Document:

staa-ex102_6.htm

Exhibit 10.2

CONSULTING AGREEMENT

This Consulting Agreement (“Agreement”) is made as of January 1, 2023, by and between Caren Mason, an independent consultant (“the Consultant”), and STAAR Surgical Company, a Delaware corporation, whose address is 25651 Atlantic Ocean Drive, Lake Forest, California 92630 (“the Company”), in reference to the following:

RECITALS

A.  The Company is in the business of manufacturing and selling medical products used for surgical implantation in the human eye.

B.  The Consultant is the former Chief Executive Officer of the Company with expertise is a wide range of leadership, strategic, and operational matters regarding the Company.  

C.  The Company wishes to retain the Consultant, and the Consultant wishes to be retained by the Company.

NOW, THEREFORE, in consideration of the premises stated above, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Consultant agree as follows:

AGREEMENT

1.Term.  The Company retains the Consultant and the Consultant accepts this appointment with the Company for a period beginning on January 1, 2023 (the “Commencement Date”) and ending December 29, 2023.

2.Duties of the Consultant.  The Consultant agrees to perform the services described in Exhibit A to this Agreement.  The Consultant will determine the method, details and means of performing the services.  

3.Compensation.  The Company shall pay to the Consultant, as compensation for the services performed pursuant to this Agreement, the amount of one hundred thousand dollars per month ($100,000.00), to be paid on the last day of each month during the term of this agreement after the performance of the services to be performed in that monthly period.  

4.Nondisclosure and Noncompetition.  

4.1.Access to Confidential Information.  The Consultant acknowledges that during the term of the business relationship between the Consultant and the Company, the Consultant will have access to, view, make use of and add value to confidential proprietary information of the Company, which includes, without limitation, trade secrets, systems, designs, methods, formulae, specifications, proprietary techniques, documentation, manuals, files, records, computer software programs, white papers, other confidential reports and communications and lists of and information relating to suppliers, customers and prospects, whether provided by the Company or developed by the Consultant (“Confidential Information”).  The Consultant further acknowledges that any information and materials 

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received by the Company from third parties in confidence (including materials so received by the Consultant on behalf of the Company) shall be included in the definition of Confidential Information.  

4.2.Nondisclosure of Confidential Information.  The Consultant agrees to hold all Confidential Information in strict confidence, and agrees not to directly or indirectly disclose, divulge, reveal, report, publish or transfer, for any purpose whatsoever, any Confidential Information to any person or entity.  The Consultant acknowledges that the Company holds all right, title, and interest in and to all tangible and intangible incidents of the Confidential Information, including, without limitation, all trade secrets, copyrights, patent rights and derivative works pertaining thereto, and that this agreement conveys to the Consultant only a limited right to use the Confidential Information in the course of performing this Agreement.  Such right is fully revocable in accordance with the provisions of this Agreement.  The Consultant further agrees that, except for such right of use, it shall not assert any right, title, or interest in or to the Confidential Information.  The Consultant agrees to return all Confidential Information in the Consultant's possession or under the Consultant's control at the request of the Company or, in the absence of such a request, upon the termination of this Agreement.

4.3.No Unfair Use by the Consultant.  The Consultant agrees that the Consultant shall not use Confidential Information in any way or at any time except as required in the course of the Consultant’s business relationship with the Company, nor will the Consultant appropriate Confidential Information for the Consultant’s own use or the use of any other party.  The Consultant agrees that any use, appropriation or disclosure of Confidential Information not in accordance with this Agreement constitutes unfair competition.  The Consultant promises and agrees not to engage in any unfair competition with the Company.  

4.4.Right of Injunction.  As any breach by the Consultant of its covenants and agreements in this section may cause irreparable injury to the Company that cannot be redressed by the payment of monies, the Company shall be entitled to enjoin any such threatened or continuing violation.  

4.5.Excluded Information.  “Confidential Information” shall not include information which is or becomes publicly available without breach of (i) this Agreement, (ii) any other agreement or instrument to which the Company is a party or a beneficiary or (iii) any duty owed to the Company by the Consultant or any third party; provided, however, that the Consultant hereby acknowledges and agrees that if the Consultant shall seek to disclose, divulge, reveal, report, publish, transfer or use any Confidential Information to any third party, the Consultant shall bear the burden of proving that any such information shall have become publicly available without any such breach.  Disclosure of Confidential Information shall not be prohibited if such disclosure is directly pursuant to a valid and existing order of a court or other governmental body or agency; provided, however, that (i) the Consultant shall first have given prompt notice to the Company of any such possible or prospective order (or proceeding pursuant to which any such order may result) and (ii) the Company shall have been afforded a reasonable opportunity to prevent or limit any such disclosure.  

