall not be exchangeable for, and shall not otherwise
be issuable as, bonds of the 2.55% Series in definitive form. The Global Securities described in this Part Four may not be transferred
except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or to a successor Depositary or its nominee.

 

None of the Company, the Trustee
nor any agent of the Company or the Trustee will have any responsibility or liability for any aspect of the records relating to or payments
made on account of beneficial ownership interests of a Global Security or maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.

 

A Global Security shall be
exchangeable for bonds of the 2.55% Series registered in the names of persons other than the Depositary or its nominee only if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as a Depositary for such Global Security and no successor Depositary
shall have been appointed by the Company within 90 days of receipt by the Company of such notification, or if at any time the Depositary
ceases to be a clearing agency registered under the Exchange Act at a time when the Depositary is required to be so registered to act
as such Depositary and no successor Depositary shall have been appointed by the Company within 90 days after it becomes aware of such
cessation, (ii) an Event of Default has occurred and is continuing with respect to the bonds of the 2.55% Series or (iii) the
Company in its sole discretion, and subject to the procedures of the Depositary, determines that such Global Security shall be so exchangeable.
Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for bonds of the 2.55% Series registered
in such names as the Depositary shall direct.

 

SECTION 2.     The
bonds of the 3.45% Series shall initially be issued in the form of one or more Global Securities registered in the name of the Depositary
(which initially shall be The Depository Trust Company) or its nominee. Except under the limited circumstances described below, bonds
of the 3.45% Series represented by such Global Security or Global Securities shall not be exchangeable for, and shall not otherwise
be issuable as, bonds of the 3.45% Series in definitive form. The Global Securities described in this Part Four may not be transferred
except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or to a successor Depositary or its nominee.

 

    	 	10	 

     

    

 

None of the Company, the Trustee
nor any agent of the Company or the Trustee will have any responsibility or liability for any aspect of the records relating to or payments
made on account of beneficial ownership interests of a Global Security or maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.

 

A Global Security shall be
exchangeable for bonds of the 3.45% Series registered in the names of persons other than the Depositary or its nominee only if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as a Depositary for such Global Security and no successor Depositary
shall have been appointed by the Company within 90 days of receipt by the Company of such notification, or if at any time the Depositary
ceases to be a clearing agency registered under the Exchange Act at a time when the Depositary is required to be so registered to act
as such Depositary and no successor Depositary shall have been appointed by the Company within 90 days after it becomes aware of such
cessation, (ii) an Event of Default has occurred and is continuing with respect to the bonds of the 3.45% Series or (iii) the
Company in its sole discretion, and subject to the procedures of the Depositary, determines that such Global Security shall be so exchangeable.
Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for bonds of the 3.45% Series registered
in such names as the Depositary shall direct.

 

SECTION 3.     Depository
Legend. Each of the Global Securities shall bear the following legend (the “Depository Legend”) on the face thereof:

 

“UNLESS THIS CERTIFICATE IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERS
OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.”

 

SECTION 4.     Transfer
and Exchange.

 

(a)        Every
bond of the 2.55% Series or the 3.45% Series presented or surrendered for registration of transfer or for exchange shall (if
so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory
to the Company and the Trustee duly executed, by the Holder thereof or his attorney duly authorized in writing.

 

(b)        No
service charge shall be made for any registration of transfer or exchange of bonds of the 2.55% Series or the 3.45% Series, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any
registration or transfer or exchange of bonds of the 2.55% Series or the 3.45% Series.

 

    	 	11	 

     

    

 

SECTION 5.     Definitions.
The following defined terms used herein shall, unless the context otherwise requires, have the meanings specified below. Capitalized terms
used herein for which no definition is provided herein shall have the meanings set forth in the Indenture.

 

“Business day”
means any day other than a day on which banks in New York City are required or authorized to be closed.

 

“Comparable Treasury
Issue” means the United States Treasury security selected by the Quotation Agent as having an actual or interpolated maturity comparable
to the remaining term of the applicable bonds of the 2.55% Series or the 3.45% Series to be redeemed (assuming, for this purpose,
that the bonds of the 2.55% Series matured on the 2031 Par Call Date and the bonds of the 3.45% Series matured on the 2051 Par
Call Date), that would be utilized at the time of selection and in accordance with customary financial practice, in pricing new issues
of corporate debt securities of a comparable maturity to the remaining term of such bonds of the 2.55% Series or the 3.45% Series.

 

“Comparable Treasury
Price” means, with respect to any redemption date, (A) the average of the Reference Treasury Dealer Quotations for such redemption
date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (B) if the Quotation Agent obtains
fewer than four of such Reference Treasury Dealer Quotations, the average of all such Reference Treasury Dealer Quotations as determined
by the Company.

 

“Depositary” means
a clearing agency registered under the Exchange Act that is designated to act as Depositary for the bonds of the 2.55% Series or
the 3.45% Series, which Depositary shall initially be The Depository Trust Company.

 

“Depository Legend”
means a legend set forth in Section 2 of this Part Four.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended.

 

“Global Security”
means a bond of the 2.55% Series or the 3.45% Series in global form.

 

“Holder” means
a Person in whose name a bond of the 2.55% Series or the 3.45% Series is registered in the registration books maintained by
the Trustee.

 

“Person”
means any individual, corporation, partnership, limited liability company or corporation, joint venture, trust, unincorporated organization
or government or any agency or political subdivision thereof.

