Document:

EX-10.1

 Exhibit 10.1 
  

 
  
  

					
		 		 	 LOWE’S COMPANIES, INC.

1000 LOWE’S BLVD.

MOORESVILLE, NC 28117

 May 20, 2018 
 Dear Marvin:

 We are delighted to offer you the position of Chief Executive Officer and President of Lowe’s Companies, Inc. (the “Company”)
effective as of your employment start date, which is currently contemplated to be July 2, 2018. During your employment with the Company, the Company shall use its best efforts to cause you to be elected as a member of the Company’s Board
of Directors (the “Board”). The Board will consider you for the position of Chairman of the Board within the first three (3) years of your employment with the Company. Your employment shall be located at the Company’s
headquarters in Mooresville, North Carolina, provided that you may be required to travel as necessary in order to perform your duties and responsibilities hereunder. You shall report solely and directly to the Board. 

The Company agrees, in consideration for your services and your agreement to the terms and conditions of this offer letter, to provide you the following
compensation and benefits during your employment with the Company: 
 Salary. Annual base salary rate of $1,450,000 which will be
reviewed by the Compensation Committee of the Board on an annual basis. 
 Annual Cash Incentive Award. Eligibility for an annual cash
incentive payment under the Lowe’s Companies, Inc. 2016 Annual Incentive Plan, as it may be amended by the Board from time to time, or any replacement executive bonus program as may be established and approved by the Board (the “Annual
Incentive Plan”) with a target award percentage of 200% of your annual base salary and a maximum opportunity of 200% of target; provided that, in respect of the current fiscal year, you will be eligible to receive a payment of no
less than target (pro-rated based on your start date) payable in March 2019, subject to the development by you of certain strategic plans by November 9, 2018 that are approved by the Board. 

Annual Long Term Equity Incentive Award. Eligibility for an annual long term equity incentive award under the Lowe’s Companies,
Inc. 2016 Long Term Incentive Plan, as it may be amended by the Board from time to time, or any replacement executive equity plan as may be established and approved by the Board (the “LTI Plan”) with a target award value of 565% of
your annual base salary; provided that, in respect of the current fiscal year, your target award value will be 565% of your annual base salary prorated based on your start date. The Compensation Committee will determine the mix of equity
award types to be 

 
granted each year under the LTI Plan (which shall be no less favorable than that provided to other senior executives of the Company). For the current fiscal year, your target award value will be
granted as follows: 25% in nonqualified stock options which will vest equally on the first three (3) anniversaries of the grant date, 25% in time-based restricted shares which will vest in full on the third anniversary of the grant date, and
50% in performance share units (“PSUs”), which will vest based upon Company performance over a three (3)-year period (commencing as of February 3, 2018), subject in each case to the terms and conditions set forth in the LTI
Plan and grant agreements which will be the same as the equity awards granted to senior executives of the Company in April of 2018. Your equity awards will be granted to you on your start date. 

Sign On Awards. 
 Grants
of (i) time-based restricted shares with an award value of $3,500,000 under the LTI Plan which will vest in full on the third anniversary of the grant date, and (ii) nonqualified stock options with an award value of $2,500,000 under the
LTI Plan which will vest equally on the first three (3) anniversaries of the grant date, in each case subject to the terms and conditions set forth in the LTI Plan and grant agreement which will be the same as the restricted share awards and
nonqualified stock option awards, respectively, granted to senior executives of the Company in April of 2018. This award will be granted to you on your start date. 

Benefit Programs. Eligibility to participate in all savings and retirement, welfare benefit and fringe benefit plans, practices,
policies and programs provided by the Company to other senior executives of the Company from time to time in accordance with their terms, including without limitation: 
  

	 	•	 	Annual physical examination. 

  

	 	•	 	Reimbursement of up to $12,000 per year of fees and expenses incurred by you for personal financial and tax advice and planning. 

  

	 	•	 	Reimbursement of all reasonable business expenses. 

  

	 	•	 	Four (4) weeks of paid time off. 

 Severance. In the event your employment with the
Company is involuntarily terminated other than for Cause, subject to your execution and non-revocation of a valid general release and waiver of claims in a form no less favorable than that typically used for
other senior executives of the Company) in favor of the Company, its affiliates and certain of their respective related parties in the form provided to you and within the timeframe specified by the Company and your compliance with your
post-termination obligations under this letter, aggregate severance payments in an amount equal to the product of (i) two (2) multiplied by (ii) the sum of your annual base salary and your target annual bonus under the Annual Incentive
Plan, in each case as of the date of the termination (the “Severance Payments”). The Severance Payments will be paid to you in equal installments over the twenty-four (24) months immediately following the

  
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termination in accordance with the Company’s normal and customary payroll practices. Except as provided in this paragraph and the Change-in-Control Agreement (as defined below), and except for (i) any vested benefits under any tax qualified pension plans of the Company, (ii) continuation of health insurance benefits on the
terms and to the extent required by Section 4980B of the Internal Revenue Code of 1986, as amended (“Code”) and Section 601 of the Employee Retirement Income Security Act of 1974, as amended (which provisions are commonly known
as “COBRA”), (iii) earned but unpaid base salary, (iv) accrued but unused vacation and (v) your equity awards, the treatment of which shall be governed by the LTI Plan and the grant agreements applicable to such awards in the
event your employment terminates, the Company shall have no contractual obligations to you in connection with or following the termination of your employment. For purposes of this letter, “Cause” shall mean: (i) your failure to
attempt in good faith to perform your duties (other than as a result of physical or mental illness or injury), which failure is not corrected within thirty (30) days following written notice to you from the Board; (ii) your willful
misconduct or gross negligence in connection with the performance of your duties as an employee or as a member of the Board, which is or could reasonably be expected to be injurious to the Company or any of its affiliates (whether financially,
reputationally or otherwise); (iii) a breach by you of your fiduciary duty or duty of loyalty to the Company or any of its affiliates; (iv) the willful performance by you of any act or acts of dishonesty in connection with or relating to the
Company’s or any of its affiliates’ business or the willful misappropriation (or willful attempted misappropriation) of any of the Company’s or any of its affiliates’ funds or property; (v) your indictment or plea of guilty
or nolo contendere to any felony or crime involving moral turpitude; (vi) a material breach of any of your obligations under any agreement entered into between you and the Company or any of its affiliates, including this letter, which material
breach is not corrected within thirty (30) days following written notice to you from the Board; or (vii) your material breach of the Company’s policies or procedures, which breach causes or could reasonably be expected to cause
material harm to the Company or its business reputation or to be injurious to the Company or any of its affiliates (whether financially, reputationally or otherwise), which material breach is not corrected within thirty (30) days following
written notice to you from the Board. 
 Company Aircraft. Use of the Company’s aircraft for personal (including immediate family
members accompanying you) travel when practical in accordance with the Board-approved Company aircraft policy as in effect from time to time. The Company’s Compensation Committee will review utilization on an annual basis and establish a
reasonable cap on personal use. For the avoidance of doubt, the Company will not reimburse you for any taxes incurred by you in connection with your personal use of the Company’s aircraft. 

Change-in-Control Agreement. A Change-in-Control Agreement (Tier 1) with substantially similar terms as the form attached hereto as Exhibit A (the “Change-in-Control Agreement”) to be executed by you and the Company on or promptly following your start date. 

Relocation. You will promptly relocate to the Charlotte, North Carolina area. You shall be provided a relocation package in connection
with your relocation to the Charlotte, North Carolina area consistent with what is provided to other senior executives of the Company. 

  
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 Indemnification. Indemnification protection to the fullest extent permitted by law and
provided by the Company’s by-laws and articles of incorporation and D&O insurance to the same extent provided to senior executives and Board members. 

Legal Fees. Reimbursement for your reasonable legal fees incurred in connection with the negotiation of this offer letter on or promptly
following your start date, provided, however, that such reimbursement shall not exceed $25,000. 
 The Company may withhold from any amounts payable
to you such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation. 
 The intent of the
parties is that payments and benefits under this letter comply with Section 409A of the Code and the regulations and guidance promulgated thereunder (except to the extent exempt as short-term deferrals or otherwise) and, accordingly, to the
maximum extent permitted, this letter shall be interpreted to be in compliance therewith. In the event the parties reasonably agree that any provision of this letter or any award agreement fail to comply with Section 409A of the Code, the
parties shall reasonably cooperate in good faith to attempt to correct such failure while preserving the economic benefits of this letter and/or the award. A termination of employment shall not be deemed to have occurred for purposes of any
provision of this letter providing for the payment of any amounts or benefits subject to Section 409A of the Code upon or following a termination of employment unless such termination is also a “separation from service” within the
meaning of Section 409A of the Code and, for purposes of any such provision of this letter, references to a “termination”, “termination of employment” or like terms shall mean “separation from service.” The
determination of whether and when a separation from service has occurred shall be made in a manner consistent with, and based on the presumptions set forth in, U.S. Treasury Regulation Section 1.409A-1(h)
or any successor provision thereto. It is intended that each installment, if any, of the payments and benefits provided hereunder shall be treated as a separate “payment” for purposes of Section 409A of the Code. Neither the Company
nor you shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A of the Code; and if, as of the date of the “separation from
service,” you are a “specified employee” (within the meaning of that term under Section 409A(a)(2)(B) of the Code, or any successor provision thereto), then with regard to any payment or the provision of any benefit that is
subject to this paragraph (whether under this letter, or pursuant to any other agreement with or plan, program, payroll practice of the Company) and is due upon or as a result of your separation from service, such payment or benefit shall not be
made or provided, to the extent making or providing such payment or benefit would result in additional taxes or interest under Section 409A of the Code, until the date which is the earlier of (i) the expiration of the six (6)-month period
measured from the date of such “separation from service,” and (ii) the date of your death (the “Delay Period”) and each such agreement, plan, program, or payroll practice shall hereby be deemed amended accordingly.
Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this paragraph (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to you
in a lump sum, and any remaining payments and benefits due under this letter shall be paid or provided in accordance with the normal payment dates specified for them herein.    All reimbursements provided under this letter or
otherwise to you shall be made or provided in accordance with the requirements of Section 409A of the Code to the extent that such reimbursements are subject to Section 409A of the Code. All expenses or other

  
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reimbursements paid pursuant herewith and therewith that are taxable income to you shall in no event be paid later than the end of the calendar year next following the calendar year in which you
incur such expense or pay such a related tax. With regard to any provision herein that provides for reimbursement of costs and expenses, except as permitted by Section 409A of the Code, the right to reimbursement shall not be subject to
liquidation or exchange for another benefit, the amount of expenses eligible for reimbursement, provided, during any taxable year shall not affect the expenses eligible for reimbursement in any other taxable year. 