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5.Ownership of Information.  

5.1.Property Belonging to the Company.  The Consultant agrees that all right, title and interest in any findings, reports, inventions, writings, disclosures, discoveries, computer code, developments and improvements written, invented, made or conceived by the Consultant and relating to implantable devices, instruments or equipment for ophthalmic surgery or related procedures (“inventions”) in the course of or arising out this Agreement and with the Company’s equipment, supplies, facilities or confidential proprietary information shall be the sole and exclusive property of the Company and shall be work made for hire.  The Consultant agrees to disclose all such inventions to the Company.  

5.2.Further Acts.  The Consultant agrees that, both during and after the Consultant's engagement by the Company, upon the request of the Company and without further compensation, but at no expense to the Consultant, the Consultant shall execute any instruments and to do all other things reasonably requested by the Company, including the giving of testimony, that in the opinion of the Company, its successors or assigns, may be necessary or desirable in order to obtain, sustain, reissue and renew, and in order to enforce, perfect, record and maintain the Company’s rights to its inventions, including without limitation patent applications and United States and foreign patents on the Company’s inventions, and copyright registrations on the Company’s inventions.  

6.Termination Without Cause.  

6.1.Termination Due to Death.  This Agreement shall be terminated upon the death of the Consultant and no further payments shall be made pursuant to its terms.

6.2.Termination Due to Disability.  The Company reserves the right to terminate this Agreement immediately after the Consultant suffers any physical or mental disability that, in the Company’s sole determination, would prevent the performance of the Consultant’s duties under this Agreement.  A termination pursuant to this section shall be effected by giving ten days’ written notice of termination to the Consultant.

6.3.Termination Not For Cause.  Termination of this Agreement under this Section 6 shall not be considered “for cause.”

7.Termination for Cause.  

7.1.Termination for Cause.  The Company reserves the right to immediately terminate this Agreement if the Consultant breaches this Agreement or habitually neglects the duties that he or she is required to perform hereunder, or if he commits acts of dishonesty, fraud, or misrepresentation, misuses or misappropriates Confidential Information, or engages in unfair competition with the Company as contemplated by Section 4 above.  The Company reserves the right to immediately terminate this Agreement if the Consultant fails to promptly and faithfully comply with all present and future policies, requirements, directions, requests and rules and regulations of the Company or fails to conform to all laws and regulations or commits any act or becomes involved in any situation or occurrence tending to bring the Company into public scandal or ridicule or which will reflect unfavorably on the reputation of the Company.

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7.2.Notice of Termination/No Election of Remedies.  If the Company terminates this Agreement pursuant to Section 7.1 above, the Company shall give written notice of termination to the Consultant without prejudice to any other remedy to which the Company may be entitled, either at law or in equity, under this Agreement.

7.3.Termination For Cause.  Termination of this Agreement under this section shall be considered termination “for cause.”

8.Termination by Notice.  With the exception of the obligations set forth in Section 10, either party may terminate this Agreement upon thirty days’ written notice to the other party.  

9.Survival of Obligations.  The Consultant’s obligations under Sections 4, 5, 15 and 16 represent a continuing obligation of the Consultant and shall survive any termination or expiration of this Agreement.  

10.Status of the Consultant.  The Consultant understands and agrees that she is not an employee of the Company and that she shall not be entitled to receive employee benefits from the Company, including, but not limited to, sick leave, vacation, retirement, death benefits, an automobile, stock in the Company and/or participation in profits earned by the Company.  The Consultant shall be responsible for providing, at the Consultant’s expense and in the Consultant’s name, disability, worker’s compensation or other insurance as well as licenses and permits usual or necessary for conducting the services hereunder.  Furthermore, the Consultant shall pay, when and as due, any and all taxes incurred as a result of the Consultant’s compensation hereunder, including estimated taxes, and shall provide the Company with proof of said payments, upon demand.  The Consultant hereby indemnifies the Company for any claims, losses, costs, fees, liabilities, damages or injuries suffered by the Company arising out of the Consultant’s breach of this section.

11.Representations by the Consultant.  The Consultant represents that the Consultant has the qualifications and ability to perform the services in a professional manner, without the advice, control, or supervision of the Company.  