 

“Quotation Agent”
means one of the Reference Treasury Dealers appointed by the Company.

 

“Reference
Treasury Dealer” means each of (i) BNP Paribas Securities Corp., BofA Securities, Inc., J.P. Morgan Securities
LLC and Morgan Stanley & Co. LLC, and (ii) a Primary Treasury Dealer (as defined below) selected by each of Credit Suisse
Securities (USA) LLC and Truist Securities, Inc.; or, in each case, their respective affiliates or successors, each of which is a
primary U.S. Government securities dealer in the United States (a “Primary Treasury Dealer”); provided, however, that if any
of the foregoing or their affiliates or successors shall cease to be a Primary Treasury Dealer, the Company shall substitute therefor
another Primary Treasury Dealer.

 

    	 	12	 

     

    

 

“Reference Treasury
Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by
the Quotation Agent, of the bid and asked prices for the applicable Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount) quoted in writing to the Quotation Agent by such Reference Treasury Dealer at 5:00 p.m., New York City time,
on the third business day preceding such redemption date.

 

“Treasury Rate”
means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity or interpolated maturity
(on a day count basis) of the applicable Comparable Treasury Issue, assuming a price for such Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the applicable Comparable Treasury Price for such redemption date.

 

PART Five.

 

MISCELLANEOUS.

 

SECTION 1.

 

(a)            For
the purposes of §2.10 of the Indenture and for the purposes of any modification of the provisions of the Replacement Fund referred
to in Part Two of this supplemental indenture, the covenants and provisions on the part of the Company which are set forth or incorporated
in Part Two of this supplemental indenture shall be for the benefit only of the holders of the bonds of the 2.55% Series and
the 3.45% Series. Such covenants and provisions shall remain in force and be applicable only so long as any bonds of the 2.55% Series or
the 3.45% Series shall be outstanding, and, subject to the provisions of paragraph (2) of subdivision (c) of §10.01
of the Indenture, any such covenants and provisions may be modified with respect to the bonds of the 2.55% Series or the 3.45% Series with
the consent, in writing or by vote at a bondholders’ meeting of the holders of sixty-six and two-thirds per cent (66 2/3%) of the
principal amount of the bonds of the 2.55% Series or the 3.45% Series, as the case may be, at the time outstanding and without the
consent of the holders of any other bonds then outstanding under the Indenture; provided that no such consent shall be effective
to waive any past default under such covenants and provisions, and its consequences, unless the consent of the holders of at least a majority
in principal amount of all bonds then outstanding under the Indenture is obtained. Such covenants shall be deemed to be additional covenants
and none of them shall affect or derogate from, or relieve the Company from, its obligation to comply with any of the other covenants,
conditions, requirements or provisions of the Indenture or any other supplemental indenture.

 

(b)            For
the purposes of §2.10 of the Indenture and for the purposes of any modification of the provisions of Part Three of this supplemental
indenture, the covenants and provisions on the part of the Company which are set forth or incorporated in said Part Three shall be
for the benefit only of the holders of the bonds of the 2.55% Series and the 3.45% Series. Such covenants and provisions shall remain
in force and be applicable only so long as any bonds of the 2.55% Series or the 3.45% Series shall be outstanding, and, subject
to the provisions of paragraph (2) of subdivision (c) of §10.01 of the Indenture, any such covenants and provisions may
be modified with respect to the bonds of the 2.55% Series or the 3.45% Series with the consent, in writing or by vote at a bondholders’
meeting of the holders of sixty-six and two-thirds per cent (66 2/3 %) of the principal amount of the bonds of the 2.55% Series or
the 3.45% Series, as the case may be, at the time outstanding and without the consent of the holders of any other bonds then outstanding
under the Indenture; provided that no such consent shall be effective to waive any past default under such covenants and provisions,
and its consequences, unless the consent of the holders of at least a majority in principal amount of all bonds then outstanding under
the Indenture is obtained. Such covenants shall be deemed to be additional covenants and none of them shall affect or derogate from, or
relieve the Company from, its obligation to comply with any of the other covenants, conditions, requirements or provisions of the Indenture
or any other supplemental indenture.

 

    	 	13	 

     

    

 

SECTION 2.     All
terms contained in this supplemental indenture shall, except as specifically provided herein or except as the context may otherwise require,
have the meanings given to such terms in the Indenture.

 

SECTION 3.     In
case any one or more of the provisions contained in this supplemental indenture should be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other provision contained in this supplemental indenture, and, to
the extent, but only to the extent, that such provision is invalid, illegal or unenforceable, this supplemental indenture shall be construed
as if such provision had never been contained herein.

 

SECTION 4.     The
Trustee hereby accepts the trusts herein declared and provided upon the terms and conditions in the Indenture set forth.