You agree, in return for the Company’s offer of employment under the terms of this offer letter, that: 

Company Policies. During your employment with the Company, you will be subject to, and will comply with, all of the Company’s
policies and procedures applicable to senior executive officers and directors of the Company, as in effect from time to time, including without limitation (i) the Company’s Code of Business Conduct and Ethics, (ii) stock ownership and
retention guidelines for senior executives (currently with a target ownership of 10.0x annual base salary for your role) and any policy with respect to insider trading, anti-hedging and clawback of compensation. 

Confidential Information. During your employment with the Company and thereafter, you will hold in a fiduciary capacity for the benefit
of the Company all trade secrets, confidential information, and knowledge or data relating to the Company and its businesses, which are obtained by you during your employment with the Company. You will not, without the prior written consent of the
Company or as may otherwise be required by law or legal process communicate or divulge any such trade secrets, information, knowledge or data to anyone other than the Company and those designated by the Company. 

Non-Competition. You understand that the Company and its affiliated entities comprise an
international, omni-channel provider of goods and services for building, expanding, enhancing, customizing, maintaining, innovating, connecting, and outfitting its customers’ living spaces (“Home Environment Business”) and that
the Company’s Home Environment Business requires a complex sourcing and supply network, multi-channel distribution and delivery systems, innovative information technology resources, and a robust infrastructure support organization. You
recognize and acknowledge that the Company operates over 1,800 retail locations in all 50 states and the District of Columbia, and has significant internet-based sales to customers spread across the United States. Furthermore, you acknowledge that
the Company has a legitimate and reasonable business interest in maintaining its competitive position in a dynamic industry and that restricting employees for a reasonable period from performing work for, or providing services to an enterprise which
engages in business activities which are in competition with the Company and would likely cause damage to the Company’s business would not unreasonably restrict employees from engaging in work or business activities. You further acknowledge
that, during your employment in your position with the Company, you will be provided access to or help develop business information proprietary to the Company and that you would inevitably disclose or otherwise utilize such information if you were
to work for, or provide services to a Competing Enterprise during the Non-Competition Period (each as defined below). 

  
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 During your employment with the Company and for the two (2) year period thereafter (the
“Non-Competition Period”), you will not directly or indirectly provide or perform services for a Competing Enterprise, whether as an employee, consultant, agent, contractor, officer, director
or any other capacity. You acknowledge that the Non-Competition Period is reasonable in duration under the terms herein. 

You acknowledge and agree for purposes of this offer letter that a “Competing Enterprise” is defined as any business:
(i) with total annual sales of at least five hundred million dollars ($500 million USD) with retail locations or distribution facilities in any US State or territory; and (ii) that provides goods and/or services to customers in the
United States, through retail or electronic means (internet, mobile application, etc.), that are the same as, substantially similar to, or otherwise in competition with the Company’s products or services. The term “Competing
Business” shall specifically include, but not be limited to, the following entities: The Home Depot, Inc.; Sears Holdings, Inc.; Costco Wholesale Corporation; Wal-Mart Stores, Inc.; Menard, Inc.;
Amazon.com, Inc.; Best Buy, Inc.; Ace Hardware Corp.; Tractor Supply Co.; Lumber Liquidators Holdings, Inc.; Wayfair, LLC; Jet.com, Inc.; and True Value Company. 

You acknowledge that during your employment in your position with the Company, you will be exposed to, and play a crucial role in, the
development and implementation of the Company’s strategic business operations, financial performance, marketing strategy, and/or plans for existing and future products and services, and that the Company’s business success and competitive
position in the industry are dependent on its exclusive possession of secret, proprietary or confidential information, knowledge or data, and its relationships with customers and suppliers. As such, you agree that the foregoing non-competition restrictions are reasonable as to the time, territory, and line of business, and are reasonably necessary to protect the Company’s legitimate business interests, protect customer goodwill, and
prevent severe and irreparable harm to the Company. 
 Non-Interference. During your
employment with the Company and for the two (2) year period thereafter, you will not directly or indirectly (i) solicit or induce any officer, director or vice president of the Company or any of its affiliates to terminate his or her
employment with the Company or any of its affiliates or (ii) solicit, contact or attempt to influence any vendor or supplier of the Company or any of its affiliates to limit, curtail, cancel or terminate any business it transacts with the
Company or any of its affiliates . 
 Enforcement. In the event of a breach or threatened breach of your obligations under the
foregoing confidential information, non-competition or non-interference provisions of this offer letter, you consent and agree (i) that the Company shall be
entitled to immediately cease payment of any Severance Payments as of the date of such breach or threatened breach, and following the date of such breach or threatened breach, you shall have no further rights to any Severance Payments, and
(ii) that the Company shall be entitled to, in addition to other available remedies, seek equitable relief (by injunction, restraining order, or other similar remedy) against such breach or threatened breach from a court of competent
jurisdiction without the necessity of showing actual damages and without the necessity of posting a bond or other security. In the event a court of competent jurisdiction 

  
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determines your obligations under the foregoing confidential information, non-competition and non-interference
provisions of this offer letter are more restrictive than necessary to protect the Company’s legitimate business interests, such court may reduce the scope of the restriction(s), or sever and remove the unenforceable provision(s), to the extent
necessary to make the restriction(s) enforceable. 
 No Conflict. You have informed us that you have no
non-compete, non-solicit, confidentiality or other agreement that would restrict your employment with the Company. You understand that this offer is contingent upon
there being no employment agreement, covenant not to compete or solicit, confidentiality agreement or other arrangement that would prohibit or restrict the performance of all of your duties for the Company. In the course of your work for the
Company, you will not use or disclose any confidential information of a third party (including your current employer). 
 Notwithstanding anything in this
offer letter or in any other agreement with or policy (including without limitation any code of conduct or employee manual) of the Company and its affiliates, nothing herein or therein is intended to or shall: (i) prohibit you from making
reports of possible violations of federal law or regulation (even if you participated in such violations) to, and cooperating with, any governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F
of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002 or of any other whistleblower protection provisions of state or federal law or regulation; (ii) require notification to or prior approval by the
Company or any of its affiliates of any such reporting or cooperation; or (iii) result in a waiver or other limitation of your rights and remedies as a whistleblower, including to a monetary award. Notwithstanding the foregoing, you are not
authorized (and the above should not be read as permitting you) to disclose communications with counsel that were made for the purpose of receiving legal advice or that contain legal advice or that are protected by the attorney work product or
similar privilege. Furthermore, you will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (1) in confidence to a federal, state or local government official,
either directly or indirectly, or to an attorney, in each case, solely for the purpose of reporting or investigating a suspected violation of law or (2) in a complaint or other document filed in a lawsuit or proceeding, if such filings are made
under seal. 
 It is our understanding that you currently serve as a member of the Board of Directors of FedEx Corporation (“FedEx”). You
may continue to serve on the FedEx Board of Directors or, subject to the reasonable approval of the Board, on the board of directors of another company in lieu of FedEx, as you and the Board may deem appropriate in the future. 

This offer letter is not, and should not be construed as, an agreement to employ you for any specific duration. As is the case for all our employees, your
employment will be “at will” which means the Company is free to terminate the employment relationship at any time, for any reason, with or without notice. The Company requests that you provide no less than thirty (30) days’
written notice to the Company in advance of any voluntary termination of your employment initiated by you. In addition, the Company reserves the right to amend or terminate its compensation plans or programs, and benefits and any of these related
changes that are applicable to the senior executive officer level will also be applicable to you. 
 This letter shall be governed by and construed in
accordance with the laws of the State of North Carolina without reference to its principles of conflicts of law. 

  
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 On behalf of Lowe’s Board of Directors and employees, we look forward to welcoming you to the Company. 

Sincerely, 
  

	
	 /s/ Marshall O. Larsen

	 Marshall O. Larsen
 Director

	
	ACCEPTED and AGREED:
	
	 /s/ Marvin Ellison

	Marvin Ellison
	
	DATE: May 21, 2018                                
                        

  
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 EXHIBIT A 

MANAGEMENT CONTINUITY AGREEMENT 

THIS MANAGEMENT CONTINUITY AGREEMENT (this “Agreement”) is made and entered into as of the
         day of                  ,
                , by and between LOWE’S COMPANIES, INC., a North Carolina corporation (the “Company”), and
                             (“Executive”). 