12.Business Expenses.  The Company shall reimburse the Consultant for all reasonable travel, supplies, long-distance telephone and business expenses incurred by the Consultant during the course of this Agreement, provided that each such expenditure qualifies as a proper deduction on the Company’s federal and state income tax return.  Each such expenditure shall be reimbursable only if the Consultant furnishes to the Company adequate records and other documentary evidence required by federal and state statutes and regulations issued by the appropriate taxing authorities for the substantiation of that expenditure as an income tax deduction.  The Consultant may not incur any single business expense in an amount exceeding $1000.00 without the express prior written consent of the Company.  The Company shall, in its sole discretion, reimburse the Consultant or not, for any business expense which exceeds such amount and which is incurred by the Consultant without the prior written consent of the Company.

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13.Notices.  Unless otherwise specifically provided in this Agreement, all notices or other communications (collectively and severally called “Notices”) required or permitted to be given under this Agreement, shall be in writing, and shall be given by: (A) personal delivery (which form of Notice shall be deemed to have been given upon delivery), (B) by telegraph or by private airborne/overnight delivery service (which forms of Notice shall be deemed to have been given upon confirmed delivery by the delivery agency), or (C) by electronic mail or facsimile or telephonic transmission, provided the receiving party has a compatible device or confirms receipt thereof (which forms of Notice shall be deemed delivered upon confirmed transmission or confirmation of receipt).  Notices shall be addressed to the address set forth in the introductory section of this Agreement, or to such other address as the receiving party shall have specified most recently by like Notice, with a copy to the other party.

14.Choice of Law and Venue.  This Agreement shall be governed according to the laws of the state of California.  Venue for any legal or equitable action between the Company and the Consultant which relates to this Agreement shall be in the courts of the State of California in the County of Los Angeles and the Central District of California of the United States District Court.  

15.Indemnification.  The Consultant hereby agrees to indemnify, defend and hold harmless the Company, and the Company’s officers, directors, and shareholders from and against any and all claims, demands, losses, costs, expenses, obligations, liabilities, damages, recoveries, and deficiencies, including, without limitation, interest, penalties, and reasonable attorney fees and costs, that the Company may incur or suffer and that arise, result from, or are related to any breach or failure of the Consultant to perform any of the representations, warranties and agreements contained in this Agreement.

16.Entire Agreement.  This Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the services to be rendered by the Consultant to the Company, and contains all of the covenants and agreements between the parties with respect to the services to be rendered by the Consultant to the Company in any manner whatsoever. The parties agree that Consultant’s Employment Agreement dated March 1, 2015 is terminated, effective December 31, 2022.  Each party to this agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, that are not embodied herein, and that no other agreement, statement, or promise not contained in this Agreement shall be valid or binding on either party.

17.Independent Contractor.  The Consultant shall at all times be an independent contractor hereunder, and not a co-venturer, agent, employee or representative of the Company, and no act, action or omission to act of the Consultant shall in any way be binding upon or obligate the Company.  No change in the Consultant's duties as a consultant of the Company shall result in, or be deemed to be, a modification of the terms of this Agreement.  The Company shall not be treated as an employee for federal tax purposes.  The Consultant hereby represents and warrants to the Company that the Consultant is an independent contractor for federal, state and local tax purposes.  Further, the Consultant hereby covenants and agrees to pay any and all federal, state and local taxes required by law to be paid by an independent contractor, including, without limitation, any taxes imposed by the Self Employment Contribution Act.

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18.Arbitration.  The parties hereby agree that all controversies, claims and matters of difference shall be resolved by binding arbitration before the American Arbitration Association (the "AAA") located in Los Angeles County, California according to the rules and practices of the AAA from time-to-time in force; provided however that the parties hereto reserve their rights to seek and obtain injunctive or other equitable relief from a court of competent jurisdiction, without waiving the right to compel such arbitration pursuant to this section.  The arbitrator shall apply California law in rendering a decision.

19.Severability.  If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be determined to be invalid, illegal or unenforceable under present or future laws effective during the term of this Agreement, then and, in that event: (A) the performance of the offending term or provision (but only to the extent its application is invalid, illegal or unenforceable) shall be excused as if it had never been incorporated into this Agreement, and, in lieu of such excused provision, there shall be added a provision as similar in terms and amount to such excused provision as may be possible and be legal, valid and enforceable, and (B) the remaining part of this Agreement (including the application of the offending term or provision to persons or circumstances other than those as to which it is held invalid, illegal or unenforceable) shall not be affected thereby and shall continue in full force and effect to the fullest extent provided by law.  