 

SECTION 5.     This
supplemental indenture may be executed in several counterparts, each of which shall be an original, and all collectively but one instrument.
The words “execution,” signed,” signature,” and words of like import in the Indenture shall include images of
manually executed signatures transmitted by facsimile, email or other electronic format (including, without limitation, “pdf,”
 “tif” or “jpg”) and other electronic signatures (including without limitation, DocuSign and AdobeSign). The use
of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent,
communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed
signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Federal Electronic
Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law,
including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code. Without
limitation to the foregoing, and anything in the Indenture to the contrary notwithstanding, (a) any officers’ certificate,
Opinion of Counsel, Trustee’s Certificate, Engineer’s Certificate, Net Earnings Certificate, bond, certificate of authentication
appearing on or attached to any bond, or other certificate, opinion of counsel, instrument, agreement or other document delivered pursuant
to the Indenture may be executed, attested and transmitted by any of the foregoing electronic means and formats, (b) all references
in Article Two or elsewhere in the Indenture to the execution, attestation or authentication of any bond or any certificate of authentication
appearing on or attached to any bond by means of a manual or facsimile signature shall be deemed to include signatures that are made or
transmitted by any of the foregoing electronic means or formats, and (c) any requirement in Article Two or elsewhere in the
Indenture that any signature be made under a corporate seal (or facsimile thereof) shall not be applicable to the bonds of the 2.55% Series and
the bonds of the 3.45% Series.

 

SECTION 6.     In
addition to the amendment provisions of the Indenture, the terms and conditions of this supplemental indenture and the bonds of the 2.55%
Series or the 3.45% Series may be modified, amended or supplemented by the Company and the Trustee, without the consent of the
holders of the bonds of the 2.55% Series or the 3.45% Series, and if not inconsistent with the Indenture, to cure ambiguities in
this supplemental indenture or the bonds of the 2.55% Series or the 3.45% Series, or correct defects or inconsistencies in the provisions
of this supplemental indenture or the bonds of the 2.55% Series or the 3.45% Series or to provide for such appropriate additional
provisions in this supplemental indenture or the bonds of the 2.55% Series or the 3.45% Series as are necessary for certificated
bonds to be issued in lieu of Global Securities or to reflect additional provisions related to the issuance of Global Securities (including
changes in the procedures of the Depositary).

 

    	 	14	 

     

    

 

IN WITNESS WHEREOF, Duke Energy
Carolinas, LLC, the party of the first part hereto, has caused this supplemental indenture to be signed in its name by one of its Senior
Vice Presidents and its company seal to be hereunto affixed, and the same to be attested by one of its Assistant Secretaries, and The
Bank of New York Mellon Trust Company, N.A., the party of the second part hereto, in token of its acceptance of the trust hereby created,
has caused this supplemental indenture to be signed in its name by one of its Vice Presidents and its company seal to be hereunto affixed,
and the same to be attested by one of its Vice Presidents, all as of the day and year first above written.

 

	 	DUKE ENERGY CAROLINAS, LLC
	 	 	 	 
	 	By:	/s/ Karl W. Newlin
	 	 	Name:	Karl W. Newlin
	 	 	Title:	Senior Vice President, Corporate Development and Treasurer

 

ATTEST:

 

	/s/ Robert T. Lucas III	 
	Name:	Robert T. Lucas III	 
	Title:	Assistant Secretary	 

 

Signed, sealed, executed, acknowledged

and delivered by Duke Energy

Carolinas, LLC, in the presence of:

 

	/s/ Carol Melendez	 
	Carol Melendez	 

 

	/s/
    Nancy M. Wright	 
	Nancy M. Wright	 

 

[COMPANY’S SIGNATURE PAGE]

[ONE-HUNDRED AND FIFTH SUPPLEMENTAL INDENTURE

TO THE DUKE ENERGY CAROLINAS, LLC FIRST AND REFUNDING MORTGAGE

DATED AS OF DECEMBER 1, 1927]

 

    

     

    

 

	 	The Bank of New York Mellon Trust Company, N.A.,

as Trustee
	 	 	 	 
	 	By:	/s/ Nathan Turner
	 	 	Name:	Nathan Turner
	 	 	Title:	Vice President

 

ATTEST:

 

	/s/ Michele R. Shrum	 
	Name:	Michele R. Shrum	 
	Title:	Vice President	 

 

Signed, sealed, executed,

acknowledged and delivered by The Bank of New York

Mellon Trust Company, N.A.,

in the presence of:

 

	/s/ Bert J. Millis	 
	Name:	Bert J. Millis	 

 

	/s/ Cindy Sheldon	 
	Name:	Cindy Sheldon	 

 

[TRUSTEE’S SIGNATURE PAGE]

[ONE-HUNDRED AND FIFTH SUPPLEMENTAL INDENTURE

TO THE DUKE ENERGY CAROLINAS, LLC FIRST AND REFUNDING MORTGAGE

DATED AS OF DECEMBER 1, 1927]

 

    

     

    

 

	State of Florida 	)
	 	) ss.:
	Countyof Duval 	)

 

Personally appeared before me, Bert J. Mills,
and made oath that he is not a party to or beneficiary of the transaction and that he saw Nathan Turner, a Vice President and Michele
R. Shrum, a Vice President, respectively, of The Bank of New York Mellon Trust Company, N.A., sign, attest and affix hereto the corporate
seal of said The Bank of New York Mellon Trust Company, N.A., and, as the act and deed of said corporation, deliver the within written
and foregoing deed, and that he, with Cindy Sheldon, witnessed the execution thereof.

 

	 	Sworn and subscribed before me
 this 23rd day of March, 2021.
	 	 