WHEREAS, the Company desires to enter into this Agreement to (i) assure that the Company will have the continued dedication of Executive,
notwithstanding the possibility, threat or occurrence of a Change in Control (as defined below) of the Company, (ii) diminish the inevitable distraction of Executive by virtue of the personal uncertainties and risks created by a pending or
threatened Change in Control, (iii) encourage Executive’s full attention and dedication to the Company currently and in the event of any threatened or pending Change in Control, and (iv) provide Executive with compensation and
benefits arrangements upon a Change in Control which ensure that the compensation and benefits expectations of Executive will be satisfied and which are competitive with those of other corporations, 

NOW THEREFORE, in order to accomplish these objectives, the Company and Executive agree as follows: 

1.        Effective Date. The “Effective Date” shall mean the first date
on which a Change in Control (as defined in Section 2) occurs. Anything in this Agreement to the contrary notwithstanding, if a Change in Control occurs and if Executive’s employment with the Company is terminated prior to the date on
which the Change in Control occurs, and if it is reasonably demonstrated by Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or
(ii) otherwise arose in connection with or anticipation of a Change in Control, then for all purposes of this Agreement the “Effective Date” shall mean the date immediately prior to the date of such termination of employment. 

2.        Change in Control. For the purposes of this Agreement, a “Change in
Control” shall mean: 
 (a)        individuals who, at the Effective Date, constitute the
Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director after the Effective Date and whose election or nomination for election was approved
by a vote of at least a majority of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection to such
nomination) shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest (as described in Rule 14a-11 under the Exchange Act (“Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of any “person” (as such term is defined in
Section 3(a)(9) of the Exchange Act and as used in Section 13(d)(3) and 14(d)(2) of the Exchange Act) other than the Board (“Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election
Contest or Proxy Contest, shall be deemed an Incumbent Director; 
 (b)        any person becomes a
“beneficial owner” (as defined in Rule 13d- 3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of the
Company’s then outstanding securities eligible to vote for the election of the Board (the “Company Voting Securities”); provided, however, that the event described in this subparagraph (b) shall not be deemed
to be a Change in Control of the Company by virtue of any of the following acquisitions: (i) an acquisition directly by or from the Company or any affiliated companies; (ii) an acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any affiliated companies, (iii) an acquisition by an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) an acquisition pursuant to a Non-Qualifying Transaction (as defined in subparagraph (c) below); or 

(c)        the consummation of a reorganization, merger, consolidation, statutory share exchange or
similar form of corporate transaction involving the Company that requires the approval of the Company’s shareholders, whether for such transaction or the issuance of securities in the transaction (a “Reorganization”), or the
sale or other disposition of 

  
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all or substantially all of the Company’s assets to an entity that is not an affiliate of the Company (a “Sale”), unless immediately following such Reorganization or
Sale: (i) more than 60% of the total voting power of (A) the corporation resulting from such Reorganization or the corporation which has acquired all or substantially all of the assets of the Company (in either case, the “Surviving
Corporation”), or (B) if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of 100% of the voting securities eligible to elect directors of the Surviving Corporation (the “Parent
Corporation”), is represented by the Company Voting Securities that were outstanding immediately prior to such Reorganization or Sale (or, if applicable, is represented by shares into which such Company Voting Securities were converted
pursuant to such Reorganization or Sale), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the holders thereof immediately prior to the Reorganization
or Sale, (ii) no person (other than (A) the Company, (B) any employee benefit plan (or related trust) sponsored or maintained by the Surviving Corporation or the Parent Corporation, or (C) a person who immediately prior to the
Reorganization or Sale was the beneficial owner of 25% or more of the outstanding Company Voting Securities) is the beneficial owner, directly or indirectly, of 25% or more of the total voting power of the outstanding voting securities eligible to
elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation), and (iii) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) following the consummation of the Reorganization or Sale were Incumbent Directors at the time of the Board’s approval of the execution of the initial agreement providing for such Reorganization or Sale
(any Reorganization or Sale which satisfies all of the criteria specified in (i), (ii) and (iii) above shall be deemed to be a “Non-Qualifying Transaction”). 

3.        Employment Period. The Company hereby agrees to continue Executive in its
employ, and Executive hereby agrees to remain in the employ of the Company subject to the terms and conditions of this Agreement, for the period commencing on the Effective Date and ending on the second anniversary of such date (the
“Employment Period”). 
 4.        Terms of Employment. 

(a)        Position and Duties. 

(i)        During the Employment Period, (A) Executive’s position (including status,
offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 120-day period immediately preceding the Effective Date and (B) Executive’s services shall be performed at the location where Executive was employed immediately preceding the Effective Date or any office
or location less than 35 miles from such location. 
 (ii)        During the Employment Period, and
excluding any periods of vacation and sick leave to which Executive is entitled, Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to Executive hereunder, to use Executive’s reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this
Agreement for Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage personal investments, so long as such
activities do not significantly interfere with the performance of Executive’s responsibilities as an employee of the Company in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such
activities have been conducted by Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to
interfere with the performance of Executive’s responsibilities to the Company. 

  
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 (b)        Compensation. 

(i)        Base Salary. During the Employment Period, Executive shall receive an annual
base salary (“Annual Base Salary”), which shall be paid at a monthly rate, at least equal to 12 times the highest monthly base salary paid or payable, including any base salary which has been earned but deferred, to Executive by the
Company and its affiliated companies in respect of the 12-month period immediately preceding the month in which the Effective Date occurs. During the Employment Period, the Annual Base Salary shall be
reviewed no more than 12 months after the last salary increase awarded to Executive prior to the Effective Date and thereafter at least annually. Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to
Executive under this Agreement. Annual Base Salary shall not be reduced after any such increase and the term Annual Base Salary as utilized in this Agreement shall refer to Annual Base Salary as so increased. As used in this Agreement, the
term “affiliated companies” shall include any company controlled by, controlling or under common control with the Company. 

(ii)        Annual Bonus. In addition to Annual Base Salary, Executive shall be awarded,
for each fiscal year ending during the Employment Period, an annual bonus opportunity (the “Annual Bonus”) at least as favorable as that to which he would have been entitled under the annual bonus plan of the Company in effect for
the last year prior to the Effective Date (annualized in the event that Executive was not employed by the Company for the whole of such fiscal year) (the “Recent Annual Bonus”). Each such Annual Bonus shall be paid in a single
lump sum in cash at a time determined by the Company but in no event later than 2- 1⁄2 months after the end of the
fiscal year for which the Annual Bonus is awarded, unless Executive shall elect to defer the receipt of such Annual Bonus. 

(iii)        Incentive, Savings and Retirement Plans. During the Employment Period,
Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to other peer executives of the Company and its affiliated companies (“Peer
Executives”). 
 (iv)        Welfare Benefit Plans. During the Employment
Period, Executive and/or Executive’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under the welfare benefit plans, practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription drug, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs) (“Welfare Plans”) to the extent applicable
generally to Peer Executives. 
 (v)        Expenses. During the Employment Period,
Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by Executive in accordance with the policies, practices and procedures of the Company and its affiliated companies to the extent applicable generally to
Peer Executives. 
 (vi)        Fringe Benefits. During the Employment Period,
Executive shall be entitled to fringe benefits in accordance with the plans, practices, programs and policies of the Company and its affiliated companies with respect to Peer Executives. 

5.        Separation from Service. 

(a)        Death, Retirement or Disability. Executive’s employment shall terminate
automatically upon Executive’s death or Retirement (pursuant to the definition of Retirement set forth below) during the Employment Period. For purposes of this Agreement, “Retirement” shall mean Executive’s voluntary
separation from service on or after the later of (i) 90 days after Executive has provided written notice to the Company’s corporate secretary of his decision to retire, or (ii) Executive’s attainment of age 60 (but shall not include
Executive’s voluntary termination after he has been given notice that he may be terminated for Cause). If the Company determines in good faith that the Disability of Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to Executive written notice in accordance with Section 12(b) of this Agreement of its intention to terminate Executive’s employment. In such event, Executive shall separate from
service with the Company effective on the 30th day after receipt of such notice by Executive (the “Disability Effective Date”), provided that, within the 30 days after such receipt, Executive shall not have returned to full-time
performance of Executive’s duties. For purposes of this Agreement, “Disability” shall mean mental or physical disability as determined by the Board in accordance with standards and procedures similar to those under the
Company’s employee long-term disability plan, if any. At any time that the Company does not maintain such a long-term disability plan, Disability shall mean any illness or other physical or mental condition of Executive that renders
Executive incapable of 

  
 3 

 
performing his customary and usual duties for the Company, or any medically determinable illness or other physical or mental condition resulting from a bodily injury, disease or mental disorder
which, in either case, has lasted or can reasonably be expected to last for at least 180 days out of a period of 365 consecutive days. The Board may require such medical or other evidence as it deems necessary to judge the nature and permanency
of Executive’s condition. 
 (b)        Cause. The Company may terminate
Executive’s employment during the Employment Period for Cause. For purposes of this Agreement, “Cause” shall mean: 

(i)        the willful and continued failure of Executive to perform substantially Executive’s
duties with the Company (other than any such failure resulting from incapacity due to physical or mental illness and specifically excluding any failure by Executive, after reasonable efforts, to meet performance expectations), after a written demand
for substantial performance is delivered to Executive by the Board or the Chief Executive Officer of the Company which specifically identifies the manner in which the Board or Chief Executive Officer believes that Executive has not substantially
performed Executive’s duties, or 
 (ii)        the willful engaging by Executive in illegal
conduct or gross misconduct which is materially and demonstrably injurious to the Company. 
 For purposes of the definition of Cause, no
act or failure to act, on the part of Executive, shall be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that Executive’s action or omission was in the best
interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company or based upon the
advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of the Company. The cessation of employment of Executive shall not be deemed to be for
Cause unless and until there shall have been delivered to Executive a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the entire membership of the Board at a meeting of the Board called and held for such
purpose (after reasonable notice is provided to Executive and Executive is given an opportunity, together with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, Executive is guilty of the conduct described
in subparagraph (i) or (ii) above, and specifying the particulars thereof in detail. 