20.Amendment or Waiver.  No amendment to this Agreement shall be valid unless in writing and signed by both parties hereto.  No waiver of any provision of this Agreement shall be valid unless the same is in writing and signed by the party against whom such waiver is sought to be enforced; moreover, no valid waiver of any provision of this Agreement at any time shall be deemed a waiver of any other provision of this Agreement at such time or shall be deemed a valid waiver of such provision at any other time.  

21.Preparation of Agreement.  It is acknowledged by each party that such party either had separate and independent advice of counsel or the opportunity to avail itself or himself of same.  In light of these facts it is acknowledged that no party shall be construed to be solely responsible for the drafting hereof, and therefore any ambiguity shall not be construed against any party as the alleged draftsman of this Agreement.

22.Data Privacy.  The Company and Consultant each acknowledge and agree that where a party processes personal data under or in connection with this Agreement it alone determines the purposes and means of such processing as a data controller. To the extent Consultant discloses, provides or otherwise makes available, personal data to Company under or in connection with the Agreement (“Shared Personal Data”), Consultant acknowledges that Company and its agents may process such Shared Personal Data for any purpose related to this Agreement, including for any purpose necessary to comply with applicable law. In connection with the Shared Personal Data, Consultant warrants that it: (a) has provided adequate notices to, and obtained valid consents from, the relevant individuals, in each case, to the extent necessary for Company or its agents to process the Shared Personal Data in connection with this Agreement which may include the transfer of the Shared Personal Data to Company outside of the European Economic Area (EEA); and (b) shall not, by act or omission, cause Company to violate any Data Protection Laws, notices provided to, or consents obtained from, data subjects 

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as result of processing the Shared Personal Data in connection with this Agreement. In addition, Consultant agrees to comply with applicable data protection and data privacy laws.

23.Counterparts.  This Agreement may be executed manually or by facsimile signature in two or more counterparts, each of which shall be deemed an original, and all of which together shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties have executed this Consulting Agreement on the date first written above.  

CONSULTANT

Caren Mason

/s/

COMPANY

STAAR SURGICAL COMPANY

/s/
Aimee Weisner

 

 

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EXHIBIT A

DUTIES OF CONSULTANT

 

Consultant shall provide advisory services in connection with the transition of her role, as requested from time to time by the Company’s CEO, members of the Board of Directors, and members of the Executive Management Team, which may include, without limitation, advice regarding corporate strategy, operations, and personnel.Document

Exhibit 4(b)

May 14, 2020

Company Order and Officers’ Certificate
3.70% Senior Notes, Series Z, due 2050

The Bank of New York Mellon Trust Company, N.A., as Trustee
2 North LaSalle Street
Chicago, Illinois 60602

Ladies and Gentlemen:

Pursuant to Article Two of the Indenture, dated as of January 1, 1998 (as it may be amended or supplemented, the “Indenture”), from Appalachian Power Company (the “Company”) to The Bank of New York Mellon Trust Company, N.A., as successor to The Bank of New York, as trustee (the “Trustee”), and the Board Resolutions dated October 28, 2019, copies of which certified by the Secretary or an Assistant Secretary of the Company are being delivered herewith under Section 2.01 of the Indenture, and unless otherwise provided in a subsequent Company Order pursuant to Section 2.04 of the Indenture,

1.    The Company’s 3.70% Senior Notes, Series Z, due 2050 (the “Notes”) are hereby established.  The Notes shall be in substantially the form attached hereto as Exhibit 1. 

2.    The terms and characteristics of the Notes shall be as follows (the numbered clauses set forth below corresponding to the numbered subsections of Section 2.01 of the Indenture, with terms used and not defined herein having the meanings specified in the Indenture):

(i)    The aggregate principal amount of Notes which may be authenticated and delivered under the Indenture shall be limited to $500,000,000 for the Notes, except as contemplated in Section 2.01(i) of the Indenture and except that such principal amount may be increased from time to time; all Notes need not be issued at the same time and the series may be reopened at any time, without the consent of any securityholder, for issuance of additional Notes, which Notes will have the same interest rate, maturity and other terms as those initially issued (other than the date of issuance, the issue price and, in some circumstances, the initial interest accrual date and the initial interest payment date);

(ii)    The date on which the principal of the Notes shall be payable shall be May 1, 2050;

(iii)    Interest shall accrue from the date of authentication of the Notes; the Interest Payment Dates on which such interest will be payable shall be May 1 and November 1, and the Regular 

Record Date for the determination of holders to whom interest is payable on any such Interest Payment Date shall be the April 15 or October 15, respectively; provided that the first Interest Payment Date shall be November 1, 2020 and interest payable on the Stated Maturity Date of the Notes or any Redemption Date shall be paid to the Person to whom principal shall be paid;