	 	 
	 	/s/ Xayyavone Gillmore
	 	Xayyavone Gillmore
	 	Notary Public – State of Florida
	 	Commission Expires 8/10/2024

 

	State of Florida	)
	 	) ss.:
	County of Duval 	)

 

I,
 Xayyavone Gillmore, a Notary Public in and for the State aforesaid, certify that Michele R. Shrum personally came before me this
day and acknowledged that she is a Vice President of The Bank of New York Mellon Trust Company, N.A., a national banking association,
and that, by authority duly given and as the act of the corporation, the foregoing instrument was signed in its name by one of its Vice
Presidents, sealed with its corporate seal, and attested by himself as one of its Vice Presidents.

 

Witness may hand and official seal, this 23rd
day of March, 2021.

 

	 	/s/
    Xayyavone Gillmore
	 	Name: Xayyavone Gillmore
	 	Notary Public – State of Florida
	 	Commission Expires 8/10/2024

 

    

     

    

 

	State of North Carolina	)
		) ss.:
	County of Mecklenburg	)

 

I, Jenny Pattana, a Notary Public in and for the
State and County aforesaid, certify that Carol Melendez personally appeared before me this day, and being duly sworn, stated that she
is not a party to or beneficiary of the transaction and that in her presence Karl W. Newlin, Senior Vice President, Corporate Development
and Treasurer of Duke Energy Carolinas, LLC, executed the foregoing instrument, and that she, with Jenny Pattana, witnessed the execution
thereof.

 

Witness my hand and official seal, this 1st
day of April, 2021.

 

	 	/s/ Carol Melendez
	 	Carol Melendez
	 	 
	 	 
	 	/s/ Jenny Pattana
	 	Name: Jenny Pattana
	 	Notary Public, State of North Carolina
	 	Mecklenburg County
	 	My Commission Expires: June 8, 2025

 

	State of North Carolina	)
		) ss.:
	County of Mecklenburg	)

 

I, Jenny Pattana, a Notary Public in and for the
State and County aforesaid, certify that Robert T. Lucas III personally came before me this day and acknowledged that he is an Assistant
Secretary of Duke Energy Carolinas, LLC, a North Carolina limited liability company, and that, by authority duly given and as the act
of the company, the foregoing instrument was signed in its name by one of its Senior Vice Presidents, sealed with its seal, and attested
by himself as one of its Assistant Secretaries.

 

Witness my hand and official seal, this 1st
day of April, 2021.

 

	 	/s/
    Jenny Pattana
	 	Name: Jenny Pattana
	 	Notary Public, State of North Carolina
	 	Mecklenburg County
	 	My Commission Expires: June 8, 2025

 

    

     

    

 

 

EXHIBIT A

 

FORM OF
DUKE ENERGY CAROLINAS, LLC

FIRST AND REFUNDING MORTGAGE BOND, 2.55% SERIES DUE 2031

 

[FACE SIDE
OF BOND]

 

[DEPOSITORY
LEGEND, IF APPLICABLE]

DUKE ENERGY CAROLINAS, LLC

 

FIRST
AND REFUNDING MORTGAGE BOND,

2.55% SERIES DUE 2031

 

	No.	 	$
	CUSIP No.	26442C BB9	 
	ISIN	US26442CBB90	 

 

Duke
Energy Carolinas, LLC, a North Carolina limited liability company (hereinafter called the “Company”), for value received,
hereby promises to pay to                                   
or registered assigns, the principal sum of                                       Dollars on April 15, 2031 in any coin or currency of the United States of America which
at the time of payment shall be legal tender for the payment of public and private debts, at the office or agency of the Company in the
Borough of Manhattan, The City of New York, and to pay interest thereon at said office or agency from the interest payment date next preceding
the date hereof to which interest on outstanding bonds of this series has been paid (unless the date hereof is prior to October 15,
2021, in which case from April 1, 2021, and unless the date hereof is subsequent to a record date (as defined below) and prior to
the next succeeding April 15 or October 15, in which case from the next succeeding April 15 or October 15 as the case
may be), at the rate of 2.55% per annum, in like coin or currency, semi-annually on April 15 and October 15, in each year, commencing
October 15, 2021, until the principal hereof shall become due and payable. Such interest payments shall be made to the person in
whose name this bond is registered at the close of business on the record date (as defined below) for such interest payment date, which
will be the close of business on (i) the business day immediately preceding such interest payment date so long as the bonds of the
2.55% Series remain in book-entry only form or (ii) the fifteenth calendar day, whether or not a business day, immediately preceding
such interest payment date if any of the bonds of the 2.55% Series do not remain in book-entry only form (each of (i) or (ii),
a “record date”) (subject to certain exceptions provided in the Indenture hereinafter mentioned), at his last address as it
shall appear upon the bond register of the Company.

 

The provisions of this bond
are continued on the reverse hereof and such continued provisions shall for all purposes have the same effect as though fully set forth
in this place.

 

This
bond shall not become or be valid or obligatory for any purpose until the Trustee shall have signed the form of certificate endorsed hereon.

 

    A-1

     

    

 

IN WITNESS WHEREOF, the Company
has caused this instrument to be signed in its name by its President or one of its Vice Presidents, manually or by facsimile signature,
and its company seal to be hereto affixed, or a facsimile thereof to be hereon engraved, lithographed or printed, and to be attested
by the manual or facsimile signature of its Secretary or one of its Assistant Secretaries.