(c)        Good Reason. Executive’s employment may be terminated by Executive for
Good Reason. For purposes of this Agreement, “Good Reason” shall mean: 

(i)        the assignment to Executive of any duties inconsistent in any material respect with
Executive’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 4(a) of this Agreement, or any other action by the Company which results in a material
diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof
given by Executive; 
 (ii)        any failure by the Company to comply with any of the provisions
of Section 4(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by Executive; 

(iii)        the failure by the Company (A) to continue in effect any compensation plan in which
Executive participates as of the Effective Date that is material to Executive’s total compensation, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or (B) to
continue Executive’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of Executive’s participation relative to Peer
Executives; 
 (iv)        the Company’s requiring Executive, without his consent, to be based
at any office or location more than 35 miles from the office or location at which Executive was based on the date immediately prior to the Effective Date, or to travel on Company business to a substantially greater extent than required immediately
prior to the Effective Date; 

  
 4 

 (v)        any purported termination by the Company of
Executive’s employment otherwise than as expressly permitted by this Agreement; or 

(vi)        any failure by the Company to comply with and satisfy Section 11(c) of this
Agreement. 
 (d)        Notice of Termination. Any termination by the Company for
Cause, or by Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12(b) of this Agreement. For purposes of this Agreement, a “Notice of
Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive’s employment under the provision so indicated, and (iii) if the Date of Separation from Service (as defined below) is other than the date of receipt of such notice, specifies the termination
date (which date shall be not more than 30 days after the giving of such notice). If a dispute exists concerning the provisions of this Agreement that apply to Executive’s termination of employment (other than a determination of
“Cause” which shall be made as provided in Section 5(b)), the parties shall pursue the resolution of such dispute with reasonable diligence. Within 5 days of such a resolution, any party owing any payments pursuant to the
provisions of this Agreement shall make all such payments together with interest accrued thereon at the rate provided in Section 1274(b)(2)(B) of the Code. The failure by either party to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of such party hereunder or preclude such party from asserting such fact or circumstance in enforcing such party’s rights hereunder. 

(e)        Date of Separation from Service. “Date of Separation from
Service” means (i) if Executive’s employment is terminated for any reason other than death, Retirement or Disability, the date specified in the Notice of Termination, and (ii) if Executive’s employment is terminated by
reason of death, Retirement or Disability, the Date of Separation from Service shall be the date of death or Retirement of Executive or the Disability Effective Date, as the case may be, provided in each such case, Executive’s termination of
employment also constitutes a separation from service under Section 409A of the Code. 

6.        Obligations of the Company upon Separation from Service. 

(a)        Good Reason; Other Than for Cause, Death or Disability. If, during the
Employment Period, the Company shall terminate Executive’s employment other than for Cause or Executive’s death or Disability or Executive shall separate from service for Good Reason, then in consideration for services rendered by
Executive prior to the Date of Separation from Service: 
 (i)        the Company shall pay to
Executive in a lump sum in cash within 30 days after the Date of Separation from Service the aggregate of the following amounts: 

(A)        the sum of (1) Executive’s Annual Base Salary through the Date of Separation
from Service to the extent not theretofore paid, and (2) any accrued vacation pay to the extent not theretofore paid (the sum of the amounts described in clauses (1) and (2) shall be hereinafter referred to as the “Accrued
Obligations”); and 
 (B)        the amount equal to the present value of the continuation
of Executive’s Base Salary for a period of 2.99 years after the Date of Separation from Service; such present value to be determined by applying a discount rate equal to 120 percent of the applicable federal rate provided in
Section 1274(d) of the Code, compounded semi-annually (the “Discount Rate”); and 

(C)        the amount equal to the present value of 2.99 times the greater of
(1) Executive’s annual bonus for the year prior to the year in which the Change in Control occurred (the “Prior Year”), or (2) Executive’s target annual bonus for the year in which the Change in Control occurred
(the “Current Year”); such present value to be determined by applying the Discount Rate and assuming two equal annual payments on each of the first and second anniversaries of the Date of Separation from Service; and 

  
 5 

 (D)        the amount equal to the present value of
2.99 times the annual cost to the Company and Executive of participation in the Welfare Plans described in Section 4(b)(iv) of this Agreement with respect to either the Prior Year or the Current Year, whichever year in which such
annual cost was higher; such present value to be determined by applying the Discount Rate and assuming 36 monthly payments beginning on the Date of Separation from Service; and 

(ii)        to the extent not theretofore paid or provided, the Company shall timely pay or provide
to Executive any other amounts or benefits required to be paid or provided or which Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company and its affiliated companies (such other amounts
and benefits shall be hereinafter referred to as the “Other Benefits”) at the time and in the manner provided in the documentation establishing or describing such Other Benefits. 

(b)        Death, Retirement or Disability. If Executive’s employment is terminated
by reason of Executive’s death, Retirement or Disability during the Employment Period, this Agreement shall terminate without further obligations to Executive’s legal representatives under this Agreement, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Separation from
Service. Other Benefits shall be paid at the time and in the manner provided in the documentation establishing or describing such Other Benefits. With respect to the provision of Other Benefits, the term Other Benefits as utilized in this
Section 6(b) shall include without limitation, and Executive’s estate and/or beneficiaries shall be entitled to receive, death, retirement or disability benefits then applicable to Executive. 

(c)        Cause; Other than for Good Reason. If Executive’s employment shall be
terminated for Cause, or if Executive voluntarily separates from service during the Employment Period, excluding a separation from service for Good Reason, this Agreement shall terminate without further obligations to Executive, other than for
Accrued Obligations and the timely payment or provision of Other Benefits. In such case, all Accrued Obligations shall be paid to Executive in a lump sum in cash within 30 days of the Date of Separation from Service. Other Benefits shall
be paid at the time and in the manner provided in the documentation establishing or describing such Other Benefits. 

(d)        Special Rule for Specified Employees. Notwithstanding anything in this
Agreement to the contrary, if Executive is a specified employee as of the Date of Separation from Service, then to the extent, and only to the extent, necessary to comply with Code Section 409A: (i) if any payment or distribution is
payable hereunder in a lump sum, Executive’s right to receive payment or distribution will be delayed until the earlier of Executive’s death or the 7th month following the Date of Separation from Service, and (ii) if any payment,
distribution or benefit is payable or provided hereunder over time, the amount of such payment, distribution or benefit that would otherwise be payable or provided during the 6 month period immediately following the Date of Separation from Service
will be accumulated, and Executive’s right to receive such accumulated payment, distribution or benefit will be delayed until the earlier of Executive’s death or the seventh month following the Date of Separation from Service and paid or
provided on the earlier of such dates, without interest, and the normal payment or distribution schedule for any remaining payments, distributions or benefits will commence. For purposes of this Agreement, Executive shall be a
“specified executive” during the 12 month period beginning April 1 each year if the Executive met the requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of the Code (applied in accordance with the regulations
thereunder and disregarding Section 416(i)(5) of the Code) at any time during the 12 month period ending on the December 31 immediately preceding the Date of Separation from Service. 

7.        Non-exclusivity of Rights. Nothing in
this Agreement shall prevent or limit Executive’s continuing or future participation in any plan, program, policy or practice provided by the Company or any of its affiliated companies and for which Executive may qualify, nor, subject to
Section 12(f), shall anything herein limit or otherwise affect such rights as Executive may have under any contract or agreement with the Company or any of its affiliated companies. Amounts which are vested benefits or which Executive is
otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any of its affiliated companies at or subsequent to the Date of Separation from Service shall be payable in accordance with
such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement. 

  
 6 

 8.        Full Settlement; Cost of
Enforcement. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have against Executive or others. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable
to Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not Executive obtains other employment. The Company agrees to pay as incurred, to the full extent permitted by law, all legal fees and
expenses which Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company, Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by Executive about the amount of any payment pursuant to this Agreement). 

9.        Obligations of the Executive. 

(a)        Non-Competition. For the one
(1) year period beginning on the Date of Separation from Service, the Executive shall not directly or indirectly engage in Competition (as defined below) with the Company; provided, that it shall not be a violation of this Section 9(a) for
the Executive to become the registered or beneficial owner of up to 5% of any class of the capital stock of a competing corporation registered under the Securities Exchange Act of 1934, as amended, provided that the Executive does not actively
participate in the business of such corporation until such time as this covenant expires. For purposes of this Agreement, “Competition” by the Executive shall mean the Executive’s engaging in, or otherwise directly or indirectly
being employed by or acting as a consultant or lender to, or being a director, officer, employee, principal, agent, stockholder (other than as specifically provided for herein), member, owner or partner of, or permitting his name to be used in
connection with the activities of any other business or organization that owns, operates, controls or maintains retail or warehouse hardware or home improvement stores in the United States, Puerto Rico, Canada or Mexico with total annual sales of at
least $500 million. Such businesses or organizations include, but are not limited to, the following entities and each of their subsidiaries, affiliates, assigns, or successors in interest, in whole or in part: The Home Depot, Inc.,
Sears Holdings Corporation, Wal-Mart Stores, Inc. and Menard, Inc. 

(b)        Non-Interference. For the one
(1) year period beginning on the Date of Separation from Service, the Executive shall not directly or indirectly (i) solicit or induce any officer, director, regional vice president, district manager,
co-manager, store manager, regional human resource manager or regional loss prevention manager of the Company to terminate his or her employment with the Company or (ii) solicit, contact or attempt to
influence any vendor or supplier of the Company to limit, curtail, cancel or terminate any business it transacts with the Company. 