(iv)    The interest rate at which the Notes shall bear interest shall be 3.70% per annum;

(v)    The Notes may be redeemed by the Company at its option, in whole at any time or in part from time to time, upon not less than thirty but not more than sixty days’ prior notice (either by mail or in compliance with the applicable procedures of DTC).  At any time prior to November 1, 2049 (six months prior to the maturity date (the “Par Call Date”)), the Company may redeem the Notes either as a whole or in part at a redemption price (calculated by the Independent Investment Banker) equal to the greater of (1) 100% of the principal amount of the Notes  being redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being redeemed that would be due if such Notes matured on the Par Call Date (excluding the portion of any such interest accrued to but excluding the date of  redemption), discounted (for purposes of determining present value) to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus 40 basis points, plus, in each case, accrued and unpaid interest thereon to but excluding the date of redemption.

At any time on or after the Par Call Date the Company may redeem the Notes in whole or in part at 100% of the principal amount of the Notes being redeemed, plus accrued and unpaid interest thereon to but excluding the date of redemption.

“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term (“remaining life”) of the Notes (assuming, for this purpose, that the Notes 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 comparable maturity to the remaining life of the Notes.

“Comparable Treasury Price” means, with respect to any redemption date, (1) 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 (2) if the Company obtains fewer than four of such Reference Treasury Dealer Quotations, the average of all such quotations.

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Company and notified by the Company to the Trustee.

“Reference Treasury Dealer” means a primary U.S. Government securities dealer or dealers selected by the Company and notified by the Company to the Trustee.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Company and notified to the Trustee, of the 
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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 Company and the Trustee by such Reference Treasury Dealer at or before 3:30 p.m., New York City time, on the third Business Day preceding such redemption date.
    
“Treasury Rate” means, with respect to any redemption, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated by the Independent Investment Banker using 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.

(vi)     (a) the Notes  shall be issued in the form of a Global Note; (b) the Depositary for the Global Note shall be The Depository Trust Company; and (c) the procedures with respect to transfer and exchange of Global Notes shall be as set forth in the form of the Note attached hereto;

(vii)    the title of the Notes shall be “3.70% Senior Notes, Series Z, due 2050”;

(viii)    the forms of the Notes shall be as set forth in Paragraph 1, above;

(ix)    not applicable;

(x)    the Notes may be subject to a Periodic Offering;

(xi)    not applicable;

(xii)    not applicable;

(xiii)    not applicable;

(xiv)    the Notes shall be issuable in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof;

(xv)    not applicable;

(xvi)    the Notes shall not be issued as Discount Securities;

(xvii)    not applicable;

(xviii)    not applicable; 

(xix)    Limitations on Liens:

So long as any of the Notes are outstanding, the Company will not create or suffer to be created or to exist any mortgage, pledge, security interest, or other lien (collectively, “Liens”) on any of the 
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Company’s utility properties or tangible assets now owned or hereafter acquired to secure any indebtedness for borrowed money (“Secured Debt”), without providing that such Notes will be similarly secured.  This restriction does not apply to the Company’s subsidiaries, nor will it prevent any of them from creating or permitting to exist Liens on their property or assets to secure any Secured Debt.  In addition, this restriction does not prevent the creation or existence of:

•Liens on property existing at the time of acquisition or construction of such property (or created within one year after completion of such acquisition or construction), whether by purchase, merger, construction or otherwise, or to secure the payment of all or any part of the purchase price or construction cost thereof, including the extension of any Liens to repairs, renewals, replacements substitutions, betterments, additions, extensions and improvements then or thereafter made on the property subject thereto; 

•Financing of the Company’s accounts receivable for electric service; 

•Any extensions, renewals or replacements (or successive extensions, renewals or replacements), in whole or in part, of liens permitted by the foregoing clauses; and

•The pledge of any bonds or other securities at any time issued under any of the Secured Debt permitted by the above clauses.

In addition to the permitted issuances above, Secured Debt not otherwise so permitted may be issued in an amount that does not exceed 15% of Net Tangible Assets as defined below.  

“Net Tangible Assets” means the total of all assets (including revaluations thereof as a result of commercial appraisals, price level restatement or otherwise) appearing on the Company’s balance sheet, net of applicable reserves and deductions, but excluding goodwill, trade names, trademarks, patents, unamortized debt discount and all other like intangible assets (which term shall not be construed to include such revaluations), less the aggregate of the Company’s current liabilities appearing on such balance sheet.  For purposes of this definition, the Company's balance sheet does not include assets and liabilities of the Company’s subsidiaries.