 

Dated:

 

	 	 	DUKE ENERGY CAROLINAS, LLC
	 	 	 
	 	 	 
	 	By:	
	 	 	Name:
	 	 	Title:

 

	ATTEST:	 
	 	 
	 	 
	 	
	Name:	 
	Title:	 

 

    A-2

     

    

 

CERTIFICATE
OF AUTHENTICATION

 

This bond is one of the bonds,
of the series designated therein, described in the within-mentioned Indenture.

 

 

	 	The Bank of New York Mellon Trust Company, N.A.,as
    Trustee
	 	 	 
	 	By:	
	 	 	Authorized Signatory

 

    A-3

     

    

 

[REVERSE
SIDE OF BOND]

 

This
bond is one of the bonds of a series, designated specially as First and Refunding Mortgage Bonds, 2.55% Series due 2031, of
an authorized issue of bonds of the Company, without limit as to aggregate principal amount, designated generally as First and Refunding
Mortgage Bonds, all issued and to be issued under and equally and ratably secured by a First and Refunding Mortgage dated as of December 1,
1927, duly executed by Duke Power Company, a New Jersey corporation (hereinafter called the “New Jersey Company”), to Guaranty
Trust Company of New York, as Trustee (The Bank of New York Mellon Trust Company, N.A., as successor trustee), as supplemented and modified
by indentures supplemental thereto, including a supplemental indenture dated as of April 1, 2021 providing for said series (said
First and Refunding Mortgage as so supplemented and modified being hereinafter referred to as the “Indenture”), to which Indenture
reference is made for a description of the property mortgaged, the nature and extent of the security, the rights of the holders of the
bonds in respect thereof, the terms and conditions upon which the bonds are secured and the restrictions subject to which additional bonds
secured thereby may be issued. To the extent permitted by, and as provided in, the Indenture, modifications or alterations of the Indenture,
or of any indenture supplemental thereto, and of the rights and obligations of the Company and of the holders of the bonds, may be made
with the consent of the Company by the affirmative vote, or with the written consent, of the holders of not less than 66 2/3% in principal
amount of the bonds then outstanding, and by the affirmative vote, or with the written consent, of the holders of not less than 66 2/3%
in principal amount of the bonds of any series then outstanding and affected by such modification or alteration, in case one or more but
less than all of the series of bonds then outstanding under the Indenture are so affected, evidenced, in each case, as provided in the
Indenture; provided that any supplemental indenture may be modified in accordance with the provisions contained therein for its
modification; and provided, further, that no such modification or alteration shall be made which will affect the terms of payment of the
principal of, or interest or premium on, this bond, or the right of any bondholder to institute suit for the enforcement of any such payment
on or after the respective due dates expressed in this bond, or reduce the percentage required for the taking of any such action. Any
such affirmative vote of, or written consent given by, any holder of this bond is binding upon all subsequent holders hereof as provided
in the Indenture.

 

In case an event of default
as defined in the Indenture shall occur, the principal of all the bonds outstanding thereunder may become or be declared due and payable
at the time, in the manner and with the effect provided in the Indenture.

 

At any time before January 15,
2031 (the “Par Call Date”), the bonds of this series may be redeemed at the option of the Company, in whole or in part and
from time to time, at a redemption price equal to the greater of (1) 100% of the principal amount of the bonds of this series to
be redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on such bonds being
redeemed that would be due if the bonds of this series matured on the Par Call Date (exclusive of interest accrued to the redemption date),
discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate
plus 15 basis points, plus, in either case, accrued and unpaid interest on the principal amount of the bonds of this series being redeemed
to, but excluding, the date of such redemption.

 

At
any time on or after the Par Call Date, the bonds of this series may be redeemed at the option of the Company, in whole or in part and
from time to time, at a redemption price equal to 100% of the principal amount of the bonds of this series to be redeemed plus
accrued and unpaid interest on the principal amount being redeemed to, but excluding, the date of such redemption.

 

“Business day” means any
day other than a day on which banks in New York City are required or authorized to be closed.

 

    A-4

     

    

 

“Comparable
Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having an actual or interpolated
maturity comparable to the remaining term of the bonds of this series to be redeemed (assuming, for this purpose, that the bonds of this
series matured on the Par Call Date), that would be utilized at the time of selection and in accordance with customary financial practice,
in pricing new issues of corporate debt securities of a comparable maturity to the remaining term of such bonds.

 

“Comparable Treasury Price”
means, with respect to any redemption date, (A) the average of the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (B) if the Quotation Agent obtains fewer
than four of such Reference Treasury Dealer Quotations, the average of all such Reference Treasury Dealer Quotations as determined by
the Company.

 

“Quotation Agent” means
one of the Reference Treasury Dealers appointed by the Company.

 

“Reference
Treasury Dealer” means each of (i) BNP Paribas Securities Corp., BofA Securities, Inc., J.P. Morgan Securities
LLC and Morgan Stanley & Co. LLC, and (ii) a Primary Treasury Dealer (as defined below) selected by each of Credit Suisse
Securities (USA) LLC and Truist Securities, Inc.; or, in each case, their respective affiliates or successors, each of which is a
primary U.S. Government securities dealer in the United States (a “Primary Treasury Dealer”); provided, however, that if any
of the foregoing or their affiliates or successors shall cease to be a Primary Treasury Dealer, the Company shall substitute therefor
another Primary Treasury Dealer.