(c)        Confidential Information. The Executive shall hold in a fiduciary capacity for
the benefit of the Company all trade secrets, confidential information, and knowledge or data relating to the Company and its businesses, which were obtained by the Executive during the Executive’s employment by the Company. The Executive
shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such trade secrets, information, knowledge or data to anyone other than the Company and those designated
by the Company. 
 10.        Enforcement. The Executive understands and agrees that any
breach or threatened breach by the Executive of any of the provisions of Section 9 shall be considered a material breach of this Agreement, and in the event of such a breach or threatened breach, the Company shall be entitled to pursue any and
all of its remedies under law or in equity arising out of such breach. The Executive further agrees that in the event of his breach of any of the provisions of Section 9, unless otherwise prohibited by law, (i) the Company shall be
released from any obligation to make any payments or further payments to the Executive under Section 6 and no payments shall be due or payable to the Executive thereunder, and (ii) the Executive shall remit to the Company, upon demand by
the Company, any payments previously paid by the Company to the Executive pursuant to Section 6. The Executive further agrees that the remedies in the immediately preceding sentence will not preclude injunctive relief, and if the Company
pursues either a temporary restraining order or temporary injunctive relief, then the Executive waives any requirement that the Company post a bond. 

  
 7 

 11.        Successors. 

(a)        This Agreement is personal to Executive and without the prior written consent of the
Company shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives. 

(b)        This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns. 
 (c)        The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company
would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise. 

12.        Miscellaneous. 

(a)        This Agreement shall be governed by and construed in accordance with the laws of the State
of North Carolina, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by
a written agreement executed by the parties hereto or their respective successors and legal representatives. 

(b)        All notices and other communications hereunder shall be in writing and shall be given by
hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: 
 If
to Executive: 
 At the Executive’s address of record on file with the Company 

If to the Company: 
 Lowe’s
Companies, Inc. 
 1000 Lowe’s Boulevard 

Mooresville, North Carolina 28117 

Attention: Chief Legal Officer 
 or to such
other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee. 

(c)        The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement. 
 (d)        The Company may
withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation. 

(e)        Executive’s or the Company’s failure to insist upon strict compliance with any
provision of this Agreement or the failure to assert any right Executive or the Company may have hereunder, including, without limitation, the right of Executive to terminate employment for Good Reason pursuant to Section 5(c) of this
Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement. 

(f)        Executive and the Company acknowledge that, except as may otherwise be provided under any
other written agreement between Executive and the Company, the employment of Executive by the Company is “at will” and prior to the Effective Date, Executive’s employment and/or this Agreement may be terminated by either

  
 8 

 
Executive or the Company at any time prior to the Effective Date, in which case Executive shall have no further rights under this Agreement. From and after the Effective Date this Agreement
shall supersede any other agreement between the parties with respect to the subject matter hereof. 
 IN WITNESS WHEREOF, Executive has
hereunto set Executive’s hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year first above written. 

 

			
	EXECUTIVE
	
	  

	  

	
	LOWE’S COMPANIES, INC.
		
	By:	 	
	Name:	 	
	Title:	 	          

  
 9Exhibit

Exhibit 4(a)
	
	
	 

AEP TEXAS INC.

TO

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

AS TRUSTEE

SECOND SUPPLEMENTAL INDENTURE
DATED AS OF MAY 17, 2018

$500,000,000 3.950% SENIOR NOTES, SERIES E DUE 2028

	
	
	 

    

	
						
	TABLE OF CONTENTS*

	 
	 
	 
	 
	 

	 
	 
	 
	 
	Page
	

	 
	 
	 
	 
	 

	ARTICLE I Additional Definitions
	 
	2
	

	 
	 
	 
	 
	 

	 
	SECTION 1.01.   Definitions
	 
	2
	

	 
	 
	 
	 
	 

	ARTICLE II The Notes
	 
	4
	

	 
	 
	 
	 
	 

	 
	SECTION 2.01.   Establishment.
	 
	4
	

	 
	SECTION 2.02.   Aggregate Principal Amount.
	 
	4
	

	 
	SECTION 2.03.   Maturity and Interest.
	 
	5
	

	 
	SECTION 2.04.   Optional Redemption.
	 
	5
	

	 
	SECTION 2.05.   Security Registrar.
	 
	6
	

	 
	SECTION 2.06.   Global Securities and Certificated Securities.
	6
	

	 
	SECTION 2.07.   Form of Securities.
	 
	8
	

	 
	SECTION 2.08.   Transfer and Exchange.
	 
	8
	

	 
	 
	 
	 
	 

	ARTICLE III Covenants
	 
	11
	

	 
	 
	 
	 
	 

	 
	SECTION 3.01.   Liens
	 
	11
	

	 
	SECTION 3.02.   Additional Information
	 
	11
	

	 
	 
	 
	 
	 

	ARTICLE IV Miscellaneous Provisions
	 
	11
	

	 
	 
	 
	 
	 

	 
	SECTION 4.01.   Recitals by Company.
	 
	11
	

	 
	SECTION 4.02.   Ratification and Incorporation of Original Indenture.
	12
	

	 
	SECTION 4.03.   Executed in Counterparts.
	 
	12
	

	 
	SECTION 4.04.   Legends.
	 
	12
	

	 
	SECTION 4.05.   New York Law to Govern
	 
	13
	

	 
	 
	 
	 
	 

	 
	SIGNATURES
	 
	14
	

	 
	 
	 
	 
	 

	 
	EXHIBIT A-1      Form of Note
	 
	Ex. A-1
	

	 
	 
	 
	 
	 

	 
	EXHIBIT B-1      Form of Transfer Certificate
	 
	Ex. B-1
	

	
	
	 

		
	* 
	This Table of Contents does not constitute part of the Indenture or have any bearing upon the interpretation of any of its terms and provisions.

i

THIS SECOND SUPPLEMENTAL INDENTURE is made as of the 17th day of May, 2018, between AEP TEXAS INC. a corporation duly organized and existing under the laws of the state of Delaware (herein called the “Company”), having its principal office at 1 Riverside Plaza, Columbus, Ohio 43215 and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., a national banking association, duly organized and existing under the laws of the United States, having its designated corporate trust office at 2 North LaSalle Street, 7th Floor, Chicago, Illinois 60602, as Trustee (herein called the “Trustee”).
W I T N E S S E T H:
WHEREAS, the Company has heretofore entered into an Indenture, dated as of September 1, 2017 (the “Original Indenture”), with the Trustee;
WHEREAS, the Original Indenture is incorporated herein by this reference and the Original Indenture, as previously supplemented and as further supplemented by this Second Supplemental Indenture, is herein called the “Indenture”;
WHEREAS, under the Original Indenture, a new series of unsecured notes (the “Senior Notes”) may at any time be established by the Board of Directors of the Company in accordance with the provisions of the Original Indenture and the terms of such series may be described by a supplemental indenture executed by the Company and the Trustee;
WHEREAS, the Company proposes to create under the Indenture a series of Senior Notes to be designated the “3.950% Senior Notes, Series E due 2028” (the “Notes”), the form and substance of the Notes and the terms, provisions and conditions thereof to be set forth as provided in the Original Indenture and this Second Supplemental Indenture;
WHEREAS, the Company and the initial purchasers named therein have entered into that certain Registration Rights Agreement, dated May 17, 2018 (the “Registration Rights Agreement”), providing for (i) the issuance from time to time of Securities issued in exchange for, and in an aggregate principal amount equal to, the Notes (the “Exchange Notes”) containing terms substantially identical to, and evidencing the same indebtedness as, the Notes exchanged therefor (except that such Exchange Notes will be registered under the Securities Act and will not bear any legend to the contrary) and (ii) the payment of any additional amounts of interest that shall become payable in respect of the Notes pursuant to the Registration Rights Agreement as a result of the registration default as described in the Registration Rights Agreement (“Additional Interest”);
WHEREAS, additional Senior Notes of other series hereafter established, except as may be limited in the Original Indenture as at the time supplemented and modified, may be issued from time to time pursuant to the Indenture as at the time supplemented and modified; and
WHEREAS, all conditions necessary to authorize the execution and delivery of this Second Supplemental Indenture and to make it a valid and binding obligation of the Company have been done or performed.

1

NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I

Additional Definitions

SECTION 1.01.  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 Original Indenture.
“Additional Interest” shall have the meaning assigned to it in the Registration Rights Agreement.
“Agent Member” shall have the meaning set forth in Section 2.06(a)(iv).
“Applicable Procedures” means, with respect to any transfer or transaction involving a Global Security or beneficial interest therein, the rules and procedures of the Depository for such Security, Euroclear and Clearstream, in each case to the extent applicable to such transaction and as in effect from time to time.
“Certificated Securities” shall have the meaning set forth in Section 2.06(b).
“Clearstream” means Clearstream Banking, S.A., or any successor securities clearing agency.
“Debt” means any indebtedness for borrowed money.
“DTC” means The Depository Trust Company, the initial Depository.
“Euroclear” means Euroclear Bank S.A./N.V., as operator of the Euroclear System or any successor securities clearing agency.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Exchange Offer Registration Statement” shall have the meaning assigned to it in the Registration Rights Agreement.
“Exchange Notes” shall have the meaning set forth in the Recitals.
“Global Notes” means, collectively, the Rule 144A Global Notes and Regulation S Global Notes.
“Global Securities” means global certificates representing the Notes as described in Section 2.06.