This restriction also will not apply to or prevent the creation or existence of leases made, or existing on property acquired, in the ordinary course of business; and

(xx)    Certain Tax Information.

In order to comply with applicable tax laws (inclusive of rules, regulations and interpretations promulgated by competent authorities) related to the Indenture, this Company Order and Officers’ Certificate and the Notes in effect from time to time (“Applicable Law”) that a foreign financial institution, issuer, trustee, paying agent or other party is or has agreed to be subject to, the Company agrees (i) to provide to the Trustee sufficient information about the parties and/or transactions (including 
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any modification to the terms of such transactions) so the Trustee can determine whether it has tax related obligations under Applicable Law and (ii) that the Trustee shall be entitled to make any withholding or deduction from payments to the extent necessary to comply with Applicable Law for which the Trustee shall not have any liability.

3.    You are hereby requested to authenticate $500,000,000 aggregate principal amount of 3.70% Senior Notes, Series Z, due 2050 executed by the Company and delivered to you concurrently with this Company Order and Officers’ Certificate, in the manner provided by the Indenture.

4.    You are hereby requested to hold the Notes as custodian for DTC in accordance with the Blanket Issuer Letter of Representations dated June 24, 2004, from the Company to DTC.

5.    Concurrently with this Company Order and Officers’ Certificate, an Opinion of Counsel under Sections 2.04 and 13.06 of the Indenture is being delivered to you.

6.    The undersigned, Julia A. Sloat and William E. Johnson, the Treasurer and Assistant Secretary, respectively, of the Company do hereby certify that:

(i)The form and terms of the Notes have been established in conformity with the provisions of the Indenture;

(ii)    We have read the relevant portions of the Indenture, including without limitation the conditions precedent provided for therein relating to the action proposed to be taken by the Trustee as requested in this Company Order and Officers’ Certificate, and the definitions in the Indenture relating thereto;

(iii)    We have read the Board Resolutions of the Company and the Opinion of Counsel referred to above;

(iv)    We have conferred with other officers of the Company, have examined such records of the Company and have made such other investigation as we deemed relevant for purposes of this certificate;

(v)    In our opinion, we have made such examination or investigation as is necessary to enable us to express an informed opinion as to whether or not such conditions have been complied with; and 

(vi)    On the basis of the foregoing, we are of the opinion that all conditions precedent provided for in the Indenture relating to the action proposed to be taken by the Trustee as requested herein have been complied with.

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Kindly acknowledge receipt of this Company Order and Officers’ Certificate, including the documents listed herein, and confirm the arrangements set forth herein by signing and returning the copy of this document attached hereto.

Very truly yours,

APPALACHIAN POWER COMPANY

									
	By:		/s/ Julia A. Sloat
			Julia A. Sloat
			Treasurer
			
			
	And:		/s/ William E. Johnson
			William E. Johnson
			Assistant Secretary
			
			
	Acknowledged by Trustee:
			
			
	By:		/s/ Valere Boyd
			Authorized Signatory
			

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Exhibit 1

Unless this certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) to the issuer or its agent for registration of transfer, exchange or payment, and any certificate to be issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., 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.  Except as otherwise provided in Section 2.11 of the Indenture, this Security may be transferred, in whole but not in part, only to another nominee of the Depository or to a successor Depository or to a nominee of such successor Depository.

No.   R-1

APPALACHIAN POWER COMPANY
3.70% Senior Notes, Series Z, due 2050

												
	CUSIP: 037735 CY1	Original Issue Date:  May 14, 2020
				
	Stated Maturity:  May 1, 2050	Interest Rate:  3.70%
				
	Principal Amount:  $500,000,000	
				
	Redeemable:	Yes  þ
	No  o
	
	In Whole:	Yes  þ
	No  o
	
	In Part:	Yes  þ
	No  o
	

APPALACHIAN POWER COMPANY, a corporation duly organized and existing under the laws of the Commonwealth of Virginia (herein referred to as the “Company”, which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & CO. or registered assigns, the Principal Amount specified above on the Stated Maturity specified above, and to pay interest on said Principal Amount from the Original Issue Date specified above or from the most recent interest payment date (each such date, an “Interest Payment Date”) to which interest has been paid or duly provided for, semi-annually in arrears on May 1 and November 1 in each year, commencing on November 1, 2020, at the Interest Rate per annum specified above, until the Principal Amount shall have been paid or duly provided for.  Interest shall be computed on the basis of a 360-day year of twelve 30-day months.