 

“Reference Treasury Dealer Quotations”
means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Quotation Agent, of the
bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing
to the Quotation Agent by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third business day preceding such redemption
date.

 

“Treasury Rate” means, with
respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity or interpolated maturity (on
a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for such redemption date.

 

The
bonds of this series are also subject to redemption for the Replacement Fund for bonds of this series provided for in the supplemental
indenture dated as of April  1, 2021, providing for this series, or upon application of moneys arising from a taking of any of the
mortgaged property by eminent domain or similar action, at any time or from time to time prior to maturity, at 100% of their principal
amount, in each case together with accrued and unpaid interest to, but excluding, the date fixed for redemption.

 

Redemption is in every case
to be effected at the office or agency of the Company in the Borough of Manhattan, The City of New York, upon at least ten, but not more
than sixty, days’ prior notice, given by mail as more fully provided in the Indenture.

 

If this bond or any portion
hereof ($2,000 and integral multiples of $1,000 in excess thereof) is called for redemption and payment is duly provided, this bond or
such portion thereof shall cease to bear interest from and after the date fixed for such redemption.

 

    A-5

     

    

 

This bond is transferable,
as provided in the Indenture, by the registered owner hereof in person or by duly authorized attorney, at the office or agency of the
Company in the Borough of Manhattan, The City of New York, upon surrender and cancellation of this bond, and thereupon a new bond of
the same series and of like aggregate principal amount will be issued to the transferee in exchange herefor as provided in the Indenture;
or the registered owner of this bond, at his option, may surrender the same for cancellation at said office or agency of the Company
and receive in exchange herefor the same aggregate principal amount of bonds of the same series of authorized denominations; all subject
to the terms of the Indenture but without payment of any charges other than a sum sufficient to reimburse the Company for any stamp taxes
or other governmental charges incident thereto.

 

This bond is a company obligation
only and no recourse whatsoever, either directly or through the Company or any trustee, receiver, assignee or any other person, shall
be had for the payment of the principal of or premium, if any, or interest on this bond, or for the enforcement of any claim based hereon,
or otherwise in respect hereof or of the Indenture, against any promoter, subscriber to the capital stock, incorporator, or any past,
present or future stockholder, member, officer or director of the Company as such, or of any successor or predecessor corporation or entity,
whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment, penalty, subscription
or otherwise, any and all such liability of promoters, subscribers, incorporators, stockholders, members, officers and directors being
waived and released by each successive holder hereof by the acceptance of this bond, and as a part of the consideration for the issue
hereof, and being likewise waived and released by the terms of the Indenture.

 

[END OF
BOND FORM]

 

    A-6

     

    

 

ABBREVIATIONS

 

The following abbreviations, when used in the
inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or
regulations:

 

	TEN COM —
    as tenants in common	 	UNIF GIFT MIN ACT -		Custodian	
	 	 		(Cust)	 	(Minor)
	TEN ENT — as tenants
    by the entireties	 	 

 

	JT TEN — as joint tenants with rights of survivorship and not as tenants in common	
    under Uniform Gifts to Minors Act

    

	 	 
	 	(State)

 

Additional abbreviations may also be used though
not on the above list.

 

FOR VALUE RECEIVED, the undersigned hereby sell(s) and
transfer(s) unto (please insert Social Security or other identifying number of assignee)

 

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING
POSTAL ZIP CODE OF ASSIGNEE

 

the within bond and all rights thereunder, hereby
irrevocably constituting and appointing agent to transfer said bond on the books of the Company, with full power of substitution in the
premises.

 

	Dated:		 	 
	 	 	 	NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change whatever.
	 	 	 	 
	 	 	 	Signature Guarantee:	 

 

    A-7

     

    

 

SIGNATURE
GUARANTEE

 

Signatures must be guaranteed
by an “eligible guarantor institution” meeting the requirements of the Trustee, which requirements include membership or participation
in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may
be determined by the Trustee in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934,
as amended.

 

    A-8

     

    

 

EXHIBIT B

 

FORM OF
DUKE ENERGY CAROLINAS, LLC

FIRST AND REFUNDING MORTGAGE BOND, 3.45% SERIES DUE 2051

 

[FACE SIDE
OF BOND]

 

[DEPOSITORY
LEGEND, IF APPLICABLE]

DUKE ENERGY CAROLINAS, LLC

 

FIRST
AND REFUNDING MORTGAGE BOND,

3.45% SERIES DUE 2051

 

	No.	$
	CUSIP No.     26442C BC7
	ISIN                US26442CBC73

 

Duke
Energy Carolinas, LLC, a North Carolina limited liability company (hereinafter called the “Company”), for value received,
hereby promises to pay to                                   
or registered assigns, the principal sum of                         Dollars on April 15, 2051 in any coin or currency of the United States of America which
at the time of payment shall be legal tender for the payment of public and private debts, at the office or agency of the Company in the
Borough of Manhattan, The City of New York, and to pay interest thereon at said office or agency from the interest payment date next preceding
the date hereof to which interest on outstanding bonds of this series has been paid (unless the date hereof is prior to October 15,
2021, in which case from April 1, 2021, and unless the date hereof is subsequent to a record date (as defined below) and prior to
the next succeeding April 15 or October 15, in which case from the next succeeding April 15 or October 15 as the case
may be), at the rate of 3.45% per annum, in like coin or currency, semi-annually on April 15 and October 15, in each year, commencing
October 15, 2021, until the principal hereof shall become due and payable. Such interest payments shall be made to the person in
whose name this bond is registered at the close of business on the record date (as defined below) for such interest payment date, which
will be the close of business on (i) the business day immediately preceding such interest payment date so long as the bonds of the
3.45% Series remain in book-entry only form or (ii) the fifteenth calendar day, whether or not a business day, immediately preceding
such interest payment date if any of the bonds of the 3.45% Series do not remain in book-entry only form (each of (i) or (ii),
a “record date”) (subject to certain exceptions provided in the Indenture hereinafter mentioned), at his last address as it
shall appear upon the bond register of the Company.