2

“Holder” means a registered holder of a Note.
“Lien or Liens” means any mortgage, pledge, security interest, or other lien on any utility properties or tangible assets, including, without limitation, the capital stock or comparable equity interest of its subsidiaries, owned on the date hereof or hereafter acquired by the Company.
“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, energy trading contracts, regulatory assets, deferred charges 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.
“Notes” has the meaning set forth in the Recitals. 
“Original Issue Date” means May 17, 2018.
“Permitted Liens” means:
		
	•
	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;

		
	•
	any extensions, renewals or replacements (or successive extensions, renewals or replacements), in whole or in part, of Liens permitted by the foregoing clauses;

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

		
	•
	the creation or existence of leases (operating or capital) made, or existing on property acquired, in the ordinary course of business.

“Registration Rights Agreement” means the Registration Rights Agreement, dated as of May 17, 2018 among the Company and the Initial Purchasers named therein, relating to the registration of the Notes under the Securities Act. 
“Regulation S” means Regulation S under the Securities Act and any successor regulation thereto.
“Regulation S Global Note” has the meaning set forth in Section 2.06(a)(ii).

3

“Rule 144” means Rule 144 under the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Securities and Exchange Commission.
“Rule 144A” means Rule 144A under the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Securities and Exchange Commission.
“Rule 144A Global Note” has the meaning set forth in Section 2.06(a)(i).
“Secured Debt” means any Debt of the Company secured by a Lien (other than a Permitted Lien).
“Securities Act” means the Securities Act of 1933, as amended from time to time, or any successor legislation.
“Securities Custodian” means the custodian with respect to a Global Security (as appointed by the Depository), or any successor Person thereto and shall initially be the Trustee.
“Stated Maturity” means June 1, 2028.
“Temporary Regulation S Global Notes” has the meaning set forth in Section 2.06(a)(ii).
“Transfer Restricted Security” shall have the meaning assigned to it in Section 6 the Registration Rights Agreement.
ARTICLE II

The Notes

SECTION 2.01.  Establishment.

The Series E Notes shall be designated as the Company’s “3.950 Senior Notes, Series E due 2028”.  The Notes shall be treated for all purposes under the Indenture as a single class or series of senior notes.
SECTION 2.02.  Aggregate Principal Amount.

The Trustee shall authenticate and deliver the Notes for original issue on the Original Issue Date in the aggregate principal amount of $500,000,000 upon a Company Order for authentication and delivery thereof and satisfaction of Section 2.01 of the Original Indenture.  The aggregate principal amount of the Notes shall be initially limited to $500,000,000 and shall be subject to Periodic Offerings pursuant to Article Two of the Original Indenture.  The Notes need not be issued at the same time and each series may be reopened at any time, without the consent of any Holder, for issuances of additional Notes.  Any such additional Notes will have the same ranking, interest rate, maturity and other terms as such series initially issued (except the issue date and issue price).  

4

SECTION 2.03.  Maturity and Interest.

(a)The Notes shall mature on, and the date on which the principal shall be payable (unless earlier redeemed) shall be June 1, 2028;

(b)The interest rate at which Notes shall bear interest shall be 3.950% per annum; provided, however, that the Additional Interest shall accrue on the Notes under certain circumstances as provided in clause (c) below; interest shall accrue from the date of authentication of the Notes; the Interest Payment Dates on which such interest will be payable shall be June 1 and December 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 May15 or November 15 preceding the relevant Interest Payment Date; provided that the first Interest Payment Date shall be December 1, 2018 and interest payable on the Stated Maturity or any redemption date shall be paid to the Person to whom principal shall be paid; each payment of interest shall include interest accrued through the day before the Interest Payment Date;

(c)Additional Interest, if any, shall accrue on the Transfer Restricted Securities over and above the interest rate set forth herein in accordance with Section 6(a) of the Registration Rights Agreement.

SECTION 2.04.  Optional Redemption.

At any time prior to March 1, 2028, the Notes shall be redeemable at the option of the Company, in whole at any time or in part from time to time, upon not less than thirty but not more than sixty days’ previous notice given to the registered owners of the Notes at a redemption price equal to the greater of (i) 100% of the principal amount of the Notes being redeemed and (ii) 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 March 1, 2028 (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 15 basis points, plus, in each case, accrued interest thereon to, but excluding,  the date of redemption.
At any time on or after March 1, 2028, the Notes shall be redeemable at the option of the Company, 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 that the Notes matured on March 1, 2028) 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 

5

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 semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated 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.
SECTION 2.05.  Security Registrar.

The Security Register referred to in Section 2.05 of the Original Indenture shall, with respect to the Notes, be kept at the office or agency that the Company may from time to time designate for such purpose (which shall initially be the Corporate Trust Office of the Trustee), and at such other place or places as the Company, with the approval of the Trustee, may hereafter designate.
SECTION 2.06.  Global Securities and Certificated Securities.

General.  The Notes shall be issued only as registered Global Securities, without coupons, in denominations of $2,000 and any integral multiples of $1,000 in excess thereof. The Notes initially will be represented by one or more Rule 144A Global Notes (as defined below) and Regulation S Global Notes (as defined below) (collectively, the “Global Notes”) registered in the name of The Depository Trust Company, as Depository or its nominee, or a successor depository or its nominee.
(a)Global Securities.

(i)Form of Restricted Global Notes.  The Notes offered and sold in reliance on Rule 144A shall be initially represented by one or more Global Notes (collectively, the “Rule 144A Global Notes”) will be deposited with the Trustee as custodian for the Depository and registered in the name of the Depository or its nominee. The Rule 144A Global Notes (and any notes issued in exchange for the Rule 144A Global Notes, other than Exchange Notes), including beneficial 

6

interests in the Rule 144A Global Notes, will be subject to certain restrictions on transfer set forth therein and in this Indenture.

(ii)Form of Regulation S Global Notes.  The Notes offered and sold in reliance on Regulation S shall be initially represented by one or more temporary Global Notes (the “Temporary Regulation S Global Notes”) and will be deposited with the Trustee as custodian for the Depository and registered in the name of the Depository or its nominee. Following the Resale Restriction Termination Date, beneficial interests in the Regulation S Temporary Global Notes will be exchanged for beneficial interests in permanent Global Notes (the “Regulation S Permanent Global Notes” and, together with the Regulation S Temporary Global Notes, the “Regulation S Global Notes”). The Regulation S Global Notes (and any notes issued in exchange for the Regulation S Global Notes, other than Exchange Notes), including beneficial interests in the Regulation S Global Notes, will be subject to certain restrictions or transfer set forth therein and in this Second Supplemental Indenture. 

(iii)At any time and from time to time after the execution and delivery of this Second Supplemental Indenture, the Company may deliver Exchange Notes to be issued in exchange for any series of Rule 144A Global Notes and Regulation S Global Notes, executed by the Company for authentication, together with an Company Order for the authentication and delivery of such Exchange Notes, and the Trustee in accordance with such Company Order shall authenticate and deliver such Exchange Notes.

The Rule 144A Global Notes, the Temporary Regulation S Global Notes, the Regulation S Global Notes are collectively referred to herein as “Global Securities”.  The aggregate principal amount of the Global Securities may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee as hereinafter provided.
(iv)Book-Entry Provisions.  This Section shall apply only to a Global Security deposited with or on behalf of the Depository.  The Company shall execute and the Trustee shall, in accordance with this Section 2.06(a)(iv), authenticate and deliver initially one or more Global Securities that (a) shall be registered in the name of the Depository for such Global Security or Global Securities or the nominee of such Depository and (b) shall be delivered by the Trustee to such Depository or pursuant to such Depository’s instructions or held by the Trustee as custodian for the Depository.

Members of, or participants in, the Depository (“Agent Members”) shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depository or by the Trustee as the custodian of the Depository or under such Global Security, and the Company, the Trustee and any agent of the Company or the Trustee shall be entitled to treat the Depository as the absolute owner of such Global Security for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of 

7

the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices of such Depository governing the exercise of the rights of a holder of a beneficial interest in any Global Security.
To the extent a notice or other communication to the beneficial owners of the  Notes is required under the Indenture, unless and until Certificated Securities shall have been issued to such owners, the Trustee shall give all such notices and communications specified herein to be given to such owners to the Depository, and shall have no obligations to such owners.
(b)Certificated Securities.  Except as provided in this Section 2.06, owners of beneficial interests in Global Securities shall not be entitled to receive physical delivery of Certificated Securities (as defined below).

Global Securities representing the Notes shall be exchangeable for certificated securities of such series, (“Certificated Securities)” if (i) the Depository (x) notifies the Company that it is unwilling or unable to continue as Depository for the Global Securities or (y) shall no longer be registered or in good standing under the Exchange Act, or other applicable statute or regulation, and a successor Depository for the Global Securities is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such condition.  Upon surrender to the Trustee of the typewritten certificate or certificates representing the Global Securities by the Depository, accompanied by registration instructions, the Trustee shall execute and authenticate the certificates in accordance with the instructions of the Depository.  Neither the Security Registrar nor the Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions.  Upon the issuance of Certificated Securities, the Trustee shall recognize the Holders of the Certificated Securities as Holders.  The Certificated Securities shall be printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Company, as evidenced by the execution thereof by the Company, and shall bear the legend set forth on Exhibit A hereto unless the Company informs the Trustee that such legend is no longer required.
SECTION 2.07.  Form of Securities.

The Global Securities and Certificated Securities shall be substantially in the forms attached as Exhibit A hereto.
SECTION 2.08.  Transfer and Exchange.

(a)General.  Subject to Section 2.01, transfers and exchanges of Securities and beneficial interests in a Global Security of the kinds specified in this Section 2.08 shall be made only in accordance with this Section 2.08.

(b)Transfer and Exchange of Global Securities.