The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date, as provided in the Indenture, as hereinafter defined, shall be paid to the Person in whose name this Note (or one or more Predecessor Securities) shall have been registered at the close of business on the Regular Record Date with respect to such Interest Payment Date, which shall be the April 15 or October 15 (whether or not a Business Day) prior to such Interest Payment Date, provided that interest payable on the 

Stated Maturity or any redemption date shall be paid to the Person to whom principal is paid.  Any such interest not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date and shall be paid as provided in said Indenture.

If any Interest Payment Date, any redemption date or Stated Maturity is not a Business Day, then payment of the amounts due on this Note on such date will be made on the next succeeding Business Day, and no interest shall accrue on such amounts for the period from and after such Interest Payment Date, redemption date or Stated Maturity, as the case may be, with the same force and effect as if made on such date. The principal of (and premium, if any) and the interest on this Note shall be payable at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, New York, in any coin or currency of the United States of America which at the time of payment is legal tender for payment of public and private debts; provided, however, that payment of interest (other than interest payable on the Stated Maturity or any redemption date) may be made at the option of the Company by check mailed to the registered holder at such address as shall appear in the Security Register.

This Note is one of a duly authorized series of Notes of the Company (herein sometimes referred to as the “Notes”), specified in the Indenture, all issued or to be issued in one or more series under and pursuant to an Indenture dated as of January 1, 1998 duly executed and delivered between the Company and The Bank of New York Mellon Trust Company, N.A., a national banking association formed under the laws of the United States, as successor to The Bank of New York, as Trustee (herein referred to as the “Trustee”) (such Indenture, as originally executed and delivered and as thereafter supplemented and amended being hereinafter referred to as the “Indenture”), to which Indenture and all indentures supplemental thereto or Company Orders reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the holders of the Notes.  By the terms of the Indenture, the Notes are issuable in series which may vary as to amount, date of maturity, rate of interest and in other respects as in the Indenture provided.  This Note is one of the series of Notes designated on the face hereof.

The Notes may be redeemed by the Company at its option, in whole at any time or in part from time to time, upon not less than thirty but not more than sixty days’ prior notice (either by mail or in compliance with the applicable procedures of DTC).
 

At any time prior to November 1, 2049 (six months prior to the maturity date (the “Par Call Date”)), the Company may redeem this Note either as a whole or in part at a redemption price (calculated by the Independent Investment Banker) equal to the greater of (1) 100% of the principal amount of the Notes  being redeemed and (2) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being redeemed that would be due if such Notes matured on the Par Call Date (excluding the portion of any such interest accrued to but excluding the date of  redemption), discounted (for purposes of determining present value) to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus 40 basis points, plus, in each case, accrued and unpaid interest thereon to but excluding the date of redemption.
2

At any time on or after the Par Call Date the Company may redeem this Note in whole or in part at 100% of the principal amount of the Notes being redeemed, plus accrued and unpaid interest thereon to but excluding the date of redemption.
    
“Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term (“remaining life”) of the Notes (assuming, for this purpose, that the Notes being redeemed 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 comparable maturity to the remaining life of the Notes.

“Comparable Treasury Price” means, with respect to any redemption date, (1) 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 (2) if the Company obtains fewer than four of such Reference Treasury Dealer Quotations, the average of all such quotations.

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Company and notified by the Company to the Trustee.

“Reference Treasury Dealer” means a primary U.S. Government securities dealer or dealers selected by the Company and notified by the Company to the Trustee.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Company and notified to the Trustee, 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 Company and the Trustee by such Reference Treasury Dealer at or before 3:30 p.m., New York City time, on the third Business Day preceding such redemption date.
    
“Treasury Rate” means, with respect to any redemption, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated by the Independent Investment Banker using 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 Company shall not be required to (i) issue, exchange or register the transfer of any Notes during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of less than all the outstanding Notes of the same series and ending at the close of business on the day of such mailing, nor (ii) register the transfer of or exchange of any Notes of any series or portions thereof called for redemption.  This Global Note is exchangeable for Notes in definitive registered form only under certain limited circumstances set forth in the Indenture.

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In the event of redemption of this Note in part only, a new Note or Notes of this series, of like tenor, for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the surrender of this Note.

In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of all of the Notes may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture.

The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Note upon compliance by the Company with certain conditions set forth therein.
    
As described in the Company Order and Officers’ Certificate, the Company is subject to a covenant regarding making certain tax information available to the Trustee and, so long as this Note is outstanding, the Company is subject to a limitation on Liens, in each case as described therein.