 

The provisions of this bond
are continued on the reverse hereof and such continued provisions shall for all purposes have the same effect as though fully set forth
in this place.

 

This
bond shall not become or be valid or obligatory for any purpose until the Trustee shall have signed the form of certificate endorsed hereon.

 

    B-1

     

    

IN WITNESS WHEREOF, the Company
has caused this instrument to be signed in its name by its President or one of its Vice Presidents, manually or by facsimile signature,
and its company seal to be hereto affixed, or a facsimile thereof to be hereon engraved, lithographed or printed, and to be attested by
the manual or facsimile signature of its Secretary or one of its Assistant Secretaries.

 

Dated:

 

	 	DUKE ENERGY CAROLINAS, LLC
	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 
	ATTEST:	 
	 
	 	 
	Name:	 
	Title:	 

 

    B-2

     

    

CERTIFICATE
OF AUTHENTICATION

 

This bond is one of the bonds,
of the series designated therein, described in the within-mentioned Indenture.

 

	 	The Bank of New York Mellon Trust Company, N.A.,
 as Trustee
	 
	 	By:	 
	 	 	Authorized Signatory

 

    B-3

     

    

[REVERSE
SIDE OF BOND]

 

This
bond is one of the bonds of a series, designated specially as First and Refunding Mortgage Bonds, 3.45% Series due 2051, of
an authorized issue of bonds of the Company, without limit as to aggregate principal amount, designated generally as First and Refunding
Mortgage Bonds, all issued and to be issued under and equally and ratably secured by a First and Refunding Mortgage dated as of December 1,
1927, duly executed by Duke Power Company, a New Jersey corporation (hereinafter called the “New Jersey Company”), to Guaranty
Trust Company of New York, as Trustee (The Bank of New York Mellon Trust Company, N.A., as successor trustee), as supplemented and modified
by indentures supplemental thereto, including a supplemental indenture dated as of April 1, 2021 providing for said series (said
First and Refunding Mortgage as so supplemented and modified being hereinafter referred to as the “Indenture”), to which Indenture
reference is made for a description of the property mortgaged, the nature and extent of the security, the rights of the holders of the
bonds in respect thereof, the terms and conditions upon which the bonds are secured and the restrictions subject to which additional bonds
secured thereby may be issued. To the extent permitted by, and as provided in, the Indenture, modifications or alterations of the Indenture,
or of any indenture supplemental thereto, and of the rights and obligations of the Company and of the holders of the bonds, may be made
with the consent of the Company by the affirmative vote, or with the written consent, of the holders of not less than 66 2/3% in principal
amount of the bonds then outstanding, and by the affirmative vote, or with the written consent, of the holders of not less than 66 2/3%
in principal amount of the bonds of any series then outstanding and affected by such modification or alteration, in case one or more but
less than all of the series of bonds then outstanding under the Indenture are so affected, evidenced, in each case, as provided in the
Indenture; provided that any supplemental indenture may be modified in accordance with the provisions contained therein for its
modification; and provided, further, that no such modification or alteration shall be made which will affect the terms of payment of the
principal of, or interest or premium on, this bond, or the right of any bondholder to institute suit for the enforcement of any such payment
on or after the respective due dates expressed in this bond, or reduce the percentage required for the taking of any such action. Any
such affirmative vote of, or written consent given by, any holder of this bond is binding upon all subsequent holders hereof as provided
in the Indenture.

 

In case an event of default
as defined in the Indenture shall occur, the principal of all the bonds outstanding thereunder may become or be declared due and payable
at the time, in the manner and with the effect provided in the Indenture.

 

At any time before October 15,
2050 (the “Par Call Date”), the bonds of this series may be redeemed at the option of the Company, in whole or in part and
from time to time, at a redemption price equal to the greater of (1) 100% of the principal amount of the bonds of this series to
be redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on such bonds being
redeemed that would be due if the bonds of this series matured on the Par Call Date (exclusive of interest accrued to the redemption date),
discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate
plus 20 basis points, plus, in either case, accrued and unpaid interest on the principal amount of the bonds of this series being redeemed
to, but excluding, the date of such redemption.

 

At
any time on or after the Par Call Date, the bonds of this series may be redeemed at the option of the Company, in whole or in part and
from time to time, at a redemption price equal to 100% of the principal amount of the bonds of this series to be redeemed plus
accrued and unpaid interest on the principal amount being redeemed to, but excluding, the date of such redemption.

 

“Business day” means any
day other than a day on which banks in New York City are required or authorized to be closed.