(i)If, at any time, whether prior to or after the expiration of the holding period with respect to the Notes set forth in Rule 144(d) under the 

8

Securities Act, an owner of a beneficial interest in a Rule 144A Global Note deposited with the Trustee, as custodian for the Depository, wishes to transfer its interest in such Rule 144A Global Note to a Person who is required or permitted to take delivery thereof in the form of an interest in a Regulation S Global Note, such owner shall, subject to the Applicable Procedures, exchange or cause the exchange of such interest for an equivalent beneficial interest in a Regulation S Global Note as provided in this Section 2.08(b)(i). Upon receipt by the Trustee of (1) written instructions given in accordance with the Applicable Procedures from an Agent Member directing the Trustee to credit or cause to be credited a beneficial interest in the Regulation S Global Note in an amount equal to the beneficial interest in the applicable Rule 144A Global Note to be exchanged, (2) a written order given in accordance with the Applicable Procedures containing information regarding the participant account of the Depository and the Euroclear or Clearstream account (if applicable) to be credited with such increase and (3) a certificate substantially in the form of Exhibit B hereto given by the owner of such beneficial interest, the Trustee, as Security Registrar, shall instruct the Depository to reduce or cause to be reduced the aggregate principal amount of the applicable Rule 144A Global Note and to increase or cause to be increased the aggregate principal amount of the applicable Regulation S Global Note by the principal amount of the beneficial interest in the Rule 144A Global Note to be exchanged, to credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Regulation S Global Note equal to the reduction in the aggregate principal amount of the applicable Rule 144A Global Note, and to debit, or cause to be debited, from the account of the Person making such exchange or transfer the beneficial interest in the Rule 144A Global Note that is being exchanged or transferred.

(ii)If, at any time prior to the expiration of one year from the date of the acquisition of the Securities from the Company, an owner of a beneficial interest in a Regulation S Global Note deposited with the Trustee as custodian for the Depository wishes to transfer its interest in such Regulation S Global Note to a Person who is required or permitted to take delivery thereof in the form of an interest in a Rule 144A Global Note, such owner shall, subject to the Applicable Procedures, exchange or cause the exchange of such interest for an equivalent beneficial interest in a Rule 144A Global Note, as provided in this Section 2.08(b)(ii). Upon receipt by the Trustee of (1) written instructions given in accordance with the Applicable Procedures from an Agent Member, directing the Trustee, as Security Registrar, to credit or cause to be credited a beneficial interest in the Rule 144A Global Note equal to the beneficial interest in the Regulation S Global Note to be exchanged; (2) a written order given in accordance with the Applicable Procedures containing information regarding the participant account of the Depository to be credited with such increase; and (3) a certificate substantially in the form of Exhibit B hereto given by the owner of such beneficial interest, the Trustee, as Security Registrar, shall instruct the Depository to reduce or cause to be reduced the aggregate principal amount of such Regulation S Global Note and to increase or cause to be increased the aggregate principal amount of the applicable Rule 144A Global Note by the principal amount of the 

9

beneficial interest in the Regulation S Global Note to be exchanged, and the Trustee, as Security Registrar, shall instruct the Depository, concurrently with such reduction, to credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the applicable Rule 144A Global Note equal to the reduction in the aggregate principal amount of such Regulations S Global Note and to debit or cause to be debited from the account of the Person making such transfer the beneficial interest in the Regulation S Global Note that is being transferred.

(iii)Beneficial interests in a Rule 144A Global Note may be transferred to a Person who takes delivery in the form of an interest in such Rule 144A Global Note without any written certification from the transferor or the transferee, but the transferee will be deemed to make the representations set forth in Exhibit B hereto.

(iv)Beneficial interests in a Regulation S Global Note may be transferred to a Person who takes delivery in the form of an interest in such Regulation S Global Note without any written certification from the transferor or the transferee; provided, however, that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than a distributor (as defined in Regulation S under the Securities Act)).

(c)Transfer and Exchange of Global Securities and Certificated Securities.

(i)In the event that a Global Security is exchanged for a Certificated Security as provided in this Section 2.08(c), such Certificated Security may be exchanged or transferred for one another, subject to Section 2.05 of the Original Indenture, only in accordance with such procedures as are substantially consistent with the provisions of clauses (b)(i) and (ii) of this Section 2.08 and as may be from time to time reasonably adopted by the Company.

(ii)Upon receipt by the Trustee of a Certificated Security, duly endorsed or accompanied by appropriate instruments of transfer, the Trustee shall cancel such Certificated Security and cause, or direct the Securities Custodian to cause, in accordance with the standing instructions and procedures existing of the Depository and the Securities Custodian, the aggregate principal amount of Notes represented by the Rule 144A Global Note or Regulation S Global Note, as applicable, to be increased by the aggregate principal amount of the Certificated Security to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Rule 144A Global Note or Regulation S Global Note, as applicable, equal to the principal amount of the Certificated Security so canceled.  If no Rule 144A Global Notes or Regulation S Global Notes, as applicable, are then outstanding, the Company shall issue and the Trustee shall authenticate, upon written order of the Company in the form of an Officers' Certificate, a new Rule 144A Global Note or Regulation S Global Note, as applicable, in the appropriate principal amount.

10

(d)Transfer Restricted Security.  Upon any sale or transfer of a Transfer Restricted Security (including any Transfer Restricted Security represented by a Global Security) pursuant to Rule 144 under the Securities Act or an effective registration statement under the Securities Act, which shall be certified to the Trustee and Security Registrar in the form attached hereto as Exhibit B upon which each may conclusively rely:

(i)in the case of any Transfer Restricted Security represented by a Certificated Security, the Security Registrar shall permit the Holder thereof to exchange such Transfer Restricted Security for a Certificated Security that does not bear the Restricted Securities Legends set forth in Exhibits A-1 and A-2 hereto and rescind any restriction on the transfer of such Transfer Restricted Security; and

(ii)in the case of any Transfer Restricted Security represented by a Global Security, such Transfer Restricted Security shall not be required to bear the Restricted Securities Legends set forth in Exhibits A-1 and A-2 hereto if all other interests in such Global Note have been or are concurrently being sold or transferred pursuant to Rule 144 under the Securities Act or pursuant to an effective registration statement under the Securities Act.

ARTICLE III

Covenants

SECTION 3.01.  Liens.

The Company covenants that for so long as any of the Notes are outstanding that it will not create or suffer to exist any Secured Debt, unless, at the same time, the Notes that are outstanding are also secured by such Lien on an equal and ratable basis.  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.  This restriction does not limit:
(a)Permitted Liens; 

(b)Financing of the Company’s accounts receivable for electric service; and

(c)Any other Lien not covered in clause (a) as long as immediately after the creation of such Lien the aggregate principal amount of Secured Debt does not exceed 15% of Net Tangible Assets.

ARTICLE IV

Miscellaneous Provisions

SECTION 4.01.  Recitals by Company.

11

The recitals in this Second Supplemental Indenture are made by the Company only and not by the Trustee and the Trustee assumes no responsibility for their correctness. All of the provisions contained in the Original Indenture in respect of the rights, privileges, protections, indemnities, immunities, powers and duties of the Trustee shall be applicable in respect of the Notes and of this Second Supplemental Indenture as fully and with like effect as if set forth herein in full. The Trustee makes no representations as to the validity or sufficiency of this Second Supplemental Indenture or of the Notes.  The Trustee shall not be accountable for the use or application by the Company of Notes or the proceeds thereof.
SECTION 4.02.  Ratification and Incorporation of Original Indenture.

As supplemented hereby, the Original Indenture is in all respects ratified and confirmed, and the Original Indenture and this Second Supplemental Indenture shall be read, taken and construed as one and the same instrument.
SECTION 4.03.  Executed in Counterparts.

This Second Supplemental Indenture may be simultaneously executed in several counterparts, each of which shall be deemed to be an original, and such counterparts shall together constitute but one and the same instrument.
SECTION 4.04.  Legends.

Except as determined by the Company in accordance with applicable law, each Note shall bear the applicable legends relating to restrictions on transfer pursuant to the securities laws in substantially the form set forth on Exhibit A hereto.
SECTION 4.05  New York Law to Govern

This Second Supplemental Indenture will be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict of laws provisions.
    

12

IN WITNESS WHEREOF, each party hereto has caused this instrument to be Signed in its name and behalf by its duly authorized signatories, all as of the day and year first above written.
AEP TEXAS INC.

By: /s/ Renee V. Hawkins
Name: Renee V. Hawkins
Title: Assistant Treasurer

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

By: /s/ Karen Yu
Name: Karen Yu
Title: Vice President

13

EXHIBIT A

FORM OF NOTE

[Rule 144A Global Security]
[Regulation S Global Security]
[Certificated Security]

 [FORM OF FACE OF INITIAL SECURITY]

[Global Securities Legend]

THIS GLOBAL SECURITY IS HELD BY THE DEPOSITORY (AS DEFINED IN THE INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE REGISTRAR MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTIONS 2.04 AND 2.05 OF THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.05 OF THE INDENTURE AND (III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.08 OF THE INDENTURE. 
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED  REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”) 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 SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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.