The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Notes of each series affected at the time outstanding, as defined in the Indenture, to execute supplemental indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or of modifying in any manner the rights of the Holders of the Notes; provided, however, that no such supplemental indenture shall (i) extend the fixed maturity of any Notes of any series, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, or reduce the amount of the principal of a Discount Security that would be due and payable upon a declaration of acceleration of the maturity thereof pursuant to the Indenture, without the consent of the holder of each Note then outstanding and affected; (ii) reduce the aforesaid percentage of Notes, the holders of which are required to consent to any such supplemental indenture, or reduce the percentage of Notes, the holders of which are required to waive any default and its consequences, without the consent of the holder of each Note then outstanding and affected thereby; or (iii) modify any provision of Section 6.01(c) of the Indenture (except to increase the percentage of principal amount of securities required to rescind and annul any declaration of amounts due and payable under the Notes), without the consent of the holder of each Note then outstanding and affected thereby.  The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the Notes of all series at the time outstanding affected thereby, on behalf of the Holders of the Notes of such series, to waive any past default in the performance of any of the covenants contained in the Indenture, or established pursuant to the Indenture with respect to such series, and its consequences, except a default in the payment of the principal of or premium, if any, or interest on any of the Notes of such series.  Any such consent or waiver by the registered Holder of this Note (unless revoked as pro-vided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and owners of this Note and of any Note issued in exchange herefor or in place hereof (whether by registration of transfer or otherwise), irrespective of whether or not any notation of such consent or waiver is made upon this Note.

4

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, and interest on this Note at the time and place and at the rate and in the money herein prescribed.

As provided in the Indenture and subject to certain limitations therein set forth, this Note is transferable by the registered holder hereof on the Security Register of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Company as may be designated by the Company accompanied by a written instrument or instruments of transfer in form satisfactory to the Company or the Trustee duly executed by the registered Holder hereof or his or her attorney duly authorized in writing, and thereupon one or more new Notes of authorized denominations and for the same aggregate principal amount and series will be issued to the designated transferee or transferees.  No service charge will be made for any such transfer, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in relation thereto.

Prior to due presentment for registration of transfer of this Note, the Company, the Trustee, any paying agent and any Security Registrar may deem and treat the registered Holder hereof as the absolute owner hereof (whether or not this Note shall be overdue and notwithstanding any notice of ownership or writing hereon made by anyone other than the Security Registrar) for the purpose of receiving payment of or on account of the principal hereof and premium, if any, and interest due hereon and for all other purposes, and neither the Company nor the Trustee nor any paying agent nor any Security Registrar shall be affected by any notice to the contrary.

No recourse shall be had for the payment of the principal of or the interest on this Note, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture, against any incorporator, stockholder, officer or director, past, present or future, as such, of the Company or of any predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly waived and released.

The Notes of this series are issuable only in registered form without coupons in denominations of $2,000 and any integral multiples of $1,000 in excess thereof.  As provided in the Indenture and subject to certain limitations, Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series of the same authorized denomination, as requested by the Holder surrendering the same.

All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

This Note shall not be entitled to any benefit under the Indenture hereinafter referred to, be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by or on behalf of the Trustee.

5

IN WITNESS WHEREOF, the Company has caused this Instrument to be executed.

APPALACHIAN POWER COMPANY

						
	By:	
		Julia A. Sloat
		Treasurer

                    
Attest:

						
	By:	
		William E. Johnson
		Assistant Secretary

    
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CERTIFICATE OF AUTHENTICATION

This is one of the Notes of the series of Notes designated in accordance with, and referred to in, the within‐mentioned Indenture.

Dated: 

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

						
	By:	
		Authorized Signatory

7

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

(PLEASE INSERT SOCIAL SECURITY OR OTHER
 IDENTIFYING NUMBER OF ASSIGNEE)

_______________________________________

________________________________________________________________

________________________________________________________________
(PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
________________________________________________________________
ASSIGNEE) the within Note and all rights thereunder, hereby
________________________________________________________________
irrevocably constituting and appointing such person attorney to 
________________________________________________________________
transfer such Note on the books of the Issuer, 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 Note in every particular, without alteration or enlargement or any change whatever and NOTICE:  Signature(s) must be guaranteed by a financial institution that is a member of the Securities Transfer Agents Medallion Program (“STAMP”), the Stock Exchange Medallion Program (“SEMP”) or the New York Stock Exchange, Inc. Medallion Signature Program (“MSP”).

8

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