 

    B-4

     

    

“Comparable
Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having an actual or interpolated
maturity comparable to the remaining term of the bonds of this series to be redeemed (assuming, for this purpose, that the bonds of this
series matured on the Par Call Date), that would be utilized at the time of selection and in accordance with customary financial practice,
in pricing new issues of corporate debt securities of a comparable maturity to the remaining term of such bonds.

 

“Comparable Treasury Price”
means, with respect to any redemption date, (A) the average of the Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or (B) if the Quotation Agent obtains fewer
than four of such Reference Treasury Dealer Quotations, the average of all such Reference Treasury Dealer Quotations as determined by
the Company.

 

“Quotation Agent” means
one of the Reference Treasury Dealers appointed by the Company.

 

“Reference
Treasury Dealer” means each of (i) BNP Paribas Securities Corp., BofA Securities, Inc., J.P. Morgan Securities
LLC and Morgan Stanley & Co. LLC, and (ii) a Primary Treasury Dealer (as defined below) selected by each of Credit Suisse
Securities (USA) LLC and Truist Securities, Inc.; or, in each case, their respective affiliates or successors, each of which is a
primary U.S. Government securities dealer in the United States (a “Primary Treasury Dealer”); provided, however, that if any
of the foregoing or their affiliates or successors shall cease to be a Primary Treasury Dealer, the Company shall substitute therefor
another Primary Treasury Dealer.

 

“Reference Treasury Dealer Quotations”
means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Quotation Agent, of the
bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing
to the Quotation Agent by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third business day preceding such redemption
date.

 

“Treasury Rate” means, with
respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity or interpolated maturity (on
a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of
its principal amount) equal to the Comparable Treasury Price for such redemption date.

 

The
bonds of this series are also subject to redemption for the Replacement Fund for bonds of this series provided for in the supplemental
indenture dated as of April 1, 2021, providing for this series, or upon application of moneys arising from a taking of any of the
mortgaged property by eminent domain or similar action, at any time or from time to time prior to maturity, at 100% of their principal
amount, in each case together with accrued and unpaid interest to, but excluding, the date fixed for redemption.

 

Redemption is in every case
to be effected at the office or agency of the Company in the Borough of Manhattan, The City of New York, upon at least ten, but not more
than sixty, days’ prior notice, given by mail as more fully provided in the Indenture.

 

If this bond or any portion
hereof ($2,000 and integral multiples of $1,000 in excess thereof) is called for redemption and payment is duly provided, this bond or
such portion thereof shall cease to bear interest from and after the date fixed for such redemption.

 

    B-5

     

    

This bond is transferable,
as provided in the Indenture, by the registered owner hereof in person or by duly authorized attorney, at the office or agency of the
Company in the Borough of Manhattan, The City of New York, upon surrender and cancellation of this bond, and thereupon a new bond of the
same series and of like aggregate principal amount will be issued to the transferee in exchange herefor as provided in the Indenture;
or the registered owner of this bond, at his option, may surrender the same for cancellation at said office or agency of the Company and
receive in exchange herefor the same aggregate principal amount of bonds of the same series of authorized denominations; all subject to
the terms of the Indenture but without payment of any charges other than a sum sufficient to reimburse the Company for any stamp taxes
or other governmental charges incident thereto.

 

This bond is a company obligation
only and no recourse whatsoever, either directly or through the Company or any trustee, receiver, assignee or any other person, shall
be had for the payment of the principal of or premium, if any, or interest on this bond, or for the enforcement of any claim based hereon,
or otherwise in respect hereof or of the Indenture, against any promoter, subscriber to the capital stock, incorporator, or any past,
present or future stockholder, member, officer or director of the Company as such, or of any successor or predecessor corporation or entity,
whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment, penalty, subscription
or otherwise, any and all such liability of promoters, subscribers, incorporators, stockholders, members, officers and directors being
waived and released by each successive holder hereof by the acceptance of this bond, and as a part of the consideration for the issue
hereof, and being likewise waived and released by the terms of the Indenture.

 

[END OF
BOND FORM]

 

    B-6

     

    

ABBREVIATIONS

 

The following abbreviations, when used in the
inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or
regulations:

 

	TEN COM — as tenants in common	 	UNIF GIFT MIN ACT -	 _________ Custodian  ___________
	 	 	 	 (Cust) 	 (Minor)
	TEN ENT — as tenants by the entireties	 	 
	 	 	 
	JT TEN — as joint tenants with rights of survivorship and not as tenants in common	 	 	 under Uniform Gifts to Minors Act
	 	 	 	 
	 	 	 	(State)

 

Additional abbreviations may also be used though
not on the above list.

 

FOR VALUE RECEIVED, the undersigned hereby sell(s) and
transfer(s) unto (please insert Social Security or other identifying number of assignee)

 

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING
POSTAL ZIP CODE OF ASSIGNEE

 

the within bond and all rights thereunder, hereby
irrevocably constituting and appointing agent to transfer said bond on the books of the Company, with full power of substitution in the
premises.

 

	Dated:	 	 	 
	 	 	 	NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change whatever.
	 
	 	 	 	Signature	 
	 	 	 	Guarantee:	 

 

    B-7

     

    

SIGNATURE
GUARANTEE

 

Signatures must be guaranteed
by an “eligible guarantor institution” meeting the requirements of the Trustee, which requirements include membership or
participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program”
as may be determined by the Trustee in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.

 

    B-8

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