Ex. A-1

[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.  NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”)), OR (B) IT IS A NON-U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO RULE 904 OF REGULATION S, AND (2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE RESALE RESTRICTION TERMINATION DATE, ONLY (A) TO AEP TEXAS INC. OR ANY OF ITS SUBSIDIARIES (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO RULE 904 OF REGULATION S, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN EACH CASE, THE SECURITIES LAWS OF ANY OTHER JURISDICTION, INCLUDING ANY STATE OF THE UNITED STATES, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL SATISFACTORY TO EACH OF THEM AND/OR A CERTIFICATE OF TRANSFER OR EXCHANGE IN THE FORM PRESCRIBED IN THE INDENTURE.  THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
[ERISA Legend]
BY ITS ACQUISITION AND HOLDING OF THIS SECURITY THE HOLDER THEREOF WILL BE DEEMED TO HAVE REPRESENTED, WARRANTED AND AGREED THAT EITHER (I) IT IS NOT AND WILL NOT BE FOR SO LONG AS IT HOLDS ANY SECURITY (OR INTEREST IN A SECURITY) AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), A “PLAN” OR ARRANGEMENT

Ex. A-2

SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF SUCH EMPLOYEE BENEFIT PLAN OR PLAN’S INVESTMENT IN THE ENTITY, OR A GOVERNMENTAL, NON-U.S., CHURCH OR OTHER PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIALLY SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAWS”), OR (II) THE PURCHASE, HOLDING AND DISPOSITION OF THIS SECURITY WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR, IN THE CASE OF A GOVERNMENTAL, NON-U.S., CHURCH OR OTHER PLAN, A SIMILAR VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.
[Temporary Regulation S Global Security Legend]
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL SECURITY, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR A REGULATION S PERMANENT GLOBAL SECURITY, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).  NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL SECURITY SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.
[Certificated Securities Legend]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE TRUSTEE AND SECURITY REGISTRAR SUCH CERTIFICATES AND OTHER INFORMATION AS THE TRUSTEE AND SECURITY REGISTRAR MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

Ex. A-3

AEP TEXAS INC.
____% Senior Notes, Series E due 20__
	
					
	CUSIP:
	[#########/144A]
	 
	Original Issue Date:  May __, 2018

	 
	[#########/Reg. S]
	 
	 

	 
	 
	 
	 
	 

	ISIN:
	[#########/144A]
	 
	 

	 
	[#########/Reg. S]
	 
	 

	 
	 
	 
	 
	 

	Stated Maturity:
	June 1, 20__
	Interest Rate:    ____%
	 

	 
	 
	 
	 
	 

	Principal Amount:
	$XXX,000,000
	 
	 

	 
	 
	 
	 
	 

	Redeemable:
	Yes    X
	No
	 

	In Whole:
	Yes    X
	No
	 

	In Part:
	Yes    X
	No
	 

                    
AEP TEXAS INC., a corporation duly organized and existing under the laws of the State of Delaware (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 [________] or registered assigns, the principal sum of [_____________] DOLLARS ($XXX,000,000) on the Stated Maturity specified above (or upon earlier redemption); 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 June 1 and December 1 in each year, commencing on December 1, 2018, 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 March 15 or September 15 (whether or not a Business Day), as the case may be, immediately preceding 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, except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, 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 may from time to time designate for that purpose, in any

Ex. A-4

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 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 Senior 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 September 1, 2017 duly executed and delivered between the Company and The Bank of New York Mellon Trust Company, N.A., a national banking association, duly organized and existing under the laws of the United States, 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 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 holder of this Notes. This Note is one of the series of Notes designated on the face hereof as ____% Senior Notes, Series E due 20__ initially issued in the aggregate principal amount of $XXX,000,000.
At any time prior to _____________, this Note shall be redeemable at the option of the Company, in whole at any time or in part from time to time, upon not less than thirty but not more than sixty days’ previous notice given to the registered owners of this Note at a redemption price equal to the greater of (i) 100% of the principal amount of this Note being redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on this Note being redeemed that would be due if this Note matured on ______________ (excluding the portion of any such interest accrued to 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 __ basis points, plus, accrued interest thereon to the date of redemption.

At any time on or after _______________, this Note shall be redeemable at the option of the Company, in whole or in part, at 100% of the principal amount of this Note 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 this Note (assuming, for this purpose, that this Note matured on _______________) 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 this Note.
“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.

Ex. A-5

“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 semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated 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 this Note during a period beginning at the opening of business 15 days before the day of the giving of a notice of redemption of less than all the outstanding Notes of this series and ending at the close of business on the day such notice is given, nor (ii) register the transfer of or exchange of any Notes of this series or portions thereof called for redemption. This Note is exchangeable for Notes in certificated registered form only under certain limited circumstances set forth in the Indenture.
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.  This Note will not have a sinking fund.
As described in the supplemental indenture relating to the Notes, so long as this Note is outstanding, the Company is subject to covenants described in Article III of the Second Supplemental Indenture.

Ex. A-6

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 Note 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 provided 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 or transfer or otherwise), irrespective of whether or not any notation of such consent or waiver is made upon this Note.
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. 

Ex. A-7

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 Note 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 released waived and released.
The Notes of this series are issuable only in registered form without coupons in minimum denominations of $2,000 and in 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 a different 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.
This Note will be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict of laws provisions. 

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

By:  ______________________________________

Ex. A-8

CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
	
			
	 
	 
	THE BANK OF NEW YORK MELLON TRUST

	 
	 
	COMPANY, N. A.,

	 
	 
	as Trustee

	 
	 
	 

	Dated:____________________
	 
	By:________________________________________

	 
	 
	Authorized Signatory

	 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

 

                           

Ex. A-9

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
	under Uniform Gifts to
Minors Act

_________________________
(State)

	JT TEN-
	As joint tenants 
with right of
survivorship and 
not as tenants in
common

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 Note and all rights thereunder, hereby irrevocably constituting and appointing

______________________________________________________________________________________________________    
agent to transfer said Note 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.

Ex. A-10

In connection with any transfer of any of the Note evidenced by this certificate, the undersigned confirms that such Note is being:
CHECK ONE BOX BELOW
	
			
	(1)
	o
	exchanged for the undersigned’s own account without transfer; or

	 
	 
	 

	(2)
	o
	transferred to a person whom the undersigned reasonably believes to be a “qualified institutional buyer” as defined in Rule 144A under the Securities Act of 1933 who is purchasing this Note for such buyer’s own account or the account of a “qualified institutional buyer” in a transaction meeting the requirements of Rule 144A under the Securities Act of 1933 and any applicable securities laws of any state of the United States or any other jurisdiction; or

	 
	 
	 

	(3)
	o
	exchanged or transferred pursuant to and in compliance with Rule 903 or 904 of Regulation S under the Securities Act of 1933; or

	 
	 
	 

	(4)
	o
	transferred to the Company or an “affiliate” (as defined in Rule 144 under the Securities Act) of the Company; or; or

	 
	 
	 

	(5)
	o
	transferred pursuant to another available exemption from the registration requirements of the Securities Act of 1933.

Unless one of the boxes is checked, the Trustee will refuse to register any Note evidenced by this certificate in the name of any person other than the registered Holder thereof; provided, however, that if box (3), (4) or (5) is checked, the Company may require, prior to registering any such transfer of this Note, such legal opinions, certifications and other information as the Company has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, such as the exemption provided by Rule 144 under such Act; provided, further, that if box (2) is checked, the transferee must also certify that it is a qualified institutional buyer as defined in Rule 144A.

________________________________________
Signature

_______________________________________
SIGNATURE GUARANTEE

Date:___________________

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, 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 Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

Ex. A-11

TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
________________________________
SIGNATURE GUARANTEE

Date:___________________
Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, 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 Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
NOTICE:  To be executed by an executive officer. 

Ex. A-12

SCHEDULE A
The initial aggregate principal amount of the Note evidenced by the Certificate to which this Schedule is attached is $___________.  The notations on the following table evidence decreases and increases in the aggregate principal amount of the Note evidenced by such Certificate.
	
				
	Decrease in Principal 
Amount of the Note
	Increase in Principal 
Amount of the Note
	Principal Amount of the
Note Remaining After 
Such Decrease or 
Increase
	Notation by
Security Registrar

    

Ex. A-13

EXHIBIT B
FORM OF TRANSFER CERTIFICATE
In connection with any transfer of any of the Notes evidenced by this certificate, the undersigned confirms that such Notes are being:
CHECK ONE BOX BELOW
	
			
	(1)
	o
	exchanged for the undersigned’s own account without transfer; or

	 
	 
	 

	(2)
	o
	transferred to a person whom the undersigned reasonably believes to be a “qualified institutional buyer” as defined in Rule 144A under the Securities Act of 1933 who is purchasing such Notes for such buyer’s own account or the account of a “qualified institutional buyer” in a transaction meeting the requirements of Rule 144A under the Securities Act of 1933 and any applicable securities laws of any state of the United States or any other jurisdiction; or

	 
	 
	 

	(3)
	o
	exchanged or transferred pursuant to and in compliance with Rule 903 or 904 of Regulation S under the Securities Act of 1933; or

	 
	 
	 

	(4)
	o
	transferred to the Company or an “affiliate” (as defined in Rule 144 under the Securities Act) of the Company; or; or

	 
	 
	 

	(5)
	o
	transferred pursuant to another available exemption from the registration requirements of the Securities Act of 1933.

Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any person other than the registered Holder thereof; provided, however, that if box (3) or (4) is checked, the Company may require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Company has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, such as the exemption provided by Rule 144 under such Act; provided, further, that if box (2) is checked, the transferee must also certify that it is a qualified institutional buyer as defined in Rule 144A.
    
	
			
	 
	 
	 

	 
	 
	Signature

	 
	 
	 

	Date:_______________
	 
	 

	 
	 
	SIGNATURE GUARANTEE

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, 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 Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

Ex. B-1

TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
	
			
	Date:_______________
	 
	 

	 
	 
	SIGNATURE GUARANTEE

        
Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Security Registrar, 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 Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

NOTICE:  To be executed by an executive officer.

Ex. B-2

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